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2004-2005
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TELECOMMUNICATIONS LEGISLATION AMENDMENT
(FUTURE PROOFING AND OTHER MEASURES) BILL 2005
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for
Communications, Information Technology and the Arts,
Senator the Hon. Helen Coonan)
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TELECOMMUNICATIONS LEGISLATION
AMENDMENT (FUTURE PROOFING AND
OTHER MEASURES) BILL 2005
OUTLINE
The Telecommunications Legislation Amendment (Future Proofing and Other
Measures) Bill 2005 (the Bill) establishes the $2 billion Communications Fund and
provides for regular independent reviews into the adequacy of telecommunications in
regional, rural and remote parts of Australia. It also allows an industry body or
association to apply to the Australian Communications and Media Authority (ACMA)
for a declaration that the body or association is eligible for reimbursement of certain
costs incurred by it in developing a consumer-related industry code.
Schedule 1 to the Bill inserts a new Part 9C of the Telecommunications (Consumer
Protection and Service Standards) Act 1999 to establish the Communications Fund.
The purpose of the Communications Fund is to provide an income stream to fund the
Commonwealth Government's response to any recommendations proposed by the
Regional Telecommunications Independent Review Committee to the Government in a
report of a review of the adequacy of telecommunications services in regional, rural
and remote parts of Australia.
Schedule 2 to the Bill inserts a new Part 9B of the Telecommunications (Consumer
Protection and Service Standards) Act 1999 relating to regular independent reviews of
regional telecommunications, and inserts relevant definitions in that Act. The first
review will commence before the end of 2008 or at an earlier time determined by the
Minister in consultation with other relevant Ministers. Each subsequent review will be
required to be commenced within 3 years after the completion of the previous review.
The reviews will be undertaken by an independent expert committee appointed by the
Minister for Communications, Information Technology and the Arts known as the
Regional Telecommunications Independent Review Committee (RTIRC). The
committee will be required to report to the Minister on its findings and
recommendations and this report will be required to be tabled in the Parliament.
Item 7 of Schedule 4 to the Bill will make a consequential amendment to subsection
8BUA(1) of the Telstra Corporation Act 1991 to ensure that at least 2 directors of
Telstra will be required to have knowledge of, or experience in, the communication
needs not only of regional areas but also of rural or remote areas of Australia.
Schedule 3 to the Bill provides that industry bodies and associations that develop
consumer-related industry codes can be reimbursed by the Australian Communications
and Media Authority (ACMA) for their costs in developing those codes. Amendments
made to the Telecommunications (Carrier Licence Charges) Act 1997 by the
Telecommunications (Carrier Licence Charges) Amendment (Industry Plans and
Consumer Codes) Bill 2005 (the Carrier Licence Charges Bill) will allow for the costs
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of development of consumer-related industry codes to be recouped from the charges
imposed on carrier licences.
Schedule 4 to the Bill `switches on' appropriations in sections 8AL, 8AS and 8BA of
the Telstra Corporation Act 1991 that were temporarily `switched off' by the Telstra
(Transition to Full Private Ownership) Bill 2005 for constitutional reasons. It also
expands the appropriation in section 8AL to deal with calls on guarantees and
obligations to make payments of amounts in relation to sale-scheme hybrid securities
issued by the Commonwealth in connection with a Telstra sale scheme as well as
authorising any borrowing of money by the Commonwealth in connection with the
issue of sale-scheme hybrid securities under a Telstra sale scheme.
FINANCIAL IMPACT STATEMENT
The full financial costs and benefits from a future sale or sales of the Commonwealth's
remaining shareholding in Telstra are difficult to quantify at this stage. However the
Government has stated that sale will only proceed when an appropriate return for
taxpayers could be achieved.
Actual sale proceeds and costs are dependent on a number of future variables,
including:
overall market conditions;
expected demand for Telstra shares;
Telstra's performance;
the outcomes of the new CEO's operational review; and
the implementation of regulatory changes.
The total market value of the Commonwealth's remaining shares in Telstra based on
the share price on 31 August 2005 is about $30 billion. The amount raised on a future
sale or sales would be dependent on the sale processes, the structure of the offer and
market circumstances at the time.
The costs of conducting a sale are dependent on the structure and size of a sale. A
future sale is expected to be a complex undertaking with a large number of service
providers which will be subject to a competitive tendering exercise for these services.
Nevertheless, it is expected that sale costs will be consistent with the level in the
previous Telstra 2 Share Offer. The Department of Finance and Administration will
manage the sale process.
The forward estimates include the effect of the sale of the Australian Government's
shareholding in Telstra, noting that the level of proceeds will depend, inter alia, on the
prevailing levels of world equity markets at the time and that the timing of the sale
could be adjusted if market levels are considered unlikely to provide an appropriate
return to taxpayers.
Proceeds from sale of the Commonwealth's remaining shareholding in Telstra may be
used to reduce net debt or allocated to the proposed Future Fund. Regardless of how
the proceeds are used, the Commonwealth will continue to receive income flows from
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investments (either in the form of interest on term deposits at the Reserve Bank of
Australia or through the Future Fund receiving interest and dividends on its
investments).
Schedule 1 to the Bill establishes a $2 billion dedicated Communications Fund to fund
the Commonwealth Government's response to any recommendations proposed by the
Regional Telecommunications Independent Review Committee to the Government in a
report of a review of the adequacy of telecommunications services in regional, rural
and remote parts of Australia.
The Bill makes amendments to the Telecommunications Act 1997 which would
provide that industry bodies and associations that develop consumer-related industry
codes can be reimbursed by the ACMA for their costs in developing those codes. The
Carrier Licence Charges Bill would amend the Telecommunications (Carrier Licence
Charges) Act 1997 to increase the maximum amount of the charges that may be
imposed on carrier licences under that Act.
Although the proposed amendment in item 1 of Schedule 3 to the Bill would result in
an increase in Commonwealth expenditure, the amount of additional expenditure in a
financial year (being the total amount of costs reimbursed to industry bodies and
associations by the ACMA) would be directly referable to the additional amount of
revenue the Commonwealth would obtain during the next financial year through the
increase in carrier licence charges permitted by the Carrier Licence Charges Bill. The
Commonwealth's additional expenditure, through ACMA, on funding the development
of telecommunications consumer-related industry codes is recouped from
telecommunications carriers through carrier licence charges. For this reason, the
introduction of a scheme to reimburse industry bodies for their costs in developing
consumer-related industry codes (as implemented by this Bill and the Carrier Licence
Charges Bill) is not expected to have a financial impact on Commonwealth revenue or
expenditure.
The Bill will not otherwise have a significant impact on Commonwealth expenditure or
revenue.
REGULATION IMPACT STATEMENT
The regulation impact statement for the measures in Schedule 3 to the Bill dealing with
costs of development of consumer-related industry codes is contained in the
explanatory memorandum for the Telecommunications (Carrier Licence Charges)
Amendment (Industry Plans and Consumer Codes) Bill 2005.
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NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides that the Bill, when enacted, may be cited as the Telecommunications
Legislation Amendment (Future Proofing and Other Measures) Act 2005.
Clause 2 - Commencement
Clause 2 provides for various provisions of the Bill, when enacted, to commence on
specified days or times.
Clauses 1 to 3 of the Bill will commence on Royal Assent (see item 1 of the table in
subclause 2(1)). Schedules 1 and 2 to the Bill and item 7 of Schedule 4 to the Bill will
also commence on Royal Assent (see items 2 and 5 in the table).
Clauses 1 to 3 provide for the short title of the Act, commencement and the effect of
the Schedules to the Bill.
Schedule 1 will amend the Telecommunications (Consumer Protection and Service
Standards) Act 1999 (the Consumer Protection Act) to establish the Communications
Fund. The purpose of the Communications Fund is to provide an income stream to
fund the Commonwealth Government's response to any recommendations of the
proposed Regional Telecommunications Independent Review Committee to the
Government contained in a report of a review of the adequacy of telecommunications
services in regional, rural and remote parts of Australia.
Schedule 2 will amend the Consumer Protection Act to provide for regular
independent reviews of the adequacy of telecommunications services in regional, rural
and remote parts of Australia.
Item 7 of Schedule 4 to the Bill will make a consequential amendment to subsection
8BUA(1) of the Telstra Corporation Act 1991 to ensure that at least 2 directors of
Telstra will be required to have knowledge of, or experience in, the communication
needs not only of regional areas but also of rural or remote areas of Australia.
Schedule 3 will commence on a single day to be fixed by Proclamation or 6 months
after the Bill receives Royal Assent, whichever is the earlier (see item 3 of the table in
clause 2 of the Bill). Schedule 3 will provide for the ACMA to reimburse industry
bodies their costs in developing consumer-related industry codes. Under the
amendments made by the Schedule, the ACMA may make determinations that certain
costs are not refundable, and may also make determinations in relation to the
requirements that will apply to the audited statements of costs that industry bodies
must submit to the ACMA for the purpose of claiming a reimbursement. It is
appropriate that commencement of these amendments be delayed to allow the ACMA
time to make these determinations, relying on subsection 4(1) of the Acts
Interpretation Act 1901. The determinations could not be expressed to commence
before the commencement of Schedule 3 to the Bill.
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Items 1 to 6 of Schedule 4 will commence on the day that is the later of the day when
this Bill receives Royal Assent and the day when the Telstra (Transition to Full Private
Ownership) Bill 2005 receives Royal Assent. However, these items will not
commence at all if the Telstra (Transition to Full Private Ownership) Bill does not pass
the Parliament and receive Royal Assent. Items 1 to 6 of Schedule 4 expand the
appropriation in section 8AL of the Telstra Corporation Act 1991 to deal with calls on
guarantees and obligations to make payments of amounts in relation to sale-scheme
hybrid securities issued by the Commonwealth in connection with a Telstra sale
scheme, `switch on' appropriations in sections 8AL, 8AS and 8BA of that Act that
were temporarily `switched off' by the Telstra (Transition to Full Private Ownership)
Bill 2005 for constitutional reasons and authorise any borrowing of money by the
Commonwealth in connection with the issue of sale-scheme hybrid securities under a
Telstra sale scheme.
Clause 3 - Schedule(s)
Clause 3 provides for the making of the amendments and repeals to the Acts specified
in the Schedules in accordance with the items in the Schedules and for the other items
in the Schedules to have effect according to their terms.
Schedule 1--Communications Fund and Connect Australia
package
Telecommunications (Consumer Protection and Service Standards) Act 1999
Item 1 - Insertion of new Part 9C - Communications Fund
Item 1 inserts a new Part 9C of the Telecommunications (Consumer Protection and
Service Standards) Act 1999 (the Consumer Protection Act) which will establish a
Communications Fund. The purpose of the Communications Fund is to provide an
income stream to fund the Commonwealth Government's response to any
recommendations to the Government contained in a report of a review of the adequacy
of telecommunications services in regional, rural and remote parts of Australia that the
proposed Regional Telecommunications Independent Review Committee prepares and
gives to the Minister for Communications, Information Technology and the Arts under
proposed section 158Q of the Consumer Protection Act. Proposed section 158Q is
inserted by Schedule 2 to the Bill.
Part 9C - Communications Fund
Division 1 - Introduction
Proposed section 158ZE of the Consumer Protection Act - Simplified outline
Proposed section 158ZE of the Consumer Protection Act sets out a simplified outline
of new Part 9C to assist readers.
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Proposed section 158ZF of the Consumer Protection Act - Definitions
Proposed section 158ZF of the Consumer Protection Act sets out key definitions of
terms used in new Part 9C.
Division 2 - Establishment of the Communications Fund
Proposed section 158ZG of the Consumer Protection Act - Establishment of the
Communications Fund
Proposed section 158ZG of the Consumer Protection Act establishes the
Communications Fund and provides that it consists of the Communications Fund
Special Account established by proposed section 158ZH and the investments of the
Communications Fund.
Proposed section 158ZH of the Consumer Protection Act - Establishment of the
Communications Fund Special Account
Proposed section 158ZH of the Consumer Protection Act establishes the
Communications Fund Special Account as a Special Account for the purposes of the
Financial Management and Accountability Act 1997 (FMA Act). The effect of
subsection 21(1) of the FMA Act is that the Consolidated Revenue Fund will be
appropriated for expenditure for the purposes identified in proposed section 158ZI of
the Consumer Protection Act, up to the balance for the time being of the
Communications Fund Special Account. Whenever an amount is appropriated against
this standing appropriation, the amount will be taken also to be debited from the
Special Account.
Proposed section 158ZI of the Consumer Protection Act - Purposes of the Fund
Account
The main purpose of the Communications Fund is to provide an income stream to fund
the Commonwealth Government's response to any recommendations to the
Government contained in a report of a review of the adequacy of telecommunications
services in regional, rural and remote parts of Australia that the proposed Regional
Telecommunications Independent Review Committee prepares and gives to the
Minister for Communications, Information Technology and the Arts under proposed
section 158Q of the Consumer Protection Act. Proposed section 158Q is inserted by
Schedule 2 to the Bill.
The other purposes of the Communications Fund are:
(a) a purpose incidental or ancillary to the main purpose e.g. to cover the running
costs of the Fund; and
(b) the making of grants of financial assistance under proposed sections 158ZL and
158ZM of the Consumer Protection Act for either of the above purposes.
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Proposed section 158ZJ of the Consumer Protection Act - Credit of amounts to
the Fund Account - Ministerial determination
Proposed subsection 158ZJ(1) of the Consumer Protection Act enables the responsible
Ministers (defined in proposed section 158ZF to be the Minister administering the
Financial Management and Accountability Act 1997 - currently the Minister for
Finance and Administration - and the Minister administering the Bill, currently
Minister for Communications, Information Technology and the Arts), by writing, to
determine that a specified amount is to be credited to the Communications Fund
Special Account on a specified day.
Proposed subsection 158ZJ(2) provides a cap of $2 billion for the total amount of cash
that may be credited to the Communications Fund Special Account.
Under proposed section 158ZK, financial assets, including shares in Telstra, may be
taken to be an investment of the Communications Fund if the responsible Ministers so
determine. If this were the case, a lesser amount than $2 billion would be credited to
the Communications Fund Special Account under proposed section 158ZJ, with the
value of the financial assets taken to be investments of the Fund under proposed
section 158ZK making up the balance of the $2 billion.
Proposed subsection 158ZJ(3) provides that the determination of the responsible
Ministers, being of an administrative character, will not be a legislative instrument for
the purposes of the Legislative Instruments Act 2003.
Proposed section 158ZK of the Consumer Protection Act - Transfer of financial
assets to the Fund
Proposed subsections 158ZK(1) and (2) of the Consumer Protection Act enable the
responsible Ministers (defined in proposed section 158ZF to be the Minister for
Finance and Administration and the Minister responsible for the administration of the
Consumer Protection Act, currently the Minister for Communications, Information
Technology and the Arts), by writing, to determine that a specified financial asset of
the Commonwealth, or each of 2 or more specified financial assets of the
Commonwealth, is taken to be an investment of the Communications Fund.
The term `financial asset' is defined widely in proposed section 158ZF and will include
shares, debentures, interests in a managed investment scheme, units of such shares,
debentures or interests and derivatives (such as futures contracts) and other intangible
assets specified in regulations under the Consumer Protection Act.
The term `investment' is defined widely in proposed section 158ZF to include any
mode of application of money or other property for the purpose of gaining a return
(whether by way of income, capital gain or any other form of return).
This will allow for the notional transfer of some Telstra shares to the Communications
Fund, with ownership of the shares remaining with the Commonwealth until they were
sold.
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A determination by the responsible Ministers under proposed subsection 158ZK(1) will
have effect accordingly and will be irrevocable (proposed subsections 158ZK(3) and
(4)).
Such a determination will not prevent the realisation of the financial asset or assets
covered by the determination in accordance with proposed section 158ZP (proposed
subsection 158ZK(5)). The term `realise' is defined in proposed section 158ZF to
include redeem or dispose of.
Such a determination will be administrative in character and will therefore not be a
legislative instrument for the purposes of the Legislative Instruments Act 2003
(proposed subsection 158ZK(6)).
To avoid doubt, proposed subsection 158ZK(7) provides that a determination will not
be a Telstra sale scheme for the purposes of the Telstra Corporation Act 1991.
Proposed section 158ZL of the Consumer Protection Act - Grant of financial
assistance to a State
Proposed section 158ZL of the Consumer Protection Act provides that if the
Communications Fund Special Account is to be debited for the purpose of making a
grant of financial assistance to a State (defined in proposed section 158ZF to include
the Australian Capital Territory and the Northern Territory), and the grant is covered
by proposed paragraph 158ZI(c) of the Consumer Protection Act, the terms and
conditions on which that assistance is granted is to be set out in a written agreement
between the Commonwealth and the State or Territory.
Such a grant may be made for:
(a) the purpose of implementing the Commonwealth Government's response to any
recommendations to the Government contained in a report of the proposed
Regional Telecommunications Independent Review Committee on the adequacy
of telecommunications services in regional, rural and remote parts of Australia;
or
(b) a purpose incidental or ancillary to this purpose e.g. to cover administrative costs
in connection with implementing the Government's response to the Committee's
report (see proposed paragraphs 158ZI(a) and (b) of the Consumer Protection
Act).
Such an agreement may be entered into by the Secretary of the Department responsible
for the Consumer Protection Act (currently the Department of Communications,
Information Technology and the Arts) or the Secretary's delegate (in accordance with
proposed section 158ZN of the Consumer Protection Act) on behalf of the
Commonwealth.
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Proposed section 158ZM of the Consumer Protection Act - Grant of financial
assistance to a person other than a State
Proposed section 158ZM of the Consumer Protection Act provides that if the
Communications Fund Special Account is to be debited for the purpose of making a
grant of financial assistance to person other than a State or Territory, and the grant is
covered by proposed paragraph 158ZI(c) of the Consumer Protection Act, the terms
and conditions on which that assistance is granted is to be set out in a written
agreement between the Commonwealth and the person.
Paragraph 22(1)(a) of the Acts Interpretation Act 1901 defines `person' to include a
body politic or a body corporate (such as a company or an incorporated association) as
well as an individual.
Such a grant may be made for:
(a) the purpose of implementing the Commonwealth Government's response to any
recommendations to the Government contained in a report of the proposed
Regional Telecommunications Independent Review Committee on the adequacy
of telecommunications services in regional, rural and remote parts of Australia;
or
(b) a purpose incidental or ancillary to this purpose e.g. to cover administrative costs
in connection with implementing the Government's response to the Committee's
report (see proposed paragraphs 158ZI(a) and (b) of the Consumer Protection
Act).
Such an agreement may be entered into by the Secretary of the Department of
Communications, Information Technology and the Arts, or the Secretary's delegate (in
accordance with proposed section 158ZN of the Consumer Protection Act) on behalf
of the Commonwealth.
Proposed section 158ZN of the Consumer Protection Act - Delegation by
Secretary of the Department
Proposed subsection 158ZN(1) of the Consumer Protection Act enables the Secretary
of the Department of Communications, Information Technology and the Arts to
delegate to any Senior Executive Service (SES) employee, or acting SES employee, as
defined in section 7 of the Public Service Act 1999 - see section 17AA of the Acts
Interpretation Act 1901) in the Department all or any of the powers conferred on the
Secretary by proposed Division 2 of Part 9C of the Consumer Protection Act. The
relevant powers are in proposed subsections 158ZL(3) and 158ZM(3) of the
Consumer Protection Act.
Proposed subsection 158ZN(2) provides that when exercising the power delegated
under proposed subsection 158ZN(1), the delegate will be subject to the written
directions of the Secretary.
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Division 3 - Investment of the Communications Fund
Proposed section 158ZO of the Consumer Protection Act - Investment of the
Fund
Proposed subsection 158ZO(1) provides that the responsible Ministers (defined in
proposed section 158ZF to mean the Minister for Finance and Administration and the
Minister for Communications, Information Technology and the Arts) may authorise the
investment of money standing to the credit of the Communications Fund Special
Account in any financial asset.
The term `financial asset' is defined widely in proposed section 158ZF and will include
shares, debentures, interests in a managed investment scheme, units of such shares,
debentures or interests and other intangible assets specified in regulations under the
Consumer Protection Act.
Proposed subsections 158ZO(2) and (3) provide that investments under proposed
subsection 158ZO(1) are to be made in the name of the Commonwealth and are taken
to be investments of the Communications Fund.
Proposed subsection 158ZO(4) provides that the Consolidated Revenue Fund is
appropriated as necessary for the purposes of proposed section 158ZO.
Proposed subsection 158ZO(5) provides that the responsible Ministers are not able to
authorise the acquisition of a derivative, such as a futures contract under section
158ZO. Proposed section 158ZQ provides for the responsible Ministers to be able to
authorise the acquisition of a derivative for certain purposes.
Proposed section 158ZP of the Consumer Protection Act - Management of
investments of the Fund
Proposed subsection 158ZP(1) provides that income derived from an investment of the
Communications Fund (such as a share dividend) is to be credited to the
Communications Fund Special Account.
Proposed subsection 158ZP(2) provides that a return of capital, or any other financial
distribution, relating to an investment of the Communications Fund is to be credited to
the Communications Fund Special Account.
Proposed subsection 158ZP(3) provides that expenses of an investment of the
Communications Fund are to be debited from the Communications Fund Special
Account.
Proposed subsection 158ZP(4) enables the responsible Ministers, currently the
Minister for Finance and Administration and the Minister for Communications,
Information Technology and the Arts to authorise the realisation of an investment of
the Communications Fund. The term `realise' is defined in proposed section 158ZF to
include redeem or dispose of.
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Proposed subsection 158ZP(5) provides that upon realisation of an investment of the
Communications Fund, the proceeds of the investment are to be credited to the
Communications Fund Special Account.
Proposed subsection 158ZP(6) provides that at any time before an investment of the
Communications Fund matures, the responsible Ministers, currently the Minister for
Finance and Administration and the Minister for Communications, Information
Technology and the Arts may authorise the re-investment of the proceeds upon
maturity in an investment with the same entity (such as the rollover of a debenture).
The proceeds of investment of the original investment will not become public money
when the investment matures (and will therefore not be required to be dealt with in
accordance with the Financial Management and Accountability Act 1997) because the
proceeds will not be received by or on behalf of the Commonwealth.
Proposed subsection 158ZP(7) provides that the Consolidated Revenue Fund is
appropriated as necessary for the purposes of proposed section 158ZP.
Proposed subsection 158ZP(8) provides that section 39 of the Financial Management
and Accountability Act 1997 (FMA Act) does not apply to an investment in the
Communications Fund. Section 39 of the FMA Act authorises the Minister for
Finance and Administration to invest public money only in a limited range of
investments like Government bonds and bank deposits. By contrast, proposed section
158ZO of the Consumer Protection Act provides a mechanism for the Minister for
Finance and Administration and the Minister for Communications, Information
Technology and the Arts to authorise the investment of money standing to the credit of
the Communications Fund Special Account in any financial asset.
Proposed section 158ZQ of the Consumer Protection Act - Derivatives
Proposed subsection 158ZQ(1) of the Consumer Protection Act allows the responsible
Ministers, currently the Minister for Finance and Administration and the Minister for
Communications, Information Technology and the Arts to authorise the acquisition of
a derivative (such as a futures contract) for the purpose of:
(a) enhancing or protecting the value of an investment of the Communications Fund
(other than a derivative); or
(b) enhancing or protecting the return on an investment of the Communications
Fund (other than a derivative).
Proposed subsections 158ZQ(2) and (3) provide that a derivative acquired under
proposed section 158ZQ(1) will be taken to be an investment of the Communications
Fund and will be held in the name of the Commonwealth.
Proposed subsection 158ZQ(4) provides that the cost of acquiring a derivative under
proposed subsection 158ZQ(1) is to be debited from the Communications Fund
Special Account.
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Proposed subsection 158ZQ(5) provides that the Consolidated Revenue Fund is
appropriated as necessary for the purposes of this section.
Proposed section 158ZR of the Consumer Protection Act - Bonus shares etc.
Proposed section 158ZR of the Consumer Protection Act deals with the issue of bonus
shares, the issue of shares as part of a takeover offer or demerger, in specie
distributions or other financial assets obtained by the Commonwealth as a result of its
holding of an investment of the Communications Fund or the exercise of any rights or
powers conferred on the Commonwealth in its capacity as the holder of an investment
of the Fund. If the Commonwealth becomes the holder of such a financial asset in
these circumstances, that asset will be taken to be an investment of the
Communications Fund.
Item 2 - Insertion of new section 159B of the Consumer Protection Act -
Connect Australia package
Item 2 inserts a new provision of the Consumer Protection Act to acknowledge the
Commonwealth Government's intention that, in addition to the Communications Fund
established under Schedule 1 to the Bill, it will introduce legislation to commit $1.1
billion for the Connect Australia package that was announced by the Minister for
Communications, Information Technology and the Arts on 17 August 2005.
The Connect Australia package comprises:
(a) the $878 million Broadband Connect program to assist residential customers,
small business and not-for-profit organisations in regional, rural and remote
areas of Australia to access broadband at affordable prices;
(b) the $113 million Clever Networks program, supplemented by funding from
State and Territory Governments and private investment, to provide for
strategic investments in new broadband infrastructure and to enhance the
delivery of government services;
(c) a further $30 million for the Mobile Connect program to expand the satellite
phone handset subsidies scheme, and for terrestrial mobile coverage where
operating costs can be recovered and investment is commercially viable; and
(d) the $90 million Backing Indigenous Ability package to deliver Community
Phones, Internet and videoconferencing in remote indigenous communities and
to improve indigenous radio and television services.
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Schedule 2--Independent reviews of regional
telecommunications etc.
Telecommunications (Consumer Protection and Service Standards) Act 1999
Items 1 to 3 - Insertion of definitions of `RTIRC', `RTIRC Chair' and `RTIRC
member' in subsection 5(2) of the Consumer Protection Act
Items 1 to 3 insert definitions in subsection 5(2) of the Consumer Protection Act for
the purposes of proposed Part 9B of that Act (see item 4). This new Part will provide
for regular independent reviews of regional telecommunications by the Regional
Telecommunications Independent Review Committee (RTIRC).
Item 4 - Insertion of new Part 9B of the Consumer Protection Act - Independent
reviews of regional telecommunications
Division 1--Independent reviews of regional telecommunications
Proposed section 158P of the Consumer Protection Act - Reviews of regional
telecommunications to be conducted by the RTIRC
Proposed subsection 158P(1) of the Consumer Protection Act provides that the
proposed Regional Telecommunications Independent Review Committee (RTIRC) will
be required to review the adequacy of telecommunications services in regional, rural
and remote parts of Australia.
The term `telecommunications services' is defined in proposed subsection 158P(10) to
include carriage services (as defined by the Telecommunications Act) and services
provided by means of carriage services. A `carriage service' is defined in the
Telecommunications Act to mean a service for carrying communications by means of
guided or unguided electromagnetic energy. The reference to communications by
means of `guided electromagnetic energy' includes communication by means of a wire,
cable, waveguide or other physical medium used, or for use, as a continuous artificial
guide for or in connection with the carrying of the communication. The reference to
communications by means of `unguided electromagnetic energy' includes
communications by means of radiocommunication.
The references to `Australia' in proposed subsections 158P(1) and (2) of the
Consumer Protection Act will not include the eligible Territories as defined in section 7
of the Telecommunications Act (proposed subsection 158P(10)). This means that
`Australia' will not include the Territory of Christmas Island, the Territory of Cocos
(Keeling) Islands or on any other external Territory prescribed for the purposes of
section 10 of the Telecommunications Act. (No other external Territory has been
prescribed for the purposes of section 10.)
The references to `Australia' will also not include the `adjacent areas' of the States, the
Territory of Christmas Island and the Territory of Cocos (Keeling) Islands where the
exploration of the continental shelf of Australia takes place or resources of the
15
continental shelf are exploited eg. on an oil rig in the continental shelf (proposed
subsection 158P(9)).
Proposed subsection 158P(2) provides that in determining the adequacy of such
services, the RTIRC will be required to have regard to whether people in regional,
rural and remote parts of Australia have equitable access to telecommunications that
are significant to people in those parts of Australia and are currently available in one or
more urban parts of Australia. This will ensure that there is an independent assessment
of the state of important telecommunications services, including the relative availability
and affordability of such services and the demand for them.
Proposed subsection 158P(3) provides that the first review must start before the end of
2008 or such earlier time as the Minister for Communications, Information Technology
and the Arts determines following consultation with relevant Ministers specified in
subsection 158P(7). The relevant Ministers are the Prime Minister, the Treasurer, the
Minister for Finance and Administration and the Minister for Transport and Regional
Services.
Proposed subsection 158P(4) provides that each subsequent review will start as soon
as practicable after the day notified to the RTIRC by the Minister in relation to that
review. This day will be within 3 years after the completion of the previous review.
The RTIRC will be required to ensure that in conducting its review there is provision
for public consultation, including consultation with people in regional, rural and remote
parts of Australia (proposed subsection 158P(5)). This will ensure that there is an
opportunity for regional and rural consumers and communities to express their views
on their telecommunications needs and priorities.
The RTIRC will also be required to ensure that in conducting its review the RTIRC
has regard to any policies of the Commonwealth government notified to the RTIRC by
the Minister for Communications, Information Technology and the Arts (proposed
paragraph 158P(6)(a)). For example, the Minister may notify the RTIRC of the need,
in conducting its review, to have regard to the existing legal obligations of carriers,
including the obligation to comply with interception capability obligations under Parts
13 to 15 of the Telecommunications Act 1997.
The RTIRC will also be able to have regard to other relevant matters (proposed
paragraph 158P(6)(b)).
Proposed subsection 158P(8) provide that the Minister's determination under
proposed paragraph 158P(3)(b) will be a legislative instrument for the purposes of the
Legislative Instruments Act 2003. The Minister's determination will therefore be
required to be registered on the Federal Register of Legislative Instruments and tabled
in Parliament. However, the Minister's determination will not be subject to
Parliamentary disallowance. As the Minister, following consultation with relevant
Ministers, will be in the best position to decide whether the first review should
commence at a time that is earlier than the end of 2008.
16
Proposed section 158Q of the Consumer Protection Act - Report of review
The RTIRC will be required to prepare a report of its review under proposed section
158P and give it to the Minister (proposed subsection 158Q(1)).
The Minister will be required to arrange for copies of the report to the tabled in each
House of Parliament within 15 sitting days of that House after receiving the report
(proposed subsection 158Q(2)).
The RTIRC's report may set out recommendations to the Commonwealth Government
(proposed subsection 158Q(3)). This will ensure that independent advice is provided
to the Commonwealth on whether action should be taken to improve equitable access
to telecommunications services in regional, rural and remote areas of Australia.
However, in formulating a recommendation that the Commonwealth should take
particular action, the RTIRC will be required to assess the costs and benefits of that
action (proposed subsection 158Q(4)). This will ensure that the RTIRC undertakes a
cost/benefit analysis of any proposed government intervention in relation to improving
access in particular areas before making a recommendation to the Commonwealth
Government.
The RTIRC will also be able to take other matters into account in formulating a
recommendation (proposed subsection 158Q(5)).
If the RTIRC's report contains recommendations that the Commonwealth should take
particular action then, as soon as practicable after receiving the report, the Minister
will be required to arrange the preparation of a statement setting out the
Commonwealth's response to the recommendations (proposed paragraph 158Q(6)(a)).
It is intended that the statement would identify the most appropriate policy
mechanisms to achieve the recommended outcomes, funding and timeframe.
In addition, if the RTIRC's report contains recommendations that the Commonwealth
should take particular action, the Minister will be required to arrange for copies of the
statement setting out the Commonwealth's response to the recommendations to be
tabled in each House of Parliament within 6 months after receiving the report
(proposed paragraph 158Q(6)(b)).
This will ensure that the Commonwealth responds to recommendations contained in a
report of the RTIRC and justifies its approach to regional, rural and remote
communities.
Proposed subsection 158Q(7) makes it clear that the Commonwealth's response to the
recommendations of the RTIRC may consider the views of industry and affected
stakeholders, including industry participants, the Australian Communications and
Media Authority, the Australian Competition and Consumer Commission, the
Telecommunications Industry Ombudsman, consumer groups and such other persons
as the Minister considers relevant.
17
Division 2--Regional Telecommunications Independent Review Committee
(RTIRC)
Proposed section 158R of the Consumer Protection Act - Establishment of the
RTIRC
Proposed section 158R establishes the expert committee to be known as the Regional
Telecommunications Independent Review Committee.
Proposed section 158S of the Consumer Protection Act - Functions of the
RTIRC
Proposed section 158S provides that the RTIRC will have the functions that are
conferred on it by proposed Part 9B of the Consumer Protection Act.
Proposed section 158T of the Consumer Protection Act - Membership of the
RTIRC
Proposed section 158T deals with the membership of the RTIRC.
The RTIRC will consist of a Chair and at least 2 other members (proposed subsection
158T(1)).
The RTIRC Chair and members will be required to have knowledge of, or experience
in matters affecting regional, rural and remote parts of Australia or telecommunications
(proposed subsection 158T(2)).
The RTIRC Chair and a majority of other RTIRC members will be required to be
independent from the Commonwealth and Commonwealth authorities (proposed
subsections 158T(3) and (4)).
To remove the potential for competitive unfairness in having an industry dominated
RTIRC, proposed subsection 158T(5) provides for the full exclusion of carrier or
carriage service representation on the RTIRC. It also requires the Minister to ensure
that no RTIRC member is an officer or employee of a related body corporate (such as
a subsidiary or holding company of a carrier or carriage service provider).
The reference to `Australia' in proposed subsection 158T(2) of the Consumer
Protection Act will not include the eligible Territories as defined in section 7 of the
Telecommunications Act (proposed subsection 158T(7)). This means that `Australia'
will not include the Territory of Christmas Island, the Territory of Cocos (Keeling)
Islands or on any other external Territory prescribed for the purposes of section 10 of
the Telecommunications Act. (No other external Territory has been prescribed for the
purposes of section 10.)
The reference to `Australia' will also not include the `adjacent areas' of the States, the
Territory of Christmas Island and the Territory of Cocos (Keeling) Islands where the
exploration of the continental shelf of Australia takes place or resources of the
18
continental shelf are exploited eg. on an oil rig in the continental shelf (proposed
subsection 158T(6)).
Proposed section 158U of the Consumer Protection Act - Appointment of
RTIRC members
The RTIRC members are to be appointed by the Minister for Communications,
Information Technology and the Arts by written instrument (proposed subsection
158U(1)).
An RTIRC member will hold office for a period of up to 4 years specified in the
instrument of appointment (proposed subsection 158U(2)).
An RTIRC member will hold office on a part-time basis (proposed subsection
158U(3)).
Subsection 33(4A) of the Acts Interpretation Act 1901 would allow the Minister to
re-appoint an RTIRC member of a further period of up to 4 years, with further
re-appointments possible after the expiration of that period.
Proposed section 158V of the Consumer Protection Act - Acting
appointmentsRTIRC Chair
The Minister for Communications, Information Technology and the Arts will be able to
appoint an RTIRC member to act as the RTIRC Chair during a vacancy in the office of
the Chair or during any period, or during all periods, when the Chair is absent from
duty or from Australia or is, for any reason, unable to perform the duties of the office
(proposed subsection 158V(1)).
A defect or irregularity in connection with a person's appointment to act under
proposed section 158V will not invalidate anything done by the person when
purporting to act under the appointment. Nor will certain other technicalities viz. the
occasion for the appointment not having arisen, the appointment ceasing to have effect
and the occasion for the person to act not having arisen or having ceased (proposed
subsection 158V(2)).
Section 33A of the Acts Interpretation Act 1901 contains further provisions dealing
with acting appointments which are relevant to acting appointments made under
proposed section 158V. The effect of these provisions is that:
(a) an acting appointment may be expressed to have effect only in the
circumstances specified in the instrument of appointment;
(b) the appointer may determine the terms and conditions of the appointment,
including remuneration and allowances and terminate the appointment at any
time;
(c) where the appointment is to act in a vacant office, the appointee must not
continue to act in the office for more than 12 months;
19
(d) where the appointee is acting in an office other than a vacant office and the
office becomes vacant while the appointee is acting then, unless his or her
instrument of appointment provides otherwise, the appointee may continue to
act until the appointer otherwise directs, the vacancy is filled or a period of 12
months from the day the vacancy ends, whichever happens first;
(e) the appointment ceases to have effect if the appointee resigns in writing
delivered to the appointer;
(f) while the appointee is acting in the office, he or she has and may exercise all the
powers, and is to perform all the functions and duties, of the holder of the
office and the Consumer Protection Act and any other legislation will apply in
relation to the appointee as if the appointee were the holder of the office.
Proposed section 158W of the Consumer Protection Act - Procedures
Proposed section 158W deals with how the procedures of the RTIRC may be
prescribed.
Regulations made under the Consumer Protection Act will be able to prescribe the
procedures to be followed at or in relation to meetings of the RTIRC, including
matters relating to the convening of meetings, the required quorum at meetings, the
member who is to preside in the absence of the Chair and how questions arising at
meetings are to be decided (proposed subsection 158W(1)).
Resolutions will be able to be passed without the need for a meeting if RTIRC
members agree and determine the method by which members are to indicate agreement
with resolutions. If this occurs, a resolution proposed outside of a meeting will be
deemed to have been passed at a meeting if a majority of RTIRC members agree with
the resolution and all members were informed of the resolution, or reasonable efforts
were made to inform all members of it (proposed subsections 158W(2) and (3)).
Proposed section 158X of the Consumer Protection Act - Disclosure of interests
An RTIRC member who has a material personal interest in a matter being considered
by the RTIRC will be required to disclose the nature of the interest at an RTIRC
meeting as soon as possible after the member becomes aware of relevant facts
pertaining to the interest (proposed subsection 158X(1)).
The member's disclosure is to be recorded in the minutes of the meeting. Unless the
Minister or the RTIRC determines otherwise (in the absence of the member making the
disclosure), the member making the disclosure of a matter will not be able to be
present during any deliberation by the RTIRC about the matter or to take part in any
decision of the RTIRC relating to that matter (proposed subsections 158X(2) and (3)).
20
Proposed section 158Y of the Consumer Protection Act - Remuneration and
allowances
An RTIRC member will be paid the remuneration determined by the Remuneration
Tribunal. If no determination of that remuneration is in operation, the member is to be
paid such remuneration as is prescribed by regulations under the Consumer Protection
Act (proposed subsection 158Y(1)).
An RTIRC member is to be paid such allowances as are prescribed by regulations
under the Consumer Protection Act (proposed subsection 158Y(2)).
Proposed section 158Y has effect subject to the Remuneration Tribunal Act 1973
which provides for the Remuneration Tribunal to conduct inquiries and make
determinations on the remuneration of certain office holders (proposed subsection
158Y(3)).
Proposed section 158Z of the Consumer Protection Act - Leave of absence
The Minister will be able to grant leave of absence (eg. recreation leave) to the RTIRC
Chair on such terms and conditions as to remuneration or otherwise as the Minister
determines (proposed subsection 158Z(1)).
The RTIRC Chair will be able to grant leave of absence to an RTIRC member on such
terms and conditions as to remuneration or otherwise as the RTIRC Chair determines
(proposed subsection 158Z(2)).
Proposed section 158ZA of the Consumer Protection Act - Resignation
Proposed section 158ZA provides that an RTIRC member will be able to resign by
way of a signed letter of resignation to the Minister.
Proposed section 158ZB of the Consumer Protection Act - Termination of
appointment
The Minister will be able to terminate the appointment of an RTIRC member for
misbehaviour or physical or mental incapacity (proposed subsection 158ZB(1)).
The Minister will also be able to terminate the appointment of an RTIRC member if:
(a) the member becomes bankrupt, applies for relief from bankruptcy, enters into
an arrangement with creditors regarding the payment of his or her debts or
assigns all or part of his or her remuneration for the benefit of creditors; or
(b) the member is absent, except on leave of absence granted in accordance with
proposed section 158Z, for 3 consecutive RTIRC meetings; or
(c) a member fails, without reasonable excuse, to comply with proposed section
158X, which requires the disclosure of material personal interests at an RTIRC
meeting (proposed subsection 158ZB(2)).
21
The Minister will also be able to terminate the appointment of the RTIRC Chair or
other RTIRC member if they subsequently breach any of the proposed new rules about
their other employment or occupational responsibilities contained in proposed
subsections 158T(3), (4) and (5) (proposed subsections 158ZB(3) and (4)).
Proposed section 158ZC of the Consumer Protection Act - Other terms and
conditions
Proposed section 158ZC provides that the Minister will be able to determine additional
terms and conditions in relation to an RTIRC member.
Proposed section 158ZD of the Consumer Protection Act - Assistance to RTIRC
The Australian Communications and Media Authority (ACMA), the Australian
Competition and Consumer Commission (ACCC), the Department of
Communications, Information Technology and the Arts and any other Department,
agency or authority of the Commonwealth will be able to assist the RTIRC in the
performance of its functions (proposed subsection 158ZD(1)). Other persons or
organisations would be able to assist the RTIRC to the extent that this was consistent
with their charter.
The assistance may include, but not be limited to, the provision of advice or
information (eg. information and advice available from the ACMA under its regional
data collection and monitoring role) and the making available of resources and facilities
such as secretariat services and clerical assistance (proposed subsection 158ZD(2)).
Proposed subsection 158ZD(3) ensures that the ACMA will be able to conduct an
investigation under Part 26 of the Telecommunications Act or exercise its information-
gathering powers under Part 27 of that Act in connection with providing assistance to
the RTIRC under proposed subsection 158ZD(1).
Schedule 3--Costs of development of consumer-related
industry codes
Schedule 3 inserts a new Division 6A into Part 6 of the Telecommunications Act which
will provide that industry bodies and associations that develop consumer-related
industry codes can be reimbursed by the ACMA for their costs in developing those
codes. Amendments made to the Telecommunications (Carrier Licence Charges) Act
1997 by the Telecommunications (Carrier Licence Charges) Amendment (Industry
Plans and Consumer Codes) Bill 2005 will allow for the costs of development of
consumer-related industry codes to be recouped from the charges imposed on carrier
licences.
22
Telecommunications Act 1997
Item 1 - After Division 6 of Part 6
Proposed Division 6A--Reimbursement of costs of development of consumer-
related industry codes
Item 1 inserts proposed Division 6A after Division 6 in Part 6 of the
Telecommunications Act. Part 6 of the Telecommunications Act deals with industry
codes and industry standards. An industry code is a code developed under Part 6
(section 107). Subsection 117 provides that the ACMA must register an industry
code, by including it on the register of industry codes kept under section 136, if certain
conditions are met. The ACMA may issue a formal warning to a person who is a
participant in the telecommunications industry if the person contravenes an industry
code that is registered (section 122), and the ACMA may also direct a person to
comply with an industry code that is registered and that applies to the person (section
121).
Proposed Division 6A will deal with the reimbursement by the ACMA of certain costs
incurred by industry bodies or associations in developing consumer-related industry
codes.
Proposed section 136A of the Telecommunications Act - Application for
eligibility for reimbursement of costs of development of consumer-related
industry code
Proposed subsection 136A(1) will provide that bodies or associations that propose to
develop certain types of industry codes may apply to the ACMA for a declaration that
the body or association is eligible for reimbursement of the refundable costs that it
incurs in developing the code. The definition of refundable costs is given in proposed
subsection 136E (see below): a refundable cost will be a cost incurred by a body or
association in developing a consumer-related industry code, other than a cost that is
specified by the ACMA. This will mean that the ACMA can decide that certain costs,
or types of costs, that might be incurred by an industry body or association in
developing a consumer-related industry code are not refundable under the scheme
established by proposed Division 6A. This will provide a means of ensuring that only
certain costs that are reasonably incurred as a part of the code development process
may be reimbursed. For example, the ACMA could determine that some or all of the
costs to industry participants of having staff participate in the code development
process should not be refundable. Similarly, the ACMA could determine that costs
incurred by representatives of consumer bodies in participating in code working groups
run by the industry body may not be refundable if funding has been provided separately
to these bodies through grants made by the Commonwealth under subsection 593(1) of
the Telecommunications Act 1997 or other Commonwealth programs.
The ACMA could also determine that certain costs are excessive, for example, first-
class airfares or accommodation costs where nightly accommodation exceeds a
specified amount, and would not be refundable costs.
23
The ACMA could also determine that certain overhead costs of the industry body or
association, which would have been incurred regardless of the code development
process, should not be refundable.
Only those codes that deal with consumer-related issues would be eligible for the
reimbursement scheme under new Division 6A. Proposed subsection 136A(1) would
ensure this by providing that a body or association will only be eligible to apply for
reimbursement of its costs in developing an industry code if the industry code:
- applies to participants in a particular section of the telecommunications
industry;
- deals with the telecommunications activities of those participants; and
- deals wholly or mainly with the relationship between carriage service providers
and their retail customers (this takes account of the fact that consumer-related
industry codes may also deal incidentally with some matters that do not relate
to consumers).
Proposed subsection 136A(2) will provide that an application made by an industry
body or association under subsection 136A(1) must be in writing and in accordance
with the form that is approved in writing by the ACMA. In addition, an application
must be accompanied by an estimate of the total of the refundable costs that are likely
to be incurred by the industry body or association in developing the consumer-related
industry code. There must also be a statement breaking down the estimate of costs
into categories of refundable costs.
The amount that an industry body or association gives as the estimate of the total of
the refundable costs it is likely to incur in developing the code would be the maximum
amount that the industry body or association may be reimbursed for its costs in
developing the code (proposed paragraph 136C(1)(e)).
Proposed subsection 136A(3) would provide that, within 20 days of the application
being made, the ACMA can request an applicant to provide the ACMA with further
information on which to make its decision. If the ACMA requests further information,
it must specify a period within which the further information is required to be given to
the ACMA. Proposed subsection 136A(4) provides that, if the ACMA has requested
further information from an applicant, the ACMA can refuse to consider the
applicant's application until it provides the further information.
These provisions would ensure that the ACMA is able to seek further information from
an industry body or association that makes an application under subsection 136A(1),
and will mean that the ACMA will only be required to consider an application made
under subsection 136A(1) when it is presented with sufficient information to allow it to
consider the application.
Proposed subsection 136A(5) would provide that, for the purposes of this new section,
business day means a day on which the ACMA is open for business in the Australian
Capital Territory and Victoria. This definition is necessary to ensure that days on
which the ACMA is not open for business do not count towards the 20 days during
which the ACMA may request further information under proposed subsection
136A(3).
24
Proposed section 136B of the Telecommunications Act - Declaration of eligibility
for reimbursement of costs of development of consumer-related industry code
Proposed subsection 136B(1) will provide that, where a body or association makes an
application to the ACMA under proposed subsection 136A(1) for a declaration that it
is eligible for the reimbursement of its refundable costs in developing a consumer-
related industry code, the ACMA must make the declaration, if it is satisfied that:
- the body or association represents the section of the telecommunications
industry to which the proposed code would apply; and
- the code will deal wholly or mainly with the relationship between carriage
service providers and their retail customers (this takes account of the fact that
consumer-related industry codes may also deal incidentally with some matters
that do not relate to consumers); and
- the process for developing the code, as outlined in the application given to the
ACMA, is likely to ensure that the interests of those retail customers are
adequately represented in relation to the development of the code; and
- the total of the refundable costs that are likely to be incurred by the industry
body, as set out in the estimate given to the ACMA along with the application,
is reasonable.
Proposed subsection 136B(2) provides that it is only when the ACMA is satisfied of
these four matters that it may make a declaration.
Obtaining a declaration is an important part of the scheme that is established by
proposed Division 6A for the reimbursement of the costs of industry bodies or
associations in developing consumer-related codes. Without being given a declaration,
an industry body or association is not eligible to be reimbursed for its costs in
developing a code. Proposed section 136B therefore requires the ACMA to make a
declaration if it is satisfied that the key elements of a consumer-related code will be
met, being:
- development by a representative organisation;
- a focus on the relationship with the customer;
- a process that includes representation of the interests of customers; and
- reasonable development costs.
Proposed subsection 136B(3) provides that declarations made by the ACMA under
proposed subsection 136B(1) are irrevocable and remain in force for two years. As a
result of this provision and proposed subsection 136C(1), if an industry body or
association is declared by the ACMA to be eligible for the reimbursement of its
refundable costs in developing a consumer-related industry code, then that industry
body or association has two years within which to give the ACMA a copy of the code
for registration under section 117 of the Telecommunications Act.
Declarations made by the ACMA under proposed subsection 136B(1) would not be
legislative instruments for the purposes of the Legislative Instruments Act 2003 (LIA)
(proposed subsection 136B(4)). This is because a decision to make a declaration
would be an administrative decision that would be reviewable under the Administrative
Decisions (Judicial Review) Act 1977 and therefore the declaration would not be a
25
legislative instrument (see section 7 of the LIA and regulation 7 and Item 21 of Part 1
of Schedule 1 to the Legislative Instruments Regulations 2004).
Proposed section 136C of the Telecommunications Act - Reimbursement of costs
of developing consumer-related industry codes
Proposed subsection 136C(1) will provide that, where an industry body or association
has made an application under section 136A, then the ACMA must give a written
notice to the industry body or association determining that the industry body or
association is entitled to be paid a specified amount as reimbursement for its costs in
developing a consumer-related industry code, if each of the following conditions is
met:
- the ACMA had made a declaration (under new section 136B) that the body or
association was eligible for reimbursement of refundable costs incurred by the
body or association in developing the code;
- the industry body or association has given the ACMA a copy of the code for
registration under section 117;
- at the time the industry body or association gave the ACMA a copy of the code
for registration, the declaration made by the ACMA under new section 136B
was still in force (see above, new subsection 136B(3));
- the ACMA is satisfied that that the code deals wholly or mainly with the
relationship between carriage service providers and their retail customers (this
provision takes account of the fact that consumer-related industry codes may
also deal incidentally with some matters that do not relate to consumers);
- the ACMA is satisfied that the process the industry body or association
undertook to develop the code ensured that the interests of retail customers
were adequately represented in relation to the development of the code;
- the copy of the code that was given to the ACMA by the industry body or
association was accompanied by a written statement that itemises the costs that
the industry body or association incurred in developing the code, a written
claim for reimbursement of the costs, an auditor's statement (see below), and a
statement describing the process that the industry body or association
undertook to develop the code; and
- the ACMA is satisfied that each of the costs that is itemised in the statement
given by the industry body or association to the ACMA is eligible to be
refunded, that is, that each of the costs is a refundable cost that was incurred by
the industry body or association in developing the code while the declaration
under new section 136B was in force (see above, new subsection 136B(3)).
In addition to giving the ACMA an itemised statement of its costs in developing the
industry code, an industry body or association that develops a consumer-related
industry code must give the ACMA an auditor's statement. Proposed subparagraph
136C(1)(e)(iii) would require that the ACMA be given a written declaration by an
approved auditor that he or she is of the opinion that the written statement of costs
complies with the approved auditing requirements. For the purposes of this
subparagraph, approved auditor and approved auditing requirements are defined by
proposed subsection 136C(5). That subsection would provide that the ACMA may
make a written determination specifying the persons who are to be approved auditors,
and the requirements that are to be approved auditing requirements. Determinations
26
made under proposed subsection 136C(5) would be given effect by proposed
subsection 136C(6), and would be legislative instruments for the purposes of the LIA
(proposed subsection 136C(7)).
Proposed subsection 136C(2) provides that the specified amount that the ACMA must
pay to the industry body or association would be either the total of the costs that were
incurred by the industry body or association in developing the consumer-related
industry code, or the estimate of the total of the refundable costs that the industry body
or association gave to the ACMA along with its application (proposed subparagraph
136A(2)(c)(i)) - whichever is lower. This would effectively mean that the estimate the
industry body or association gives the ACMA of the total costs it is likely to incur for
development of the industry code would be the cap on the amount that the industry
body or association is able to be reimbursed.
As with the preconditions to the making of a declaration by the ACMA (see above,
proposed section 136B), the preconditions to reimbursement are again designed to
ensure that codes developed under the scheme established by new Division 6A observe
the four key elements of a consumer-related code.
The ACMA must pay the specified amount to the industry body or association within
30 days after the day on which the industry body or association was notified by the
ACMA of its entitlement to be refunded under proposed subsection 136C(1)
(proposed subsection 136C(3)).
Proposed subsection 136C(4) would provide a standing appropriation to allow for
payments to be made to industry bodies or associations under proposed
subsection 136C(1).
Proposed section 136D of the Telecommunications Act - Costs--transactions
between persons not at arm's length
Proposed section 136D would provide a special rule that would apply to costs that are
incurred by an industry body or association in developing a consumer-related industry
code where the parties to the transactions are not at arm's length. An arm's length
transaction is a transaction in which the parties are dealing with each other
independently and neither party is subject to the other's control or influence. Where a
cost is a refundable cost and is incurred through a transaction that is not at arm's
length and the cost is greater than reasonable, then the refundable cost would be taken
to be the amount that would have been reasonable if the parties were at arm's length.
Proposed section 136E of the Telecommunications Act - Refundable cost
Proposed section 136E will provide for the definition of the term refundable cost that
is used in new Division 6A. A refundable cost incurred by a body or association is a
cost that is incurred by the body or association in developing the code, other than a
cost that is specified by the ACMA in a written determination made under subsection
136E(1). New subsection 136E(2) provides that determinations made by the ACMA
under new subsection 136E(1) are legislative instruments for the purposes of the LIA.
27
The effect of new section 136E is that the ACMA can provide that certain costs, or
types of costs, that are or might be incurred by an industry body that develops a
consumer-related industry code are not able to be reimbursed under the scheme
established by new Division 6A.
Examples of the costs or categories of costs that the ACMA may determine not to be
refundable are set out in the explanatory remarks in relation to new section 136A. It is
anticipated that stakeholders will be consulted on the contents of any determination
made by the ACMA under new section 136E.
Schedule 4--Other amendments
Telstra Corporation Act 1991
Item 1 - Insertion of proposed section 8AKA of the Telstra Corporation Act -
Authorisation of borrowingissue of sale-scheme hybrid securities
Item 1 inserts proposed section 8AKA in the Telstra Corporation Act 1991. This
provides that to the extent to which the issue of sale-scheme hybrid securities under a
Telstra sale scheme involves a borrowing of money by the Commonwealth, the
borrowing is authorised.
This will ensure that section 37 of the Financial Management and Accountability Act
1997 (FMA Act) is complied with. Section 37 of the FMA Act provides that an
agreement for the borrowing of money by the Commonwealth is of no effect unless the
borrowing is authorised by an Act. Proposed section 8AKA provides the required
authorisation.
Items 2 and 3 - Amendment of subsection 8AL(2) of the Telstra Corporation Act
Subsection 8AL(1) of the Telstra Corporation Act 1991 provides an appropriation for
the costs, expenses and other obligations incurred by the Commonwealth in connection
with carrying out a Telstra sale scheme. Subsection 8AL(2) gives examples of the
costs and expenses that are covered by subsection 8AL(1).
Item 3 adds further examples of the costs, expenses and obligations referred to in
subsection 8AL(1). These include:
calls on guarantees given by the Commonwealth (enabling the Commonwealth to
guarantee borrowings by the hybrid-security issuer company); and
obligations to make payments of amounts in relation to sale-scheme hybrid
securities issued by the Commonwealth (including, but not limited to, payments of
interest).
Item 2 makes an amendment consequential on item 3.
Item 4 - Repeal of subsection 8AL(3) of the Telstra Corporation Act
28
Subsection 8AL(1) of the Telstra Corporation Act provides an appropriation to the
extent necessary for the purpose of the payment or discharge of the costs, expenses
and other obligations incurred by the Commonwealth in connection with the
formulation, entering into, or carrying out, of a Telstra sale scheme.
Section 53 of the Constitution provides that a proposed law appropriating revenue or
moneys shall not `originate in the Senate'. Item 19 of Schedule 1 to the Telstra
(Transition to Full Private Ownership) Bill 2005, which was introduced in the Senate,
therefore inserted subsection 8AL(3) which temporarily `switched off' the
appropriation in subsection 8AL(1).
Item 4 repeals subsection 8AL(3) with the result that the appropriation in subsection
8AL(1) will be `switched on' again following the passage and Royal Assent of this Bill
and the Telstra (Transition to Full Private Ownership) Bill 2005 (see item 4 of the table
in subclause 2(1) of the Bill).
Item 5 - Repeal of subsection 8AS(5) of the Telstra Corporation Act
Subsection 8AS(3) of the Telstra Corporation Act provides an appropriation for the
purposes of a payment to Telstra or a Telstra Board member to reimburse expenses
incurred in giving assistance to the Commonwealth in connection with a Telstra sale
scheme.
Section 53 of the Constitution provides that a proposed law appropriating revenue or
moneys shall not `originate in the Senate'. Item 23 of Schedule 1 to the Telstra
(Transition to Full Private Ownership) Bill 2005, which was introduced in the Senate,
therefore inserted subsection 8AS(5) which temporarily `switched off' the
appropriation in subsection 8AS(3).
Item 5 repeals subsection 8AS(5) with the result that the appropriation in subsection
8AS(3) will be `switched on' again following the passage and Royal Assent of this Bill
and the Telstra (Transition to Full Private Ownership) Bill 2005 (see item 4 of the table
in subclause 2(1) of the Bill).
Item 6 - Repeal of subsection 8BA(4) of the Telstra Corporation Act
Subsection 8BA(3) of the Telstra Corporation Act provides an appropriation for the
payment of compensation for any acquisition of property otherwise than on just terms
as the result of a Telstra sale scheme.
Section 53 of the Constitution provides that a proposed law appropriating revenue or
moneys shall not `originate in the Senate'. Item 29 of Schedule 1 to the Telstra
(Transition to Full Private Ownership) Bill 2005, which was introduced in the Senate,
therefore inserted proposed subsection 8BA(4) which temporarily `switched off' the
appropriation in subsection 8BA(3).
Item 6 repeals subsection 8BA(4) with the result that the appropriation in subsection
8BA(3) will be `switched on' again following the passage and Royal Assent of this Bill
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and the Telstra (Transition to Full Private Ownership) Bill 2005 (see item 4 of the table
in subclause 2(1) of the Bill).
Item 7 - Amendment of subsection 8BUA(1) of the Telstra Corporation Act
Subsection 8BUA(1) of the Telstra Corporation Act requires Telstra to ensure that at
least 2 of its directors have knowledge of, or experience in, the communications needs
of regional areas of Australia.
Item 7 replaces the reference in subsection 8BUA(1) to `regional areas' with a
reference to `regional, rural or remote areas' for consistency with the requirements in
proposed Part 9B of the Consumer Protection Act dealing with independent reviews of
telecommunications services in regional, rural and remote parts of Australia.