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2004-2005
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
TELECOMMUNICATIONS LEGISLATION AMENDMENT
(FUTURE PROOFING AND OTHER MEASURES) BILL 2005
REVISED EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for
Communications, Information Technology and the Arts,
Senator the Hon. Helen Coonan)
THIS EXPLANATORY MEMORANDUM TAKES ACCOUNT OF AMENDMENTS MADE BY THE HOUSE
OF REPRESENTATIVES
TO THE BILL AS INTRODUCED
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 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 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.
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.
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.
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.
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 provides that
the sum of $2 billion in cash is to be credited to the Communications Fund
Special Account (the Account). The Account be credited on the first
business day after the later of:
(a) the day on which this Bill receives Royal Assent; and
(b) the day on which the Telstra (Transition to Full Private Ownership)
Bill 2005 receives Royal Assent.
Proposed subsection 158ZJ(3) defines 'business day' to mean a day that is
not a Saturday, a Sunday or a public holiday in the Australian Capital
Territory.
Proposed subsection 158ZJ(2) provides that the sum of $2 billion in cash
will not be credited to the Account if the Telstra (Transition to Full
Private Ownership) Bill 2005 does not pass the Parliament and receive Royal
Assent.
The sum of $2 billion will be an initial deposit to the Account. The
balance of the Communications Fund may exceed $2 billion as a result of
future investment growth.
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.
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.
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.
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.
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.
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.
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 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.
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.
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 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
appointments(RTIRC 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;
(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)).
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)).
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.
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.
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).
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 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 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.
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 borrowing(issue 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
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 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.
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