Details of the Financial Framework (Supplementary Powers) Amendment

(Health and Aged Care Measures No. 1) Regulations 2022

 

Section 1 - Name

 

This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Health and Aged Care Measures No. 1) Regulations 2022.

 

Section 2 - Commencement

 

This section provides that the Regulations commence on the day after registration on the Federal Register of Legislation.

 

Section 3 - Authority

 

This section provides that the Regulations are made under the Financial Framework (Supplementary Powers) Act 1997.

 

Section 4 - Schedules

 

This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 are amended as set out in the Schedule to the Regulations.

 

Schedule 1 - Amendments

 

Financial Framework (Supplementary Powers) Regulations 1997

 

Item 1 - In the appropriate position in Part 4 of Schedule 1AB (table)

 

This item adds a new table item to Part 4 of Schedule 1AB to establish legislative authority for government spending on an activity administered by the Department of Health and Aged Care (the department).

 

New table item 557 establishes legislative authority for government spending on the
Co-operative and Mutual Enterprises (CMEs) Support Program (the program), which aims to support CMEs to provide aged care, disability care, veterans' care and primary and allied healthcare.

 

As part of the Australian Government's commitment to the Aged Care Workforce Action Plan: 2022-2025 (www.health.gov.au/resources/publications/aged-care-workforce-action-plan-2022-2025), funding of up to $6.9 million over three years from 2022-23 will be provided to the Business Council of Co-operatives and Mutuals (BCCM) for the staged rollout of the program nationally to increase the number of, and expand existing, CMEs across the Australian social care sector.

 

BCCM is the peak body for co-operatives and mutuals in Australia. Formed in 2013, it unites co-operatives and mutuals with the common objective of increasing awareness of these business models, emphasising the important contribution they make to the economy and local communities.

 

The program is leveraging the expertise of BCCM to raise awareness about the benefits of CME models to help attract investment in areas of need, and facilitate greater innovation in business models across the social care sector. BCCM previously delivered the
Co-operative Farming program (January 2020 to July 2021) that supported the development of new agricultural co-operatives and mutuals and the growth of existing early-stage
co-operatives. With a similar structure to the CMEs Support Program, the Co-operative Farming program saw the creation of seven new co-operatives and mutual business formations, with 689 program participants taking part in 58 workshops. Through consultancy, the Co-operative Farming program helped 14 early-stage co-operatives to raise capital, increase manufacturing capacity, create more jobs and improve governance, and other business capacity.

 

The program will aim to promote the development of new CME business models in social care. CMEs are organisations that are owned and run by their members, such as consumers, service providers, employees, or people in the local community to provide services across the social care sector. Having more CMEs in the social care sector will help to address critical care workforce issues (such as employee attraction and retention and skill development and training), enhance consumer choice and control, and increase access to quality care services. Increasing opportunities for workers to become owners of the business they work in creates more incentives to be more engaged with and personally invested in business success. Employee members have more control over their own remuneration, work conditions, and skills and training needs which will address some of the current workforce issues.

 

The program will aim to enable the delivery of specialised care services and care delivery in thin markets including regional, rural and remote areas. Funding will:

• support the establishment of up to seven new CME start-up projects in social care (to be agreed with the department) through the provision of strategic, business, finance and legal advice to help providers, workers, individuals and communities form sustainable member-owned enterprises. Projects could include the establishment of a CME model to deliver aged care, disability care, veterans' care and primary and allied healthcare, and mental health (including psychosocial supports) in rural areas, establishment of a nurse-led, self-managed team supported by a member owned platform and co-operative housing solutions building on principles of Specialist Disability Accommodation and Supported Independent Living;
• support up to six additional projects that will help to grow existing CMEs through the provision of strategic, business, finance and legal advice. Projects could include supporting existing employee owned co-operatives in disability care and community based aged care to scale up into priority areas to support independent living in regional markets, such as mental health services; and supporting Aboriginal and Torres Strait Islander owned home care service co-operatives;
• develop a member-owned digital platform, which will be an access point for connecting care givers (workers) with care receivers (participants, consumers and carers). It will provide a technology solution to support the business processes for Members and Member CMEs. This platform would be co-designed by members and will be able to scale over time as additional CMEs come on board;
• provide a series of roadshows and hybrid online events facilitating exploration of CME business models; and
• undertake independent research and evaluation in each stage of the program to identify best practice and lessons learned to assess the suitability of CMEs in the broader aged care and disability support services sectors. The evaluation will provide insights on opportunities to harness the benefits of CME business models for the care sectors.

 

The program will be delivered over three years, with activities across five work streams, including:

*         Year 1: BCCM scaling stakeholder engagement and multichannel communications strategies, selection of a digital partner and co-design group to support the development of the member-owned digital platform. Through the provision of advice, support two to three projects to establish new CMEs, and one to two projects to scale and grow existing CMEs;

*         Year 2: BCCM will increase stakeholder outreach, execute its investment plan and seed funding and conduct qualitative and quantitative research. Through the provision of advice, support four to five projects to establish new CMEs, and three to four projects to scale and grow existing CMEs; and

*         Year 3: BCCM will hold a National Summit to close the program and showcase
start-ups, capture and share insights and submit the research report, in addition to launching the full member-owned platform prototype onto the market. Through the provision of advice, support up to seven projects to establish new CMEs, and up to six projects to scale and grow existing CMEs.

 

Across the three years, BCCM will also continue its Social Care Community of Practice.

 

The department will deliver the program through a limited tender procurement process, undertaken in accordance with applicable legislative requirements under the Public Governance, Performance and Accountability Act 2013 (PGPA Act), the Commonwealth Procurement Rules (CPRs) and the department's Accountable Authority Instructions. Final spending decisions will be made by the Secretary of the department or an appropriate delegate, in accordance with financial delegations.

 

The department will procure the services from BCCM, as the peak body for co-operatives mutual enterprises to:

• provide strategic, business, financial and legal advice to providers, workers, individuals and communities to support the establishment of up to seven new, and the growth or expansion of up to six existing, CMEs in social care;
• develop a member-owned digital platform, which will be an access point for connecting care givers (workers) with care receivers (participants, consumers and carers);
• develop resources and tools for communities, care providers, workers and individuals to improve awareness and capability-building;
• provide a series of roadshows and hybrid online events facilitating exploration of CME business models; and

*         undertake independent research and evaluation in each stage of the program to identify best practice and lessons learned.

 

Depending on the amount being signed off, departmental delegates (at EL2 and SES level) will be responsible for the decision to enter into an agreement with BCCM. EL2 officers and Senior Executives officers are financial delegates of the Secretary of the department, who have the relevant skills, qualifications and expertise, and are able to perform relevant functions in accordance with the Commonwealth resource management framework.

 

Procurement decisions will be made in accordance with the PGPA Act and the CPRs. Information about the tender and the resultant contracts will be made available on AusTender (www.tenders.gov.au) once contracts are signed.

 

Merits review of decisions made in connection with the funding are not considered appropriate because the funding decision relates to the provision of a one-off payment to a single service provider. The Administrative Review Council has recognised that it is justifiable to exclude merits review in relation to decisions of this nature (see paragraphs 4.16 to 4.19 of the guide, What decisions should be subject to merit review?).

 

BCCM was determined as the only appropriate organisation to be funded to deliver the program due to its experience supporting CMEs in Australia, its national reach, its standing as the peak body for CMEs in Australia, and its expertise in providing business and financial support and legal advice specific to CME business models, including attracting CME friendly capital. The program will also leverage BCCM's previous experience delivering the
Co-operative Farming Program which was supported by the Department of Agriculture, Fisheries and Forestry. Therefore, it is unlikely that review of the decision would result in another service provider being selected and the process of seeking a review application would delay the channelling of funds into the program, which would then delay the establishment of CMEs and the provision of care to participants in the program.

 

The review and audit process undertaken by the Australian National Audit Office also provides a mechanism to review Government spending decisions and report any concerns to the Parliament. These requirements and mechanisms help to ensure the proper use of Commonwealth resources and appropriate transparency around decisions relating to making, varying or administering arrangements to spend relevant money. Further, the right to review under section 75(v) of the Constitution and review under section 39B of the Judiciary Act 1903 may be available. Persons affected by spending decisions would also have recourse to the Commonwealth Ombudsman where appropriate.

 

The department attended the "Action to Empower Roundtable" hosted by BCCM on 25 August 2021. The Roundtable explored co-operative and mutual business models and their role in increasing diversity and choice in the social care sector. Following the Roundtable, the Social Care Community of Practice was established by BCCM to engage with stakeholders on co-operatives and mutual enterprises in social care. Following further consultation with the department, a proposal was put forward for consideration of the CME Support Program.

 

Funding for the program of up to $6.9 million over three years from 2022-23 will come from Program 3.3: Aged Care Quality, which is part of Outcome 3. Details are set out in the October 2022-23 Budget and the Portfolio Budget Statements, Health portfolio.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers of the Constitution:

*         the defence power (section 51(vi));

*         the social welfare power (section 51(xxiiiA)); and

*         the external affairs power (section 51(xxix)).

 

Defence power

 

Section 51(vi) of the Constitution empowers the Parliament to make laws with respect to 'the naval and military defence' of the Commonwealth and States, and 'the control of the forces to execute and maintain the laws of the Commonwealth'.

 

The program may also support the establishment and scale-up of CMEs which provide medical and aged care to veterans, therefore conferring a benefit by reward or compensation for their service in the armed forces.

 

Social welfare power

 

Section 51(xxiiiA) of the Constitution empowers the Parliament to make laws with respect to the provision of certain social welfare benefits, including sickness and hospital benefits, and medical and dental services (but not as to authorise any form of civil conscription).

 

The program involves funding the BCCM to support the establishment of new, and expand existing, CMEs to provide aged care, disability care, veterans' care and primary and allied healthcare. In doing so, the program will increase the availability of those services, as it will address workforce issues (such as employee attraction/retention and skills) and involve the delivery of specialised care. Additionally, BCCM will be funded to develop a member-owned digital platform to support the establishment and operation of CMEs, which will be an access point for connecting care givers with care recipients and carers.

 

External affairs power

 

Section 51(xxix) of the Constitution empowers the Parliament to make laws with respect to 'external affairs'. The external affairs power supports legislation implementing Australia's international obligations under treaties to which it is a party.

 

Australia has international obligations under the Convention on the Rights of Persons with Disabilities [2008] ATS 12 (CRPD). Article 4 of the CRPD requires States Parties to undertake to ensure and promote the full realisation of all human rights and fundamental freedoms of all persons with disabilities without discrimination of any kind on the basis of disability. Article 25 recognises the right of persons with disabilities to the enjoyment of the 'highest attainable standard of health without discrimination on the basis of disability' and provides a list of obligations to that end.

 

The program will aim to support the establishment and scale-up of CMEs which provide aged care for all persons including those who have disabilities. This may include the delivery of specialised care services and care delivery in thin markets including regional, rural and remote areas. Finally, independent research and evaluation activities planned to be undertaken at each stage of the program will also identify best practice and lessons learned to assess the suitability of CMEs in the broader aged care and disability support services sectors and therefore further improve the provision of care to those receiving aged care services and/or disability support services.  

 

Australia also has international obligations relating to the 'right to health' under the International Covenant on Economic, Social and Cultural Rights [1976] ATS 5 (ICESCR). In particular, Article 2 of the ICESCR relevantly requires Australia to 'take steps ... to the maximum of its available resources, with a view to achieving progressively the full realization' of the rights set out in the ICESCR. Article 12(1) then recognises the 'right of everyone to the enjoyment of the highest attainable standard of physical and mental health' and Article 12(2) provides a non-exhaustive list of 'steps’ to be taken by States Parties to achieve the full realisation of the right to health, including those necessary for 'the creation of conditions which would assure to all medical services and attention in the event of sickness' (Article 12(2)(d)).

 

The program will aim to facilitate the establishment and expansion of CMEs which provide medical services and attention in the event of sickness, as CMEs will aim to provide aged care, disability care, veterans' care and primary and allied healthcare. Measures directed at establishing new, and expanding existing, CMEs will address workforce issues (such as employee attraction/retention and skills) and therefore facilitate better provision of these services. In addition, BCCM's proposed member-owned digital platform will be an access point for connecting care givers with recipients and therefore more easily enable them to receive medical services and attention in the event of sickness.

 

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Financial Framework (Supplementary Powers) Amendment (Health and Aged Care Measures No. 1) Regulations 2022

 

This disallowable legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the legislative instrument

 

Section 32B of the Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the FF(SP) Regulations) and to make, vary and administer arrangements and grants for the purposes of programs specified in the Regulations. Schedule 1AA and Schedule 1AB to the FF(SP) Regulations specify the arrangements, grants and programs. The powers in the FF(SP) Act to make, vary or administer arrangements or grants may be exercised on behalf of the Commonwealth by Ministers and the accountable authorities of non-corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013.

 

The Financial Framework (Supplementary Powers) Amendment (Health and Aged Care Measures No. 1) Regulations 2022 (the Regulations) amend Schedule 1AB to the Principal Regulations to establish legislative authority for government spending for the Co-operative and Mutual Enterprises (CMEs) Support Program (the program). The program is administered by the Department of Health and Aged Care.

 

Funding will be provided to the Business Council of Co-operatives and Mutuals (BCCM) to support CMEs to provide aged care, disability care, veterans' care and primary and allied healthcare as part of the Australian Government's response to the Aged Care Workforce Action Plan: 2022-2025.

 

The program aims to raise awareness of the benefits of the CME models in social care, provide legal, financial and business advice on CME models, help attract investment in areas of need, and facilitate greater innovation in business models across the social care sector, by leveraging the expertise of BCCM as the national peak body for co-operatives and mutual enterprises.

 

The program aims to develop resources and tools for the community, care providers, workers and individuals to improve awareness of CMEs and build capability related to CMEs. The program will also aim to support organisations to develop CMEs through the provision of strategic, business, finance and legal advice to help providers, workers, individuals and communities form sustainable member-owned enterprises.

 

Funding of up to $6.9 million over three years from 2022-23 will be available for the program.

 

Human rights implications

 

This disallowable legislative instrument engages the following rights:

• the right of everyone to the enjoyment of the highest attainable standard of physical and mental health - Articles 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), read with Article 2; and
• the right to the enjoyment of the highest attainable standard of health without discrimination on the basis of disability - Article 25 of the Convention of the Rights of Persons with Disabilities (CRPD), read with Article 4.

 

Right of everyone to the enjoyment of the highest attainable standard of physical and mental health

 

Article 2 of the ICESCR provides that each State Party undertakes to take steps to the maximum of its available resources with a view to achieving progressively the full realisation of the rights recognised in the Covenant, by all appropriate means.

 

Article 12(1) and 12(2) of the ICESCR recognises the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

 

The program will contribute to Australia's obligation to take steps necessary for 'the creation of conditions which would assure to all medical service and attention in the event of sickness'. The objective is to ensure all Australians continue to have access to healthcare services that support their needs.

 

Australia's social care providers are an essential part of our social care system and the long-term viability of these sectors is critical. In particular, there are a significant number of aged care providers facing workforce challenges, further compounded by the ongoing challenges of the COVID-19 pandemic.

 

The program is designed to support the aged care and broader care services across Australia, including through supporting, attracting and growing a skilled workforce. Therefore, this funding will assist to maintain access to medical services for older Australians who require aged care services and broader care and supports. As the proposed activities are directed at ensuring that medical services are available to people when they are sick, they can reasonably be said to be supported by Article 12(2)(d).

 

Right to the enjoyment of the highest attainable standard of health without discrimination on the basis of disability

 

Article 4 of the CRPD provides that States Parties undertake to ensure and promote the full realisation of all human rights and fundamental freedoms for all persons with disabilities without discrimination of any kind on the basis of disability.

 

Article 25 of the CRPD requires that persons with disabilities have the right to the enjoyment of the highest attainable standard of health without discrimination on the basis of disability.

 

The program could include projects delivered for disability services or services delivered to those with disabilities. As supported by Articles 4 and 25 of the CRPD, this measure supports the right of persons with disabilities to the enjoyment of the 'highest attainable standards of health without discrimination of any kind on the basis of disability'.

 

The program is designed to enhance care services across Australia, including through supporting, attracting and growing a skilled workforce. These services are likely to be delivered to persons with disabilities. Growing Australia's care workforce will help ensure the ongoing sustainability of the social care sector into the future, of which persons with disabilities benefit. 

 

Conclusion

 

This disallowable legislative instrument is compatible with human rights because it promotes the protection of human rights.

 

 

 

 

Senator the Hon Katy Gallagher

Minister for Finance