Explanatory Memorandum
(Circulated by the authority of the Hon. Joe Hockey, Minister for Human Services)Outline and financial impact statement
Outline
The Human Services Legislation Amendment Bill 2005 (referred to in this Explanatory Memorandum as " the Bill ") provides for:
- (a)
- the abolition of the governance boards of Centrelink and the Health Insurance Commission ( HIC ); and
- (b)
- the replacement of HIC (an authority with separate legal personality to the Commonwealth) with Medicare Australia (a body that will form part of the Commonwealth); and
- (c)
- the creation of the offices of Chief Executive Officer ( CEO ) of Centrelink and Medicare Australia, with statutory functions; and
- (d)
- the establishment of new governance arrangements under which the CEOs will be directly accountable to the Minister.
When HIC's staff transition to Medicare Australia, they will change their employment framework and become subject to the Public Service Act 1999.
Despite these changes, the activities of HIC/Medicare Australia and Centrelink will not change as a result of the Bill. Transitional arrangements will ensure that governance changes do not disrupt service delivery to customers.
The governance changes for Centrelink and HIC are part of the implementation of the Government's response to the review of corporate governance of statutory office holders carried out by Mr John Uhrig. The objective of the review was to identify issues surrounding existing governance arrangements and to provide options for Government to improve the performance and get the best from statutory authorities and office holders, and their accountability frameworks. The Government assessed both Centrelink and HIC against Mr Uhrig's Executive Management Template and the changes made by the Bill are consistent with that Template. The changes will improve governance and accountability in both bodies.
It is appropriate to rename HIC as, after the changes made by the Bill, the successor body to HIC will no longer be a commission. The naming of the new body "Medicare Australia" reflects the fact that one of its key roles is the delivery of the Medicare program. "Medicare" is also a name that commonly is known and identified with by most Australians.
Medicare Australia and Centrelink will each consist of their respective CEOs and their staff, but legally will be part of the Commonwealth. Both bodies will be prescribed agencies for the purposes of the Financial Management and Accountability Act 1997.
Financial impact statement
The Bill will have no financial impact.
Abbreviations
The following abbreviations are used throughout this Explanatory Memorandum.
Act , unless the context indicates otherwise, means the Health Insurance Commission Act 1973;
HIC means the Health Insurance Commission;
Centrelink means the Commonwealth Services Delivery Agency;
Centrelink Act means the Commonwealth Services Delivery Agency Act 1997;
CEO means Chief Executive Officer; and
HeSA means Health eSignature Authority Pty Ltd (a subsidiary of HIC).
Notes on clauses
Part 1 - Preliminary
Clause 1 is a formal provision specifying the short title.
Clause 2(1) of the Bill provides that each provision of the Bill specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 is taken to have effect according to its terms.
Item 1 of the table provides that clauses 1 to 3 of the Bill (containing the short title, the commencement provision and the provision explaining the operation of the Schedules to the Bill) will commence on the day on which the Bill receives Royal Assent.
Item 2 of the table provides that Schedule 1 of the Bill (that is, the amendments relating to Centrelink) commences on a single day to be fixed by Proclamation (the reference to a "single day" means that all of the provisions must be Proclaimed to commence at the same time). However, if the provisions have not been proclaimed to have commenced within the period of 6 months beginning on the day on which the Act receives Royal Assent, the provisions will commence on the first day after the end of that period.
Items 3, 5 and 7 of the table provide that items 1 and 2 of Schedule 2 (which amend the long and short title of the Health Insurance Commission Act 1973) commence on a single day to be fixed by Proclamation (the reference to a "single day" means that both of the provisions must be proclaimed to commence at the same time). However, if the provisions have not been proclaimed to have commenced within the period of 6 months beginning on the day on which the Act receives Royal Assent, the provisions will commence on the first day after the end of that period. Items 4 and 6 of the table provide for a slightly different commencement for items 3 and 28 of Schedule 2. These items commence immediately after, and not at the same time, as the other items of Schedule 2 because of a minor drafting technicality.
Clause 3 provides that each Act that is specified in a Schedule to the Bill is amended or repealed as set out in that Schedule and any other item in a Schedule has effect according to its terms.
Schedule 1 to the Bill provides for amendments relating to Centrelink. Part 1 of Schedule 1 deals with amendments to the Commonwealth Services Delivery Act 1997, Part 2 contains consequential amendments to other legislation arising from the amendments to the Commonwealth Services Delivery Act 1997, while Part 3 contains transitional provisions to ensure that governance changes do not disrupt Centrelink's service delivery to customers and to cover other transitional issues such as reporting.
Schedule 2 to the Bill provides for amendments relating to the Health Insurance Commission. Part 1 of Schedule 1 deals with amendments to the Health Insurance Commission Act 1973, Part 2 contains consequential amendments to other legislation arising from the amendments to the Health Insurance Commission Act 1973, while Part 3 contains transitional provisions to ensure that governance changes do not disrupt the Health Insurance Commission's service delivery to customers and to cover other transitional issues such as reporting.
Schedule 2 - Amendments relating to the Health Insurance Commission
Part 2 - Consequential amendments
The Bill will make a number of consequential amendments to other Acts as follows:
Item 80 - Administrative Decisions (Judicial Review) Act 1977
The Bill amends this Act by omitting reference to the "Health Insurance Commission" in paragraph (k) of Schedule 2 (the current effect of the reference in Schedule 2 is to exempt decisions of HIC in respect of commercial activities from the application of section 13 of the Act, which requires the giving of reasons for decisions). It is not intended that a corresponding exemption apply to Medicare Australia, hence reference to Medicare Australia is not to be made in paragraph (k) of Schedule 2.
A transitional provision applies to ensure the ongoing operation of the exemption to HIC decisions made prior to the commencement date.
Items 84 to 89 - A New Tax System (Family Assistance) (Administration) Act 1999
The Bill amends this Act by:
- (a)
- omitting references to the "Health Insurance Commission" and replacing those references with "Medicare Australia", reflecting that the Bill establishes Medicare Australia (which replaces HIC); and
- (b)
- omitting references to the "Managing Director of the Commission" or the "Managing Director of the Health Insurance Commission", and replacing those references with the "Chief Executive Officer of Medicare Australia" reflecting that the Bill establishes Medicare Australia (which replaces HIC) with HIC's functions and powers being vested in the new position of CEO.
The Bill also adds a new section (ba) to the definition of "protected information" which clarifies that the definition will continue to cover information about a person obtained by an officer under the family assistance law, that was held in the records of the Health Insurance Commission, even if such information is not transferred to the new Medicare Australia.
Items 90 and 91 - Freedom of Information Act 1982
The Bill amends this Act by omitting reference to the "Health Insurance Commission" in Division 1 of Part II of Schedule 2, and replacing the reference with "Medicare Australia", reflecting the Bill's establishment of Medicare Australia (which replaces HIC).
Item 398 - Income Tax Assessment Act 1936
The Bill amends section 16(4) of this Act by omitting reference to the "Health Insurance Commission" reflecting the Bill's abolition of the Health Insurance Commission and replacing such reference with "the Chief Executive Officer of Medicare Australia" reflecting the establishment of Medicare Australia, with relevant functions, powers and duties being invested in the new position of CEO.