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House of Representatives

Building and Construction Industry Improvement (Consequential and Transitional) Bill 2005 (Extract Only)

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.


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