Senate

Explanatory Memorandum

Circulated by authority of the Minister for Superannuation and Corporate Law, Senator the Hon Nick Sherry

SCHEDULE 2 - TECHNICAL AMENDMENTS RELATING TO LEGISLATIVE INSTRUMENTS

112. On 1 January 2005 the Legislative Instruments Act 2003 (LI Act) introduced a new, comprehensive regime for the making, registration, publication, parliamentary scrutiny and sunsetting of Commonwealth delegated legislation. Schedule 2 contains technical amendments to certain superannuation Acts as a consequence of the LI Act.

113. One of the features of the LI Act is that it provides a consistent tabling and disallowance regime to facilitate Parliamentary scrutiny of registered legislative instruments. The LI Act and Legislative Instruments (Transitional Provisions and Consequential Amendments) Act (LITPACA Act) substantially repealed and re-enacted those provisions of the Acts Interpretation Act 1901 (AI Act) that related to the tabling and disallowance of regulations and disallowable instruments and extended their operation to all legislative instruments.

114. The LITPACA Act also repealed the entire Statutory Rules Publication Act 1903 (SRP Act), reflecting the new publication arrangements introduced by the LI Act.

Parliamentary Contributory Superannuation Act 1948 ( PCS Act )

Item 1 - Orders are legislative instruments

115. Item 1 of Schedule 2 amends subsection 22CK(1) of the PCS Act to clarify that Orders made under section 22CK of that Act are legislative instruments and therefore must meet the requirements of the LI Act.

Item 2 - Disallowable instruments

116. Item 2 of Schedule 2 repeals subsections 22CK(2) and (3) of the PCS Act, which refer to a repealed provision of the AI Act and to the repealed SRP Act.

117. The repealed subsection 22CK(2) provided that Orders made under section 22CK were disallowable instruments. Item 2 of Schedule 2 also substitutes a new subsection 22CK(2) to ensure that those Orders continue to be disallowable. The new subsection 22CK(2) overrides section 44 of the LI Act, which exempts superannuation instruments from disallowance, and provides that the disallowance provisions of section 42 of that Act will apply to Orders made under section 22CK of the PCS Act.

Superannuation Act 1922 ( 1922 Act )

Item 3 - Orders are legislative instruments

118. Item 3 of Schedule 2 amends subsection 93DE(1) of the 1922 Act to clarify that Orders made under section 93DE of that Act are legislative instruments and therefore must meet the requirements of the LI Act.

Item 4 - Disallowable instruments

119. Item 4 of Schedule 2 repeals subsections 93DE(2) and (3) of the 1922 Act, which refer to a repealed provision in the AI Act and to the repealed SRP Act.

120. The repealed subsection 93DE(2) provided that Orders made under section 93DE were disallowable instruments. Item 4 of Schedule 2 also substitutes a new subsection 93DE(2) to ensure that those Orders continue to be disallowable. The new subsection 93DE(2) overrides section 44 of the LI Act, which exempts superannuation instruments from disallowance, and provides that the disallowance provisions of section 42 of that Act will apply to Orders made under section 93DE of the 1922 Act.

Superannuation Act 1976 ( 1976 Act )

Items 5, 7, 8, 10, 13, 14, 15, 17, 18, 21, 22, 24, 25 and 27 - Legislative instruments

121. Item 5 of Schedule 2 amends paragraph (a) of the definition of "approved authority" in subsection 3(1) of the 1976 Act to clarify that declarations made for the purposes of that definition are legislative instruments and therefore must meet the requirements of the LI Act.

122. Item 7 of Schedule 2 amends paragraph (ec) of the definition of "eligible employee" in subsection 3(1) of the 1976 Act to clarify that declarations made for the purposes of that paragraph are legislative instruments and therefore must meet the requirements of the LI Act.

123. Item 8 of Schedule 2 amends paragraph (j) of the definition of "eligible employee" in subsection 3(1) of the 1976 Act to clarify that declarations made for the purposes of that paragraph are legislative instruments and therefore must meet the requirements of the LI Act.

124. Item 10 of Schedule 2 amends subsection 3(2A) of the 1976 Act to clarify that declarations made for the purposes of paragraph (b) of the definition of "approved authority" in subsection 3(1) of that Act are legislative instruments and therefore must meet the requirements of the LI Act.

125. Item 13 of Schedule 2 repeals and substitutes section 110D of the 1976 Act to clarify that declarations made under that section are legislative instruments and therefore must meet the requirements of the LI Act.

126. Item 14 of Schedule 2 amends subsection 110E(1) of the 1976 Act to clarify that declarations made under section 110E of that Act are legislative instruments and therefore must meet the requirements of the LI Act.

127. Item 15 of Schedule 2 amends subsection 110F(1) of the 1976 Act to clarify that declarations made under section 110F of that Act are legislative instruments and therefore must meet the requirements of the LI Act.

128. Item 17 of Schedule 2 amends subsection 146MH(1) of the 1976 Act to clarify that Orders made under section 146MH of that Act are legislative instruments and therefore must meet the requirements of the LI Act.

129. Item 18 of Schedule 2 repeals subsections 146MH(2) and (3) of the 1976 Act, which refer to a repealed provision of the AI Act and to the repealed SRP Act.

130. The repealed subsection 146MH(2) provided that Orders made under section 146MH were disallowable instruments. Item 18 of Schedule 2 also substitutes a new subsection 146MH(2) to ensure that those Orders continue to be disallowable. The new subsection 146MH(2) overrides section 44 of the LI Act, which exempts superannuation instruments from disallowance, and provides that the disallowance provisions of section 42 of that Act will apply to Orders made under section 146MH of the 1976 Act.

131. Item 21 of Schedule 2 amends section 167AB of the 1976 Act to omit the term "disallowable instrument" and substitute "legislative instrument" to reflect the change in terminology introduced to that Act by Schedule 2 to the Bill.

132. Item 22 of Schedule 2 amends subsection 238(1) of the 1976 Act to clarify that determinations made under section 238 of that Act are legislative instruments and therefore must meet the requirements of the LI Act.

133. Items 24 and 25 of Schedule 2 amend subsection 241(1) of the 1976 Act to clarify that determinations made under section 241 of that Act are legislative instruments and therefore must meet the requirements of the LI Act.

134. Item 27 of Schedule 2 amends subsection 242C(1) of the 1976 Act to clarify that determinations made under section 242C of that Act are legislative instruments and therefore must meet the requirements of the LI Act.

Item 6, 9, 11, 16, 23, 26 and 28 - Disallowable instruments

135. Item 6 of Schedule 2 repeals the definition of "disallowable instrument" in subsection 3(1) of the 1976 Act as a consequence of the amendments made to that Act by Schedule 2 to the Bill, to replace references to disallowable instruments for the purposes of the AI Act with references to the disallowance provisions of the LI Act.

136. Items 9, 11, 16, 23, 26 and 28 amend the 1976 Act to remove references to various instruments as disallowable instruments for the purposes of the AI Act or Statutory Rules for the purposes of the repealed SRP Act. The amendments also clarify that those instruments continue to be disallowable. This is achieved by overriding section 44 of the LI Act, which exempts superannuation instruments from disallowance, and providing that the disallowance provisions of section 42 of that Act will apply.

137. Item 9 of Schedule 2 repeals subsection 3(1BD) of the 1976 Act, which relates to declarations made for the purposes of paragraph (ec) or (j) of the definition of "eligible employee" in subsection 3(1) of the Act of the 1976 Act , and substitutes a new subsection 3(1BD) which provides for those instruments to be disallowable under the LI Act.

138. Item 11 of Schedule 2 repeals subsections 4A(1) and (2) of the 1976 Act, which apply to declarations made for the purposes of the definition of "approved authority" in subsection 3(1) of the Act, and substitutes a new subsection 4A(1) which provides for those instruments to be disallowable under the LI Act.

139. Item 16 of Schedule 2 repeals and substitutes section 110G of the 1976 Act, which applies to declarations made under sections 110D, 110E or 110F of the Act. The new section 110G provides for those instruments to be disallowable under the LI Act.

140. Item 23 of Schedule 2 repeals and substitutes subsection 238(2) of the 1976 Act, which applies to determinations made under section 238 of the Act. The new subsection 238(2) provides for those instruments to be disallowable under the LI Act.

141. Item 26 of Schedule 2 repeals and substitutes subsection 241(3) of the 1976 Act, which applies to determinations made under section 241 of the Act. The new subsection 241(3) provides for those instruments to be disallowable under the LI Act.

142. Item 28 of Schedule 2 repeals and substitutes subsection 242C(4) of the 1976 Act which applies to determinations made under section 242C of the Act. The new subsection 242C(4) provides for those instruments to be disallowable under the LI Act.

Item 12 - Technical amendment

143. Item 12 of Schedule 2 amends subsection 110C(2) of the 1976 Act to omit the reference to declarations by the "Minister" under section 110D of that Act and substitute a reference to declarations by the "Board" to reflect the amendment made to section 110D of the 1976 Act by the Superannuation Legislation (Commonwealth Employment) Repeal and Amendment Act (No. 1) 2003 . That amendment to section 110D transferred the power to make declarations under that section from the Minister to the Board. The Board in this case is ARIA.

Items 19 and 20 - Removal of requirement to gazette interest determinations

144. ARIA makes periodic determinations of interest in respect of the CSS and the PSS to be applied to members' accounts. Generally, weekly interest rates are struck. However, from time to time, it can be necessary for daily rates to be determined. Those rates are published on the scheme website (generally on the business day immediately after the rates become effective). The interest determinations for the CSS are also required to be gazetted.

145. Interest determinations under both the 1976 Act, for the CSS, and the 1990 Act, for the PSS, have been exempted from the requirements of the Legislative Instruments Act 2003 by the Legislative Instruments Regulations 2004 . This was done because setting of interest rates is based on commercial considerations that are a matter for ARIA. Disallowance of the interest determinations could adversely affect the operation of the schemes by disrupting the orderly distribution of funds to members leaving the schemes. The frequency and numbers of interest determinations also make registration on the Federal Register of Legislative Instruments administratively burdensome.

146. For the same reasons, compliance with the current statutory requirement that each CSS interest determination must be gazetted also results in an undue administrative and financial burden on ARIA.

147. Item 19 of Schedule 2 therefore repeals and substitutes subsection 154A(2) of the 1976 Act to remove the requirement for gazettal of CSS interest determinations. This change will also result in consistent arrangements for CSS and PSS interest determinations, which will assist ARIA in its administration of the interest determination process. ARIA has given an undertaking that the interest rates will continue to be published on the CSS website.

148. Item 20 of Schedule 2 specifies that the removal of the requirement for gazettal of CSS interest determinations applies to determinations made after the repeal and substitution of subsection 154A(2). This will occur on Royal Assent.

Superannuation Act 1990 ( 1990 Act )

Item 29 - Amendments to Trust Deed

149. Item 29 of Schedule 2 amends subsection 5A(2) of the 1990 Act to replace a reference to a repealed provision of the AI Act with a reference to the equivalent provision in the LI Act, to clarify that amendments to the PSS Trust Deed referred to in section 5A may be made with retrospective effect.

Items 30 and 31- Disallowable instruments

150. Items 30, 31 and 32 amend section 45 of the 1990 Act to remove references to various instruments as disallowable instruments for the purposes of the AI Act or Statutory Rules for the purposes of the repealed SRP Act. The amendments also clarify that those instruments continue to be disallowable. This is achieved by overriding section 44 of the LI Act, which exempts superannuation instruments from disallowance, and providing that the disallowance provisions of section 42 of that Act will apply.

151. Item 30 of Schedule 2 amends subsection 45(1) of the 1990 Act omit the reference to the disallowance provisions of section 46A of the AI Act. Item 31 of Schedule 2 introduces the disallowance provisions in the LI Act by overriding section 44 of that Act.

Item 32 - Retrospective effect of instruments

152. Item 32 of Schedule 2 amends subsection 45(6) of the 1990 Act to replace a reference to a repealed provision of the AI Act with a reference to the equivalent provision in the LI Act, to clarify that amendments to the Trust Deed made under subsection 5(1) may be made with retrospective effect.

Superannuation ( Productivity Benefit ) Act 1988 ( PB Act )

Items 33 to 37 - Legislative instruments

153. Item 33 of Schedule 2 amends section 3D of the PB Act to clarify that declarations made under section 3D of that Act are legislative instruments and therefore must meet the requirements of the LI Act.

154. Item 34 of Schedule 2 amends subsection 3E(1) of the PB Act to clarify that declarations made under section 3E of that Act are legislative instruments and therefore must meet the requirements of the LI Act.

155. Item 35 of Schedule 2 amends subsections 3F(1) and (2) of the PB Act to clarify that declarations made under section 3F that Act are legislative instruments and therefore must meet the requirements of the LI Act

156. Item 36 of Schedule 2 amends subsections 4A(1) and (2) of the PB Act to clarify that declarations made under section 4A of that Act are legislative instruments and therefore must meet the requirements of the LI Act.

157. Item 37 of Schedule 2 amends subsections 4G(1) and (2) of the PB Act to clarify that determinations made under section 4G of that Act are legislative instruments and therefore must meet the requirements of the LI Act.

Item 38 - Disallowable instruments

158. Item 38 of Schedule 2 repeals and substitutes section 9B of the PB Act. This is in order to override section 44 of the LI Act, so that the disallowance provisions of section 42 of that Act apply to legislative instruments made under the PB Act. The repealed section refers to repealed provisions in the AI Act and to the repealed SRP Act.