EXPLANATORY STATEMENT
Australian Institute of Health and Welfare Act 1987
Australian Institute of Health and Welfare (Contracts) Regulation 2016
Section 32 of the Australian Institute of Health and Welfare Act 1987 (the Act) provides that the Governor-General may make regulations consistent with the Act prescribing matters required or permitted by the Act to be prescribed.
Paragraph 23(a) of the Act provides that the Australian Institute of Health and Welfare (the AIHW) must seek the written approval of the Minister for Health and Aged Care (the Minister) before entering into a contract involving the payment or receipt by the AIHW of an amount exceeding $200,000 or such higher amount as prescribed. The Act does not limit the contract amount that may be prescribed.
An amount of $1,500,000 was prescribed in the Australian Institute of Health and Welfare Regulations on 13 December 2006. The regulations contain no other substantive provisions. The regulations are due to sunset on 1 April 2017. Remaking of the regulations prior to sunsetting will avoid reversion of the contract value to $200,000 as specified in paragraph 23(a) of the Act.
The purpose of the Australian Institute of Health and Welfare (Contracts) Regulation 2016 (the Regulation) is to repeal and remake the regulations and prescribe an amount of $3,000,000. The Regulation will reduce the burden of regulation and red tape. It will create administrative efficiencies by reducing the number of submissions that must be sent to the Minister by the AIHW for approval and streamline processes for the AIHW to enter contracts up to $3,000,000. The increased contract amount is commensurate with the AIHW’s standing as a mature corporate Commonwealth entity with 30 years’ operational experience, its recent expansion by assuming the functions and some staff of the former National Health Performance Authority, and the significant increase in its budgeted expenditure and revenue over the ten years since the 2006 regulations were made.
The Act specifies no prerequisites or conditions that must be satisfied before the power to make the Regulation is exercised.
Consultation on the Regulation was not required as increasing the prescribed amount is of a machinery nature and does not substantially alter existing arrangements. No documents are incorporated into the Regulation by reference.
The Regulation commences on the day after it is registered on the Federal Register of Legislation.
The Regulation is a legislative instrument for the purposes of the Legislation Act 2003.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Australian Institute of Health and Welfare (Contracts) Regulation 2016
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 Disallowable Legislative Instrument
Paragraph 23(a) of the Australian Institute of Health and Welfare Act 1987 provides that the Australian Institute of Health and Welfare (the AIHW) must seek the written approval of the Minister for Health and Aged Care (the Minister) before entering into a contract involving the payment or receipt by the AIHW of an amount exceeding $200,000 or such higher amount as prescribed.
The Disallowable Legislative Instrument repeals the Australian Institute of Health and Welfare Regulations 2006, which prescribed a contract amount of $1,500,000, and remakes the regulation increasing the prescribed amount to $3,000,000. The Instrument reduces the burden of regulation and red tape. It creates administrative efficiencies by reducing the number of submissions that must be sent to the Minister by the AIHW for approval and streamlines processes for the AIHW to enter contracts up to $3,000,000.
Human rights implications
This Disallowable Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Disallowable Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
Overview
The Australian Institute of Health and Welfare (Contracts) Regulation 2016 was enacted to address the need for updated regulatory provisions governing contract approvals for the Australian Institute of Health and Welfare (AIHW), a Commonwealth entity established under the Australian Institute of Health and Welfare Act 1987. The regulation was introduced by the Governor-General in exercise of the legislative powers vested in them by the Act. Its policy objective is to streamline the approval process for contracts by increasing the threshold amount for ministerial approval, thereby reducing administrative burden and enhancing operational efficiency for the AIHW. By raising the prescribed contract amount from $1,500,000 to $3,000,000, the regulation aims to align with the AIHW's expanded responsibilities and increased financial scope. The regulation is designed to be compatible with human rights, as it does not engage any of the applicable rights or freedoms under the international instruments declared in the Human Rights (Parliamentary Scrutiny) Act 2011.
Scope and Application
The Australian Institute of Health and Welfare Act 1987 and its subsidiary regulation, the Australian Institute of Health and Welfare (Contracts) Regulation 2016, pertain to the Australian Institute of Health and Welfare (AIHW), a Commonwealth entity within the health and aged care portfolio. The Act applies to the AIHW, requiring it to obtain the Minister for Health and Aged Care's written approval before entering into any contract involving payments or receipts exceeding a specified amount. The Regulation sets this threshold at $3,000,000, aiming to streamline the approval process and reduce administrative burdens on the AIHW. This change from the previous threshold of $1,500,000 reflects the AIHW's maturity, its expanded role, and increased financial activity. The Regulation is a legislative instrument under the Legislation Act 2003 and is compatible with human rights, as it does not engage any of the applicable rights or freedoms as outlined in the Human Rights (Parliamentary Scrutiny) Act 2011.
Key Provisions
Section 23(a) of the Australian Institute of Health and Welfare Act 1987 mandates that the Australian Institute of Health and Welfare (AIHW) must obtain the written approval of the Minister for Health and Aged Care before entering into any contract where the payment or receipt by the AIHW exceeds a specified amount. Initially, this amount was set at $200,000, but it was later prescribed to be $1,500,000 under the Australian Institute of Health and Welfare Regulations 2006. The Australian Institute of Health and Welfare (Contracts) Regulation 2016 was made to repeal these 2006 regulations and to prescribe a new threshold amount of $3,000,000. This adjustment is intended to streamline processes and reduce administrative burdens on the AIHW, reflecting its status as a well-established corporate Commonwealth entity with extensive experience and increased financial commitments.
The AIHW, as a governed entity under this regulation, must ensure that any contract exceeding the newly set amount of $3,000,000 is approved in writing by the Minister for Health and Aged Care before execution. This requirement is designed to maintain oversight and ensure that significant financial commitments are appropriately vetted and authorised. Furthermore, the regulation aims to reduce the frequency of submissions to the Minister for approval, thereby creating a more efficient process for the AIHW to enter into substantial contractual agreements.
In terms of compliance, the Act does not specify any particular procedures or conditions that must be fulfilled before the power to make the regulation is exercised. Additionally, no consultation was deemed necessary as the changes pertain to a machinery nature and do not significantly alter existing arrangements. The Regulation operates by repealing the previous set of regulations and establishing the new threshold, thus ensuring that the AIHW can manage its contractual obligations more effectively within the specified financial limits.
In the event of non-compliance, where the AIHW enters into a contract exceeding the prescribed amount without the requisite approval from the Minister, there may be civil or administrative consequences. Although the specific penalties are not detailed within the regulation, breaches of such contractual requirements could potentially lead to legal actions or financial repercussions as stipulated by the overarching Act or other relevant legislation. The regulation is designed to mitigate these risks by clearly defining the scope of contracts that require ministerial approval, thereby providing a clear framework for compliance.