EXPLANATORY STATEMENT
Select Legislative Instrument 2006 No. 352
Issued by the Authority of the Minister for Health and Ageing
Australian Institute of Health and Welfare Act 1987
Australian Institute of Health and Welfare Regulations 2006
Section 32 of the Australian Institute of Health and Welfare Act 1987 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed.
Paragraph 23(a) of the Act requires Ministerial approval for the Australian Institute of Health and Welfare (the Institute) to enter into a contract involving the payment or receipt of an amount exceeding $200,000 or such higher amount as may be prescribed.
An amount of $500,000 was prescribed in the Australian Institute of Health and Welfare Regulations on 3 September 1997 (the 1997 Regulations).
That limit has not been varied since 1997 and it is considered timely to increase the limit to reflect the growth in the size of the Institute’s business. Since 1997 the value of the Institute’s revenue from external contracts has grown by over 200%. An increase in the limit to $1,500,000 (including Goods and Services Tax) is considered administratively more efficient and more in keeping with the original intent of the Act than the current limit.
The Regulations will repeal the 1997 Regulations and prescribe a limit of $1,500,000 in respect of contracts entered into by the Institute.
The Act specifies no conditions that need to be satisfied before the power to make the Regulations may be exercised.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.
Consultation: Consultation on these Regulations was not required since increasing the value of the prescribed amount is of an administrative nature.
Authority: Section 32 of the Australian Institute of Health and Welfare Act 1987
Overview
The Australian Institute of Health and Welfare Regulations 2006 were introduced to amend the threshold limit for Ministerial approval of contracts entered into by the Australian Institute of Health and Welfare (AIHW), as provided for under the Australian Institute of Health and Welfare Act 1987. Enacted by the Australian Government under the authority of the Minister for Health and Ageing, these regulations aim to reflect the significant growth in the size and value of the Institute's business since the threshold was last updated in 1997. The policy objective is to ensure that the administrative framework remains efficient and relevant, allowing the AIHW to effectively manage its contracts without unnecessary delays. The increased threshold from $500,000 to $1,500,000 is intended to align with the current scope and scale of the Institute’s operations, facilitating smoother and more streamlined contract processes.
Scope and Application
The Australian Institute of Health and Welfare Act 1987 governs the operations of the Australian Institute of Health and Welfare, a statutory authority established to provide reliable, timely and relevant information and statistics on Australia's health and welfare. The Act applies to the Australian Institute of Health and Welfare, which is responsible for the collection, analysis and dissemination of health and welfare data across the Commonwealth of Australia. The Act also allows for the creation of regulations that may prescribe additional matters required or permitted by the Act, including the threshold for Ministerial approval of contracts involving payments or receipts over a certain amount. The Australian Institute of Health and Welfare Regulations 2006, made under the authority of Section 32 of the Act, currently prescribe a limit of $500,000 for contracts that require Ministerial approval. However, this limit has not been varied since 1997 and is now considered outdated given the significant growth in the Institute's business. To reflect this, the Regulations will increase the limit to $1,500,000, inclusive of Goods and Services Tax, to better align with the original intent of the Act and to promote administrative efficiency. The Regulations will repeal the 1997 Regulations and will come into effect on the day after they are registered on the Federal Register of Legislative Instruments.
Key Provisions
The Australian Institute of Health and Welfare Regulations 2006 (the Regulations) are established under Section 32 of the Australian Institute of Health and Welfare Act 1987 (the Act). These Regulations prescribe the amount above which the Australian Institute of Health and Welfare (the Institute) requires Ministerial approval to enter into a contract. Specifically, Section 32 of the Act allows for the Governor-General to make regulations that set forth certain requirements or permissions outlined in the Act. Currently, Paragraph 23(a) of the Act necessitates Ministerial approval for contracts involving payments or receipts exceeding $200,000, or a higher amount prescribed by the Regulations.
The Regulations specify that the threshold amount for requiring Ministerial approval has been set at $1,500,000, including Goods and Services Tax. This represents a significant increase from the previous threshold of $500,000, as prescribed in the Australian Institute of Health and Welfare Regulations 1997. The increase is intended to align with the substantial growth in the Institute's business operations and revenue from external contracts, which has expanded by over 200% since 1997. By raising the limit, the Regulations aim to enhance administrative efficiency and remain consistent with the original intent of the Act.
Parties governed by these Regulations, primarily the Institute, are obligated to ensure that any contract involving payments or receipts exceeding the prescribed amount of $1,500,000 is reviewed and approved by the relevant Minister before it is finalised. This requirement ensures that significant financial commitments are subject to appropriate scrutiny and authorisation, maintaining accountability and integrity in the Institute's dealings.
Failure to adhere to these Regulations could lead to complications in contract enforcement and potential financial liabilities. While the Regulations themselves do not explicitly outline specific penalties for non-compliance, breaches of contract terms may result in civil or criminal consequences depending on the nature and extent of the breach. The Act and related legislation may impose further penalties or remedies for non-compliance with regulatory requirements.