EXPLANATORY STATEMENT
Statutory Rules 1989 No. 35
Issued by Authority of the Minister for Community Services and Health
Commonwealth Serum Laboratories Act 1961
Commonwealth Serum Laboratories Regulations
(Amendment)
Section 45 of the Commonwealth Serum Laboratories Act 1961 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to this Act.
Subsection 20(2) of the Act provides that the Commonwealth Serum Laboratories Commission shall not, except with the approval of the Minister -
(a) enter into a contract involving the purchase or sale of pharmaceutical products where the consideration under the contract would exceed $500,000 or such higher amount as is prescribed; or
(b) enter into a contract, other than a contract referred to in paragraph (a), where the consideration would exceed $250,000 or such greater amount as is prescribed.
Regulations prescribing such higher amounts for the purposes of subsection 20(2) of the Act have been made on several occasions.
Subregulations 5(1) and (2) of the Commonwealth Serum Laboratories Regulations previously prescribed amounts of $2,000,000 and $1,000,000 for paragraph 20(2)(a) and 20(2)(b) of the Act respectively.
This Regulation prescribes the following new limits:
(a) in respect of paragraph 20(2)(a) of the Act $3,000,000;
(b) in respect of paragraph 20(2)(b) of the Act $3,000,000
Overview
The Commonwealth Serum Laboratories Regulations (Amendment) Statutory Rules 1989 No. 35, issued under the authority of the Minister for Community Services and Health, amend the existing Commonwealth Serum Laboratories Regulations 1961. This legislative amendment was introduced to address the need to update the financial thresholds for contractual agreements made by the Commonwealth Serum Laboratories Commission. As stipulated in Section 20(2) of the Commonwealth Serum Laboratories Act 1961, these amendments were enacted to ensure that the Commission’s contracting powers remain aligned with current economic conditions and operational requirements, thereby facilitating more effective and efficient management of pharmaceutical product transactions. The regulations set new limits for the amounts that can be considered in contracts without the explicit approval of the Minister, reflecting an adjustment from previous thresholds of $2,000,000 and $1,000,000 to $3,000,000 for both types of contracts. This amendment aims to streamline administrative processes and enhance the Commission’s flexibility in managing its pharmaceutical procurement activities.
Scope and Application
The Commonwealth Serum Laboratories Act 1961 applies to the Commonwealth Serum Laboratories Commission and governs the transactions and contracts they may enter into, specifically those involving the purchase or sale of pharmaceutical products. The Act places restrictions on the financial thresholds for contracts, requiring ministerial approval for contracts exceeding certain monetary limits. Specifically, contracts involving pharmaceutical products must not exceed $500,000 without approval, and other contracts must not exceed $250,000. These limits are subject to amendment through regulations, as evidenced by the Commonwealth Serum Laboratories Regulations (Amendment) Statutory Rules 1989 No. 35. These regulations have updated the thresholds to $3,000,000 for both types of contracts, thereby extending the application of the Act through subordinate instruments. This amendment ensures that the Act remains responsive to the evolving financial landscape while maintaining oversight over significant transactions by the Commission.
Key Provisions
The key provisions of these regulations concern the financial thresholds for contracting activities undertaken by the Commonwealth Serum Laboratories Commission, as stipulated under the Commonwealth Serum Laboratories Act 1961 (the Act). Specifically, subsection 20(2) of the Act sets out the financial limits for contracting without ministerial approval. Subregulation 5(1) now prescribes that the Commonwealth Serum Laboratories Commission cannot enter into a contract involving the purchase or sale of pharmaceutical products without ministerial approval if the consideration under the contract exceeds $3,000,000. Similarly, subregulation 5(2) stipulates that for other types of contracts not specifically related to pharmaceutical products, the threshold is also set at $3,000,000, provided the consideration exceeds this amount without the Minister's approval.
The Act imposes obligations on the Commonwealth Serum Laboratories Commission to ensure that any contracts exceeding these thresholds must be approved by the Minister before execution. This is a safeguard to ensure that significant financial commitments are properly vetted and authorised at a high level within the government. The requirement to obtain ministerial approval is intended to provide oversight and accountability in the procurement process, particularly for large financial transactions.
Failure to comply with the financial thresholds and ministerial approval requirements set out in the Act and the regulations could result in serious consequences. The Act does not explicitly state the penalties for non-compliance, but breaches of such regulations could be viewed as administrative violations subject to the general legal consequences for non-compliance with statutory requirements. This may include financial penalties, legal actions to rectify the breach, or other corrective measures deemed appropriate by the relevant authorities. The precise penalties would depend on the specific context and the severity of the breach, but the overarching intent is to ensure compliance with the regulatory framework designed to protect public interests and resources.