EXPLANATORY STATEMENT
Subject - Financial Framework Legislation Amendment Act 2010
Proclamation
The Financial Framework Legislation Amendment Act 2010 (FFLA Act) was given Royal Assent on 17 December 2010.
Subsection 2(1) of the FFLA Act provided that Schedule 5 to the FFLA Act commence on a day to be fixed by Proclamation or 12 months after Royal Assent. Subsection 2(1) also provided that Schedule 8 commence at the same time as the provisions covered in Schedule 5.
Schedule 5 to the FFLA Act amended the Commonwealth Authorities and Companies Act 1997 (CAC Act) primarily to allow for regulations to be made to clarify governance arrangements for interjurisdictional Commonwealth authorities. The Schedule also made a number of other amendments to the CAC Act, in particular, expressly allowing a Minister to delegate some of his or her powers and functions to a Departmental Secretary, which allows for a clearer basis for implementing arrangements that occur partly through Ministerial authorisation.
Schedule 8 to the FFLA Act amended the Financial Management and Accountability Act 1997 (FMA Act) to allow for regulations to specify certain prescribed agencies as interjurisdictional, consistent with the provision made in Schedule 5 for interjurisdictional Commonwealth authorities.
Schedule 8 also transferred from the CAC Act to the FMA Act, the responsibility to inform Parliament when there are changes to the involvement of the Commonwealth in a company. Item 12 of Schedule 5 removed this provision, section 45, from the CAC Act.
Schedule 8 also amended the definition of “proper use” of Commonwealth resources in subsection 44(3) of the FMA Act to explicitly include “economical” use. Schedule 8 further amends several headings in the FMA Act to clarify the links to relevant content and to remove obsolete references.
All Departments of State and FMA Act Agencies have been consulted on the commencement date.
This Proclamation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Proclamation fixed 1 March 2011 as the day on which Schedule 5, and consequently Schedule 8, commence.
Authority: Subsection 2(1) of the Financial Framework Legislation Act 2010.
Overview
The Financial Framework Legislation Amendment Act 2010 was enacted to address gaps in the governance and financial management frameworks for interjurisdictional Commonwealth authorities and agencies. The Act was given Royal Assent on 17 December 2010 and was subsequently proclaimed to commence on 1 March 2011. This legislation was introduced by the Parliament of Australia and seeks to streamline and clarify governance and financial accountability processes. Specifically, it amends the Commonwealth Authorities and Companies Act 1997 to facilitate the making of regulations that clarify governance arrangements for interjurisdictional Commonwealth authorities, and it amends the Financial Management and Accountability Act 1997 to allow for the specification of certain agencies as interjurisdictional. Additionally, it addresses the delegation of Ministerial powers and functions to Departmental Secretaries, enhancing the clarity of implementation arrangements.
Scope and Application
The Financial Framework Legislation Amendment Act 2010 applies to the Commonwealth Authorities and Companies Act 1997 and the Financial Management and Accountability Act 1997. It provides for amendments to governance arrangements for interjurisdictional Commonwealth authorities and facilitates clearer implementation arrangements by allowing certain powers and functions to be delegated by Ministers to Departmental Secretaries. The Act also extends to the definition of "proper use" of Commonwealth resources, now explicitly including "economical" use, and it streamlines the process for notifying Parliament of changes in Commonwealth involvement in companies. The Act applies nationally across Australia, covering all Commonwealth authorities and agencies governed under the amended Acts. While the Act primarily focuses on governance and financial management, it does not specify exclusions or exemptions beyond its stated amendments. The scope of application is further extended through subordinate regulations that may be made under the authority of the Act to clarify governance arrangements and specify prescribed agencies as interjurisdictional.
Key Provisions
The Financial Framework Legislation Amendment Act 2010 (FFLA Act) encompasses several key provisions primarily through Schedules 5 and 8. Schedule 5 (item 1) amends the Commonwealth Authorities and Companies Act 1997 (CAC Act) to enable regulations that clarify governance arrangements for interjurisdictional Commonwealth authorities. This aims to ensure that the governance and administrative structures of these authorities are well-defined and can operate effectively across state and territory boundaries. Schedule 5 also allows for the delegation of Ministerial powers and functions to Departmental Secretaries (item 2), which provides a clearer framework for implementing certain arrangements that involve both Ministerial and departmental actions. Furthermore, it includes various other amendments to the CAC Act, primarily to streamline governance and administrative processes.
Under the FFLA Act, several obligations and requirements are imposed on the parties it governs. The Act necessitates that regulations be made to clarify the governance arrangements for interjurisdictional Commonwealth authorities (Schedule 5, item 1). It also mandates that certain powers and functions of a Minister can be delegated to a Departmental Secretary (Schedule 5, item 2). Additionally, the Act transfers the responsibility to inform Parliament of changes in the Commonwealth's involvement in a company from the CAC Act to the Financial Management and Accountability Act 1997 (FMA Act) (Schedule 8, item 12). The Act further requires that prescribed agencies be specified as interjurisdictional through regulations (Schedule 8, item 1), and that the use of Commonwealth resources be both proper and economical (Schedule 8, item 4).
The FFLA Act imposes certain civil and criminal consequences for breaches of its provisions. However, the specific offences, penalties, or consequences are not detailed in the Explanatory Statement. Given that the Act amends existing legislative frameworks, it is reasonable to infer that breaches may be subject to the penalties and consequences outlined in the amended Acts, such as the CAC Act and the FMA Act. These may include fines, imprisonment, or other civil remedies, depending on the nature and severity of the breach. For precise details regarding penalties, one would need to refer to the specific provisions of the amended Acts themselves.