EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Finance
Financial Framework (Supplementary Powers) Act 1997
Financial Framework (Supplementary Powers) Amendment
(Social Services Measures No. 3) Regulation 2016
The Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) confers on the Commonwealth, in certain circumstances, powers to make arrangements under which money can be spent; or to make grants of financial assistance; and to form, or otherwise be involved in, companies. The arrangements, grants, programs and companies (or classes of arrangements or grants in relation to which the powers are conferred) are specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the Principal Regulations). The FF(SP) Act applies to Ministers and the accountable authorities of non‑corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013.
Section 65 of the FF(SP) Act provides that the Governor-General may make regulations prescribing matters required or permitted by that Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to that Act.
Section 32B of the FF(SP) Act authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Principal Regulations. Section 32B also authorises the Commonwealth to make, vary and administer arrangements for the purposes of programs specified in the Principal Regulations. Schedule 1AA and Schedule 1AB to the Principal Regulations specify the arrangements, grants and programs.
Schedule 1 to the Regulation amends the Principal Regulations to establish legislative authority in Schedule 1AB for government spending on the Try, Test and Learn Fund which will finance trial policy responses for a select group of people at high risk of long-term welfare dependency. The policy responses will address the individual barriers to employment of this group in order to support them to become employed.
Funding of $96.1 million was announced in the 2016-17 Budget for the Try, Test and Learn Fund which will be administered by the Department of Social Services.
Details of the Regulation are set out at Attachment A. A Statement of Compatibility with Human Rights is at Attachment B.
The Regulation is a legislative instrument for the purposes of the Legislation Act 2003. The Regulation commences on the day after registration on the Federal Register of Legislation.
Consultation
In accordance with section 17 of the Legislation Act 2003, consultation has taken place with the Department of Social Services.
A regulation impact statement is not required as the Regulation only applies to non‑corporate Commonwealth entities and does not adversely affect the private sector.
Details of the Financial Framework (Supplementary Powers) Amendment (Social Services Measures No. 3) Regulation 2016
Section 1 – Name
This section provides that the title of the Regulation is the Financial Framework (Supplementary Powers) Amendment (Social Services Measures No. 3) Regulation 2016.
Section 2 – Commencement
This section provides that the Regulation commences on the day after it is registered on the Federal Register of Legislation.
Section 3 – Authority
This section provides that the Regulation is made under the Financial Framework (Supplementary Powers) Act 1997.
Section 4 – Schedules
This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 are amended as set out in the Schedules to the Regulation.
Schedule 1 – Amendments
Item 1 – In the appropriate position in Part 4 of Schedule 1AB (table)
This item adds a new table item to Part 4 of Schedule 1AB to establish legislative authority for government spending for an activity to be administered by the Department of Social Services.
New table item 174 establishes legislative authority for the Government to fund the Try, Test and Learn Fund. The Try, Test and Learn Fund will finance trial policy responses for a select group of people at high risk of long-term welfare dependency. The policy responses will address the individual barriers to employment of this group in order to support them to become employed.
The Try, Test and Learn Fund is part of the Priority Investment Approach to Welfare. The 2015 review of Australia’s welfare system, A New System for Better Employment and Social Outcomes (the McClure Report), proposed a simpler welfare system that focuses on supporting people into work. The Priority Investment Approach is consistent with the recommendations of the McClure Report and builds on lessons learned from the New Zealand model.
The Try, Test and Learn Fund will be used to implement and test the effectiveness of new policy responses to Priority Investment Approach actuarial analysis. The annual valuations produced by this analysis will help to identify key groups in the Australian population or points in people’s lives where targeted investment may improve life outcomes through independence from welfare. The Try, Test and Learn Fund will finance policy responses tailored to those groups. These new policy responses will be evaluated on their effectiveness in supporting people to increase their capacity to live independently of welfare and to reduce long-term welfare costs. This evaluation will inform whether policy responses should be continued, revised, scaled up or ceased, and will also inform the design of future policy responses. It is anticipated the Try, Test and Learn Fund will cease on 30 June 2020.
The Department of Social Services will seek proposals for policy responses from government agencies and external stakeholders, including the community and business sectors. The decision-maker for funding under this initiative is the Minister for Social Services.
Depending on the selected proposals, the Try, Test and Learn Fund will be delivered by a variety of mechanisms. Services will be procured or delivered in accordance with the Commonwealth Procurement Rules or the Commonwealth Grants Rules and Guidelines, as appropriate. The Try, Test and Learn Fund is not intended to be a traditional mainstream funding program for community organisations to deliver services. Rather, it will provide funding to try and test new or innovative policy ideas over set timeframes.
Where grants are used to deliver funding, the Department will follow the Commonwealth Grants Rules and Guidelines and prepare program guidelines that will be made available on the Department of Social Services’ website (www.dss.gov.au).
Internal merits review is not applicable in respect of decisions made in relation to targeted funding, given the non-competitive nature of the funding.
The Try, Test and Learn Fund was included in the 2016-17 Budget, with funding of $96.1 million over the next four years from 2016‑17. Details are set out under the measure ‘Investment Approach to Welfare – Try, Test and Learn Fund’ at page 142 of Budget 2016‑17, Budget Measures, Budget Paper No. 2 2016-17, with funding details set out at page 21 of the Portfolio Budget Statements 2016‑17, Budget Paper No. 1.15a, Social Services Portfolio.
The program is part of Program 1.10: Working Age Payments, which comes under Outcome 1: Social Security – Financial support for individuals and families who are unable to fully support themselves by providing a sustainable payments and concession system.
Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers of the Constitution:
- the social welfare power (section 51(xxiiiA)); and
- the external affairs power (section 51(xxix)).
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Financial Framework (Supplementary Powers) Amendment (Social Services Measures No. 3) Regulation 2016
This Regulation 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 Legislative Instrument
Section 32B of the Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the FF(SP) Regulations) and to make, vary and administer arrangements and grants for the purposes of programs specified in the Regulations. Schedule 1AA and Schedule 1AB to the FF(SP) Regulations specify the arrangements, grants and programs.
The FF(SP) Act applies to Ministers and the accountable authorities of non‑corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013.
Schedule 1 to the Regulation adds a new item to Schedule 1AB to establish legislative authority for government spending on the Try, Test and Learn Fund which will finance trial policy responses for a select group of people at high risk of long-term welfare dependency. The policy responses will address the individual barriers to employment of this group in order to support them to become employed.
Funding of $96.1 million was announced in the 2016-17 Budget for the Try, Test and Learn Fund which will be administered by the Department of Social Services. The Minister for Social Services has portfolio responsibility for this program.
Human rights implications
The Regulation does not engage any of the applicable rights or freedoms.
Conclusion
This Regulation is compatible with human rights as it does not raise any human rights issues.
Senator the Hon Mathias Cormann
Minister for Finance