Public Governance, Performance and Accountability (Relevant Company) Amendment (2023 Measures No. 1) Rules 2023

Administered by Department of Finance

Legislation au F2023L00463 Rules Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Issued by the Authority of the Minister for Finance

 

Public Governance, Performance and Accountability Act 2013

 

Public Governance, Performance and Accountability (Relevant Company) Rule 2016

 

Public Governance, Performance and Accountability (Relevant Company) Amendment (2023 Measures No. 1) Rules 2023

 

Section 85 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) provides the Finance Minister with the authority to form, or participate in forming, a relevant company on behalf of the Commonwealth, or to acquire shares or become a member of a relevant company in circumstances that would result in the relevant company becoming a Commonwealth company.

 

Subsection 85(2) of the PGPA Act provides that a relevant company is a company of a kind prescribed by the rules whose objects or proposed activities are of a kind prescribed by the rules. Section 101 of the PGPA Act provides that the Finance Minister may make rules by legislative instrument to prescribe matters giving effect to the Act.

 

Relevant companies are prescribed in the Public Governance, Performance and Accountability (Relevant Company) Rule 2016 (the PGPA Relevant Company Rule).

 

The Public Governance, Performance and Accountability (Relevant Company) Amendment (2023 Measures No. 1) Rules 2023 (the Amendment Rules) makes two amendments to the PGPA Relevant Company Rule.

 

The first amendment is to remove the relevant company prescribed in item 2 of the table of relevant companies in section 5 of the PGPA Relevant Company Rule. This reflects the conclusion of the Commonwealth’s involvement in this relevant company.

 

The second amendment adds a new item at the end of the table at section 5 of the PGPA Relevant Company Rule. The new item prescribes a relevant company of a kind that is limited by shares and whose objects or proposed activities are to:

  • undertake research on, design, manufacture, assemble, develop, support, maintain and provide other services in relation to radar and communications systems and products:
    • for Australia’s defence and national security; or
    • to be exported

and to undertake related activities; or

  • acquire and hold shares in a company with these objects.

 

This amendment provides the legislative authority for the Commonwealth’s involvement in relevant companies of this kind with the objects and proposed activities prescribed.

 

Details of the Amendment Rules are set out at Attachment A. A Statement of Compatibility with Human Rights is at Attachment B.

 

The Amendment Rules are a legislative instrument for the purposes of the Legislation Act 2003.

 

The Amendment Rules will commence 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 Defence and the Attorney‑General’s Department.

 

Details of the Public Governance, Performance and Accountability (Relevant Company) Amendment (2023 Measures No. 1) Rules 2023

 

Section 1 – Name

 

This section provides that the title of the instrument is the Public Governance, Performance and Accountability (Relevant Company) Amendment (2023 Measures No. 1) Rules 2023 (the Amendment Rules).

 

Section 2 – Commencement

 

This section provides that the Amendment Rules commence on the day after they are registered on the Federal Register of Legislation.

 

Section 3 – Authority

 

This section provides that the Amendment Rules are made under the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

 

Section 4 – Schedules

 

This section provides that the Public Governance, Performance and Accountability (Relevant Company) Rule 2016 (the PGPA Relevant Company Rule) is amended as set out in the Schedule to the Amendment Rules.

 

Schedule 1 – Amendments

 

Public Governance, Performance and Accountability (Relevant Company) Rule 2016

 

Item 1 – Section 5 (table item 2)

 

This item amends the table of relevant companies in section 5 of the PGPA Relevant Company Rule by removing the relevant company prescribed in item 2 of the table.

 

Removing this relevant company reflects the decision of government to wind up the Financial Adviser Standards and Ethics Authority Ltd (FASEA) and divide the company’s functions between the Department of the Treasury and the Financial Services and Credit Panel (FSCP) within the Australian Securities and Investments Commission (ASIC). The standard-making functions of FASEA moved to the Department of the Treasury. The remaining elements of FASEA’s role including administering the adviser examination, were incorporated into the FSCP. The expansion of the role of the FSCP gave effect to Recommendation 2.10 from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to establish a new single disciplinary body for financial advisers. On 10 September 2022, ASIC deregistered FASEA meaning the company also ceased to be a Commonwealth company for section 89 of the PGPA Act.


Item 2 – Section 5 (at the end of the table)

 

This item amends the table of relevant companies in section 5 of the PGPA Relevant Company Rule by adding a new kind of relevant company. The new kind of relevant company that is prescribed is a company of a kind that is limited by shares whose objects or proposed activities are to:

  • undertake research on, design, manufacture, assemble, develop, support, maintain and provide other services in relation to radar and communications systems and products:
    •  for Australia’s defence and national security or
    •  be exported

and to undertake related activities; or

  • acquire and hold shares in a company with these objects.

 

This amendment will provide the Finance Minister with authority under paragraph 85(1)(b) of the PGPA Act to, on behalf of the Commonwealth, acquire shares in, or become a member of existing companies in circumstances that would result in the relevant companies becoming Commonwealth companies. This legislative authority will facilitate the acquisition of shares in an Australian company that undertakes the activities as prescribed, which are in relation to radar and communications systems and products and services used in Australia’s defence and national security. Such a company’s activities may include exporting products overseas. The item also provides legislative authority for the acquisition of shares in any company incorporated for the purpose of acquiring and holding shares in the former company. Such acquisitions will enable the Commonwealth to expand its sovereign defence capability through ownership interests in these companies.

 

The acquired companies will become Commonwealth companies for the purposes of section 89 of the PGPA Act.

 

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

The Public Governance, Performance and Accountability (Relevant Company) Amendment (2023 Measures No. 1) Rules 2023 (the Amendment Rules) are 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

 

The Public Governance, Performance and Accountability Act 2013 (PGPA Act) establishes a framework for the use and management of public resources by the Commonwealth and relevant entities. Section 101 of the PGPA Act provides that the Finance Minister may make rules by legislative instrument to prescribe matters giving effect to the Act.

 

The Amendment Rules makes two amendments to the Public Governance, Performance and Accountability (Relevant Company) Rule 2016 (PGPA Relevant Company Rule).

 

The first amendment is to remove the relevant company prescribed in item 2 of the table of relevant companies in section 5 of the PGPA Relevant Company Rule. This reflects the conclusion of the Commonwealth’s involvement in this relevant company.

 

The second amendment adds a new item at the end of the table at section 5 of the PGPA Relevant Company Rule. The new item prescribes a relevant company of a kind that is limited by shares and whose objects or proposed activities are to:

  • undertake research on, design, manufacture, assemble, develop, support, maintain and provide other services in relation to radar and communications systems and products:
    •  for Australia’s defence and national security or
    •  be exported

and to undertake related activities; or

  • to acquire and hold shares in a company with these objects.

 

This amendment provides the Finance Minister, on behalf of the Commonwealth, the legislative authority, under paragraph 85(1)(b) of the PGPA Act to acquire shares in circumstances that would result in the relevant companies becoming Commonwealth companies.

 

Human rights implications

 

The Amendment Rules do not engage any of the applicable rights or freedoms.

 

Conclusion

 

The Amendment Rules are compatible with human rights as they do not raise any human rights issues.

 

Senator the Hon Katy Gallagher

Minister for Finance

Overview

The Public Governance, Performance and Accountability (Relevant Company) Amendment (2023 Measures No. 1) Rules 2023 amend the Public Governance, Performance and Accountability (Relevant Company) Rule 2016, which itself was made under the Public Governance, Performance and Accountability Act 2013 (PGPA Act). This Act aims to establish a framework for the use and management of public resources by the Commonwealth and relevant entities. The Amendment Rules facilitate the acquisition of shares in companies involved in activities relating to radar and communications systems and products for Australia's defence and national security, as well as those potentially involved in exporting such products. This legislative change enables the Commonwealth to expand its sovereign defence capabilities by gaining ownership interests in these companies, which will become Commonwealth companies for the purposes of section 89 of the PGPA Act. The Amendment Rules were introduced to address the need for updated legislative authority for the Commonwealth's involvement in certain companies, particularly in light of the conclusion of the Commonwealth’s involvement in the Financial Adviser Standards and Ethics Authority Ltd (FASEA) and the creation of a new disciplinary body for financial advisers. The Amendment Rules ensure that the Finance Minister has the necessary legislative authority to acquire shares in companies engaged in defence-related activities, thereby aligning with the policy objective of enhancing Australia's defence capabilities through strategic investments in critical sectors. The rules were developed in consultation with relevant departments and are compatible with human rights as they do not engage any of the applicable rights or freedoms.

Scope and Application

The Public Governance, Performance and Accountability (Relevant Company) Amendment (2023 Measures No. 1) Rules 2023 amends the Public Governance, Performance and Accountability (Relevant Company) Rule 2016, which prescribes relevant companies under the Public Governance, Performance and Accountability Act 2013 (PGPA Act). These rules are applicable to the Minister for Finance and the Commonwealth in their capacity to form, participate in forming, or acquire shares in relevant companies. This amendment serves to both remove a company from the list of relevant companies, reflecting the conclusion of the Commonwealth's involvement with it, and add a new kind of relevant company, specifically those limited by shares whose activities involve research, design, manufacture, assembly, development, support, maintenance, and other services related to radar and communications systems and products for Australia's defence and national security or for export and related activities. The amendment provides legislative authority for the Commonwealth to acquire shares in such companies, thereby making them Commonwealth companies under section 89 of the PGPA Act. These rules apply nationally across Australia and do not contain specific exclusions or exemptions beyond those stipulated in the PGPA Act and the PGPA Relevant Company Rule. The Amendment Rules are a legislative instrument made under the authority of section 101 of the PGPA Act, and they come into effect on the day after registration on the Federal Register of Legislation. This legislative amendment ensures the Finance Minister can effectively manage the Commonwealth's involvement in relevant companies, particularly those engaged in critical defence and national security activities. The Amendment Rules have been developed in consultation with relevant departments and are compatible with human rights as they do not raise any human rights issues.

Key Provisions

The Public Governance, Performance and Accountability (Relevant Company) Amendment (2023 Measures No. 1) Rules 2023 (the Amendment Rules) are designed to amend the Public Governance, Performance and Accountability (Relevant Company) Rule 2016 (PGPA Relevant Company Rule). The Amendment Rules contain two primary amendments to the table of relevant companies in section 5 of the PGPA Relevant Company Rule. The first amendment removes the relevant company prescribed in item 2 of the table, reflecting the conclusion of the Commonwealth’s involvement in this company (Schedule 1, Item 1). This specific company was the Financial Adviser Standards and Ethics Authority Ltd (FASEA), which was wound up and its functions divided between the Department of the Treasury and the Financial Services and Credit Panel (FSCP) within the Australian Securities and Investments Commission (ASIC). The second amendment adds a new kind of relevant company at the end of the table in section 5 of the PGPA Relevant Company Rule (Schedule 1, Item 2). This new relevant company is limited by shares and is involved in activities such as research, design, manufacture, assembly, development, support, maintenance, and other services related to radar and communications systems and products, either for Australia’s defence and national security or for export and related activities. Additionally, it can acquire and hold shares in a company with these objects. The Amendment Rules impose several obligations and requirements on relevant companies and the Finance Minister. For relevant companies, these requirements include adhering to the objects and proposed activities prescribed by the rules. Specifically, for the newly added kind of relevant company, this involves engaging in activities related to radar and communications systems and products, either for Australia’s defence and national security or for export. The Finance Minister, on behalf of the Commonwealth, must ensure compliance with these prescribed activities and objects. The Amendment Rules also provide the legislative authority for the Finance Minister to acquire shares in companies that meet these criteria, thereby enabling the Commonwealth to expand its sovereign defence capability through ownership interests in these companies. Failure to comply with the requirements of the Amendment Rules may lead to civil or criminal consequences, although the specific offences and penalties are not detailed in the text. However, under the Public Governance, Performance and Accountability Act 2013 (PGPA Act), breaches of legislative instruments made under the Act could potentially lead to enforcement actions by the relevant authorities. The consequences may include administrative penalties, legal actions, or other measures as prescribed by the PGPA Act or other applicable legislation. The maximum penalties would depend on the nature of the breach and the specific provisions of the PGPA Act and other relevant laws. In summary, the Amendment Rules amend the PGPA Relevant Company Rule by removing a specific relevant company and adding a new kind of relevant company involved in radar and communications systems and products. These changes provide the Finance Minister with the authority to acquire shares in companies that meet these criteria, thereby expanding the Commonwealth’s involvement in sovereign defence capabilities. Compliance with the prescribed objects and activities is mandatory for relevant companies, and non-compliance may result in civil or criminal consequences as outlined in the PGPA Act and other applicable legislation.

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Public Governance, Performance and Accountability
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.