Federal Register of Legislation - Australian Government

Primary content

A Bill for an Act to deal with consequential matters arising from the enactment of the Medical Research Future Fund Act 2015, and for related purposes
Administered by: Finance
For authoritative information on the progress of bills and on amendments proposed to them, please see the House of Representatives Votes and Proceedings, and the Journals of the Senate as available on the Parliament House website.
Registered 27 May 2015
Introduced HR 27 May 2015

 

 

 

 

 

2013-2014-2015

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

MEDICAL RESEARCH FUTURE FUND (CONSEQUENTIAL AMENDMENTS) BILL 2015

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the Minister for Finance, Senator the Hon Mathias Cormann)


Table of abbreviations and common terms

 

Abbreviation or

common term

Description

Agency

means the Future Fund Management Agency established by section 74 of the Future Fund Act 2006

BAF

means the Building Australia Fund established by
section 12 of the Nation-building Funds Act 2008

BAF Special Account

means the Building Australia Fund Special Account established by section 13 of the Nation-building Funds Act 2008

COAG Reform Fund

means the Fund established by section 5(1) of the COAG Reform Fund Act 2008

CRF

  means the Consolidated Revenue Fund

DCAF

means the DisabilityCare Australia Fund established by
section 10 of the DisabilityCare Australia Fund Act 2013

DCAF Act

means the DisabilityCare Australia Fund Act 2013

DCAF Special Account

means the DisabilityCare Australia Fund Special Account established by section 11 of the DisabilityCare Australia Fund Act 2013

EIF

means the Education Investment Fund established by
section 131 of the Nation-building Funds Act 2008

EIF Special Account

means the Education Investment Fund Special Account established by section 132 of the Nation-building
Funds Act 2008

Finance Minister

has the same meaning as defined in the Public Governance, Performance and Accountability Act 2013

Future Fund

means the Future Fund established by section 11 of the Future Fund Act 2006

Future Fund Act

means the Future Fund Act 2006

Future Fund Special Account

means the Future Fund Special Account established by section 12 of the Future Fund Act 2006

Health Minister

means the Minister who administers the Health Insurance Act 1973

HHF

means the Health and Hospitals Fund established by
section 214 of the Nation-building Funds Act 2008

HHF Special Account

means the Health and Hospitals Fund Special Account established by section 215 of the Nation-building Funds Act 2008

Health Insurance Act

means the Health Insurance Act 1973

ITAA

means the Income Tax Assessment Act 1997

Legislative Instruments Act

means the Legislative Instruments Act 2003

MRFF

 

 

 

 

MRFF

means the Medical Research Future Fund

MRFF Act

means the Medical Research Future Fund Act 2015

 

MRFF Special Account

means the Medical Research Future Fund Special Account established by section 14 of the Medical Research Future Fund Bill 2015

MRFF Health Special Account

means the Medical Research Future Fund Health Special Account established by section 23 of the Medical Research Future Fund Bill 2015

Nation-building Funds

means the Nation-building Funds established by sections 12, 131 and 214 of the Nation-building Funds Act 2008

Nation-building Funds Act

means the Nation-building Funds Act 2008

PGPA Act

 

 

means the Public Governance, Performance and Accountability Act 2013

Responsible Ministers

means the following:

 

(a)       the Treasurer; and

(b)       the Finance Minister

The Board

means the Future Fund Board of Guardians established by
section 34 of the Future Fund Act 2006


Outline

 

The Medical Research Future Fund (Consequential Amendments) Bill 2015 (the Bill) makes a number of consequential amendments to other pieces of legislation required to enable the effective operation of the Medical Research Future Fund at commencement.

 

The MRFF Bill establishes the Medical Research Future Fund as a dedicated financial asset and an endowment that supports medical research and innovation (including in health disciplines). The Medical Research Future Fund will be established as the MRFF Special Account and the investments of the Medical Research Future Fund (made and managed by the Future Fund Board).

 

The consequential amendments made in the Bill support the establishment of the Medical Research Future Fund in that they:

 

 enable grants to the States and Territories through the COAG Reform Fund; and

 

 extend the Future Fund Board’s duties to manage the Medical Research Future Fund; and

 

 allow for amounts to be transferred between the Medical Research Future Fund and the Future Fund to allow for proper apportioning of common expenses incurred by the Future Fund Board in managing the Medical Research Future Fund, the Future Fund, the Nation-building Funds and the DCAF.

 

The Bill amends the COAG Reform Fund Act 2008, the Future Fund Act 2006, sections of the Nation-building Funds Act 2008, the DisabilityCare Australia Fund Act 2013, and the Health Insurance Act 1973.

 

The Bill also abolishes the Health and Hospitals Fund by repealing relevant sections of the Nation-building Funds Act 2008. The closure of the Health and Hospitals Fund is a consequence of the decision to establish the Medical Research Future Fund with an initial balance equal to the balance of the Health and Hospitals Fund not already committed.

 

The Bill amends the Health Insurance Act 1973 to create a special appropriation to allow the Department of Health to meet ongoing financial commitments arising from Health and Hospitals Fund projects already committed before the closure of the Health and Hospitals Fund.

 

Providing for a separate Bill for the consequential amendments conforms to the Commonwealth practice to reduce the complexity of principal Acts.


Financial Impact Statement

 

The Bill has no financial impact.

 

 

Statement of Compatibility with Human Rights

 

The proposed amendments do not engage any of the applicable rights or freedoms outlined in the Human Rights (Parliamentary Scrutiny) Act 2011, such as encompassed in the International Covenant on Civil and Political Rights.

 

The proposed amendments do not limit any human rights, nor propose any offences or penalties.

 

This Bill is therefore compatible with the human rights and freedoms recognised or declared in the international instruments listed in subsection 3(1) of the Human Rights (Parliamentary Scrutiny) Act 2011.


Medical Research Future Fund

(Consequential Amendments) Bill 2015

 

NOTES ON SECTIONS

 

Section 1 – Short Title

 

Section 1 provides for the Act to be cited as the Medical Research Future Fund (Consequential Amendments) Act 2015.

 

Note: The sections in the Bill will become sections of the Act on Royal Assent.

 

Section 2 – Commencement

 

Section 2 is the commencement provision for the Bill. The commencement dates for the specific provisions are provided in the table in subsection 2(1).

 

Item 1 of the table provides that sections 1 to 3 and anything not covered in the table commence on the day the Act receives Royal Assent.

 

Item 2 of the table provides that Schedule 1 will commence immediately after the commencement of the Medical Research Future Fund Act 2015.

 

Item 3 of the table provides that Schedule 2 will commence on a day fixed by Proclamation or six months after Schedule 1 to this Act commences, whichever comes first.

 

Item 4 of the table provides that Schedule 3 will commence on the later of the commencement of the Medical Research Future Fund Act 2015 or the commencement of the Acts and Instruments (Framework Reform) Act 2015.

 

Section 3 – Schedules

 

Section 3 provides that each Act specified in a Schedule to this Act is amended or repealed as set out in the Schedule concerned.

 

Schedule 1 Main Amendments

 

 

COAG Reform Fund Act 2008

 

Item 1 inserts Note 2AA after Note 2A to subsection 5(2) to reflect that an amount originating in the MRFF may be transferred to the COAG Reform Fund to mirror Note 2 and Note 2A that refer to the ability to transfer amounts originating in the BAF, EIF, HHF and DCAF to the COAG Reform Fund.

 

Item 2 inserts a new paragraph 7(1)(baa) after paragraph 7(1)(ba) to recognise that grants from the MRFF to States and Territories are channelled through the COAG Reform Fund. The MRFF Bill requires that payments to States and Territories through the COAG Reform Fund are bound by the terms and conditions of a written agreement.

 

Item 3 inserts Note 1AA after Note 1A to subsection 7(3) to reflect that the channelling of grants to States and Territories from the MRFF through the COAG Reform Fund is subject to the provisions of the MRFF Act.


DisabilityCare Australia Fund Act 2013

 

Item 4 repeals subparagraphs 16(a)(iii) to (vi) and replaces them with new subparagraphs 16(a)(iii) and (iv) to provide that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the DCAF can be met from the DCAF Special Account to the extent that such expenses do not relate to any other fund including the MRFF.

 

Item 5 repeals subparagraphs 16(b)(iii) to (vi) and replaces them with new subparagraphs 16(b)(iii) and (iv) to provide that the cost of insurance incurred by the Future Fund Board in relation to the DCAF can be met from the DCAF Special Account to the extent that such insurance premiums do not relate to any other fund including the MRFF.

 

Item 6 repeals subparagraphs 16(c)(iii) to (vi) and replaces them with new subparagraphs 16(c)(iii) and (iv) to provide that expenses incurred by the Future Fund Board in relation to managing the DCAF can be met from the DCAF Special Account to the extent that such expenses do not relate to any other fund including the MRFF.

 

Future Fund Act 2006

 

Item 7 inserts a reference within the note to section 4 to confirm that the Future Fund Board has additional functions under the MRFF Act.

 

Item 8 inserts a definition of Medical Research Future Fund’ in section 5 by reference to section 11 of the MRFF Act.

 

Item 9 inserts a definition ofMRFF Special Account’ in section 5 by reference to section 14 of the MRFF Act.

 

Item 10 amends Note 2A to section 13 to insert a reference to the MRFF.

 

Items 11 and 12 insert new subparagraphs 28(5)(bb) and 28(5)(h) which will allow investment managers engaged in connection with the management of the MRFF to also be engaged for the purposes of managing the Future Fund, DCAF, BAF, EIF or HHF.

 

Item 13 inserts a reference to the MRFF Act in the note at section 33. The note alerts the reader to the fact that the Future Fund Board has additional functions under other Acts which will now include the MRFF Act.

 

Item 14 adds a new paragraph 35(b)(iv) which will extend the functions of the Future Fund Board to its functions specified under the MRFF Act.

 

Item 15 adds a new paragraph 55(3)(c) to provide that the Future Fund Boards reporting obligation in relation to the Future Fund do not include its separate reporting obligation to the responsible Ministers under the MRFF Act.

 

Item 16 inserts a new paragraph 63(1)(d) and item 17 inserts a new paragraph 63(2)(ac).  These changes will ensure that that the Chair or a member of the Future Fund Board does not breach civil and criminal obligations under the Future Fund Act by performing an act that they are required to perform under the MRFF Act.

 


 

Item 18 inserts a new heading and new subsection 81(1E) and item 19 inserts a new subsection 81(2E). These changes will require that the annual report prepared by the Chair of the Future Fund Board include a report on the performance of investments of the MRFF and the amounts debited from the MRFF for purposes allowed under the MRFF Act. In addition, the annual report will also need to include benchmarks in relation to the performance of the debits from the MRFF. This is consistent with the arrangements in relation to the other Funds which are the responsibility of the Future Fund Board.

Item 20 inserts new paragraph 83B(1)(db) which will allow the Future Fund Board to delegate its power to engage investment managers in relation to the MRFF to the Chair of the Future Fund Board or a SES Employee of the Future Fund Management Agency.

 

Item 21 inserts new subparagraph 84(1)(b)(iib) and item 22 inserts a new subparagraph 84(1)(b)(viii) to provide that any amount of money received by the Board must be credited to the Future Fund Special Account if it is not covered by a relevant provision under the Future Fund, DCAF, Nation-building Funds or MRFF Acts.

 

Item 23 inserts a new heading and new subsection 84(4B) to allow the nominated Minister under section 83 to provide a written direction to the Future Fund Board requiring an amount credited to the Future Fund Special Account under subsection 84(1) to be subsequently debited from this account and credited to the MRFF Special Account.

 

Item 24 inserts a reference to new subsection 84(4B) in paragraph 84(5)(b) to provide further guidance on how amounts transferred to the MRFF under section 84 are to be determined.

 

Item 25 inserts a reference to new subsection 84(4B) in subsection 84(6) to provide that a written direction made under new subsection 84(4B) does not have the status of a legislative instrument. This is consistent with the status of other written directions that can be made by the nominated Minister under subsections 84(2), 84(3), 84(4) and 84(4A) in relation to the transfer of amounts to other Special Accounts as provided under those subsections.

 

Items 26, 27 and 28 amend paragraphs 2(2)(a), 2(2)(b) and 2(2)(c) of Schedule 2 to include a reference to various provisions of the MRFF Act. These changes will provide that bank account expenses, insurance premiums and costs relating to the management of the MRFF by the Future Fund Board are to be considered to be for the purposes of the Future Fund Special Account.

 

Item 29 inserts a reference to the MRFF in Clause 1 of Schedule 2A which provides a simplified outline of Schedule 2A which relates to inter-fund transfers. Schedule 2A will be amended by item 31 to include a reference to the MRFF.

 

Item 30 makes a minor amendment to subclauses 2(2) and (3), 3(2) and (3), and 5(2) and (3), of Schedule 2A to ensure the consistent use of language and reflect contemporary drafting conventions.

 

Item 31 adds a new clause 6 to the end of Schedule 2A to allow the nominated Minister under the Future Fund Act to provide a written direction requiring the reversal of a debit from the MRFF to meet bank account, insurance premium or other costs relating to the MRFF. This reversal is to be effected by debiting the Future Fund Special Account and crediting the MRFF Special Account. The reversal amount cannot exceed the amount originally debited from the MRFF Special Account. The nominated Minister’s written direction is not to be regarded as a legislative instrument.

 

 

Nation-building Funds Act 2008

 

Item 32 amends paragraph 20(a) to include a reference to the MRFF to confirm that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the BAF can be met from the BAF Special Account to the extent that such expenses do not relate to any other fund including the MRFF.

 

Item 33 amends paragraph 20(b) to include a reference to the MRFF to confirm that the cost of insurance incurred by the Future Fund Board in relation to the BAF can be met from the BAF Special Account to the extent that such insurance does not relate to any other fund including the MRFF.

 

Item 34 amends paragraph 20(c) to include a reference to the MRFF to confirm that expenses incurred by the Future Fund Board in relation to managing the BAF can be met from the BAF Special Account, to the extent that such expenses do not relate to any other fund including the MRFF.

 

Item 35 amends paragraph 138(a) to include a reference to the MRFF to confirm that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the EIF can be met from the EIF Special Account to the extent that such expenses do not relate to any other fund including the MRFF.

Item 36 amends paragraph 138(b) to include a reference to the MRFF to confirm that the cost of insurance incurred by the Future Fund Board in relation to the EIF can be met from the EIF Special Account to the extent that such insurance does not relate to any other fund including the MRFF.

 

Item 37 amends paragraph 138(c) to include a reference to the MRFF to confirm that expenses incurred by the Future Fund Board in relation to managing the EIF can be met from the EIF Special Account, to the extent that such expenses do not relate to any other fund including the MRFF.

 

Item 38 amends paragraph 219(a) to include a reference to the MRFF to confirm that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the HHF can be met from the HHF Special Account to the extent that such expenses do not relate to any other fund including the MRFF.

 

Item 39 amends paragraph 219(b) to include a reference to the MRFF to confirm that the cost of insurance incurred by the Future Fund Board in relation to the HHF can be met from the HHF Special Account to the extent that such insurance does not relate to any other fund including the MRFF.

 

Item 40 amends paragraph 219(c) to include a reference to the MRFF to confirm that expenses incurred by the Future Fund Board in relation to managing the HHF can be met from the HHF Special Account, to the extent that such expenses do not relate to any other fund including the MRFF.

 

 

 

 

 

 

 

Schedule 2 Amendments relating to the abolition of the Health and Hospitals Fund

 

COAG Reform Fund Act 2008

 

Item 1 removes a reference to the HHF from the note to subsection 5(2), to reflect that credits to the COAG Reform fund can no longer be made by debiting the HHF Special Account.

 

Item 2 amends subparagraph 7(1)(b)(v) as a result of item 3. Item 3 will repeal subparagraph 7(1)(b)(vi) to remove references to requirements for grants from the COAG Reform Fund to be covered by terms and condition relating to the HHF if the grants are being made using funds debited from the HHF Special Account.

 

Item 4 amends the Note 1 to subsection 7(3) to removes reference to the HHF.

 

DisabilityCare Australia Fund Act 2013

 

Items 5, 6 and 7 amend subparagraphs 16(a)(iii), 16(b)(iii) and 16(c)(iii) to remove references to the HHF. These subparagraphs prescribe certain expenses in relation to the HHF that can be met from the DCAF Special Account. These provisions will no longer be necessary following the abolition of the HHF.

 

Future Fund Act 2006

 

Item 8 repeals the definitions of the Health and Hospitals Fund and the HHF Special Account in section 5 as a consequence of subsequent provisions of the Bill that abolish the HHF through repealing relevant provisions of the Nation-building Funds Act.

 

Item 9 removes a reference to the HHF from Note 2A to section 13 as a consequence of item 18 that will amend Schedule 2A to remove references to the HHF from that Schedule. Note 2A currently reminds the reader that Schedule 2A of the Future Fund Act includes provisions to allow for transfers from the Future Fund to the HHF which will no longer be necessary.

 

Item 10 repeals paragraph 28(5)(f) as following abolition of the HHF it will no longer be necessary to allow for investment managers employed in relation to Future Fund assets to also be employed for the purposes of managing HHF assets.

 

Item 11 repeals subsections 81(1C) and (2C) to no longer require the annual report prepared by the Chair of the Future Fund Board to include information in relation to the HHF.

 

Item 12 repeals paragraph 83B(1)(d) as it will no longer be necessary to allow for the Future Fund Board to delegate powers in relation to the HHF Fund to the Chair, SES employee or acting SES employee of the Agency.

 

Item 13 repeals subpargraph 84(1)(b)(vi) which is a reference to the HHF Special Account which is being abolished. 

 

Item 14 repeals subsection 84(4) which relates to the transfer of amounts from the Future Fund to the HHF Special Account.   

 

Items 15 and 16 amend paragraph 84(5)(b) and subsection 84(6) to remove references to subsection 84(4).

 

 

 

 

 

Item 17 repeals subparagraphs 2(2)(a)(v), (b)(v) and (c)(v) of Schedule 2. This will remove references to certain expenses of the HHF which can be a purpose of the Future Fund Special Account.

 

Item 18 removes a reference to the HHF in clause 1 of Schedule 2A. Clause 1 provides a simplified outline to Schedule 2A.

 

Item 19 repeals clause 4 of Schedule 2A as it is no longer necessary to allow for transfers from the Future Fund to the HHF.

 

Health Insurance Act 1973

 

Item 20 inserts a new Part IVAA and new sections 46AA, 46AB and 46AC to the Health Insurance Act in relation to payments relating to the former HHF. New Part IVAA will allow the remaining HHF commitments to be met from the ‘general’ CRF, as a result of the transfer of the balance of the HHF Special Account (not transferred to the MRFF) to the ‘general’ CRF following abolition of the HHF. New section 46AA will allow the Health Minister to authorise (by written direction) payments to meet commitments made prior to the abolition of the HHF.

 

The direction can only be made if the payments relate to the creation or development of health infrastructure that met the requirements specified for approval of projects prior to the abolition of the HHF, namely:

 

·         a recommendation by the HHF Advisory Board that projects satisfied the HHF evaluation criteria;

 

·         the Health Minister had previously recommended payments in relation to the projects; and

 

·         the recipients of payments are not a State or Territorynoting that remaining Health and Hospitals Fund payments to the States and Territories will be made under the Federal Financial Relations Act 2009.

 

The Health Minister’s written direction(s) authorising payments following the abolition of the HHF will not be a legislative instrument and will not be subject to requirements under the Legislative Instruments ActThis is in line with the written determinations authorising payments under the Nation-building Funds Act prior to the abolition of the HHF.

 

Under new section 46AB health infrastructure payments following the abolition of the HHF are to be bound by the terms and conditions of a written agreement between recipients and the Commonwealth.

 

New section 46AC establishes an appropriation for the purpose of amounts payable under new section 46AA.

 

New section 46AD details the Constitutional basis upon which payments made in relation to ongoing HHF projects rely.

 

Medical Research Future Fund 2015

 

Items 21, 22 and 23 amend subparagraphs 17(a)(iii), 17(b)(iii) and 17(c)(iii) to remove references to the HHF from the definition of the purposes of the Future Fund Special Account for which debits from this account are permissible.

 

 

Nation-Building Funds Act 2008

 

Item 24 removes a reference to the HHF from the Title of the Act.

 

Item 25 removes a reference to the HHF from section 3 of the Act which sets out a simplified outline of the Act.

 

Item 26 repeals a number of definitions in section 4 related to the HHF.

 

Item 27 amends the definition of person in section 4.

 

Item 28 makes a consequential amendment to paragraph (b) of the definition of value in section 4 as a consequences of item 29.  

 

Item 29 repeals paragraph (c) which refers to the HHF in the definition of value of an investment.

 

Item 30 repeals subparagraphs 20(a)(iv), (b)(iv) and (c)(iv). This will remove references to the HHF in the definition of the purposes of the BAF Special Account for which debits from this account are permissible.

 

Item 31 repeals section 29 as it will no longer be necessary to provide for transfers from the BAF to HHF.

 

Items 32 and 33 amend subsections 122(1) and (3) as a consequence of the repeal of section 29 by item 31. It will no longer be necessary to include references to transfers between the BAF and HHF in the description of powers in relation to the BAF that can be delegated by the Finance Minister.

 

Item 34 repeals subparagraphs 138(a)(iv), (b)(iv) and (c)(iv) which will remove references to the HHF in the definitions of the purposes of the EIF Special Account for which debits from this account are permissible.

 

Item 35 repeals section 148 which provides for transfers from the EIF to the HHF.

 

Items 36 and 37 make consequential changes to subsections 207(1) and 207(3) as a result of item 35 repealing section 148. It will no longer be necessary to include a reference to transfers between the EIF and HHF in the description of powers in relation to the EIF that can be delegated by the Finance Minister.

 

Item 38 repeals Chapter 4. This will abolish the HHF by repealing the all provisions of the Act relating to the establishment and management of the HHF.

 

Item 39 is a transitional provision that ensures that agreements relating to payments from the HHF in force under section 261 of the Act immediately before the repeal of that section are taken immediately after repeal to be agreements for the purposes of new section 46AB of the Health Insurance Act as inserted by item 20 of Schedule 2.

 

 

 

 

 

 

 

 

 

Schedule 3 Amendments contingent on the Acts and Instruments (Framework Reform) Act 2015

 

Medical Research Future Fund Act 2005

 

Items 1, 2 and 3 change any reference to Legislative Instruments Act 2003 to Legislation Act 2003 should the Acts and Instruments (Framework Reform) Bill 2015 pass Parliament.