ALERT DIGEST 2 of 1994

Part 1

The Committee has considered the following Bills
Agent-General's Bill
Administration and Probate (Amendment) Bill
Petroleum (Amendment) Bill
Financial Management (Consequential Amendment) Bill
Small Business Development Corporation (Amendment) Bill
Albury-Wodonga Agreement (Amendment) Bill
State Insurance Office (Amendment) Bill
Mineral Resources Development (Further Amendment) Bill
Borrowing and Investment Powers (Further Amendment) Bill
Land (Further Miscellaneous Matters) Bill

The Committee reports on the following Bills
Agent-General's Bill
Administration and Probate (Amendment) Bill
Petroleum (Amendment) Bill
Small Business Development Corporation (Amendment) Bill
Albury-Wodonga Agreement (Amendment) Bill
State Insurance Office (Amendment) Bill
Mineral Resources Development (Further Amendment) Bill
Borrowing and Investment Powers (Further Amendment) Bill
Land (Further Miscellaneous Matters) Bill

Consideration is proceeding on the following Bill
Financial Management (Consequential Amendments) Bill

AGENT-GENERAL’S BILL

1.1

This Bill was introduced into the Legislative Assembly on 24 November 1993 by The Honourable Phil Gude with The Honourable Pat McNamara.

1.2

This Bill repeals and re-enacts with amendments the Agent-General’s Act 1958.

According to the Second Reading Notes, the purpose of the Act is "reflect the different circumstances of the 1990’s."

The most significant changes are in respect of:

• the updated function of the Agent-General's office and the Agent-General’s role in European countries other than the United Kingdom.
• the Minister’s ability to give directions and seek reports from the Agent-General.
• delegation provisions for more efficient administration.

1.3 _¯ Remuneration

Insufficiently subjects the exercise of legislative power to Parliamentary scrutiny (section 4D(a)(v) Parliamentary Committees Act 1968)

Clause 5 (1)(a) provides that the Agent-General is entitled to the remuneration and allowances fixed in respect of the office by the Minister. This differs from the previous provision, old Clause 7 which provided that such remuneration be fixed by the Governor-in-Council. Pursuant to Clause 5 (1)(b), the Agent-General is appointed subject to any other terms and conditions fixed in respect of the office by the Minister.

The Committee acknowledges that in other sections of the Public Service in Victoria. income is revealed in bands. The Committee also acknowledges that the position of the Agent-General is a position of standing in that it is specially created by statute.

The Committee notes the discretion given to the Minister as to the conditions of employment. Previously, the Agent-General’s income was a matter for the Governor-in-Council and made by way of an Order-in- Council.

The Committee wrote to the Minister on 11 March 1994 requesting his response to the above. The Minister replied to the Committee in a letter dated 15 March 1994 which is set out in full.

"I write in response to your Alert Digest No. 2 in respect to the Agent-General’s Bill. In relation to the Committee’s comments on the subject of remuneration I, would make the following points.

• The Agent-General is appointed by an Order-in-Council;
• The specific remuneration of the Agent-General will be a matter for the Minister to determine from time to time;
• The amount of remuneration offered to the Agent-General will take into account special circumstances in existence at the time of the appointment such as exchange rates;
• Any remuneration matter will be discussed with the Public Service Commissioner with a view to the current bands contained in the Public Sector Management Act prior to any determination; and
• There is no precedent for the reporting to Parliament of the remuneration of other Senior Public Servants of the State, eg. Secretaries to Departments, nor, of any other Statutory appointment in the State.

In relation to the other points raised in the Alert Digest, I take note of the Committee’s concerns and the fact that they were covered in the Second Reading Notes."

While noting the Minister’s comments that "there is no precedent for the reporting to Parliament of the remuneration of other senior Public Servants of the State, e.g. Secretaries to Departments, nor, of any other Statutory appointment in the State", the Committee is of the opinion that the remuneration of the Agent-General should be published in the Government Gazette.*

1.4 _¯ Agent-General to represent Victoria in Europe

Clause 9 provides that the Agent-General is to represent Victoria in the United Kingdom, Northern Ireland and other European countries as directed by the Minister for the purposes of the Act. Previously, the Agent-General’s appointment related to the United Kingdom and Ireland. The Committee notes the comments in the Second Reading Notes.

"The Government views the office as particularly important in contributing to the expansion of trade and investment essential to the recovery and growth of the Victorian economy. The traditional business links with the United Kingdom and other European countries provide great scope for building new relationships on Australia’s proximity to the rapidly growing economies in Asia."

The Committee notes the increase in the Agent-General’s capacity to represent Victoria in other countries and acknowledges the explanation given in the Second Reading Notes as sufficient.

1.5 _¯ Ministerial Directions - Reports when Specified

Clause 10 (1) provides that the Minister may give written directions to the Agent-General in relation to the European countries in which the Agent-General is to perform functions and carry out duties. The Committee notes the comments in the Second Reading Notes.

"This will ensure a more direct and speedy contact with the Agent-General than previously existed with contact of this nature being via the Governor-in Council.

The Committee notes that pursuant to Clause 7, the Governor-in-Council still has the power to remove the Agent-General from office on certain grounds. The Committee acknowledges the explanation given in the Second Reading Notes as sufficient.

Clause 10 (2) provides that the Agent-General must prepare a report when specified by the Minister. Under the old provisions, the Agent-General was obliged to prepare a report every three months to the Governor-in-Council. The Committee acknowledges the explanation given in the Second Reading Notes as sufficient.

1.6 _¯ Delegation

Clause 12 provides that the Minister may, by instrument, delegate to the Secretary to the Department of Business and Employment any power of the Minister under the Act. The Committee notes that the powers can only be delegated to the Secretary of the Department of Business and Employment. The Committee notes the explanation in the Second Reading Notes that it will provide for more "efficient administration" and makes no further comment.

* A vote was taken in respect of Clause 1.3. Please refer to the Extracts from the Proceedings of the Committee.

ADMINISTRATION AND PROBATE (AMENDMENT) BILL

2.1

This Bill was introduced into the Legislative Assembly on 9 March 1994 by The Honourable Jan Wade with The Honourable Phil Gude.

2.2

This Bill amends the Administration and Probate Act 1958 and the Wills Act 1958. More specifically, it:-

• increases various monetary limits in the Acts;
• enables a spouse to obtain his or her intestate partner’s share in their matrimonial home;
• provides that where there is an annulment or dissolution of a marriage, any provision of a will leaving property to the former spouse or appointing the former spouse as executor or trustee is revoked;
• makes various other consequential amendments

2.3 _¯ Commencement Clause

Clause 2 is the commencement clause of the Bill. The Committee notes the forced commencement procedure in clause 2(3) which provides that all of the Bill is to be in operation on 1 July 1995.

The Committee commends the forced commencement provision.

2.4 _¯ Deposit of Wills with the Registrar of Probates

Clause 5 provides that wills may be deposited with the Registrar of Probates. Wills are currently stored at the Land Titles Office. The Committee notes the comments made in the Second Reading Speech;

"It will transfer the function of receiving and storing wills from the Land Titles Office to the Probates Office and will thus enable members of the public applying for administration and probate to carry out all their searches in one place."

The Committee makes no further comment.

2.5 _¯ Spouse may obtain intestate’s interest in the matrimonial home

Clause 8 applies to an intestate’s interest. It provides that where a person dies intestate as to an interest in his or her matrimonial home and that person leaves a spouse, then that spouse may elect to acquire the interest at its value as at the date of the intestate’s death.

Prior to this provision, the spouse of an intestate had an "expectancy" that he or she would be able to purchase the interest. This often created problems where the spouse was the trustee of the estate or where there were children involved. On occasions, the share of the deceased’s estate was sold, denying the surviving spouse the opportunity of residing in the matrimonial home. What this provision does is give the spouse a right or an option to purchase the interest, which did not exist previously, where the spouse so desires. That interest may be purchased for its value at the date of the intestate’s death. It also enables the spouse to acquire an interest, even though he or she may be a trustee, rectifying the previous problems.

The Committee makes no further comment

2.6 _¯ Increase of Spouse’s share

Clause 9 relates to the distribution of an intestate’s residuary estate when a spouse is left. It increases the monetary value left to the spouse from $50,000 to $100,000 which more accurately reflects current values.

The Committee makes no further comment.

2.7 _¯ Dissolution of marriage revokes a disposition in favour of a testator’s spouse

Clause 14 insert a new section 16A into the Wills Act 1958. It provides that when a marriage is dissolved, any disposition made in a will in existence at the time of the marriage by a testator to the spouse, is revoked. It also revokes any appointment of the testator’s spouse as executor or trustee. It does not revoke the appointment of the testator’s spouse as guardian of the spouse’s children.

The Committee notes the comments made in the Second Reading Notes;

"At present, a will is revoked on the marriage of the testator on the basis that the change in the circumstances is so great that the testator would not wish the provisions of the will to apply. However, it is a little known fact that divorce does not revoke a will and consequently people often fail to make a new will after divorce. This creates a situation where the provisions of the will apply not as the testator intended or wished."

The Committee notes that the amendments rectify an existing problem and makes no further comment.

PETROLEUM (AMENDMENT) BILL

3.1

This Bill was introduced into the Legislative Assembly on 9 March 1994 by The Honourable Jim Plowman with The Honourable Phil Gude.

3.2

This Bill amends the Petroleum Act 1958. More specifically, it: -

• clarifies that royalties are to be paid on the value of the petroleum at the wellhead; and
• provides for the delegation of powers by the Minister

3.3 _¯ Petroleum Royalties

Clause 4 amends section 31 of the Act to provide that royalties are to be paid on the value of the petroleum at the wellhead. The Committee notes the comments in the Second Reading Notes:

"At present, the royalty provisions in section 31 of the Act makes the Victorian royalty requirements more onerous than other States......The proposed amendment in the Bill will bring Victoria into line with other States and ensure that producers in Victoria do not pay a higher effective rate of royalty."

The Committee makes no further comment.

3.4 _¯ Delegation of Minister’s Powers

Inappropriately delegates legislative power; or makes rights, freedoms or obligations dependent upon insufficiently defined administrative powers; (sections 4D(a)(iv) and (ii) Parliamentary Committees Act 1968)

Clause 3 provides that the Minister "may by instrument delegate to any person or class of persons employed in the administration of this Act any power of the Minister under this Act, other than this power of delegation and the powers under sections 5,6,7,8,31 and 53."

Sections 5-8 relate to the rights and powers of the Crown when a state of war or national emergency exists. Similarly, section 53 provides that the Minister shall have the authority in relation to petroleum produced from land in Victoria and the power to construct and maintain pipe-lines and oil refineries when there exists a state of war or national emergency, as set out in section 6.

Notwithstanding these exceptions, the Committee notes that any other powers can be delegated to any other person or class of persons. The Committee notes the comments in the Second Reading Speech;

"The existing Act does not provide for any delegation of Ministerial powers. Delegation of some Ministerial powers is essential to ensure that approvals required by the Act and the Regulations are provided to industry in a timely and efficient manner.

During petroleum operations the pace of activities often allows less than a day between the time approval is sought and when it is required. Obtaining Ministerial approval in such a short time frame can be extremely difficult and the ensuing delays are a cost to the industry. Delegation of certain powers overcomes this problem. Under the current arrangements, the formal consent of the Minister is on the recommendation of Departmental officers.

From an industry perspective delegation is advantageous as it significantly reduces the approval time frame and is seen as achieving more conformity with other States approach and legislation."

The Committee is of the view that the provision may breach sections 4D(a)(iv) and (v) because there is such an unlimited delegation of power. The Committee understands that the delegation of "certain powers" may be desirable. It would be preferable, however, in the Committee’s view, that the powers and the people or classes to whom they are to be delegated, be specified.

The Committee wrote to the Minister on 17 March 1994. A response has not been received at this point.

SMALL BUSINESS DEVELOPMENT CORPORATION (AMENDMENT) BILL

4.1

This Bill was introduced into the Legislative Assembly on 9 March 1994 by The Honourable Vincent Heffernan with The Honourable Phil Gude.

4.2

This Bill amends the Small Business Development Corporation Act 1976. More specifically, it: -

• changes the corporation’s name to "Small Business Victoria";
• expands the definition of "small business" under sections 2(1) of the Act;
• repeals the provision which enables the Treasurer to administer guarantees for repayments and be responsible for liabilities incurred by small business;
• repeals the requirement for the Governor-in-Council to approve the employment terms and conditions of the corporation staff;
• deletes various functions such as the buying and selling of land, assisting in arranging financial assistance through loans and guarantees and arranging finance for the provision of services and or facilities to small business;

4.3 _¯ Deletion of some functions

Clause 5 expands the definition of a small business to include small agricultural businesses and businesses with specified employee numbers. The Committee makes no further comment.

Clause 6 relates to the objectives and the functions of the corporation. It deletes certain functions, ie: - the arranging of financial assistance through loans or guarantees, the arranging of finance to government bodies or private enterprises to assist in the provision of facilities or services to small businesses. It also deletes the function of buying and selling of land.

The Committee notes the comments in the Second Reading Speech;

"On the 5th of July, the Government launched "Small Business Victoria". This represented the start of a new era for the relationship between small business and the government - the aim of reorganising the former organisation, the Small Business Development Corporation, was to provide a stronger focus for the small business sector in the 1990's to continue to contribute to economic and job growth.

"Small Business Victoria" will play a major part in restoring Victoria's economic recovery by addressing small business needs, operation, performance, competitiveness and development. It will facilitate the delivery of improved advisory and support services through the private sector."

The Committee makes no further comment.

4.4 _¯ Repeal of Treasurer's Guarantees

Clause 7 repeals the Treasurer's guarantees and loans functions. The Committee makes no further comment.

ALBURY-WODONGA AGREEMENT (AMENDMENT) BILL

5.1

This Bill was introduced into the Legislative Assembly on 9 march 1994 by The Honourable Roger Pescott with the Honourable Phil Gude.

5.2 _¯ Change of reporting requirements

This Act changes the reporting provisions of the Albury-Wodonga Agreement Act1973.

The Committee makes no further comment.

STATE INSURANCE OFFICE (AMENDMENT) BILL

6.1

This Bill was introduced into the Legislative Assembly on 9 March 1994 by The Honourable Alan Stockdale with The Honourable Ian Smith.

6.2

This Bill amends the State Insurance Office Act 1984 following the sale of the major businesses of the office.

6.3

Clause 5(2) reduces the number of directors on the Board from seven to five and removes the requirement for the appointment for a Treasury Officer to be appointed to the Board.

Clause 5(5)(c) provides that meetings of the Board are to be held at least once every three months rather than every calendar month as is the case presently.

Clause 5(5)(d) deletes section 12(5) of the Act which permitted directors to arrange insurance with the office.

The Committee makes no further comment.

6.4 _¯ Office of General Manager appointed by the Board, not the Governor-in- Council

Clause 6 provides that the General Manager shall be appointed by the Board and not by the Governor-in-Council as was previously the case. The Board also determines the remuneration and the travelling conditions and other allowances for the General Manager.

The Committee recognises the changes in the structure of the State Insurance Office and that the major part of the business has been sold to G.I.O. The Committee makes no further comment.

6.5 _¯ Repeal of certain provisions

Clause 8 repeals the provisions enabling the State Insurance Office to act as an authorised insurer for compulsory third party motor insurance. It also repeals the requirements for and references to life insurance funds and other redundant provisions relating to the use of State Insurance Office property for residential purposes and for the payment of a tax equivalent dividends.

The Committee notes the comments in the Second Reading Notes;

"The requirement for the State Insurance Office to pay a tax equivalent amount in addition to a dividend is no longer appropriate having regard to the nature of its operations. The Bill will enable the State Insurance Office to operate under statutory provisions, which are more appropriate to the reduced scale of its operations."

The Committee makes no further comment.

MINERAL RESOURCES DEVELOPMENT (FURTHER AMENDMENT) BILL

7.1

This Bill was introduced into the Legislative Assembly on 9 March 1994 by The Honourable Jim Plowman with The Honourable Phil Gude.

7.2

The background to the Bill is that some uncertainty has arisen in respect of the application of the Mineral Resources Development Act 1990 and the Extractive Industries Act 1966. The uncertainty arises in respect of the regulation of "minerals" and "stone" under the Acts.

This Bill amends the definition of "mineral" in the Mineral Resources Development Act 1990 and clarifies the application of that Act.

7.3 _¯ Commencement Clause

Inappropriately delegates legislative power; (section 4D(a)(v) of the Parliamentary Committees Act 1968)

Clause 2 is the commencement clause. It provides that the Act"(except section 6) comes into operation on the day on which it receives the Royal Assent."

The Committee is of the view that the open-ended commencement provision in respect of section 6 may breach section 4D(a)(v) of the Parliamentary Committees Act 1968. The Committee suggests that where such an open-ended commencement is inserted into a Bill, the reasons for not limiting the period by which commencement must be made, should be set out in any accompanying explanatory memorandum.

The Committee wrote to the Minister on 17 March 1994. A response has not been received at this point.

7.4

Clause 4 amends the definition of "mineral" contained in the Principal Act.

Clause 5 provides for the inclusion of an additional Schedule to the Principal Act which lists substances defined as "minerals".

Clause 6 amends the Principal Act to provide that the holder of an exploration licence or a mining licence may undertake exploration without a planning permit. The Committee notes the comments in the Second Reading Speech;

"Section 23 of the Mineral Resources Development (Amendment) Act 1993 overrides planning restrictions in relation to exploration and it was the intent of this legislation that it override those restriction for all exploration, whether carried out under an exploration licence or a mining licence. Section 6 of the Bill ensures that the intent of the provision in the Principal Act is clarified to ensure that it applies to all exploration as originally intended."

Clause 7 contains transitional provisions for titles issued and still in force under the Extractive Industries Act 1966 and titles applications being processed under the Extractive Industries Act 1966 for substances previously classified as "stone" but classified as "mineral" with the commencement of the this Bill. These provision ensure that existing titles retain the status, operation and effect of extractive industry titles.

The Committee makes no further comment.

7.5 _¯ Schedule 4

The members of the Committee raised an additional issue in respect of the new Schedule 4. Schedule 4 effectively provides for additional substances to be included as minerals. The members were concerned that the inclusion of these substances and the fact that they are found on the surface and not mined, will have the effect of expropriating certain substances lying on the surface to the Crown. The Committee requested clarification of the effect of the Schedule from the Minister. A response has not been received at this point.

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