Annual Review 2002,
Regulations 2002

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Significant Issues

In 2002, 136 regulations and one State Environment Protection Policy were made and reviewed by the Regulation Review Subcommittee.

The Committee did not make any Reports to Parliament concerning regulations made in 2002. While the Committee did not make any Reports to Parliament, where the Regulation Review Subcommittee had concerns with regulations it wrote to responsible Ministers seeking clarification on each occasion. The Committee is pleased to report that Ministers generally responded promptly to all concerns expressed by the Regulation Review Subcommittee. Appendix 2 contains a list of correspondence between the Regulation Review Subcommittee and Ministers concerning regulations made in 2002.

Inconsistent with the Objectives of the Authorising Act

Under section 21(1)(c) of the Subordinate Legislation Act 1994 (Vic) the Regulation Review Subcommittee examines regulations to ensure that they are consistent with the objectives of their authorising Acts.

Example

SR 9 – Health (Quality of Drinking Water) Regulations 2002 impose standards and obligations on water supply authorities to protect water supplies from contamination. These Regulations replaced the Health (Quality of Drinking Water) Regulations 1991 (the 1991 Regulations). Under the 1991 Regulations the maximum penalty for non-compliance was $5,000 whereas under these Regulations the maximum penalty which may be imposed is $2,000. The Regulation Review Subcommittee considered that the new maximum penalty for non-compliance was very low given the serious consequences which can result from non-compliance.

The Regulation Review Subcommittee wrote to the Minister pointing out that the maximum penalty imposed under the Regulations may be inconsistent with the objectives of the Health Act 1958 and seeking advice as to why the penalties for non-compliance had been reduced. The Minister indicated that the penalties had been reduced because of provisions in the Premier’s Guidelines which indicate that penalties exceeding $2,000 should be contained in primary legislation, that is Acts rather than Regulations.

The Regulation Review Subcommittee considers that regulations may impose penalties exceeding $2,000 as long as the authorizing Act specifically provides power for regulations to impose those sorts of penalties. The Regulation Review Subcommittee accepted the Minister's response.

Subcommittee’s letter

SR 9 – Health (Quality of Drinking Water) Regulations 2002

At a meeting on 30 August 2002 the Regulation Review Subcommittee examined the above Regulations as it is required to do under the Subordinate Legislation Act 1994.

The Health (Quality of Drinking Water) Regulations 2002 replace the Health (Quality of Drinking Water) Regulations 1991. The Regulations impose standards and obligations on water supply authorities to protect water supplies from contamination. More specifically the Regulations –

  • Impose a general duty upon water supply authorities to take reasonable precautions to ensure that their water supply systems are protected from contamination;

  • Require officers of water supply authorities and councils who suspect that water supplied by a water authority may be the cause of an illness or the means by which an illness is being (or has been) transmitted to report the matter to the Secretary within 24 hours of forming the suspicion;

  • Require water supply authorities to take samples of water within their control at set intervals;

  • Require water samples to be tested for E-coli and total coliform bacteria;

  • Require water authorities to comply with any directions from the Secretary requiring more frequent sampling.

The penalties imposed for non-compliance with these provisions is $2,000 whereas under the previous regulations a maximum penalty of $5,000 could be imposed. The RIS notes that the regime of monitoring and testing water supplies operates to reduce the probability of major contamination incidents such as that which occurred in Sydney in 1998 and which is estimated to have cost $300 million. The Subcommittee notes that the penalties imposed seem to be very low in light of the serious consequences which may result from failure to comply with these Regulations.

Section 21(1)(c) of the Subordinate Legislation Act 1994 allows the Scrutiny of Acts and Regulations Committee to report to Parliament where a regulation appears to be inconsistent with the objectives of the authorising Act. Two of the objectives of the Health Act 1958 are –

(c) to reduce the incidence of disease, disability, distress and symptoms of ill health;

(d) to reduce the incidence of untimely death.

The Subcommittee notes that significant benefits are obtained from the regulation of water authorities as contained in these Regulations. The regime of sampling and testing established by the Regulations reduces the probability of water contamination incidents. However the penalties for non-compliance with this regulatory regime are very low, given that non-compliance could result in serious illness and death. It is on this basis that the Subcommittee considers that the penalties imposed under these Regulations may be inconsistent with the general objectives of the Health Act 1958 and may possibly constitute a breach of section 21(1)(c) of the Subordinate Legislation Act 1994.

The Subcommittee seeks your advice as to why the penalties imposed for non-compliance with the Regulations were reduced, given the serious consequences which may result from non-compliance. The Subcommittee looks forward to receiving your response.

Minister's Response[27]

SR 9 – Health (Quality of Drinking Water) Regulations 2002

Thank you for your letter of 13 September 2002 regarding the levels of penalties in the Health (Quality of Drinking Water) Regulations 2002.

The penalties in the new Regulations were reduced to 20 penalty units or less having regard to the content of paragraph 1.13 of the Subordinate Legislation Act 1994 Guidelines (1997) made by the Premier under section 26 of the Subordinate Legislation Act 1994. Paragraph 1.13 sets out several matters which should be in primary rather than subordinate legislation, including matters that impose significant criminal penalties (such as fines exceeding 20 penalty units or imprisonment).

It is understood that the difference between matters properly the subject of primary or subordinate legislation is derived from views previously expressed in the former Legal and Constitutional Committee’s 24th Report on Subordinate Legislation (November 1991) and the 3rd Report of the Scrutiny of Acts and Regulations Committee on Subordinate Legislation (October 1993).

I trust that this clarifies the matter.

Hon. John Thwaites, MP
Minister for Health

Inconsistent with Principles of Justice and Fairness

Under section 21(1)(h) of the Subordinate Legislation Act 1994 (Vic) the Regulation Review Subcommittee examines regulations to ensure that they are consistent with principles of justice and fairness.

Example

SR 42 – Health Records Regulations 2002 set maximum fees for obtaining access to records under the Health Records Act 2001 and set out the circumstances for the collection of health information. These Regulations enable people to access their health records where that information is held by a private sector health service provider (for example private hospitals, dentists, pathology services) or a private sector organisation which holds health information (for example private schools, kindergartens, crèches).[28]

In its submission as part of the RIS process the Mental Health Legal Centre expressed concern about the ability of pensioners and health care card holders to access their own health records and suggested that these groups should have been granted an exemption from fees. The Regulation Review Subcommittee considers inability by low income groups to access health information because of high maximum to be inconsistent with principles of justice and fairness under section 21(1)(h) of the Subordinate Legislation Act 1994 (Vic).

The Regulation Review Subcommittee wrote to the Minister seeking clarification. The Minister acknowledged the Regulation Review Subcommittee’s concerns and pointed out that the Regulations provide a discretion to private sector organisations not to charge fees where those seeking access are financially disadvantaged. The Minister indicated that the Health Services Commissioner does not keep statistics which specifically relate to financially disadvantaged groups but that general enquiries from consumers and health service providers are monitored. Interestingly many of the telephone calls received by the Health Services Commissioners have been from doctors complaining that the fees are too low. The Minister confirmed that the comments made by the Mental Health Legal Centre were taken into account prior to the enactment of the Regulations. The Minister also indicated that the Department will monitor the impact of the regulations on pensioners and health care cardholders.

The Regulation Review Subcommittee accepted this response noting the need to carefully balance the competing interests of providing access to health care records to financially disadvantaged groups and the need for some level of cost recovery by private sector oganisations. The Subcommittee is very pleased to note that the Minister’s department will be monitoring the impact of the Regulations on pensioners and health care cardholders.

Subcommittee’s letter

SR 42 – Health Records Regulations 2002

At its meeting on 11 April 2003 the Regulation Review Subcommittee discussed the above Regulations following up from comments made by the previous Subcommittee.

The Health Records Regulations 2002 set maximum fees for obtaining access to records under the provisions of the Health Records Act 2001 and set out the circumstances for the collection of health information. The maximum fees payable by an individual depend on the type of access sought to that information. These fees are set out in Schedule 1 of the Regulations.

The previous Subcommittee was concerned about comments made by the Mental Health Legal Centre that the cost of accessing health records for pensioners and health care card holders may be prohibitive and that these groups should have been granted an exemption. The Subcommittee's Legal Adviser was requested to seek further information.

The Subcommittee notes advice provided to the Department by Parliamentary Counsel that there is power in the Health Records Act 2001 to fix a lower maxima for eligible beneficiaries but not to impose a "nil fee" or to make waiver mandatory. The Subcommittee also notes that usually where private sector costs are reduced (for example electricity) the Government provides a subsidy to organisations affected to compensate for the lower charge. No Government subsidy is envisaged for organisations affected by these Regulations. The Subcommittee is aware that in setting maximum fees competing interests had to be carefully weighed – provision of access to low income applicants and allowing organisations, particularly those in the private sector to obtain a reasonable level of cost recovery.

The Subcommittee remains concerned about the ability of pensioners and health care card holders to access their health information. The Subcommittee seeks your advice as to how the Regulations are operating in practice and in particular whether there is any data available about the extent to which pensioners and health care card holders are accessing their health information. The Subcommittee considers that if the maximum fees imposed by the Regulations are inhibiting access by pensioners and health care card holders to their health information this would be inconsistent with principles of justice and fairness under section 21(1)(h) of the Subordinate Legislation Act 1994.

The Subcommittee looks forward to receiving your response.

Minister's Response[29]

SR 42 – Health Records Regulations 2002

Thank you for your letter of 16 April 2003 that identifies some of the ongoing concerns of the Regulation Review Subcommittee in relation to the Health Records Regulations 2002 (the Regulations).

As you identified in your letter, in setting these Regulations careful consideration was given to the competing interests of both consumers and private sector organisations that hold health records. In response to concerns about the ability of pensioners and health care cardholders to access their information, the Health Services Commissioner (the Commissioner) has produced information for organisations and consumers about the rights to access created under the Health Records Act. These highlight the fact that organisations are not obliged to charge a fee for providing access to health information and that if they do so the fee cannot be more than that which is set out in the regulations. In addition, as part of the ongoing education process provided by the Commissioner’s office, doctors are informed that they have a discretion not to charge a fee for access or transfer of health information, and they always have the option not to do so in situations where the patient is financial disadvantaged.

The Commissioner’s office has informed the Department that it does not keep statistics on complaints that relate specifically to pensioners and health care cardholders accessing their health information. The office does receive general enquiries from both consumers and health service providers about the costs associated with providing access to health records or having these records transferred to another health service provider. I am advised that normally these are resolved through clarification of fees prescribed by the regulations associated with these types of requests.

It is interesting to note that, of the telephone calls (approximately 60) received by the office this year regarding fees, many have been from doctors complaining that the fees are too low, or asking for advice on how much they can charge.

I appreciate that the committee is concerned to ensure that pensioners and health care cardholders can have reasonable access to their health information. The concerns of the Mental Health Legal Centre are important, and were taken into account when the regulations were settled. However, I am advised that the Health Issues Centre, which is the peak Victorian organisation representing a wide range of consumers, acknowledged that the Health Records Act is designed to allow some measure of cost recovery. It accepted that the regulations did strike a balance between cost recovery and ensuring that access is not prohibitive. The Government accepted their advice that the maxima set out in the (then) draft regulations should not be increased in the final regulations. The views expressed by the Health Issues Centre also reflected discussions within the Consumer Reference Group, which advises the Health Services Commissioner regarding health records issues. My Department will liaise with the Commissioner to monitor the impact of the regulations on pensioners and health care cardholders.

As you note, in setting the maximum fees under the regulations, the Government had to ensure that the competing interests of consumers and private health care providers were carefully balanced. At this stage there is no evidence that access to health information for pensioners and health care cardholders has been a significant issue since the Act came into operation last year.

Hon. Bronwyn Pike MP
Minister for Health

Non Compliance with the Subordinate Legislation Act 1994

Under section 21(1)(j) of the Subordinate Legislation Act 1994 (Vic) the Regulation Review Subcommittee examines regulations to ensure that there is substantial compliance with the requirements of the Act and the Premier’s Guidelines.

Example

SR 133 – Private Agents (Interim) (Amendment) Regulations 2002 regulate the security industry. These Regulations were exempted from the RIS process by the Premier under section 9(3) of the Subordinate Legislation Act 1994 (Vic). Section 9(3) allows the Premier to exempt regulations from the RIS process in cases of emergency or overriding public interest. The Premier’s Guidelines make it clear that Premier’s certificates should only be granted where there are ‘special circumstances’ and not for administrative convenience. The ‘special circumstances’ in this case were that final form regulations could not be completed because of the calling of the election and without final form regulations the security industry would have been left unregulated. The Regulation Review Subcommittee was concerned because this was the fourth occasion on which final form regulations governing the security industry were unable to be completed.

The Regulation Review Subcommittee wrote to the Minister acknowledging that the need for the security industry to continue to be regulated constitutes ‘special circumstances’ but pointing out that the extension of these Regulations on four occasions defeated the purpose of the Subordinate Legislation Act 1994 (Vic) which requires regulations to sunset at the end of 10 years. The Regulation Review Subcommittee also indicated that it considered the use of Premier’s certificates on three separate occasions and the granting of an extension under section 8(1)(d)(iii) on another occasion to be inconsistent with the intention of the Subordinate Legislation Act 1994 (Vic) and the Premier’s Guidelines.

The Minister noted the Regulation Review Subcommittee’s comments concerning the use of Premier’s certificates and provided the Subcommittee with a detailed explanation of the difficulties faced in producing final form regulations.

The Subcommittee was satisfied with the Minister’s response. The Subcommittee remains of the view that Premier’s certificates should only be used where there are ‘special circumstances’.

Subcommittee’s letter

SR 133 – Private Agents (Interim) (Amendment) Regulations 2002

At a meeting on 12 May 2003 the Regulation Review Subcommittee examined the above Regulations as it is required to do under the Subordinate Legislation Act 1994.

The Private Agents (Interim) (Amendment) Regulations 2002 regulate the security industry. These Regulations were exempted from the Regulation Impact Statement (RIS) process by the Premier under section 9(3) of the Subordinate Legislation Act 1994. The Subcommittee notes that under section 9(3) of the Subordinate Legislation Act 1994 the Premier can exempt regulations from the RIS process in cases of emergency or overriding public interest. The Premier's Guidelines indicate that Premier's certificates are not to be issued merely for administrative convenience. In addition the Premier's Guidelines point out that such an exemption should only be given if the proposed regulation is to sunset in 12 months.

The Premier certified that the special circumstances and overriding public interest for exempting these Regulations from the RIS process was that final form regulations could not be completed due to the calling of the election and without final form regulations the security industry would be left unregulated. The Subcommittee agrees that leaving the security industry unregulated constitutes special circumstances. However the Subcommittee is very concerned that this is the fourth time final form Regulations were unable to be completed.

The Private Agents Regulations 1990 were first extended for a period of 12 months by SR 79 – Subordinate Legislation (Private Agents Regulations – Extension of Operation) Regulations 2000 on the basis that additional time was needed to complete a review of the Private Agents Act 1966. Sections 8(1)(d)(iii) and 5(3) of the Subordinate Legislation Act 1994 were relied upon for granting this extension.

On 12 August 2001 the Private Agents Regulations 1990 expired and were replaced by SR 76 – the Private Agents (Interim) Regulations 2001 (the 2001 Interim Regulations). The 2001 Interim Regulations were exempted from the RIS process under section 9(3) so that the review of the Private Agents Act 1966 could be completed and to ensure that the private security industry continued to be regulated. The 2001 Interim Regulations expired on 30 June 2002.

The Subcommittee wrote to the Minister concerning the 2001 Interim Regulations seeking an explanation as to when the review of the Private Agents Act 1966 would be completed. The Minister indicated that while precise timelines could not be given it would be necessary to complete final Regulations before the 2001 Interim Regulations expired in June 2002. The Subcommittee notes that final form Regulations were not completed prior to June 2002.

The 2001 Interim Regulations were replaced by SR No. 52 — Private Agents (Interim) Regulations 2002 (the First 2002 Interim Regulations). The First 2002 Interim Regulations were exempted from the RIS process by a certificate of exemption issued by the Premier on the basis that the Private Agents Act 1966 was subject to extensive review and that final Regulations could not be remade until the review of the Act was finalised. The Subcommittee notes that the First 2002 Interim Regulations expired on 30 December 2002 and final form Regulations had still not been completed.

The First 2002 Interim Regulations were replaced by the Private Agents (Interim) (Amendment) Regulations 2000). These are discussed above in paragraph 2 of this letter. The Subcommittee notes that the final form regulations have now been made – SR No. 27 – Private Agents Regulations 2003 and that these commenced on 2 April 2003. The commencement of these Regulations on 2 April 2003 left the security industry unregulated for a period of two days.

While the Subcommittee accepts that the need for the security industry to continue to be regulated constitutes special circumstances – the extension of these Regulations on four occasions defeats the purpose of the Subordinate Legislation Act 1994 which requires Regulations to sunset at the end of 10 years. Sunsetting is an important part of the regulation-making process because it enables regulations to be subject to regular review. Part 12 of the Premier's Guidelines makes clear that it is important for sufficient time to be allowed for a proper evaluation and review of regulations. The use of section 8(1)(d)(iii) and later Premier's certificates to enable the private security to continue to be regulated while final form regulations were completed has meant that the Private Agents Regulations 1990 have continued in existence for approximately 12 1/2 years rather than 10 years as required by the Subordinate Legislation Act 1994. The Subcommittee sees this as a serious issue and as undermining the sunsetting process.

The Subcommittee considers the use of Premier's certificates on three separate occasions to grant extensions to these Regulations as being at odds with the spirit and intention of the Subordinate Legislation Act 1994 and the Premier's Guidelines. The Premier's Guidelines make clear that Premier's certificates should only be issued where there is an emergency or overriding public interest and that they should not be issued merely for administrative convenience. The Subcommittee wishes to remind legislative officers of the importance of commencing reviews of regulations well in advance of the expiry of regulations.

While the Subcommittee has approved the Regulations on this occasion it will consider any future use of Premier's certificates as outlined above to constitute a breach of section 21(1)(j) of the Subordinate Legislation Act 1994.

The Subcommittee would appreciate it if the above matters could be drawn to the attention of legislative officers in your department.

Minister's Response[30]

SR 133 – Private Agents (Interim) (Amendment) Regulations 2002

Thank you for your letter dated 20 May 2002 concerning the above Regulations.

I have noted the Committee’s view that the extension of the operation of the existing Regulations on four occasions is at odds with the spirit and intent of the Subordinate Legislation Act 1994 and the Premier’s Guidelines issued under the Act.

As you observe in your letter, the reason for the series of extensions was to allow for the continuation of the existing licensing regime while the review of the Private Agents Act 1966 was completed and any resultant reforms implemented. That process has proved to be more protracted than is perhaps desirable; however, the ambit and method of the future regulation of the private security industry is an important issue and has been the subject of extensive discussion within Government.

Each of the extensions was based on the expectation that a new regulatory regime would be implemented and, importantly in that context, avoiding the potential confusion within the industry and community if two Regulatory Impact Statements (RIS) were issued in rapid succession – the first on effectively remaking the existing Regulations so as to preserve the status quo on an interim basis and the second on any proposed new statutory rule under a new legislative regime. In my view, far from being simply a matter of administrative convenience as you imply, these circumstances gave rise to an overriding public interest in issuing the Premier’s Certificates.

On the view that a new regime appeared unlikely to be agreed in time and the undesirability of a further extension to the interim Regulations, the Department of Justice had prepared a RIS as a necessary step in effectively re-making the existing Regulations prior to the expiry of the Private Agents (Interim) Regulations 2002 on 30 December 2002. However, the calling of the State Election in late 2002 made it inappropriate to release that RIS until a new Government was formed. As a consequence, the Private Agents (Interim)(Amendment) Regulations 2002 were made without an RIS under a Premier’s Certificate, which had the effect of extending the operation of the existing Regulations until 30 March 2003. I am grateful that your Sub-Committee has acknowledged that leaving the security industry unregulated (had the interim regulations simply been allowed to expire) constitutes special circumstances warranting the issue of a Premier’s Certificate.

The extension of the operation of the Regulations until 30 March 2003 was regarded as the minimum period possible for a new Government to formulate a view and, if necessary, undertake the RIS process required under the Subordinate Legislation Act 1994. As you are aware, the Bracks’ Government was returned to office with a resounding majority. This victory enabled the Department of Justice to release the RIS and draft Regulations that it had previously prepared for public comment. These Regulations were identical to those that the Department had drafted prior to the 2002 election (save for some amendments that were adopted in response to submissions received on the RIS) and that would have been made prior to 30 December 2002 had the election not been called. As you have noted, the resultant regulations, the Private Agents Regulations 2003 (SR No. 27/2003), came into operation on 2 April 2003.

I note your advice that the Sub-Committee considers that any future use of Premier’s Certificates as occurred with the Private Agents Regulations will constitute a breach of section 21(1)(j) of the Subordinate Legislation Act 1994.

I trust that my response has made clear why the extensions to the operation of the Regulations were sought and the unusual circumstances that necessitated the final extension.

Hon. André Haermeyer MP
Minister for Police and Emergency Services

Consultation

Section 6 of the Subordinate Legislation Act 1994 (Vic) sets out the requirements for consultation. These requirements apply to regulations made with or without RISs. Responsible Ministers must ensure that there is consultation “where the guidelines[31] require consultation” with any sector of the community on which an appreciable economic or social burden may be imposed and other Ministers whose area of responsibility may be affected.[32] The Premier’s Guidelines provide –[33]


5.20 If the proposed statutory rule is likely to impose an appreciable burden, cost or disadvantage on any sector of the public, consultation should take place with that sector, eg business groups, community groups, special interest groups. The consultation should include discussion of the need for and method of the proposed regulation.

The Premier’s Guidelines indicate that the “nature and degree of consultation that is appropriate for any particular rule will vary with the nature of that rule”.[34] This places ultimate responsibility on Ministers to ensure that appropriate consultation takes place and includes all those affected by a proposed regulation.

While the Premier’s Guidelines provide assistance with the consultation process, the Regulation Review Subcommittee acknowledges that some sections are unclear and ambiguous, making it difficult for department and agency officers to determine in what circumstances consultation should take place. There is, for example, an inconsistency between the Subordinate Legislation Act 1994 (Vic) and the Premier’s Guidelines as to whether consultation must[35] or should[36] occur in accordance with the Premier’s Guidelines. It is the strong preference of the Regulation Review Subcommittee that consultation take place with all those affected by a particular regulation and that the current ambiguities be resolved.

The Regulation Review Subcommittee notes that not all departments and agencies provide details of who was consulted in consultation certificates for regulations excepted and exempted from the RIS process. Consequently the Regulation Review Subcommittee has had to seek additional information concerning consultation on a number of occasions. The Regulation Review Subcommittee considers that it is important for all consultation certificates to provide details of all those consulted.

Example 1

Section 11(3) of the Subordinate Legislation Act 1994 (Vic) imposes a duty on Ministers “to consider all submissions and comments received on a draft statutory rule where a RIS has been prepared”. The Premier’s Guidelines also emphasise the need for all comments and submissions to be considered before a regulation is made. The Subcommittee considers that community wide consultation is essential for the effectiveness of the regulatory system.

During the Inquiry into the Subordinate Legislation Act 1994 (Vic) the Committee received evidence of some dissatisfaction with the community consultation process, particularly the adequateness of consideration given to comments made. The Committee considers that there will always be some dissatisfaction with final form regulations however stronger support can be obtained where the reasons for proceeding in a particular direction are more clearly explained. The Committee recommended that departments and agencies provide detailed reasoning in support of final regulations and that this be made available on a centralised website dedicated to all types of legislation. In the Government Response to the Committee’s Report, it was agreed that departments and agencies should provide broad reasons in support of final regulations to all those who made submissions.

SR 62 – Domestic (Feral and Nuisance) Animals (Amendment) Regulations 2002 set out the requirements for perimeter fencing for dangerous dogs guarding commercial premises, the accreditation requirements for qualified dog trainers and the standards to be met by obedience assessment programs. Twelve submissions raising a number of issues were received in response to the RIS. A standard response, which did not address many of the issues raised, was sent to all those who made submissions.

The Regulation Review Subcommittee wrote to the Minister emphasising the importance of responding to specific comments. The Regulation Review Subcommittee considers that where there is a more specific response to issues raised there will be much greater support for the final regulations and greater public confidence in the adequacy of the submission process.

Subcommittee’s letter

SR 62 – Domestic (Feral and Nuisance) Animals (Amendment) Regulations 2002

At a meeting on 16 April 2003 the Regulation Review Subcommittee examined the above Regulations as it is required to do under the Subordinate Legislation Act 1994.

These Regulations set out the requirements for perimeter fencing for dangerous dogs guarding commercial premises, the accreditation requirements for qualified dog trainers and the standards to be met by obedience assessment programs.

Twelve submissions were received as part of the Regulation Impact Statement (RIS) process and a number of concerns were raised by those who made submissions. For example the Geelong City Council suggested that the requirements concerning perimeter fencing should also apply to gates to ensure that gates also meet minimum standards and the Australian Association of Gentle Modern Dog Training expressed dissatisfaction with not being consulted and concern over the requirement that organisations conducting dog training need to obtain annual approval from the Minister. The Subcommittee's Legal Adviser sought clarification from the responsible policy officer in the Department concerning these and other issues raised in submissions and the Subcommittee is satisfied with the response received. However the Subcommittee remains concerned that those organisations which made these comments did not receive any feedback on the issues they raised.

The Subcommittee notes that all those who made submissions received a standard response from the Department and that this standard response did not address many of the concerns raised in those submissions. The Subcommittee draws attention to the requirement under section 11(3) of the Subordinate Legislation Act 1994 that the responsible Minister must ensure that all comments and submissions are considered before a regulation is made. Paragraph 5.42 of the Premier's Guidelines also discusses this requirement and the need to adequately address valid criticisms.

The Subcommittee understands that some people and organisations will always remain dissatisfied with the final regulatory outcome. However the Subcommittee considers that where an effort is made to explain the reasons for rejecting particular suggestions there is more support for the final regulations and for the public submission process. In its Report on the Subordinate Legislation Act 1994 the Scrutiny of Acts and Regulations Committee (the Committee) received evidence of some dissatisfaction with the public consultation process in that some members of the public believed that their comments were not seriously taken into account. To improve public satisfaction with the consultation process the Committee recommended that departments and agencies consider providing detailed reasoning in support of final regulations. In its Response to the Committee's Report, the Government agrees that departments and agencies should provide reasons which broadly address issues raised in submissions.

The Subcommittee wishes to draw your attention to the importance of the public submission process and to the need for public confidence in and satisfaction with that process. The Subcommittee has approved the Regulations but wishes to emphasise the importance of providing more specific feedback to individuals and organisations on issues raised as part of the public submission process.

Minister’s Response[37]

SR 62 – Domestic (Feral and Nuisance) Animals (Amendment) Regulations 2002

I refer to your letter of 28 April 2003, in which you provided comments by the Regulation review Subcommittee on the Domestic (Feral and Nuisance) Animal (Amendment) Regulations 2002.

I accept the Committee’s comments on the quality of the Department of Primary Industries response to public input on these regulations and will ensure that the quality of departmental feedback to public comment is improved.

Hon Bob Cameron, MP
Minister for Agriculture

Example 2

SR 121 – Supreme Court (Chapter I Amendment No. 22) Rules 2002 make changes to the scale of costs and to the costs awarded where offers of compromise are involved. The Regulation Review Subcommittee was concerned about the cost impact on defendants who reject offers of compromise and wrote to the Attorney-General seeking clarification of the consultation undertaken prior to the enactment of these Rules.

The Attorney-General indicated that there had been consultation with and support from the Victorian Bar Council and the Law Institute and that Victorian law would now be consistent with other jurisdictions. The Attorney-General indicated that the changes to the costs awarded where offers of compromise are involved were only made after careful consideration.

The Regulation Review Subcommittee thanks the Attorney-General for assisting it to obtain a better understanding of the above Rules and the changes made to them.

Subcommittee’s letter

SR 121 – Supreme Court (Chapter I Amendment No. 22) Rules 2002

At a meeting on 5 May 2003 the Regulation Review Subcommittee examined the above Rules as it is required to do under the Subordinate Legislation Act 1994.

The Supreme Court (Chapter I Amendment No. 22) Rules 2002 makes changes to the scale of costs and to the costs awarded where offers of compromise are involved. Rule 26.08 provides that where an offer of compromise is rejected by the defendant and the plaintiff later obtains judgment on no less favourable terms (unless the court orders otherwise) the plaintiff shall be entitled to costs as follows–

(1) where the claim involves damages arising out of death or bodily injury costs on an indemnity basis;

(2) for any other claim costs on a party-party basis up to and including the day the offer was served and all costs after that on an indemnity basis.

The Subcommittee notes that previously in the above circumstances costs were awarded on a solicitor-client basis rather than an indemnity basis. The Subcommittee understands that solicitor-client costs include all those costs reasonably incurred while costs on an indemnity basis include all costs. The Subcommittee seeks your advice as to what consultation was undertaken prior to changing the type of costs awarded and whether prior to making these changes any consideration was given to the cost impact on defendants who reject offers of compromise.

The Subcommittee looks forward to receiving your response.

Minister's Response[38]

SR 121 – Supreme Court (Chapter I Amendment No. 22) Rules 2002

Thank you for your letter dated 12 May 2003 inquiring about consultation before the making of the Supreme Court (Chapter 1 Amendment No.22) Rules 2002, relating in particular to the costs penalty in respect of offers of compromise.

I have made inquiries of the Supreme Court. The Acting Chief Justice advises that the matter came before the Supreme Court Rules Committee at its meeting on 30 October 2001, shortly after making of the Supreme Court (Chapter I Amendment No. 18) Rules 2001 (SR 111/2001). Rule 8 of these Rules amended Rule 63.28 and inserted a new Rule 63.30 to make express provision for the first time for costs on an indemnity basis.

I am advised that after the making of the Chapter I Amendment No.18 Rules on 25 October 2001, the Chairman of the Rules Committee wrote to the Bar Council and the Law Institute to seek their views on the proposal to amend Order 26 by changing the costs penalty from solicitor/client costs, to costs on an indemnity basis. It also appears that the Law Institute’s representative on the Rules Committee had drawn to his attention the Rules of the Federal Court which provided for costs on an indemnity basis as distinct from costs on a solicitor/client basis.

On 27 November 2001, the Committee was told that the Law Institute had welcomed the opportunity to contribute and had appointed a sub-committee to examine the proposal.

On 7 May 2002 the Bar’s representative on the Committee indicated that, as he apprehended it, the proposal had been approved by a sub-committee of the Bar Council. This was subsequently confirmed on 20 August 2002.

On 3 September 2002, the Law Institute’s representative reported that a Committee of the Law Institute had also agreed to the proposal. The Law Institute’s representative observed that the concept of offers of compromise had originated in Victoria but that, in adopting the concept, other jurisdictions had chosen to include costs on an indemnity basis. The current proposal therefore would bring Victorian into line with other jurisdictions.

Accordingly, at its meeting on 17 September 2002, the Rules Committee instructed its Secretary to prepare the Supreme Court (Chapter I Amendment No.22) Rules 2002 to effect, inter alia, the change to indemnity costs in relation to offers of compromise. A draft rule was prepared and considered by the Rules Committee on 1 October and 15 October 2002. The draft was finally settled and approved on 12 November 2002.

I gave an exception certificate on 18 November 2002 and, as you are aware, the Rules were made by the Council of Judges on 28 November 2002.

It would appear that the change from solicitor/client costs to indemnity costs in respect of offers of compromise was not made lightly. The Rules Committee consulted with both branches of the profession at a formal level. Consultation extended over a considerable period of time. I am confident that the matter was considered by the profession from a range of perspectives, including the cost impact on defendants.

I trust this answers your query.

Hon. Rob Hulls, MP
Attorney-General

Example 3

SR 114 – Road Safety (General) (Responsible Driving) Regulations 2002 specify the particulars to be contained in a licence suspension notice and increase fines for speeding offences. SR 115 – Road Safety (Drivers) (Demerit Points) Regulations 2002 amend the demerit points for specified traffic offences. Both regulations were exempted from the RIS process on the basis that they did not impose an appreciable economic or social burden on any sector of the public.

The Regulation Review Subcommittee was concerned that both Regulations may impose a burden on taxi drivers, chauffers and other groups who spend long hours driving on roads. The Regulation Review Subcommittee wrote to the Minister seeking clarification as to the consideration given to the impact on and consultation with these particular groups.

Subcommittee’s letter

SR 114 – Road Safety (General) (Responsible Driving) Regulations 2002
SR 115 – Road Safety (Drivers) (Demerit Points) Regulations 2002

At a meeting on 12 May 2003 the Regulation Review Subcommittee examined the above Regulations as it is required to do under the Subordinate Legislation Act 1994.

The Road Safety (General)(Responsible Driving) Regulations 2002 specify the particulars to be contained in a licence suspension notice and increase fines for speeding offences. The Road Safety (Drivers)(Demerit Points) Regulations 2002 amend the demerit points for specified traffic offences. Both Regulations were exempted from the Regulation Impact Statement (RIS) process under section 9(1)(a) of the Subordinate Legislation Act 1994 as not imposing an appreciable economic and social burden on any sector of the public.

Both Regulations were also accompanied by section 6 consultation certificates. These certificates indicate that prior to making these Regulations consultation was undertaken with Victoria Police, the Department of Justice and VicRoads. The section 6 certificates also indicate that the proposed regulations do not impose an appreciable economic or social burden on any sector of the public. The Subcommittee is concerned that both these Regulations may impose a burden on taxi drivers, chauffers and other groups who spend considerably more hours driving on roads than most other road users.

The Subcommittee notes that paragraph 5.20 of the Premier's Guidelines provides that where a proposed regulation "is likely to impose any appreciable burden, cost or disadvantage on any sector of the public, consultation should take place with that sector, eg business groups, community groups, special interest groups".

The Subcommittee seeks your advice as to whether any consideration was given to the impact of these Regulations on taxi drivers, chauffers and other similar groups who spend long hours driving on roads and whether any consultation took place with these groups and organisations such as the RACV.

The Subcommittee looks forward to receiving your response.

Minister's Response[39]

SR 114 – Road Safety (General)(Responsible Driving) Regulations 2002
SR 115 – Road Safety (Drivers)(Demerit Points) Regulations 2002

Thank you for your letter of 20 May 2003, in relation to the Road Safety (General)(Responsible Driving) Regulations 2002 (SR 114) and the Road Safety (Drivers)(Demerit Points) Regulations 2002 (SR 115).

You have indicated that the Subcommittee is concerned that both Regulations may impose a burden on taxi drivers and other groups of “professional” drivers and that the Premier’s Guidelines may require consultation with such groups.

You also ask whether consideration was given to the impact of the Regulations on such groups and whether any consultation took place with such groups and organisations such as the RACV.

The answer to your question is that although consideration was given to the matter, the conclusion reached was that an increase in penalties for actions that were already unlawful could not be said to impose an appreciable economic or social burden on a sector of the public within the meaning of the Subordinate Legislation Act 1994.

The above conclusion took into account independent legal advice obtained from the Victorian Government Solicitor in 2000 and from Crown Counsel in 2001.

I am advised that economic and social burdens include the burdens of complying with the law but not penalties for offences. In reality, the burden in this area was imposed when the conduct was proscribed by earlier laws which created the offences.

A further aspect is that the penalty increases only impact on people who commit offences in the future. Potential offenders are not an identifiable sector of the public because their identity cannot be ascertained until offences are committed.

It follows that consultation in accordance with the Premier’s Guidelines was not required, having regard to the terms of section 6(b) of the Act.

I appreciate that the concerns of the Subcommittee may have been influenced by the fact that people who drive for a living have a greater reason to fear an increase in penalties for driving offences than people who drive only occasionally. Putting it another way, there is potential for the increase in penalties to have a greater influence on “professional drivers” than on the rest of the community.

The question whether considerations of that kind should lead to a more tolerant scale of demerit points for “professional drivers” was considered by the Parliamentary Road Safety Committee in its Inquiry into the Demerit Points Scheme in 1994. Section 6.6 of the Committee’s Report contains a discussion of the topic. It endorsed an earlier response by the Parliamentary Crime Prevention Committee in 1993 to representations by taxi drivers on the matter, which was in the following terms:

“…they should be held more accountable with an expectation of a higher professional driving skill than that of a normal driver. ...Regardless of the number of hours on the roads, they should be able to drive without coming to the notice of the police.”

The Report indicated that the RACV’s submission to the Parliamentary Road Safety Committee argued against differential treatment of professional drivers.

In the circumstances, I consider that consultation with the groups referred to in you letter was not required.

Hon. Peter Batchelor, MP
Minister for Transport

Regulation Impact Statements

A Regulation Impact Statement (RIS) must accompany all regulations that are made, unless the regulations fall within an exception[40] or exemption[41] under the Subordinate Legislation Act 1994 (Vic). A RIS is an assessment of the economic and social costs and benefits of a proposed regulation. It is not supposed to be complex but “a commonsense document which provides an honest assessment of the foreseeable impact of a proposed regulation”.[42] A RIS should carefully consider and evaluate the impact of a proposed regulation on those affected and the competing interests involved. It should also contain an evaluation of alternatives to a proposed regulation and the reasons for rejecting those alternatives. A person reading a RIS should be able to conclude that the proposed regulatory change is justified and that the benefits of the particular regulation outweigh the potential costs which may be imposed on the community.

In 2002 there were 23 regulations made with RISs. The Regulation Review Subcommittee notes that there is still considerable variation in the quality of RISs produced. This issue is discussed in detail in the Committee’s Report on the Subordinate Legislation Act 1994.

Example 1

Section 10(1)(c) of the Subordinate Legislation Act 1994 (Vic) requires a RIS to include a discussion of other practicable means of achieving the objectives of the Regulations. This is reinforced by Parts 2 and 3 of the Premier’s Guidelines. The Committee received evidence during the Inquiry into the Subordinate Legislation Act 1994 that the analysis of alternatives is generally poor –

… it is apparent in most RIS that the alternatives described have not been properly developed or considered and that they were not seriously reviewed as a means of achieving the identified objective.[43]

The Regulation Review Subcommittee considers that the lack of consideration and analysis of alternatives coupled with the poor analysis of problems to be overcome means that RIS cannot properly contribute to the development of new and innovative policy. The Regulation Review Subcommittee draws attention to the need for legislation and policy officers involved in the RIS process to take particular care when analysing alternatives.

SR 56 – Water (Groundwater) Regulations 2002 set out the fees for the grant and renewal of licences for drilling and require persons who take water from a bore for domestic or stock use to give the Minister written notice of the amount taken. The RIS did not contain any discussion of regulatory or non-regulatory options for achieving the objectives. The Regulation Review Subcommittee wrote to the Minister indicating its concerns and highlighting examples of possible alternatives which could have been considered. It also sought advice as to whether there had been any consultation with the Victorian Farmers Federation.

The Minister indicated that the Regulation Review Subcommittee’s comments concerning the discussion of regulatory and non-regulatory alternatives had been noted. The Minister also confirmed that consultation had taken place with the Victorian Farmers Federation and that they had agreed that the impact of the Regulations on farmers was minimal.

The Regulation Review Subcommittee was satisfied with the Minister’s response.

Subcommittee’s letter

SR 56 – Water (Groundwater) Regulations 2002

At a meeting on 16 April 2003 the Regulation Review Subcommittee examined the above Regulations as it is required to do under the Subordinate Legislation Act 1994.

The Water (Groundwater) Regulations 2002 replace the Water (Application Fees) Regulations 1991. The Regulations set out the fees for the grant and renewal of licences for drilling and they require persons who take water from a bore for domestic or stock use to give the Minister written notice of the amount taken. The Regulations were made with a Regulation Impact Statement (RIS).

The Subcommittee notes that the RIS which accompanied these Regulations does not contain any discussion of alternative regulatory or non-regulatory options for achieving the objectives of the Regulations. Section 10(1)(c) of the Subordinate Legislation Act 1994 requires a RIS to include a discussion of other practicable means of achieving the objectives. Parts 2 and 3 of the Premier's Guidelines reinforce this requirement. Paragraph 2.12 of the Premier's Guidelines provides –

Each alternative should receive consideration by an agency before a final decision is made on how to deal with a particular problem. Agencies should carefully consider the advantages and disadvantages of each option before proceeding to the next stage in development of policy.

The Subcommittee considers that it is essential that RIS comply with the requirements of the Subordinate Legislation Act 1994. The Subcommittee notes the comments in the RIS that the Water Act 1989 requires notice to be given to the Minister concerning the use of bore water and that there are therefore no alternatives. However the Subcommittee considers that there are feasible alternatives which could have been discussed concerning the prescription of fees for the issue and renewal of driller's licences. For example alternatives to a decrease in licence application fees include increasing licence application fees or maintaining them at the same level. Alternatives to increasing renewal fees including decreasing renewal fees or maintaining them at the same level. The Subcommittee has approved the Regulations but wishes to indicate that in future it will expect all RIS to include a discussion of alternative means of achieving objectives.

The RIS also contains details of those organisations consulted prior to making these Regulations. The RIS indicates that consultation occurred with the Goulburn-Murray Rural Water Authority, the Wimmera Mallee Rural Water Authority, the Gippsland & Southern Rural Water Authority and the Victorian Branch of the Australian Drilling Industry Association. The Subcommittee is concerned about the breadth of consultation undertaken for these Regulations.

Section 6(b) of the Subordinate Legislation Act 1994 requires the responsible Minister to ensure that consultation take place with any sector of the public on which an appreciable economic or social burden may be imposed by a proposed regulation. Paragraph 5.20 of the Premier’s Guidelines provides –

If the proposed statutory rule is likely to impose any appreciable burden, cost or disadvantage on any sector of the public, consultation should take place with that sector, eg business groups, community groups, special interest groups.

The Subcommittee is concerned that the consultation for these Regulations may have been too narrowly focussed. The Subcommittee considers that many Victorian farmers would use bore water and that it may therefore have been appropriate for the Victorian Farmers Federation to have been consulted. The Subcommittee seeks your advice as to why there was no consultation with the Victorian Farmers Federation.

The Subcommittee looks forward to receiving your response.

Minister's Response[44]

SR 56 – Water (Groundwater) Regulations 2002

I refer to your letter dated 28 April 2003 seeking advice on the extent of consultation in establishing the Water (Groundwater) Regulations 2002 and, in particular, seeking advice as to why there was apparently no consultation with the Victorian Farmers Federation (VFF) on the regulations and their impact.

Firstly, the committee’s views on the need to consider alternatives to increasing the drillers’ licence fees have been noted. Alternatives were addressed in the statement, although they may not have been sufficiently detailed given the Government’s policy of full cost recovery for this type of regulatory service.

Secondly, on the issue of consultation, the Department of Sustainability and Environment has advised me that a meeting was held with the VFF to discuss the draft regulations and the Regulation Impact Statement (RIS). In that meeting the VFF noted that:

  • the requirement for persons who take water from domestic and stock use to give the Minister written notice of the amount taken was unchanged and there was no cost to farmers;

  • the costs of administering the drillers’ licensing system are to be recovered from those who directly undertake bore construction (drillers) and there are no direct costs to farmers arising from the proposed regulations. The VFF acknowledged that costs for drillers licensing will be passed on to their individual customers but this was considered insignificant (estimated at less than 30 cents per bore) compared to the costs of drilling and constructing a bore ($5,000 to $150,000).

    The VFF concurred that there was a negligible impact of the proposed regulations on farmers and a consequence decided that a formal response on the RIS was not warranted.

    I regret that this informal response and consultation with the VFF was not conveyed to the Scrutiny of Acts and Regulations Committee.

    Hon. John Thwaites, MP
    Minister for Water

Example 2

The Premier’s Guidelines make it clear that RIS should provide a commonsense assessment of the impact of proposed regulations. The Regulation Review Subcommittee considers that it is essential that any member of the public reading a RIS be able to clearly understand the proposed regulatory changes, the alternatives and the reasons for rejecting those alternatives. Where RIS are complex, confusing or unclear the ability to participate in the regulatory process is inhibited. The Regulation Review Subcommittee considers that it is essential for good quality RIS to be prepared so that the public can easily understand the reasons for change and form a view as to whether the proposed changes are justified.

SR 99 – Mineral Resources Development Regulations 2002 regulate various matters concerning mineral resource development. The Regulation Review Subcommittee found the RIS which accompanied these Regulations unnecessarily complex and confusing making it difficult to understand the changes introduced and the impact of those changes.

The Regulation Review Subcommittee wrote to the Minister highlighting its concerns. The Minister indicated that all issues raised by the Regulation Review Subcommittee had been drawn to the attention of appropriate officers within the department and assured the Subcommittee that future RIS prepared by his department will be clear and easy to understand so that members of the public can “understand and comment on regulatory proposals”. The Regulation Review Subcommittee was satisfied with the Minister’s response.

Subcommittee’s letter

SR 99 – Mineral Resources Development Regulations 2002

At a meeting on 5 May 2003 the Regulation Review Subcommittee examined the above Regulations as it is required to do under the Subordinate Legislation Act 1994.

The Mineral Resources Development Regulations 2002 regulate various matters concerning mineral resource development. They specify the royalty rates for brown coal, tailings from Crown land and all other minerals excluding gold. They also set out the information required and the fees to be paid for applications for exploration licences, mining licences, miners' rights, tourist fossicking authorities and tourist mine authorities. The Regulations were made with a Regulation Impact Statement (RIS).

The Subcommittee notes that the RIS which accompanied these Regulations was unclear and unnecessarily difficult to follow. By way of example the Subcommittee draws your attention to the discussion on the royalty rates for brown coal.

On page 14 the RIS states –

No changes to existing royalty rates (which have a historical basis) are proposed in the Regulations. The main differences from the current regulations are that –

  • existing royalty rates for brown coal are specified in licences ….

This suggests that the royalty rates for brown coal have not been changed and have simply been moved from licences to the Regulations.

Later the RIS discusses the costs and benefits of the options considered prior to making the decision to proceed with the Regulations. One option was the maintenance of the status quo, that is the situation prior to the introduction of the above Regulations. On page 23 the RIS states –

In this alternative there is the imposition of unit-based gypsum royalties and ad valorem based royalties on all other minerals except for gold.

This suggests that under the previous regulations ad valorem based royalties were imposed on brown coal.

Another option considered was the above Regulations which are based on partial cost recovery. On page 25 the RIS states –

In this alternative there is the imposition of unit-based brown coal royalties and ad valorem based royalties on all other minerals except for gold.

This indicates that the Regulations impose unit-based royalties on brown coal and ad valorem royalties on all other minerals. Reading the statements on page 23 and 25 together the RIS appears to suggest that there has been a change in the type of royalties imposed on brown coal, that is from ad valorem to unit-based. This however contradicts the statement on page 14 which indicates that there has been no change in the royalty rates imposed on brown coal.

The Subcommittee's legal adviser sought clarification from the relevant policy officer as to whether the royalty rates for brown coal had changed. It was later confirmed that the royalty rates had not changed but simply been moved from licences to the Regulations. It was also confirmed that the discussion on page 23 of the RIS does not include the royalty rates for brown coal because these rates were not contained in the previous Regulations but in the licences; page 23 examines only what was contained in the Regulations. The Subcommittee is concerned that this is not explained in the RIS making it difficult to understand the changes which have been introduced and the impact of those changes.

Paragraph 13.1 of the Premier's Guidelines makes clear that an RIS is not supposed to be complex but "a commonsense document which provides an honest assessment of the foreseeable impact of a proposed regulation". Any member of the public reading an RIS should be able to clearly understand the proposed changes, the regulatory alternatives and the reasons for the rejection of those alternatives. In its Report on the Subordinate Legislation Act 1994 the Committee commented on the poor quality of some of the RIS received. In particular the Committee was concerned that some RIS are complex and confusing when they should be simple and easily understood.

The Subcommittee considers that it is crucial that department and agency staff prepare good quality RIS so that any person can understand the reasons for change and form a view as to whether proposed regulations are justified. Paragraph 13.3 of the Premier's Guidelines reinforces this –

Agencies should remember that the purpose of a RIS is to explain the need for the statutory rule and to set out the costs and benefits which would follow from its adoption. It must also explain the practicable alternatives which have been considered and the reasons for their rejection. The RIS should be intelligible to the general public and should allow those with an interest in the proposed rule to comment on that rule.

The Subcommittee considers that the RIS which accompanied these Regulations was complex and confusing and that consequently it was difficult to understand the changes introduced and the impact of those changes. The Subcommittee would appreciate it if the above matters could be drawn to the attention of legislative officers in your department.

Minister's Response[45]

SR 99 – Mineral Resources Development Regulations 2002

Thank you for your letter of 12 May 2003, concerning the Regulatory Impact Statement (RIS) for the Mineral Resources Development Regulations 2002.

I have passed your comments to the Executive Director of the Minerals and Petroleum Division of the Department of Primary Industries and he has advised me that they have been drawn to the attention of appropriate officers. He has also advised that he will ensure that future RISs from his Division are clear and easily understood.

I am therefore confident that future RISs will achieve the standards required to ensure that the community can readily understand and comment on regulatory proposals.

Hon. Theo Theophanous, MP,
Minister for Energy Industries and Resources

Fee Increases

Regulations increasing fees may be excepted from the RIS process under section 8(1)(a) of the Subordinate Legislation Act 1994 (Vic) as long as the fee increases do not exceed the rate approved by the Treasurer in relation to the State Budget.[46] Section 8(2) of the Subordinate Legislation Act 1994 (Vic) allows rounding off to the nearest whole dollar, with the consequence that some fee increases may exceed the rate approved by the Treasurer. During the Inquiry into the Subordinate Legislation Act 1994 the Committee noted that the rounding off process did not appear to be causing concern to anyone and the Committee therefore recommended that this feature be retained.

However of some concern to the Committee and to some of those who made submissions to the Inquiry into the Subordinate Legislation Act 1994 was the use of the ‘basket approach’. The basket approach allows fee increases to be viewed as a package, so that individual fees can exceed the rate fixed by the Treasurer, provided the total package of fees does not. The Committee’s concern was that this allowed individual fees to fall outside the rate set by the Treasurer with the possibility for some of these individual fees to have a significant impact on some sections of the community. The Committee recommended that the ‘basket approach’ be prohibited and this recommendation has been accepted by the Government in its Response to the Committee’s Report.

In the Inquiry into the Subordinate Legislation Act 1994 the Committee also pointed out the usefulness of providing the Regulation Review Subcommittee with a table comparing new fees with old fees making it easier for the Subcommittee to understand the changes. In its Report on the Subordinate Legislation Act 1994 the Committee recommended that department and agency staff be required to prepare a table comparing new and old fees including an indication of the percentage increase or decrease for each fee and to provide the Subcommittee with a copy of that comparative table. The Government supported this recommendation in its Response to the Committee’s Report.

The Subcommittee draws attention to SR 89 – Road Safety (Drivers) (Amendment) Regulations 2002 as an example of regulations increasing fees using the basket approach. These Regulations increased various driver licence and search extract fees.

Subcommittee’s letter

SR 89 – Road Safety (Drivers)(Amendment) Regulations 2002

At a meeting on 28 April 2003 the Regulation Review Subcommittee examined the above regulations as it is required to do under the Subordinate Legislation Act 1994.

The Road Safety (Drivers)(Amendment) Regulations 2003 exempt drivers of emergency vehicles from the requirements to display P-Plates, allow interstate drivers to display interstate P-Plates only and increase various driver licence and search and extract fees. The Regulations were accompanied by a certificate of exemption under sections 9(1)(a) and 9(1)(c). The Subcommittee notes that the provisions increasing various fees were exempted from the Regulation Impact Statement (RIS) process under section 9(1)(a) as not imposing an appreciable economic and social burden on any sector of the public. The Subcommittee also notes that when viewed as a group the fee increases fall within the rate of 3% set by the Treasurer. The Subcommittee considers that regulations increasing fees at or below the rate set by the Treasurer should be excepted from the RIS process under section 8(1)(a) rather than section 9(1)(a). It is the Subcommittee's view that in addition to exemptions granted under sections 9(1)(a) and 9(1)(c) the provisions in these Regulations concerning fee increases should have been excepted under section 8(1)(a).

The Subcommittee would also like to comment on the use of the basket approach. Under the current Treasurer's Guidelines it is acceptable for individual fee increases to exceed the Treasurer's approved rate provided that the total package of fees falls within that rate. In its Report on the Subordinate Legislation Act 1994 the Scrutiny of Acts and Regulations Committee (the Committee) expressed concern about the use of the basket approach as there is always the possibility that some fees which exceed the Treasurer's rate may have a significant impact on those required to pay them. The Committee recommended that the Subordinate Legislation Act 1994 be amended to prohibit the use of the basket approach. In its Response to the Committee's Report, the Government agrees that this amendment is necessary to ensure that all fee increases fall within the Treasurer's approved rate.

The Subcommittee also notes that some departments and agencies provide it with a table comparing new fees with old fees. The Subcommittee finds this extremely helpful in understanding fee increases. In its Report on the Subordinate Legislation Act 1994 the Committee recommended that department and agency staff be required to prepare a table comparing new and old fees including an indication of the percentage increase or decrease for each fee and provide the Subcommittee with a copy of that comparative table. In its Response to the Committee's Report the Government supported this recommendation.

The Subcommittee would appreciate it if the above matters could be drawn to the attention of legislative officers in your department.

Department’s Response[47]

Subordinate Legislation Act 1994

I refer to your letter of 5 May 2003 addressed to the Minister for Transport outlining a number of issues of concern to your subcommittee arising from the Road Safety (Drivers) Amendment) Regulations 2003.

You also requested that the concerns identified be raised with relevant officers within the department. This letter is to advise you that the matters referred to in that letter have been brought to the attention of officers within the Department.

I apologise for the delay in responding. If you require any further information please contact Karen Macdonald, Senior Adviser, Legal on 96556720.

Extension of Operation

The Subordinate Legislation Act 1994 (Vic) allows regulations which are due to expire to be extended for a further 12 months where the Minister certifies that due to ‘special circumstances’ there is insufficient time to undertake a RIS.[48] The Premier’s Guidelines indicate that ‘special circumstances’ exist where a review of the whole area is under way but is incomplete or where national scheme legislation is being negotiated. Regulations normally expire 10 years after they have been made[49] so this exception effectively extends the life of a regulation to 11 years instead of 10.

The Committee notes that there has not been any decline in the number of regulations made under this exception during the last 12 months, with 17 being made.[50] Extensions of regulations should not be granted for mere administrative convenience or poor management procedures. The Regulation Review Subcommittee considers that ‘special circumstances’ include the development of national scheme legislation or national competition policy reviews. The Regulation Review Subcommittee reminds departments and agencies of the need to clearly explain ‘special circumstances’ in section 5(3) certificates or in explanatory memoranda. Paragraphs 12.4 and 12.5 of the Premier’s Guidelines reinforce the need for details of the ‘special circumstances’ to be provided in section 5(3) certificates and explanatory memoranda.

During the Inquiry into the Subordinate Legislation Act 1994 the Committee found that sometimes extensions were sought for regulations which are minor in nature and which could easily have been remade before the expiry of 10 years. The Committee recommended that departments and agencies continue to be able to seek a once only extension of up to 12 months. However to make it more difficult to obtain extensions the Committee recommended that departments and agencies be required to obtain approval from the Premier. Both these recommendations were accepted by the Government in its Response to the Committee’s Report.

Example

SR 120 – Subordinate Legislation (Forests (You Yangs Regional Park) Regulations 1992 – Extension of Operation) Regulations 2002 extend the operation of the Forests (You Yangs Regional Park) Regulations 1992 (the Principal Regulations). The Principal Regulations deal with the management of the You Yangs Regional Park. The ‘special circumstances’ for granting the extension to these Regulations was the calling of the election and the commencement of the caretaker period of Government. The Regulation Review Subcommittee was not entirely satisfied that these reasons constituted ‘special circumstances’ and it sought clarification from the Minister.

The Minister advised that the review of the Principal Regulations had been conducted efficiently and that the papers for the new regulations had been signed by the previous Minister on 2 November 2002. With the calling of the election on 4 November the caretaker convention applied requiring the status quo to be maintained until the formation of the new Government. The Minister also indicated that he would pass on the Regulation Review Subcommittee’s views concerning the use of extensions and the need for ‘special circumstances’.

The Regulation Review Subcommittee is satisfied with the Minister’s response and is pleased that its views concerning the use of extensions and ‘special circumstances’ have been conveyed to department officers.

Subcommittee’s letter

SR 120 – Subordinate Legislation (Forests (You Yangs Regional Park) Regulations 1992 – Extension of Operation) Regulations 2002

At a meeting on 12 May 2003 the Regulation Review Subcommittee examined the above Regulations as it is required to do under the Subordinate Legislation Act 1994.

The Subordinate Legislation (Forests (You Yangs Regional Park) Regulations 1992 – Extension of Operation) Regulations 2002 extend the operation of the Forests (You Yangs Regional Park) Regulations 1992 (the Principal Regulations) to 30 November 2003. The Principal Regulations concern the management of the You Yangs Regional Park.

Under section 5(4) of the Subordinate Legislation Act 1994 the Governor-in-Council may make a regulation extending the operation of an existing regulation for a maximum period of 12 months provided that the Minister has certified that due to "special circumstances" there is insufficient time to enable compliance with the requirements of Part 2 of the Subordinate Legislation Act 1994.

The Subcommittee notes that the Premier's Guidelines make clear that extensions under section 5(4) should be granted because of "special circumstances" and not for administrative convenience. Paragraph 12.5 of the Premier's Guidelines provides–

The Act does not provide any definition of "special circumstances", however the type of circumstances envisaged would be cases where a review of the operation of the whole area of the regulations is proposed or being undertaken or where a national scheme is being negotiated. Administrative oversight should not be considered to be a "special circumstance".

The section 5(3) certificate which accompanied these Regulations indicated that the regulatory impact statement assessment process could not be undertaken due to the calling of the election and the commencement of the caretaker period of Government. The Subcommittee is not satisfied that that these reasons constitute "special circumstances".

The Subcommittee considers that it is important for departments and agencies to commence reviews of regulations 18 months to 2 years prior to the expiration of regulations. The Premier's Guidelines make clear that it is the responsibility of departments and agencies to maintain a list of the expiry dates of regulations for which they are responsible. Paragraph 12.1 of the Premier's Guidelines provides –

It is the responsibility of the agency to maintain accurate records of the sunset dates for all statutory rules administered by the Ministers to whom the agency reports. It is essential that an agency allow sufficient time for the review of the continuing appropriateness of the regulations and for the completion of the RIS process if they are to be made in whole, part or in a modified form.

Departments and agencies are assisted with keeping track of sunsetting regulations by the Office of Parliamentary Counsel and by the Office of Regulation Reform. The Office of Parliamentary Counsel sends out reminder letters 12 to 18 months prior to the expiration of regulations and the Office of Regulation Reform produces the Victorian Regulation Alert which provides details of all regulations due to expire over the next 12 months.

The Subcommittee would appreciate it if the above matters could be drawn to the attention of legislative officers in your department.

Minister's Response[51]

SR 120 – Subordinate Legislation (Forests (You Yangs Regional Park) Regulations 1992 – Extension of Operation) Regulations 2002

Thank you for your letter of 20 May 2003 in relation to the Subordinate Legislation (Forests (You Yangs Regional Park) Regulations 1992 – Extension of Operations) Regulations 1992.

I am advised that the review of the Forests (You Yangs Regional Park) Regulations 1992 was well programmed and efficiently conducted. Departmental officers completed all components of the regulatory review and prepared all necessary papers more than one month in advance of the sunset date of 1 December 2002. The former Minister for Environment and Conservation signed all papers in relation to the proposed new regulations on 2 November 2002. The State election was announced on 4 November and conducted on 30 November 2002.

The ‘caretaker convention’, which applied between 5 November and the formation of the new Government following the election, required that the status quo be maintained. Therefore, the former Minister effectively had no choice but to seek to extend the existing regulations as either making the proposed new regulations or allowing the existing regulations to sunset would involve a change to the status quo and therefore a breach of the caretaker convention.

The Forests (You Yangs Regional Park) Regulations 2003 were subsequently made on 27 May 2003 (well in advance of the final sunset date of the ‘extended’ Forests (You Yangs Regional Park) Regulations 1992).

However, the concerns outlined in your letter are noted and they will be communicated to relevant departmental officers.

Hon. John Thwaites MP,
Minister for Environment

Certificates

The Subordinate Legislation Act 1994 (Vic) requires regulations to be prepared with various certificates. Although the Subordinate Legislation Act 1994 (Vic) does not prescribe the exact form that certificates must take, the Premier’s Guidelines provide some guidance and examples. The Regulation Review Subcommittee considers that it is important for certificates to comply with the Premier’s Guidelines as certificates provide crucial information about regulatory proposals.

The Regulation Review Subcommittee notes that there was a general improvement in the standard of certificates presented during 2002. The Subcommittee is pleased to see that all departments and agencies are complying with the requirement to date certificates and that all section 9 exemption certificates contained reasons for granting the exemption. Some problems which did occur included – failure to specify the precise section under which a regulation is excepted or exempted and excepting or exempting regulations under the incorrect section.

SR 89 – Road Safety (Drivers) (Amendment) Regulations 2002 (discussed earlier in this Report at pp 37-38) provide an example of the need for care to be taken when selecting the most appropriate exception or exemption. These Regulations exempt drivers of emergency vehicles from the requirements to display P-Plates, allow interstate drivers to display interstate P-Plates only and increase various driver licence and search and extract fees. The Regulations were accompanied by certificate of exemption under section 9(1)(a) and 9(1)(c). The fee increases used the basket approach and complied with the rate set by the Treasurer. The provisions increasing fees were exempted under 9(1)(a) on the basis that they did not impose any appreciable economic or social burden. The Regulation Review Subcommittee considers that regulations increasing fees at or below the rate set by the Treasurer should be excepted from the RIS process under section 8(1)(a) rather than section 9(1)(a). The Regulation Review Subcommittee wrote to the Minister expressing this view.

The Regulation Review Subcommittee is also concerned about the failure of departments and agencies to provide it with all relevant documentation in a timely manner. On a number of occasions Regulation Review Subcommittee staff have needed to make inquiries to obtain copies of relevant documentation and this is considered to be wasteful of the Subcommittee's time and resources. In its Report on the Subordinate Legislation Act 1994 the Committee recommended that all paperwork be forwarded to the Regulation Review Subcommittee within 7 days of the enactment of regulations. This recommendation has been accepted by the Government in its Response to the Committee’s Report.

Environment Protection and Waste Management Policies

State Environment Protection Policies and Waste Management Policies must comply with the requirements of the Environment Protection Act 1970 (Vic). Section 18C of the Environment Protection Act 1970 (Vic) requires a policy impact assessment to include a statement of purposes, identification of alternative policy options and an assessment of the costs and benefits of each alternative option.

In 2002 the Regulation Review Subcommittee was presented with one State Environment Protection Policy – the Prevention and Management of Contamination of Land. The Regulation Review Subcommittee was impressed with the standard of the Policy presented.

The Policy provides a regulatory framework for the prevention and management of contamination of land and includes details of management strategies which may be used where a site has become contaminated. While the Regulation Review Subcommittee was satisfied that the Policy complied with the requirements of the Environment Protection Act 1970 (Vic) it had some concerns about the notification provisions. The Regulation Review Subcommittee wrote to the Minister seeking advice as to why the Policy does not impose a legal obligation on owners to inform potential purchasers that a site has been contaminated.

The Minister responded to all the Regulation Review Subcommittee’s concerns. The Minister also confirmed that the possibility exists for vendors to be aware of contamination and not to disclose it to prospective purchasers. The Minister indicated that the appropriate means of addressing this situation is through an amendment to the Sale of Land Act 1962 (Vic).

The Committee considers that it is very important for purchasers to be confident that the property they purchase is free from contamination. The Committee has written to the Minister responsible for the Sale of Land Act 1962 (Vic) – the Hon. John Lenders, Minister for Consumer Affairs drawing the matter to his attention and seeking a strengthening of the notification provisions.

Subcommittee’s letter

State Environment Protection Policy (Prevention and Management of Contamination of Land) June 2002

At a meeting on 12 May 2003 the Regulation Review Subcommittee examined the above State Environment Protection Policy as it is required to do under the Environment Protection Act 1970.

The State Environment Protection Policy (Prevention and Management of Contamination of Land) (the Policy) provides a regulatory framework for the prevention and management of contamination of land. The Policy identifies six types of land use and a number of beneficial uses. For each land use the Policy indicates which beneficial uses apply. The Policy includes an attainment program and identifies the responsibilities of all parties to protect the land quality. Those involved in the transportation, use or storage of chemical substances or waste must ensure that no contamination of land results from those activities. Where the Environment Protection Authority (the EPA) believes that land is polluted it may require the land at the site to be assessed. These assessments are designed to identify the type and extent of contamination.

The Policy also sets out management strategies to be used where the site has become contaminated. These strategies must be consistent with the Environment Protection Act 1970 and prevent further contamination. Where a site is undergoing clean up to protect beneficial uses a site specific risk assessment is necessary to determine the depth of clean up. The EPA may also require owners or occupiers to undertake an environmental audit. The Subcommittee notes that this is an important Policy which puts in place a good regulatory structure to prevent and manage land contamination.

However the Subcommittee is concerned about the notification provisions contained in clause 27. Where the EPA has issued any notice to clean up pollution or requested an environmental audit, clause 27 of the Policy requires the occupier to give details of the condition of the site to any person who proposes to become the occupier. The Subcommittee notes that these requirements appear only to apply if the notice to clean up pollution or the statement of environmental audit is current. The Subcommittee also notes that these requirements apply only to occupiers, which having regard to the definition of "occupier" in the Environment Protection Act 1970, does not necessarily include owners. The Subcommittee is concerned that the Policy does not place any legal obligation on owners to inform potential purchasers that a site has been contaminated and that consequently purchasers may purchase land and be unaware of the condition of that land and in particular that the land was previously contaminated. The Subcommittee seeks your advice as to why the Policy does not impose a legal obligation on owners to inform potential purchasers that a site has been contaminated.

The Subcommittee looks forward to receiving your advice.

Minister's Response[52]

State Environment Protection Policy (Prevention and Management of Contamination of Land)

Thank you for your letter of 20 May 2003 in which you sought advice on the notification and information provisions of the State environment protection policy (Prevention and Management of Contamination of Land) June 2002. Specifically, you sought advice as to why the Policy does not impose a legal obligation on owners to inform potential purchasers that a site has been contaminated. The key points are:

  • should Notices issued pursuant to the Environment Protection Act 1970, and Statements of Environmental Audit that are not current be notified to prospective occupiers; and

  • should an owner of a site have the same obligations as an occupier in respect of notifying prospective occupiers of contamination.

In respect of the first point when EPA Victoria is satisfied that the requirements of a Clean Up notice issued pursuant to s62A of the Environment Protection Act 1970 have been complied with, it will be revoked and no longer in force. At this point, EPA will have been satisfied that the condition of site no longer represents an unacceptable risk to the environment or to the owners and other occupiers. In such a case, no purpose would be served, and it would appear to be an unreasonable burden on the occupier (and subsequent occupiers in perpetuity), to apply notification requirements.

Frequently, EPA requires that clean up be demonstrated through the completion of an audit which results in the issue of a Statement of Environmental Audit indicating there is some limitation on the use of the land. Similarly planning controls often require an audit leading to the issue of a Statement. A Statement of Environmental Audit, once issued, is current and can only be superseded by the outcomes of a further audit. The further audit can result in a subsequent Statement of Environmental Audit which must be provided to prospective occupiers or a Certificate of Environmental Audit which indicates that there is no impediment to the use of the site. In the case of the latter as there is no restriction on the use of the land the view taken, as with Clean Up Notices, is that no purpose would be served by applying notification requirements.

In respect of the second concern I am advised by EPA that, as defined in the Environment Protection Act 1970, “occupier” includes the “owner” of the site. The definition of “occupier” is broader than “owner” to include those who may be leasing or renting a property, for example, and who have relevant information or are subject to legal obligations. Clean Up Notices are served on those causing the problem and in many cases this will be an “occupier” other than an “owner”.

I am also advised that in addition to contamination that is known to EPA through audits and Notices there is the possibility that vendors are aware of contamination and do not disclose it to prospective purchasers. The appropriate means to address this situation would be through an amendment to the Sale of Land Act 1962 requiring such disclosures. If the subcommittee is of the view that strengthening of notification provisions is warranted this approach could be further investigated.

The main purpose of the Policy is to ensure that landowners, other land occupiers and the people of Victoria generally, are protected from the residual impacts of past uses of land. I am satisfied that approaches described in the Policy meet that aim.

Hon. John Thwaites,
Minister for Environment

Footnotes

[27]

Letter dated 21 October 2002 to the Hon. Jenny Mikakos MLC, Chair of the Subcommittee during the 54th Parliament, from the Hon. John Thwaites, MP, Minister for Health.

[28]

The procedures in these Regulations may not be used to access health records held by the Victorian public sector. The Freedom of Information Act applies to requests for access to health information where it is held in the public sector.

[29]

Letter dated 16 May 2002 to Mr. Peter Lockwood, MLA, Chair of the Subcommittee from the Hon. Bronwyn Pike MP, Minister for Health.

[30]

Letter dated 4 June 2003 to Mr. Peter Lockwood, MLA, Chair of the Subcommittee from the Hon. André Haermeyer, Minister for Police and Emergency Services.

[31]

Department of Premier and Cabinet, Premier’s Guidelines, December 1997.

[32]

Subordinate Legislation Act 1994 (Vic), s. 6.

[33]

Department of Premier and Cabinet, Premier’s Guidelines, December 1997, paragraph 5.20.

[34]

Department of Premier and Cabinet, Premier’s Guidelines, December 1997, paragraph 5.17.

[35]

Subordinate Legislation Act 1994 (Vic), s. 6.

[36]

Department of Premier and Cabinet, Premier’s Guidelines, December 1997, paragraph 5.20.

[37]

Letter dated 1 October 2003 to Mr. Peter Lockwood, MLA, Chair of the Subcommittee from the Hon. Bob Cameron, Minister for Agriculture.

[38]

Letter dated 29 June 2003 to Mr. Peter Lockwood, MLA, Chair of the Subcommittee from the Hon. Rob Hulls, Attorney-General.

[39]

Letter dated 16 July 2003 to Mr. Peter Lockwood, MLA, Chair of the Subcommittee from the Hon. Peter Batchelor, MLA, Minister for Transport.

[40]

Subordinate Legislation Act 1994 (Vic), s. 8.

[41]

ibid., s. 9.

[42]

Department of Premier & Cabinet, Premier’s Guidelines, paragraph 13.1.

[43]

Mr. R. Deighton-Smith, The Quality of the Regulatory Impact Assessment Process in Victoria, February 2001, p. 33.

[44]

Letter dated 7 July 2003 to Mr. Peter Lockwood, MLA, Chair of the Subcommittee from the Hon. John Thwaites, MLA, Minister for Water.

[45]

Letter dated 18 June 2003 to Mr. Peter Lockwood, MLA, Chair of the Subcommittee from the Hon. Theo Theophanous, MLA, Minister for Energy Industries and Resources.

[46]

Department of Treasury and Finance, Guidelines for Setting Fees and Charges Imposed by Departments and Budget Sector Agencies, Melbourne.

[47]

Letter dated 20 October 2003 to Mr. Peter Lockwood, MLA, Chair of the Subcommittee from Mr Lawrie Tooher, Executive and Legal, Department of Infrastructure.

[48]

Subordinate Legislation Act 1994 (Vic), s. 8(1)(d)(iii).

[49]

Subordinate Legislation Act 1994 (Vic), s. 5(1).

[50]

In 1999 there were 14, in 2000 there were 19 and in 2001 there were 17 regulations made under section 8(1)(d)(iii).

[51]

Letter dated 29 July 2003 to Mr. Peter Lockwood, MLA, Chair of the Subcommittee from the John Thwaites MP, Minister for Environment.

[52]

Letter dated 17 July 2003 to Mr. Peter Lockwood, MLA, Chair of the Subcommittee from the Hon. John Thwaites, Minister for the Environment.

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