Annual Review 2005, Regulations 2005
July 2006

Appendix 3 - Committee Practice Notes

Exemptions and Exceptions

Explanatory Memoranda

Fee Increases: 8(1)(a) and 8(2)

Independent Advice Certificate: 10(3)

Legislative Instruments outside the Subordinate Legislation Act 1994

Provision of Documentation to Regulation Review Subcommittee

Recommendations

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Exemptions and Exceptions

• Dating Certificates. The Subcommittee has been presented with a number of undated exemption and exception certificates. The Subcommittee expects all certificates to be dated.

• Reasons for Exemption. The Subcommittee has occasionally received regulations exempted under section 9 with certificates of exemption which fail to adequately explain the reasons for granting the exemption or with reasons for granting the exemption contained in the Explanatory Memorandum. It should be noted that it is a requirement of section 9(2) of the Subordinate Legislation Act 1994 (Vic) that certificates of exemption ‘specify the reasons for the exemption’. The Subcommittee expects all exemption certificates to contain adequate explanations of the reasons for granting the exemptions.

• Extension of Regulations for Periods up to 12 months. Regulations expire 10 years after they have been made. The Subcommittee has been presented with a number of regulations made under sections 8(1)(d)(iii) and 5(3) extending regulations due to expire for periods up to 12 months. Before an extension of time can be granted, the Minister must certify that due to ‘special circumstances’ there is insufficient time available to comply with the formal regulation-making requirements of the Subordinate Legislation Act 1994. The Subcommittee expects details of the ‘special circumstances’ to be contained in the section 5(3) certificate itself as required by the Subordinate Legislation Act 1994.

• Using Appropriate Exemption and Exception Categories. Department and agency officers need to be careful when determining which category to use when exempting and excepting regulations from the Regulation Impact Statement process. The Subcommittee has received regulations which are incorrectly exempted and excepted.

• Typographical Errors. Department and agency officers need to be careful when preparing certificates to ensure that they do not contain typographical errors.

Explanatory Memoranda

The Subcommittee expects an Explanatory Memorandum to comply with the requirements contained in Paragraph 8.10 Premier's Guidelines. An Explanatory Memorandum must contain:–

• A brief outline of each provision;

• An explanation of the changes effected by each provision;

• A statement of the reasons for making the rule;

• Where applicable, the reasons why no regulatory impact statement was prepared;

• a statement as to whether consultation has taken place, and if it has not taken place, an explanation as to why a decision was made not to consult.
  

Fee Increases: 8(1)(a) and 8(2)

Regulations increasing fees made under section 8(1)(a) of the Subordinate Legislation Act 1994 (Vic) must not increase fees by more than the percentage set by the Treasurer. For each financial year a percentage increase is set by the Treasurer. The Treasurer notifies the Subcommittee in writing of the relevant percentage increase.

A regulation may increase a number of fees, with some individual fee increases falling outside the rate set by the Treasurer. However when the total average of fee increases for that regulation is calculated, it falls within the rate fixed by the Treasurer. This practice is referred to as the ‘basket approach’. Paragraph 5.25 of the Premier’s Guidelines provides that:–

It is acceptable to make a statutory rule setting a package of fees. This is known as the ‘basket approach’. However, the exception available in section 8(1)(a) does not apply if any individual fee component in the package exceeds the Treasurer’s annual rate. It does not matter if the average fee increase across the package is less than the annual rate. If any individual fee is increased above the annual rate, a RIS process needs to be undertaken as the fee increase may have a significant and adverse impact on the community and business.

Section 8(2) of the Subordinate Legislation Act 1994 (Vic) validates the rounding up of fee increases to the nearest whole dollar. Sometimes the total average increase may be greater than that set by the Treasurer but may be validated on the basis that there has been rounding up to the nearest whole dollar. The Subcommittee may only approve such increases where the extra amount can be considered trifling when compared to the whole fee. Where the amount is significant in proportion to the whole fee, the Subcommittee may request the Minister to reconsider the increase.

The Subcommittee is bound by the Premier’s Guidelines. A strict interpretation of the Premier’s Guidelines leads to the view that as a matter of principle individual fees in a ‘basket’ package should not exceed the Treasurer’s annual rate. However, the Subcommittee is of the view that fee increases and the Premier’s Guidelines need to be read in a commonsense manner. Clearly, it is often sensible to introduce a ‘basket’ package of fees. It is a more efficient and streamlined manner of introducing a large number of routine fee increases. In this instance monetary increases were extremely small.

The Subcommittee will examine each regulation carefully. The Subcommittee is conscious of its statutory obligations. The Subcommittee’s view is that it is a matter of balance. The ‘basket’ of fees in its entirety must not exceed the Treasurer’s approved annual rate. However if, in a package of a number of fees, three or four slightly exceed the Treasurer’s annual rate then that may not necessarily be an immediate cause for concern. Rather, the Subcommittee will examine each fee increase, the monetary amount and what the fee is for. Each regulation will be examined on its merits and in context.

At this stage, the Premier’s Guidelines have only been in operation for over a year. The Subcommittee will continue to carefully scrutinise the regulations and the Premier’s Guidelines.

The preparation of a table showing new and old fees and including an indication of the percentage increase or decrease is of great assistance to the Subcommittee. The Subcommittee provides the following as an example.

Independent Advice Certificates: 10(3)

Under section 10(3) of the Subordinate Legislation Act 1994 (Vic) a Minister must ensure that independent advice as to the adequacy of a Regulation Impact Statement is obtained. The provision of that independent advice assists the Subcommittee in its review of the regulations.

Legislative Instruments outside the Subordinate Legislation Act 1994

The Subcommittee plays a vital role in ensuring that rights are adequately protected. It cannot do this if provisions are incorporated in legislative instruments outside its scrutiny. The Subcommittee prefers department and agency officers not to use Guidelines and Codes of Practice. Where Guidelines and Codes of Practice are used the Subcommittee would like those Guidelines and Codes of Practice to be published and available to the public at the same time as the regulation commences operation.

Provision of Documentation to Regulation Review Subcommittee

The Subcommittee needs to receive Explanatory Memoranda, all certificates, RISs and comments and submissions made in relation to RISs within 7 days after a regulation has been made. The Subcommittee has a limited time within which to review regulations. If the Committee wants to move for disallowance of a regulation it must do so within 18 sitting days of that regulation being tabled in Parliament. Prior to the Committee moving a motion for disallowance, the Subcommittee corresponds and negotiates with the particular Minister. The Subcommittee needs sufficient time for this process to take place.

Paragraph 5.51 of the Premier’s Guidelines provides that:–

All certificates required under the Act are to be signed and dated with the date of the day of signing. Copies of all certificates prepared in the course of making statutory rules are to be forwarded to SARC within 7 days of the making of the statutory rule, or within 7 days of the establishment of SARC (whichever is the longer period of time).

Recommendations

The Subcommittee notes that some regulations are made on the recommendation of a Minister or some other authorised body. If the Subcommittee is provided with a copy of the recommendation, it can certify that the regulations have been validly made in accordance with that recommendation. Where the Subcommittee is not provided with a copy of that recommendation, it cannot certify that the regulations have been validly made. The Subcommittee would appreciate receiving copies of all recommendations.

Scrutiny of Acts and Regulations Committee
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