Scrutiny of Acts and Regulations Committee
Ninth Report to Parliament on Subordinate Legislation

Annual Report
concerning
Statutory Rules Series 1995 and 1996

Ordered to be Printed
Melbourne
Government Printer
May 1997
No. 41 Session 1996/1997

INTRODUCTION

1. The Scrutiny of Acts and Regulations Committee is pleased to present to the Parliament its Ninth Report on Subordinate Legislation. This is its Fifth Annual Report.

The Report concerns the 197 statutory rules which were made during 1995 and the 166 rules which were made in 1996. These rules were scrutinised by the Subordinate Legislation Subcommittee of the Scrutiny of Acts and Regulations Committee.

This is the first annual report of the Committee describing the scrutiny of statutory rules in accordance with the Subordinate Legislation Act 1994. The Subordinate Legislation Act 1994 came into operation on 1 January 1995 and it is against this Act that rules now are examined.

COMMITTEE POWERS

2. The Subordinate Legislation Act 1994 came into being subsequent upon an inquiry by the Committee in 1993 into the operation of the Subordinate Legislation Act 1962.[1] The 1994 Act implements portions of that Report, both in relation to form and substance. A key change in the form of the Act relates to a restructuring of the Act. The restructuring focuses attention on a major change in the substance of the Act - that of requiring preliminary consultation by the responsible Minister with other Ministers as well as with those members of the public on whom an appreciable social or economic burden may be imposed by the rule.

The heads of scrutiny remain unaltered and this Report will deal with the rules under these heads, in a manner which will be familiar to readers of past reports. The Committee engages in scrutiny of a technical nature and does not examine the policy behind any Regulations. Policy formulation and examination properly belongs to the Parliament itself.

3. The Scrutiny of Acts and Regulations Committee has power to report to the Parliament if it considers that a statutory rule offends any of the review criteria set out in s.21 of the Subordinate Legislation Act 1994.

A report may contain any recommendations that the Committee considers appropriate. This may be a recommendation that the statutory rule be disallowed in whole or in part, or a recommendation that the rule be amended. The Committee may also recommend under s.22 of the Act, where it is of the opinion that considerations of justice and fairness require it, that the rule or any part of it be suspended pending consideration of the rule by the Parliament. Finally, a report may simply be for the information of the Parliament.

During 1996, the Committee issued an Information Paper on the Fisheries (Abalone) Regulations 1996. This provided Members of Parliament, as well as members of the general public, with an example of the process which the Committee adopts as it examines Regulations under the Subordinate Legislation Act.

More commonly in practice, where it is considered that a defect in a statutory rule can be rectified by amendment, the Committee approaches the responsible Minister privately to seek amendment, rather than reporting to the Parliament. The Committee continues to experience a high degree of cooperation from Ministers in implementing suggested amendments.

The Committee will continue to issue Committee Memorandums for the assistance of legislative officers. The Committee's Memorandums can be found in Appendix 6.

GROUNDS FOR REVIEW

4. Section 21

The Committee's power to scrutinise statutory rules derives from s.21(1) of the Subordinate Legislation Act, which provides as follows:

21. Review of statutory rules by the Scrutiny Committee

(1) The Scrutiny Committee may report to each House of the Parliament if the Scrutiny Committee considers that any statutory rule laid before Parliament -

(a) does not appear to be within the powers conferred by the authorising Act;
(b) without clear and express authority being conferred by the authorising Act -

(i) has a retrospective effect; or
(ii) imposes any tax, fee, fine, imprisonment or other penalty; or
(iii) purports to shift the onus of proof to a person accused of an offence; or
(iv) provides for the sub-delegation of powers delegated by the authorising Act;

(c) appears to be inconsistent with the general objectives of the authorising Act;
(d) makes unusual or unexpected use of the powers conferred by the authorising Act having regard to the general objectives of that Act;
(e) contains any matter or embodies any principles which should properly be dealt with by an Act and not by subordinate legislation;
(f) unduly trespasses on rights and liberties of the person previously established by law;
(g) makes rights and liberties of the person unduly dependent upon administrative and not upon judicial decisions;
(h) is inconsistent with principles of justice and fairness;
(i) requires explanation as to its form or intention;
(j) has been prepared in contravention of any of the provisions of this Act or of the guidelines with respect tot he statutory rule and the contravention is of a substantial or material nature;
(k) is likely to result in administration and compliance costs which outweigh the likely benefits sought to be achieved by the statutory rule.

The Subordinate Legislation Subcommittee examined all of the statutory rules made in 1995 and 1996 to determine whether or not they offended any of the above criteria. The grounds for review authorise the Committee to consider the substance of the statutory rules, as well as procedural aspects, including where applicable, the statutory requirements for regulatory impact statements.

5. Substantive review

During its review of the 1995 and 1996 series of statutory rules, the Committee found statutory rules which it considered to be in contravention of sub-paragraphs (a), (b), (c), (f), (h), (i), (j) and (k) of s.21(1). These matters are discussed in Part 2 of this report.

6. Procedural review

Procedural matters take a higher profile under the new Subordinate Legislation Act. Part 2 of the Act is entitled `Preparation of Statutory Rules' and contains not only a requirement under section 6 for consultation where required by the guidelines, but also contains section 7, which reads:

7. Circumstances in which regulatory impact statement is to be prepared.

Unless an exception certificate or an exemption certificate is issued in respect of a proposed statutory rule, the responsible Minister must ensure that a regulatory impact statement is prepared in respect of the proposed statutory rule.

Section 7 highlights the importance of regulatory impact statements (RISs) to the Victorian regulatory scheme, and makes it clear that a RIS is required unless the responsible Minister has issued either an exception certificate under section 8 of the Act, or an exemption certificate under section 9. Increasingly, concerns which the Committee might raise about statutory rules relate to inadequacies in a RIS rather than questions of substantive breach of the developed law pertaining to delegated legislation.

In 1995 there were 31 Regulations prepared with the input from the public by means of the RIS process. In 1996, there were 35 Regulations prepared with public input by means of the RIS process.

7. Consultation

Section 6 of the Subordinate Legislation Act 1994 reads as follows:

6. Consultation

The responsible Minister must ensure that where the guidelines require consultation -

(a) there is consultation in accordance with the guidelines with any other Minister whose area of responsibility may be affected by a proposed statutory rule so as to avoid any overlap or conflict with any other existing or proposed statutory rule or legislation;
(b) there is consultation in accordance with the guidelines with any sector of the public on which an appreciable economic or social burden may be imposed by a proposed statutory rule so that the need for, and the scope of, the proposed statutory rule is considered;
(c) a certificate of consultation in accordance with the guidelines is given to the Scrutiny Committee as soon as practicable after the statutory rule is made.

Two issues arise in the implementation of this section. The first is the interpretation of the guidelines, and the second is the construction of the appropriate certificate. Guidelines under the Act are made by the Premier, and may also be called `Premier's Guidelines'.

8. Premiers Guidelines

Section 26(2) of the Act specifies that the guidelines must deal with the matters specified in Schedule 1 to the Act.

The Premier, who is the Minister responsible for the Subordinate Legislation Act, issued guidelines prior to the commencement of the Act to be effective from 1 January, 1995. During the past two years, the guidelines have been reviewed and will be reissued shortly. The Committee has been consulted during the preparation of the new guidelines, in accordance with section 27 of the Act.

Item 5(d) of Schedule 1 to the Act reads this way:

5. Guidelines as to the procedure to be adopted to ensure that -

(d) proper consultation takes place in circumstances where consultation is required under section 6.

The approach taken by the guidelines is to declare where consultation is not required rather than detail where it is required. This lack of specificity has caused the Committee some difficulty in its scrutiny of Regulations.

The question to be asked for each regulation is: do the guidelines "require consultation" in this instance? To some extent the legislation and guidelines are unclear, each asking a similar question.

The Committee has taken a broad position on this point. It will seek a section 6 certificate in all cases where the guidelines do not declare that consultation is not required.

9. The Certificate

The nature of the certificate itself has also raised questions within the Committee. Several Regulations[2] have been made with a certificate which refers to it being "the Minister's opinion" that consultation has taken place and that, in the opinion of the Minister, there is no overlap or conflict. The section does not call for any expression of opinion, but rather, it seeks a factual conclusion that consultation took place and that there is no overlap or conflict.

10. Section 6 and the RIS process

Finally, the relationship between a section 6 certificate and the RIS process has raised questions. Is a section 6 certificate required where the regulatory impact process is to be embarked on? It would seem, from the guidelines, that the resolution of this question is found in these words:

(The) consultation (under section 6(a)) should occur early in the development of policy options and, in any event, must take place before external consultation is undertaken and before notice of a RIS is given under section 11 of the Act. (Emphasis added.)

From this it appears that s.6 consultation is in the nature of interdepartmental consultation while the consultation required by the RIS process is with persons and organisations external to government bureaucracy. Both would appear necessary under the Act. The Committee will request a s.6 consultation certificate and a s.10 certificate of compliance with the Act and guidelines if both are not supplied without an acceptable explanation.

11. The Office of Regulation Reform (ORR) has published helpful material on the preparation of Regulatory Impact Statements. Its first Handbook, published in July, 1995 was called "Better Regulation". Since then, ORR has produced Toolkits covering Regulatory Alternatives and Principles of Good Regulation as well as a replacement Handbook on Regulatory Impact Statements.

12. Exception certificates

Section 8 of the Subordinate Legislation Act reads:

Exceptions to section 7

(1) Section 7 does not apply if the responsible Minister certifies in writing that in his or her opinion-

(a) the proposed statutory rule increases fees in respect of a financial year by an annual rate that does not exceed the annual rate approved by the Treasurer in relation to the State Budget for the purposes of this section; or
(b) the proposed statutory rule is a rule which relates only to a court or tribunal or the procedure, practice or costs of a court or tribunal; or
(c) the proposed statutory rule only prescribes an equalisation factor for the purposes of the Land Tax Act 1958; or
(d) the proposed statutory rule only-

(i) prescribes under section 4(1)(a) an instrument or class of instrument to be a statutory rule; or
(ii) exempts under section 4(1)(b) an instrument or class of instrument from the operation of this Act; or
(iii) extends under section 5(4) the operation of a statutory rule that would otherwise be revoked by virtue of section 5.

(2) For the purposes of sub-section (1)(a), in calculating the amount of an increase the amount is deemed to have been calculated in accordance with sub-section (1)(a) if the calculation is made to the nearest whole $1.

(3) The responsible Minister must ensure that a copy of the exception certificate is given to the Scrutiny Committee as soon as practicable after the Statutory rule is made.

(4) A copy of the exception certificate must be laid before each House of the Parliament at the same time as the statutory rule is so laid under section 15.

"Settling in" to the new Act, and the obligations it imposes has taken some time, but its structure does clarify where a RIS is required and where it is not. A table of section 8 exception certificates under the various categories is presented below. (See Table 3 and Table 3A at p. 22).

13. Section 8 and reasons for exception not required

It is not necessary under section 8 for reasons for the particular exception to be given in a certificate. This contrasts with section 9 which contains the following sub-section:

(2) An exemption certificate under sub-section (1) must specify the reasons for the exemption.

Exception certificates cover objective matters, such as approved annual fee increases and court rules.

14. Automatic sunsetting

A certificate of exception under Section 8(1)(d)(iii) is available to assist where otherwise a statutory rule would be automatically revoked (or "sunsetted") under section 5 of the new legislation.

Sections 5(3)-(5) of the Act read as follows:

(3) If the responsible Minister is satisfied that due to special circumstances there is insufficient time to enable compliance with Part 2 in respect of a proposed statutory rule before the statutory rule it is intended to replace is to be revoked by virtue of this section, the responsible Minister may so certify.

(4) The Governor in Council may, on the certificate and recommendation of the relevant responsible Minister under sub-section (3), make a regulation under this Act extending the operation of a statutory rule that would otherwise be revoked by virtue of this section for a period as is specified in the regulation not exceeding 12 months.

(5) Only one extension of the operation of a statutory rule can be made under sub-section (4).

15. SR 59/95 Subordinate Legislation (Housing (Standard of Habitation) Regulations 1985 Extension of Operation) Regulations 1995 was excepted from the RIS process by virtue of a certificate under section 8(1)(d)(iii).

Section 8(1)(d)(iii) refers to section 5(4) of the Act, which in turn relies on a certificate of the responsible Minister under section 5(3). This certificate describes the "special circumstances" which prevented compliance with Part 2 of the Act prior to revocation by virtue of the automatic sunsetting contained in section 5.

Although there was no requirement under section 8 of the Act that the section 8(1)(d)(iii) certificate state the special circumstances, in this instance, the Explanatory Memorandum did provide an indication of the prevailing situation.

This is to be commended and the Committee hopes that this practice will be followed in future similar cases.

16. The Committee raised the content of section 8(1)(d)(iii) certificates with the Department of Premier and Cabinet, by letter dated 28 July, 1995 reprinted below:

I enclose for your interest copies of two "extension of operation" Regulations under section 8(1)(d)(iii) of the Subordinate Legislation Act 1994.

These Regulations came before the Committee on 18 July, 1994 where it was noted that the Explanatory Memorandum did give some indication of the "special circumstances" which brought about the Regulations. While not required by the Act, officers responsible for SR No 66/95 supplied the Committee with a section 5(3) certificate, but that certificate did not elaborate on the "special circumstances" at all.

The Committee considers that this issue may be of interest to you and legal officers generally.

Certainly the Committee believes that provision to it of a section 5(3) certificate would probably add value to the scrutiny process without unduly increasing administrative costs.

It observes that a certificate for an exemption under section 9 of the Act must be supplied to the Committee and that it must "specify the reasons for the exemption.

The Committee favours this more broadly drafted explanation for both exemptions under section 9 and exemptions by way of extension of operation. It would appreciate your comments.

The reply dated 25 September, 1995 was favourable to the Committee's suggestion, and is reported below:

Thank you for your letter of 28 July 1995 and the matters discussed therein concerning the operation of the extension provisions of the Act. As the Premier is the Minister responsible for the Subordinate Legislation Act 1994 it is useful to have these issues of practical operation brought to our attention.

We are currently revising the Guidelines issued under section 26 of the Act. As part of that process we will explore the possibility of giving guidance to departments on the proper use of section 5(3) and (4). Without amending the Act, it will not be possible to introduce a formal requirement for the giving of reasons in relation to "special circumstances" under s.5(3). However, it may be possible to develop a form for a section 5(4) certificate which includes the type of information which was set out in the Explanatory Memorandum to the Subordinate Legislation (Housing (Standard of Habitation) Regulations 1985 - Extension of Operation Regulations 1995.

I will forward a copy of the revised Guidelines as soon as they are available.

17. SR 33/96 Subordinate Legislation (Professional Boxing Control Regulations 1986 Extension of Operation) Regulations

These Regulations provide the first instance as examined by the Committee of significant, although unintentional, non-compliance with procedural aspects of the Subordinate Legislation Act 1994. The Regulations were presented to the Committee with a certificate extending the life of the Regulations under section 5(4) of the Subordinate Legislation Act but without the appropriate certificate of exception from the RIS process under section 8(1)(d)(iii) of the Act.

In the event, the original Regulations expired by virtue of the automatic sunsetting provision of the Act and were remade with a Premier's certificate of exemption from the RIS process under section 9(3) of the Subordinate Legislation Act.

18. Tabling requirements

Both section 8(4) and section 9(6) of the Subordinate Legislation Act mandate that a copy of the relevant exception or exemption certificate be laid before each House of the Parliament at the same time as the statutory rule is so laid under section 15 of the Act.

In the case of SR 33/96, a section 8(1)(d)(iii) exception certificate was issued after the Regulation was made but it was not tabled at the same time as the Regulation was laid before either House of the Parliament.

On further investigation, it appears that there are several instances where a Regulation and its certificate were not tabled together. The Clerks take the view that failure to table a certificate at the same time as a Regulation is laid does not effect the operation of the Regulation, but may be reported to the Parliament in the same way as failure to table the statutory rule within 6 days of notice of making does not render a statutory rule inoperative.

As it has happened, there are several examples of this non-compliance with the Act[3] and it is a matter to which the Committee is giving further attention in the light of a projected over all review of the operation of the 1994 Subordinate Legislation Act.

19. Section 9

Section 9 of the Act reads as follows:

9. Exemptions from section 7

(1) Section 7 does not apply if the responsible Minister certifies in writing that in his or her opinion-

(a) the proposed statutory rule would not impose an appreciable economic or social burden on a sector of the public; or
(b) the proposed statutory rule is required under a national uniform legislation scheme and an assessment of costs and benefits has been undertaken under that scheme; or
(c) the proposed statutory rule is of a fundamentally declaratory or machinery nature; or
(d) the proposed statutory rule deals with administration or procedures within or as between Departments or declared authorities within the meaning of the Public Sector Management Act 1992; or
(e) notice of the proposed statutory rule would render the proposed statutory rule ineffective or would unfairly advantage or disadvantage any person likely to be affected by the proposed statutory rule.

(2) An exemption certificate under sub-section (1) must specify the reasons for the exemption.

(3) Section 7 does not apply if the Premier certifies in writing that in the Premier's opinion in the special circumstances of the case the public interest requires that the proposed statutory rule be made without complying with section 7.

(4) The Premier must not issue an exemption certificate unless the proposed statutory rule is to expire on or before the day which is 12 months after the first day on which any provision of the statutory rule is to come into operation.

(5) The responsible Minister must ensure that a copy of the exemption certificate is given to the Scrutiny Committee as soon as practicable after the statutory rule is made.

(6) A copy of the exemption certificate must be laid before each House of the Parliament at the same time as the statutory rule is so laid under section 15.

This section covers more flexible criteria, as well as a limited Premier's Certificate. Table 4 and Table 4A on pp 22 and 23 below set out a list of section 9 exemption certificates under the several categories.

The primary exemptions are that the rule would not impose an "appreciable economic or social burden on a sector of the public" or that the rule is of a "fundamentally declaratory or machinery nature". Also included is an exemption for national uniform scheme legislation. An exemption certificate is only available under this category, however, where a costs and benefits assessment has already been undertaken for the national scheme.

20. Premiers certificate

One historical criticism of Premier's certificates under the Subordinate Legislation Act 1962 was that, up until the current Premier, such certificates generally were open-ended and totally excused the regulation from the RIS process. Under section 9(4) of the current Act, Premier's exemption certificates must expire on or before 12 months from their making. Section 9(2) of the Act obliges a responsible Minister to give reasons for exemptions given under section 9(1). By contrast, section 9(3) requires only that the Premier's opinion is that in the special circumstances of the cases the public interest requires exemption. No further explanation is required.

In 1995, there were 4 Premier's certificates issued. In 1996, there were 7 Premier's certificates issued. Appendix 5 contains a summary of each certificate issued by the Premier under section 9(3) in 1995 and 1996.

21. Tabling before the Parliament

Section 8(4) and section 9(6) require tabling of exception certificates and exemption certificates respectively before each House of the Parliament at the same time as the respective statutory rule is so laid.

This is to ensure that members of parliament, and the public too, are made aware of the reasons why a RIS is not undertaken in the circumstances. With the reservation mentioned at paragraph 18 above, the system now appears to function well in the main.

Section 8(3) and section 9(5) of the Subordinate Legislation Act require that the Scrutiny of Acts and Regulations Committee receive copies of the relevant certificates as soon as possible after the statutory rule is made. Where documentation is not received by the Committee within 4-6 weeks of making, it is the Committee's practice to chase up the responsible Department or agency.

22. Regulatory Impact Statements

Section 10 of the Act sets out clearly what is required of a RIS. It reads as follows:

10. Regulatory Impact Statements

(1) A regulatory impact statement must include-

(a) a statement of the objectives of the proposed statutory rule;
(b) a statement explaining the effect of the proposed statutory rule, including in the case of a proposed statutory rule which is to amend an existing statutory rule the effect on the operation of the existing statutory rule;
(c) a statement of other practicable means of achieving those objectives, including other regulatory as well as non-regulatory options;
(d) an assessment of the costs and benefits of the proposed statutory rule and of any other practicable means of achieving the same objectives;
(e) the reasons why the other means are not appropriate;
(f) any other matters specified by the guidelines;
(g) a draft copy of the proposed statutory rule.

(2) The assessment of the costs and benefits must include an assessment of the economic, environmental and social impact and the likely administration and compliance costs including resource allocation costs.

(3) The responsible Minister must ensure that independent advice as to the adequacy of the regulatory impact statement and of the assessment included in the regulatory impact statement is obtained and considered in accordance with the guidelines.

(4) The responsible Minister must before a statutory rule in respect of which a regulatory impact statement is required is made, give a certificate in writing specifying-

(a) that the requirements relating to regulatory impact statements in this Act and the guidelines have been complied with; and

(b) that in his or her opinion the regulatory impact statement adequately assesses the likely impact of the proposed statutory rule.

(5) The responsible Minister must ensure that a copy of the regulatory impact statement and the compliance certificate is given to the Scrutiny Committee as soon as practicable after the statutory rule is made.

23. What the Act now mandates is that the responsible Minister give a certificate stating that in his or her opinion the requirements of the Act and guidelines have been complied with, and also that in his or her opinion the RIS adequately assesses the likely impact of the proposed rule.

24. The Committee has opportunity to examine the RIS process, and the comments and submissions process under section 21(1)(j) of the Subordinate Legislation Act.

In passing, the Committee draws attention to several RISs of a superior standard.[4] These RISs are well presented, clear and persuasive and illuminating to all who read them. Accompanying documentation acknowledges submissions of respondents and occasional appropriate amendments are made to the final Regulation as a result. The Committee congratulates all who were involved in the preparation of these RISs.

25. Qualitative analysis in RIS

When examining the Australian Grands Prix (Formula One) Regulations 1996 (SR 151/1996), the Committee had its attention drawn to what might be described as the qualitative cost-benefit analys it presented. It had become aware of several RISs[5] where the social impact was considered to be the primary cost of the regulatory scheme. Accordingly, some RISs presented a qualitative analysis rather than a quantitative analysis which is the more common analysis. In all cases, the Minister had ensured that there had been independent advice as to the adequacy of the RIS and had averred to this in the certificate given under section 10(4) to the Subordinate Legislation Act.

At the time the Committee considered its Annual Report, the Committee had not concluded its deliberations on the matter.

26. Section 10 clearly provides in one location what is required of a RIS. One alteration to the content of section 10 from the previous requirements is that the independent advice (s.10(3) advice) which the responsible Minister must obtain as to the adequacy of the RIS need not come from the Office of Regulatory Reform.

Further, the independent advice is not required, under the 1994 Act, to be sent to the Scrutiny of Acts and Regulations Committee.

However, the Committee has taken the position of requesting that such advice be furnished to the Committee, noting that the Committee could obtain the advice under the Freedom of Information Act 1982 in any case. (See Appendix 6 for Committee Memorandums.)

The Committee has formed the view that in order to properly assess a RIS, access to the independent advice which the responsible Minister must obtain under section 10(3) of the Act is essential.

It has written to several Ministers seeking the relevant section 10(3) certificate.

For example, on 21 August 1995 it wrote to the Minister for Finance about the Emergency Services Superannuation Scheme (Amendment) Regulations 1995 - SR 58/95.

These regulations were subject to the RIS process and the Committee noted that the RIS complied with section 10 of the Subordinate Legislation Act 1994.

The Committee is aware that the Act does not technically require the forwarding to the Committee of the independent advice which the responsible Minister is required to obtain and consider under section 10(3). However, for the Committee to assess properly a RIS such independent advice is essential, and would be available under the Freedom of Information processes in any event.

The Committee asks that you kindly sent it a copy of the independent advice obtained for SR 58/95, and make it a practice to furnish the Committee with this independent advice for all future RIS.

It received the following reply, and gratefully acknowledges the Minister's compliance in this regard.

Thank you for your letter dated 21 August 1995 requesting confirmation with regard to independent advice on the Regulatory Impact Statement for the above regulations.

A copy of this confirmation is attached.

As per your request, we have made notations in our Subordinate Legislation Guidelines to include independent advice confirmations in future submissions to your Committee.

27. Supporting material

From time to time the Committee reads an Explanatory Memorandum of a superior standard.[6] These Explanatory Memorandums do just what the title indicates: they clearly explain the purpose and nature of a regulatory proposal. The Committee compliments those responsible for these Explanatory Memorandums which are of great assistance to the Committee in its scrutiny of the Regulations.

28. Minor slips

Occasionally the Committee is aware of minor slips or errors in Regulations.[7] Sometimes these may be in the nature of printing errors. Other times, they involve omission of footnotes or incorrect citation of footnotes. The Committee usually draws these matters to the attention of the responsible Minister, but mindful of the costs of preparing amending Regulations does not withhold approval of the Regulation, which it might do in the more serious breaches of the Act, where it seeks an undertaking to amend before it approves the Regulation.

Instruments examined

29 Definitions of statutory rule

Section 3 of the new Act defines `statutory rule' as follows:

"Statutory rule" means

(a) a regulation-

(i) made by the Governor in Council; or
(ii) made with the consent or approval of the Governor in Council; or
(iii) which the Governor in Council has power to disallow-
other than a regulation made by a local authority or by a person or body with jurisdiction limited to a district or locality; or

(b) a rule relating to a court or tribunal or the procedure, practice or costs of a court or tribunal; or
(c) an instrument or a class of instruments prescribed to be a statutory rule or statutory rules under section 4 (1) (a); or
(d) an instrument or class of instrument that is deemed to be a statutory rule or statutory rules by the authorising Act-
but does not include an instrument or class of instrument specified in paragraph (a) or (b) which is exempted under section 4 (1) (b).

30. In addition, the Governor in Council may make Regulations under this Act which prescribe an instrument to be a statutory rule or to be exempt from scrutiny as a statutory rule. This power is contained in section 4, which reads:

4. Prescribing instruments to be a statutory rule or to be exempt

(1) The Governor in Council may make Regulations under this Act-

(a) prescribing an instrument or class of instruments to be a statutory rule or statutory rules for the purposes of paragraph (c) of the definition of "statutory rule" in section 3;
(b) exempting an instrument or class of instruments that is a statutory rule under paragraph (a) or (b) of the definition of "statutory rule" in section 3 and is not of a legislative character.

(2) The Minister must consult the Scrutiny Committee before submitting a proposed regulation under sub-section (1) to the Governor in Council.

(3) If an instrument or class of instrument is prescribed to be a statutory rule or statutory rules-

(a) this Act applies to the instrument or class of instrument; and
(b) any provision of the Act under which the instrument or class of instrument is made which is inconsistent with, or duplicates, any provision of this Act does not apply to the instrument or class of instrument.

(4) If an instrument or class of instrument is exempt-

(a) this Act (other than this sub-section) does not apply to the instrument or class of instrument; and
(b) publication of the instrument in the Government Gazette is sufficient compliance with any requirements in relation to the publication of the instrument that are contained in the Act under which it is made; and
(c) unless provision is made to the contrary by the Act under which it is made, the instrument or a provision of it comes into operation at the beginning of the day on which the instrument is published in the Government Gazette or at the beginning of such later day as is expressed in the instrument as the day on which the instrument or provision (as the case requires) comes into operation.

31. The Subordinate Legislation Subcommittee examined the 197 statutory instruments made during 1995 and the 166 statutory instruments made in 1996. These can be broken into groups according to the above definition, as shown in Table 1 and Table 1A on p 20 below.

Ministerial Undertakings

32. In the course of examining the 1995 statutory rules, the Subordinate Legislation Subcommittee received undertakings from Ministers to amend 6 statutory rules to meet its concerns. Details of these undertakings appear in Part 2 of this Report. There were 7 statutory rules made in 1995 fulfilling Ministerial undertakings given in earlier years.

With respect to a further 5 statutory rules, matters raised by the Subordinate Legislation Subcommittee were resolved by the provision of further explanation and information to the Subcommittee, and further action was not taken.

33. In the course of examining the 1996 statutory rules, the Subordinate Legislation Subcommittee received undertakings from Ministers to amend 2 statutory rules to meet its concerns. Details of these undertakings appear in Part 2 of this report. There was one statutory rule made in 1996 fulfilling a Ministerial undertaking given earlier in the year.

With respect to a further 7 statutory rules, matters raised by the Subordinate Legislation Subcommittee were resolved by the provision of further explanation and information to the Subcommittee, and further action was not taken.

As referred to earlier, in December, 1996 the Committee released an Information Paper on one Regulation.[8]

34. Reports to the Parliament

No statutory rules were the subject of report to the Parliament in 1995 under the Subordinate Legislation Act. This fact is indicative of the cooperation which the Subcommittee receives from responsible Ministers and government departments.
In 1996 one Information Paper was tabled in the Parliament. Again, the fact that the Committee did not report on any other of the Regulations made in 1996 is evidence of the cooperative spirit which exists between the Parliamentary Committee and the Executive arm of Government.

A complete list of reports made to Parliament pursuant to s.14(1) of the Subordinate Legislation Act 1962 from 1985 to 1994, and pursuant to s.21(1) of the Subordinate Legislation Act 1994 appears as Appendix 2 to this report. A complete list of all reports and papers prepared by the Scrutiny of Acts and Regulations Committee is found at Appendix 7 of this Report.

35. Transitional Provisions

The new Act states that "it applies to a statutory rule whether made before, on or after the commencement of the Act" (See s.34(1)). However, in relation to those rules which were part-prepared prior to the commencement of the 1994 Act several transitional arrangements were in place. Matters which have their equivalents under the new legislation were deemed to be done under that new provision. Rules which were subject to RIS under the old Act, are exempt from Part 2 of the 1994 Act if notice of the RIS had been published before the 1994 Act commenced.

36. SR 6/95[9] is an instance of a rule made under the current Act, with a RIS under the 1962 Act. Under section 34 of the Subordinate Legislation Act 1994, SR 6/1996 was not required to comply with Part 2 of that Act, and was presented to the Committee with a "section 13 certificate" under the 1962 Act. A certificate of consultation and a certificate of compliance under the 1994 Act were not presented.

37. Similarly, SR 17/95[10] was also made with a RIS prepared under the 1962 Act. Accordingly, it did not need to comply with the extra requirements which the new legislation demands for RIS prepared since commencement of the 1994 Act.

38. Section 32 of the Interpretation of Legislation Act 1984.

The Subordinate Legislation Act 1994 included miscellaneous amendments to the Interpretation of Legislation Act 1984, one of which removed the review powers of the Scrutiny Committee over compliance with section 32 of the Interpretation of Legislation Act.

39. Subordinate Instruments which are deemed to be statutory rules

It appears that the Subcommittee has power to recommend that Parliament disallow documents other than statutory rules, but only where the empowering Act specifically states this. For example, amendments to the Building Code of Australia 1990 may be disallowed by virtue of Schedule 1 to the Building Act 1993. Similarly, State Environment Protection Policies (SEPPs) are subject to SARC scrutiny because of section 18D of the Environment Protection Authority Act 1970.

40. There are many other deeming provisions in Acts of the Victorian Parliament which state that certain documents are to be treated as though they were statutory rules for the purpose of disallowance by the Parliament. This means that they could be subject to motions of disallowance on recommendation of the SARC. An attempt was made to cover several of these provisions in a consequential amendment contained in Schedule 2 to the Subordinate Legislation Act 1994.

Consequential amendments were necessary to convert references in the various pieces of legislation to sections of the 1994 Act rather than the 1962 Act. There was an attempt to reconstrue references in the many Victorian Acts which contained reference to the 1962 Act as a reference to the relevant section of the 1994 Act. This has not been without its difficulties as the new Act has a different structure to the former Act.

This is another area which the Subcommittee could consider more closely in the future. It would seem that more specific amendments are required for certainty of practice.

41. State environment protection policy

Under Part III of the Environment Protection Act 1970, Orders made by the Governor in Council called State Environment Protection Policies or SEPPs may be made. These Orders are examinable by the Scrutiny of Acts and Regulations Committee which may recommend disallowance or amendment of a SEPP.

The Committee is pleased to have the opportunity to scrutinise significant pieces of delegated legislation such as SEPPs. It appreciated the visit early in 1997 of officers from the Environment Protection Authority who advised the Committee on the history of SEPPs and the nature of the documents themselves.

42. Delegated legislation not subject to Scrutiny of Acts and Regulations Committee scrutiny

The Committee is aware of a growing number of examples of delegated legislation which do not fall within the definition of `statutory rule' and which are not expressed to be subject in the empowering legislation to be subject to disallowance by the Parliament. Such pieces of delegated legislation are therefore beyond the formal scrutiny of the Committee.

For example, Tariff Orders made by the Governor in Council under section 169 of the Electricity Industry Act 1993 are published by notice in the Government Gazette but not subject to Committee scrutiny. Similarly, there are numerous Fisheries Notices made under s.80 of the Fisheries Act 1968 which appear in the Government Gazette and are not subject to Committee examination. In this latter case, it is argued that fishing notices may be required at a moment's notice in order to protect an important natural resource. The Melbourne Cricket Ground (Operation of Floodlights) (Amendment) Order No. 1 / 1996 is an example in 1996 of a formal document - quasi-legislation - which is not subject to the controls and scrutiny of the Subordinate Legislation Act 1994. The contents of the Order are arguably no different to other executive documents which are statutory rules and thus examinable by the Committee. In this case, the Order is made under s.3 of the Melbourne Cricket Ground Act 1984 and not subject to Parliamentary scrutiny.

The area of quasi-legislation is one to which the Subcommittee will devote further time as it forms a view as to whether there are formal documents which, in its opinion, ought be subject to additional Parliamentary scrutiny.

43. Drafting of statutory rules

The standard of drafting of subordinate instruments is generally high. The drafting is a task allocated to Departmental officers. The final document is usually settled by the Office of Parliamentary Counsel. During the years which this Report covers, there were minor instances only of drafting error or oversight. The Committee commends all of the officers involved for their role in the process of producing significant statutory documents.

TABLE 1 -
SUBORDINATE LEGISLATION MADE IN 1995 EXAMINED BY SCRUTINY COMMITTEE

TABLE 1A -
SUBORDINATE LEGISLATION MADE IN 1996 EXAMINED BY SCRUTINY COMMITTEE

TABLE 2 -
1995 REPORTS

There were no Reports in 1995.

TABLE 2A -
1996 REPORTS

There were no Reports in 1996.

An Information Paper entitled "ABALONE - TAKING STOCK", Review of the Fisheries (Abalone) Regulations 1996 was prepared and tabled in December, 1996.

TABLE 3 -
1995 STATUTORY RULES:
EXCEPTIONS TO SECTION 7, UNDER THE SEVERAL CATEGORIES LAID OUT IN SECTION 8

TABLE 3A -
1996 STATUTORY RULES:
EXCEPTIONS TO SECTION 7, UNDER THE SEVERAL CATEGORIES LAID OUT IN SECTION 8

TABLE 4 -
1995 STATUORY RULES:
EXEMPTIONS FROM SECTION 7, UNDER THE SEVERAL CATEGORIES LAID OUT IN SECTION 9

TABLE 4A -
1996 STATUTORY RULES
EXEMPTIONS FROM SECTION 7, UNDER THE SEVERAL CATEGORIES LAID OUT IN SECTION 9

In 1996, statutory rules were made by the Governor in Council with exemption certificates covering more than one category. For example, the number of certificates of exemption relying on section 9(1)(a) and (c) was 16 and the number relying upon section 9(1)(a), (c) and (d) for exemption from RIS was 1. One Regulation made use of a combined exception and exemption certificate. Also one Regulation did not comply with the Subordinate Legislation Act from a procedural point of view (See para 17 above). Another Regulation revoked a Regulation which had been made earlier in 1996. This explains totals which do not add up.

Scrutiny of Acts and Regulations Committee
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