Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2013-2014-2015
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
MEDICAL RESEARCH FUTURE FUND BILL 2015
MEDICAL RESEARCH FUTURE FUND (CONSEQUENTUAL
AMENDMENTS) BILL 2015
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendments and New Clauses to be Moved on Behalf of the Government
(Circulated by authority of the Minister for Finance,
Senator the Hon Mathias Cormann)
MEDICAL RESEARCH FUTURE FUND BILL 2015
OUTLINE
The Medical Research Future Fund Bill 2015 (the Bill) gives effect to the
Government‟s decision (announced as a 2014-15 Budget measure) to establish a
dedicated financial asset - the Medical Research Future Fund (MRFF) - as an
endowment that supports medical research and innovation (including in health
disciplines).
The Government wishes to accumulate assets that can be invested to create earnings
used to financially support medical research and medical innovation over the long-
term. All Australians stand to benefit from additional, well-targeted investments in
medical research and medical innovation. The additional national funding for medical
research and innovation provided through the MRFF is expected to translate into
improvements in the health, life expectancy and quality of life of all Australians.
The Bill was introduced to the House of Representatives on 27 May 2015.
Amendments to the Bill enhance the decision-making and accountability mechanisms
that will be used for the disbursement of funds from the MRFF.
The amendments will:
- establish an independent expert Australian Medical Research Advisory Board
(Advisory Board) to develop the Australian Medical Research and Innovation
Strategy (the Strategy) and the Australian Medical Research and Innovation
Priorities (the Priorities);
- create a requirement to have a Strategy;
- create a requirement to have Priorities;
- specify that decision-making mechanisms for the disbursement of funds from the
MRFF must take account of the Strategy and the Priorities which determines the
focus of medical research and innovation every two years; and
- clarify the involvement of the National Health and Medical Research Council
(NHMRC) in the effective disbursement of funding from the MRFF.
The Government is committed to boosting health and medical research. This must not
just do more of the same, but demonstrate greater value and returns to the Australian
people. The MRFF will give particular impetus to the translation of medical research
into health and economic benefits. The MRFF will complement the Medical Research
Endowment Account operated by the National Health and Medical Research Council
(NHMRC), and leverage the existing capabilities of the NHMRC, including peer
review, grants management, and the provision of expert advice.
The amendments also include a contingent amendment to the Medical Research
Future Fund (Consequential Amendments) Bill 2015 regarding the Acts and
Instruments (Framework Reform) Act 2015, which updates references to the
Legislation Act 2003.
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The Advisory Board
The proposed amendments to the Bill establish an independent expert Advisory Board
and set out the Advisory Board‟s role, governance and reporting arrangements. The
purpose of the Advisory Board is to develop the Strategy and the Priorities.
The Advisory Board will also provide advice, as requested, to the Health Minister on
other matters which relate to the Strategy, Priorities, and the use of funding from the
MRFF.
In addition to expertise in medical research, the Advisory Board members will
collectively possess expertise in medical research, policy relating to health systems,
management of health services, medical innovation, financing and investment, and
commercialisation. The CEO of the NHMRC will be a member of the Advisory
Board.
The Australian Medical Research and Innovation Strategy and the Australian
Medical Research and Innovation Priorities
The proposed amendments make clear that the independent expert Advisory Board
will develop and publish the Strategy. The purpose of the Strategy is to ensure that a
coherent and consistent approach is adopted in the funding of medical research and
medical innovation from the MRFF over a five year period. The Advisory Board must
refer to the NHMRC‟s national strategy for medical research and public health
research when developing the Strategy and should also refer to other relevant
publications such as the Government‟s Science and Research Priorities. The Strategy
will not identify particular projects to receive funding; in part this requirement ensures
that the members of the Board who are also members of the medical research
community are not exposed to potential conflicts of interest.
A new Strategy will be determined every five years. A subsequent Strategy must be
determined before the current Strategy ceases to be in force.
The Advisory Board will consider the Strategy in setting the Priorities which the
Government must use in making decisions regarding programme-level funding from
the MRFF. The Priorities are to be set every two years.
The Advisory Board must take into account the following in setting the Priorities:
- the burden of disease on the Australian community;
- how to deliver practical benefits to as many Australians as possible from
medical research and innovation;
- how to ensure that financial assistance provided under this Act provides the
greatest value for all Australians;
- how to ensure that financial assistance provided under this Act complements
and enhances other funding provided for medical research and medical
innovation.
The application of the Priorities to inform decision-making is expected to ensure that
any expenditure from the MRFF will have a strong business case, underpinned by
consideration of how the financial assistance provided from the MRFF delivers the
greatest value for all Australians.
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Programme-level funding decisions will be made by Cabinet through the Budget
process. The Health Minister will bring forward proposals for Cabinet‟s consideration
consistent with the Strategy and Priorities set by the independent expert Advisory
Board.
Report on Financial Assistance for Medical Research
The proposed amendments set out a requirement for the Health Minister to produce a
report to Parliament every two years on medical research and innovation investment.
The report must detail all funding provided by the Government for medical research
and innovation and how MRFF funding decisions align with the Priorities.
The report must differentiate funding provided from the MRFF from other medical
research and innovation funding.
Role of the NHMRC in Disbursements
The funding from the MRFF is in addition to funding already provided to the
NHMRC. The Government will rely on a range of experts, including the experience
and expertise of the NHMRC and other expert bodies when funding medical research
in particular for scientific and laboratory-based research. This recognises that other
expert funding bodies, including Government Departments, might be required to
assist with for example, the management of funding for medical research
infrastructure, or for commercialisation of medical research.
The Advisory Board, that includes the CEO of the NHMRC, will take account of the
work and priorities of the NHMRC, to ensure that funding from the NHMRC and
funding from the MRFF are complementary and that there is no duplication.
Any allocation of MRFF funding to the NHMRC will be for purposes consistent with
the Strategy and Priorities.
Decisions of Financial Assistance from the MRFF
The amendments support that the decision-making processes for financial assistance
from the MRFF will be transparent.
The independent expert Advisory Board will set the Strategy and Priorities for
medical research and innovation. The Health Minister and Cabinet, through the
Budget process, will take these into account when making decisions on funding at the
programme level. The NHMRC and other expert bodies will at times be engaged to
allocate funds to specific projects in order to implement the Budget measures. In
addition to the two year report by the Health Minister to the Parliament, decisions on
funding will be reported in the Budget papers each year and through the grant
reporting requirements set out in the Commonwealth Grants Rules and Guidelines.
The MRFF Bill establishes a range of appropriation mechanisms for providing
funding for medical research. Recipients can include corporate Commonwealth
entities, States and Territories, Australian universities, medical research institutes,
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not-for-profit organisations and commercial enterprises. The Bill does not bind the
Government to make payments to all of these potential recipients each year but it does
allow for allocations of funding consistent with the medical research and medical
innovation Priorities over time.
For example MRFF funding may be made available, through the COAG Reform
Fund, to States and Territories in order to support medical research infrastructure
development. This may involve supporting infrastructure projects by hospitals, health
services, universities or collaborative projects between state governments and medical
research institutes. MRFF funding may also be made available to a Corporation. This
could involve supporting research into the development of medicines or medical
technologies (including personal health technologies) for commercial use. In each
case the funding would only be available to the extent that the programmes are
consistent with the Strategy and Priorities for medical research and innovation.
Powers to Credit and Debit the MRFF
The Treasurer and the Finance Minister are responsible Ministers for the purposes of
determining amounts to be credited to the MRFF. In doing so the responsible
Ministers are required to take into account the object of the Act, which is to improve
the health and wellbeing of Australians by establishing the Medical Research Future
Fund to provide grants of financial assistance to support medical research and medical
innovation.
The Finance Minister is given authority to give effect to the decisions of the
Government, in relation to the debiting of amounts from the MRFF. These amounts
will be made available to the NHMRC and other bodies, to address the Priorities.
The amendments show that while the Finance Minister has authority to issue
directions regarding the debiting of amounts from the MRFF, the Finance Minister
can only debit those amounts if required to do so by the Health Minister. The Health
Minister must take into account the Priorities in determining whether to require the
Finance Minister to debit an amount from the MRFF.
The proposed amendments do not change the Finance Minister‟s role in debiting
amounts. Instead the amendments make clearer the framework for the decision-
making processes, which will be used to determine how amounts debited from the
MRFF are to be disbursed so that they are applied to the Priorities.
The Finance Minister, with the Treasurer, as joint responsible Minister, remains
responsible for the administration of the MRFF through the Future Fund Board of
Guardians.
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MRFF governance and disbursement arrangements
The following diagram illustrates the decision making process which applies to
funding from the MRFF.
Financial impact statement
The amendments to the Bill have no financial impact.
Statement of compatibility with Human Rights
The amendments to the Bill do not:
- engage any of the applicable rights or freedoms outlined in the Human Rights
(Parliamentary Scrutiny) Act 2011, such as encompassed in the International
Covenant on Civil and Political Rights; or
- limit any human rights, nor propose any offences or penalties.
This Bill, including the amendments, is therefore compatible with the human rights
and freedoms recognised or declared in the international instruments listed in
subsection 3(1) of the Human Rights (Parliamentary Scrutiny) Act 2011.
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MEDICAL RESEARCH FUTURE FUND BILL 2015
SUPPLEMENTARY EXPLANATORY NOTES
Section 12 - Determination of amount of Medical Research Future Fund
As stated in the Explanatory Memorandum the determination would usually be
regarded as administrative rather than legislative in character. The determination has
been declared as a legislative instrument because there needs to be a high level of
public accountability around the amount to be transferred. The determination will be
tabled in the Parliament and published on the Federal Register of Legislative
Instruments.
Section 13 - Allocation of investments to the Medical Research Future Fund from
the Health and Hospitals Fund
The Future Fund Board‟s determination under Subsection 13(1) is not a legislative
instrument because determinations of this type are administrative in character. They
do not determine or alter the content of the law itself.
Subsection 15(3) - Credits of amounts
As stated in the Explanatory Memorandum the determination would usually be
regarded as administrative rather than legislative in character. The determination has
been declared as a legislative instrument because there needs to be a high level of
public accountability around the amounts to be transferred.
NOTES ON AMENDMENTS
Item 1 amends section 4 of the Bill so that the simplified outline of the Act states that
an Advisory Board is established to determine the Strategy and Priorities, and clarifies
that the Health Minister must take into account the Strategy and Priorities when
making funding decisions from the MRFF.
Items 2 and 3 amend section 5 of the Bill to insert definitions for the Advisory
Board, the Australian Medical Research and Innovation Strategy and the Australian
Medical Research and Innovation Priorities.
Item 4 amends section 10 of the Bill to clarify in the simplified outline that the debits
from the MRFF Special Account are made by the Finance Minister only after being
required to do so by the Health Minister. The amendment also specifies that the
Health Minister, as the decision-maker on financial assistance from the MRFF, will
take into account the Strategy and Priorities set by the independent expert Advisory
Board.
Item 5 amends Subdivision A of the Bill by modifying the title and adding section
15A. The new section clarifies that the Health Minister may require the Finance
Minister to debit a specified amount from the MRFF Special Account in accordance
with Subdivision C, D or E.
The section also requires the Health Minister to take into account the Priorities when
requiring the Finance Minister to debit a specified amount from the MRFF Special
Account.
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The Health Minister‟s requirement under section 15A is administrative, rather than
legislative, in character and is therefore not a legislative instrument for the purposes
of the Legislative Instruments Act. Directions of this type are administrative in
character because they are merely the application of a legal power in a particular case;
that is, they do not determine or alter the content of the law itself.
Item 6 amends section 20 of the Bill to clarify that the Finance Minister must debit
the amount specified by the Health Minister under section 15A from the Medical
Research Future Fund Special Account and credit it to the COAG Reform Fund.
Item 7 amends section 20(1) (a) to omit the words "Medical Research Future Fund".
Items 8, 9 and 12 amend section 24 and 25 of the Bill by removing section 24
subsection 2 and section 25 subsection 2. These changes clarify that the Finance
Minister does not have a role in specifying grants.
Item 10 amends section 25 of the Bill to clarify that the Finance Minister must debit
the amount specified by the Health Minister under section 15A from the Medical
Research Future Fund Special Account and credit it to the MRFF Health Special
Account.
Item 11 amends section 25(1) (a) of the Bill to omit the words "Medical Research
Future Fund".
Item 13 amends section 26 of the Bill by replacing the section with a revised section.
The amendments clarify when and how the Health Minister is to debit the MRFF
Health Special Account when making one or more grants of financial assistance from
the MRFF. As well as outlining that where a grant does not eventuate and cannot be
made, then that grant of financial assistance is to be credited from the MRFF Health
Special Account back to the Medical Research Future Fund Special Account.
The amendments also added a note which highlights that the Health Minister may
delegate his or her powers under this section to the CEO, an SES employee or acting
SES employee of the NHMRC, as outlined in section 61A.
Items 14 and 15 amend section 27 of the Bill to align the reference to the MRFF
Health Special Account and to incorporate a note that the Health Minister may
delegate his or her powers under this section to the CEO, an SES employee or acting
SES employee of the NHMRC, as outlined in section 61A.
Items 16 and 22 move section 28 of the Bill to section 61A for consistency with the
location of other delegations in the Bill. The amendment also provides the Health
Minister with the ability to delegate his or her powers under section 15A.
Item 17 amends section 29 of the Bill to clarify that the Finance Minister must debit
the amount specified by the Health Minister under section 15A from the Medical
Research Future Fund Special Account in order to make a grant to a corporate
Commonwealth entity.
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Item 18 amends section 29 of the Bill to omit the words "Medical Research Future
Fund".
Item 19 inserts, at the end of Part 2 of the Bill, a new Part that establishes the
Advisory Board, the Strategy and the Priorities, and the arrangements for Advisory
Board members.
The Health Minister will provide written directions to the Advisory Board outlining
how it should carry out its functions and the procedures for meetings. These
Ministerial directions are administrative rather than legislative in nature and are
therefore not a legislative instrument for the purposes of the Legislative Instruments
Act.
The function of the Advisory Board is to develop the Strategy every five years and the
Priorities every two years. The Health Minister is to take into account the Strategy
and Priorities when making decisions on financial assistance provided from the
MRFF. The Advisory Board must take into account the NHMRC‟s national strategy
for medical research and public health research when developing the Strategy.
The Priorities determined by the Advisory Board must be consistent with the Strategy
and must take into account:
- the burden of disease on the Australian community;
- how to deliver practical benefits to as many Australians as possible from
medical research and innovation;
- how to ensure that financial assistance provided under this Bill provides the
greatest value for all Australians; and
- how to ensure that financial assistance provided under this Bill complements
and enhances other funding provided for medical research and medical
innovation.
The Strategy and Priorities have been declared as legislative instruments because
there needs to be a high level of public transparency around these publications and
around the direction of medical research funding.
The Strategy and Priorities cannot be disallowed under the Legislative Instruments
Act. This approach enables the public and the Parliament to hold the Advisory Board
and the Government accountable without impeding the Advisory Board‟s ability to
perform its functions.
Additionally the Strategy and Priorities cannot be repealed, rescinded, revoked,
amended, or varied in any way under the Acts Interpretation Act. It is intended that
the Strategy and Priorities remain unchanged for periods of five and two years
respectively to support a consistent and planned approach to medical research
funding.
The Advisory Board consists of up to eight members, including the CEO of the
NHMRC. The board members, with the exception of the CEO of the NHMRC are
appointed by the Health Minister for a period of up to five years.
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Members of the Advisory Board must satisfy the Health Minister that, collectively,
they possess an appropriate balance of experience or knowledge in the following
fields: medical research; policy relating to health systems; management of health
services; medical innovation; financing and investment; and commercialisation of
research and innovation.
The new Part also incorporates the other terms and conditions for the appointment of
Advisory Board members, such as: remuneration and allowances (determined by the
Remuneration Tribunal); leave of absence; disclosure of interests; other terms and
conditions that can be determined by the Health Minister; resignation; and termination
of Advisory Board members.
Item 20 amends section 54 of the Bill by incorporating into the simplified outline that
every two years the Health Minister must provide a report to Parliament on the
financial assistance provided from the MRFF.
Item 21 inserts section 57A of the Bill which states that the Health Minister must
prepare a report on the financial assistance provided from the MRFF against the
Priorities every two years, to align with the frequencies of the Priorities.
The report must include a description of how the financial assistance provided was
consistent with the Strategy and Priorities and outline any other financial assistance
provided by the Commonwealth Government in relation to medical research and
innovation.
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MEDICAL RESEARCH FUTURE FUND (CONSEQUENTIAL
AMENDMENTS) BILL 2015
NOTE ON AMENDMENT
Item 1 amends Schedule 3 of the Bill to change the references to the „Legislative
Instruments Act 2003‟ to the „Legislation Act 2003‟, as a result of the Acts and
Instruments (Framework Reform) Act 2015.
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