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2002-2003
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF REPRESENTATIVES
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Health and Ageing,
Senator the Hon. Kay Patterson)
The Australian National Audit Office Audit Report No. 32 1999-2000:
“Management of Commonwealth Non-Primary Industry Levies”, identified
issues with the Private Health Insurance Administration Council (Council)
administration levy (established via subparagraph 82G(1)(h)(i) of the
National Health Act 1953) having regard to the operation of section 55 of
the Commonwealth of Australia Constitution (the Constitution).
Section
55 provides that laws imposing taxation shall deal only with the imposition of
taxation, and any provision therein dealing with any other matter shall be of no
effect.
This Bill, together with three other Bills, reimposes four health
insurance industry levies (and validates previous impositions of the levies)
having regard to section 55 of the Constitution with a view to removing any
doubt regarding the technical validity of the levies.
The four private
health insurance industry levies being reimposed
are:
§ the Private Health Insurance
Administration Council administration levy (subparagraph 82G(1)(h)(i)
National Health Act 1953);
§ the collapsed organization levy (paragraph
82G(1)(j) National Health Act 1953);
§ the Acute Care Advisory Committee (ACAC)
review levy (subparagraph 82G(1)(h)(ii) National Health Act 1953);
and
§ the
Reinsurance Trust Fund levy (section 73BC National Health Act
1953).
These levies are to be reimposed via the following
Bills:
§ Private Health Insurance (Council
Administration Levy) Bill 2003;
§ Private Health Insurance (Collapsed
Organization Levy) Bill 2003;
§ Private Health Insurance (ACAC Review
Levy) Bill 2003; and
§ Private Health Insurance (Reinsurance
Trust Fund Levy) Bill 2003.
The National Health Amendment (Private Health
Insurance Levies) Bill 2003 amends the National Health Act 1953 making
changes ancillary to, or consequential to, the reimposition of four private
health insurance industry levies.
The reimposition effects a technical
change in process. The changes effectively repeal the existing levy mechanisms
replacing them having regard to section 55 of the Constitution. While the
levies will still be administered by the Council, the money collected under the
levies will be placed into the consolidated revenue fund and then appropriated
for the purposes of those levies.
These levies only apply to the private
health insurance industry. Only registered health benefits organizations are
required to meet liabilities imposed via the levies. The purpose of the
reimposition of the levies is not to increase the financial burden on the
private health insurance industry. This proposal does not involve a change in
policy but rather corrects a technical defect to ensure that the legislation
functions as intended.
Doubt in relation to the validity of the levies
has the potential to substantially reduce or impede Council in undertaking its
functions including the prudential regulation of the private health insurance
industry. Given the role of Council its financial basis should not be
compromised by doubt in relation to section 55 of the Constitution.
Acute Care Advisory Committee review levy
This Bill reimposes the Acute Care Advisory Committee (ACAC) review levy.
The purpose of the reimposed ACAC review levy is the same as in the current
provision in subparagraph 82G(1)(h)(ii) of the National Health Act 1953.
A levy is imposed on each registered health benefits organization, to be
calculated on the number of contributors of each organization, for the purpose
of meeting the administrative costs of reviews conducted by Acute Care Advisory
Committees under section 3B of the Health Insurance Act 1973.
The
reimposed Acute Care Advisory Committee review levy will be able to be imposed
on each day specified in the regulations or in relation to the supplementary
power as determined by the Minister (via disallowable instrument).
As is
currently the case, the regulations may only impose the ACAC review levy four
times a year. In addition a supplementary power has been provided.
The
supplementary power requires Ministerial determination (via disallowable
instrument) for both the imposition as well as the rates. The supplementary
power may only be used to cover unexpected administrative costs of reviews
conducted by Acute Care Advisory Committees under section 3B of the Health
Insurance Act 1973.
Before the Minister may use the supplementary
power the Minister must take into account advice from Council. Advice must
include: a justification as to why additional monies are required from the
industry for the administrative costs of reviews conducted by Acute Care
Advisory Committees under section 3B of the Health Insurance Act 1973,
the number of supplementary collections required, and the rate to be specified
to apply to the registered health benefits organizations.
The maximum
rate able to be set for the Acute Care Advisory Committee review levy is set in
the Bill. The day to day rate will be set in the regulations, or if in relation
to the supplementary power set by Ministerial determination (via disallowable
instrument). The cumulative total of the Acute Care Advisory Committee review
levy and the supplementary Acute Care Advisory Committee levy must not exceed
the maximum amount set in this legislation.
The original purpose of the Acute Care Advisory Committee review levy has
not changed. The functions funded have been at the behest of the Australian
Parliament. This legislation addresses a technical concern identified by the
Australian National Audit Office. As such this Bill validates the previous
purported impositions of the Acute Care Advisory Committee review levy by
Council.
The Private Health Insurance (Acute Care Advisory Committee Review Levy)
Bill 2003 is not expected to have any significant impact upon the
finances of the Commonwealth.
NOTES ON CLAUSES
This clause provides that upon enactment this Act may be cited as the
Private Health Insurance (ACAC Review Levy) Act 2003.
This clause provides for the commencement of the Act on 1 July 2004 to
enable a seamless transition in the reimposition of the ACAC review levy between
financial years.
This clause provides that this Act binds the Crown in each of its
capacities.
This clause provides that this Act extends in its application to the
Territory of Cocos (Keeling) Islands and to the Territory of Christmas
Island.
This clause establishes a range of definitions for the purposes of the
Act. In particular the clause defines ACAC as an Acute Care Advisory Committee
established under section 3B of the Health Insurance Act 1973. An Acute
Care Advisory Committee is established by the Minister to review the validity of
acute care certificates issued under section 3B of the Health Insurance Act
1973.
Clause 6: Imposition of ACAC review levy
This clause imposes the ACAC review levy on each registered health benefits
organization on:
• Each day specified in the
regulations as an ACAC review levy day for a financial year;
and
• Each day (if any) determined in writing by
the Minister as a supplementary ACAC review levy day for a financial
year.
Subclause 2 of this clause provides that the regulations may not
impose more than four ACAC Review Levy days for a financial
year.
Subclause 3 of this clause provides for the setting via Ministerial
determination of a maximum of two supplementary ACAC review levy days for a
financial year. The supplementary powers are for unforeseen costs associated
with the administration of the Acute Care Advisory Review Committees.
Subclause 4 of this clause provides that the Minister’s determination
in relation to the imposition of the supplementary ACAC review levy is a
disallowable instrument for the purposes of section 46A of the Acts
Interpretation Act 1901.
The purpose of the ACAC review levy and
supplementary levy is to meet the administrative costs of reviews conducted by
an ACAC under section 3B of the Health Insurance Act 1973. The purpose
is set out in the National Health Amendment (Private Health Insurance Levies)
Bill 2003.
Clause 7: Rate of ACAC review levy
This clause provides that the rate of the ACAC review levy is the rate that
is specified in the regulations and applies on the prescribed day. The clause
also provides that the rate of the supplementary ACAC review levy is the rate
determined by the Minister and applies on the supplementary ACAC review levy
day.
Subclause 2 of this clause sets out that the rate of the levy
(including the supplementary levy) must be based on the number of contributors
who contribute to the health benefits fund conducted by a registered health
benefits organization. As is currently the case, a different rate may be set
for contributors who contribute in respect of a single person and contributors
who contribute in respect of more than a one person.
Paragraph 2(c) of
this clause provides for the rate to be set at zero. The rate must not exceed
the maximum rate (cumulative of both the ACAC review levy and the supplementary
ACAC review levy). The maximum rate is set
at:
§ $0.50 for a financial year per contributor
who contributes in respect of one person; and
§ $1.00 for a financial year per contributor
who contributes in respect of more than one person.
The maximum has been
fixed to enable Parliament to be certain as to the maximum rate. The day to day
rate for the ACAC review levy will be set by regulation to enable flexibility
whilst enabling Parliamentary scrutiny.
Subclause 3 of this clause
provides that a Ministerial determination in relation to the supplementary levy
is a disallowable instrument for the purposes of section 46A of the Acts
Interpretation Act 1901.
Clause 8: Minister to obtain advice from Council
This clause provides that before the Minister makes a determination in
relation to the supplementary levy powers, the Minister must obtain and take
into account advice from the Council in relation to the
following:
• whether to make a determination
imposing the supplementary ACAC review levy, including a justification as to why
the additional impost is required;
• the day or
days to be specified as the supplementary ACAC review levy day or days for a
financial year;
• the rate that is to be
specified as the rate of the supplementary ACAC review levy;
and
• the days to be specified as census days for
the purposes of the supplementary ACAC review levy.
Clause 9: Validation of ACAC review levy
This clause validates
all previous ACAC review levy payments.
This clause provides for the Governor-General to make regulations
prescribing matters:
§ required or permitted by this Act to be
prescribed; or
§ necessary or convenient to be prescribed
for carrying out or giving effect to this Act.
Subclause 2 of this clause
provides that prior to the Governor-General making regulations under the
previous sub-section, the Minister must take into consideration any relevant
recommendations made to the Minister by the Council.