FINANCIAL FRAMEWORK (SUPPLEMENTARY POWERS) AMENDMENT (2015 MEASURES NO. 1) REGULATION 2015 (SLI NO 12 OF 2015) EXPLANATORY STATEMENT

FINANCIAL FRAMEWORK (SUPPLEMENTARY POWERS) AMENDMENT (2015 MEASURES NO. 1) REGULATION 2015 (SLI NO 12 OF 2015)

The Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) confers on the Commonwealth, in certain circumstances, powers to: make arrangements under which money can be spent; or to make grants of financial assistance; and to form, or otherwise be involved in, companies. The arrangements, grants, programmes and companies (or classes of arrangements or grants in relation to which the powers are conferred) are specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the Principal Regulations). The FF(SP) Act applies to Ministers and the accountable authorities of non-corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013.

Section 65 of the FF(SP) Act provides that the Governor-General may make regulations prescribing matters required or permitted by that Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to that Act.

Section 32B of the FF(SP) Act authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Principal Regulations. Section 32B also authorises the Commonwealth to make, vary and administer arrangements for the purposes of programmes specified in the Principal Regulations. Schedule 1AA and Schedule 1AB to the Principal Regulations specify the arrangements, grants and programmes.

Schedule 1 to the Regulation amends the Principal Regulations to establish legislative authority in Schedule 1AB for spending by the Government on the following activities for the Education and Training portfolio to:

* provide approximately 7,500 scholarships under the Training for Employment Scholarships Pilot Programme which will support employers to train new employees by assisting micro, small and medium sized businesses that hire an unemployed person aged 18 to 24 years for at least 12 months, with funding for the cost of up to 26 weeks of job specific training

* fund the Youth Employment Pathways Pilot Programme to enable community service organisations to provide training and other assistance to unemployed youth to find employment or undertake further education or training, with approximately 3,000 young people aged 15 to 18 years being offered support under the programme.

Details of the Regulation are set out at Attachment A. A Statement of Compatibility with Human Rights is at Attachment B.

The Regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Regulation commences on the day after registration on the Federal Register of Legislative Instruments.

In accordance with section 17 of the Legislative Instruments Act 2003, consultation has taken place with the Department of Education and Training.

A regulation impact statement is not required as the Regulation only applies to a non-corporate Commonwealth entity and does not adversely affect the private sector.

Details of the Financial Framework (Supplementary Powers) Amendment (2015 Measures No. 1) Regulation 2015

Section 1 - Name

This section provides that the title of the Regulation is the Financial Framework (Supplementary Powers) Amendment (2015 Measures No. 1) Regulation 2015.

Section 2 - Commencement

This section provides that the Regulation commences on the day after it is registered on the Federal Register of Legislative Instruments.

Section 3 - Authority

This section provides that the Regulation is made under the Financial Framework (Supplementary Powers) Act 1997.

Section 4 - Schedules

This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 is amended as set out in the Schedule to the Regulation.

Schedule 1 - Amendments

Item 1 - Part 4 of Schedule 1AB (at the end of the table)

This item adds two new items to Part 4 of Schedule 1AB.

New table item 72 establishes legislative authority for the Government to provide funding under the Training for Employment Scholarships Pilot Programme to support employers to train new employees. The programme will be administered by the Department of Education and Training.

On 8 September 2014, the Prime Minister, the Hon Tony Abbott MP, and the Minister for Industry, the Hon Ian Macfarlane MP, jointly announced the programme.

The programme, which will commence in March 2015, is part of the youth stream of the Industry Skills Fund, which is a key element of the Government's Industry Innovation and Competitiveness Agenda. The Government has allocated $37.6 million over three years to provide an employer-led training programme that links training with business needs whilst also building employability skills for young people.

The programme will assist micro, small and medium sized businesses that hire an unemployed person aged 18 to 24 years for at least 12 months, with funding for the cost of up to 26 weeks of job specific training. Approximately 7,500 scholarships will be available in specific regional areas and areas of high youth unemployment.

The Programme Guidelines, including eligibility and selection criteria and further information will be publicly available on the Department of Education and Training's website (www.education.gov.au). Grants will be made in accordance with the Public Governance, Performance and Accountability Act 2013 and the Commonwealth Grants Rules and Guidelines. Details of grants will be made publicly available in accordance with the Commonwealth Grants Rules and Guidelines.

The decision-maker for the programme will be a delegate to be appointed by the Assistant Minister for Education and Training. Applications will be assessed on a continual basis by departmental officials who will make recommendations to the programme delegate.

The programme is unsuitable for merits review as it is a time limited pilot initiative; has limited funds; and only a proportion of applications can be met. An application for review would result in funding delays that would affect all grants under the programme, affecting the successful and timely provision of support to employers.

The programme comes under Outcome 3: Promote growth in economic productivity and social wellbeing through access to quality higher education, international education, and international quality research, skills and training; Programme 3.8: Building Skills and Capability. Funding details and a description of the programme are set out in the Mid-year Economic and Fiscal Outlook 2014-15 at page 183.

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the social welfare power (section 51(xxiiiA)) of the Constitution.

New table item 73 establishes legislative authority for the Government to provide funding under the Youth Employment Pathways Pilot Programme for community service organisations to provide training and other assistance to unemployed youth to find employment or undertake further education or training. The programme will be administered by the Department of Education and Training.

On 8 September 2014, the Prime Minister, the Hon Tony Abbott MP, and the Minister for Industry, the Hon Ian Macfarlane MP, jointly announced the programme.

The programme, which will commence in March 2015, is part of the youth stream of the Industry Skills Fund, which is a key element of the Government's Industry Innovation and Competitiveness Agenda. The Government has allocated $6.2 million over three years to this programme to assist disengaged youth to transition to education, training or work.

The programme will enable community service organisations to deliver support services to address non-vocational barriers to employment for young people aged 15 to 18 years who have been disengaged from school for at least three months and who are not participating in training or employment. The programme will support approximately 3,000 young people in specific regional areas and areas of high youth unemployment, with up to $2,000 being provided per person.

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the social welfare power (section 51(xxiiiA)) of the Constitution.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Financial Framework (Supplementary Powers) Amendment (2015 Measures No. 1) Regulation 2015

This Regulation is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

Section 32B of the Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the FF(SP) Regulations) and to make, vary and administer arrangements and grants for the purposes of programmes specified in the Regulations. Schedule 1AA and Schedule 1AB to the FF(SP) Regulations specify the arrangements, grants and programmes.

The FF(SP) Act applies to Ministers and the accountable authorities of non-corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013.

The Regulation amends Schedule 1AB to the FF(SP) Regulations to establish legislative authority for the Government to spend on the following programmes which will be administered by the Department of Education and Training:

* the Training for Employment Scholarships Pilot Programme which will support employers to train new employees by assisting micro, small and medium sized businesses that hire an unemployed person aged 18 to 24 years for at least 12 months, with funding for the cost of up to 26 weeks of job specific training; with approximately 7,500 scholarships available in specific regional areas and areas of high youth unemployment

* the Youth Employment Pathways Pilot Programme to enable community service organisations to provide training and other assistance to unemployed youth to find employment or undertake further education or training; with support for approximately 3,000 young people aged 15 to 18 years in specific regional areas and areas of high youth unemployment.

The items specified in Schedule 1AB are the responsibility of the relevant Minister who has portfolio responsibility for the matter.

Human rights implications

The Regulation does not engage any of the applicable rights or freedoms.

Conclusion

This Regulation is compatible with human rights as it does not raise any human rights issues.

Senator the Hon Mathias Cormann

Minister for Finance

Commonwealth Numbered Regulations - Explanatory Statements