“My minister is in a real flap at the moment,” said Humpy, as he leaned back into the club’s sumptuous leather chair, savouring the bouquet of his brandy.
“Why so, may I ask?” said his companion, known in the senior bureaucracy as Piggy, as he helped himself to his third after-dinner mint.
A formidable public servant both physically and organisationally, Piggy’s minister had responsibility for the Australian Taxation Office, which made Piggy the most powerful of Australia’s senior bureaucrats. Humpy was not yet in this class and often spoke to the more senior man for advice on how to handle his minister.
“Oh, an article in IFA magazine in October saying that ASIC has too much power,” Humpy said. “An excellent article,” Piggy said. “You read it Piggy?” said Humpy surprised. “Certainly not. But the very fact that it was written shows we’re doing the right thing.” “How so?” the slightly confused Humpy said.
“Well, it shows that the system we’ve established, that gives most material power to the bureaucracy at the expense of the legislature or the courts, is working,” Piggy explained. “But they’re saying the system is undemocratic,” exclaimed the worried Humpy. “Of course it’s undemocratic,” roared Piggy. “If it were democratic it would be controlled by our ministers and, heaven forbid, the Parliament, and then what sort of a state would we be in?”
Humpy’s look of confusion prompted Piggy to go on. “Look, it’s well-known that legislation is affected by pre-enactment policy and postenactment policy. Pre-enactment policy are the concepts that our political masters wish to see enacted and that we have to work so hard to convince them have been so when we produce a massive draft of incomprehensible legislation,” Piggy said. “Post-enactment policy is the interpretive implementation of the legislation by our dear brethren in the public service. ASIC is a wonderful example of post-enactment policy in full cry.”
“We ensured that its powers were dutifully large, sweeping and therefore incapable of clear definition. In section 12A of the ASIC Act we simply say ‘ASIC has the function of monitoring and promoting market integrity and consumer protection in relation to the Australian financial system’.”
“What on earth does that mean?” Humpy squeaked. “Precisely – who knows?” said Piggy with a broad smile. “I’m surprised it’s taken your financial services industry press so long to understand it. In the 1999 Sydney Law Review a young senior lecturer delightfully-named Dimity Kingsford-Smith wrote a full explanation of how the system works, but too few people read it or understood it, luckily.”
“But isn’t this, I don’t know, wrong somehow?” Humpy interjected. “Of course not,” trumpeted Piggy. “Over at the tax office we’ve been doing it for years. We don’t let the black-letter law get in the way of our doing our job. We issue our rulings and assessments and if they don’t like it they can spend a fortune in the courts fighting it. Oh, but they’ve still got to pay the disputed tax in the meantime. You’d be surprised at how many people are put off from fighting with us when they’re faced with that scenario.”
While Humpy shuddered at the thought, Piggy went on: “Mind you, your ASIC mob seem to have taken things to a new level.Thanks to us, Parliament, through the Corporations Act and the ASIC Act, showed that they contemplated that the agency would have both interpretive and law creation roles. So ASIC have picked up the ball and now issue policies, practice notes, class orders, stop orders, enforceable undertakings; the whole kit and caboodle. They make the law, then they interpret what they’ve made and then they enforce those interpretations. All of this was contemplated by the legislation. It’s benevolent dictatorship really.”
“Don’t the courts intervene?” Humpy meekly asked. “Heavens no. We’ve had the High Court on side for ages. In Re Drake v Minister for Immigration and Ethnic Affairs (No 2) the judgments accepted that, for reasons of good administration, a body like ASIC will issue policy as a guide to the exercise of its discretion and is entitled to stick to that policy. They said that the courts reviewing the exercise of discretions relying on policy should not be quick to overturn them. It’s also been held that the Administrative Appeals Tribunal is expected to apply ASIC policy in its hearings,” Piggy said.
“Wake up and smell the roses, Humpy. As the good Ms Kingsford-Smith said: ‘We should see agency policy as one factor in ascertaining the legal meaning of statutory provisions. There is little weight in objecting to ASIC’s views as interpretive factors just because they are postenactment.'”
“That, I take it, is academic-speak for ‘get used to it’,” mumbled Humpy. “Precisely,” came the larger man’s smirked reply. “But the article called for ASIC’s powers to be curtailed and for the industry to be regulated in conjunction with an industry body like, for example, the FPA.” Humpy’s statement was clearly a call for help. “Capital idea,” leered Piggy.
“We should have fun with an organisation like the FPA that only has about 70 per cent industry coverage. And didn’t I read somewhere recently that a survey said two-thirds of its members thought it was doing an unsatisfactory job? They should be easy to sideline. Oh, if we have to we’ll give them some role or other to make it appear that there is true co-regulation, whatever that may be, but when was the last time you can recall the public service sharing power with such clearly unsuitable folk?”
“So what do I say when the Minister shows me the article and says ‘we’ve got to do something about it’?” Humpy asked. “Say what we always say – ‘yes, minister'”, came the reply.
With apologies to Antony Jay and Jonathan Lynn the writers of the BBC comedy series Yes, Minister.
