Bills Digest 26 1996-97
Appropriation (Parliamentary Departments) Bill 1996-97
WARNING:
This Digest is prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments.
This Digest was available from 12 September 1996.
CONTENTS
Appropriation (Parliamentary Departments) Bill 1996-97
Date Introduced: 20 August 1996
House: House of Representatives
Portfolio: Finance
Commencement: Royal Assent
To appropriate $137.2 million for the recurrent and capital expenditure
of the five Parliamentary Departments for 1996-97. (1)
The appropriation represents less than 50% of total outlays for all
services provided to Members and Senators. The figure for total outlays
for 1996-97 (excluding superannuation benefits for Members and Senators)
is estimated at $343.6 million.(2)
(a) Glossary of Terms
Appropriation - is the setting apart, assigning or applying to
a particular use or to a particular person a sum of money. In the budget
context an appropriation usually refers to an authorisation by Parliament
to draw on funds from the Consolidated Revenue Fund (CRF).
Budget Outlays - refer to the net cost to the taxpayer of providing
government services. Appropriations/payments out of the CRF are adjusted
to take account (for example) of many government receipts. Hence a hypothetical
government program 'XYZ' may have a total appropriation of $600 million
but this may only represent budget outlays of $500 million if the 'XYZ'
receives income of $100 million from other (non budget) sources.
Running costs - are the full current and minor capital costs
incurred by a department or agency in providing government services for
which the department or agency is responsible. For many departments, staff
salaries will represent the largest proportion of such costs.
(b) Overview
Since 1982, the appropriations for the Parliamentary Departments have
been effected by a separate Bill. This followed the Fraser Government's
consideration of the Report of the Senate Select Committee (the Select
Committee) on Parliamentary Appropriations and Staffing tabled on 18 August
1981.
Under current arrangements, the executive government maintains control
over the contents of the Bill as introduced. In theory however, as the
Appropriation (Parliamentary Departments) Bill is not for the ordinary
annual services of the government, it may be amended by the Senate.
The Public Service Act 1922 provides that the administration
of the Parliament is undertaken by five Parliamentary Departments - the
Department of the Senate, the Department of the House of Representatives,
the Joint House Department, the Department of the Parliamentary Reporting
Staff (DPRS) and the Department of the Parliamentary Library.
The Department of the House of Representatives and the Department of
the Senate are responsible for the provision of procedural, information
and administrative services to Members and Senators respectively. The
Joint House Department performs building management, maintenance and catering
functions associated with Parliament House. DPRS provides reporting, information
technology, telecommunications and broadcasting services to the Parliament
through Hansard, the Parliamentary Information Systems Office (PISO) and
the Sound and Vision Office (SAVO). The Department of the Parliamentary
Library is responsible for the provision of library, reference and research
services to the Parliament.
Funding across the Parliamentary Departments is to be reduced in 1996-97
by the 2% across the board cut to government agencies, the 1% annual efficiency
dividend and a one-off cut of $10 million to the Parliament.
Excluding provisions for borrowings and various advances(3) to the Speaker
and the President, the sum appropriated for the Parliamentary Departments
falls from $142.7 million in 1995-96 to $135.3 million for 1996-97. Allowing
for inflation, in real terms this is a cut of approximately 7.5%.
(c) Impact on Departments
House of Representatives
Total outlays rise from $41.6 million in 1995-96 to $41.9 million in
1996-97 and to $43.0 million in 1999-2000. Staffing is to decline from
263.2 staff years in 1995-96 to 241 staff years in 1996-97.(4)
The Department notes in its 1996-97 Portfolio Budget Statements that:
The Government's decisions to reduce parliamentary outlays (this department
contributing $0.3 million in 1996-97), to reduce departmental running
costs in 1996-97 by 2% in addition to the 1% efficiency dividend, and
not to provide additional parliamentary committee funding, have required
the department to implement a number of savings measures to achieve efficiencies
and to reduce or eliminate lower priority activities. In particular, the
department introduced a new staffing structure to support parliamentary
committees, reduced expenditure on parliamentary security functions whilst
maintaining security of the building, and achieved savings through efficiencies
including the printing of documents.
While the department anticipates that it will have the capacity to operate
within the reduced level of funding for 1996/97, the situation remains
extremely tight with little scope to absorb any additional expenditure
requirements. Any similar reductions by the Government to the department's
running costs over the coming years will place it in a most difficult
situation.(5)
Department of the Senate
Total outlays rise from $32.6 million in 1995-96 to an estimated $34.2
million in the current year but are estimated to fall to $32.5 million
by 1999-2000. Staffing falls from 260 to 257 in the current financial
year.(6)
The Department notes in its 1996-97 Portfolio Budget Statements that:
The year ahead will require more than the usual careful financial planning
and management. In 1995-96 there were significant across-the-board permanent
cuts in the department's running costs. In 1996-97 further and greater
cuts have been planned. These will have a significant impact on departmental
funding, committee funding and Senate staff. . . .
Progressively effective from 1 July 1996, the department will shed 28
positions, having shed 11 positions progressively from 1 July 1995 (including
previously vacant positions intentionally left unfilled for budget reasons).
Salary savings equivalent to $855,000 will be made (including some possible
provision for voluntary redundancies). Administrative savings equivalent
to over $1m will be achieved. These will include savings in recruitment,
training, computers, newspapers, printing, microfilming and hospitality.
The cuts will affect all programs and will be evident in reduced services,
abolition of functions and restrictions on external and temporary recruitment.
Services to Senators will be affected.(7)
Joint House Department
Total outlays are to rise from $38.8 million in 1995-96 to $39.1 million
in 1996-97 but are estimated to fall to $35.2 million in 1997-98 and $34.4
million by 1999-2000. Staffing levels are to decline from 346 staff years
to 336 staff years in the current financial year.(8)
Department of Parliamentary Reporting Staff
Total outlays decline from $40.5 million in 1995-96 to $33.5 million
in 1996-97 with a fairly constant budgetary outcome estimated for the
following three financial years. DPRS staffing is to decline from 283
to 271 staff years in the present financial year.(9)
The Department notes in its 1996-97 Portfolio Budget Statements that:
The appropriations for DPRS for 1996-97 have been reduced by $7.052
million as against the department's 1995/96 funding. The reductions compromise
$1.127 million in running costs as a result of the Australian Public Service
wide reductions ($947,000 in efficiency dividends and $180,000 whole of
government telecommunications savings) and $5.925 million as DPRS's contribution
to a Parliament-specific further reduction of $10 million from the combined
appropriation of the five parliamentary departments. This latter amount
is made up of a $4.675 million reduction in asset replacement funds and
$1.250 million in running costs.
The department is examining all areas of its operations to identify
ways of absorbing this very substantial reduction (17.4% of 1995/96 appropriations)
while continuing to give priority to services to Senators and Members.(10)
Department of the Parliamentary Library
Total outlays are to fall from $16.1 million in 1995-96 to $15.3 million
in 1996-97 and an estimated $14.4 million in 1999-2000. Actual staff years
are to decline from 214 in 1995-96 to 207 in the current financial year.(11)
The Department notes in its 1996-97 Portfolio Budget Statements that:
The Parliamentary Library's running cost base has been reduced as a
consequence of the Government's decision to reduce departmental running
costs across the Australian Public Service by 2%, in addition to the previously
scheduled 1% annual reduction by way of the efficiency dividend. The department's
running costs base has been further reduced by $572,000 as DPL's share
of the $10 million parliamentary specific savings imposed by the Government.
The total reduction of $1.036 million in DPL's running costs base represents
a 6.9% cut against the permanent base. Including once only items, the
1996-97 appropriation is 7.6% less than the appropriation for 1995-96.
The Parliamentary Library is reviewing all areas of its operations to
manage these reductions whilst giving priority to maintaining services
to Senators and Members.(12)
Clause 4 and Schedule 1 provide that the Minister for Finance
is authorised to appropriate a total of $137 191 000 from the Consolidated
Revenue Fund for the purposes listed in Schedule 3 of the Bill.
These funds equate to the anticipated cost of the services provided by
the Parliamentary Departments in 1996-97.
Clauses 3 and 4 make it plain that the Bill subsumes funds already
appropriated for the provision of parliamentary services under the Supply
(Parliamentary Departments) Act 1996-97. However, that earlier appropriation
is to be reduced by a sum of $95,000. This measure in effect cuts funding
previously appropriated under the Supply Act for capital expenditure by
DPRS in 1996-97 (clauses 4 and 10).(13)
Part 2 foreshadows certain technical amendments to the Act contingent
on the passage of the Government's proposed public sector financial management
reforms. The necessary legislation will, amongst other things, replace
the Audit Act 1901. The Bills that will give effect to these proposals
have not yet been introduced. The financial management reform package
is likely to be similar to the measures debated but not passed by the
last Parliament.
Remarks
A number of the Portfolio Budget Statements comment on the implications
of proposed and recently implemented budget reductions for the operations
of the Parliament.
The Department of the Senate takes the trouble to observe that '[t]he
workload of the Department of the Senate is determined almost entirely
by the level of activity of the Senate and its committees.'(14) This remark
highlights the difficulty of budget preparation in the parliamentary environment
where the demand for additional funding and resources frequently is generated
by the vicissitudes of politics.
In relation to staffing, the Department of the Senate notes that:
There is a view that reducing the number as (sic) people working in
organisations and saving their salaries for non-salary allocation elsewhere
is an inherently good thing for those organisations. Whatever its applicability
elsewhere, such a view has little application to an organization like
the Senate Department. In essence, the department (and the budget that
funds it) provides senators with the skills, knowledge and expertise of
its officers.(15)
The Department of the House of Representatives Portfolio Statements
draw attention to the comparatively low rates of growth in its running
costs for the Department over the 1990-91 to 1995-96 period when compared
with the rise in running costs for rest of the Australian Public Service
between 1987-88 and 1993-94.(16)
These comments may be juxtaposed with what has been a lively debate
about the structure and size of the parliamentary departments and to the
cost of services provided to the parliament and to individual Members
and Senators.
On 20 May 1996, the Hon Stephen Martin introduced the Public Service
(Parliamentary Departments) Amendment Bill 1996 providing for the amalgamation
of the three service departments (Joint House, DPRS and the Parliamentary
Library). The former Speaker observed that:
In a period of increasing emphasis on micro-economic reform, when the
Public Service is being called upon to increase efficiency, it is impossible
to justify the pinnacle of the democratic system, the legislature, being
served by a system the origins of which are in the beginning of this century
and which has not kept pace with the demands of modern times. This bill
will send a streamlined structure into the next century.(17)
The cost of servicing the parliament continues to attract a degree of
unfavourable press comment.(18)
The National Commission of Audit Report also remarked on the provision
of services to Senators and Members, suggesting that:
The current arrangements in relation to the parliamentary departments
involve a significant duplication of corporate functions and are an inefficient
way of delivering these support services to Parliament.(19)
Whilst the methodologies employed by the Audit Commission(20) and of
other commentators may be flawed, such criticisms are less easily ignored
in the present fiscal environment. In facing increasing pressures to provide
value for money, the parliamentary departments (as opposed to the democratic
institution of 'the parliament') arguably have only a tenuous claim to
being treated as special cases.
Similarly, whether funding cuts to parliamentary appropriations are
justified is not a question which can be addressed in isolation or by
simply comparing existing funding with that provided in previous years.
Such an approach may serve only to divert attention from the issue of
whether the existing means of servicing parliament, parliamentarians and
the electorate are both as efficient and effective as they might be.
On the other hand, sensible consideration of funding decisions in most
organisations will attempt to accommodate other core organisational values
as well as that of 'efficiency'.
Staff of the parliamentary departments are engaged under the provisions
in the Public Service Act 1922 and the five departments are subject
to the provisions of the Audit Act 1901 and other APS-wide accountability
mechanisms. Thus, despite the existence of a separate Appropriation Bill
for the Parliament, the five departments largely mirror APS managerial
and financial practices. The Appropriations (Parliamentary Departments)
Bill, as presented, also reflects the budget priorities of the current
Government, particularly the expectation that all or most public sector
organisations should bear a portion of the pain in reducing the underlying
Commonwealth budget deficit. As such, any debate on this Bill may well
cover issues of relevance to the public sector and public finance in the
broad.
Of perhaps more immediate interest to Member and Senators, if the Bill
passes without substantial changes, is that there may be added pressure
for a re-structuring of the parliamentary departments as well as for further
changes to the provision of parliamentary services. Reductions in funding
to the parliament of the relative size projected in the forward estimates
for the next three years may, as some Departments seem to imply, be too
large to absorb merely by a further 'thinning out' of current programs
and services.
- With the exception of one sum of $95 000, the Bill incorporates funds
previously appropriated Supply (Parliamentary Departments) Act 1996-97.
- Budget Paper No.1, 1996-97: 3-48.
- Monies which may only be called on in unforseen circumstances.
- Department of the House of Representatives, Portfolio Budget Statements
1996-97: 6-7.
- ibid: 2.
- Department of the Senate, Portfolio Budget Statements 1996-97:
8-9.
- ibid: 5.
- Refer Joint House Department, Portfolio Budget Statements 1996-97:
5-6. These, however, do not contain the same extended commentary on
appropriations and staffing matters as those prepared by the other parliamentary
departments.
- Department of Parliamentary Reporting Staff, Portfolio Budget
Statements 1996-97: 4.
- ibid: 2.
- Department of the Parliamentary Library, Portfolio Budget Statements
1996-97: 7-8.
- ibid: 5.
- See Department of Parliamentary Reporting Staff, op cit: 23.
- op cit: 3.
- ibid: 6.
- op cit: 5.
- Parliamentary Debates: 799.
- Alan Ramsay, 'Prime cuts in pampered MPs', Sydney Morning Herald,
10 July 1996; and 'A failure on two counts', Sydney Morning Herald,
24 August 1996. Fia Cumming, 'Our $2.2 million MPs', Sun-Herald,
14 July 1996. 'Pampering Politicians', Sydney Morning Herald Editorial,
8 July 1996.
- National Commission of Audit, Report to the Commonwealth Government,
June 1996: 110.
- Denis James, 'More of the Same or Brave New World?: The National
Commission of Audit, Current Issues Brief No.23 1995-96, Parliamentary
Research Service, 1996: 25-27.
Bob Bennett Ph. 06 277 2430
8 September 1996
Bills Digest Service
Parliamentary Research Service
This Digest does not have any official legal status. Other sources should
be consulted to determine whether the Bill has been enacted and, if so,
whether the subsequent Act reflects further amendments.
PRS staff are available to discuss the paper's contents with Senators
and Members and their staff but not with members of the public.
ISSN 1323-9032
© Commonwealth of Australia 1996
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Published by the Department of the Parliamentary Library, 1996.
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Last updated: 5 September 1996
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