Bills Digest No. 76 2000-01
Appropriation Bill (No. 3) 2000-2001
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Appropriation Bill (No. 3) 2000-2001
Date Introduced: 29 November
2000
House: House of Representatives
Portfolio: Finance and
Administration
Commencement: Royal
Assent.
To authorise the Minister for Finance to issue $1.879
billion from the Consolidated Revenue Fund (CRF) in addition to funds
appropriated by the Appropriation Act (No.1) 2000-01.
Annual authorisations for expenditure are contained in:
- Appropriation Act (No.1), which authorises expenditure for
the ordinary annual services of government
- Appropriation Act (No.2), which authorises expenditure on capital
works and services, payments to the States and other purposes not authorised
by special legislation, and
- Appropriation (Parliamentary Departments) Act which authorises
expenditure for the five parliamentary departments.
However, if the initial appropriation is insufficient
for the financial year additional appropriations may be sought. These
additional appropriations, known as additional estimates, are extra spending
requirements - for example, for cost overruns in existing programs or
for new programs - not foreseen when the Budget was presented.
From 1999-2000 the method of tabulating the Budget and
additional estimates has differed from previous additional estimates in
two main ways. First, the estimates documentation is presented in an outcomes
and outputs framework. Previous estimates were based on a program approach.
Second, the estimates use an accrual budgeting framework. Prior to 1999-2000
budgets used a cash framework.
Accrual budgeting allows for the incorporation of all
assets, liabilities, expenses and revenues, including cash receipts and
expenditures. Under accrual budgeting, agencies are funded for the full
cost of their functions, including non-cash costs such as employee entitlements
such as long service leave or depreciation. Thus the amount an agency
is appropriated under accrual budgeting in any one year may exceed its
cash costs. Any unspent amount is accumulated for use in future years
when required - for example accumulated depreciation to replace buildings
and equipment.
As noted in the Second Reading Speech to the additional
appropriation Bills, there have also been savings in various items from
the Budget appropriations and this must be considered when determining
the total effect on government outlays from the additional amounts appropriated.
Savings from the initial amount appropriated by Appropriation Acts Nos.
1 and 2 are contained in the Department of Finance and Administration
Information Paper titled Statement of Savings in Annual Appropriations.
In relation to funding for the 'ordinary annual services
of government' contained in Appropriation Act No. 1 2000-2001 (the
Appropriation Act (No.1)) and this Bill, the Appropriation Act (No. 1)
appropriated approximately $38.5 billion while this Bill appropriates
an additional $1.88 billion. Estimated savings from the Appropriation
Act (No. 1) are $110.7 million, the majority of which ($68.5 million)
comes from the Agriculture, Fisheries and Forestry portfolio. This saving
comes from the 'More sustainable, competitive and profitable Australian
agriculture, food, fisheries and forestry industries' outcome. Other major
estimated savings occur in the Family and Community Services portfolio
($19.4 million) and the Health and Aged Care portfolio ($10 million).
Outline of Major Additional Appropriations
- Defence - An additional $1 009 million is appropriated
for 'The prevention or defeat of the use of armed force against Australia
and its interests' outcome. According to the Second Reading Speech for
the Bill this comprises $659 million transferred from capital and an
additional funding of $350 million. The $659 million comes from savings
in 'Equity injections and loans', for which $752.9 million was appropriated
in the Appropriation Act (No. 2) 2000-01.(1) The transfer
appears to reflect a feature of the accrual accounting system and according
to the Department of Finance paper referred to above, another 4 portfolios
are expecting savings in equity injections and loans.
- Health and Aged Care - An additional $223 million
is appropriated for this portfolio. The additional funding is spread
across the 9 outcomes of the portfolio, with the largest increases relating
to:
- Improved quality, integration and effectiveness of health care ($66.4
million). The funding principally reflects amounts which were scheduled
for expenditure in 1999-2000 but which, due to delays in various programs,
were not spent.
- Access through Medicare to cost-effective medical services, medicines
and acute health care ($60.6 million). Reasons for the increased expenditure
include the listing of celecoxib on the Pharmaceutical Benefit Scheme
and cross-portfolio expenditure relating to the New Community Pharmacy
Agreement and the provision of the full Medicare rebate for other medical
practitioners in rural and remote Australia.
- Knowledge, information and training for developing better strategies
to improve the health of Australians, principally relating to amounts
which were scheduled for expenditure in 1999-2000 for medical research
and schools ($45.9 million), and
- Support for healthy ageing for older Australians and quality and cost-effective
care for frail older people and support for their carers ($31 million).
The expenditure principally relates to amounts scheduled for expenditure
in 1999-2000 for Community Care Establishment Grants, National Respite
for Carers and Carelink.(2)
- Treasury - An additional $216.5 million is appropriated
for this portfolio, with the vast majority, $202 million, being for
the Australian Taxation Office (ATO). According to the Second Reading
Speech for the Bill $183 million is for the increased cost of administering
the GST while $20 million is implementation of the New Business Tax.
- Finance and Administration - This portfolio will receive
an additional $75.4 million, of which $52.3 million is for the Department
for 'improved and more efficient government'. This includes an additional
$36.4 million for assistance to the sugar industry. The Office of Asset
Sales and Information Technology Outsourcing receives $23 million principally
for 'improved economic efficiency, industry structure and customer service
in business sold from government ownership...'. Approximately $13.5
million of this is for advisory, administrative and restructuring associated
with the purchase of additional shares in the Australian Submarine Corporation.(3)
Other additional appropriations include:
- $3.7 million for the Native Title Tribunal
- $1.9 million for the ABC
- $5.9 million for the SBS
- $18.7 million for the Australian Greenhouse Office
- $10.8 million for the 'Lawful and orderly entry and stay of people'
outcome of the Immigration and Multicultural affairs portfolio, and
- $61 million for the 'Linking Australia through transport and regional
services' outcome of the Transport and Regional Services portfolio.
The amount available for an agency's expenditure on Departmental
and administered items is specified in the Schedule to the Bill. The total
amount specified in the Schedule is $1.879 billion (clause 6).
Where an amount is specified in the Schedule for an administered
item, the Minister for Finance may issue the lesser of the amount specified
in the item and the amount determined by the Minister as expenses incurred
by the entity in relation to the item in the year (clause 8). In
relation to departmental items, the Minister must issue the amount specified:
- where an Act specifies that an entity must be paid amounts appropriated
for the purposes of the entity and this Bill specifies an amount, or
- for certain payments of remuneration and allowances (clause 7).
The Minister for Finance may increase the amount in a
Departmental item/s by determination to a total maximum of $20 million
(clause 10), while clause 11 provides that where there are
unforeseen circumstances and the need is urgent, the Minister for Finance
may increase expenditure by a total of $175 million. Parliament must be
notified of increased spending under clauses 10 and 11.
Clause 14 will formally appropriate the funds
for the Bill.
- 'Equity injection represents the additional contribution to Defence
by the Commonwealth as owner. It is determined on the basis of the amount
additional to the Department outcome appropriation required to fund
Defence up to the government-agreed level of global funding. Within
Defence's global flexibilities the injection can be used for any purpose
that increases the net assets of Defence. It is planned to use these
funds for investment in new or replacement capital equipment or facilities.
The injection is not tied to any specific capital projects.' - Portfolio
Budget Statement 2000-01p.vii.
- Portfolio Additional Estimates Statements 2000-2001.
- Portfolio Additional Estimates Statements 2000-2001.
Chris Field and Ian Ireland
22 January 2001
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 2000
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