Bills Digest No. 094 2003-04
Appropriation Bill (No. 4) 2003–04
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
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Appropriation
Bill
(No. 4) 2003–04
Date Introduced:
11 February 2004
House:
House of Representatives
Portfolio:
Department of Finance and Administration
Commencement:
On the day when it receives the Royal Assent
To appropriate additional sums for
other than the ordinary annual services of the Government.
For a more detailed background, see the Digest for
the companion Bill: Appropriation Bill (No. 3) 2003-04.
The Bill provides additional funds for other than for
the ordinary annual services of the Government. They include:
Administered expenses include:
Administered items are expenses, revenues, assets or
liabilities managed by agencies on behalf of the Commonwealth. Agencies
do not control administered items. Administered expenses include grants,
subsidies and benefits. In many cases, administered expenses fund the
delivery of third party outputs.
Non-operating costs—sometimes called 'capital costs'—include:
-
'equity injections', which are provided to agencies to enable investment
in new capacity when normal cash flows are insufficient
-
'loans', which are provided to agencies and used when an investment
is expected to result in a direct return such as an efficiency saving
-
previous years outputs appropriations: these provide funding for
outputs that were delivered in a previous year. This can occur, for
example, when a decision is made to implement a new activity after
the date for inclusion in the additional appropriation Bills. Such
activities are funded initially from cash balances, which are then
replenished by the previous years outputs appropriation, and
-
'administered assets and liabilities' appropriations: they provide
funding for acquiring new assets, extending existing assets, and discharging
administered liabilities relating to activities administered by agencies
in their fiduciary capacity on behalf of the Government.(1)
The Bill itself provides virtually no detailed information about the purposes
for which the additional amounts are sought. However, according to the
second reading speech, the following are the main purposes:
- $294.6 million in additional payments to the States and Territories
including:
-
$187.7 million as part of the drought assistance package for exceptional
circumstances;
-
$36.7 million in funding to enable payments for drug diversion
activities for the Tough on Drugs initiative;
-
$10.2 million in rephasings from previous years for the Commonwealth
State and Territory Disability
Agreement; and
-
$10 million in tax compensation payments to New
South Wales and Victoria
for an expected increase in revenue for Snowy Hydro Ltd.
- $190.8 million for non-operating expenses including:
-
$47 million in equity injections for the AFP in relation to the
PNG deployment, Solomon Islands
operations and people trafficking;
-
$43 million in equity injections for the Australian Customs Service
which will be accessed if shortfalls occur in a number of initiatives,
particularly the Cargo Management Re-engineering project; and
-
$32.4 million for payment to the Australian Rail Track Corporation Limited
on finalisation of the company's lease of New
South Wales main line track.(2)
Further information can be obtained from agency Portfolio
Additional Estimates Statements.
Proposed Part 1 of the Bill contains preliminary
provisions. Clause 3 contains definitions although it does not
define 'non-operating' as used in proposed Schedule 2.
Proposed Part 2 deals with 'basic appropriations'.
These are the amounts payable to different agencies to enable them to
undertake the activities described above. Clause 6 provides a
sum of $485.42 million for these purposes. The allocations by agency
are set out in Schedule 2.
Proposed Part 2 contains two new clauses: proposed
Clauses 11 and 12. In his second reading speech, the Parliamentary
Secretary to the Minister for Finance and Administration, the Hon.
Peter Slipper said:
Two new clauses have been added to the three additional
estimates bills. The new clauses will provide a mechanism for the finance
minister, on request from a portfolio minister, to lapse amounts of
departmental expense appropriations which are not required. Such amounts
may be not required because of an accounting reclassification, efficiency
gains resulting in reduced spending or changes in the structure of government.
The first clause provides the lapsing mechanism in respect
of the three bills. The second clause provides the same mechanism in
respect of the annual appropriation acts agreed to since the 1999 budget.
Clause 11 provides that a Minister—proposed
subsection 11(1)—or a Chief Executive—proposed subsection 11(2)—may
request the Minister for Finance to make a written determination which
reduces an administered assets and liabilities item or an other departmental
item by the amount specified in the determination. Following receipt
of such a request, the Minister for Finance can issue such a determination.
Proposed subsection 11(5) limits the amount of the reduction
in two circumstances. First, paragraph 11(5)(a) limits the reduction
to the amount in the determination. Second, where payments have already
been made from the Consolidated Revenue Fund, paragraph 11(5)(b) limits
the actual reduction to the difference between the amount already paid
and the reduction sought in the determination. In the absence of this
provision, the amount of the reduction would be excessive. Proposed
subsection 11(9) provides that a determination is a disallowable
instrument for the purpose of section 46A of the Acts Interpretation
Act 1901.
A similar mechanism is proposed in Clause 12. This
empowers the Minister for Finance, on receipt of a written request
from a Minister—proposed subsection 12(2)—or a Chief Executive—proposed
subsection 12(3)—to reduce, by a written determination, amounts
allocated by the Acts set out in subsection 12(1). All these
Acts are Appropriation Acts of earlier years.
Proposed Part 3 deals with 'additions to basic
appropriations'. The main item is the Advance to the Minister for Finance.
Clause 14 limits this amount to $215 million.
Compared with Appropriation Act (No. 4) 2002–03,
the only significant change in the Bill—other than the amounts appropriated—are
Clauses 11 and 12 of Part 2.
The effect of Clause 11 seems to be to make it possible
to claw back the amount appropriated under the Bill to the amount likely
to be spent. Similarly, Clause 12 seems to be intended to claw back
unused departmental appropriations from previous years. The purpose
of these clauses is not clear but seems to be a spending control mechanism
aimed at preventing agencies from seeking unduly large appropriations
for departmental expenses and carrying forward unspent amounts to future
years that agencies are unlikely to spend.
-
Budget Paper No. 4 2003-04, pp. 4–5.
-
House Hansard, 11 February
2004, p. 24256.
Richard Webb
19 February 2004
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 2004
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