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Bills Digest No. 25, 2005–06
Appropriation
(Tsunami Financial Assistance) Bill 2004-2005
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
(Tsunami Financial Assistance and Australia-Indonesia Partnership) Bill
2004-2005
Appropriation
(Tsunami Financial Assistance) Bill 2004-2005
Date
Introduced: 9 March 2005
House:
House of Representatives
Portfolio:
Finance and Administration
Commencement:
22 March 2005, on receipt of Royal Assent
The Bills appropriate money to fund
the Federal Government’s response to the tsunami in the Indian Ocean
on 26 December 2004.
The Bills were passed by Parliament on 15 March 2005.
On 26 December 2004 a severe earthquake in the ocean
off the coast of northern Sumatra caused tsunamis that devastated communities
in neighbouring countries and other countries in the Indian Ocean. The
earthquake measured 9.0 on the Richter Scale, the world’s most severe
in 40 years. The tsunamis resulted in a disaster of extraordinary proportions.
The death toll is now put at more than 225,000 (United Nations and media
estimates). The casualty list continues to grow and it is acknowledged
than an exact death toll will never be known. The United Nations estimates
that the tsunamis displaced one million people and deprived five million
of basic services.(1)
Indonesia was particularly hard hit by the tsunami,
with over 124,000 people confirmed dead and over 111,000 missing, presumed
dead.(2)
The Appropriation (Tsunami Financial Assistance and
Australia-Indonesia Partnership) Bill 2004-2005 establishes the Australia-Indonesia
Partnership for Reconstruction and Development (AIPRD), a five-year
program comprising two components:(3)
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$500 million in grant funding, and
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up to $500 million in loans for reconstruction and development.
The Appropriation (Tsunami Financial Assistance) Bill
2004-2005 provides approximately $130 million in appropriations for
Government agencies (primarily AusAID and the Department of Defence)
to replace money diverted from current programs to fund the tsunami
relief and recovery work of those agencies. The Bill also contains
an appropriation for the purposes of AIPRD.(4)
On 5 January 2005, Prime Minister Howard announced
a $1 billion contribution to a newly formed Australia-Indonesia Partnership
for Reconstruction and Development (AIPRD). These funds would be in
addition to Australia’s existing development cooperation program and
would ‘bring Australia’s commitment to Indonesia to a total of $1.8
billion over five years’. The Prime Minister called it ‘an historic
step in Australia-Indonesia relations … the single largest aid contribution
ever made by Australia, focused on the long-term and founded in partnership’.(5)
All opposition parties have expressed their support
for the Government’s $1 billion aid package to Indonesia.(6)
However, while the quantum of the appropriation is
supported by the opposition and minor parties, there were concerns regarding
the effective expenditure of the money and how decisions about funding
were to be made.(7) A further issue was the provision of
approximately half of the aid as a loan, rather than as a straight-out
donation.(8)
Following the announcement of AIPRD, one issue of concern
was that the administration of the aid package would be such that contracts
for the five-year program would be awarded exclusively to Australian
and New Zealand companies, in effect putting in place a package of ‘boomerang’
aid.(9)
In March 2005, the first meeting of the Joint Commission
for AIPRD was held in Canberra. At that meeting there was agreement
on the following:(10)
-
the arrangements under AIPRD to guide priority setting and decision
making, to ensure joint management and to govern tendering and contracting
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the terms and conditions for the $500 million loan program
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that work would begin immediately on a $50 million ‘Aceh Rehabilitation
Program’, which would include assistance to renovate the Zainoel
Abidin Hospital in Banda Aceh and rebuild the health workforce,
provide essential education equipment and teacher training, and
help restore essential government services to Aceh
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development of a $10 million program to strengthen Indonesia’s
disaster management and response systems and build a closer partnership
between Indonesia’s disaster coordination authority and Emergency
Management Australia
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a $5 million package of assistance measures to address needs arising
from the recent earthquakes in Alor and Nabire
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a $50 million five year program to assist Indonesia in economic,
financial and public-sector management, through the exchange of
skills and expertise between Australian and Indonesian Government
agencies.
Recent media reports on the progress of the AIPRD made
the following comments:(11)
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$10 million of the $1 billion package has been spent
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AIPRD officials conceded they may have difficulty spending
the entire amount of the package
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Australia’s efforts are focussed on the smaller-scale projects
such as health, education and governance programs.
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Clause 6 sets out the total appropriation in
the Bill: $1,001,526,000.
Clause 7 provides that for administered items
(that is, the amounts set out in Schedule 1 as ‘New Administered Expenses’)
the Finance Minister may issue from the Consolidated Revenue Fund amounts
that do not exceed in total, the lesser of:
-
the amount listed in the Schedule to the Bill, and
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the amount determined by the Finance Minister in relation to the
item, having regard to the expenses incurred that year in relation
to that item.
Subclause 7(2) provides that where money is appropriated
from the Consolidated Revenue Fund for an administered item, the money
can only be used for activities which have the purpose of contributing
to, or achieving, that outcome.
Clause 8 deals with the administered assets and
liabilities items (that is, an amount listed in Schedule 1 in relation
to an entity opposite the heading ‘Administered Assets and Liabilities’).
Subclause 8(1) provides that for administered assets and liabilities
the Finance Minister may issue from the Consolidated Revenue Fund amounts
with a total not exceeding the amount in the Schedule to the Bill.
Subclause 8(2) provides that where money is appropriated from
the Consolidated Revenue Fund for an administered assets and liabilities
item, the money can only be used for activities which have the purpose
of contributing to, or achieving, that outcome.
Clause 9 provides for appropriations in relation
to other departmental items (effectively, amounts in Schedule 1 of the
Bill listed as ‘Equity Injections’).
Clause 10 sets out the procedures for the Finance
Minister to reduce administered assets
and liabilities items and other departmental item appropriations
on request by a Minister.
Clause 11 provides for appropriations additional
to the amounts set out in the Bill. In order for the provisions of
clause 11 to apply, the Finance Minister must be satisfied that:
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there is an urgent need for expenditure that is either not provided
for, or insufficiently provided for in Schedule 1 of the Bill, and
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the additional expenditure is either not provided for, or insufficiently
provided for,:
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because of an erroneous omission or understatement, or
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because additional expenditure was unforeseen until after
the last day on which it was practicable to provide for it in
this Bill before it was introduced into the House of Representatives.
Subclause 11(3) limits the total amounts determined
by the Finance Minister under clause 11, and under sections 13 of the
Appropriation Act (No. 2) 2004-2005 and the Appropriation
Act (No. 4) 2004-2005(12) to $215 million.
Schedule 1 provides for the following appropriations:
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Department of Defence: $488,000 for equity injections,
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Health Insurance Commission: $94,000 for equity injections, and
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Australian Agency for International Development:
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$1,000,830,000 to advance Australia’s national interest by
implementing a partnership between Australia and Indonesia for
reconstruction and development, and
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$114,000 for administered assets and liabilities.
Clause 6 sets out the total appropriation in
the Bill: $131,375,000.
Clause 7 provides
that for departmental items (that is, the amounts set out in Schedule
1 as ‘Departmental Outputs’), the Finance Minister may issue from the
Consolidated Revenue Fund amounts that do not exceed that listed in
the Schedule to the Bill, and that such funds must be used for the departmental
expenses of the relevant entity.
Clause 8 provides that for administered items
(that is, the amounts set out in Schedule 1 as ‘Administered Expenses’)
the Finance Minister may issue from the Consolidated Revenue Fund amounts
that do not exceed in total, the lesser of:
-
the amount listed in the Schedule to the Bill, and
-
the amount determined by the Finance Minister in relation
to the item, having regard to the expenses incurred that year in
relation to that item.
Subclause 8(2) provides that where money is appropriated
from the Consolidated Revenue Fund for an administered item, the money
can only be used for activities which have the purpose of contributing
to, or achieving, that outcome.
Clause 9 sets out the procedures for the Finance
Minister to reduce departmental item appropriations on request by a
Minister.
Clause 10 provides for appropriations additional
to the amounts set out in the Bill. In order for the provisions of
clause 11 to apply, the Finance Minister must be satisfied that:
-
there is an urgent need for expenditure that is either not provided
for, or insufficiently provided for in Schedule 1 of the Bill, and
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the additional expenditure is either not provided for, or
insufficiently provided for:
-
because of an erroneous omission or understatement, or
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because additional expenditure was unforeseen until after
the last day on which it was practicable to provide for it in
this Bill before it was introduced into the House of Representatives.
Subclause 10(3) limits the total amounts determined
by the Finance Minister under clause 11, and under sections 12 of the
Appropriation Act (No. 1) 2004-2005 and the Appropriation
Act (No. 3) 2004-2005(13) to $175 million.
Schedule 1 provides for the following appropriations:
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Attorney-General’s Department: $20,000 for coordinated federal
criminal justice, security and emergency management activity, for
a safer Australia
-
Australian Federal Police: $4,920,000 for the investigation and
prevention of crime against the Commonwealth and protection of Commonwealth
interests in Australia and overseas
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CrimTrac: $643,000 for coordinated national policing information
systems for a safer Australia
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Department of Defence: $50,453,000 for command of operations in
defence of Australia and its interests
-
Department of Family and Community Services: $2,446,000 for services
and assistance that encourage communities to be self-reliant and
to connect with their members and that promote partnerships between
business, communities and government
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Health Insurance Commission: $409,000 for improving Australia’s
health through payments and information
-
Department of Foreign Affairs:
-
$277,000 to protect and advance Australia’s national interests
through contributions to international security, national economic
and trade performance and global co-operation, and
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$17,047,000 to keep Australians informed about and to provide
access to consular and passport services in Australia and overseas
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Australian Agency for International Development:
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$50,640,000 to advance Australia’s national interests by assistance
to developing countries to reduce poverty and achieve sustainable
development, and
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$1,632,000 to advance Australia’s national interest by implementing
a partnership between Australia and Indonesia for reconstruction
and development.
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Department of Health and Ageing:
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$144,000 for promoting and protecting the health of all Australians
and minimising the incidence of preventable mortality, illness,
injury and disability, and
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$2,392,000 to provide access through Medicare to cost-effective
medical services, medicines and acute health care for all Australians
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National Blood Authority: $352,000 for improved quality,
integration and effectiveness of health care.
While the Bills provide for generous appropriations
to provide financial aid following the Boxing Day tsunami, it will be
necessary to follow the progress of the AIPRD to ensure that the funds
are spent effectively and appropriately.
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AusAID Hot Topics, ‘Indian Ocean Disaster: Background to the Indian
Ocean Disaster’, AusAID website, available at
http://www.ausaid.gov.au/hottopics/topic.cfm?Id=9562_2054_7529_7688_4864#history
(accessed 8 August 2005).
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Hon. Peter Costello, Treasurer, ‘Second reading speech: Appropriation
(Tsunami Financial Assistance and Australia-Indonesia Partnership)
Bill 2004-2005’, House of Representatives, Debates, 9 March
2005, p. 1.
-
Ibid., p. 2.
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Hon. Peter Costello (Treasurer), ‘Second reading speech: Appropriation
(Tsunami Financial Assistance) Bill 2004-2005’, House of Representatives,
Debates, 9 March 2005, p.3.
-
Hon. John Howard (Prime Minister), Australia-Indonesia Partnership
for Reconstruction and Development, media release, 5 January
2005, available at: http://www.pm.gov.au/news/media_releases/media_Release1195.html,
accessed on 9 August 2005.
-
See for example Kevin Rudd, ‘Second reading speech: Appropriation
(Tsunami Financial Assistance and Australia-Indonesia Partnership)
Bill 2004-2005 and Appropriation (Tsunami Financial Assistance)
Bill 2004-2005’, House of Representatives, Debates, 10 March
2005, p. 24; Senator Andrew Bartlett, ‘Second reading speech: Appropriation
(Tsunami Financial Assistance and Australia-Indonesia Partnership)
Bill 2004-2005 and Appropriation (Tsunami Financial Assistance)
Bill 2004-2005’, Senate, Debates, 14 March 2005, p. 115;
Senator Kerry Nettle, ‘Second reading speech: Appropriation (Tsunami
Financial Assistance and Australia-Indonesia Partnership) Bill 2004-2005
and Appropriation (Tsunami Financial Assistance) Bill 2004-2005’,
Senate, Debates, 15 March 2005, p. 2.
-
See Kevin Rudd, ibid., p. 25.
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See for example, Senator Kerry Nettle, op. cit., p. 3.
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For more information on this point see Dr Ravi Tomar, ‘Australia’s
$1 billion tsunami-related aid package to Indonesia: progress on
the eve of the March ministerial meetings’, Research Note,
no. 36, Parliamentary Library, Canberra, 2004–05, available at:
http://www.aph.gov.au/Library/pubs/rn/2004-05/05rn36.pdf,
accessed on 9 August 2005.
-
Hon. A, Downer (Minister for Foreign Affairs), Australia Indonesia
Partnership for Reconstruction and Development – Inaugural Joint
Commission Meeting, joint media release, Canberra, 17 March
2005, available at http://www.foreignminister.gov.au/releases/2005/jointpr170305_aus-ind.html,
accessed on 9 August 2005.
-
John Breusch, ‘Downer backs wave-aid’, Australian Financial
Review, 23 June 2005, p. 7.
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Sections 13 of the Appropriation Act (No. 2) 2004-2005
and the Appropriation Act (No. 4) 2004-2005
provide for advances by the Finance Minister for unforeseen
circumstances.
-
Sections 12 of the Appropriation Act (No. 1) 2004-2005
and the Appropriation Act (No. 3) 2004-2005
provide for advances by the Finance Minister for unforeseen
circumstances.
Ann Palmer
10 August 2005
Bills Digest Service
Information and Research Services
This paper has been prepared to support the work of the Australian Parliament
using information available at the time of production. The views expressed
do not reflect an official position of the Information and Research Service,
nor do they constitute professional legal opinion.
IRS staff are available to discuss the paper's contents
with Senators and Members and their staff but not with members of the
public.
ISSN 1328-8091
© Commonwealth of Australia 2005
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Published by the Parliamentary Library, 2005.
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