Bills Digest 26 1996-97 Appropriation (Parliamentary Departments) Bill 1996-97


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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

Passage History

Appropriation (Parliamentary Departments) Bill 1996-97

Date Introduced: 20 August 1996
House: House of Representatives
Portfolio: Finance
Commencement: Royal Assent

Purpose

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)

Background

(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)

Main Provisions

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.

Endnotes

  1. With the exception of one sum of $95 000, the Bill incorporates funds previously appropriated Supply (Parliamentary Departments) Act 1996-97.
  2. Budget Paper No.1, 1996-97: 3-48.
  3. Monies which may only be called on in unforseen circumstances.
  4. Department of the House of Representatives, Portfolio Budget Statements 1996-97: 6-7.
  5. ibid: 2.
  6. Department of the Senate, Portfolio Budget Statements 1996-97: 8-9.
  7. ibid: 5.
  8. 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.
  9. Department of Parliamentary Reporting Staff, Portfolio Budget Statements 1996-97: 4.
  10. ibid: 2.
  11. Department of the Parliamentary Library, Portfolio Budget Statements 1996-97: 7-8.
  12. ibid: 5.
  13. See Department of Parliamentary Reporting Staff, op cit: 23.
  14. op cit: 3.
  15. ibid: 6.
  16. op cit: 5.
  17. Parliamentary Debates: 799.
  18. 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.
  19. National Commission of Audit, Report to the Commonwealth Government, June 1996: 110.
  20. 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.

Contact Officer and Copyright Details

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

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1996.

This page was prepared by the Parliamentary Library, Commonwealth of Australia
Last updated: 5 September 1996

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