Bills Digest 28 1996-97 Appropriation Bill (No. 2) 1996-97


Numerical Index | Alphabetical Index

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 Bill (No. 2) 1996-97

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

Purpose

To appropriate $3 531 529 000 for expenditure on capital works and services, payments to the States and Territories, and for other services during the 1996-97 financial year.

Background

Annual authorisations for expenditure are contained in the Appropriation Act (No. 1), which authorises expenditure for the ordinary services of government, and the Appropriation Act (No. 2), which deals with expenditure on capital works and services, payments to the States and other purposes not authorised by special legislation. The Parliamentary Departments are covered by the Appropriation (Parliamentary Departments) Act.

Reference is made in the Bill to the Supply Act (No. 2) 1996-97. That Act together with the Supply Act (No. 1) 1996-97 and the Supply (Parliamentary Departments) Act 1996-97 provided interim appropriations for the period between the start of the 1996-97 financial year and the passage of the 1996-97 Appropriations Bills. The amounts appropriated by the Supply Bills are incorporated with those made under the Appropriation Acts to form the yearly expenditure.

Supply Bills are required as a result of the timing factors in the Budget cycle. The Commonwealth financial year begins on 1 July, but the Budget is often not presented until August and it is usually not until November that the Appropriation Bills have been enacted. Since the Appropriation Bills of the previous financial year lapse on 30 June, a hiatus of approximately five months duration appears in the financial activities of the Government. This hiatus necessitates interim appropriations. This is achieved through the passing of Supply Bills shortly before the end of the previous financial year.

It is recommended that this Bills Digest be read in conjunction with the Parliamentary Research Service Budget Review 1996-97.

Outline

The Schedules to the Bill deal with the proposed allocation of funds appropriated by the Bill, a total of $3 531 529 000.

The majority of funds to be appropriated go to the Department of Health and Family Services, a total of $1 517 323 000. This principally consists of $1 455 626 000 for payments to the States and Territories.

Comment: Payments to the States and Territories (Division 891 at pp. 37-39 of the Bill) comprise a number of items, the main ones being health advancement ($131 837 000), health care access ($353 251 000), assistance for people with disabilities ($300 403 000), home and community care ($451 220 000) and housing and crisis accommodation ($121 931 000).

Major Budget measures within Division 891 include (figures obtained by subtracting 1996-97 appropriation from 1995-96 actual expenditure): +$1 200 000 for the establishment of musculoskeletal medicine clinics; +$3 000 000 for Australian Universities Rural Health Departments establishment grants; and +$1 000 000 for strengthening services under the National Youth Suicide Strategy.

Major Budget measures within Division 892 - Other Services (p. 39 of the Bill) include (figures obtained by subtracting 1996-97 appropriation from 1995-96 actual expenditure): +$4 200 000 for the New Directions in Public Health programme; +$2 137 000 for a Youth Homelessness Pilot; +$150 000 for Rural Health - specialist and general practitioner locum support; +$200 000 for Rural Health - promotion of nursing training; +$20 000 000 in financial assistance for the provision of additional services in areas with a shortage of doctors; +$2 020 000 in strengthening services under the National Youth Suicide Strategy; and +$2 626 000 in education, accreditation and review of diagnostic services.

Major Budget reductions within Divisions 890 (capital works and services), 891 and 892 include (figures obtained by subtracting 1996-97 appropriation from 1995-96 actual expenditure): -$5 959 547 for department plant and equipment; - $53 173 273 for the Commonwealth dental program for health card holders; - $19 035 000 for the supported accommodation assistance program; - $1 066 103 for the supported accommodation program - national case management and data strategies.

The second highest amount allocated, $331 652 000, is for the Department of Primary Industries and Energy. This principally consists of $227 641 671 for payments to the States and Territories.

Comment: Payments to the States and Territories (Division 931 at pp. 34-45 of the Bill) comprise a number of items, the main ones being industries development ($2 900 000), infrastructure and support ($236 002 000) and research and assessment ($4 698 000).

Major Budget measures within Division 931 include (figures obtained by subtracting 1996-97 appropriation from 1995-96 actual expenditure): +$26 724 522 for the forest industry structural adjustment package; +$9 386 837 for rural adjustment; +$8 336 229 for the sugar industry package; and +$3 155 630 the Commonwealth/New South Wales Forest Industry Package.

Major Budget measures within Divisions 930 (capital works and services) and 932 (other services) include (figures obtained by subtracting 1996-97 appropriation from 1995-96 actual expenditure): +$2 630 053 towards screw worm facility; +$53 771 789 for the Australian geological survey organisation for a new building; + $2 063 727 contribution to salinity mitigation works and other constructions and investigations; +$4 500 000 for the Murray-Darling 2001 project; +$1 642 000 for the forest industry structural adjustment package; and +$1 500 000 loan conversion grant for the wine industry.

Major Budget reductions within Divisions 930, 931 and 932 include (figures obtained by subtracting 1996-97 appropriation from 1995-96 actual expenditure): - $2 600 609 in plant and equipment for the Australian Geological Survey Organisation; and - $222 950 in payments to State rural adjustment scheme authorities for costs associated with issuing drought exceptional circumstances certificates.

The third highest amount allocated, $261 219 000, is for the Department of Administrative Services. This principally consists of $251 827 000 for capital works and services.

Comment: Capital works and services (Division 865 at pp. 34 and 35 of the Bill) comprise a number of items, the main ones being overseas property services - major acquisitions and works ($81 711 000), Commonwealth offices ($39 359 000) and overseas property services - acquisitions, buildings and works under $6 000 000 ($30 560 000).

Major Budget measures within Division 865 include (figures obtained by subtracting 1996-97 appropriation from 1995-96 actual expenditure): +$11 907 207 for Commonwealth offices - construction, acquisition and refurbishment under $6 000 000; +$8 650 250 for dredging of Kedron Brook Floodway in Brisbane; +$10 986 888 for overseas property services - acquisitions, buildings and works under $6 000 000; and +$54 762 411 for overseas property services - major acquisitions and works.

Major Budget measures within Division 866 (other services) include (figures obtained by subtracting 1996-97 appropriation from 1995-96 actual expenditure): +$1 592 000 for halon decanting and destruction; +$4 800 000 for business rationalisation and pre-sale costs; and +$3 000 000 for COMCAR community service obligation.

Major Budget reductions within Division 865 include (figures obtained by subtracting 1996-97 appropriation from 1995-96 actual expenditure): -$37 481 557 for Commonwealth offices - major construction and refurbishment; -$1 861 119 for overseas property services - instalment purchases of sites and buildings; and -$675 000 for departmental buildings and works.

A total of $175 000 000 is allocated for the Advance to the Minister for Finance (p. 33 of the Bill).

Comment: The Advance to the Minister for Finance is a form of contingency fund which is kept topped-up via provisions in the Appropriation Bills and the Supply Bills. The Advance is only used to provide funding for any unforeseen and urgent expenditures. These may arise if there are unforeseen shortfalls in funding for programs for which an appropriation already exists, or may relate to totally new programs. Monies may also be provided out of the Advance to cover payments which must be made pending the Minister for Finance's authorisation for the issue of Warrant authority. (A Warrant is a document provided by the Minister for Finance to the Secretary of a Department authorising the drawing of monies from the Commonwealth Public Account. The Warrant in effect ensures or attests that the making of any payment is covered by a lawful appropriation.)

Main Provisions

The effect of clause 3 is to authorise the Minister for Finance to issue from the Consolidated Revenue Fund a total of $1 822 255 000 for the year ending 30 June 1997 (Schedule 4 gives a portfolio and program breakup of the proposed expenditure).

The effect of clause 4 is to appropriate a total of $3 531 529 000 million from the CRF. This total comprises $1 822 255 000 million authorised to be issued under clause 3 and $1 709 274 000 million appropriated by the Supply Act (No. 2) 1996-97.

Clause 5 deals with payments to the States. Schedule 4 deals with payments to the States and Territories by each Department. Payments to States detailed in Schedule 3 must be made on the terms and conditions determined by the specified Minister.

Part 2 of the Bill foreshadows certain technical amendments to the proposed Appropriation Act (No. 2) 1996-97 contingent on the passage of the Government's proposed public sector financial management reforms. The necessary legislation which, amongst other things, will 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

The Senate and its Powers in Relation to Money Bills

Section 53 of the Constitution provides:

Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. But a proposed law shall not be taken to appropriate revenue or moneys, or to impose taxation, by reason only of its containing provisions for the imposition or appropriation of fines or other pecuniary penalties, or for the demand or payment or appropriation of fees for licences, or fees for services under the proposed law.

The Senate may not amend proposed laws imposing taxation, or proposed laws appropriating revenue or moneys for the ordinary annual services of the Government.

The Senate may not amend any proposed law so as to increase any proposed charge or burden on the people.

The Senate may at any stage return to the House of Representatives any proposed law which the Senate may not amend, requesting, by message, the omission or amendment of any items or provisions therein. And the House of Representatives may, if it thinks fit, make any of such omissions or amendments, with or without modifications.

Except as provided in this section, the Senate shall have equal power with the House of Representatives in respect of all proposed laws.

Section 53 deals with the powers of the House of Representatives and the Senate in relation to money Bills, that is, Bills appropriating revenue or moneys or imposing taxation. This Bill is an example of a money bill.

The first paragraph of section 53 provides that bills appropriating revenue or moneys or imposing taxation shall not originate in the Senate. The Bill, as per the requirement in section 53, did not originate in the Senate. The Bill originated in the House of Representatives.

The second paragraph of section 53 provides that the Senate may not amend Bills imposing taxation or Bills appropriating revenue or moneys for the ordinary annual services of the government. The paragraph does not prevent the Senate amending appropriation Bills which do not deal with the ordinary annual services of the government.

The question of what an appropriation for the ordinary annual service of the government is has not been definitively settled by the courts. However, the High Court in Brown v. West 169 C.L.R. 195, quoting from House of Representatives Practice (2nd ed), held:

Pursuant to certain principles stated by the Treasurer in 1965, the Bills which are treated as Bills for the ordinary annual services of the Government (the expenditure being described as "for the service of the year") are Appropriation Bill (No. 1) introduced in August, Appropriation Bill (No. 3) usually introduced in the following April, and Supply Bill (No. 1) usually introduced in April or May to make an interim appropriation of funds for the service of the financial year next following until the ensuring Appropriation Act (No. 1) commences: see pp. 419-421. These Bills are not subject to amendment by the Senate. Appropriation Bill (No. 2) contains appropriations for capital works and equipment, grants to States under s. 96 of the Constitution and new policies not authorized by special legislation: p. 421. This Bill relates to expenditure "in respect of the year", and the Senate and the House of Representatives consider that Appropriation Bill (No. 2) is subject to amendment by the Senate: p. 421. Each financial year Appropriation Act (No. 4) and Supply Act (No. 2) follow Appropriation Act (No. 2) in the way in which Appropriation Act (No. 3) and Supply Act (No. 1) follow Appropriation Act (No. 1): see Browning concerning the corresponding Bill, p. 421.

On the basis of the High Court's obiter dicta in Brown v. West it is arguable that this Bill does not appropriate revenue for the ordinary annual services of government, and as such, can be amended by the Senate.

While the Senate may amend proposed laws appropriating revenue or moneys which are not for the ordinary annual services of government, paragraph 3 of section 53 provides that it may not so amend where the amendment would increase any proposed charge or burden on the people. As noted by R.D. Lumb:

this provision operates to prevent amendments being made to a Bill passed by the House of Representatives in such a way that the appropriation of money needed for fulfilling the purposes of the Bill is increased.

If this Bill were taken to appropriate money for the ordinary annual services of government, and as such, cannot be amended by the Senate, it remains open for Senate, under paragraph 4 of section 53, to return the Bill to the House of Representatives requesting that it omit or amend any items or provisions contained in it. Where this occurs, the House of Representatives may, if it thinks fit, make any omission or amendment.

Endnotes

  1. Brown v. West 169 C.L.R. 207.
  2. R.D. Lumb, The Constitution of the Commonwealth of Australia Annotated, Fourth Edition, p. 212.

Contact Officer and Copyright Details

Ian Ireland Ph. 06 277 2438
6 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: 6 September 1996

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