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
Appropriation Bill (No. 2) 1997-98
Date Introduced: 13 May 1997
House: House of Representatives
Portfolio: Finance
Commencement: Royal Assent
To appropriate $5 866 977 000 for expenditure on capital works
and services, payments to the States and Territories, and for other
services during the 1996-97 financial year. The Bill appropriates $
1 000 000 000 for the Federation Fund Trust Account.
The Information Research Services publication Budget Review
1997-98 contains a detailed analysis of the Budget and its
impact on particular departments and programs. It should be read in
conjunction with this Digest.
(a) Introduction
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.
(b) 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. Borrowings - Borrowings allow
agencies to bring forward some future years appropriation to be
spent in an earlier year. This is intended to provide agencies with
the flexibility to respond to changing spending priorities; and a
mechanism to meet unforeseen costs. Borrowings are arranged either
through annual appropriation or additional estimates Bills, such as
is the case with this Bill, with a consequent reduction in a future
appropriation, or through the Provision for Running Costs Borrowing
(PRCB) where the borrowing does not coincide with an appropriation
Bill.
Agencies are allowed to borrow up to 10% of the total running
costs budget from any one year. Running Costs Borrowings
(PRCB) - The PRCB is a reserve that agencies can draw on to
borrow running costs funds from future appropriation where it is
not viable to wait until the passage of the next Appropriation
Bill. Agencies can borrow from the PRCB if: there is a legitimate
reason to borrow running costs; the agency has a running costs
appropriation; the borrowings are repaid in full from some future
appropriation; and sufficient funds are available.
(c) Outline of Bill
Schedule 2 of the Bills deals with the proposed allocation of
funds appropriated by the Bill, a total of $5 886 977 000.
The major part of funds to be appropriated go to the Department
of Health and Family Services, a total of $1 539 755 000. This
principally consists of $1 403 132 000 for payments to the States
and Territories.
Comment: Payments to the States and Territories (Division 891 at
pp. 33-35 of the Bill) comprise a number of items, the main ones
being health advancements ($113 787 000), health care access ($283
609 000), assistance for people with disabilities ($316 084 000),
home and community care ($476 329 0000) and housing and crisis
accommodation ($128 173 000). Major Budget measures within Division
891 (figures obtained by subtracting 1997-98 appropriation from
1996-97 estimated expenditure): +$2 728 000 in payments for special
health programs (e.g. blood transfusion services, imported blood
and blood related products, and artificial limbs scheme); -$8 305
000 in grants for provision of health services; -$4 816 000 for
medicare agreements - other health services; +3 048 for University
Departments of Rural Health; +$1 586 000 for the national youth
suicide prevention strategy; +6 309 000 for assistance for people
with disabilities; -$2 893 000 for supported accommodation
assistance under the Supported Accommodation Assistance Act
1994; - $518 000 for referral services for women escaping
domestic violence in rural and remote areas; +$1 430 000 for the
supported accommodation assistance program - national case
management and data strategies; +$5 010 000 in alternative funding
arrangements for rural obstetric services; and -$52 580 000 for the
Commonwealth dental program for health card holders. Major Budget
measures within Division 892 - Other Services (p. 35 of the Bill)
include (figures obtained by subtracting 1997-98 appropriation from
1996-97 estimated expenditure): -$6 057 000 for hearing services -
payments for contestable services through a voucher system; +$5 050
000 for acute health care - microeconomic reform initiatives; +$5
252 000 for improving access of Aboriginal people to primary care;
and +$6 878 000 for aged care accreditation and quality
assurance.
The second highest amount allocated, $1 115 458 000, is for the
Department of Social Security. This principally consists of $1 093
630 000 for payments to the States and Territories.
Comment: Payments to the States and Territories (Division 949 at
p. 43 of the Bill) comprises a number of items, the main ones being
compensation for extension of fringe benefits to pensioners and
older long-term allowees and beneficiaries ($116 452 000), social
housing subsidy program ($2 130 000), and Commonwealth State
housing agreement ($975 048 000).
The third highest amount allocated, $1 002 889, is for the
Department of Prime Minister and Cabinet. This principally consists
of $1 001 000 000 under Division 939 (at p. 42 of the Bill) for
Other Services.
Comment: Other Services (Division 939) comprises two items, the
principal being Centenary of Federation. An amount of 1 000 000 000
will be appropriated for this item for payment to the Federation
Fund Trust Account. The purpose of the Federation Fund (FF) is to
finance a number of major projects of national significance, in
order to both mark the Centenary of Federation and contribute to
the building of required infrastructure for the coming century. The
FF will be established as a separate Trust Account within the
Commonwealth Public Account with total funds of the amount
appropriated by this Bill. The projects are to be well advanced but
not necessarily completed by the Centenary of Federation in 2001,
and will be selected on the basis that they will generate jobs in
the construction phase and make a significant ongoing contribution
to Australia and the Australian economy. For example, it has
already been decided to draw upon the FF from 1998-99 onwards to
finance the cost of constructing the National Museum of Australia
and the associated building for the Australian Institute of
Aboriginal and Torres Strait Islander Studies. An amount of $1 000
000 is also appropriated under Division 939 for assistance to
improve the integration of young offenders into education,
training, employmentand community life.
A total of $175 000 000 is allocated for the Advance to the
Minister for Finance (p. 29 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.)
The effect of clause 3 is to authorise the
Minister for Finance to issue from the Consolidated Revenue Fund a
total of $5 866 977 000 for the year ending 30 June 1998 (Schedule
2 gives a portfolio and program breakup of the proposed
expenditure).
Clause 4 deals with payments to the States and
Territories. Schedule 2 deals with payments to the States and
Territories by each Department. Payments detailed in Schedule 2
must be made on terms and conditions determined by the specified
Minister.
Part 2 of the Bill foreshadows certain technical amendments to
the proposed Appropriation Act (No. 2) 1997-98 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.
Ian Ireland
26 June 1997
Bills Digest Service
Information and Research Services
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.
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 1997
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Published by the Department of the Parliamentary Library,
1997.
This page was prepared by the Parliamentary Library,
Commonwealth of Australia
Last updated: 14 July 1997
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