Bills Digest No. 104   1997-98 Appropriation Bill (No. 3) 1997-98


Numerical Index | Alphabetical Index

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

Appropriation Bill (No. 3) 1997-98

Date Introduced: 29 October 1997
House: House of Representatives
Portfolio: Finance
Commencement: Royal Assent

Purpose

To authorise the Minister for Finance to issue an additional $1 173 388 000 from the Consolidated Revenue Fund, in addition to funds appropriated by the Appropriation Act (No.1) 1997-98, for the annual services of the government.

Background

Annual authorisations for expenditure are contained in the Appropriation Act (No. 1), which authorises expenditure for the ordinary services of government.The Appropriation Act (No. 2) 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 (No. 1).

Additional appropriations may be sought in further Appropriation Bills, commonly known as additional estimates, when the appropriation sought in the Appropriation Bills is insufficient for the financial year.

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.

It is suggested that this Bills Digest be read in conjunction with the Parliamentary Research Service Budget Review 1997-98.

Outline of Major Additional Appropriations

The major additional appropriations effected by this Bill are:

  • Department of the Veterans' Affairs - $301 861 000. Of that total $245 189 000 is appropriated for the maintenance of patients in non-departmental institutions. Note: The rationale given by the Minister in the Second Reading Speech to the Bill for the $245 189 000 in additional appropriations, is that the amount '... largely reflecting to a self balancing transfer of $189 million from the Nursing Homes Benefit special appropriation in the Department of Health and Family Services following the Government's decision that responsibility for residential aged care for veterans would be centralised in the Department of Veterans' Affairs.
  • Department of the Treasury $204 346 000. Of that total $174 000 000 is appropriated for acquisition of debt of the Australian National Railways Commission.
  • Department of Finance and Administration $157 853 000. Of that total $71 000 000 is appropriated for business sales and restructuring. The rationale given by the Minister in the Second Reading Speech to the Bill for the $71 000 000 in additional appropriations, is that the amount is required '... for managing surplus staff of the former Department of Administrative Services business units for which the actual costs could not be reliably determined until arrangements for the sale of the businesses had been completed.'
  • An amount of $40 026 000 is also appropriated for the costs of major asset sales. The rationale given by the Minister in the Second Reading Speech to the Bill for the additional appropriation is that it is '... largely attributable to an anticipated increase in the sales commission as a result of an expected increase in the proceeds of the partial privatisation of Telstra.'
  • Department of Defence $111 121 000. Of that total $88 135 000 is appropriated for equipment and stores. The Minister in the Second Reading Speech to the Bill states that the $88 135 000 for equipment and stores is required '... for high priority logistic items including spares and equipment repair activities.'

Main Provisions

Clause 3 authorises the Minister for Finance to issue from the Consolidated Revenue Fund a total of $1 173 388 000 in respect of the year ending 30 June 1998. The Schedule gives a portfolio and program breakup of the proposed expenditure.

Clause 5 authorises the Minister for Finance to issue additional funds in respect of increases in salaries in 1997-98.

Other provisions of this Bill primarily provide for item changes that may arise from the creation of various proposed schemes, programs and agencies, such as the employment subsidy scheme or program, the Human Rights and Responsibilities Commission, the Office of the Privacy Commissioner, the Australian Prudential Regulation Authority, the Australian Corporations and Financial Services Commission and the Productivity Commission.

Contact Officer and Copyright Details

Ian Ireland
17 November 1997
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

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

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, 1997.

This page was prepared by the Parliamentary Library, Commonwealth of Australia
Last updated: 18 November 1997

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