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Appropriation Bill (No. 1) 1998-99
Date Introduced: 12 May 1998
House: House of Representatives
Portfolio: Finance and Administration
Commencement: On Royal Assent.
To appropriate $30 863 585 000
from the Consolidated Revenue Fund (CRF) for the ordinary annual
services of the government for the 1998-99 financial year.
This Bill forms part of a three-part package
relating to government finance and covers expenditure for the
ordinary annual services of the government. The other parts of the
- Appropriation Bill (No. 2) 1998-99 which covers expenditure
- capital works and services:
- payments to the States and Territories
- expenditure on any new programs not covered by other
- Appropriation (Parliamentary Departments) Bill 1998-99 which
covers expenditure by the five parliamentary departments.
The Executive Government of the Commonwealth
cannot expend moneys unless Parliament has authorised that
expenditure.(1) Authorised expenditure is obtained through
Appropriation Bills Nos. 1 and 2 and
Appropriation (Parliamentary Departments) Bills are now introduced
in May. If needed, Appropriation Bills Nos. 3 and 4 (corresponding
to Appropriation Bills Nos. 1 and 2) and Appropriation
(Parliamentary Departments) Bill No. 2 are introduced during the
financial year to provide funding for cost overruns or new
programs. They are commonly referred to as additional
When past Budgets were handed down in August,
enactment of those Budget Bills did not usually take place until
November. As all appropriation Bills lapse on 30 June, further
measures were required to make funds available from 30 June to
November (or until the Bills were enacted). To address this
possible 'gap' in funds, Supply Bills were passed at the end of the
previous financial year in order to maintain the status quo in the
objects of government expenditure authorised in the preceding
Now that the Budget is handed down in May,
Supply Bills are no longer required. The Bills pass through both
Houses by the end of June and begin life from the start of the new
financial year - lapsing on 30 June at the end of the financial
The Budget process now results in a reduced time
frame for debate when compared to the August Budgets of the
As a general rule, the Senate may not amend
proposed laws appropriating revenue or moneys for the ordinary
annual services of the government.(3) However, the
Senate may amend an appropriation Bill which does not deal with the
ordinary annual services of the government, provided such
amendment does not increase any proposed charge or burden on the
people.(4) As mentioned above, the purpose of this Bill is for the
ordinary annual services of the government.(5)
General Economic Forecasts
The Budget is based on a number of economic
assumptions. In 1998-99, the underlying budget balance is estimated
to be in surplus by $2.688 billion, or 0.5% of Gross Domestic
The Budget includes the following annual growth
rate estimates for 1998-99:
- Real GDP: 3%
- Employment: 1.75%
- Average Earnings: 4.25%
- CPI: 2.5%.(7)
GDP is forecast to grow by 3% in 1998-99,
following estimated growth of 3.75% in 1997-98. The economic crisis
in Asia has slowed Australia's GDP growth rate estimate. It is
anticipated that the Asian crisis will effect confidence, resulting
in a downturn in business growth and consumer spending.(8)
Employment growth is expected to remain firm.
The unemployment rate is forecast to fall to around 7.75% in the
June quarter 1999.
A rise in underlying inflation is forecast,
though it is expected to remain within the 2% to 3% band. Some
moderation in wage growth is forecast.
The current account deficit is forecast to rise
to $31 billion, or 5.25% of GDP, in 1998-99. This compares with
3.4% of GDP in 1996-97 and an estimated 4.5% of GDP in
In 1998-99 total revenue is estimated to
increase by 6.5% over estimated revenue of the previous year, with
the ratio of revenue to GDP increasing to 25.0% from 24.9%.
This amounts to total estimated revenue for
1998-99 of $144.258 billion - up by $8.810 billion on the previous
The main increases in estimated revenue will
- PAYE taxpayers - an additional $5.18 billion (8.4%)
- Indirect taxes - an additional $1.2 billion (3.8%)
- Non-tax revenue - an additional $1.465 billion (31.7%) due
mainly to a surge in dividend revenue expected to flow from the
In 1998-99 total underlying outlays are
estimated to increase by 3.6% over total estimated underlying
outlays of the previous year.(11)
Total underlying outlays amount to $141.5703
billion - up by $4.9669 billion on the previous year.
The main Budget cuts to spending are
linked to the following portfolios:
- Employment, Education, Training and Youth Affairs - 12.5% cut
from $13.1998 billion to $11.5443 billion
- Primary Industries and Energy - 8.4% cut from $1.7961 billion
to $1.6448 billion
- Attorney General - 2.7% cut from.$1.0381 billion to $1.00099
The main Budget increases in spending
are linked to the following portfolios:
- Veteran's Affairs - 7.6% increase from $6.7394 billion to
- Environment - 20.1% increase from $0.570 billion to 0.6852
- Prime Minister and Cabinet: 14.9% from $1.11269 billion to
- Social Security: 8% from $41.5287 billion to $44.8478
Fiscal Risks and Contingent
The forward estimates of revenue and outlays in
the Budget incorporate assumptions and judgements based on
information available at the time of publication.(13)
Fiscal risks and contingent liabilities with a
possible impact on the forward estimates greater than $20 million
in any one year, or $40 million over the forward estimates period,
are listed in Budget Paper No. 1 from pages 2-43 to
One such listing is the Department of Defence's
involvement in several cases covering a wide range of litigation
where the cases either have not been heard, or damages and costs
have yet to be awarded. The value of these claims is $49
No allowance has been made for any possible
contingent liability attaching to the Commonwealth with respect to
upcoming litigation arising from the recent waterfront
Clause 4 authorises the Minister for Finance to
issue $30 863 585 000 out of the CRF for the ordinary annual
services of the Government in respect of the year ending 30 June
1999. The money is to be spent according to a detailed list in
Schedule 2 of the Bill. The Schedule lists the spending breakdown
by department and program.
Clause 6 authorises the
Minister to issue additional funds if required to recover any
Other provisions relate to:
- payments to Agencies out of the money appropriated for the
purposes of certain employment subsidy schemes or programs
- payments to Agencies out of the Comcover Reserve.
- Commonwealth Constitution - section 83.
- May Budget - approximately 17 sitting days.
- August Budget - approximately 33 sitting days.
- While the Senate has no power to amend an appropriation bill
for the purpose of the ordinary annual services of the
government, this lack of power is mitigated by the condition
that no matters extraneous to the ordinary annual services of
the government may be 'tacked' to the Bill. However, if
extraneous matter is tacked to an appropriation Bill, and no
objection is taken in the Senate prior to assent, the resulting Act
is not subject to invalidation by a court by reason of the tacking:
Constitution sections 53, 54, 81, 83; Osborne v
Commonwealth (1911) 12 CLR 321.
- The expression ordinary annual services of the
government is used only in sections 53 and 54. It is not
justiciable as those sections deal with proposed laws and
not laws. Its interpretation is therefore a matter for the
two Houses in their dealings with each other. The interpretation of
the expression was settled by the Compact of 1965 agreement between
the Senate and the government, and by agreed applications of the
terms of that agreement since that time: see Odgers' Australian
Senate Practice,. 276, 284-286.
- Commonwealth Constitution - section 53, Brown v West
(1990) 91 ALR at 207.
- An appropriation, whether annual or standing, must designate
the purpose or purposes for which the moneys appropriated might be
expended. The principle was stated by Latham C.J. in
Attorney-General (Vic) v Commonwealth, (1945) 71 CLR at p
253: '.....there cannot be appropriation in blank, appropriations
for no designated purpose, merely authorising expenditure with no
reference to purpose' and see The State of New South Wales v
Commonwealth ('the Surplus Revenue Case') (1908) 7 CLR 179, at
p 200, where Isaacs J. said: 'Appropriation of money to a
Commonwealth purpose means legally segregating it from the general
mass of the Consolidated Revenue Fund and dedicating it to the
execution of some purpose which either the Constitution has itself
declared, or Parliament has lawfully determined, shall be carried
- Budget Paper No. 1 1998-99, 1-3.
- Ibid., 2-29.
- Ibid., 2-29.
- Ibid., 2-4.
- Ibid., 5-3.
- It is important to distinguish between appropriations and
underlying outlays. Appropriations derive from Acts of Parliament
which authorise the drawing down of Commonwealth money for the
functions and activities of the Commonwealth.
- Underlying outlays = total appropriations -
- Budget Paper No. 1 1998-99, 4-4.
- Ibid, 2-43 (close of parliamentary business - 8 April 1998.
Information supplied by departments and agencies - 31 March 1998).
- Bills Digest No. 201 1997-98, 15-19.
25 May 1998
Bills Digest Service
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