Bills Digest No. 094 2003-04
Appropriation Bill (No. 4)
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
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Administered expenses include:
Administered items are expenses, revenues,
assets or liabilities managed by agencies on behalf of the
Commonwealth. Agencies do not control administered items.
Administered expenses include grants, subsidies and benefits. In
many cases, administered expenses fund the delivery of third party
Non-operating costs sometimes called 'capital
'equity injections', which are provided to agencies to enable
investment in new capacity when normal cash flows are
'loans', which are provided to agencies and used when an
investment is expected to result in a direct return such as an
previous years outputs appropriations: these provide funding for
outputs that were delivered in a previous year. This can occur, for
example, when a decision is made to implement a new activity after
the date for inclusion in the additional appropriation Bills. Such
activities are funded initially from cash balances, which are then
replenished by the previous years outputs appropriation, and
'administered assets and liabilities' appropriations: they
provide funding for acquiring new assets, extending existing
assets, and discharging administered liabilities relating to
activities administered by agencies in their fiduciary capacity on
behalf of the Government.(1)
The Bill itself provides virtually no
detailed information about the purposes for which the additional
amounts are sought. However, according to the second reading
speech, the following are the main purposes:
- $294.6 million in additional payments to the States and
$187.7 million as part of the drought assistance package for
$36.7 million in funding to enable payments for drug diversion
activities for the Tough on Drugs initiative;
$10.2 million in rephasings from previous years for the
Commonwealth State and Territory Disability Agreement; and
- $10 million
in tax compensation payments to New South Wales and Victoria for an
expected increase in revenue for Snowy Hydro Ltd.
- $190.8 million for non-operating expenses including:
- $47 million
in equity injections for the AFP in relation to the PNG deployment,
Solomon Islands operations and people trafficking;
- $43 million
in equity injections for the Australian Customs Service which will
be accessed if shortfalls occur in a number of initiatives,
particularly the Cargo Management Re-engineering project; and
- $32.4 million for
payment to the Australian Rail Track Corporation Limited on
finalisation of the company's lease of New South Wales main line
Further information can be obtained from
agency Portfolio Additional Estimates Statements.
Proposed Part 1 of the Bill
contains preliminary provisions. Clause 3 contains
definitions although it does not define 'non-operating' as used in
proposed Schedule 2.
Proposed Part 2 deals with
'basic appropriations'. These are the amounts payable to different
agencies to enable them to undertake the activities described
above. Clause 6 provides a sum of $485.42 million
for these purposes. The allocations by agency are set out in
Proposed Part 2 contains two new clauses:
proposed Clauses 11 and 12. In
his second reading speech, the Parliamentary Secretary to the
Minister for Finance and Administration, the Hon. Peter Slipper
Two new clauses have been added to the three
additional estimates bills. The new clauses will provide a
mechanism for the finance minister, on request from a portfolio
minister, to lapse amounts of departmental expense appropriations
which are not required. Such amounts may be not required because of
an accounting reclassification, efficiency gains resulting in
reduced spending or changes in the structure of government.
The first clause provides the lapsing mechanism in
respect of the three bills. The second clause provides the same
mechanism in respect of the annual appropriation acts agreed to
since the 1999 budget.
Clause 11 provides that a Minister
proposed subsection 11(1) or a Chief Executive
proposed subsection 11(2) may request the Minister
for Finance to make a written determination which reduces an
administered assets and liabilities item or an other departmental
item by the amount specified in the determination. Following
receipt of such a request, the Minister for Finance can issue such
a determination. Proposed subsection 11(5) limits
the amount of the reduction in two circumstances. First, paragraph
11(5)(a) limits the reduction to the amount in the determination.
Second, where payments have already been made from the Consolidated
Revenue Fund, paragraph 11(5)(b) limits the actual reduction to the
difference between the amount already paid and the reduction sought
in the determination. In the absence of this provision, the amount
of the reduction would be excessive. Proposed subsection
11(9) provides that a determination is a disallowable
instrument for the purpose of section 46A of the Acts
Interpretation Act 1901.
A similar mechanism is proposed in Clause 12.
This empowers the Minister for Finance, on receipt of a written
request from a Minister proposed subsection 12(2)
or a Chief Executive proposed subsection 12(3) to
reduce, by a written determination, amounts allocated by the Acts
set out in subsection 12(1). All these Acts are
Appropriation Acts of earlier years.
Proposed Part 3 deals with
'additions to basic appropriations'. The main item is the Advance
to the Minister for Finance. Clause 14 limits this
amount to $215 million.
Compared with Appropriation Act (No. 4)
2002 03, the only significant change in the Bill other than
the amounts appropriated are Clauses 11 and 12 of Part 2.
The effect of Clause 11 seems to be to make it
possible to claw back the amount appropriated under the Bill to the
amount likely to be spent. Similarly, Clause 12 seems to be
intended to claw back unused departmental appropriations from
previous years. The purpose of these clauses is not clear but seems
to be a spending control mechanism aimed at preventing agencies
from seeking unduly large appropriations for departmental expenses
and carrying forward unspent amounts to future years that agencies
are unlikely to spend.
Budget Paper No. 4 2003-04, pp. 4 5.
House Hansard, 11 February 2004, p. 24256.
19 February 2004
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