Bills Digest No. 155 2004–05
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
Contact Officer & Copyright Details
Bill (No. 2)
Introduced: 10 May
House: House of Representatives
Portfolio: Finance and
To appropriate funds for the
non-ordinary (or other ) annual services of Government.
Under section 83 of the
Constitution, no monies may be withdrawn from the Consolidated
Revenue Fund except under an appropriation made by law . Laws
authorising spending are either:
Three appropriation Bills are generally introduced to accompany
the May Budget. By far the most important in dollar terms is
Appropriation Bill (No. 1), which appropriates funds for the
ordinary annual services of the government while Appropriation Bill
(No. 2) appropriates funds for other annual services.(1)
Section 54 of the Constitution requires that there be a separate
law appropriating funds for the ordinary annual services of the
government. That is why there are separate bills for ordinary
annual services and for other annual services. The distinction
between ordinary and other annual services was set out in a Compact
between the Senate and the government in 1965 (the Compact was
updated to take account of the adoption of accrual budgeting).
The Appropriation Bill (No. 2) 2005-06 (the Bill) provides
funding for agencies to meet:
expenses in relation to grants to the States under section 96 of
the Constitution and for payments to the Northern Territory and the
Australian Capital Territory;
administered expenses for new outcomes;
requirements for departmental equity injections, loans and
previous years outputs; and
requirements to create or acquire administered assets and to
discharge administered liabilities.
The total appropriated by the Bill is $7.787 billion. This
compares to $5.187 billion for the Appropriation Act (No.2)
2004-05. The increase is largely due to higher appropriations
for the Defence and Transport and Regional Service Portfolios.
Clause 4 provides that Portfolio Budget
Statements are to be considered as relevant extrinsic
interpretational material under section 15AB of the Acts
Interpretation Act 1903.
Clause 6 lists the total amount appropriated by
the Bill $7.787 billion.
Clause 11 provides that the responsible
portfolio Minister may request the Finance Minister to make a
written determination reducing the appropriation for an item in the
budget of an entity within their portfolio. The amount of reduction
is to be no greater than the amount requested, or, where payments
have already been made from the Consolidated Revenue Fund, the
difference between the amount appropriated to an item and the
amount already paid. For entities within the Finance Minister s
portfolio, the reduction request must come from the Chief Executive
of the relevant entity. Subclause 11(9) provides
that a determination may be disallowed by either House of
Parliament in accordance with the provisions of section 42 of the
Legislative Instruments Act 2003. However, the sunset
provisions contained in Part 6 of that Act do not apply to such a
Under clause 12, the Finance Minister is able
to increase the amount appropriated for certain items, such as
equity injections, listed in Schedule 2. The
maximum additional amount available under clause
12 is a total of $20 million. Similar provisions are
contained in previous appropriation Acts. Once the Bill commences,
no additional funding can be provided by the Finance Minister under
the relevant provisions of those previous appropriation Acts listed
in subclause 12(4).
Clause 13 allows the Finance Minister to
provide additional funding due to unforseen and urgent
circumstances. The maximum additional funding available under
clause 13 is a total of $215 million. Similar
provisions are contained in previous appropriation Acts. Once the
Bill commences, no additional funding can be provided by the
Finance Minister under the relevant provisions of those previous
appropriation Acts listed in subclause 13(5).
For specific payments to States and Territories, the relevant
portfolio Minister (listed in column 3 of
Schedule 1) will be able to determine conditions
under which payments can be made: clause 14.
Apart from the amount appropriated, the
main provisions of the Bill only differ in three notable
respects from the Appropriation Act (No.2) 2004-2005.
The first is that the Appropriation Act (No.2) 2004-05
did not contain the limitations in subclauses
12(4) and 13(5) referred to in the Main
Provisions section of this Digest.
The two other differences both relate of the coming into force
of the Legislative Instruments Act 2003. One is that the
power of either House of Parliament to disallow the Finance
Minister s determinations made under subclauses
11(1) and (2) now resides in section 42
of Legislative Instruments Act 2003. The procedures for
disallowance remain the same. The final difference is that the
Finance Minister is no longer obliged to give Parliament details of
the increases in departmental funding under clauses 12 and
13. Presumably this is because these determinations are
now classed as legislative instruments and thus must be registered
to have effect. Registration will mean that the determinations are
on the public record and thus accessible by Parliamentarians.
- The third is the Appropriation (Parliamentary Departments) Bill
20 May 2005
Bills Digest Service
Information and Research Services
This paper has been prepared to support the work of the
Australian Parliament using information available at the time of
production. The views expressed do not reflect an official position
of the Information and Research Service, nor do they constitute
professional legal opinion.
IRS staff are available to discuss the paper's
contents with Senators and Members and their staff but not with
members of the public.
© Commonwealth of Australia 2005
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
Published by the Parliamentary Library, 2005.
Back to top