Bills Digest No. 25, 2005–06
Appropriation (Tsunami Financial Assistance) Bill
2004-2005
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
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage
History
Appropriation (Tsunami Financial
Assistance and Australia-Indonesia Partnership)
Bill
2004-2005
Appropriation (Tsunami
Financial Assistance) Bill 2004-2005
Date
Introduced: 9 March
2005
House: House of
Representatives
Portfolio: Finance and Administration
Commencement: 22
March 2005, on receipt of Royal Assent
The Bills appropriate
money to fund the Federal Government s response to the tsunami in
the Indian Ocean on 26 December 2004.
The Bills were passed by Parliament on 15
March 2005.
On 26 December 2004 a severe earthquake in the
ocean off the coast of northern Sumatra caused tsunamis that
devastated communities in neighbouring countries and other
countries in the Indian Ocean. The earthquake measured 9.0 on the
Richter Scale, the world s most severe in 40 years. The tsunamis
resulted in a disaster of extraordinary proportions. The death toll
is now put at more than 225,000 (United Nations and media
estimates). The casualty list continues to grow and it is
acknowledged than an exact death toll will never be known. The
United Nations estimates that the tsunamis displaced one million
people and deprived five million of basic
services.(1)
Indonesia was particularly hard hit by the
tsunami, with over 124,000 people confirmed dead and over 111,000
missing, presumed dead.(2)
The Appropriation (Tsunami Financial
Assistance and Australia-Indonesia Partnership) Bill 2004-2005
establishes the Australia-Indonesia Partnership for Reconstruction
and Development (AIPRD), a five-year program comprising two
components:(3)
-
$500 million in grant funding, and
-
up to $500 million in loans for reconstruction and
development.
The Appropriation (Tsunami Financial Assistance)
Bill 2004-2005 provides approximately $130 million in
appropriations for Government agencies (primarily AusAID and the
Department of Defence) to replace money diverted from current
programs to fund the tsunami relief and recovery work of those
agencies. The Bill also contains an appropriation for the purposes
of AIPRD.(4)
On 5 January 2005, Prime Minister Howard
announced a $1 billion contribution to a newly formed
Australia-Indonesia Partnership for Reconstruction and Development
(AIPRD). These funds would be in addition to Australia s existing
development cooperation program and would bring Australia s
commitment to Indonesia to a total of $1.8 billion over five years
. The Prime Minister called it an historic step in
Australia-Indonesia relations the single largest aid contribution
ever made by Australia, focused on the long-term and founded in
partnership .(5)
All opposition parties have expressed their
support for the Government s $1 billion aid package to
Indonesia.(6)
However, while the quantum of the
appropriation is supported by the opposition and minor parties,
there were concerns regarding the effective expenditure of the
money and how decisions about funding were to be
made.(7) A further issue was the provision of
approximately half of the aid as a loan, rather than as a
straight-out donation.(8)
Following the announcement of AIPRD, one issue
of concern was that the administration of the aid package would be
such that contracts for the five-year program would be awarded
exclusively to Australian and New Zealand companies, in effect
putting in place a package of boomerang aid.(9)
In March 2005, the first meeting of the Joint
Commission for AIPRD was held in Canberra. At that meeting there
was agreement on the following:(10)
-
the arrangements under AIPRD to guide priority setting and
decision making, to ensure joint management and to govern tendering
and contracting
-
the terms and conditions for the $500 million loan
program
-
that work would begin immediately on a $50 million Aceh
Rehabilitation Program , which would include assistance to renovate
the Zainoel Abidin Hospital in Banda Aceh and rebuild the health
workforce, provide essential education equipment and teacher
training, and help restore essential government services to
Aceh
-
development of a $10 million program to strengthen Indonesia s
disaster management and response systems and build a closer
partnership between Indonesia s disaster coordination authority and
Emergency Management Australia
-
a $5 million package of assistance measures to address needs
arising from the recent earthquakes in Alor and Nabire
-
a $50 million five year program to assist Indonesia in economic,
financial and public-sector management, through the exchange of
skills and expertise between Australian and Indonesian Government
agencies.
Recent media reports on the progress of the AIPRD
made the following comments:(11)
-
$10 million of the $1 billion package has been spent
-
AIPRD officials conceded they may have difficulty
spending the entire amount of the package
-
Australia s efforts are focussed on the smaller-scale projects
such as health, education and governance programs.
-
Clause 6 sets out the total
appropriation in the Bill: $1,001,526,000.
Clause 7 provides that for
administered items (that is, the amounts set out in Schedule 1 as
New Administered Expenses ) the Finance Minister may issue from the
Consolidated Revenue Fund amounts that do not exceed in total, the
lesser of:
-
the amount listed in the Schedule to the Bill, and
-
the amount determined by the Finance Minister in relation to the
item, having regard to the expenses incurred that year in relation
to that item.
Subclause 7(2) provides that
where money is appropriated from the Consolidated Revenue Fund for
an administered item, the money can only be used for activities
which have the purpose of contributing to, or achieving, that
outcome.
Clause 8 deals with the
administered assets and liabilities items (that is, an amount
listed in Schedule 1 in relation to an entity opposite the heading
Administered Assets and Liabilities ). Subclause
8(1) provides that for administered assets and liabilities
the Finance Minister may issue from the Consolidated Revenue Fund
amounts with a total not exceeding the amount in the Schedule to
the Bill. Subclause 8(2) provides that where money
is appropriated from the Consolidated Revenue Fund for an
administered assets and liabilities item, the money can only be
used for activities which have the purpose of contributing to, or
achieving, that outcome.
Clause 9 provides for
appropriations in relation to other departmental items
(effectively, amounts in Schedule 1 of the Bill listed as Equity
Injections ).
Clause 10 sets out the
procedures for the Finance Minister to reduce administered
assets
and liabilities items and other departmental item
appropriations on request by a Minister.
Clause 11 provides for
appropriations additional to the amounts set out in the Bill. In
order for the provisions of clause 11 to apply, the Finance
Minister must be satisfied that:
-
there is an urgent need for expenditure that is either not
provided for, or insufficiently provided for in Schedule 1 of the
Bill, and
-
the additional expenditure is either not provided for, or
insufficiently provided for,:
-
because of an erroneous omission or understatement, or
-
because additional expenditure was unforeseen until after the
last day on which it was practicable to provide for it in this Bill
before it was introduced into the House of Representatives.
Subclause 11(3) limits the
total amounts determined by the Finance Minister under clause 11,
and under sections 13 of the Appropriation Act (No. 2)
2004-2005 and the Appropriation Act (No. 4)
2004-2005(12) to $215
million.
Schedule 1 provides for the
following appropriations:
-
Department of Defence: $488,000 for equity injections,
-
Health Insurance Commission: $94,000 for equity injections,
and
-
Australian Agency for International Development:
-
$1,000,830,000 to advance Australia s national interest by
implementing a partnership between Australia and Indonesia for
reconstruction and development, and
-
$114,000 for administered assets and liabilities.
Clause 6 sets out the total
appropriation in the Bill: $131,375,000.
Clause
7 provides that for departmental items (that is, the
amounts set out in Schedule 1 as Departmental Outputs ), the
Finance Minister may issue from the Consolidated Revenue Fund
amounts that do not exceed that listed in the Schedule to the Bill,
and that such funds must be used for the departmental expenses of
the relevant entity.
Clause 8 provides that for
administered items (that is, the amounts set out in Schedule 1 as
Administered Expenses ) the Finance Minister may issue from the
Consolidated Revenue Fund amounts that do not exceed in total, the
lesser of:
-
the amount listed in the Schedule to the Bill, and
-
the amount determined by the Finance Minister in relation
to the item, having regard to the expenses incurred that year in
relation to that item.
Subclause 8(2) provides that
where money is appropriated from the Consolidated Revenue Fund for
an administered item, the money can only be used for activities
which have the purpose of contributing to, or achieving, that
outcome.
Clause 9 sets out the procedures
for the Finance Minister to reduce departmental item appropriations
on request by a Minister.
Clause 10 provides for
appropriations additional to the amounts set out in the Bill. In
order for the provisions of clause 11 to apply, the Finance
Minister must be satisfied that:
-
there is an urgent need for expenditure that is either not
provided for, or insufficiently provided for in Schedule 1 of the
Bill, and
-
the additional expenditure is either not provided for, or
insufficiently provided for:
-
because of an erroneous omission or understatement, or
-
because additional expenditure was unforeseen until after the
last day on which it was practicable to provide for it in this Bill
before it was introduced into the House of Representatives.
Subclause 10(3) limits the
total amounts determined by the Finance Minister under clause 11,
and under sections 12 of the Appropriation Act (No. 1)
2004-2005 and the Appropriation Act (No. 3)
2004-2005(13) to $175
million.
Schedule 1 provides for the
following appropriations:
-
Attorney-General s Department: $20,000 for coordinated federal
criminal justice, security and emergency management activity, for a
safer Australia
-
Australian Federal Police: $4,920,000 for the investigation and
prevention of crime against the Commonwealth and protection of
Commonwealth interests in Australia and overseas
-
CrimTrac: $643,000 for coordinated national policing information
systems for a safer Australia
-
Department of Defence: $50,453,000 for command of operations in
defence of Australia and its interests
-
Department of Family and Community Services: $2,446,000 for
services and assistance that encourage communities to be
self-reliant and to connect with their members and that promote
partnerships between business, communities and government
-
Health Insurance Commission: $409,000 for improving
Australia s health through payments and information
-
Department of Foreign Affairs:
-
$277,000 to protect and advance Australia s national interests
through contributions to international security, national economic
and trade performance and global co-operation, and
-
$17,047,000 to keep Australians informed about and to provide
access to consular and passport services in Australia and
overseas
-
Australian Agency for International Development:
-
$50,640,000 to advance Australia s national interests by
assistance to developing countries to reduce poverty and achieve
sustainable development, and
-
$1,632,000 to advance Australia s national interest by
implementing a partnership between Australia and Indonesia for
reconstruction and development.
-
Department of Health and Ageing:
-
$144,000 for promoting and protecting the health of all
Australians and minimising the incidence of preventable mortality,
illness, injury and disability, and
-
$2,392,000 to provide access through Medicare to cost-effective
medical services, medicines and acute health care for all
Australians
-
National Blood Authority: $352,000 for improved quality,
integration and effectiveness of health care.
While the Bills provide for generous
appropriations to provide financial aid following the Boxing Day
tsunami, it will be necessary to follow the progress of the AIPRD
to ensure that the funds are spent effectively and
appropriately.
-
AusAID Hot Topics, Indian Ocean Disaster: Background to the
Indian Ocean Disaster , AusAID website, available at
http://www.ausaid.gov.au/hottopics/topic.cfm?Id=9562_2054_7529_7688_4864#history
(accessed 8 August 2005).
-
Hon. Peter Costello, Treasurer, Second reading speech:
Appropriation (Tsunami Financial Assistance and Australia-Indonesia
Partnership) Bill 2004-2005 , House of Representatives,
Debates, 9 March 2005, p. 1.
-
Ibid., p. 2.
-
Hon. Peter Costello (Treasurer), Second reading speech:
Appropriation (Tsunami Financial Assistance) Bill 2004-2005 , House
of Representatives, Debates, 9 March 2005, p.3.
-
Hon. John Howard (Prime Minister), Australia-Indonesia
Partnership for Reconstruction and Development, media release,
5 January 2005, available at: http://www.pm.gov.au/news/media_releases/media_Release1195.html,
accessed on 9 August 2005.
-
See for example Kevin Rudd, Second reading speech: Appropriation
(Tsunami Financial Assistance and Australia-Indonesia Partnership)
Bill 2004-2005 and Appropriation (Tsunami Financial Assistance)
Bill 2004-2005 , House of Representatives, Debates, 10
March 2005, p. 24; Senator Andrew Bartlett, Second reading speech:
Appropriation (Tsunami Financial Assistance and Australia-Indonesia
Partnership) Bill 2004-2005 and Appropriation (Tsunami Financial
Assistance) Bill 2004-2005 , Senate, Debates, 14 March
2005, p. 115; Senator Kerry Nettle, Second reading speech:
Appropriation (Tsunami Financial Assistance and Australia-Indonesia
Partnership) Bill 2004-2005 and Appropriation (Tsunami Financial
Assistance) Bill 2004-2005 , Senate, Debates, 15 March
2005, p. 2.
-
See Kevin Rudd, ibid., p. 25.
-
See for example, Senator Kerry Nettle, op. cit., p. 3.
-
For more information on this point see Dr Ravi Tomar, Australia
s $1 billion tsunami-related aid package to Indonesia: progress on
the eve of the March ministerial meetings , Research Note,
no. 36, Parliamentary Library, Canberra, 2004 05, available at:
http://www.aph.gov.au/Library/pubs/rn/2004-05/05rn36.pdf,
accessed on 9 August 2005.
-
Hon. A, Downer (Minister for Foreign Affairs), Australia
Indonesia Partnership for Reconstruction and Development Inaugural
Joint Commission Meeting, joint media release, Canberra, 17
March 2005, available at
http://www.foreignminister.gov.au/releases/2005/jointpr170305_aus-ind.html,
accessed on 9 August 2005.
-
John Breusch, Downer backs wave-aid , Australian Financial
Review, 23 June 2005, p. 7.
-
Sections 13 of the Appropriation Act (No. 2)
2004-2005 and the Appropriation Act (No. 4)
2004-2005 provide for advances by the Finance
Minister for unforeseen circumstances.
-
Sections 12 of the Appropriation Act (No. 1)
2004-2005 and the Appropriation Act (No. 3)
2004-2005 provide for advances by the Finance
Minister for unforeseen circumstances.
Ann Palmer
10 August 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.
ISSN 1328-8091
© 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
duties.
Published by the Parliamentary Library, 2005.
Back to top