Bills Digest no. 137 2005–06
Appropriation Bill (No. 5) 2005–2006
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 Bill (No. 5) 2005 06
appropriates funds for the ordinary annual services of
government
Date introduced: 9 May 2006
House: House of
Representatives
Portfolio: Finance and Administration
Commencement: Day of Royal Assent
Appropriation Bill (No. 5) 2005 06 appropriates funds for the
ordinary annual services of government.
Appropriation Bill (No. 6) 2005 06 appropriates funds for the
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monies may be withdrawn from the Consolidated Revenue Fund except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:
- special appropriations, or
- six (usually) annual appropriation acts.
Special appropriations which account of about 75 per cent of
spending are Acts that provide money for particular purposes. For
example, age pensions, disability support pensions and the Newstart
Allowance are paid under the Social Security (Administration)
Act 1999, while the Family Tax Benefits A and B are paid under
A New Tax System (Family Assistance) (Administration) Act
1999.
There are usually six annual appropriation bills. Three
Appropriation Bill (No. 1), Appropriation Bill (No. 2) and
Appropriation (Parliamentary Departments) Bill (No. 1) are
introduced with the Budget. Appropriation Bill (No. 1) appropriates
funds for the ordinary annual services of the government while
Appropriation Bill (No. 2) appropriates funds for other annual
services. Appropriation (Parliamentary Departments) Bill (No. 1)
appropriates funds for the Parliamentary departments.
Section 53 of the Constitution provides that the Senate may not
amend laws appropriating money for the ordinary annual services,
while section 54 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. There is a separate
Bill for the Parliamentary departments because the services they
provide are not considered to be either ordinary or 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 Bills appropriate funds to departmental outputs and
administered expenses. Departmental outputs are expenses that
agencies control. Examples are salaries and other day-to-day
operating expenses. Administered expenses are those that agencies
administer on the Government s behalf. The examples of special
appropriations above are administered expenses.
Departmental outputs and administered expenses contribute to
outcomes. They are the results or consequences for the community
that the Government wishes to achieve.
As noted, there are usually six annual appropriation bills of
which three are introduced when the Budget is brought down.
However, funding requirements often change after the Budget is
brought down. Governments make new policy commitments which have to
be funded. Agencies reassess their requirements and, if necessary,
submit requests for additional funding. The Government may agree to
additional funding if the amounts in the first three Appropriation
Acts are inadequate. The process whereby additional funds are
provided is called additional estimates and begins around November.
The approved additional estimates are normally incorporated into
three appropriation bills, which are introduced in the spring
sitting of Parliament. They are Appropriation Bill (No. 3) for
ordinary annual services, Appropriation Bill (No. 4) for other
annual services, and Appropriation (Parliamentary Departments) Bill
(No. 2) for the Parliamentary departments.
Appropriation Bill (No. 5) 2005 06 and Appropriation Bill (No.
6) 2005 06 are unusual in that they are supplementary to the usual
additional estimates bills. However, they are not unusual in that
they are, to all intents and purposes, the same as the usual
additional estimates bills. Appropriation Bill (No. 5) 2005 06
appropriates additional money for ordinary annual services while
Appropriation Bill (No. 6) 2005 06 appropriates money for other
annual services.
The data in the Bills are aggregated. Additional information can
be found in Portfolio Supplementary Additional Estimates
Statements.
The amount available for agencies spending on departmental and
administered items is specified in schedules. The total specified
in Schedule 1 of Appropriation Bill (No. 5) is $1
336 450 000, while the total specified in Schedule
2 of Appropriation Bill (No. 6) is $2 289 288
000.
Basic appropriations are provided for in Part 2
of the Bill. Clauses 7 and 8 provide for
appropriations for departmental items and administered items
respectively. Specific amounts are outlined in Schedule
1 and include:
- additional funding to the Department of Agriculture, Fisheries
and Forestry to enable a payment of $500 million to the
Murray-Darling Basin Commission in 2005-06
- an additional $310.4 million to fund a coordinated package of
measures to assist those adversely affected by Tropical Cyclone
Larry, including:
- $97 million to the Department of Families, Community Services
and Indigenous Affairs to provide support in the form of ex-gratia
payments to individuals and families, a one-off diesel and petrol
subsidy program to assist businesses, including farmers, and a
one-off program of income support payments
- $86.9 million in wage subsidy payments to businesses and
farmers affected by the cyclone, and
- an additional $126.5 million in grants to affected businesses
to assist with restocking, replanting, re-establishment and
clean-up
- grants totalling $265 million to a number of medical research
facilities, including $50 million each to the Walter and Eliza Hall
Institute of Medical Research and the John Curtin School of Medical
Research at the Australian National University and $165 million to
a number of other medical research facilities for a variety of
development and expansion projects, including $37 million to the
Howard Florey Institute
- an additional $243 million to the Department of Transport and
Regional Services to enable a $270 million payment to be made to
the Australian Rail Track Corporation to assist with investment in
Australia s interstate rail network, including the upgrading of the
North-South corridor
- contributions totalling $87 million to universities, including
$75 million to the Australian National University for general
capital works, subject to the university also contributing
$50 million of its own resources; $12 million will be provided
to the University of Wollongong to expand the Centre of
Transnational Crime Prevention; and a one-off contribution of $23
million to support the establishment of new medical schools in
Victoria
- an additional $19.5 million financial assistance to support
primary producers in regions that have been declared eligible for
exceptional circumstances assistance and those in regions that have
been declared eligible for interim income support.
- a $10 million contribution to the construction cost of a
non-government, community managed boarding college to deliver
education and related services to Indigenous high school students
on the Tiwi Islands, and
- grants to sporting facilities, including $15 million towards
the establishment of the South Australian State Aquatic Centre, $15
million to the Melbourne Cricket Ground to support the
establishment of an Australian sports museum; and $9.6 million
toward upgrade of Toyota Park, home of the Cronulla Sharks Rugby
League Club, to enhance spectator safety and security and improve
disabled access.(2)
Clause 9 deals with reduction of appropriations
upon request . In this context, it is important to distinguish
between the processes for departmental appropriations and annual
administered appropriations. In short:
- departmental appropriations do not lapse at the end of the
financial year. They therefore remain legally valid until spent.
The unspent balances of all departmental appropriations remain
available across all financial years unless the Finance Minister
withdraws drawing rights
- annual administered appropriations are determined by the
Finance Minister. If the amount determined is less than the
original appropriation, the difference lapses.
This has been explained more fully thus:
The annual appropriations acts are not expressed
in terms of a particular financial year and so do not automatically
lapse. [ ] Amounts appropriated for departmental expenses and for
non-operating costs can be subject to a lapsing process first
introduced in the additional estimates appropriations bills for
2003-2004. Under this process, on request in writing from a
responsible minister for an agency, the Finance Minister may issue
a determination to reduce the agency s departmental expense or
non-operating costs appropriation. Requests for amounts to be
lapsed may arise, for example, because the appropriation is no
longer required. Until the Finance Minister issues a determination
under this process, moneys appropriated for departmental expenses
and non-operating costs may be issued from the CRF as required.
[ ]
Appropriations for administered expenses are
subject to a determination by the Finance Minister on the amounts
to be issued. The effect of that determination is to prevent any
part of the appropriation that has not been expensed in the year
from being issued from the CRF. By convention the Finance Minister
issues determinations in relation to administered expenses
appropriations following the completion of each financial
year.(3)
Clause 9 gives effect to the intention to lapse unspent
departmental expenses.
Basic appropriations are provided for in Part 2
of the Bill. Clauses 7 and 8
provide for appropriations for departmental items and administered
items respectively. Specific amounts are outlined in
schedule 2. The major item is additional funding
to the Department of Transport and Regional Services to enable a
total payment of $1.759 billion for a range of highway projects of
which $1.741 billion was allocated in the 2006 07 Budget.
(4)
Clause 11: Reduction of appropriations upon
request . This clause is identical in wording to clause 9 in
Appropriation Bill (No. 5) 2005 06 except that whereas clause 9
refers to reducing a departmental item [sub-clauses 9(1) and 9(2)],
clause 11 refers to reducing an administered assets and liabilities
item or an other departmental item [sub-clauses 11(1) and
11(2)].
- This section is drawn from previous work by Richard Webb, of
the Economics, Commerce and Industrial Relations Section,
Parliamentary Library.
- Mr Gary Nairn, MP Secretary to the Minister for Finance and
Administration, Second reading speech: Appropriation Bill (No.5)
2005-2006 , House of Representatives, Debates, 9 May
2006, p. 43.
- Agency Resourcing 2006-07, Budget Paper No. 4, p. 6.
- Budget Measures 2006-07, Budget Paper No. 2, p. 317.
Mary Anne Neilsen
Law and Bills Digest
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.
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contents with Senators and Members and their staff but not with
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ISSN 1328-8091
© Commonwealth of Australia 2006
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Published by the Parliamentary Library, 2006.
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