Bills Digest no. 151 2006–07
Appropriation Bill
(No. 1) 2007-08
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
Financial implications
Main Provisions
Endnotes
Contact Officer & Copyright Details
Passage History
Appropriation Bill (No. 1)
2007-08
Date introduced:
8 May 2007
House: House of Representatives
Portfolio: Finance and
Administration
Commencement:
On Royal
Assent
To appropriate
approximately $58.986 billion for the ordinary annual services of
the Government.
Section 83 of the Constitution provides that
no monies may be withdrawn from the Consolidated Revenue Fund (CRF)
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 spending authorised by Acts for
particular purposes. Examples are age pensions, carer payments, and
the seniors concession allowance paid under the Social Security
(Administration) Act 1999, and the Family Tax Benefits A and B
paid under A New Tax System (Family Assistance)
(Administration) Act 1999.
Appropriation Bill (No. 1) 2007-2008 (the
Bill) appropriates funds for the ordinary annual services of the
Government . By comparison Appropriation Bill (No. 2) 2007-2008
appropriates funds for other annual services. 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 has been updated to take account of
the adoption of accrual budgeting).
The amounts allocated to each portfolio and
the breakdown between departmental outputs and administered
expenses, are set out in Schedule 1.
Departmental outputs are expenses that
portfolio departments and agencies control. They are essentially
the cost of running agencies, for example, salaries and other
day-to-day operating expenses. The bulk of appropriations in the
Bill are for departmental expenses. Administered expenses are those
that agencies administer on the Government s behalf. While most
administered expenses are funded through special appropriations,
some are funded through the Bill. The regional partnerships program
and the Bass Strait Passenger Vehicle Equalisation Scheme are
examples of administered expenses funded through the
Bill.(1)
Departmental outputs and administered expenses
contribute to outcomes. They are the results or consequences for
the community that the Government wishes to achieve. For
example, under the Attorney-General s portfolio, the Bill
appropriates funds for the Federal Magistrates Court of Australia
under Outcome 1 which is:
To provide the Australian community with a simple
and accessible forum for the resolution of less complex disputes
within the jurisdiction of the Federal Magistrates Court of
Australia.(2)
Section 53 of the Constitution provides that
the Senate may not amend proposed laws appropriating revenue or
moneys for the ordinary annual services of the Government. The
Senate may, however, return to the House of Representatives any
such proposed laws requesting, by message, the omission or
amendment of any items or provisions therein.
The total amount appropriated from
consolidated revenue under the Bill is more than $58.986 billion
(compared with about $53.335 billion in Appropriation Act (No.
1) 2006-2007). As usual, by far the largest single
portfolio appropriation is Defence with some $19.721 billion.
Whilst aggregate appropriations for the various portfolios and
agencies within each portfolio are contained in Schedule
1 of the Bill, more detailed information for all
portfolios can found in their respective Portfolio Budget
Statements at http://www.budget.gov.au/2007-08/pbs/html/index.htm.
The provisions of the Bill are generally
identical to those in Appropriation Act (No. 1) 2006-07.
The main difference is that the Bill drops the section relating to
adjustments to departmental items.
Section 11 of Appropriation Act (No. 1)
2006-07 allowed the Finance Minister to increase, by
determination, spending on departmental items. The maximum allowed
was $20 million. Such determinations were legislative instruments
but were not disallowable under the Legislative Instruments Act
2003. The Bill, by removing this section, eliminates the power
of the Finance Minister to increase departmental appropriations by
determination. The practical effect is that the amount authorised
for departmental appropriations is capped at the amounts specified
in the Bill. The minister, in the second reading speech for
Appropriation Bill (No. 2) 2007-08, gave the following as the
reason for this change:
We have also taken the opportunity to remove a
redundant provision from appropriation bills Nos. 1 and 2 and the
parliamentary departments appropriation bill. The Departmental
Items Adjustments and other similar provisions will no longer be
required in the annual appropriation bills. These sections were
originally included to smooth the transition to the accrual
arrangements implemented in 1999-2000. They have not been exercised
for some five years and are no longer required.(3)
However, the power to
make some supplementation remains. Under proposed section
12, the Finance Minister may increase the total amount
appropriated in Schedule 1 by up to a total of
$175 million in urgent cases where the need for an additional
amount was unforeseen or not provided for due to an erroneous
omission or understatement . A determination by the Finance
Minister increasing the appropriation is a legislative instrument,
but is not disallowable under the Legislative Instruments Act
2003: proposed subsection 12(4).
-
Department of Transport and Regional Services, Portfolio Budget
Statements 2007-08.
-
Appropriation Bill (No. 1) 2007-08, p. 32.
-
Hon G Nairn, Special Minister of State, Second reading speech:
Appropriation Bill (No. 2) 2007 08 , Votes and
Proceedings, 8 May 2007, p. 60.
Richard Webb
18 May 2007
Bills Digest Service
Parliamentary Library
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ISSN 1328-8091
© Commonwealth of Australia 2007
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Published by the Parliamentary Library, 2007.
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