Appropriation Bill (No. 4) 2011–2012

Bills Digest no. 109 2011–12

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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.

Bernard Pulle
Economics Section
14 February 2012

Contents
Purpose
Background
Financial implications

 

 


Date introduced:  8 February 2012
House:  House of Representatives
Portfolio:  Finance and Deregulation
Commencement:  On the day this Act receives the Royal Assent

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill's home page, or through http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation. When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at http://www.comlaw.gov.au/.

can be found on the Bill's home page, or through . When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at .

 

Purpose

To appropriate about $341 million for the non-ordinary (‘other’) annual services of government.

Background[1]

Additional Estimates

Appropriation Bill (No. 1) is introduced with the Budget and appropriates funds for the ‘ordinary annual services of the Government’. Appropriation Bill (No. 2)—which is also introduced with the Budget—appropriates funds for other annual services. A third Appropriation Bill—Appropriation (Parliamentary Departments) Bill (No. 1)—funds the parliamentary departments.

Funding requirements usually change after the Budget is brought down. The Government may seek additional funding if the amounts in the three Budget Appropriation Acts are inadequate and so has to seek parliamentary approval for additional expenditure. The process whereby additional funds are provided is called ‘Additional Estimates’ and usually begins around November of the Budget year. The approved additional funding is incorporated into Appropriation Bills (No. 3) and (No. 4) and Appropriation (Parliamentary Departments) Bill (No. 2). These Bills are the counterparts of Appropriation Bills (No. 1) and (No. 2) and Appropriation (Parliamentary Departments) Bill (No. 1) respectively.

Constitutional aspects

Annual appropriations

Section 83 of the Australian Constitution provides that no money may be withdrawn from the Treasury except ‘under appropriation made by law’. Acts authorising expenditure are either:

  • special appropriations, or
  • one of (usually) six annual appropriation Acts.

Special appropriations—which account for more than 80 per cent of expenditure—are expenditure authorised by Acts for particular purposes. An example of a special appropriation is the Tax Benefits A and B paid under A New Tax System (Family Assistance) (Administration) Act 1999. The remainder of expenditure is funded by annual appropriations. Appropriation Bill (No. 4) 2010-2011 (the Bill) is an annual appropriation Bill.

Ordinary and other annual services

Section 54 of the Australian Constitution requires that there be a separate law appropriating funds for ordinary annual services.[2] There are therefore separate annual appropriation 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.[3]

Other annual services

Under the Bill, other services fall into three categories:

  • administered expenses in the form of some payments to the states, territories and local governments, which are paid under section 96 of the Australian Constitution
  • administered expenses for new outcomes, and
  • ‘non-operating’ costs (sometimes called ‘capital’ costs).

Payments to the states, territories and local governments

How Federal Government payments are made for the states, territories and local governments is somewhat confusing. First, a distinction needs to be made between payments made ‘to’ the states and those made ‘through’ the states. Payments ‘to’ the states are funds that the states use for their

own purposes, for example, government schools and hospitals. Payments ‘to’ the states are the largest component of payments for the states, and the great bulk of these are made under the Federal Financial Relations Act 2009. Payments made ‘through’ the states are funds that the states pass on to other bodies, for example, ‘on-going’ grants for non-government schools (see below).

Payments to local governments fall into two categories: financial assistance grants, and grants made directly to local governments. Financial assistance grants for local governments are paid under the Local Government (Financial Assistance) Act 1995. An example of a grant paid directly to local governments is payments under the roads to recovery program.

In summary, payments for the states have four components:

  • payments ‘to’ the states for their own-purposes
  • payments ‘through’ the states
  • financial assistance grants for local governments, and
  • payments made directly to local governments.

Appropriation Acts for ‘other’ services (such as those proposed under the Bill) appropriate funds for payments made directly to local governments. The Bill also appropriates some payments for non‑government schools. Payments for non-government schools fall into two categories: ‘on-going’ and ‘other’. ‘On-going’ non-government schools payments, that are classified as made ‘through’ the states, are made under the Schools Assistance Act 2008. ‘Other’ non-government schools payments are made under the Appropriation Acts for ‘other’ services.

New administered outcomes

By their nature, payments for new administered outcomes cannot be classified as ordinary annual services and so are appropriated as an ‘other’ service. There are no new administered outcomes in the Bill.

Non-operating costs

Non-operating costs are:

  • ‘equity injections’ into agencies to fund, for example, major investment in new assets to produce departmental outputs
  • ‘administered assets and liabilities’ appropriations which fund, for example, the purchase of new administered assets and the reduction/extinguishment of administered liabilities, and
  • payments to bodies established under the Commonwealth Authorities and Companies Act 1997 (CAC Act bodies) for their non-operating costs.

Terms used in the Bill

Departmental and administered expenses

Departmental expenses (outputs) are the costs incurred in running agencies, for example, salaries, supplies of goods and services, and other day-to-day operating expenses. Administered expenses are the costs of providing the programs that agencies administer. Most administered expenses are funded through special appropriations but some are funded through the Appropriation Bills. The Bass Strait Passenger Vehicle Equalisation Scheme is an example of an administered expense funded as an ordinary annual service.

Reduction processes

Budget allocations can be reduced. It is sometimes the case that an appropriation for a departmental expense exceeds what is needed. However, departmental items do not automatically lapse if they are not spent. In these circumstances, a ‘reduction process’ to extinguish the unspent amount is available. Under this process, on request in writing from a minister, the Finance Minister may issue a determination to reduce the agency’s departmental expenses appropriation. In short, the excess of the amount allocated over the amount expended can be extinguished.

Appropriations for administered expenses are also subject to an annual process to extinguish amounts that are not required. The amount identified as expenditure on administered expenses in agencies’ financial statements—as published in their annual reports—is the basis for this process. In short, the amount of the reduction is the difference between the amount appropriated and the amount spent as shown in the agency’s financial statements.

A process exists for reducing CAC Act body payments (see below). This process is almost identical to that for departmental items.

Outcomes and programs

Departmental expenses and administered expenses contribute to outcomes. Outcomes are the results or consequences for the community that the Government wishes to achieve. An example of an outcome, in the Attorney-General’s portfolio, is:

A just and secure society through the maintenance and improvement of Australia’s law and justice framework and its national security and emergency management system.[4] 

Programs contribute to outcomes. For example, program 1.3 ‘justice services’ contributes to the above outcome.

Advance to the Finance Minister

The Advance to the Finance Minister (AFM) provides flexibility in the Budget process by authorising the Finance Minister to expend money when the Finance Minister is satisfied that there is an urgent need for expenditure during the financial year but for which there is not a sufficient appropriation. The Finance Minister can expend money from the AFM only if the proposed expenditure meets certain criteria, namely, there is an urgent need for the expenditure that is not provided for, or is insufficiently provided for, because of an omission or understatement or because of unforeseen circumstances.

Portfolio Budget Statements

When the Budget is brought down, the Government releases Portfolio Budget Statements.[5] They contain, amongst other things, information on all sources of funding for an agency—including annual Appropriation Bills—and how the agency proposes to spend those funds.

Proposed section 3 of the Bill provides that ‘Portfolio Budget Statements’ means the Portfolio Budget Statements that were tabled in the Senate or the House of Representatives in relation to the Bill for the Appropriation Act (No. 1) 2011-2012 and the Bill for the Appropriation Act (No. 2) 2011‑2012.

Portfolio Additional Estimates Statements

Clause 3 of the Bill also provides that ‘Portfolio Statements’ means the Portfolio Budget Statements and the ‘Portfolio Additional Estimates Statements’.

Clause 3 of the Bill further provides that ‘Portfolio Additional Estimates Statements’ (PAES) means the Portfolio Additional Estimates Statements that were tabled in the Senate or the House of Representatives in relation to the Bill for this Act and the Bill for the Appropriation Act (No. 4) 2011‑2012.[6] Thus, PAESs are the counterparts of PBSs and contain explanations of the funding sought through the Additional Estimates Appropriation Bills.

However, unlike the PBS, the PAES summarise only the changes in resourcing by outcome since the Budget, that is, they update the resourcing for the agency. The PAES include new measures, summarise the changes by Appropriation Bill, and, where relevant, by Special Appropriation and Special Account.

Special appropriations (including standing appropriations) are an amount of money appropriated by a particular Act of Parliament for a specific purpose and number of years. For special appropriations the authority to withdraw funds from the Consolidated Revenue Fund does not generally cease at the end of the financial year. Standing appropriations are a sub‑category consisting of ongoing special appropriations— the amount appropriated will depend on circumstances specified in the legislation.

The PBS and the PAES are ‘relevant documents’ for the purposes of paragraph 15AB of the Acts Interpretation Act 1901 as provided in clause 4 of the Bill. This means that the PBS and PAES can be used to help interpret an Act.

CAC Act body

Proposed section 3 of the Bill provides that a ‘CAC Act body’ means a Commonwealth authority or a Commonwealth company within the meaning of the Commonwealth Authorities and Companies Act 1997 (CAC Act).

Examples of CAC Act bodies are the Australian War Memorial and the Australian Broadcasting Corporation. CAC Act bodies are legally and financially separate from the Commonwealth and so do not debit appropriations or make payments from the Consolidated Revenue Fund. Payments to CAC Act bodies used to be made ‘directly’ to the bodies. Since 2008–09, in recognition of the fact that CAC Act bodies are legally and financially separate, payments to CAC Act bodies have been made ‘indirectly’ through portfolio departments. For example, funding for the Australian Broadcasting Corporation and the Special Broadcasting Corporation are made through the Department of Broadband, Communications and the Digital Economy, this being the relevant portfolio department. The department then passes the funds to the CAC Act bodies.

Special Accounts

A Special Account is an appropriation mechanism that notionally sets aside an amount within the Consolidated Revenue Fund to be expended for specific purposes. The appropriation authority is section 20 or 21 of the Financial Management and Accountability Act 1997 (FMA Act). The type of appropriation provided by a Special Account is a special appropriation. The appropriation amount is limited up to the balance of the Special Account and this remains available until the Special Account is abolished. An example of a Special Account is that established for the Future Fund. A Special Account can be established by:

  • a legislative instrument made by the Finance Minister, under section 20 of the FMA Act or
  • an enabling Act, under section 21 of the FMA Act.

General drawing rights limits

Under the Financial Management and Accountability Act 1997 (FMA Act), no money can be paid from the Consolidated Revenue Fund without a valid drawing right. Drawing rights control payments from the Consolidated Revenue Fund and the use of appropriations. They allow conditions and limits to be set by the Finance Minister (or the Finance Minister’s delegate) in relation to those activities. The FMA Act also provides that an official or minister must not make a payment of money from the Consolidated Revenue Fund, or debit an appropriation, unless they are authorised by a valid drawing right. General drawing rights limits cap how much money can be spent from a particular year. General drawing rights do not appropriate funds.

Basis of policy commitment

In his second reading speech, the Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten MP, described the broad basis for the appropriations by this Bill, and the Appropriations Bill (No. 3) 2011-2012, as follows:

There are two additional estimates bills this year: Appropriation Bill (No. 3) and Appropriation Bill (No. 4).

The additional estimates bills seek appropriation authority from the parliament for the additional expenditure of money from the Consolidated Revenue Fund. These funds are sought in order to meet requirements that have arisen since the last budget as well as to take into account impacts on Australia’s economic and fiscal outlook that have arisen as a result of the European sovereign debt crisis and instability on the global financial markets. The total additional appropriation being sought through additional estimates bills 3 and 4 this year is a little over $3.1 billion.

The recent Mid-Year Economic and Fiscal Outlook identified several impacts on the Australian economy that have implications for Australia’s near-term outlook.

Since last year’s budget, the European sovereign debt crisis has had an increased impact on international growth and overall market stability. Despite the pressures this has placed on the Australian economic and fiscal outlook, Australia continues to outperform the developed world in economic growth, low unemployment, resources investment and strong public finances. The government remains on track to deliver a budget surplus in the 2012-13 financial year.[7]

Financial implications

The Bill appropriates about $341 million for other annual services of government for the financial year 2011-2012, compared with about $1.024 billion in Appropriation Act (No. 4) 2010-2011 for the previous financial year 2010-2011.

Key provisions

Part 2—Appropriation items

Clause 6—Summary of appropriations appropriates $314 102 000 for additional other annual services specified in Schedule 2.

Clause 7 deals with payments to the states, territories and local governments. Subclause 7(1) provides that where an amount is identified as a payment to the states, territories and local governments and the amount is for an agency outcome, the amount can be applied for the purpose of achieving that outcome. Subclause 7(2) provides that if the Portfolio Statements indicate that certain activities were intended to be for achieving a particular outcome, then expenditure on those activities is taken to be for the purpose of contributing to achieving the outcome.

Clause 8 deals with ‘administered items’. Subclause 8(1) provides that the amount identified for an administered item in an outcome can be used to contribute to achieving that outcome. The wording of subclause 8(2) is identical to that in subclause 7(2).

As noted above, administered assets and liabilities appropriations are a non-operating cost. Clause 9 deals with administered assets and liabilities items. Subclause 9(1) provides that the amount, identified for an agency’s administered assets and liabilities in the Schedules in various Appropriation Acts, may be applied to achieving any of the agency’s outcomes. The wording of subclause 9(2) is identical to that in subclauses 7(2) and 8(2).

As noted above, ‘other’ departmental non-operating appropriations comprise equity injections, loans and previous years’ outputs. Clause 10 authorises funding for departmental non-operating costs by providing that the amount specified in another departmental item for an Agency may be applied for the departmental expenditure of the Agency as a whole.

Clause 11 deals with ‘CAC Act body payments items’. Subclause 11(1) provides that an amount appropriated for a CAC Act body payment item may only be applied for payment to the CAC Act body named in the appropriation. Subclause 11(2) provides that if an Act provides that a CAC Act body must be paid amounts that are appropriated by the Parliament for the purposes of the body, and Schedule 2 contains a CAC Act body payment item for that body, then the body must be paid the full amount specified in the item. Schedule 2 shows the names of the CAC Act bodies and the amounts to be paid to each.

Part 3—Adjusting appropriation items

Clause 12 deals with adjustments to payments to the states, territories and local government, and to administered items. Subclause 12(1) provides that the amount by which payments to the states, territories and local government and for administered items can be reduced is the difference between what has been appropriated and what has been spent, the latter being the amount shown in agencies’ financial statements included in the annual report of the agency. However, paragraph 12(2)(a) gives the Finance Minister power to determine that subclause 12(1) does not apply or that subclause 12(1) applies as if the amount in the annual report were the amount that the Finance Minister determines (paragraph 12(2)(b)).

Subclause 13(1) enables the Prime Minister, the minister responsible for an agency, or the Chief Executive of the agency—where the Finance Minister is responsible for the agency—to seek a reduction in administered assets and liabilities and other departmental items. Subclause 13(2) empowers the Finance Minister to make a determination in response to the request. However, the determination cannot reduce the appropriation below zero (subclause 13(3)). Requests are not legislative instruments (subclause 13(6)). However, while the Finance Minister’s determinations are legislative instruments and are disallowable, the determinations are not subject to the sunsetting provisions of the Legislative Instruments Act 2003 (subclause 13(7)).

Clause 14 deals with reductions to CAC Act body payment items. The wording in clause 14 is almost the same as in clause 13. However, whereas a request can come from the Chief Executive of an agency for which the Finance Minister is responsible in the case of clause 13, a similar request must come from the Secretary of the Department in the case of CAC Act bodies (paragraph 14(1)(c)).

Subclause 14(6) confirms that a reduction can be made for a CAC Act body even though it has been allocated funds under subclause 11(2).

As noted above, the Advance to the Finance Minister (AFM) provides flexibility in the Budget process by authorising the Finance Minister to expend money, by determination, in certain circumstances. Subsection 15(3) of the Appropriation Act (No. 2) 2011-2012 provides that the total amount that can be determined under the AFM provision is $380 million.

Clause 15 deals with the AFM. Subclause 15(1) provides that if the Finance Minister has made a determination under subsection 15(2) of Appropriation Act (No. 2) 2011-2012 before the Bill commences—thereby changing an amount authorised under Appropriation Act (No. 2) 2011‑2012 then the determined amount is to be disregarded for the purposes of section 15(3) of the Appropriation Act (No. 2) 2011-2012 when the Bill commences. In other words, the effect of subclause 15(1) is to ensure that the amount of the AFM remains at $380 million and is not reduced by the amount of a determination. As the Note to subclause 15(1) states:

This means that, after the commencement of this Act, the Finance Minister has access to $xxx million under section 15 of the Appropriation Act (No. 2) 2011-2012, regardless of amounts that have already been determined under that section.

Subclause 15(2) is designed to ensure that the same item of expenditure is not authorised twice: once under the AFM and once under the Bill. Subclause 15(2) provides that if the Bill appropriates an amount for particular expenditure (paragraph 15(2)(a)) and if, before the Bill commences, the Finance Minister has determined an amount—the advanced amount—under section 15 of the Appropriation Act (No. 2) 2011-2012 for the expenditure, the amount the Bill appropriates is taken to be reduced (but not below nil) by the advanced amount. The Explanatory Memorandum contains the following example:

For example if the Bill provides $20 million for a program and an advanced amount of $5 million is determined by the Finance Minister under [Appropriation Act (No. 2) 2011-2012] for a particular payment under that program, then the amount appropriated by the Bill, once enacted, will be reduced by $5 million (i.e. appropriating only $15 million for the program).[8]

Part 4—General drawing rights limits

Section 16 of Appropriation Act (No. 2) 2011-2012 limited the amounts that can be paid in a financial year exclusive of GST — that is, general drawing rights limits—from the three funds established under the Nation-building Funds Act 2008, namely, the Building Australia Fund, the Education Investment Fund, and the Health and Hospitals Fund.

Section 16 also limited the amounts that can be paid for general purpose financial assistance to the states, territories and local government and national partnership payments to the states and territories under the Federal Financial Relations Act 2009. General purpose financial assistance for the states includes the GST and other payments, which the states can spend as they wish.

Clause 16General drawing rights limits, changes the limits on the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund in the manner described below.

Building Australia Fund – Increase in limit

Subclause 16(1) increases the limit on expenditure that could be drawn from the Building Australia Fund by $269 500 000 from $1 956 200 000 to $2 225 700 000.

Education Investment Fund – reduction in limit

Subclause 16(2) reduces the limit on the Education Investment Fund by $131 751 000 from $1 061 305 000 to $929 554 000.

Health and Hospitals Fund – increase in limit

Subclause 16(3) increases the limit on the Health and Hospitals Fund by $212 887 000 from $1 287 120 000 to $1 500 007 000.

As noted in the Assistant Treasurer’s second reading speech, these changes recognise adjustments in the timing of payments to better reflect project milestones and previously announced funding.

Part 5—Miscellaneous

Section 96 of the Australian Constitution allows Parliament to provide financial assistance to the states on such terms and conditions as the Parliament thinks fit. Clause 18—Conditions etc. applying to state, ACT, NT and local government items, seeks to ensure that payments made by the states, territories and local governments from financial assistance provided by the Commonwealth must accord with the conditions established by the Minister listed in Schedule 1 in relation to the relevant outcome.

Clause 19—Appropriation of the Consolidated Revenue Fund, provides that the Consolidated Revenue Fund is appropriated as necessary for the purposes of the proposed Act including the operation of the proposed Act as affected by the Financial Management and Accountability Act 1997.

As clause 2 provides that this Act commences on the day this Act receives the Royal Assent, the appropriations are made when the Royal Assent is given.

Schedule 1

Proposed Schedule 1 of the Bill confers on the ministers named, power to determine conditions under which any payments to or for the states, territories and local governments may be made, and the amounts and timing of those payments.

Schedule 2

Proposed Schedule 2 of the Bill on page 16 lists out the services for which money is proposed to be appropriated to various agencies and these details are shown below for ease of reference.

This list also has a page reference against each agency which should direct the reader to the page in Schedule 2 for an abstract of the proposed expenditure.

Schedule 2—Services for which money is appropriated

Note:      See sections 6 and 19.

Abstract

 

 

Page

Reference

Portfolio

Portfolio

$'000

Total

20

Attorney‑General’s

54 039

24

Broadband, Communications and the Digital Economy

6 996

27

Climate Change and Energy Efficiency

29 961

29

Defence

5 043

31

Education, Employment and Workplace Relations

37 832

33

Foreign Affairs and Trade

200

35

Human Services

6 781

37

Immigration and Citizenship

9 269

39

Industry, Innovation, Science, Research and Tertiary Education

54 041

43

Prime Minister and Cabinet

175

45

Regional Australia, Local Government, Arts and Sport

53 108

47

Sustainability, Environment, Water, Population and Communities

71 345

49

Treasury

12 312

 

Total

341 102

 

A summary of the proposed appropriations for 2011-2012 in bold figures, with the comparative Budget appropriations for 2011-2012 in italic figures, is given in a table on pages 18 and 19 of the Bill.

Further information, may be available in the Portfolio Additional Estimates Statements (PAES), and as indicated above may include new measures, summaries of the changes by Appropriation Bill, and, where relevant, by Special Appropriation and Special Account.

Information on some of the proposed expenditure may be also found in the Mid-Year Economic and Fiscal Outlook 2011-12, Appendix A.[9]

The Assistant Treasurer highlighted the following major expenditure proposals in the second reading speech to the Bill:

  • $53 million will be reappropriated to the Department of Regional Australia, Local Government, Arts and Sport to be directed to local governments and regional development. This reappropriation, in part, will be used to offset the amounts provided to the Department earlier in the year through the Advance to the Finance Minister mechanism
  • $29 million for capital funding for the establishment of the Clean Energy Regulator to administer the carbon pricing mechanism. This was indicated in the second reading speech for Appropriation Bill (No. 3) 2011-2012 and
  • he Department of Education, Employment and Workplace Relations. This is a result of a transfer of $50 million from Appropriation Act (No. 1) 2011-2012 for the Reward for Great Teachers program, offset by payments to government schools that have been transferred to the Department of the Treasury.

The Assistant Treasurer also stated that the Department of Industry, Innovation, Science, Research and Tertiary Education will provide a $25 million loan to Howe and Co. Pty Ltd and its parent company Howe Automotive Ltd. The loan is to be fully repaid over ten years with annual interest and principal payments.[10] The provision of this loan and its subsequent repayment have no impact on the Government’s fiscal balance but affect the composition of the Government’s assets.

Glossary

AEs

Additional Estimates

AFM

Advance to the Finance Minister

AI Act

Acts Interpretation Act 1901

CAC Act

Commonwealth Authorities and Companies Act 1997

CRF

Consolidated Revenue Fund

FMA Act

Financial Management and Accountability Act 1997

FMA Regulations

Financial Management and Accountability Regulations 1997

GST

Goods and Services Tax

LI Act

Legislative Instruments Act 2003

PAES

Portfolio Additional Estimates Statements

PBS

Portfolio Budget Statements

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2469.


[1].       The structure of the Appropriation Bill (No. 3) 2011-2012 and the Appropriation Bill (No. 4) 2011-2012 is very similar to the structure of the corresponding Appropriation Bill (No. 3) 2010-2011 and the Appropriation Bill (No. 4) 2010‑2011 respectively. The concepts and definitions that are covered in these Bills have not changed since Bills Digest, no. 66 of 21 February 2011 for the Appropriation Bill (No. 3) 2010-2011 and the Bills Digest, no. 68 of 23 February 2011 for the Appropriation Bill (No. 4) 2010-2011 were written by my colleague R Webb. The author acknowledges that the paragraphs in the Background and the Key Provisions of the Bills Digest for Appropriation Bill (No. 3) 2011-2012 and the Bills Digest for Appropriation Bill (No. 4) 2011-2012 have been taken and or adapted from the corresponding sections of the Bills Digests of the previous year, where the concepts and definitions were so succinctly and ably dealt with in the following Bills Digest: R Webb, Appropriation Bill (No. 3) 2010‑2011, Bills Digest, no. 66, 2010-11, Parliamentary Library, Canberra, 2011, viewed 11 February 2011, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fbillsdgs%2F570461%22 and R Webb, Appropriation Bill (No. 4) 2010-2011, Bills Digest, no. 68, 2010-11, Parliamentary Library, Canberra, 2011, viewed 11 February 2011, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fbillsdgs%2F574773%22

[2].       Section 54 states that the proposed law which appropriates revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriation.

[3].       The Compact was updated to take account of the adoption of accrual budgeting.

[4].       Attorney-General’s Department, Portfolio budget statements 2010-11, Commonwealth of Australia, Canberra, 2009, p. 23.

[5].       Australian Government, Portfolio budget statements 2011-12, Budget website, viewed 11 February 2012,

http://www.budget.gov.au/2011-12/content/pbs/html/index.htm

[6].       Australian Government, Portfolio additional estimates statements 2011-12, Budget website, viewed 11 February 2012,

http://www.budget.gov.au/2011-12/content/paes/html/index.htm

[8].       Explanatory Memorandum, Appropriation Bill (No. 4) 2011-12, paragraph 48, p. 15.

[9].       Australian Government, ‘Mid-year economic and fiscal outlook 2011-12’, Budget website, viewed 10 February 2012, http://www.budget.gov.au/2011-12/content/myefo/html/prelims.htm.

[10].      The Mid-year Economic and Fiscal Outlook 2011-12 in Appendix A , Capital Measures, set out the history of the loan to Howe Automotive Limited as follows: The Government will provide a loan of $25.0 million to Howe and Company Proprietary Limited and its parent company Howe Automotive Limited (collectively Howe Leather). The loan is to be fully repaid over ten years with annual interest and principal payments. The provision of the loan is conditional upon Howe Leather repaying two existing loans to the Government, involving principal repayments totalling $30.7 million and an interest payment of approximately $2.0 million. The Government previously provided Howe Leather with a $25.0 million loan in 1996, followed by an additional $13.7 million loan in 2000 as part of the company's exclusion from the automotive and textile, clothing and footwear industry support schemes. The existing loans are to be repaid by February 2012. The provision of loans from the Budget and their repayment affect only the composition of government assets and as such this loan component has no impact on the fiscal balance. Forecast loan interest payments will have a positive impact on fiscal balance of $5.8 million over the forward estimates. 

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