Bills Digest No. 69  1998-99 Appropriation Bill (No.4) 1998-99


Numerical Index | Alphabetical Index

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
Endnotes
Contact Officer and Copyright Details

Passage History

Appropriation Bill (No.4) 1998-99

Date Introduced: 3 December 1998

House: House of Representatives

Portfolio: Finance and Administration

Commencement: On Royal Assent

Purpose

To authorise the Minister for Finance to issue an additional $254 977 000 from the Consolidated Revenue Fund (CRF) to the funds allocated under the Appropriation Act (No. 2) 1998-99 for proposed expenditure on capital works and services, payments to the States and Territories and other services.

Background

The reader is referred to the Digest for the Appropriation Bill (No. 3) 1998-99.

Outline of Major Additional Appropriations

Department of Agriculture, Fisheries and Forestry - $5 600 000 is appropriated for grants to specialist pigmeat processors. A further amount of $1 904 000 is appropriated for the Pork Industry Development Group. An amount of $2 799 000 is appropriated for assistance to the sugar industry.

Department of Communications, Information Technology and the Arts - $3 516 000 is appropriated for refurbishment and fitout of the Old Parliament House.

Department of Finance and Administration - $100 000 000 is appropriated for payments to assist people and small business affected by the interruption to the Victorian gas supply.

Department of Industry, Science and Resources - $11 000 000 for a grant and $4 000 000 for a loan is appropriated for IIF Investments Pty Ltd. The Innovation Investment Fund (IIF) program is a strategy to improve access to venture capital by innovative, high technology start-up companies.

Department of Transport and Regional Services - $20 000 000 is appropriated to South Australia for runway extension at Adelaide Airport. An amount of $10 000 000 is appropriated for payment to the Northern Territory Indigenous Health Infrastructure.

Department of the Treasury - $19 443 000 is appropriated for a community education and information program (CEIP) on the introduction of the new tax system. This program relates to the advertising and information campaign undertaken by the Howard Government prior to the 1998 General Election in respect of its plan for a new tax system.

CEIP Funding

The Government approved an initial expenditure of $10 million for this program in April 1998, intending to fund the program from the Advance to the Minister for Finance and Administration (AMFA), a fund from which payments may be made for Commonwealth purposes which are both urgent and unforeseen. The 1998-99 Budget Papers(1) show that this sum was expected to be expended by the end of June 1998, so no further appropriation was sought for this purpose in the May 1998 (Appropriation Bill No. 2) although by early June,(2) Treasury officials were indicating that the bulk of the money would be spent in 1998-99.

By the end of 1997-98, only $250,000 had been issued from the AMFA of which $57 194 was actually expended.(3) The Minister for Finance and Administration, on 1 July 1998, approved the carryover of the remainder of the $10 million already approved and any unspent funds into 1998-99.

During 1998-99, funding for the program continued to be drawn from the AMFA since no annual appropriation for it existed. Furthermore, on 28 July 1998, the Government approved up to an additional $10 million for the program. In line with the above arrangements, a sum of $1 million was issued from the AMFA in July 1998, along with $4.5 million in August, $5.7 million in September and $650 000 in October. Item 978.01 of this Bill represents, in part, a formal appropriation of funds already issued from the AMFA in respect of the community education and information program.

The expenditure of funds on this particular program has been controversial. In particular, two issues have been raised:

  1. the use of the AMFA to fund the program, and

  2. the propriety of using public funds to promote a policy initiative of a Government just prior to an election. These issues, among others, have been examined by the Commonwealth Auditor-General.(4)

The Auditor-General examined whether payments from the AMFA for the program met the legislative requirement that such funding may only be used for urgent and unforseen purposes. The Auditor-General concluded that:

In light of legal advice received, the ANAO [Australian National Audit Office] was satisfied that the approval of funds from the AMFA met the legislative conditions that the requirement for the funds was urgent and unforseen. However, in the ANAO's view, at the cut-off time for the 1998-99 Appropriation Bills in early May 1998, Treasury's expectation that there would be no requirement for funds in 1998-99 was arguably optimistic given the lead time, program length, guidelines and normal commercial billing conditions for this type of program, as subsequent events have shown.

The issue of a Government's use of public money to fund information programs has arisen on several occasions. The Coalition, in opposition, criticised this activity on several occasions, for example, in response to the Hawke Government's tax advertising in 1986.(5) In 1995, Mr Howard stated that:

Today's Shadow Cabinet meeting in Gladstone decided that, in Government, we will ask the Auditor General to draw up new guidelines on what is an appropriate use of taxpayers' money in this area.(6)

However, no such request appears to have been made by the Howard Government to date.

In his recent report, the Auditor-General concluded:

In the light of...concerns surrounding the use of public monies for government information and advertising...the ANAO suggests that the Government and/or Parliament consider such concerns and determine whether, in the interests of public accountability and confidence, it is necessary to establish... Parliamentary review of government information and advertising arrangements to assist in determining appropriate guidelines for taxpayer funded programs.(7)

Appendix 1 of the Auditor-General's report outlines suggested principles and guidelines for the use of government advertising, derived from guidelines adopted in New Zealand and the United Kingdom and as suggested as a result of reviews of government advertising in Victoria, New South Wales, Queensland, Western Australia and British Columbia.

 

Main Provisions

Clause 4 authorises the Minister for Finance to issue an additional $509 973 00 from the CRF for the year ending 30 June 1999 (Schedule 2 gives a portfolio and program break-up of the proposed expenditure).

Clause 5 deals with payments to the States. Schedule 1 deals with payments to the States and Territories by each Department. Payments to States details in Schedule 1 must be made on the terms and conditions determined by the specified Minister.

Endnotes

  1. Portfolio Budget Statements, 1998-99, Treasury Portfolio, pp. 40-41.

  2. Treasury evidence to the Senate Economics Legislative Committee, 4 June 1998.

  3. Commonwealth of Australia, Issues from the Advance to the Minister for Finance as a Final Charge for the Year Ending 30 June 1998, Commonwealth government Printer, 1998, p.15.

  4. Auditor-General. Taxation Reform. Community Education and Information Program, Audit Report No. 12, 1998-99, p.9.

  5. Hansard, Prime Minister, Motion of Censure. Speaker: Hon J. Howard, p. 3033.

  6. Press Release, Leader of the Opposition, 5 September 1995.

  7. Auditor-General, op. cit, p.14.

Contact Officer and Copyright Details

Ross Kilmurray
6 January 1999
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

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 1999

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 Department of the Parliamentary Library, 1999.

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