Bills Digest No. 155 2004–05
Appropriation Bill (No. 2) 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. 2) 2005-2006
Date Introduced: 10 May 2005
House: House
of Representatives
Portfolio: Finance and Administration
Commencement: On
Royal Assent
To appropriate funds for the non-ordinary (or ‘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monies may be withdrawn from the Consolidated Revenue Fund except ‘under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:
Three appropriation Bills are generally introduced to accompany the May
Budget. By far the most important in dollar terms is Appropriation Bill
(No. 1), which appropriates funds for the ‘ordinary’ annual services of
the government while Appropriation Bill (No. 2) appropriates funds for
other annual services.(1) 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 was updated to take
account of the adoption of accrual budgeting).
The Appropriation Bill (No. 2) 2005-06 (the Bill) provides funding for
agencies to meet:
-
expenses in relation to grants to the States under section 96 of
the Constitution and for payments to the Northern Territory and the
Australian Capital Territory;
-
administered expenses for new outcomes;
-
requirements for departmental equity injections, loans and previous
years’ outputs; and
-
requirements to create or acquire administered assets and to discharge
administered liabilities.
The total appropriated by the Bill is $7.787 billion. This compares to
$5.187 billion for the Appropriation Act (No.2) 2004-05. The increase
is largely due to higher appropriations for the Defence and Transport
and Regional Service Portfolios.
Clause 4 provides that Portfolio Budget Statements are to be considered
as relevant extrinsic interpretational material under section 15AB of
the Acts Interpretation Act 1903.
Clause 6 lists the total amount appropriated by the Bill – $7.787
billion.
Clause 11 provides that the responsible portfolio Minister may
request the Finance Minister to make a written determination reducing
the appropriation for an item in the budget of an entity within their
portfolio. The amount of reduction is to be no greater than the amount
requested, or, where payments have already been made from the Consolidated
Revenue Fund, the difference between the amount appropriated to an item
and the amount already paid. For entities within the Finance Minister’s
portfolio, the reduction request must come from the Chief Executive of
the relevant entity. Subclause 11(9) provides that a determination
may be disallowed by either House of Parliament in accordance with the
provisions of section 42 of the Legislative Instruments Act 2003.
However, the sunset provisions contained in Part 6 of that Act do not
apply to such a determination.
Under clause 12, the Finance Minister is able to increase the
amount appropriated for certain items, such as equity injections, listed
in Schedule 2. The maximum additional amount available under clause
12 is a total of $20 million. Similar provisions are contained in
previous appropriation Acts. Once the Bill commences, no additional funding
can be provided by the Finance Minister under the relevant provisions
of those previous appropriation Acts listed in subclause 12(4).
Clause 13 allows the Finance Minister to provide additional funding
due to unforseen and urgent circumstances. The maximum additional
funding available under clause 13 is a total of $215 million. Similar
provisions are contained in previous appropriation Acts. Once the Bill
commences, no additional funding can be provided by the Finance Minister
under the relevant provisions of those previous appropriation Acts listed
in subclause 13(5).
For specific payments to States and Territories, the relevant portfolio
Minister (listed in column 3 of Schedule 1) will be able
to determine conditions under which payments can be made: clause 14.
Apart from the amount appropriated, the main
provisions of the Bill only differ in three notable respects from
the Appropriation Act (No.2) 2004-2005.
The first is that the Appropriation Act (No.2) 2004-05 did not
contain the limitations in subclauses 12(4) and 13(5) referred
to in the Main Provisions section of this Digest.
The two other differences both relate of the coming into force of the
Legislative Instruments Act 2003. One is that the power of either
House of Parliament to disallow the Finance Minister’s determinations
made under subclauses 11(1) and (2) now resides in section
42 of Legislative Instruments Act 2003. The procedures for disallowance
remain the same. The final difference is that the Finance Minister is
no longer obliged to give Parliament details of the increases in departmental
funding under clauses 12 and 13. Presumably this is because these
determinations are now classed as legislative instruments and thus must
be registered to have effect. Registration will mean that the determinations
are on the public record and thus accessible by Parliamentarians.
- The third is the Appropriation (Parliamentary Departments) Bill (No.1).
Angus Martyn
20 May 2005
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 2005
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Published by the Parliamentary Library, 2005.
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