Bills Digest no. 152 2006–07
Appropriation Bill (No. 2) 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. 2) 2007-08
Date
introduced: 8 May 2007
House:
House of Representatives
Portfolio:
Finance and Administration
Commencement:
On Royal Assent
To appropriate approximately $10.133
billion for the non-ordinary (or ‘other’) annual services of government.
Section 83 of the Constitution provides that no monies
may be withdrawn from the Consolidated Revenue Fund except ‘under an
appropriation made by law’. Laws authorising spending are either:
Of the appropriation Bills 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. 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) 2007-2008 (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,
the Australian Capital Territory and local government authorities
-
new administered expenses
-
requirements for so-called ‘non-operating’ costs,
that is, for equity injections, loans and previous years’ outputs
appropriations, and
-
requirements to create or acquire administered assets
and to discharge administered liabilities.
The Bill appropriates about $10.133 billion (compared
to about $9.215 billion in Appropriation Act (No. 2) 2006-2007).
The provisions of the Bill are generally identical
to those in Appropriation Act (No. 2) 2006-07. The main difference
is that the Bill drops the section relating to adjustments to departmental
items.
Section 12 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, 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.(1)
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).
The only other change is to proposed paragraph
14(2)(b). Proposed section 14 deals with conditions attached
to payments to the states and territories and to local government. Proposed
section 14 provides that where a payment is made, it must accord with
the conditions of the payments, and with the way set out in subsection
14(3). Paragraph 14(2)(b) has three elements. Payments:
-
with respect to amounts and timing must accord with
a determination
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the determination must be in writing, and
-
the Minister—specified in column 4 of the table in
Schedule 1—must make the determination.
The minister, in the second reading speech, gave the
following reason for the change:
The bill includes a minor technical change to section
14 to streamline ministerial determinations that are made on payments
to the states, territories and local government authorities. The change
will enable payments to be made without the mandatory ministerial determination
on the amount and timing. The provision otherwise is unaltered and determinations
may be issued if require d. (2)
-
Hon G Nairn, Special Minister of State, ‘Second reading speech:
Appropriation Bill (No. 2) 2007–08’, Votes and Proceedings,
8 May 2007, p. 60.
-
ibid.
Richard Webb
18 May 2007
Bills Digest Service
Parliamentary Library
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ISSN 1328-8091
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