Bills Digest No. 101 2001-02
Appropriation Bill (No. 3) 2001-2002
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
Contact Officer & Copyright Details
Passage History
Date Introduced: 14 February
2002
House: House of Representatives
Portfolio: Finance and
Administration
Commencement: Royal
Assent
Purpose
To authorise the Minister for Finance
to issue $1 457 690 000 from the Consolidated Revenue Fund
(CRF) in addition to funds appropriated by the Appropriation Act (No.1)
2001-02.
Annual authorisations for expenditure are contained in:
- Appropriation Act (No.1), which authorises expenditure for
the ordinary annual services of government
- Appropriation Act (No.2), which authorises expenditure on capital
works and services, payments to the States and other purposes not authorised
by special legislation, and
- Appropriation (Parliamentary Departments) Act which authorises
expenditure for the five parliamentary departments.
However, if the initial appropriation is insufficient
for the financial year additional appropriations may be sought. These
additional appropriations, known as additional estimates, are extra spending
requirements - for example, for cost overruns in existing programs or
for new programs - not foreseen when the Budget was presented.
From 1999-2000 the method of tabulating the Budget and
additional estimates has differed from previous additional estimates in
two main ways. First, the estimates documentation is presented in an outcomes
and outputs framework. Previous estimates were based on a program approach.
Second, the estimates use an accrual budgeting framework. Prior to 1999-2000
budgets used a cash framework.
Accrual budgeting allows for the incorporation of all
assets, liabilities, expenses and revenues, including cash receipts and
expenditures. Under accrual budgeting, agencies are funded for the full
cost of their functions, including non-cash costs such as employee entitlements
such as long service leave or depreciation. Thus the amount an agency
is appropriated under accrual budgeting in any one year may exceed its
cash costs. Any unspent amount is accumulated for use in future years
when required - for example accumulated depreciation to replace buildings
and equipment.
As noted in the Second Reading Speech to the additional
Appropriation Bills, there have also been savings in various items from
the Budget appropriations and this must be considered when determining
the total effect on government outlays from the additional amounts appropriated.
Savings from the initial amount appropriated by Appropriation Acts Nos.
1 and 2 are contained in the Department of Finance and Administration
Information Paper titled Statement of Savings in Annual Appropriations.
In relation to funding for the ‘ordinary annual services
of government’ contained in Appropriation Act No. 1 2001-2002 (the
Appropriation Act (No. 1)) and this Bill, the Appropriation Act (No. 1)
appropriated approximately $41 425 224 000 while this Bill
appropriates an additional $1 457 690 000. The Second Reading
Speech to the Bill states that estimated savings from the Appropriation
Acts are $63 000 000.
Outline of Major Additional Appropriations
Defence –
As stated in the Schedule to the Bill, an additional
$350 051 000 is appropriated for "[T]he defence of Australia
and its national interests". According to the Second Reading Speech
for the Bill this amount is to fund additional costs associated with operations
relating to the War Against Terrorism and unauthorised boat arrivals and
parameter and foreign exchange rate adjustments.
Immigration and Multicultural and Indigenous
Affairs
As stated in the Schedule to the Bill, an additional
$166 410 000 is appropriated. This total comprises $147 956 000
for "Contributing to Australia’s society and its economic advancement
through the lawful and orderly entry and stay of people"; $15 228 000
for "A society which values Australian citizenship, appreciates cultural
diversity and enables migrants to participate equitably"; and $3 226 000
for "[S]ound and well coordinated policies, programmes and decision-making
processes in relation to Indigenous affairs and reconciliation."
According to the Second Reading Speech for the Bill, some $145 000 000
is appropriated to fund the Government’s strategy to deal with unauthorised
arrivals.
Transport and Regional Services
As stated in the Schedule to the Bill, an additional
$144 327 000 is appropriated for "[A] better transport
system for Australia and greater recognition and opportunities for local,
regional and territory communities." According to the Second Reading
Speech for the Bill "$144 million in the Transport and Regional Services
portfolio is for a number of programmes including:
- measures in response to Ansett’s financial crisis ($44.4 million);
- the Stronger Regions Programme ($16.7 million);
- transportation costs for the American Helitankers (Georgia Peach and
Incredible Hulk) ($0.8 million) and a further $1 million contribution
to the Christmas 2001 New South Wales Bushfire Appeal; and
- Rephasing the Mainline Interstate Rail Track Programme ($37.8 million)."
Treasury
As stated in the Schedule to the Bill, an additional
$141 699 000 is sought for the Treasury portfolio. Of this total,
$122 190 000 million is sought for the Australian Taxation Office.
Schedule 1 of the Bill states that the amount is appropriated for "[E]ffectively
managed and shaped systems that support and fund services for Australians
and give effect to social and economic policy through the tax system."
According to the Second Reading Speech for the Bill the additional $122
million is for "… resourcing for the Australian Taxation Office."
Attorney-General’s
As stated in the Schedule to the Bill, an additional
$120 051 000 is sought for the Attorney-General’s portfolio.
As stated in the Schedule to the Bill, $87 664 000 is sought
for the Attorney-General’s Department and $22 636 000 for the
Australian Customs Service. In relation to the amount sought by the Attorney-General’s
Department, the Schedule to the Bill states that the amount sought is
for "[A]n equitable and accessible system of federal law and justice
[and] coordinated federal criminal justice, security and emergency management
activity." In relation to the amount sought for the Australian Customs
Service, the Schedule to the Bill states that the amount sought is for
"[E]ffective border management that, with minimal disruption to legitimate
trade and travel, prevents illegal movement across the border, raises
revenue and provides trade statistics." According to the Second Reading
Speech to the Bill "$60 million in the Attorney-General’s portfolio
[is] for costs associated with the HIH and Building and Construction Industry
Royal Commissions."
As stated in the Second Reading Speech to the Bill, other
additional appropriations include:
- $15 million for the extension of the First Home Owners Scheme
- $7.5 million for access to superannuation for permanently departing
temporary residents
- $7.2 million for the First Child Tax Refund
- $3.0 million for the Fishing Hall of Fame
- $2.0 million for the Stockman’s Hall of Fame, and
- $1.0 million for the Back of Bourke Exhibition.
The amount available for an agency's expenditure on Departmental
and administered items is specified in the Schedule to the Bill. The total
amount specified in the Schedule is $1 457 690 000 (clause
6).
Where an amount is specified in the Schedule for an administered
item, the Minister for Finance may issue the lesser of the amount specified
in the item and the amount determined by the Minister as expenses incurred
by the entity in relation to the item in the year (clause 8). In
relation to departmental items, the Minister must issue the amount specified:
- where an Act specifies that an entity must be paid amounts appropriated
for the purposes of the entity and this Bill specifies an amount, or
- for certain payments of remuneration and allowances (clause 7).
The Minister for Finance may increase the amount in a
Departmental item/s by determination to a total maximum of $20 million
(clause 10), while clause 11 provides that where there are
unforeseen circumstances and the need is urgent, the Minister for Finance
may increase expenditure by a total of $175 million. Parliament must be
notified of increased spending under clauses 10 and 11.
Clause 14 will formally appropriate the funds
for the Bill.
While the legal purpose of Appropriation Bills, such
as the Appropriation Bill (No. 3) 2001-2002, is a self evident fact, that
is, to appropriate money from the Consolidated Revenue Fund, it is not
however always easy to ascertain from a reading of such Bills what purpose/s
and to which program/s within each portfolio funds are to flow. For such
detail the reader of the Bill must resort to the Second Reading Speech
to the Bill, the Portfolio Additional Estimates Statements (PAES), and
transcripts of Senate estimate hearings.
PAES are intended to provide a means by which the executive
remains accountable to the Parliament and through the Parliament to the
Australian people.
PAES explain Appropriation Bills (Nos 3 & 4) and
Appropriations (Parliamentary Departments) Bill (No 2) to Senators and
Members. There is a clause in the Appropriation Bills (see clause 4
of the Appropriation Bill (No. 3) 2001-2002), which requires the PAES
to be taken into account when interpreting the items in the Appropriation
Acts.
All agencies that propose changes to their outcomes since
the Budget must report these changes in a PAES. The reason for this is
because appropriations made at Budget time are linked legally to the agreed
outcomes at that time, and changing the outcomes will require changes
to the Appropriation Bill (ie. a legal action).
Department of Finance and Administration guidelines for
PAES specify that PAES should serve as an addendum to Portfolio Budget
Statements and should explain changes to Budget estimates that are in
the Additional Estimates Appropriation Bills: (http://www.dofa.gov.au/budgetgroup/Other_Guidance_Notes/portfolio_additional_estimates.html).
In addition, PAES should provide sufficient information, explanation
and justification to enable Parliament, and through Parliament the Australian
public, to understand the purpose of each item in the Bill(s). In effect,
PAES should translate the information in the Bills into the related outcomes
and outputs: http://www.dofa.gov.au/budgetgroup/Other_Guidance_Notes/portfolio_additional_estimates.html.
Links to PAES
Department of Defence: http://www.defence.gov.au/budget/01-02paes/menu.htm.
Department of Immigration and Multicultural and Indigenous Affairs: http://www.minister.immi.gov.au/general/paes01.pdf.
Department of Industry, Tourism and Resources: http://www.industry.gov.au/department/Budget2001/PAES0102/paes0102.html.
Treasury: http://www.budget.gov.au/paes/index.htm.
Attorney-General’s: http://www.ag.gov.au/publications/budget.htm.
Department of Foreign Affairs and Trade: http://www.dfat.gov.au/dept/budget/2001_2002_paes/index.html.
Department of Agriculture, Fisheries and Forestry: http://www.affa.gov.au/corporate_docs/publications/pdf/about_affa/budget/paes2001_2002.pdf.
Department of Education, Science and Training: http://www.detya.gov.au/budget/PAES/PAES_2001-2002.pdf.
Department of Industry, Tourism and Resources: http://www.industry.gov.au/library/content_library/paes0102.pdf.
Department of Family and Community Services: http://www.facs.gov.au/internet/facsinternet.nsf/aboutfacs/budget/budget2001-budget2001.htm.
Department of Health and Ageing: http://www.health.gov.au/budget2001/pubs/budget2001/addition.htm.
Department of Employment and Workplace Relations: http://www.dewrsb.gov.au/department/budget/portfolioadditionalestimatesstatements/.
Department of Communications, Information Technology and the Arts: http://www.dcita.gov.au/cgi-bin/graphics.pl?path=6193.
Department of Environment and Heritage: http://www.ea.gov.au/about/budget/2001/paes/index.html.
Department of Veterans’ Affairs: http://www.dva.gov.au/media/aboutus/budget/paes02/PAES%2001-02-FINAL_bookmarked.pdf.
Ian Ireland
11 March 2002
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
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ISSN 1328-8091
© Commonwealth of Australia 2002
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Published by the Department of the Parliamentary Library, 2002.
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