Bills Digest No. 104 1997-98
Appropriation Bill (No. 3) 1997-98
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
Appropriation Bill (No. 3) 1997-98
Date Introduced: 29 October 1997
House: House of Representatives
Portfolio: Finance
Commencement: Royal Assent
To authorise the Minister for Finance to issue an additional $1 173
388 000 from the Consolidated Revenue Fund, in addition to funds appropriated
by the Appropriation Act (No.1) 1997-98, for the annual services
of the government.
Annual authorisations for expenditure are contained in the Appropriation
Act (No. 1), which authorises expenditure for the ordinary services
of government.The Appropriation Act (No. 2) deals with expenditure
on capital works and services, payments to the States and other purposes
not authorised by special legislation. The Parliamentary Departments are
covered by the Appropriation (Parliamentary Departments) Act (No. 1).
Additional appropriations may be sought in further Appropriation Bills,
commonly known as additional estimates, when the appropriation sought
in the Appropriation Bills is insufficient for the financial year.
Glossary of Terms
Appropriation - is the setting apart, assigning or applying
to a particular use or to a particular person a sum of money. In the budget
context an appropriation usually refers to an authorisation by Parliament
to draw on funds from the Consolidated Revenue Fund (CRF).
Budget Outlays - refer to the net cost to the taxpayer of providing
government services. Appropriations/payments out of the CRF are adjusted
to take account (for example) of many government receipts. Hence a hypothetical
government program 'XYZ' may have a total appropriation of $600 million
but this may only represent budget outlays of $500 million if the 'XYZ'
receives income of $100 million from other (non budget) sources.
Running costs - are the full current and minor capital costs
incurred by a department or agency in providing government services for
which the department or agency is responsible. For many departments, staff
salaries will represent the largest proportion of such costs.
Borrowings - Borrowings allow agencies to bring forward some
future years appropriation to be spent in an earlier year. This is intended
to provide agencies with the flexibility to respond to changing spending
priorities; and a mechanism to meet unforeseen costs.
Borrowings are arranged either through annual appropriation or additional
estimates Bills, such as is the case with this Bill, with a consequent
reduction in a future appropriation, or through the Provision for Running
Costs Borrowing (PRCB) where the borrowing does not coincide with an Appropriation
Bill.
Agencies are allowed to borrow up to 10% of the total running costs
budget from any one year.
Running Costs Borrowings (PRCB) - The PRCB is a reserve that
agencies can draw on to borrow running costs funds from future appropriation
where it is not viable to wait until the passage of the next Appropriation
Bill. Agencies can borrow from the PRCB if: there is a legitimate reason
to borrow running costs; the agency has a running costs appropriation;
the borrowings are repaid in full from some future appropriation; and
sufficient funds are available.
It is suggested that this Bills Digest be read in conjunction with the
Parliamentary Research Service Budget Review 1997-98.
Outline of Major Additional Appropriations
The major additional appropriations effected by this Bill are:
- Department of the Veterans' Affairs - $301 861 000. Of that total
$245 189 000 is appropriated for the maintenance of patients in non-departmental
institutions. Note: The rationale given by the Minister in the Second
Reading Speech to the Bill for the $245 189 000 in additional appropriations,
is that the amount '... largely reflecting to a self balancing transfer
of $189 million from the Nursing Homes Benefit special appropriation
in the Department of Health and Family Services following the Government's
decision that responsibility for residential aged care for veterans
would be centralised in the Department of Veterans' Affairs.
- Department of the Treasury $204 346 000. Of that total $174 000 000
is appropriated for acquisition of debt of the Australian National Railways
Commission.
- Department of Finance and Administration $157 853 000. Of that total
$71 000 000 is appropriated for business sales and restructuring. The
rationale given by the Minister in the Second Reading Speech to the
Bill for the $71 000 000 in additional appropriations, is that the amount
is required '... for managing surplus staff of the former Department
of Administrative Services business units for which the actual costs
could not be reliably determined until arrangements for the sale of
the businesses had been completed.'
- An amount of $40 026 000 is also appropriated for the costs of major
asset sales. The rationale given by the Minister in the Second Reading
Speech to the Bill for the additional appropriation is that it is '...
largely attributable to an anticipated increase in the sales commission
as a result of an expected increase in the proceeds of the partial privatisation
of Telstra.'
- Department of Defence $111 121 000. Of that total $88 135 000 is appropriated
for equipment and stores. The Minister in the Second Reading Speech
to the Bill states that the $88 135 000 for equipment and stores is
required '... for high priority logistic items including spares and
equipment repair activities.'
Clause 3 authorises the Minister for Finance to issue from the
Consolidated Revenue Fund a total of $1 173 388 000 in respect of the
year ending 30 June 1998. The Schedule gives a portfolio and program breakup
of the proposed expenditure.
Clause 5 authorises the Minister for Finance to issue additional
funds in respect of increases in salaries in 1997-98.
Other provisions of this Bill primarily provide for item changes that
may arise from the creation of various proposed schemes, programs and
agencies, such as the employment subsidy scheme or program, the Human
Rights and Responsibilities Commission, the Office of the Privacy Commissioner,
the Australian Prudential Regulation Authority, the Australian Corporations
and Financial Services Commission and the Productivity Commission.
Ian Ireland
17 November 1997
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 1997
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Published by the Department of the Parliamentary Library, 1997.
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Last updated: 18 November 1997
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