Bills Digest No. 141 2003-04
Appropriation Bill (No. 2) 2004–05
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 & Copyright Details
Passage History
Appropriation Bill (No. 2) 2004–05
Date
Introduced: 11 May 2004
House:
House of Representatives
Portfolio:
Treasury
Commencement:
When they receive the Royal Assent
Appropriation Bill (No. 1) 2004–05
appropriates funds for the ordinary annual services of government.
Appropriation Bill (No. 2) 2004–05 appropriates funds
for the 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withdrawn from the Consolidated Revenue Fund except ‘under an appropriation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:
Special appropriations—which account of about 75 per
cent of spending—are acts that provide money for particular purposes.
For example, age pensions, disability support pensions and the Newstart
Allowance are paid under the Social Security (Administration) Act 1999,
while the Family Tax Benefits A and B are paid under A New Tax System
(Family Assistance) (Administration) Act 1999.
There are usually six annual appropriation bills. Three—Appropriation
Bill (No. 1), Appropriation Bill (No. 2) and Appropriation (Parliamentary
Departments) Bill (No. 1)—are introduced with the Budget. Appropriation
Bill (No. 1) appropriates funds for the ordinary annual services of the
government while Appropriation Bill (No. 2) appropriates funds for other
annual services. Appropriation (Parliamentary Departments) Bill (No. 1)
appropriates funds for the Parliamentary departments. There is a separate
Bill for the Parliamentary departments because the services they provide
are not considered to be either ordinary or other annual services.
The other three appropriation bills are introduced in
the spring sitting of Parliament and are usually called additional estimates.
They are Appropriation Bill (No. 3) for ordinary annual services, Appropriation
Bill (No. 4) for other annual services, and Appropriation (Parliamentary
Departments) Bill (No. 2) for the Parliamentary departments.
Section 53 of the Constitution provides that the Senate
may not amend laws appropriating money for the ordinary annual services
while Section 54 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).
Both Bills appropriate funds to departmental outputs
and administered expenses. Departmental outputs are expenses that agencies
control. Examples are salaries and other day-to-day operating expenses.
Administered expenses are those that agencies administer on the Government’s
behalf. The examples of special appropriations above are administered
expenses.
Departmental outputs and administered expenses contribute
to outcomes. They are the results or consequences for the community that
the Government wishes to achieve. For example, Appropriation Bill (No.
1) 2004–05 appropriates funds for the Federal Magistrates Service under
Outcome 1 which is:
To provide the Australian community with a simple and accessible
forum for the resolution of less complex disputes within the jurisdiction
of the Federal Magistrates Service.
The data in the Bills are aggregated. Additional information
can be found in Portfolio Budget Statements.
The Labor Party, the Australian Democrats and the Greens
have indicated that they will oppose some of the Government’s proposals
contained in the Budget. An attempt to block these proposals is not
an attempt to ‘block supply’. Any changes that the Opposition parties
want to make to the Government proposals would entail amendment to either
Appropriation Bill (No.2) or will be special appropriations legislation.
The amount available for agencies’ spending on departmental
and administered items is specified in Schedules. The total specified
in Schedule 1 of Appropriation Bill (No. 1) 2004–05 is $45.060 billion,
while the total specified in Schedule 2 of Appropriation Bill (No. 2)
2004–05 is $5.187 billion.
Both Bills contain a clause ‘Advance to the Finance Minister’.
These clauses allow the Minister to pay sums for emergency or unforseen
purposes. The maximum is $175 million for Appropriation Bill (No. 1) 2004–05
and $215 million for Appropriation Bill (No. 2) 2004–05 [sub-clauses
12(3) and 13(3) respectively]. The Minister has to account to Parliament
for the sums spent from the Advances.
Appropriation Bill (No. 1) 2004–05 is largely identical
to Appropriation Bill (No. 1) 2003–04. The changes are:
The Introduction to Budget Paper No. 4 explains this
more fully:
The annual appropriations acts are not expressed in terms
of a particular financial year and so do not automatically lapse. Amounts
appropriated for departmental expenses and for non-operating costs(1)
can be subject to a lapsing process first introduced in the additional
estimates appropriations bills for 2003-2004. Under this process, on request
in writing from a responsible minister for an agency, the Finance Minister
may issue a determination to reduce the agency’s departmental expense
or non-operating costs appropriation. Requests for amounts to be lapsed
may arise, for example, because the appropriation is no longer required.
Until the Finance Minister issues a determination under this process,
moneys appropriated for departmental expenses and non-operating costs
may be issued from the CRF in the budget or later years.
Appropriations for administered expenses are subject to a
determination by the Finance Minister on the amounts to be issued. The
effect of that determination is to prevent any part of the appropriation
that has not been expensed in the year from being issued from the CRF.
By convention the Finance Minister issues determinations in relation to
administered expenses appropriations following the completion of each
financial year.(2)
Clause 9 gives effect to the intention to lapse unspent
departmental expenses.
- Clause 10 deals with ‘net appropriations’. Subclause
4 deals with items that are taken to be administered ‘marked net appropriations’,
and adds paragraph 4(e) which provides that the administered item for
outcome 2 of the Department of Transport and Regional Services is also
to be marked as a net appropriation.
Appropriation Bill (No. 2) 2004–05 is largely identical
to Appropriation Bill (No. 2) 2003–04. The changes
are:
-
the definition of ‘agency’ now includes the High Court (Clause
3)
-
the definition of ‘entity’
now includes the Australian National Training Authority (Clause
3)
-
Clause 11: ‘reduction of appropriations upon
request’. This clause is identical in wording to Clause 9 in the Appropriation
Bill (No. 1) 2004–05 except that whereas Clause 9 refers to reducing
‘a departmental item’ [sub-clauses 9(1) and 9(2)], Clause 11 refers
to reducing ‘an administered assets and liabilities item or an other
departmental item’ [sub-clauses 11(1) and 11(2)].
-
Non-operating costs include things such as equity injections and
loans.
-
Agency Resourcing 2004-05, Budget Paper No. 4, p. 5.
Richard Webb
24 May 2004
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 2004
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