Bills Digest no. 110 2007–08
Appropriation Bill (No. 5) 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
Contact officer & copyright details
Passage history
Appropriation Bill (No. 5) 2007-08
Date
introduced: 13 May 2008
House: House
of Representatives
Portfolio: Finance
and Deregulation
Commencement: For
both Bills: on Royal Assent
Links: The relevant
links to the Bill, Explanatory Memorandum and second reading speech
can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/. When Bills
have been passed they can be found at ComLaw, which is at http://www.comlaw.gov.au/.
Appropriation Bill (No. 5) 2007-08 appropriates approximately $626.5
million for the ordinary annual services of the Government.
Appropriation Bill No. 6 (No. 6) 2007-08 appropriates approximately $501.9
million for the non-ordinary (or ‘other’) annual services of the Government.
Section 83 of the Constitution provides that
no monies may be withdrawn from the Consolidated Revenue Fund (CRF) except
‘under an appropriation made by law’. Laws authorising spending are either:
- special appropriations, or
- six (usually) annual Appropriation Acts.
Special appropriations—which account of about three quarters of spending—are
spending authorised by Acts for particular purposes. Examples are age
pensions, carer payments, and the seniors concession allowance paid under
the Social Security (Administration) Act 1999, and the Family Tax
Benefits A and B paid under A New Tax System (Family Assistance) (Administration)
Act 1999.
Appropriation Bill (No. 1) appropriates funds for the ‘ordinary annual
services of the Government’. By comparison 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 has been updated
to take account of the adoption of accrual budgeting).
Funding requirements usually change after the Budget is brought down.
Governments make new policy commitments that need to be funded. Agencies
reassess their requirements and, if necessary, submit requests for additional
funding. The Government may agree to additional funding if the amounts
in the three Budget Appropriation Acts are inadequate and so has to seek
parliamentary approval for additional spending. The process whereby additional
funds are provided is called ‘additional estimates’ and begins around November of the Budget year. The
approved additional estimates are incorporated into Appropriation Bills
3 and 4 and Appropriation (Parliamentary Departments) Bill No. 2.
These Bills are the counterparts of Appropriation Bills No. 1 and
2 and Appropriation (Parliamentary Departments) Bill No. 1 respectively.
Portfolio Additional Estimates Statements are the additional estimates
counterparts of Portfolio Budget Statements and contain explanations of
Appropriation Bills 3 and 4 and Appropriations (Parliamentary Departments)
Bill No. 2. The Senate estimates committees also scrutinise the additional
estimates Bills. Parliament usually passes the additional estimates Bills
around April.
The Government can introduce as many Appropriation Bills as it believes
necessary. Appropriation Bill (No. 5) 2007-08 and Appropriation Bill (No.
6) 2007-08 are examples of Appropriation Bills supplementary to Appropriation
Bill (No. 1) and Appropriation Bill (No. 2) and to the additional estimates
Bills. Such Bills are referred to as supplementary additional estimates.
The Portfolio Supplementary Additional Estimates Statements are the counterparts
of the Portfolio Budget Statements for the annual Appropriation Bills.
In the second reading speech for Appropriation Bill (No. 5) 2007-08,
the Minister for Finance and Deregulation, the Hon. Lindsay Tanner, MP,
stated that the Government was seeking additional funding for universities.[1] Under this measure, the Government
proposes to provide $500.0 million in 2007-08 to Australian universities
as a contribution towards capital investment in five priority areas including
IT communications in research and teaching, laboratories, libraries and
places to study, teaching spaces, and critical student amenities. According
to the Government, the measure will begin to address past capital under-investment
in these priority areas. Funding will be distributed among universities
through grants taking into account each university’s share of funds under
the existing Institutional Grant Scheme and its share of total domestic
students.
The Minister also announced measures affecting the Department of the
Environment, Water, Heritage and the Arts, notably measures under the
Water for the Future program. There are five projects under this
program. Under the National Rainwater and Greywater Initiative—which was
an election commitment—the Government will provide $250.0 million over
six years (including $50.0 million in 2012-13 and $24.0 million in 2013-14)
to provide rebates of up to $500 for up to 500,000 homes towards the cost
of installing rainwater tanks or new piping for grey water use. This measure
is designed to help reduce the impact of drought and climate change on
Australia’s towns and cities. The measure also includes $3.0 million in
2008-09 to provide up to $10,000 to every surf life saving club in Australia
for the installation of a rainwater tank, or as a contribution towards
a larger water saving project.
The second project—also an election commitment—is the National Urban
Water and Desalination Plan. Under this Plan, the Government will provide
$1.0 billion over six years (including $192.0 million in 2012-13) for
desalination, water recycling and stormwater harvesting projects in Australian
cities with populations of over 50,000. The private sector, water utilities
and State, Territory and local governments will be able to apply for funds,
which will be provided through grants and refundable tax offsets of up
to 10 per cent of project costs, capped at a maximum of $100.0 million
per project. This measure includes funding for a Centre of Excellence
in desalination technology in Perth ($20.0 million), a Centre of Excellence
in water recycling in Brisbane ($20.0 million), the Glenelg to Adelaide
water recycling project ($30.2 million) and the Geelong Shell water recycling
project ($20.0 million).
Under the third project—the National Water Security Plan for Cities and
Towns, again an election commitment—the Government will provide $254.8
million over five years to work with governments and local water authorities
to minimise water loss, invest in more efficient water infrastructure,
refurbish older pipes and water systems, and fund practical projects to
save water. This measure will help reduce the impact of drought and climate
change on Australia’s towns and cities.
The fourth proposal—taking early action—brings forward $400.0 million
of funding from 2011-12 under Water for the Future, to accelerate investment
in water savings infrastructure and to purchase water entitlements from
willing sellers. This reflects the Government’s recognition that urgent
action is needed to tackle the water crisis. This measure is an election
commitment.
Finally, under the Water Efficiency Western Australia project, the Government
will provide $35.0 million in 2007-08 (brought forward from 2011-12) under
the Water for the Future program, to make an initial contribution
to the Harvey Water Piping Project in Western Australia. The project involves
upgrading irrigation supply infrastructure to reduce seepage and evaporation,
with the water saved to be piped to Perth. The Government’s remaining
contribution of $14.0 million is expected to be provided in 2008-09, from
within existing funding for the program. This measure is also an election
commitment.
In the second reading speech for Appropriation Bill (No. 6) 2007-08,
the Minister for Finance and Deregulation announced additional funding
for Digital Education Revolution.[2]
Under this program, the Government will provide $1.2 billion over five
years. A National Secondary School Computer Fund will be established to
provide grants of up to $1.0 million to eligible secondary schools to
assist them in providing new or upgraded computers and communications
technology to students in Years 9 to 12. Funding will also be available
to contribute toward the provision of high speed fibre-to-the-premises
broadband connections to schools and to provide support to ensure the
effective deployment and installation of computers and ICT equipment purchased
under the Fund. Additionally, funding will be provided for collaborative
work between the Commonwealth, State and Territory governments and non-government
school systems and industry to develop a unified technical framework and
to fund administration costs of Block Grant Authorities which will manage
funding for non-government schools. This measure was an election commitment.
Under the Ageing Carers—additional support program, the Government will
provide $100.0 million in 2007-08 to State and Territory governments under
the Commonwealth State Territory Disability Agreement to increase the
availability of supported accommodation for people with a disability where
their carers are ageing. The funding will allow the States and Territories
to build or purchase new facilities with the capacity to care for more
people with disabilities. These facilities will allow older carers to
plan for the transition of their children with a disability from the family
home to other accommodation arrangements.
According to the second reading speech, the Government will provide an
additional $182.4 million in 2007-08 to the Department of Health and Ageing
to fund a range of initiatives including $100 million towards a $389.5
million program to upgrade health facilities. The Government will provide
$389.5 million over five years in grants and recurrent funding to support
health care facilities and improve patient outcomes. This includes funding
for advanced medical technology, improved facilities and services and
medical training infrastructure. This measure will bring the benefits
of advanced medical technology to communities around Australia. An additional
12 Medicare-eligible magnetic resonance imaging units will be provided,
along with new and upgraded technology in hospitals around the country.
Funding will also support upgrades to hospitals and community health centres
and expand services to areas of need. This includes improved access to
renal dialysis and a mobile sexual assault referral centre for remote
communities in the Northern Territory. The Government is also committed
to catering for Australia’s future health needs. This measure invests
in medical training infrastructure to help meet the training needs of
medical graduates and provide a skilled health workforce in years to come.
This measure was an election commitment.
The Government is also seeking $75 million in 2007-08 towards providing
up to $600.0 million over four years to reduce waiting lists for elective
surgery in public hospitals in each State and Territory. This funding
includes $150.0 million to provide more than 25,000 new procedures to
help clear the backlog of people who have been waiting longer than the
clinically recommended time for elective surgery. A further $150.0 million
will be provided to make systemic improvements to Australia’s hospital
system, including the construction of additional day surgery units. A
further $300.0 million will be available in incentive payments to States
and Territories that meet elective surgery waiting list reduction targets.
The funding will be provided if performance benchmarks are met. This measure
was an election commitment.
An amount of $75 million is to be provided to the Department of Infrastructure,
Transport, Regional Development and Local Government in 2007-08 towards
the development of feasibility and planning studies for projects to address
urban congestion. The projects include the Western Metro rail link, and
the eastern section of the M5 in New South Wales; components of the East-West
transport corridor, and Western Ring Road in Victoria; key sections of
the Bruce Highway and Gateway Motorway in Queensland; a transport master
plan for the Perth Airport; and a Transport Sustainability Study in South
Australia.
The Government proposes to eliminate the excise exemption of condensate.[3]
This will result in Western Australia losing revenue. The Government proposes
to provide Western Australia with ongoing compensation for the loss of
its share of offshore petroleum royalty revenue as a result of the imposition
of crude oil excise on condensate, at an estimated cost of $406.6 million
over the three forward estimates years. An initial payment of $80 million
will be made to the Western Australian Government in 2007-08, with payments
in subsequent years adjusted to equal the impact of removing the condensate
exemption on payments to Western Australia relating to the offshore petroleum
royalty.
The amount sought under Appropriation Bill (No. 5) 2007-08 is $626 540
000.
The amount sought under Appropriation Bill (No. 6) 2007-08 is $501 897
000.
The provisions in Appropriation Bill (No. 5) 2007-08 are virtually identical
with those in Appropriation Act (No. 5) 2006-07, and those in Appropriation
Bill (No. 6) 2007-08 are virtually identical with those in Appropriation
Act (No. 6) 2006-07. The reader is referred to the Bills Digest
for Appropriation Act (No. 5) 2006-07 and Appropriation Act (No. 6) 2006-07.
Clause 13 of Appropriation Bill (No. 5) 2007-08—which is titled
Appropriation of the Consolidated Revenue Fund—expands the comparable
clause in Appropriation Act (No. 5) 2006-07 by adding the words ‘including
the operation of this Act as affected by the Financial Management and
Accountability Act 1997’. The purpose of this change seems
to be the recognition that the Financial Management and Accountability
Act also governs the appropriations process.
Clause 3 in Appropriation Bill (No. 6) 2007-08 contains definitions.
A definition not included in previous Appropriation Acts is that of Chief
Executive. Clause 3 defines this as having the same meaning as
in the Financial Management and Accountability Act 1997. (The Financial
Management and Accountability Act itself defines Chief Executive to include
either a person identified by regulations to be the Chief Executive, or
a person who is the Secretary of an Agency under the Public Service
Act 1999 or the Parliamentary Services Act 1999, section 5).
Similar to Clause 13 of Appropriation Bill (No. 5) 2007-08, clause
15 of Appropriation Bill (No. 6) 2007-08 expands the comparable clause
in Appropriation Act (No. 6) 2006-07 by adding the words ‘including the
operation of this Act as affected by the Financial Management and Accountability
Act 1997’.
Richard Webb
23 May 2008
Bills Digest Service
Parliamentary Library
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