Appropriation and supply bills

Summary of annual financial legislation

The Parliament appropriates moneys from the Consolidated Revenue Fund on an annual basis in order to fund expenditure by the Government. Prior to 1999 the appropriation of funds by the annual appropriation bills expired at the end of the financial year on 30 June. The annual appropriations, although related to activity in a specific year, no longer lapse at the end of the year—appropriations for departmental expenses are open ended, while appropriations for administered expenses are limited to expenses incurred in that year. Each annual appropriation Act now provides for the automatic repealing of itself prospectively (for example, on 1 July 2019 for the 2016–17 Acts).[60]

Appropriation Bill (No. 1) is a key element in ‘the Budget’; it contains details of estimates for ordinary annual government services—that is, continuing expenditure by government agencies on services for existing policies.[61]

Appropriation Bill (No. 2) is also introduced as part of the Budget and appropriates funds for new administered expenses; non-operating costs; and payments to the States, Australian Capital Territory, Northern Territory and local government.[62]

Appropriation (Parliamentary Departments) Bill, also introduced as part of the Budget, appropriates funds for the parliamentary departments.

Appropriation Bills (No. 3) and (No. 4) and Appropriation (Parliamentary Departments) Bill (No. 2) are referred to as the additional or supplementary estimates. Appropriation Bill (No. 3) appropriates funds for administrative expenses, while Appropriation Bill (No. 4) provides for capital expenditure—thus they parallel Appropriation Bills (No. 1) and (No. 2) respectively.[63] They are needed in order to meet requirements that have arisen since the passage of Appropriation Bills (No. 1) and (No. 2). The Appropriation (Parliamentary Departments) Bill (No. 2) performs the same function in respect of the parliamentary departments.

Supply bills make interim provision for expenditure when the main appropriation bills are not going to be passed before the start of the financial year on 1 July. Supply bills are no longer part of the normal annual routine, but were necessary in the past when Budgets were introduced in August, and have sometimes been used since then in special circumstances (see page 433). As with the appropriation bills, (No. 1) refers to salaries and administrative expenses and (No. 2) provides for capital expenditure. The Supply (Parliamentary Departments) Bill provides funds for parliamentary expenditure.[64]

The Advance to the Finance Minister, and the advances to the Presiding Officers, are allocations of funds in the main appropriation bills and (if introduced) the supply bills in order to meet emergency or unforeseen expenditure during the course of the financial year (see page 434).

Ordinary annual services of the Government

The Constitution provides that a proposed law which appropriates revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriation (to avoid what is known as ‘tacking’ on to a bill other measures which the Senate could otherwise amend).[65] The Senate may not amend any proposed law appropriating revenue or moneys for the ordinary annual services of the Government.[66] The main appropriation bill (Appropriation Bill (No. 1)) for the year has, since soon after Federation, provided for the ordinary annual services of the Government, and a second appropriation bill has contained provision for expenditure not appropriately included in the main bill. The second bill (Appropriation Bill (No. 2)) has, in earlier years, been called Appropriation (Works and Buildings), Appropriation (Works and Services) and Appropriation (Special Expenditure). The second appropriation bill is considered, constitutionally, to be capable of amendment by the Senate.

Subsequent bills for equivalent purposes are treated similarly. Appropriation Bill (No. 3) and Supply Bill (No. 1) are for the ordinary annual services of the Government and are therefore not capable of amendment by the Senate. Appropriation Bill (No. 4) and Supply Bill (No. 2) are capable of amendment by the Senate, subject to the restrictions imposed by section 53 of the Constitution. As the parliamentary appropriation and supply bills are not for ordinary annual services of government they are therefore also subject to possible Senate amendment.

The distribution of appropriations between the (No. 1) and (No. 2) bills was the subject of negotiation and agreement between the Government and the Senate in 1965, when the Treasurer announced that henceforth there would be a separate bill (Appropriation Bill (No.2)), subject to amendment by the Senate, containing appropriations for expenditure on:

  • the construction of public works and buildings;
  • the acquisition of sites and buildings;
  • items of plant and equipment which are clearly identifiable as capital expenditure;
  • grants to the States under section 96 of the Constitution; and
  • new policies not authorised by special legislation (subsequent appropriations to be included in the Appropriation Bill (No. 1) not subject to amendment by the Senate).[67]

In 1999, with the introduction of accrual accounting to the budget process, the Senate agreed to government proposals to vary the contents of the two appropriation bills as follows:

  • items regarded as equity injections and loans be regarded as not part of the annual services;
  • all appropriation items for continuing activities for which appropriations have been made in the past be regarded as part of ordinary annual services;
  • all appropriations for existing asset replacement be regarded as provision for depreciation and part of ordinary services.[68]

In recent years some additional appropriation bills for special purposes (see page 432) have been identified in their titles as being for ordinary annual services. The Senate has disputed such classification and has treated such bills as amendable.[69]

The components of the annual Budget

Appropriation Bill (No. 1)—the main appropriation bill

The main appropriation bill for the year (Appropriation Bill (No. 1)) is an integral part of the Government’s budget proposals. The ‘Budget’ is the term ordinarily used for the annual financial statement presented to the House by the Treasurer[70] and includes the Appropriation Bills (Nos 1 and 2), the Appropriation (Parliamentary Departments) Bill, documents relating to the bills and other legislation to give effect to the Budget. The introduction of the Appropriation Bill (No. 1) is the first parliamentary step in placing the Budget before the House.

Message recommending appropriation and introduction

The introduction of the Appropriation Bill (No. 1) is preceded by the announcement by the Speaker of a Governor-General’s message recommending an appropriation for the purposes of the bill.[71]

The long title of the bill introduced must be identical to the title of the bill cited in the Governor-General’s message.[72] Before an amendment can be moved to an appropriation or supply bill’s title a further message is necessary, specifying the long title as proposed to be amended.[73]

Standing order 178 allows the bill to be introduced without notice by a Minister, in this instance the Treasurer.[74]

Second reading—Budget speech and debate

In moving the second reading, the Treasurer delivers the budget speech, in which he or she compares the estimates of the previous financial year with actual expenditure, reviews the economic condition of the nation, and states the anticipated income and expenditure for the current financial year, including the taxation measures proposed to meet the expenditure.[75] In making the budget speech, the Treasurer speaks without limitation of time (but in practice about 30 minutes) and at the conclusion of the speech debate is adjourned on the motion of an opposition Member, usually the Leader of the Opposition.

The debate on the second reading of the Appropriation Bill (No. 1) is known as the ‘budget debate’. It is traditionally resumed by the Leader of the Opposition later in the budget week. In the response to the Government’s budget proposals, the Leader of the Opposition (or a Member deputed by the Leader) speaks without limitation of time (but in practice about 30 minutes). The scope of discussion in the budget debate is almost unlimited, as the standing order which applies the rule of relevancy makes the main appropriation bill one of the exceptions from its provisions.[76] Until recent years the budget debate traditionally continued over a period of several weeks. However, now that the Budget is (usually) presented in May less time is spent in considering it in order that the appropriation bills can be passed by the Parliament before the start of the financial year on 1July. The appropriation bills have been subject to a declaration of urgency.[77] The budget debate may be, and now usually is, taken partly in the Federation Chamber.

Reasoned amendment

An amendment relating to public affairs beyond the scope of the bill may be moved to the motion for the second reading of the main appropriation bill.[78] Such amendments are often moved by the Leader of the Opposition or a shadow minister and can be expected to refer to aspects of the Budget with which the Opposition is dissatisfied.[79] On occasion the second reading amendment has been moved at a later stage in the debate.[80] This procedure allows opposition Members to address themselves to the main question and to address the House again (speaking to the amendment) later in the debate. The Leader of the House, in moving a motion to reduce the time limits for speeches on the second reading debate on the Appropriation Bill (No. 1) 1978–79 from 20 to 15 minutes, explained that opposition Members, on the basis of an amendment being moved after they had spoken once, had two opportunities to address the House; the reduced time limits were necessary to give the maximum number of government Members the opportunity to address the House.[81]

If such a reasoned amendment were carried this would, in effect, place the Government’s position in jeopardy. In 1963, on the first Budget to which the revised financial procedures applied, the Leader of the Opposition unsuccessfully moved an amendment to the effect that, for reasons specified, the House was of the opinion that the Government no longer possessed the confidence of the nation.[82]

Consideration by estimates committees

Between 1979 and 1981 the House experimented with sessional orders providing for the proposed expenditures contained in Appropriation Bill (No.1) to be considered in estimates committees.[83] An account of the operation of the estimates committees is given at page 359 of the first edition. In 2003 the Procedure Committee recommended that the House refer the proposed expenditures to its standing committees or committees composed of House members of joint committees, and that hearings be held for those departments where the responsible Minister or Presiding Officer was a Member of the House of Representatives.[84]

After copies of the budget documentation (see page 431) are presented in the Senate on budget night, the ‘particulars of proposed expenditure’ (the schedules in the appropriation bills containing the estimates) and the Portfolio Budget Statements are referred to Senate legislation committees. This allows Senate consideration of the estimates before the appropriation bills have passed the House of Representatives. The Senate legislation committees in estimates mode usually conduct public hearings over a two week period while the House is engaged in the budget debate.[85]

Consideration in detail

It is now standard practice for the consideration in detail stage of Appropriation Bill (No. 1) to be taken in the Federation Chamber and the following text presumes that this is the case. However, this stage could be taken in the House.

The Federation Chamber first considers the schedule which expresses the services for which the appropriation is to be made (‘the estimates’), before considering the clauses.[86] The order for considering the proposed expenditures is the order in which the portfolios are listed in the schedule which is traditionally in alphabetical order. As this order may not be convenient to individual Ministers or shadow ministers, it is the usual practice for a Minister to suggest a different order for consideration.[87] When the Federation Chamber has agreed to the order, it is recorded as a resolution.[88] The agreed order may be varied by further resolution.[89]

The Federation Chamber goes through the schedule portfolio by portfolio, debating for each portfolio the question ‘that the proposed expenditure be agreed to.’ The relevance rule applies during the detail stage. However, debate which covers departmental activity and government policy in the area, as well as financial details, is in order.

Previous Deputy Speakers have encouraged a question and answer format in the Federation Chamber rather than general debate. Consideration of each portfolio sometimes starts with introductory remarks by the responsible Minister. Shadow ministers usually play an important role and may speak first. Members seek the call to question the Minister, often not taking their full five minutes. Ministers may respond to questions individually, may wait until several Members have spoken before responding, or may respond to all questions in their closing remarks. Ministers may also offer, or be requested, to take some of the questions on notice.[90] On one occasion when the Minister for a portfolio area was a Senator, a Member by leave presented a list of questions and the Minister representing the Senate Minister undertook to obtain answers.[91]

A timetable for the consideration in detail stage is now circulated in advance showing the day and time allocated to each portfolio and the name of the Minister attending. Periods allocated to portfolios have varied between 60 and 30 minutes.

After completing consideration of the schedule, the Federation Chamber then considers the remainder of the bill in the same way as an ordinary bill. It is usual, however, for the remainder of the bill to be taken as a whole and agreed to formally.[92]


A private Member may not move an amendment which would infringe the financial initiative of the Executive.[93] A private Member may move to reduce the amount of the proposed expenditure or may move to omit or reduce items, but may not move to increase an amount or alter the purposes of the proposed expenditure. The traditional form of the amendment is ‘That the proposed expenditure for the Department of … be reduced by $ … ’.[94] The Member may then state the reason for moving the amendment, for example, ‘as an instruction to the Government to … ’, ‘because the Government has failed to … ’, ‘because, in the opinion of the House, the Government should …’. The reason is not recorded in the Votes and Proceedings.[95]

In 1941, under now superseded financial procedures, an amendment was successfully moved in Committee of Supply to reduce the first item by £1.[96] The Government resigned four days later.[97] However, a successful private Member’s motion to reduce a budget appropriation does not necessarily place the Government in jeopardy. For example, in 1995 an appropriation in Appropriation Bill (No.4) was reduced as a result of an amendment moved by an opposition Member.[98]

An amendment to an appropriation bill to increase, or extend the objects and purposes or alter the destination of the appropriation recommended by the Governor-General must be preceded by a further message which must be announced before the amendment is moved.[99] An amendment to an appropriation bill which does not affect the appropriation recommended may be moved without obtaining a further message.[100]

Proposed improvements to procedures for consideration of estimates

In 2003 the Procedure Committee reviewed arrangements for the consideration of the annual estimates by the House, in response to criticisms of then current practice.[101] The committee focused on the problem of time allocation, noting that in recent years the estimates debates had been curtailed because of the time restraints imposed by the need to have the appropriation legislation introduced in mid-May agreed to by both Houses of the Parliament before the beginning of the financial year on 1 July. The committee’s solution was to make better use of the opportunities offered by the then Main Committee (now Federation Chamber) for ‘parallel processing’ by separating the general budget debate from the second reading of Appropriation Bill (No.1) in order to enable the estimates debates—the consideration in detail stage—to begin much earlier. The committee proposed that the second reading would be agreed to without further debate immediately following the Leader of the Opposition’s reply. After this, the ‘budget debate’ (on the motion ‘That the House approves the Budget’), and the consideration in detail stage of the bill could take place concurrently.[102] This proposal was not adopted and instead the House has relied on extended and additional meetings of the Federation Chamber to provide the time needed for sequential budget and estimates debates.[103]

In 2016 the Procedure Committee inquired into the consideration in detail of the main appropriation bill, with reference to the conduct of debate, including the allocation of the call; and into the adequacy of the standing orders in facilitating the debate. The committee recommended the adoption of standing orders specifically relating to the main appropriation bill in order to clarify the existing rules and practice, including rules for the consideration in detail stage,[104] and recommended, as a trial, that speech time limits for this stage be reduced from five minutes to two minutes.

In relation to the allocation of the call, the committee observed that the practice that had developed of allocating the call during the detail stage as it was allocated in Question Time had resulted in a disproportionate amount of time being allocated to the government side, noting that this had only become an issue in recent years as more government Members had participated in the debate. The committee argued that the call should be allocated consistent with the practice applying in all other debates—that is, as far as practicable the call should alternate and afford a roughly equal number of speaking opportunities and time to each side of the House.[105]

Appropriation Bill (No. 2)

This bill is also introduced without notice following the Speaker’s announcement of a Governor-General’s message recommending an appropriation for the purposes of the bill.[106] The bill is introduced immediately after Appropriation Bill (No. 1). The procedure for the passage of Appropriation Bill (No. 2) is similar to that for the main appropriation bill except that when the second reading is debated separately the wide range of debate and amendment allowed on the second reading consideration of the main bill is not permitted and normal relevancy rules apply. Should the House consider the bill in detail, it would be considered in the same manner as the main appropriation bill; that is, the schedule is considered before the clauses.[107] However, it is generally the practice for leave to be granted for the third reading to be moved immediately after the second reading.

Appropriation (Parliamentary Departments) Bill

This bill is also introduced without notice following the introduction of Appropriation Bill (No. 2) and provides for funds for the operations of the parliamentary departments. The practice for the passage of the bill has been the same as that for Appropriation Bill (No. 2), with the rule of relevancy applying.

Budget papers and related documents

Associated with the Budget are certain related documents and bills. After debate on Appropriation Bill (No. 1) has been adjourned, budget-associated documents are normally presented. The nature and titles of these documents have varied. In recent years the Treasurer presented the following papers:

  • Budget Strategy and Outlook, containing information on the economic and financial outlook, together with information on the fiscal strategy (Budget paper No. 1);
  • Budget Measures, providing a comprehensive statement on the budget expense, revenue and capital measures in the Budget (Budget paper No. 2);
  • Federal Financial Relations, providing information on the Australian Government’s financial relations with the States, Territories and local government (Budget paper No. 3);
  • Agency Resourcing, containing information on resourcing for Australian Government agencies, (including special appropriations, special accounts and a summary of agency resourcing) (Budget paper No. 4).

Together with a pamphlet copy of the Treasurer’s speech these documents are presented as the ‘Budget Papers’. At the same time the Treasurer may also present other ‘Budget related papers’. Alternatively such papers may be presented by another Minister or a Parliamentary Secretary at a later stage of proceedings. Portfolio Budget Statements, also listed as ‘Budget related papers’, are available from individual departments after the Budget.[108] Budget and budget related documents may be accessed on the internet.[109]

After the presentation of the papers by the Treasurer a motion may be moved that the documents be made Parliamentary Papers. This motion may be debated but debate must be relevant to the motion, and does not allow the subject matter of the documents, including the state of the economy or events in the preceding financial year, to be debated.[110]

Other budget related business may follow.[111] Budget related bills may be introduced,[112] ministerial statements explaining budget decisions in detail are sometimes made or presented, and customs and excise tariff proposals connected with the Budget are often moved. In recent years additional appropriation bills (see below) for the current financial year have been introduced at this time.

The term ‘budget measure’ is used to describe bills introduced to implement the financial proposals announced in the Treasurer’s budget speech. That a bill is described as a budget measure does not in itself bestow on it any special procedural status or immunity from amendment, as is occasionally assumed.

Explanatory memorandums for appropriation bills

While the standing orders exempt appropriation and supply bills from the requirement that they be accompanied by an explanatory memorandum,[113] for the first time in 2008 the Appropriation Bills (Nos 1 and 2) and the Appropriation (Parliamentary Departments) Bill were introduced with explanatory memorandums explaining the bills and the changes compared to previous appropriation bills.[114]

Additional appropriation bills

Where an amount provided in the Appropriation Acts (Nos 1 or 2) is insufficient to meet approved commitments falling due in a financial year, additional or supplementary appropriation may be sought in further appropriation bills. These are usually designated Appropriation Bill (No. 3) for expenditure in respect of the ordinary annual services of the Government, and Appropriation Bill (No. 4) for expenditure for other than the ordinary annual services. Similarly, an Appropriation (Parliamentary Departments) Bill (No. 2) may be introduced in respect of the departments supporting the Parliament. Appropriations may also be sought in these bills for new expenditure proposals. Appropriation Bill (No. 3) is not considered in the same detail as Appropriation Bill (No. 1). However, as with Appropriation Bill (No. 1), a wide range of debate and amendment is permitted on the second reading of an additional appropriation bill for expenditure for the ordinary annual services of the Government[115]—that is, (usually) Appropriation Bill (No. 3).

As well as providing for increased appropriations, additional appropriation bills have been used to reallocate funds previously appropriated for other purposes—Appropriation Bills (Nos 3 and 4) 1992–93 were introduced with this explanation.[116] Further additional appropriation bills may be introduced if funds provided by the Nos 3 and 4 bills prove insufficient—for example, Appropriation Bills (Nos 5 and 6) 2007–2008.[117] In 1995 an amendment moved by an opposition Member to Appropriation Bill (No. 4) 1995–96 (to reduce expenditure on a proposal) was agreed to.[118]

Appropriation Bill (No. 5) 1991–92 was introduced, while Appropriation Bills (Nos 3 and 4) were before the House, with the purpose of separating for urgent consideration certain appropriations from Appropriation Bill (No. 3),[119] which was later correspondingly amended.[120]

Additional appropriation bills for special purposes

On occasion additional appropriation bills are introduced for special purposes, for example:

  • Appropriation Bill (No.3) 1990–91 appropriated funds to meet urgent requirements arising as a consequence of the Gulf War;[121]
  • Appropriation (Supplementary Measures) Bills (Nos 1 and 2) 1999 appropriated funds for book industry assistance, for a welfare program and for expenditure on environmental matters;[122]
  • Appropriation (East Timor) Bill 1999–2000 appropriated funds for expenditure related to East Timor;[123]
  • Appropriation (Tsunami Financial Assistance) Bill 2004–2005 and Appropriation (Tsunami Financial Assistance and Australia–Indonesia Partnership) Bill 2004–2005 appropriated funds for assistance to Indonesia in response to the December 2004 tsunami disaster.[124]

Such bills are preceded by the announcement of a Governor-General’s message recommending appropriation[125] and may be introduced without notice.[126]

The Appropriation (Tsunami Financial Assistance) Bill 2004–2005 listed above was identified in its title as being for ‘ordinary annual services’, and more recently several appropriation bills for special purposes have followed this precedent.[127] This classification has been a matter of ongoing dispute between the Government and the Senate (see page 425). In the House the practice has been not to recognise these bills as ones to which the relevancy exemption provided by standing order 76(c) applies.

Supply bills

Supply bills are no longer part of the regular annual routine. Their function is to provide funds in the interim period when the main appropriation bills are not scheduled to pass before the commencement of the financial year on 1 July. This was the usual practice when the Budget was presented in August. Supply Bills (Nos 1, 2 and Parliamentary Departments) would be introduced in April or May to appropriate money from the Consolidated Revenue Fund to make interim provision for expenditure for the following financial year from 1 July pending the passing of the main appropriation bills for that year. The amount provided in each supply bill was usually limited to not more than five months’ requirements—that is, the first five months of the forthcoming financial year, in the main based on expenditures or appropriations of the previous year.

Since the 1994 change to May Budgets, supply bills have been used in 1996 when a general election in February and change of government meant that a May Budget was not practical, and in 2016 when the pending general election left insufficient time for the main appropriation bills to be passed.[128] In 2016 the supply bills appropriated approximately 5/12ths of the whole year amount, excluding budget measures, and the main appropriation bills appropriated the remaining 7/12ths, plus budget measures.[129]

Procedures for supply bills, including the financial initiative limitation on amendment, are the same as for appropriation bills. As in the case of the main appropriation bills, the wide scope of debate and amendment allowed in respect of Supply Bill (No. 1) for the ordinary services for the year[130] would not extend to Supply Bill (No.2) providing for certain other expenditure. However, supply bills differ from the main appropriation bills in that there is no budget speech or budget debate, as such.

Supply bills additional to Supply Bills (Nos 1 and 2) have been introduced. Supply Bills (Nos 3 and 4) 1992–93 were introduced concurrently with Appropriation Bills (Nos 1 and 2) 1992–93, with the expectation that Parliament would agree to the earlier passage of the interim provisions.[131]

Advance to the Finance Minister

The Appropriation Acts (Nos 1 and 2) and, when they are used, the Supply Acts (Nos 1 and 2) each provide an appropriation of funds for what is known as the Advance to the Finance Minister (AFM). These amounts enable the Finance Minister (that is, the Minister for Finance) to make money available for expenditure that the Finance Minister is satisfied is urgently required and was unforeseen or erroneously omitted from, or understated in, the Appropriation or Supply Act.

Amounts are issued from the advances by determination of the Finance Minister. Such determinations are legislative instruments and are presented to the Parliament, although they are not subject to disallowance. The Minister also accounts to the Parliament for expenditure from the advances by means of the presentation of an annual report on the use of the AFM provision.[132]

Advances to the Presiding Officers

The Appropriation (Parliamentary Departments) Acts and Supply (Parliamentary Departments) Acts each contain provisions for an Advance to the responsible Presiding Officer. The advance enables the President and the Speaker, separately in relation to the Departments of the Senate and the House of Representatives respectively, and jointly in relation to the Department of Parliamentary Services[133] and the Parliamentary Budget Office, to make money available for expenditure they are satisfied is urgently required and was unforeseen or erroneously omitted from, or understated in, the relevant Appropriation or Supply Act.

Amounts are issued from the advance by determination of the Presiding Officers. Such determinations are legislative instruments and presented to the Parliament, although they are not subject to disallowance. Details of expenditure under the advance are also included in the advances annual report referred to above.