Parliament has ultimate control over federal government resources, through its power under the Constitution to approve taxation and spending, but must comply with constitutional and other legal requirements. The Budget Bills are only concerned with expenditure. Revenue or taxation Bills have distinct Constitutional requirements and must be tabled separately (Constitution s. 55).
The Constitution requires that:
- All money raised by government must be placed in one consolidated revenue fund (CRF) (s. 81). Money may only be withdrawn from the CRF under a legal appropriation (s. 83). (While Appropriation Acts allow the release of money from the CRF, they do not create a source of power to spend money – this must be found in other parts of the Constitution.)
- All laws for the appropriation of money must be initiated in the House of Representatives (s. 53). During Budget time this roughly translates into the House debating the Annual Appropriation Bills and the Senate holding Budget estimates at the same time.
- In addition, there must be separate laws appropriating money for the ‘ordinary’ and for the ‘other’ annual services of government (s. 54). The distinction between ordinary and other services of government is not defined in the Constitution but in a Compact between the Senate and the Government.
- Payments can be made to the states with or without conditions and these payments are identified separately in the Budget Bills (s. 96) and treated as ‘other’ services of government.
In the Pharmaceutical Benefits (1945) case, the High Court held that “… there cannot be appropriations in blank, appropriations for no designated purpose, merely authorising expenditure …”. Appropriation Bills must describe in general terms what the money will be used for, usually expressed as programs and outcomes. The exception is that the Advance to the Finance Minister (and to the Presiding Officers) does not have a specific purpose, it is used as a ‘contingency fund’ for unforeseen events, like COVID 19, or an erroneous omission.
In addition, the Australian Accounting Standard 1050 requires that Government agencies distinguish between:
- Departmental expenses: generally, costs incurred in running departments/agencies
- Administered expenses: generally, money to carry out the objectives of the Australian Government (for example, money for social security payments). Entities do not have control over these items and must use the funding for the outcome for which it has been appropriated.
An administered appropriation may be used only for the program or outcome that it is appropriated for, while a departmental appropriation may be moved between different departmental activities (Combet v Commonwealth, 2005).
Types of appropriation bills
| Type of appropriation |
Appropriation Bill/Act |
Period of operation |
|
Annual Appropriation Bills
(Budget)
|
Appropriation Bill (No. 1)
(ordinary services of Government)
- Second reading speech by the Treasurer is the Budget Speech
- Debated in the House
- After being presented in the Senate on Budget night, Bills and Budget Papers are referred to Senate committees (Senate Budget estimates)
- If passed by the House, the Bill is transmitted to the Senate for concurrence
|
1 financial year
|
|
Appropriation Bill (No. 2)
(other services of Government)
- Debated in the House
- After being presented in the Senate on Budget night, Bills and Budget Papers are referred to Senate committees (Senate Budget estimates)
- If passed by the House, the Bill is transmitted to the Senate for concurrence
|
1 financial year
|
|
Appropriation (Parliamentary Departments) Bill (No. 1)
- Reflects the independence of Parliament from government
- Debated in the House
- After being presented in the Senate on Budget night, Bills and Budget Papers are referred to Senate committees (Senate Budget estimates)
- If passed by the House, the Bill is transmitted to the Senate for concurrence
|
1 financial year
|
|
Additional Appropriation Bills
Bills associated with the Mid-Year Economic and Fiscal Outlook (prepared in accordance with the Charter of Budget Honesty Act 1998)
- Can be used for additional agency resources, and/or to adjust resourcing during the financial year, and/or announcements of new measures.
|
Appropriation Bill (No. 3)
(ordinary services of Government)
- Debated in the House
- After being presented in the Senate, Bills are referred to Senate committees (Senate Additional Budget estimates)
- If passed by the House, the Bill is transmitted to the Senate for concurrence
|
Less than 1 year
|
|
Appropriation Bill (No. 4)
(other services of Government)
- Debated in the House
- After being presented in the Senate, Bills are referred to Senate committees (Senate Additional Budget estimates)
- If passed by the House, the Bill is transmitted to the Senate for concurrence
|
Less than 1 year
|
|
Appropriation (Parliamentary Departments) Bill (No. 2)
- Debated in the House
- After being presented in the Senate, Bills are referred to Senate committees (Senate Additional Budget estimates)
- If passed by the House, the Bill is transmitted to the Senate for concurrence
|
Less than 1 year
|
|
Supplementary Appropriation Bills
|
Appropriation Bill (No. 5)
Appropriation Bill (No. 6)
Appropriation (Parliamentary Departments) Bill (No. 3)
(Senate Supplementary Budget estimates)
|
Less than 1 year
|
|
Supply Bills
Normally used during an election year
- an interim measure until the Appropriation Bills are passed
- ensures that Government agencies are funded (secures supply) until after the election
- no new measures funded
|
Supply Bill (No. 1)
(ordinary services of Government)
- Normally passes the House and Senate within a day of tabling in the House.
|
Part of the year, usually 5/12 or 7/12 of the year
|
|
Supply Bill (No. 2)
(other services of government)
- Normally passes the House and Senate within a day of tabling in the House.
|
Part of the year, usually 5/12 or 7/12 of the year
|
|
Supply (Parliamentary Departments) Bill (No. 1)
- Normally passes the House and Senate within a day of tabling in the House.
|
Part of the year, usually 5/12 or 7/12 of the year
|
|
Special appropriation
Not affected by the passage of the annual Appropriation Acts
|
All special appropriations are published in Budget Paper No. 4 each year.
They comprise around 75% of Budget expenditure.
Below are some examples.
|
Usually more than a year
|
|
Additional appropriation for special purposes
|
Below are some examples.
|
As needed
|