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monies may be withdrawn from the Consolidated Revenue Fund except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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Published by the Parliamentary Library, 2004.
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