Bills Digest no. 149 2006–07
Appropriation Bill (No. 5)
2006-07
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
Endnotes
Contact Officer & Copyright Details
Passage History
Appropriation
Bill (No. 5)
2006-07
Appropriation
Bill (No. 6) 2006-07
Date introduced:
8 May 2007
House: House of Representatives
Portfolio: Finance and
Administration
Commencement:
On Royal
Assent
Appropriation Bill (No. 5) 2006 07 appropriates
$554.816 million for the ordinary annual services of
government.
Appropriation Bill (No. 6) 2006 07
appropriates $259.2 million 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monies may be withdrawn from the Consolidated Revenue Fund except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, or
- six (usually) annual appropriation acts.
Special appropriations which account of about
75 per cent of spending are Acts that provide money for particular
purposes. For example, age pensions, carer payments, and the
seniors concession 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.
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. 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 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).
The 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.
As noted, there are usually six annual
appropriation bills of which three are introduced when the Budget
is brought down. However, funding requirements often change after
the Budget is brought down. Governments make new policy commitments
which have 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
first three Appropriation Acts are inadequate. The process whereby
additional funds are provided is called additional estimates and
usually begins around November. The approved additional estimates
are normally incorporated into three appropriation bills, which are
introduced in the spring sitting of Parliament. 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.
Appropriation Bill (No. 5) 2006 07 and
Appropriation Bill (No. 6) 2006 07 are supplementary to the
additional estimates bills. They are similar to the additional
estimates bills in that Appropriation Bill (No. 5) 2006 07
appropriates additional money for ordinary annual services while
Appropriation Bill (No. 6) 2006 07 appropriates money for other
annual services.
The data in the Bills are aggregated.
Additional information can be found in Portfolio Supplementary
Additional Estimates Statements.
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. 5) is $554.816 million, while the total specified in
Schedule 2 of Appropriation Bill (No. 6) is $259.2
million.
Among the measures the minister mentioned in
the second reading speech for Appropriation Bill (No. 5) were $50
million for the synchrotron facility and funds for medical research
facilities. The following is an extract from Budget Paper
No. 2 2007-08, pages 238 and 239.
Medical research facilities grants for
development and expansion
The Government will provide $485.8 million in
2006-07 to fund a variety of development and expansion projects by
medical research facilities and the operations of the Australian
Synchrotron. This measure will enhance the capacity and quality of
Australia s health and medical research efforts and assist
Australian researchers to continue high quality world-class
research. Funding for the Australian Synchrotron will be subject to
matching funding from the Victorian Government. Funding
comprises:
$30.0 million for the Prince of Wales Medical
Research Institute, New South Wales;
$15.0 million for the Westmead Millennium
Institute, New South Wales;
$10.0 million for the Sydney Cancer Centre, New
South Wales;
$6.0 million for the Brain and Mind Institute, New
South Wales;
$14.0 million for the Baker Heart Research
Institute, Northern Territory;
$5.3 million for the Menzies School of Health
Research, Northern Territory;
$100.0 million for the Princess Alexandra Hospital
and University of Queensland, Queensland;
$55.0 million for the Queensland Institute of
Medical Research, Queensland;
$10.0 million for the Flinders Centre for
Innovation in Cancer, South Australia;
$50.0 million for the Murdoch Children s Research
Institute, Victoria;
$50.0 million for the Australian Synchrotron,
Victoria;
$15.0 million for the Australian Regenerative
Medicine Institute, Victoria;
$6.0 million for the Macfarlane Burnet Institute
for Medical Research and Public Health, Victoria;
$100.0 million for the Western Australian
Institutes for Health, Western Australia; and
$19.5 million for the Institute for Immunology and
Infectious Diseases, Western Australia.
The provisions of Appropriation Bill (No. 5)
2006 07 are generally identical to those in Appropriation Act
(No. 5) 2005 06. The main difference is that proposed
subsection 10(4) which dealt with the Advance to the
Finance Minister has been recast. Subsection 10(4) of
Appropriation Act (No. 5) 2005 06 provided:
However, if an amount determined by the Finance
Minister under section 12 of the Appropriation Act (No. 1)
2005-2006 or section 12 of the Appropriation Act (No. 3)
2005-2006 is recovered from an amount set out in Schedule 1 to
this Act, the determined amount is to be disregarded for the
purposes of subsection (3).
Subclause 10(4) of Appropriation Bill (No. 5)
2006 07 provides:
However, if:
(a) an amount determined by the Finance Minister
under section 12 of the Appropriation Act (No. 1) 2006-07
is recovered from:
(i) an amount set out in Schedule 1 to the
Appropriation Act (No. 3) 2006-07; or
(ii) an amount set out in Schedule 1 to this Act;
or
(b) an amount determined by the Finance Minister
under section 12 of the Appropriation Act (No. 3) 2006-07
is recovered from an amount set out in Schedule 1 to this Act;
the determined amount is to be disregarded for the
purposes of subsection (3).
Compared to Appropriation Act (No. 5)
2005-06, Appropriation Bill (No. 5) 2006-07 adds
subparagraph 10(4)(a)(i) and thus broadens the
scope of the clause to include Appropriation Act (No. 3)
2006-07. The Explanatory Memorandum does not explain the
consequences of this inclusion.
The provisions of Appropriation Bill (No. 6)
2006 07 are generally identical to those in Appropriation Act
(No. 6) 2005 06. There are two main differences.
First, similar to Appropriation Bill (No. 5),
Appropriation Bill (No. 6) recasts a subsection subsection 12(4) of
Appropriation Act (No. 6) 2005-06 which dealt with the
Advance to the Finance Minister. Indeed, proposed
subsection 12(4) of Appropriation Bill (No. 6) contains
effectively identical wording to subclause 10(4) of Appropriation
Bill (No. 5) that is discussed above.
Second, proposed
paragraph 14(2)(b) recasts paragraph 14(2)(b) of
Appropriation Act (No. 6) 2005-06. Section
14 deals with conditions and other matters applying to
payments to the States, the ACT, the Northern Territory and local
governments. The minister set out the reasons for this change in
the second reading speech for Appropriation Bill (No. 2) 2007
08:
The bill includes a minor technical change to
section 14 to streamline ministerial determinations that are made
on payments to the states, territories and local government
authorities. The change will enable payments to be made without the
mandatory ministerial determination on the amount and timing. The
provision otherwise is unaltered and determinations may be issued
if required.(1)
Consequently, the wording of paragraph
14(2)(b) in Appropriation Bill (No. 6) is identical to that of
paragraph 14(2)(b) of Appropriation Bill (No. 2) 2007 08.
- Hon G Nairn, Special Minister of State,
Second reading speech: Appropriation Bill (No. 2) 2007 08 ,
Votes and Proceedings, 8 May 2007, p. 60.
Richard Webb
17 May 2007
Economics Section
Parliamentary Library
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ISSN 1328-8091
© Commonwealth of Australia 2007
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Published by the Parliamentary Library, 2007.
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