Bills Digest no. 152 2006–07
Appropriation Bill
(No. 2) 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
Endnotes
Contact Officer & Copyright Details
Passage History
Appropriation Bill (No. 2)
2007-08
Date introduced:
8 May 2007
House: House of Representatives
Portfolio: Finance and
Administration
Commencement:
On Royal
Assent
To appropriate
approximately $10.133 billion for the non-ordinary (or other )
annual services of government.
Section 83 of the Constitution provides that
no monies may be withdrawn from the Consolidated Revenue Fund
except under an appropriation made by law . Laws authorising
spending are either:
Of the appropriation Bills introduced to
accompany the May Budget, by far the most important in dollar terms
is Appropriation Bill (No. 1), which appropriates funds for the
ordinary annual services of the government while 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 was
updated to take account of the adoption of accrual budgeting).
The Appropriation Bill (No. 2) 2007-2008 (the
Bill) provides funding for agencies to meet:
-
expenses in relation to grants to the States
under section 96 of the Constitution and for payments to the
Northern Territory, the Australian Capital Territory and local
government authorities
-
new administered expenses
-
requirements for so-called non-operating costs,
that is, for equity injections, loans and previous years outputs
appropriations, and
-
requirements to create or acquire administered
assets and to discharge administered liabilities.
The Bill appropriates about $10.133 billion
(compared to about $9.215 billion in Appropriation Act (No. 2)
2006-2007).
The provisions of the Bill are generally
identical to those in Appropriation Act (No. 2) 2006-07.
The main difference is that the Bill drops the section relating to
adjustments to departmental items.
Section 12 of Appropriation Act (No. 1)
2006-07 allowed the Finance Minister to increase, by
determination, spending on departmental items. The maximum allowed
was $20 million. Such determinations were legislative instruments
but were not disallowable under the Legislative Instruments Act
2003. The Bill, by removing this section, eliminates the power
of the Finance Minister to increase departmental appropriations by
determination. The practical effect is that the amount authorised
for departmental appropriations is capped at the amounts specified
in the Bill. The minister, in the second reading speech, gave the
following as the reason for this change:
We have also taken the opportunity to remove a
redundant provision from appropriation bills Nos. 1 and 2 and the
parliamentary departments appropriation bill. The Departmental
Items Adjustments and other similar provisions will no longer be
required in the annual appropriation bills. These sections were
originally included to smooth the transition to the accrual
arrangements implemented in 1999-2000. They have not been exercised
for some five years and are no longer required.(1)
However, the power to
make some supplementation remains. Under proposed section
12, the Finance Minister may increase the total amount
appropriated in Schedule 1 by up to a total of
$175 million in urgent cases where the need for an additional
amount was unforeseen or not provided for due to an erroneous
omission or understatement . A determination by the Finance
Minister increasing the appropriation is a legislative instrument,
but is not disallowable under the Legislative Instruments Act
2003: proposed subsection 12(4).
The only other change is to
proposed paragraph 14(2)(b).
Proposed section 14 deals with conditions attached
to payments to the states and territories and to local government.
Proposed section 14 provides that where a payment is made, it must
accord with the conditions of the payments, and with the way set
out in subsection 14(3). Paragraph 14(2)(b) has
three elements. Payments:
-
with respect to amounts and timing must accord
with a determination
-
the determination must be in writing, and
-
the Minister specified in column 4 of the table
in Schedule 1 must make the determination.
The minister, in the second reading speech,
gave the following reason for the change:
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 require
d.
(2)
-
Hon G Nairn, Special Minister of State, Second reading speech:
Appropriation Bill (No. 2) 2007 08 , Votes and
Proceedings, 8 May 2007, p. 60.
-
ibid.
Richard Webb
18 May 2007
Bills Digest Service
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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