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 and Copyright Details
Appropriation Bill (No.3)
1998-99
Date Introduced: 3 December 1998
House: House of Representatives
Portfolio: Finance and Administration
Commencement: On Royal Assent
To authorise the Minister for Finance to issue
an additional $1 382 330 000 from the Consolidated Revenue Fund
(CRF), in addition to funds appropriated by the Appropriation
Act (No.1) 1998-99, for the ordinary annual services of the
government.
Annual authorisations for expenditure are
contained in:
-
- Appropriation Act (No. 1), which authorises
expenditure for the ordinary annual services of government
-
- Appropriation Act (No. 2), which authorises
expenditure on capital works and services, payments to the States
and other purposes not authorised by special legislation, and
-
- Appropriation (Parliamentary Departments) Act (No.1),
which authorises expenditure for the five parliamentary
departments.
If the initial appropriation is insufficient for
the financial year additional appropriations may be sought. These
additional appropriations are known as additional estimates - their
purpose being to meet essential and unavoidable expenditures.
Glossary of Terms
Appropriation - is the setting apart,
assigning or applying to a particular use or to a particular person
a sum of money. In the budget context an appropriation usually
refers to an authorisation by Parliament to draw on funds from the
CRF.
Budget Outlays - refer to the net cost
to the taxpayer of providing government services.
Appropriations/payments out of the CRF are adjusted to take account
(for example) of many government receipts. Hence a hypothetical
government program 'XYZ' may have a total appropriation of $600
million but this may only represent budget outlays of $500 million
if the 'XYZ' receives income of $100 million from other
(non-budget) sources.
Running costs - are the full current
and minor capital costs incurred by a department or agency in
providing government services for which the department or agency is
responsible. For many departments, staff salaries will represent
the largest proportion of such costs.
Carryovers - are the mechanism by which
funds appropriated for running costs in one year can be spent in
some future year. The rationale for carrying forward unspent
funding is based upon flexibility. Carryovers also reduce the
incentive for unnecessary end-of-year spending and allow managers
to plan spending without being restricted by cut-off dates. Up to
10 per cent of the total running costs budget can be carried
forward from any one year.
Borrowings - Borrowings allow agencies
to bring forward some future years' appropriation to be spent in an
earlier year. This is intended to provide agencies with the
flexibility to respond to changing spending priorities; and a
mechanism to meet unforeseen costs.
Borrowings are arranged either through annual
appropriation or additional estimates Bills, with a consequent
reduction in a future appropriation, or through the Provision for
Running Costs Borrowings (PRCB). The PRCB is a reserve that
agencies can draw on to borrow running costs funds from future
appropriation where it is not viable to wait until the passage of
the next Appropriation Bill. Agencies can borrow from the PRCB
if:
-
- there is a legitimate reason to borrow running costs
-
- the agency has a running costs appropriation
-
- the borrowings are repaid in full from some future
appropriation, and
-
- sufficient funds are available.
Agencies are allowed to borrow up to 10% of the
total running costs budget from any one year.
It is suggested that this Bills Digest
be read in conjunction with the Parliamentary Research Service
Budget Review 1998-99.
Outline of Major Additional
Appropriations
Major additional appropriations effected by this
Bill are:
-
- Attorney-General's Department - $27 680 000 is appropriated for
the running costs of the Australian Federal Police (AFP). Most of
this amount is associated with the AFP Reform program.(1)
-
- Department of Defence - Changing priorities has lead to an
appropriation of $119 021 000 for running costs.(2) An
appropriation of $22 329 000 is for compensation and legal services
associated with the Military Compensation Scheme.(3) The Defence
Housing Authority receives an appropriation of $58 052 000 to
'reposition itself in the market'.(4)
-
- Department of Employment, Workplace Relations and Small
Business - $83 237 000 is appropriated for labour market training
and assistance largely due to carryovers.(5) An amount of $2 085
000 is appropriated to meet the litigation costs of the waterfront
dispute.(6)
-
- Department of Family and Community Services - $147 047 000 is
appropriated for the running costs of Centrelink(7) which also
receives an appropriation of $64 849 000 for delivery of income
support services.(8) An amount of $32 267 000 is appropriated for
child care assistance due to a delay in the implementation of the
childcare smartcard.(9)
-
- Department of Health and Aged Care - $21 700 000 is
appropriated for the running costs associated with additional
funding for private health insurance initiatives.(10) An amount of
$46 942 000 is appropriated to meet obligations in capital funding
for residential facilities.(11) An amount of $39 060 000 is
appropriated for contestable hearing services as a result of new
contract arrangements with service providers and
manufacturers.(12)
-
- Department of Industry, Science and Resources - $20 102 000 is
appropriated for the running costs of the Australian Geological
Survey Organisation. This includes imposition of a capital use
charge for the Symonston building in Canberra of $18 387 000.(13)
An amount of $18 579 000 is appropriated for bounty payments under
the Bounty (Computers) Act 1984 to meet additional claims
lodged and anticipated through to the end of the current financial
year.(14)
-
- Department of the Treasury - $247 500 000 is appropriated for
servicing the debt of the Australian National Railways
Commission.(15)
Clause 4 authorises the Minister for Finance to
issue from the CRF a total of $1 382 330 000 in respect of the year
ending 30 June 1999. The Schedule gives a portfolio and program
break-up of the proposed expenditure.
Clause 6 authorises the
Minister for Finance to issue additional funds in respect of
increases in salaries in 1998-99.
-
- Additional Estimates Statements 1998-99, Attorney-General's
Portfolio, p.70.
- Appropriations Bill (No.3) 1998-99, Second Reading Speech,
Minister for Finance and Administration, the Hon. John Fahey, MP, 3
December 1998.
- Ibid.
- Ibid.
- Ibid.
- Additional Estimates Statements 1998-99, Employment, Workplace
Relations and Small Business Portfolio, p.19.
- Commonwealth Services Delivery Agency.
- Additional Estimates Statements 1998-99, Family and Community
Services Portfolio, p.22.
- Ibid., p.23.
- Additional Estimates Statements 1998-99, Health and Aged Care
Portfolio, p.6.
- Ibid.
- Appropriations Bill (No.3) 1998-99, Second Reading Speech,
Minister for Finance and Administration, the Hon. John Fahey, MP, 3
December 1998.
- Additional Estimates Statements 1998-99, Industry, Science and
Research Portfolio, p.32.
- Ibid., p.21.
- Additional Estimates Statements 1998-99, Treasury Portfolio,
p.16.
Ross Kilmurray
6 January 1999
Bills Digest Service
Information and Research Services
This paper has been prepared for general distribution to
Senators and Members of the Australian Parliament. While great care
is taken to ensure that the paper is accurate and balanced, the
paper is written using information publicly available at the time
of production. The views expressed are those of the author and
should not be attributed to the Information and Research Services
(IRS). Advice on legislation or legal policy issues contained in
this paper is provided for use in parliamentary debate and for
related parliamentary purposes. This paper is not professional
legal opinion. Readers are reminded that the paper is not an
official parliamentary or Australian government document.
IRS staff are available to discuss the paper's contents with
Senators and Members
and their staff but not with members of the public.
ISSN 1328-8091
© Commonwealth of Australia 1999
Except to the extent of the uses permitted under the
Copyright Act 1968, no part of this publication may be
reproduced or transmitted in any form or by any means, including
information storage and retrieval systems, without the prior
written consent of the Parliamentary Library, other than by Members
of the Australian Parliament in the course of their official
duties.
Published by the Department of the Parliamentary Library,
1999.
Back to top