Advance to the Finance Minister Determination (No. 1 of 2020-2021)

Overview

The Supply Act (No. 2) 2020-2021 was enacted to address urgent and unforeseen expenditures not accounted for in the initial appropriation legislation due to the exigencies posed by the COVID-19 pandemic. The Act, introduced by the Australian Parliament, empowers the Finance Minister to allocate funds through Advances to the Finance Minister (AFM) when there is an immediate necessity for expenditure not covered or inadequately provided for in the appropriations schedule. The policy objective is to ensure that the government can respond swiftly to unforeseen circumstances, such as the economic impacts of the COVID-19 pandemic, by providing necessary funding to support critical infrastructure and economic resilience. This legislative instrument allows for the allocation of up to $24 billion, adjusted for previous AFMs, to be distributed as needed, subject to the approval of the Finance Minister and the conditions stipulated in the Act.

Scope and Application

The Supply Act (No. 2) 2020-2021 provides for the allocation of funds to the Finance Minister to facilitate urgent and unforeseen expenditure, as outlined in the AFM Determination (No. 1 of 2020-2021). This particular determination allows for an allocation of up to $24,000 million, after accounting for an existing allocation of $91.5 million under the Appropriation Act (No. 6) 2019-2020, resulting in a balance of $23,908.5 million. The determination is applicable to the Department of Infrastructure, Transport, Regional Development and Communications, specifically to fund the Local Roads and Community Infrastructure Program for local governments to undertake road resilience and community infrastructure projects in response to the economic impact of COVID-19. This allocation is conditional on the Finance Minister being satisfied that there is an urgent need for the expenditure, which was not previously provided for in the Supply Bill (No. 2) 2020-2021. The legislation does not impose any duties or rights beyond authorising the withdrawal of money from the Consolidated Revenue Fund for the purposes identified, and is thus considered compatible with human rights under the Human Rights (Parliamentary Scrutiny) Act 2011.

Key Provisions

The Supply Act (No. 2) 2020-2021, as amended by the AFM Determination (No. 1 of 2020-2021), allows for an urgent allocation of funds from the Advance to the Finance Minister (AFM) up to a maximum of $24,000 million. This provision is adjusted to $23,908.5 million after accounting for prior AFMs issued under the Appropriation Act (No. 6) 2019-2020. The Act mandates that the Finance Minister must be convinced of an urgent necessity for certain expenditures in the current fiscal year, which were not sufficiently covered in Schedule 2 of the Act. This urgency must be due to reasons outlined in paragraphs 12(1)(a) and (b). In this instance, the additional expenditure was identified as unforeseen until after the last practicable day to include it in the Supply Bill (No. 2) 2020-2021, introduced into the House of Representatives on 23 March 2020. The AFM Determination (No. 1 of 2020-2021) specifies an additional $250 million allocation to the Infrastructure sector for Outcome 3, which is intended to fund the Local Roads and Community Infrastructure Program. This funding aims to support local governments in delivering road resilience and community infrastructure projects to stimulate economic activity following the initial impact of COVID-19. The Finance Minister's satisfaction with the urgency and necessity of this expenditure is based on information from the Department of Infrastructure, Transport, Regional Development and Communications (Infrastructure). The determination amends Schedule 2 of the Supply Act (No. 2) 2020-2021 to reflect this additional allocation, thereby enabling the required funding to proceed. The Supply Act (No. 2) 2020-2021 imposes specific obligations on the Finance Minister and the relevant government departments. The Finance Minister must ensure that any allocation from the AFM is justified by an urgent and unforeseen need for expenditure. This requirement necessitates thorough consultation and substantiation from relevant departments, such as Infrastructure, to validate the necessity of the additional funds. The Act also stipulates that the AFM determination must be made in accordance with the legislative requirements and must be consistent with the overall budgetary framework established by the Appropriation Acts. The Infrastructure department, in turn, must provide detailed explanations and justifications for the additional funding, ensuring alignment with the legislative intent and fiscal responsibilities. Breaching the requirements set forth in the Supply Act (No. 2) 2020-2021 and the AFM Determination (No. 1 of 2020-2021) could lead to various legal consequences. Although the explanatory statement does not explicitly mention specific offences or penalties, non-compliance with appropriation laws generally can result in administrative penalties, financial repercussions, or legal actions. These might include fines, imprisonment, or other civil or criminal penalties as prescribed under relevant Australian laws. The seriousness of the breach, intent, and the impact on public funds typically influence the severity of these penalties. It is essential for the Finance Minister and the relevant departments to adhere strictly to the legislative requirements to avoid any legal or financial liabilities.