Advance to the Finance Minister Determination (No. 1 of 2021-2022)

Administered by Department of Finance

Legislation au F2021L01581 Not in force Legislative Instrument

Select Document

EXPLANATORY STATEMENT

Appropriation Act (No. 2) 2021-2022

AFM Determination (No. 1 of 2021-2022)

Purpose of this Determination

The Advance to the Finance Minister (AFM) is a mechanism provided under section 12 of Appropriation Act (No. 2) 2021-2022 (the Act). Section 12 permits the Finance Minister, by legislative instrument, to effectively amend Schedule 2 to the Act to make provision for certain urgent expenditure up to a total limit of $3,000 million.

Section 12(1) has the effect that a determination can only be made under s 12(2) if the Finance Minister is satisfied there is an urgent need for expenditure, in the current year, that is not provided for, or is insufficiently provided for, in Schedule 2 of the Act either:

because of an erroneous omission or understatement (see s 12(1)(a)), or
because the expenditure was unforeseen until after the last day on which it was practicable to provide for it in the Bill for the Act introduced into the House of Representatives (see s 12(1)(b)).

In relation to the present determination (AFM Determination (No. 1 of 2021-2022), the Finance Minister is satisfied that there is an urgent need for the expenditure for the reason in 12(1)(b).

The Bill for the Act was Appropriation Bill (No. 2) 2021-2022 (the Bill). The Bill was introduced into the House of Representatives on 11 May 2021. The Finance Minister is satisfied, based on information provided by the Department of Finance (Finance), that the additional expenditure was unforeseen until after the last day on which it was practicable to provide for it in the Bill before it was introduced to the House of Representatives on this date.

Additional funding is provided to the Department of Finance to support decisions by the Australian Government to construct Centres for National Resilience (CNRs) at Mickleham in Victoria, Pinkenba in Queensland and Bullsbrook in Western Australia. The CNRs are urgently required to provide dedicated additional quarantine capacity to manage higher-risk cohorts of international travellers arriving during the COVID-19 pandemic, as Australia reopens to international travel. The CNRs are also intended to provide future contingency, including for natural disasters, health crises, or humanitarian situations.

This AFM is required to support the Commonwealth’s commitments to construct the respective CNRs and hand them over to State Government operators, as agreed in separate Memoranda of Understanding with the Governments of Victoria (4 June 2021), Queensland (16 August 2021) and Western Australia (16 August 2021). Due to the timing of these commitments, the additional expenditure was unforeseen until after the last day on which it was practicable to provide for it in Appropriation Bill (No. 2) 2021-22, before it was introduced into the House of Representatives on 11 May 2021.

Under its contractual arrangements the Commonwealth is obliged to reimburse the managing contractor (Multiplex) and other suppliers largely on a monthly basis, reflecting liabilities incurred in preceding periods. Multiple cost components are subject to ongoing procurement activities and approaches to market. This AFM therefore mainly relates to the expenses accrued by the month of October 2021.

Initial payments for the CNRs, in periods preceding October 2021, were funded from some of the balance held in the Australian Government’s Property Special Account. The Property Special Account supports the non-Defence property portfolio and is used to receive rental payments from Commonwealth tenants and to meet costs related to Commonwealth properties, with residual funds ordinarily returned to Consolidated Revenue.

This AFM primarily supports funding for early stage construction works at the CNR Melbourne and early-stage costs for the CNR Perth and the CNR Brisbane. The Commonwealth continues to actively procure in the market for future stages of works, so in the interests of continuing to ensure value for money, this Explanatory Statement does not disaggregate the value of project costs by the type of cost component. To ensure an appropriate level of transparency, the broad heads of costs are summarised below.

A substantial number of trade packages have been awarded by managing contractor Multiplex for the CNR Melbourne related to bulk earthworks, landscaping and civil works. Site infrastructure activities are well underway and include electrical, mechanical, hydraulics, sewerage and waste packages. Construction of central buildings and facilities has also commenced to support the Centre. In addition, orders have been placed for accommodation units and manufacturing by modular contractors has commenced with a number of modules already delivered to site.
This AFM includes design and management costs for the CNR Perth and the CNR Brisbane, initial module orders for both locations and some civil works for CNR Brisbane.

Consequently, the Finance Minister is able to make a determination under s 12(2) of the Act. The result of the determination is that Schedule 2 of the Act will have effect as if it were amended as specified in the determination. The total amount that the present determination makes provision for is $218 million.

The effect of s 12(4) of the Act is that although the determination is a legislative instrument, it is not subject to disallowance in accordance with s 42 of the Legislation Act 2003 (Legislation Act).

Section 12(4) of the Act also provides that the determination will not sunset in accordance with Part 4 of Chapter 3 of the Legislation Act.

Statement of Compatibility with Human Rights

Appropriation Acts perform an important constitutional function, by authorising the withdrawal of money from the Consolidated Revenue Fund for the broad purposes identified in the annual Appropriation Acts. However, annual Appropriation Acts do not create rights or impose any duties on an individual.

Given that the legal effect of annual Appropriation Acts is limited in this way, an increase to amounts appropriated in accordance annual Appropriation Acts through the AFM mechanism does not engage or otherwise affect the human rights described in the Human Rights (Parliamentary Scrutiny) Act 2011.

Consultation and Impact

The Department of Finance was consulted in the preparation of this determination in accordance with s 17 of the Legislation Act.

This determination results in the amount specified in the administered item for Outcome 2 for Finance, as set out in Schedule 2 to the Act, being increased by $218,000,000.

Overview

The Appropriation Act (No. 2) 2021-2022, enacted in 2021, was designed to address urgent expenditure needs that were unforeseen at the time the Appropriation Bill (No. 2) 2021-2022 was introduced to the House of Representatives on 11 May 2021. This Act enables the Finance Minister, under section 12, to make an Advance to the Finance Minister (AFM) to cover urgent expenditure requirements not initially provided for in Schedule 2 of the Act, up to a limit of $3,000 million. The policy objective of this legislation is to ensure that the Australian Government can respond promptly to unforeseen circumstances, such as the urgent need to construct Centres for National Resilience (CNRs) in response to the COVID-19 pandemic and other potential contingencies. The determination made under this Act allocates $218 million to support the early-stage construction of CNRs in Mickleham, Pinkenba, and Bullsbrook, thereby fulfilling the Commonwealth's commitments as outlined in Memoranda of Understanding with the governments of Victoria, Queensland, and Western Australia.

Scope and Application

The Appropriation Act (No. 2) 2021-2022, complemented by the AFM Determination (No. 1 of 2021-2022), provides the Finance Minister with the authority to amend the Act's Schedule 2 to cater for urgent expenditure not initially accounted for due to unforeseen circumstances or errors. This legislative mechanism is designed to address situations where expenditure needs arise post the introduction of the appropriation bill into the House of Representatives, particularly in cases of unforeseen expenditures, such as those necessitated by the COVID-19 pandemic and the urgent need to construct Centres for National Resilience (CNRs) in various locations across Australia. This authority is confined to a maximum total of $3,000 million and applies to specific projects like the CNRs in Mickleham, Pinkenba, and Bullsbrook, which aim to provide additional quarantine capacity and future contingency for various crises. The Act applies to the Commonwealth of Australia, focusing on the Department of Finance and its associated entities, and the expenditure covered pertains to the construction and management of the CNRs. The Act does not extend to state or territory governments, nor does it apply to private entities unless they are directly involved in the execution of the specified projects under contract with the Commonwealth. This AFM determination is not subject to disallowance or sunset provisions, ensuring its continued applicability until the specified expenditure is completed.

Key Provisions

The Appropriation Act (No. 2) 2021-2022 (the Act) contains provisions that allow for urgent expenditures not initially budgeted for, specifically through an Advance to the Finance Minister (AFM) mechanism outlined in section 12 of the Act. Section 12(2) empowers the Finance Minister to amend Schedule 2 of the Act, facilitating the allocation of funds for urgent needs that either were not accounted for due to an error or were unforeseen until the last practicable moment before the Bill's introduction to the House of Representatives (section 12(1)(a) and (b)). This provision was utilized in the AFM Determination (No. 1 of 2021-2022) to address the urgent need for constructing Centres for National Resilience (CNRs) in Mickleham, Pinkenba, and Bullsbrook. The determination, made under section 12(2), allows the Act to be amended as specified, ensuring the necessary funding is available to meet the urgent demands for additional quarantine capacity and future contingencies like natural disasters or health crises. The Act imposes specific obligations on the Finance Minister and other relevant parties, particularly in relation to the AFM mechanism. The Finance Minister must be satisfied that there is an urgent need for the expenditure, as detailed in section 12(1). This requirement ensures that any determination made under section 12(2) is justified by a genuine and pressing need. Additionally, the Act mandates that the determination is not subject to disallowance under section 42 of the Legislation Act 2003 and will not sunset, as specified in section 12(4) of the Act. This provision ensures that the legislative instrument retains its effect without the need for ongoing parliamentary oversight, streamlining the process for urgent appropriations. Under the Act, there are no specific offences or penalties outlined for breaches of the AFM mechanism. However, the determination and its implementation are subject to the general legal framework governing financial appropriations and legislative instruments. Unauthorized or improper use of the AFM mechanism could lead to legal challenges or administrative penalties, depending on the nature and extent of the breach. The Act's provisions ensure that any expenditure made under the AFM is transparent, justified, and in accordance with the legislative intent, thereby mitigating potential risks associated with its use.

Area of Law: Finance & Banking Law
Instrument: Statutory Instrument
Concepts: Definitions & Interpretation; Offence Provisions; Compliance Obligations; Regulatory Standards

Interactions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

Legislation content