Advance to the Finance Minister Determination (No. 2 of 2018-2019)

Administered by Department of Finance

Legislation au F2019L00577 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Appropriation Act (No. 1) 2018-2019

AFM Determination (No. 2 of 2018-19)

Purpose of this Determination

The Advance to the Finance Minister (AFM) is provided under subsection 10(2) of Appropriation Act (No. 1) 2018-2019 (the Act). Section 10 provides that amounts can be issued from the AFM, up to a limit of $295 million. The Finance Minister must, however, be satisfied there is an urgent need for expenditure, in the current year, that is not provided for, or is insufficiently provided for, in Schedule 1 of the Act, for one of the reasons specified in paragraphs 10(1)(a) and (b).

The Finance Minister is satisfied, based on information provided by the Department of Home Affairs (Home Affairs) that the additional expenditure was unforeseen until after the last day on which it was practicable to provide for it in the Bill for the Act, before the Bill was introduced into the House of Representatives: paragraph 10(1)(b).

To enable Additional Estimates Bills for the 2018-19 year to be collated, audited and printed in time for the Estimates Hearings in the week beginning 18 February 2019, the Department of Finance set 28 January 2019 as the last date for entry of estimates into the Central Budget Management System. After data checking and sign off by Chief Financial Officers, the Finance Minister approved the final form of the bills on Thursday 7 February 2019, to enable printing of the bills and supporting materials over the subsequent weekend, in time for expected introduction on Tuesday 12 February 2019. The bills were introduced at 11:08am on Thursday 14 February 2019, to enable their consideration in Senate Additional Estimates hearings the following week.

On Tuesday 12 February 2019 the House of Representatives voted to agree to Senate amendments to the Home Affairs Legislation Amendment (Miscellaneous Measures) Bill 2018 (the Bill) and the House made additional amendments to the Bill. The following day, Wednesday 13 February 2019, the Senate agreed to the Bill as amended by the House, in a division that commenced at 11:05am. This parliamentary vote, that changed the financial impact of the Home Affairs Bill, occurred just a day earlier than the introduction of the Additional Estimates Bills.

Accordingly the legislative vote that gave rise to a need for additional Home Affairs expenditure came well after the time when it was logistically possible to include funding in the Additional Estimates Bills before their introduction into the House of Representatives.

An explanation of the magnitude of additional expenditure is provided in this determination under the heading ‘Consultation and Impact’ below. The additional expenditure represents the shortfall between available appropriations and estimated expenditure for the Home Affairs portfolio.

The effect of the determination is that Schedule 1 of Appropriation Act (No. 1) 2018-19 will have effect as if it were amended as specified in the determination.

Advances to the Finance Minister generally

The section providing for the AFM is contained in the annual Appropriation Acts. It enables the Finance Minister to facilitate urgent and unforeseen expenditure that was not within the contemplation of Parliament when the Appropriation Act was passed, and was therefore not provided for in Schedule 1 of the Appropriation Act.

A determination made under subsection 10(2) of Appropriation Act (No. 1) 2018-2019 is a legislative instrument, but neither section 42 (disallowance) nor Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 applies to the determination.

Statement of Compatibility with Human Rights

The annual 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, as the High Court has emphasised, beyond this, the annual Appropriation Acts do not create rights and nor do they, importantly, impose any duties.

Given that the legal effect of annual Appropriation Acts is limited in this way, the increase of amounts in the annual Appropriation Acts through an AFM is not seen as engaging, or otherwise affecting, the rights or freedoms relevant to the Human Rights (Parliamentary Scrutiny) Act 2011.

Consultation and Impact

Consistent with Chapter 3, Part 1 of the Legislation Act 2003, Home Affairs was consulted in the preparation of this Determination.

The instrument determines that, in Appropriation Act (No. 1) 2018-2019, the departmental item for Outcome 1 for Home Affairs is increased by $52.6 million.

The effect of the Home Affairs Legislation Amendment (Miscellaneous Measures) Act 2019 (the Miscellaneous Measures Act) requires the Department of Home Affairs to re-open the Christmas Island Detention Centre at short notice to deal with the management of people transferred from offshore processing centres. This determination meets the costs for reactivating the centre’s facilities; appropriate medical and security escorts; welfare and medical services; additional medical equipment; garrison security; departmental staffing; legal expenses; and translator and interpreter services.

Further, the Miscellaneous Measures Act requires the Department of Home Affairs to establish an Independent Health Advice Panel (IHAP) to monitor, assess and report on the physical and mental health of transitory persons who are in regional processing countries and the standard of health services provided to them. The functions of the IHAP came into effect on 2 March 2019.

The expenditure consequences of the amendments to the Home Affairs legislation were unforeseen until after it was practicable to provide for these costs before the introduction of preceding appropriation bills. Funding for the Miscellaneous Measures Act is consequently urgent because the operative provisions commenced the day after Royal Assent, without sufficient appropriations being available. Given the late stage of the financial year, and noting existing commitments of the Department of Home Affairs, there are not sufficient available reserves to meet the costs of implementing this legislation.

Before the end of the Financial Year the Department of Home Affairs will have drawn down all existing prior year departmental operating appropriations, and all remaining funds are fully committed for operating costs for the final quarter of the year. These existing appropriations are insufficient to also meet the costs of the above requirements. As such, without an Advance to the Finance Minister, the Department will not be able to meet its financial commitments as they fall due.

Overview

The Appropriation Act (No. 1) 2018-2019 was enacted to address urgent and unforeseen expenditures not accounted for in the initial appropriation schedules. This Act authorises the Finance Minister to provide an Advance to the Finance Minister (AFM) up to a limit of $295 million, subject to the condition that there is an urgent need for expenditure not provided for in the Act. The Act was introduced by the Australian Parliament to enable the government to meet unforeseen financial obligations that arise during the financial year, ensuring that critical services and operations can continue without disruption. The policy objective of the Act is to provide a mechanism for addressing urgent budgetary needs that were not anticipated at the time of the initial appropriation, thereby ensuring that the government can respond effectively to emergent circumstances without delay. This AFM Determination (No. 2 of 2018-19) was made under subsection 10(2) of the Appropriation Act (No. 1) 2018-2019 to provide for an additional $52.6 million in funding for the Department of Home Affairs to cover unforeseen costs related to the re-opening of the Christmas Island Detention Centre and the establishment of an Independent Health Advice Panel. This additional funding was necessitated by legislative changes that occurred after the appropriation bills had been finalised and introduced into Parliament, thus creating a shortfall that needed immediate attention to avoid breaching existing financial commitments.

Scope and Application

The Advance to the Finance Minister (AFM) Determination (No. 2 of 2018-19) is a legislative instrument that amends Appropriation Act (No. 1) 2018-2019 to facilitate an urgent and unforeseen expenditure requirement of $52.6 million for the Department of Home Affairs. This determination applies to the Commonwealth of Australia and is relevant to the Finance Minister and the Department of Home Affairs. The increase in funding is necessitated by the unforeseen requirements arising from the Home Affairs Legislation Amendment (Miscellaneous Measures) Act 2019, which mandates the reopening of the Christmas Island Detention Centre and the establishment of an Independent Health Advice Panel to monitor the health of transitory persons in regional processing countries. This AFM is permissible under subsection 10(2) of the Appropriation Act, which allows for urgent and unforeseen expenditures not provided for in the Act's Schedule 1. The determination takes effect as if Schedule 1 of the Appropriation Act were amended accordingly. Notably, this instrument is not subject to disallowance or sunsetting provisions, and it does not engage with human rights issues as the annual Appropriation Acts do not create rights or impose duties beyond authorising the withdrawal of money from the Consolidated Revenue Fund.

Key Provisions

The main operative sections of the Appropriation Act (No. 1) 2018-2019, as specified in the Explanatory Statement, permit the Finance Minister to issue an advance to the Finance Minister (AFM) up to a limit of $295 million if there is an urgent need for expenditure not provided for in the Act (section 10(2)). This AFM is contingent on the Finance Minister being satisfied that there is an urgent need for the expenditure (section 10(1)(a) and (b)). The Explanatory Statement details the necessity for this AFM due to unforeseen expenditure resulting from legislative changes that occurred after the appropriation bills were finalised. The obligations imposed by the Act on the parties involved, particularly the Finance Minister and the Department of Home Affairs, include ensuring that any AFM issued is justified by an urgent and unforeseen need for expenditure. The Finance Minister must be satisfied based on information provided by the relevant department that the expenditure falls under the criteria set out in section 10(1) of the Act. The Department of Home Affairs, in this case, has to provide detailed information on the unforeseen costs arising from the legislative changes that necessitate the AFM. The Explanatory Statement outlines that the determination of the AFM is a legislative instrument that is not subject to disallowance under section 42 of the Legislation Act 2003 or sunsetting under Part 4 of Chapter 3 of the same Act. This means that once the AFM is determined, it cannot be disallowed by Parliament nor will it automatically expire. The Statement also assures that the AFM does not engage or affect rights under the Human Rights (Parliamentary Scrutiny) Act 2011, as the Appropriation Acts do not create rights but merely authorise the withdrawal of money from the Consolidated Revenue Fund. The determination specifies that the departmental item for Outcome 1 for Home Affairs is increased by $52.6 million, reflecting the urgent need to reactivate the Christmas Island Detention Centre and establish an Independent Health Advice Panel. These funds are necessary to cover costs such as facility reactivation, medical and security escorts, welfare services, additional medical equipment, staffing, legal expenses, and translator services. The Statement emphasises that without this AFM, the Department of Home Affairs would be unable to meet its financial commitments as they fall due, given the insufficient existing appropriations and committed funds for the final quarter of the financial year. The Explanatory Statement does not specify any offences, penalties, or civil/criminal consequences for breach in relation to the AFM determination. However, it is implied that failure to provide the necessary AFM when justified could lead to the government being unable to meet its financial obligations, which could have broader implications for public services and the operation of government departments. The absence of specific penalties in the Statement suggests that the primary consequence of not providing the AFM is the inability to fund urgent and necessary government activities as required by law.

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

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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.

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