Advance to the Finance Minister Determination (No. 2 of 2021-2022)

Administered by Department of Finance

Legislation au F2021L01771 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Appropriation Act (No. 2) 2021-2022

AFM Determination (No. 2 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. 2 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 National Recovery and Resilience Agency (NRRA) 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 NRRA to support a decision by the Australian Government to extend the availability of the Pandemic Leave Disaster Payment (PLDP) until 30 June 2022.

The PLDP is a lump sum payment of up to $1,500 made to people who cannot earn an income because they must self-isolate, quarantine or care for someone who has to self-isolate or quarantine.

The NRRA assumed policy responsibility for the PLDP from 1 July 2021. At the 2021-22 Budget, the NRRA received $12.6 million in appropriation funding for the PLDP in 2021-22, for the period from July to October 2021, based on the outlook at that time for expected COVID cases. Actual expenditure for the payment has been higher than originally estimated due to the continuing rate of spread for COVID-19, in particular the emergence of the COVID-19 Delta variant which has higher reproductive characteristics compared to preceding strains.

The Finance Minister has made 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 $66 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 NRRA 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 1 for NRRA, as set out in Schedule 2 to the Act, being increased by $66,000,000.

Overview

The Appropriation Act (No. 2) 2021-2022, enacted in 2021, serves to address urgent financial needs that were not anticipated or inadequately provided for during the drafting of the annual budget. This Act allows for the allocation of funds to unforeseen expenditures through a mechanism known as the Advance to the Finance Minister (AFM), as stipulated under section 12 of the Act. The AFM mechanism empowers the Finance Minister to amend the appropriation schedule to accommodate urgent spending requirements, subject to specific conditions including the necessity of the expenditure and its unforeseen nature post the budget bill's introduction to Parliament. The Act was enacted by the Parliament of Australia to ensure fiscal flexibility in responding to unpredicted economic or social circumstances, such as the ongoing impact of the COVID-19 pandemic. The policy objective underpinning this Act is to provide the government with the capacity to swiftly allocate additional funds to critical areas without the delay inherent in the standard legislative process.

Scope and Application

The Appropriation Act (No. 2) 2021-2022, and specifically the AFM Determination (No. 2 of 2021-2022) under section 12 of the Act, applies to the Finance Minister and the National Recovery and Resilience Agency (NRRA), an entity established to oversee the Australian Government’s response to the COVID-19 pandemic. This legislation provides a mechanism for the Finance Minister to amend the appropriation schedule to account for urgent, unforeseen expenditures related to the pandemic, in this instance, the extension of the Pandemic Leave Disaster Payment (PLDP) until 30 June 2022. The determination permits the appropriation of an additional $66 million to the NRRA for this purpose, thereby addressing the urgent need for increased funding to support the extended PLDP. The Act applies at the Commonwealth level, impacting federal government expenditure. The determination is not subject to disallowance or sunset provisions under the Legislation Act 2003. No specific exclusions, exemptions, or thresholds are stated in the explanatory statement, though the determination process is restricted by the conditions outlined in section 12 of the Act, requiring urgency and unforeseeability of the expenditure.

Key Provisions

The main operative sections of this legislation include sections 12 and 12(4) of the Appropriation Act (No. 2) 2021-2022. Section 12 allows the Finance Minister to amend Schedule 2 of the Act to make provision for urgent expenditure up to a total limit of $3,000 million, if certain conditions are met. Section 12(4) specifies that such determinations are not subject to disallowance and do not sunset, meaning they remain in effect unless specifically revoked. The obligations and requirements imposed by this Act on the parties it governs, particularly the Finance Minister and the National Recovery and Resilience Agency (NRRA), involve the necessity to ensure that any urgent expenditure not originally provided for in the Appropriation Bill is both necessary and unforeseen. The Finance Minister must be satisfied that the urgent need for expenditure falls under the criteria of either an erroneous omission or understatement or being unforeseen until after the last practicable day to include it in the Bill. The NRRA, in this case, is required to provide information and estimates to the Finance Minister to facilitate the determination process. There are no direct offences, penalties, or civil/criminal consequences specified for breach of this Act in the provided text. However, the implications of not adhering to the processes and requirements set forth could potentially lead to financial mismanagement or failure to address urgent needs, which may attract scrutiny or consequences under other applicable laws or regulations. The legislation itself focuses on the procedural framework for making urgent appropriations and does not detail specific penalties for non-compliance with its provisions.

Area of Law: Finance & Banking Law
Instrument: Statutory Instrument
Concepts: Definitions & Interpretation; Offence Provisions; Reporting & Disclosure Obligations; 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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