Advance to the Finance Minister Determination (No. 3 of 2021-2022)

Administered by Department of Finance

Legislation au F2021L01795 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Appropriation Act (No. 2) 2021-2022

AFM Determination (No. 3 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. 3 of 2021-2022)), the Finance Minister is satisfied that there is an urgent need for the expenditure for the reason in s 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 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 Memorandums 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 the Bill, 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 mainly relates to expenses accrued for the months of November and December 2021 (including forward provision of funding for anticipated liabilities in the latter part of December 2021). By covering two months of costs, this AFM ensures continuity of financing to meet liabilities as they fall due and supports ongoing project work across the Christmas and New Year periods.

This AFM supports funding for 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.

Trade packages have been awarded by managing contractor Multiplex for the CNR Melbourne related to bulk earthworks, landscaping and civil works. Site infrastructure activities include electrical, mechanical, hydraulics, sewerage and waste packages. Other activities include construction of central buildings and facilities to support the Centre and manufacturing of modular accommodation units and delivery to site.
This AFM includes design and management costs for the CNR Perth and the CNR Brisbane. It also includes activities by Multiplex on bulk earthworks, civils, landscaping and costs for accommodation modules for both locations.

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 $403 million. This funding brings total AFMs for construction of CNRs to $621 million to date, following an AFM for $218 million provided in November.

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, allocating amounts from the AFM provision in the annual Appropriation Acts does not engage or otherwise affect the human rights described in the Human Rights (Parliamentary Scrutiny) Act 2011.

Consultation and Impact

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 Departmental item for Outcome 2 for Finance, as set out in Schedule 2 to the Act, being increased by $403 million.

Overview

The Appropriation Act (No. 2) 2021-2022, enacted in 2021, addresses the need to provide for urgent and unforeseen expenditures that are not accounted for in the original appropriation schedule. This Act authorises the Finance Minister to make an Advance to the Finance Minister (AFM) by legislative instrument, allowing for the amendment of Schedule 2 to allocate up to $3 billion for such expenditures. This mechanism was introduced to ensure that the government can respond to unforeseen circumstances without waiting for the annual appropriation process. The policy objective of this Act is to enable the government to meet urgent financial requirements swiftly and efficiently, thereby maintaining the continuity and effectiveness of public services and projects. The determination under section 12 of this Act, namely AFM Determination (No. 3 of 2021-2022), allows for the allocation of additional funds to construct Centres for National Resilience in Mickleham, Pinkenba, and Bullsbrook, addressing the urgent need for additional quarantine capacity during the COVID-19 pandemic. This determination is a legislative instrument made by the Finance Minister, and while it is subject to parliamentary scrutiny, it is not subject to disallowance or sunset provisions as stipulated in the Legislation Act 2003.

Scope and Application

The Appropriation Act (No. 2) 2021-2022 and the accompanying AFM Determination (No. 3 of 2021-2022) apply to the Finance Minister, who is empowered by section 12 of the Act to make certain urgent expenditure provisions up to a total limit of $3 billion. This determination specifically facilitates the allocation of an additional $403 million to support the construction of Centres for National Resilience (CNRs) in Mickleham, Victoria; Pinkenba, Queensland; and Bullsbrook, Western Australia. This urgent funding addresses unforeseen expenses related to the construction of these facilities, necessitated by the need to provide additional quarantine capacity for higher-risk international travellers amidst the COVID-19 pandemic. The additional funding is intended to support the Commonwealth’s commitments under separate Memorandums of Understanding with the governments of Victoria, Queensland, and Western Australia. While the Act provides for such urgent appropriations, it is noted that the determination, being a legislative instrument, is not subject to disallowance or sunset provisions as outlined in the Legislation Act 2003.

Key Provisions

The Appropriation Act (No. 2) 2021-2022 includes Section 12, which allows the Finance Minister to amend Schedule 2 of the Act to address urgent expenditures not covered or insufficiently covered in the original appropriation (s 12(1)). Section 12(2) permits the Finance Minister to make such a determination if there is an urgent need for expenditure that is either due to an omission or understatement in the appropriation (s 12(1)(a)), or unforeseen expenditure occurring after the last practicable date to include it in the Bill (s 12(1)(b)). For this determination, the Finance Minister has identified an urgent need for expenditure under s 12(1)(b). The additional funding provided by this Advance to the Finance Minister (AFM) supports the construction of Centres for National Resilience (CNRs) in Mickleham, Pinkenba, and Bullsbrook, addressing the need for additional quarantine capacity and future contingencies such as natural disasters, health crises, or humanitarian situations (s 12(3)). This determination is the third AFM for the 2021-2022 financial year and brings the total funding for CNR construction to $621 million. Under the Act, the Finance Minister must be satisfied that there is an urgent need for the expenditure, as outlined in Section 12(1). The obligation to provide additional funding falls on the Finance Minister, who must determine whether the criteria for an urgent need are met based on information from the Department of Finance. Once the determination is made, Schedule 2 of the Act is amended to reflect the additional funding, ensuring that the necessary resources are available to support the construction of the CNRs (s 12(4)). The Finance Minister must also ensure that the total amount provided for by all AFMs does not exceed the $3,000 million limit specified in the Act (s 12(1)). Breaches of the requirements under Section 12 of the Act do not directly result in criminal or civil penalties, as the Act's provisions are primarily administrative in nature. However, failure to comply with the legislative process for making determinations could lead to legal challenges regarding the validity of the AFM. The Act specifies that the determination is not subject to disallowance under Section 42 of the Legislation Act 2003 and will not sunset according to Part 4 of Chapter 3 of the Legislation Act (s 12(4)). The Act ensures that the process for making such determinations is robust and that the additional funding is provided in a timely manner to meet urgent needs, without the need for additional legislative scrutiny beyond the initial determination.

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

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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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