Advance to the Finance Minister Determination (No. 4 of 2020-2021)

Overview

The Supply Act (No. 2) 2020-2021, enacted in 2020, addresses the urgent and unforeseen expenditure needs arising from the COVID-19 pandemic that were not accounted for in the initial appropriation legislation. This Act was introduced by the Australian Parliament to provide the necessary financial flexibility to respond to the unprecedented global health crisis, ensuring that the government could swiftly allocate resources to combat the spread of the virus and protect public health. The policy objective of this legislation is to enable the Finance Minister to make immediate allocations from the Advance to the Finance Minister (AFM) when there is an urgent need for expenditure that could not be anticipated at the time of drafting the Supply Bill. The explanatory statement highlights that the additional expenditure is critical for procuring essential medical supplies and equipment, underscoring the necessity for rapid financial response mechanisms in extraordinary circumstances.

Scope and Application

The Supply Act (No. 2) 2020-2021 and the associated AFM Determination (No. 4 of 2020-2021) govern the allocation of funds through the Advance to the Finance Minister (AFM) mechanism. This Act applies to the Commonwealth of Australia and is specifically directed towards the Finance Minister, who is authorised to allocate funds under the AFM to address urgent and unforeseen expenditures not provided for in the appropriations schedules. The determination allows for an allocation of up to $24 billion, with the current available amount set at $23,658.5 million, following certain prior allocations. The AFM is intended to support urgent needs identified by government departments, such as the Department of Health, in this instance for the procurement of personal protective equipment and other essential medical supplies to address the COVID-19 pandemic. The Act does not apply to any other entities or individuals outside the scope of the Finance Minister's authority to allocate AFM funds, and no specific exclusions or exemptions are stated beyond the statutory constraints on the use of AFM provisions. The geographic reach of this legislation is limited to the national level, operating within the framework of Commonwealth legislation.

Key Provisions

The Supply Act (No. 2) 2020-2021, particularly through subsection 12(2), provides for an Advance to the Finance Minister (AFM) of up to $24,000 million, adjusted for previous allocations under the Appropriation Act (No. 6) 2019-2020. Currently, the available amount for allocation from the Supply Act (No. 2) 2020-2021 stands at $23,658.5 million, following allocations of $91.5 million and $250.0 million respectively from the earlier Appropriation Act and the Supply Act itself. The Finance Minister may allocate funds from the AFM if there is an urgent need for expenditure that was not or is insufficiently provided for in Schedule 2 of the Act, for reasons specified in paragraphs 12(1)(a) and (b). Such allocations are permissible if the expenditure is unforeseen and necessary within the current year, a condition satisfied in this instance by information from the Department of Health (Health). The Act imposes specific obligations on the Finance Minister to ensure that the urgent and unforeseen nature of the expenditure is verified, based on credible and timely information provided by relevant government departments, such as Health. The Minister must also ensure that the expenditure falls within the allowable limits and that it addresses an urgent need that could not be reasonably anticipated when the Supply Bill (No. 2) 2020-2021 was introduced into the House of Representatives on 23 March 2020. This determination is instrumental in allowing the Act to operate as if amended, reflecting the need for flexibility in funding critical areas like the procurement of personal protective equipment and other essential medical supplies and equipment. The legislation does not specify offences or penalties for breach within the AFM provision itself, but any misuse or misallocation of funds could potentially lead to broader legal consequences under other provisions of the Supply Act or related financial management regulations. The AFM provision is designed to ensure that urgent, unforeseen expenditures are met without the need for additional parliamentary approval, thus facilitating prompt action in times of crisis. The legal instrument is exempt from certain legislative scrutiny processes such as disallowance and sunsetting as per the Legislation Act 2003. The compatibility of this AFM provision with human rights is upheld as the High Court has noted that annual Appropriation Acts do not create rights or impose duties beyond the authorisation of withdrawals from the Consolidated Revenue Fund. Consequently, the increase of amounts through an AFM does not engage or affect relevant human rights or freedoms as stipulated under the Human Rights (Parliamentary Scrutiny) Act 2011. This determination was prepared in consultation with Health, aligning with the legislative requirement under Part 1 of the Legislation Act 2003. The specific allocation of $384,060,000 to Health is intended to address the unforeseen scale of the COVID-19 pandemic by funding essential supplies for the National Medical Stockpile.