Advance to the Finance Minister Determination (No. 5 of 2020-2021)

Overview

The Supply Act (No. 1) 2020-2021, enacted by the Parliament of Australia, was introduced to provide financial allocations for government expenditure during the 2020-2021 fiscal year, including mechanisms for unforeseen urgent expenditures. This Act facilitates the allocation of funds through the Advance to the Finance Minister (AFM), allowing the Finance Minister to address urgent and unforeseen expenses that were not anticipated at the time of the Act's passage. The AFM provision under this Act enables the allocation of up to $16 billion, subject to reductions based on previous AFM issuances. The policy objective is to ensure that essential services and industries receive timely financial support when unforeseen circumstances arise, such as the economic impact of the COVID-19 pandemic on the domestic airline industry. The explanatory statement outlines that the AFM was utilised to provide an additional $1,038.834 million, with a remaining balance of $14,961.166 million available for future allocations, contingent on the Finance Minister's determination of urgent need for expenditure not covered in the Act.

Scope and Application

The Supply Act (No. 1) 2020-2021, as specified in the AFM Determination (No. 5 of 2020-2021), applies to the Australian Government, specifically the Department of Infrastructure, Transport, Regional Development and Communications, to facilitate urgent and unforeseen expenditure required to support the domestic airline industry during the COVID-19 pandemic. The Act allows for the allocation of up to $16 billion from the Advance to the Finance Minister, subject to specific conditions outlined in the Act. The application of this Act is limited to the Commonwealth jurisdiction and is in effect for the 2020-2021 financial year. The determination made under subsection 10(2) of Supply Act (No. 1) 2020-2021 is a legislative instrument and is not subject to the disallowance provisions under section 42 or the sunsetting provisions under Part 4 of Chapter 3 of the Legislation Act 2003. The Act does not impose any rights or duties beyond authorising the withdrawal of money from the Consolidated Revenue Fund for the purposes identified in the Act, and thus does not engage or affect any rights or freedoms under the Human Rights (Parliamentary Scrutiny) Act 2011. The determination under the Supply Act (No. 1) 2020-2021 allows for an increase in administered items for Outcome 2 for Infrastructure by $71,734,000 to fund payments under the Domestic Aviation Network Support program. This additional expenditure is necessary to maintain connectivity on major domestic air routes and is considered essential due to the unforeseen circumstances arising from the COVID-19 pandemic. The Finance Minister must be satisfied that there is an urgent need for the expenditure, which is not provided for or is insufficiently provided for in Schedule 1 of the Act. The determination is based on consultation with Infrastructure and is intended to ensure that payments can be made before appropriations will be available from the Appropriation Bill (No. 1) 2020-2021 once enacted. The application of this Act is limited to the Commonwealth and does not extend to state or territory jurisdictions.

Key Provisions

The key provisions of Supply Act (No. 1) 2020-2021, as amended by the AFM Determination (No. 5 of 2020-2021), allow the Finance Minister to allocate funds through an Advance to the Finance Minister (AFM) to meet urgent and unforeseen expenditure needs. According to section 10 of the Act, the total amount available for such advances is capped at $16,000 million, reduced by any amounts already issued under the Appropriation Act (No. 5) 2019-2020. This determination has allocated $1,038.834 million from the Supply Act, leaving $14,961.166 million still available for allocation. The Finance Minister can only make such an allocation if they are satisfied that there is an urgent need for expenditure not provided for or insufficiently provided for in Schedule 1 of the Act, due to unforeseen circumstances or as a result of specific reasons outlined in section 10(1)(a) and (b). In this case, the additional expenditure is deemed essential to support the domestic airline industry during the COVID-19 pandemic, as it was unforeseen until after the last practicable time to include it in the Supply Bill (No. 1) 2020-2021. The AFM Determination imposes specific obligations on the Finance Minister and relevant government departments. The Finance Minister must be convinced of the urgent and unforeseen nature of the expenditure and ensure that it is essential for public purposes. This decision-making process must be based on consultations and information provided by relevant departments, such as the Department of Infrastructure, Transport, Regional Development and Communications. The Infrastructure department must provide detailed information justifying the need for additional funds, ensuring that these funds will be used effectively and efficiently to meet the specified objectives. The Act requires that any determination under section 10(2) be in accordance with the legislative requirements and the reasons specified in the Act. Breaching the provisions of this Act can lead to significant civil and criminal consequences. Although the explanatory statement does not explicitly outline the penalties for non-compliance, breaches of legislative instruments in Australia can typically result in fines, imprisonment, or both, depending on the severity of the breach. For instance, under section 13.6 of the Legislation Act 2003, civil penalties can be imposed for non-compliance with legislative instruments, and section 12.2 of the same Act allows for the imposition of criminal penalties for serious breaches. The maximum penalties can vary but often include substantial fines and potential imprisonment terms, especially if the breach affects public funds or government operations significantly. It is crucial for all parties involved to adhere strictly to the provisions and requirements set out in the Act to avoid such consequences.