Advance to the Finance Minister Determination (No. 6 of 2019-2020)

Overview

The Appropriation Act (No. 1) 2019-2020, enacted by the Australian Parliament, facilitates the allocation of funds to address urgent and unforeseen expenditure not initially provided for in the Act's appropriation schedule. The Act includes a provision under subsection 10(2) that enables the Finance Minister to allocate funds from an Advance to the Finance Minister (AFM) up to a limit of $295 million, contingent on the Finance Minister being satisfied that there is an urgent need for such expenditure. This Act aims to ensure that the government can respond to unforeseen circumstances that require immediate financial allocation to maintain essential services and operations. The policy objective is to provide flexibility in funding to meet unexpected needs while maintaining fiscal responsibility and parliamentary oversight. The explanatory statement for AFM Determination (No. 6 of 2019-2020) clarifies that the Advance to the Finance Minister was deemed necessary to support the Department of Industry, Science, Energy and Resources in leasing storage in the United States Strategic Petroleum Reserve for oil stocks. This allocation was determined to be urgent and unforeseen, as it was not contemplated when the Appropriation Bill (No. 5) 2019-2020 was introduced into the House of Representatives. The additional $2.5 million is intended to enhance Australia's fuel security and deliver value to taxpayers, aligning with the government’s commitment to critical national interests.

Scope and Application

The Appropriation Act (No. 1) 2019-2020 and the associated AFM Determination (No. 6 of 2019-2020) apply to the Commonwealth of Australia, specifically to the Finance Minister and the Department of Industry, Science, Energy and Resources. The Act facilitates the provision of urgent and unforeseen expenditure through the Advance to the Finance Minister, allowing for the allocation of funds up to a limit of $295 million when there is an urgent need for expenditure not initially provided for in the appropriation legislation. The AFM Determination increases the Administered item for Outcome 3 for Industry by $2,500,000, enabling the Department to lease storage in the United States Strategic Petroleum Reserve for oil stock purchases. This additional appropriation is considered essential for improving Australia's fuel security and ensuring maximum value for Australian taxpayers. The determination comes into effect immediately after registration and is a legislative instrument under the Legislation Act 2003, exempt from disallowance and sunsetting provisions. It is also noted that the increase in appropriation does not engage or affect human rights, as confirmed by the Human Rights (Parliamentary Scrutiny) Act 2011.

Key Provisions

The Appropriation Act (No. 1) 2019-2020 (the Act) includes a provision for an Advance to the Finance Minister (AFM) under section 10 (subsection 10(2)). This provision allows for the allocation of up to $295 million when the Finance Minister determines there is an urgent need for expenditure that was not or is insufficiently provided for in Schedule 1 of the Act (subsection 10(1)). The urgency must be due to one of the reasons specified in subsection 10(1)(a) or (b), namely, the expenditure being unforeseen until after the last practicable opportunity to include it in appropriation legislation or the timing of the expenditure being unforeseen at the time the relevant Appropriation Act was passed. This determination is reflected in the Explanatory Statement, which indicates that the additional expenditure was unforeseen until after the Appropriation Bill (No. 5) 2019-2020 was introduced into the House of Representatives. The Act imposes specific obligations on the Finance Minister, including the requirement to be satisfied that there is an urgent need for the additional expenditure, and that this need falls within the parameters of subsection 10(1)(a) or (b). The Finance Minister must also rely on information provided by the relevant department, in this case, the Department of Industry, Science, Energy and Resources (Industry), to substantiate the need for the AFM. Furthermore, the Commonwealth Government must agree that the appropriation is essential for a specific purpose, such as improving Australia's fuel security and maximising value for Australian taxpayers. The obligation extends to ensuring that the AFM is consistent with the constitutional function of the Appropriation Acts, which is to authorise the withdrawal of money from the Consolidated Revenue Fund. The Act does not explicitly state any offences or penalties for breaches of its provisions. However, the determination process and the allocation of the AFM are subject to scrutiny and parliamentary oversight. Any misuse or mismanagement of the AFM could potentially lead to broader accountability and transparency issues, although specific penalties are not detailed in the Act. The Act also notes that the AFM is not subject to the disallowance process under section 42 of the Legislation Act 2003 nor the sunsetting provisions in Part 4 of Chapter 3 of the same Act. Additionally, the Act includes a Statement of Compatibility with Human Rights, clarifying that the annual Appropriation Acts do not create rights or impose duties beyond authorising the withdrawal of money from the Consolidated Revenue Fund. Consequently, the increase in amounts through an AFM is not seen as engaging or affecting any relevant rights or freedoms under the Human Rights (Parliamentary Scrutiny) Act 2011. The consultation process with the relevant department, in this instance Industry, is mandated by Part 1 of the Legislation Act 2003 and is reflected in the Explanatory Statement, which notes that Industry was consulted in preparing this determination.