EXPLANATORY STATEMENT
Appropriation Act (No. 6) 2019‑2020
AFM Determination (No. 7 of 2019‑2020)
Purpose of the Determination
The Advance to the Finance Minister (AFM) is provided under subsection 12(2) of Appropriation Act (No. 6) 2019‑2020 (the Act). Section 12 provides that amounts can be allocated from the AFM, up to a limit of $24,000 million. The Finance Minister must, however, be satisfied there is an urgent need for expenditure, in the current year, that is not provided for, or is insufficiently provided for, in Schedule 1 of the Act, for one of the reasons specified in paragraphs 12(1)(a) and (b).
The Finance Minister is satisfied, based on information provided by the Department of Industry, Science, Energy and Resources (Industry) that the additional expenditure was unforeseen until after the last day on which it was practicable to provide for it in Appropriation Bill (No. 6) 2019‑2020 (the Bill), before it was introduced into the House of Representatives. The Bill was introduced into the House of Representatives on Wednesday 8 April 2020. An explanation of the additional expenditure is provided in this determination under the heading ‘Consultation and Impact’ below.
The Commonwealth Government agreed that this appropriation is essential to improving Australia’s fuel security and maximising value for Australian taxpayers. Consistent with paragraph 12(1)(b) of the Act funding is urgent because the timing for the expenditure was unforeseen when it was last possible to include funding in appropriation legislation before the end of the financial year.
The effect of the determination is that Schedule 1 of Appropriation Act (No. 6) 2019‑2020 will have effect as if it were amended as specified in the determination.
Commencement
The determination commences immediately after it is registered.
Advances to the Finance Minister generally
The section providing for the AFM is contained in the annual Appropriation Acts. It enables the Finance Minister to facilitate urgent and unforeseen expenditure that was not within the contemplation of Parliament when the relevant Appropriation Act was passed, and was therefore not provided for in Schedule 1 of the Appropriation Act.
A determination made under subsection 12(2) of Appropriation Act (No. 6) 2019‑2020 is a legislative instrument, but neither section 42 (disallowance) nor Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 applies to the determination.
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, as the High Court has emphasised, beyond this, the annual Appropriation Acts do not create rights and nor do they, importantly, impose any duties.
Given that the legal effect of annual Appropriation Acts is limited in this way, the increase of amounts in the annual Appropriation Acts through an AFM is not seen as engaging, or otherwise affecting, the rights or freedoms relevant to the Human Rights (Parliamentary Scrutiny) Act 2011.
Consultation and Impact
Consistent with Part 1 of the Legislation Act 2003, Industry was consulted in the preparation of this Determination.
The instrument determines that, in Appropriation Act (No. 6) 2019‑2020, the Administered Assets and Liabilities item for Industry is increased by $91,500,000.
This Advance is provided to enable Industry to purchase oil stocks.
Overview
The Appropriation Act (No. 6) 2019–2020, enacted by the Parliament of Australia, addresses the need to allocate funds for urgent and unforeseen expenditures not originally included in the appropriation bill. This Act allows for an Advance to the Finance Minister (AFM), up to a maximum of $24 billion, to be made under specific circumstances, ensuring that the government can meet immediate financial requirements. The AFM Determination (No. 7 of 2019–2020) specifies that the additional expenditure, amounting to $91.5 million, is necessary for the Department of Industry, Science, Energy and Resources to purchase oil stocks, thereby enhancing Australia's fuel security and maximising value for taxpayers. The urgency of this expenditure was recognised only after the appropriation bill was introduced to Parliament, necessitating the AFM to facilitate the required funding. This legislative instrument ensures that the Act operates as if amended by the determination, without the need for disallowance or sunsetting provisions.
Scope and Application
The Appropriation Act (No. 6) 2019-2020, as amended by the AFM Determination (No. 7 of 2019-2020), applies to the Commonwealth of Australia and specifically to the Finance Minister and the Department of Industry, Science, Energy and Resources. This legislation provides for an urgent and unforeseen appropriation of funds from the Advance to the Finance Minister, up to a limit of $24,000 million, to address immediate and unbudgeted expenditures necessary for public purposes. The urgency and unforeseen nature of these expenditures must align with the criteria specified in section 12(1)(a) and (b) of the Act, which require the Finance Minister to be satisfied that the expenditure is essential and could not have been reasonably anticipated at the time the Appropriation Bill was introduced. The determination allows for an increase in the Administered Assets and Liabilities item for the Department of Industry, Science, Energy and Resources by $91,500,000 to facilitate the purchase of oil stocks, thereby enhancing Australia’s fuel security and ensuring taxpayer value. The Act and its subordinate instruments do not provide for any specific exclusions or exemptions, and the jurisdictional reach is limited to the Commonwealth level.
Key Provisions
The main operative sections of the Appropriation Act (No. 6) 2019-2020, as detailed in the Explanatory Statement, pertain to the Advance to the Finance Minister (AFM) outlined in section 12(2). This section allows for the allocation of up to $24,000 million, provided the Finance Minister is satisfied that there is an urgent need for expenditure that is not or insufficiently provided for in Schedule 1 of the Act. This need must be due to one of the reasons specified in paragraphs 12(1)(a) and (b). In this instance, the urgent need was determined based on information from the Department of Industry, Science, Energy and Resources, which indicated that additional unforeseen expenditure was required for improving Australia’s fuel security.
The Act imposes specific obligations on the Finance Minister, including ensuring that any AFM is made only when there is an urgent need for expenditure not accounted for in the appropriation legislation. This determination requires the Finance Minister to be satisfied that the expenditure is both unforeseen and necessary before authorising the advance. Additionally, the Act mandates consultation with relevant departments, such as the Department of Industry, Science, Energy and Resources, to verify the necessity and urgency of the expenditure.
In terms of consequences for non-compliance or misuse, the Explanatory Statement clarifies that the determination is a legislative instrument that does not fall under the disallowance provisions of section 42 or the sunsetting provisions of Part 4 of Chapter 3 of the Legislation Act 2003. While the Act does not explicitly state penalties for breaches, the failure to adhere to the stringent conditions for an AFM could potentially lead to scrutiny and review by Parliament, as well as broader implications for financial oversight and appropriation processes.
The determination specifies an increase of $91,500,000 to the Administered Assets and Liabilities item for the Department of Industry, Science, Energy and Resources, enabling the purchase of oil stocks. This allocation is designed to address urgent and unforeseen expenditure related to improving Australia’s fuel security. The legislative instrument, once registered, comes into effect immediately, ensuring that the additional funds are available for their intended purpose without delay.