EXPLANATORY STATEMENT
Appropriation Act (No. 1) 2020‑2021
AFM Determination (No. 7 of 2020‑2021)
Purpose of this Determination
The Advance to the Finance Minister (AFM) is provided under subsection 10(2) of Appropriation Act (No. 1) 2020‑2021 (the Act). Section 10 provides that amounts can be allocated from the AFM, up to a limit of $4,000 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 10(1)(a) and (b).
The Finance Minister is satisfied, based on information provided by the Department of Infrastructure, Transport, Regional Development and Communications (Infrastructure) that the additional expenditure was unforeseen until after the last day on which it was practicable to provide for it in Appropriation Bill (No. 1) 2020‑2021 (Bill 1), before it was introduced into the House of Representatives (paragraph 10(1)(b)). Bill 1 was introduced into the House of Representatives on Tuesday, 6 October 2020.
The Australian Government has agreed that this additional expenditure is necessary to provide urgent support to the aviation sector during the next stages of recovery from the COVID-19 pandemic. Continuing aviation support announced in December 2020, including a further extension to the Domestic Aviation Network Support program, and the Tourism and Aviation Stimulation Package announced in March 2021, could not have been foreseen to be included in Bill 1.
Although funding for the aviation support announced in December 2020 has been subsequently included in Appropriation Bill (No. 3) 2020‑2021 (Bill 3), the need for additional expenditure is urgent as payments are required to be made before appropriations will be available from Bill 3, once enacted.
To the extent that payments for aviation support are met using this Advance to the Finance Minister, offsetting amounts will be withheld from Bill 3 by the Department of Finance after that legislation commences.
The result of the determination is that Schedule 1 of Appropriation Act (No. 1) 2020‑2021 will have effect as if it were amended as specified in the determination.
Advances to the Finance Minister generally
Sections providing for the AFM is contained in each of the annual Appropriation Acts. They enable 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 relevant Act.
A determination made under subsection 10(2) of Appropriation Act (No. 1) 2020‑2021 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, Infrastructure was consulted in the preparation of this determination.
The instrument determines that, in Appropriation Act (No. 1) 2020‑2021, the administered item for Outcome 2 for Infrastructure is increased by $475,816,000.
Overview
The Appropriation Act (No. 1) 2020-2021, enacted by the Parliament of Australia, addresses the need for urgent and unforeseen expenditures that were not accounted for in the initial appropriation bill due to the unprecedented nature and rapid development of the COVID-19 pandemic. The Act provides a mechanism through which the Finance Minister can make additional appropriations if there is an urgent need for expenditure that was not included in the original appropriation bill, as specified in subsection 10(2). This determination allows for the provision of necessary funds to support sectors severely impacted by the pandemic, such as the aviation industry, which was grappling with the fallout of drastically reduced travel and operational capabilities. The policy objective here is to ensure that critical sectors receive timely financial support to aid in their recovery and stability during a national crisis.
Scope and Application
The Appropriation Act (No. 1) 2020-2021 provides for the appropriation of funds for the Commonwealth Government's expenditure for the financial year 2020-2021. The Act applies to the Commonwealth of Australia and its entities, with specific allocations outlined in Schedule 1. The AFM Determination (No. 7 of 2020-2021) amends the Act by increasing the administered item for Outcome 2 for Infrastructure by $475,816,000 to facilitate urgent and unforeseen expenditure. This additional funding is required to support the aviation sector's recovery from the COVID-19 pandemic, with payments needed before appropriations will be available from subsequent appropriation bills. The determination is a legislative instrument that alters the effect of Schedule 1 of the Appropriation Act (No. 1) 2020-2021, and it is exempt from disallowance and sunsetting provisions. The increase in funding through the AFM is deemed not to engage or affect any human rights under the Human Rights (Parliamentary Scrutiny) Act 2011, as the legal effect of Appropriation Acts is limited to authorising the withdrawal of money from the Consolidated Revenue Fund.
Key Provisions
The key provisions of the Appropriation Act (No. 1) 2020-2021 AFM Determination (No. 7 of 2020-2021) are contained in section 10, which allows for an advance to the Finance Minister (AFM) up to a limit of $4,000 million (section 10(2)). This provision 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 Act. This can only occur if the Finance Minister is satisfied that 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 (section 10(1)(a) and (b)). This determination is based on the information provided by the Department of Infrastructure, Transport, Regional Development and Communications that the additional expenditure was unforeseen until after the last day on which it was practicable to provide for it in Appropriation Bill (No. 1) 2020-2021 (section 10(1)(b)).
The Act imposes several obligations on the parties and entities it governs. Firstly, the Finance Minister must be satisfied that there is an urgent need for expenditure that is not provided for or is insufficiently provided for in Schedule 1 of the Act (section 10(1)(a) and (b)). Secondly, the Department of Infrastructure, Transport, Regional Development and Communications must provide information to the Finance Minister to enable the Minister to make this determination (section 10(1)(b)). Finally, the Department of Finance must withhold offsetting amounts from Appropriation Bill (No. 3) 2020-2021 once that legislation commences (section 10(2)).
There are no specific offences, penalties, or civil/criminal consequences outlined in the Act for breach of its provisions. However, the Act is a legislative instrument, and therefore, any breach of its provisions could potentially lead to legal action being taken against the relevant party or entity. The maximum penalty for breach of a legislative instrument is generally a fine of up to $21,000 for individuals and up to $105,000 for bodies corporate, as outlined in the Criminal Code Act 1995 (Cth). However, it is important to note that the specific penalties for breach of this Act may vary depending on the nature and severity of the breach.