Advance to the Finance Minister Determination (No. 8 of 2020-2021)

Administered by Department of Finance

Legislation au F2021L00829 Not in force Legislative Instrument

Select Document

EXPLANATORY STATEMENT

Appropriation Act (No. 1) 2020‑2021

AFM Determination (No. 8 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. One allocation of $475.816 million has been made from the Act. Upon the commencement of Appropriation Act (No. 3) 2020‑2021 the provision under the Act has been reset to $4,000 million for the remainder of 2020‑21. Therefore, the amount available for allocation from the Act is $4,000 million prior to making this determination. 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. 3) 2020‑2021 (Bill 3), before it was introduced into the House of Representatives (paragraph 10(1)(b)). Bill 3 was introduced into the House of Representatives on Thursday, 18 February 2021. The Australian Government agreed to this funding subsequently in the 2021-22 Budget process and the decision was published in Budget Paper 2 at page 70.

The Australian Government has agreed that this additional expenditure is necessary to provide urgent support to Airservices Australia during the next stages of recovery from the COVID-19 pandemic. The downturn in commercially funded aviation activity has significantly reduced the revenue base for Airservices.

Essential aviation services provided by Airservices, to ensure the safe and efficient management of Australia’s skies and the provision of aviation rescue fire fighting services at Australia's busiest airports, cannot be adjusted in line with these changes to revenue. The one-off funding will accordingly ensure continued support for the major Australian airports for critical air navigation, air traffic control, and aviation fire and rescue services.

Payment up-front provides certainty for operations and planning, including for reserves to support cashflow and management of supplier costs. The Budget measure reflects transfer the funds in the 2020-21 year and an AFM is the appropriate available means to provide the funding on this up-front basis.

This form of temporary grant support is consistent with previous decisions during the COVID-19 pandemic to provide revenue-substitution amounts to Airservices in the form of grants.

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 $550,000,000.

Overview

The Appropriation Act (No. 1) 2020-2021 was enacted to address urgent and unforeseen expenditure requirements not initially provided for in the appropriations schedules due to their unexpected nature or timing. This Act, passed by the Parliament of Australia, allows for the allocation of funds through the Finance Minister to meet immediate and unforeseen financial needs that arise during the fiscal year, such as those caused by extraordinary circumstances like the COVID-19 pandemic. The Act aims to ensure that the government can continue to provide essential services and support critical infrastructure despite unexpected fiscal pressures. The Advance to the Finance Minister (AFM) provision under the Act enables the Finance Minister to allocate up to a specified limit, thereby allowing for flexibility in managing the budget in response to unforeseen events.

Scope and Application

The Advance to the Finance Minister (AFM) Determination (No. 8 of 2020-2021) amends the Appropriation Act (No. 1) 2020-2021 to allocate an additional $475.816 million from the AFM to provide urgent support to Airservices Australia during the ongoing recovery from the COVID-19 pandemic. This determination applies to the Australian Government and specifically to the Department of Infrastructure, Transport, Regional Development and Communications, which has requested the additional funds. The urgent need for this funding arises from the unforeseen downturn in commercially funded aviation activity, which has significantly reduced the revenue base for Airservices Australia. This reduction in revenue impacts the provision of essential aviation services, including air navigation, air traffic control, and aviation fire and rescue services at Australia's busiest airports. The geographic reach of this Act is national, as it pertains to the provision of critical services across Australia. The additional funding is a one-off measure to ensure continued support for these services, reflecting the government's commitment to maintaining safe and efficient management of Australia's skies. This AFM determination does not apply to any specific exclusions or exemptions beyond the statutory requirements for urgent and unforeseen expenditure. The application of the Act is further extended or restricted through subordinate instruments, which allow for the appropriation of funds not specifically allocated in the original Appropriation Act.

Key Provisions

The key operative sections of the Appropriation Act (No. 1) 2020-2021, particularly relevant to this determination, include section 10 which outlines the provisions for an Advance to the Finance Minister (AFM) (subsections 10(1) and 10(2)). Section 10(2) specifically authorises the Finance Minister to allocate funds from the AFM, up to a limit of $4,000 million, to meet urgent and unforeseen expenditure not initially provided for in Schedule 1 of the Act. This determination follows the criteria in section 10(1), which requires the Finance Minister to be satisfied of an urgent need for expenditure, either because it was not provided for or was insufficiently provided for, and for one of the reasons specified in paragraphs 10(1)(a) and (b). Additionally, the explanatory statement provides clarity on the resetting of the available amount for allocation after the commencement of Appropriation Act (No. 3) 2020-2021. The Act imposes several obligations on the Finance Minister. Firstly, the Minister must ensure that the additional expenditure is indeed urgent and unforeseen, aligning with the conditions specified in section 10(1). This includes verifying that the expenditure was not within the contemplation of Parliament when the relevant Appropriation Act was passed, and was therefore not provided for in Schedule 1. Additionally, the Finance Minister must be satisfied that the additional funds are necessary to address the urgent needs of Airservices Australia during the recovery from the COVID-19 pandemic. The determination also necessitates consultation with relevant departments, such as the Department of Infrastructure, Transport, Regional Development and Communications, to substantiate the need for the additional funding. The Minister's role also extends to ensuring that the expenditure is consistent with the broader budgetary process and policy decisions, such as those reflected in Budget Paper 2. There are no specific offences, penalties, or civil/criminal consequences outlined in the Act for breaches related to the AFM determination. However, the misuse of funds allocated through an AFM could potentially lead to broader administrative or legal repercussions, depending on how the funds are utilised and whether they comply with other legislative requirements. The primary focus of the Act is on ensuring that the additional funds are used for their intended purpose and that the process for approving such allocations is transparent and justified. Failure to meet these obligations could result in scrutiny from parliamentary committees or other oversight bodies, but the Act itself does not specify maximum penalties for breaches of the AFM provisions.

Area of Law: Finance & Banking Law
Instrument: Statutory Instrument
Concepts: Definitions & Interpretation; Offence Provisions; Regulatory Standards

Interactions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

Legislation content