Explanatory Statement
Appropriation Act (No. 1) 2007-2008, Section 11 – Advance to the Finance Minister
The instrument to which this explanatory statement relates
This explanatory statement relates to an instrument (the instrument) entitled “Advance to the Finance Minister – Section 11 of Appropriation Act (No. 1) 2007-2008”, dated 17 October 2007 and numbered 3 of 2007-2008.
The legislative authority under which the instrument is made
The Advance to the Finance Minister is a provision authorised by the annual Appropriation Acts and made available to the Finance Minister as a central contingency fund to provide urgent funding to agencies throughout the financial year.
In Appropriation Act (No. 1) 2007-2008, the Advance to the Finance Minister is provided for under section 11. This section indicates that amounts can be issued from the Advance to the Finance Minister, up to a limit of $175 million, if the Finance Minister is satisfied that:
(a) There is an urgent need for expenditure, in the current year, that is not provided for, or is insufficiently provided for, in Schedule 1 (which sets out the amounts appropriated); and
(b) The additional expenditure is not provided for, or is insufficiently provided for, in Schedule 1:
(i) Because of an erroneous omission or understatement; or
(ii) Because the additional expenditure was unforeseen until after the last day on which it was practicable to provide for it in the Bill for this Act before that Bill was introduced into the House of Representatives.
Exercise of the provision via the issue of a determination, has effect as if Schedule 1 of Appropriation Act (No. 1) 2007-2008 were amended to make provision for the additional expenditure specified in the determination.
In an instrument dated 12 February 2003, the Finance Minister has authorised the person holding the position of SES Band 2, Financial Reporting and Cash Management Division in the Department of Finance and Administration to exercise the power provided for under section 11 of Appropriation Act (No. 1) 2007-2008.
Purpose of the instrument
The instrument determines that the Administered Expenses – Outcome 13 appropriation for the Department of Health and Ageing in Appropriation Act (No. 1) 2007-2008 be increased by $48,760,078.
Background
The background to the instrument is provided in the application made by the Department of Heath and Ageing for funding from the Advance to the Finance Minister. The application is reproduced below.
APPLICATION FOR FUNDS - ADVANCE TO THE FINANCE MINISTER 2007-2008
Agency: Department of Health and Ageing
Appropriation: Appropriation Act (No. 1) 2007-2008
Description: Administered expenses – Outcome 13
Description of Outcome: Acute Care - Australians have access to public hospitals and related hospital care underpinned by appropriate medical indemnity arrangements.
Source of Available Funds | 2005-06 | 2006-07 | 2007-08 |
$ | $ | $ | |
Appropriation Act (No. 1) | N/A | 15,491,000 | 13,992,000 |
Receipts including Section 8 retention |
| 2,807,373 |
|
|
|
|
|
TOTAL FUNDS AVAILABLE | N/A | 18,298,373 | 13,992,000 |
|
|
|
|
TOTAL EXPENDITURE | N/A | 12,614,072 | 5,608,078 |
Note: Expenditure as at 15 October 2007
|
|
|
|
TOTAL UNSPENT FUNDS | N/A | 5,684,301 | 8,383,922 |
NB Outcome 13 did not exist in 2005-06 and comparable data is unavailable
Funds Required: $ 57,144,000
Funds Currently Unspent: $ 8,383,922
Note: As at 16 October 2007 1430
Amount required from AFM: $ 48,760,078
AFM Category: Appropriation Act (No. 1) 2007-2008 Part 3 11 (1)(b)(ii)
Explanation of requirements from AFM:
Since the 2007-08 Budget the Australian Government has announced a number of hospital and blood related initiatives. These initiatives will be funded from the Department of Health and Ageing’s outcome 13 - Acute Care. Outcome 13 – Acute Care Appropriation Act (No.1) 2007-2008 already has a number of commitments including the demand driven life saving bone marrow transplantation program and only has $8.384 million cash remaining.
Mersey Community Hospital
The Commonwealth Government signed a binding Heads of Agreement on 24 September 2007 for the transfer of the Mersey Hospital from the Tasmanian State government to the Commonwealth government.
From 1 November 2007, the ownership and responsibility for the hospital transfers to the Commonwealth. The Commonwealth will require funds before it commences operations. A Community Hospital Board will take over responsibility for running the Hospital as soon as practical in 2008.
On 10 October 2007, the Commonwealth government committed an additional $1 million for payment by 1 November 2007. The money is intended to upgrade essential equipment for Mersey Hospital.
In total it is expected that $44.951 million will be required in payments to operate the Mersey Hospital. This will provide adequate funds until May 2008 when the Appropriation Act (No. 3) 2007-2008 is expected to receive Royal Assent.
Tasmanian Health Initiatives
On 8 October 2007, the Prime Minister announced Australian Government funding of $35 million over four years for a number of measures to improve Tasmania’s health services infrastructure.
In 2007-08, the Australian Government will contribute a total of $5.8 million towards Tasmanian Health Initiatives. It is anticipated that $2 million will be required to be paid in October 2007 for the Ouse and Rosebery Hospitals. Other anticipated payments include $1 million for Launceston Hospital, $0.75 million for Burnie Hospital and a further $2.05 million is required to pay for hospital transportation in the region.
Blood and Organ Donation
The Prime Minister has agreed that the $2 million for the Year of the Blood Donor measure will now be paid in 2007-08. The measure was originally funded over 3 years. This will require payment of $1 million during December 2007, pending contract finalisation. The balance will be paid at the end of year. There are also expected to be $5.393 million required for activities in this area originally provided for in the 2007-08 Budget.
In summary, the Department of Health and Ageing is seeking funding of $48.76 million (GST exclusive) to cover the funding obligations of the Mersey Hospital, Tasmanian Health Initiative, Year of the Blood Donor measure and ongoing blood and organ donation services. This will provide adequate funds until May 2008 when Appropriation Act (No. 3) 2007-2008 is expected to have received Royal Assent.
Urgent:
A number of payments need to be made before passage of Appropriation Act (No.3) 2007-08. These include $44.951 million of funding for Mersey Hospital, $5.8 million for the Tasmanian Health Initiatives and $6.393 million under the Blood and Organ Donation Services Program. Insufficient funds are currently available for these payments to occur. It is expected that all legal appropriations will be depleted by 23 October 2007. As at 16 October 2007, Outcome 13 – Acute Care Appropriation Act (No. 1) 2007-2008 has $8.384 million cash available.
Unforeseen:
The recent government announcements for the above health initiatives were made after the finalisation of Appropriation Bill (No. 1) 2007-2008.
Notes on the instrument
The instruments provides that the appropriation item listed in column 1 for the Department of Health and Ageing be increased by the amount listed in column 3. The instrument specifies that the additional amount be provided to cover the funding obligations for the Mersey Community Hospital, Tasmanian Health Initiatives, Year of the Blood Donor measure and ongoing blood and organ donation services.