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 18 January 2008 and numbered 4 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.
Purpose of the instrument
The instrument determines that the Administered Expenses – Outcome 1 appropriation for the Department of Agriculture Fisheries and Forestry in Appropriation Act (No. 1) 2007-2008 be increased by $90,183,625. The additional amount is provided to meet income support payments for those affected by the drought and assistance to the horse industry in dealing with the outbreak of equine influenza.
Background
The background to the instrument is provided in the application made by the Department of Agriculture, Fisheries and Forestry 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 Agriculture, Fisheries and Forestry
Appropriation: Appropriation Act (No. 1) 2007-2008
Description: Administered Expenses - Outcome 1
Description of Outcome: More sustainable, competitive and profitable Australian agricultural, food, fisheries and forestry industries
Source of Available Funds | 2005-2006 | 2006-2007 | 2007-2008 |
$ | $ | $ | |
Appropriation Act (No. 1) | 310,070,000 | 513,728,000 | 392,012,000 |
Appropriation Act (No. 3) | 168,532,000 | 66,844,000 | - |
Appropriation Act (No. 5) | 366,305,000 | - | - |
Section 32 transfer | - | (2,711,646) | - |
TOTAL FUNDS AVAILABLE | 844,907,000 | 577,860,354 | 392,012,000 |
|
|
|
|
TOTAL EXPENDITURE | 811,903,432 | 524,519,695 | 357,065,501 |
|
|
|
|
TOTAL UNSPENT FUNDS | 33,003,568 | 53,340,659 | 34,946,499 |
Funds Required: $125,130,124
Funds Currently Unspent: $34,946,499
Amount required from AFM: $90,183,625
AFM Category: Appropriation Act (No. 1) 2007-2008 Part 3 11 (1)(b)(ii)
Explanation of requirements from AFM:
The Department of Agriculture, Fisheries and Forestry (the Department) requires funds from the Advance to the Finance Minister to allow payments in January and February 2008 of funds for the various Administered Programs under Appropriation Act (No. 1) 2007-2008.
Significant funds have been expended in providing for an increased take up in Drought Assistance – Interim Income Support and payments relating to the response for Equine Influenza. There have been a number of other drought related assistance packages which have arisen since the finalisation of Appropriation Bill (No. 1) 2007-2008 and subsequently approved as part of the 2007-08 MYEFO process. The Department is therefore seeking additional funds totaling $90.2 million to allow payments to continue to be made for programs under Appropriation Act (No.1) 2007-2008 during January and February 2008 prior to the anticipated availability of funding from an emergency bill: Appropriation (Drought and Equine Influenza Assistance) Bill (No. 1) 2007-2008 which is not expected to be available before late February 2008.
Urgent:
The Department is planning to make an estimated $125.1 million in payments in January and February 2008. As at 14 January 2008, the Department has remaining funding of $34.9 million. This funding is expected to run out by 21 January 2008 based on current projections.
Unforeseen:
Since the 2007-08 Budget, there has been a significant increase in the take up of drought assistance – interim income support assistance in areas which have been drought declared and a strong take up of the expanded drought related entitlements packages announced by the Government. There has also been the widespread outbreak of equine influenza with considerable funding being provided to assist the horse industry cope with the economic consequences. These were unforeseen at the time of the preparation of the 2007-08 Budget and no funding was provided for these additional requirements.
Notes on the instrument
The instruments provides that the appropriation item listed in column 1 for the Department of Agriculture, Fisheries and Forestry be increased by the amount listed in column 3. The instrument specifies that the additional amount be provided to meet income support payments for those affected by the drought and assistance to the horse industry in dealing with the outbreak of equine influenza.