Explanatory Statement
Appropriation Act (No. 1) 2004-05, Section 12 – 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 12 of Appropriation Act (No. 1) 2004-05”, dated 29 June 2005 and numbered 4 of 2004-2005.
The legislative authority under which the instrument is made
The Advance to the Finance Minister (the Advance) is a central contingency fund to provide urgent appropriation to agencies through the year where existing appropriation proves insufficient or a new appropriation is required. The Advance is authorised by the annual Appropriation Acts.
In Appropriation Act (No. 1) 2004-05, the contingency fund is provided for under section 12. 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 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 because:
(i) Of an erroneous omission or understatement; or
(ii) The additional expenditure was unforeseen until after the last day on which it was practicable to provide for it in the Appropriation Bills before those Bills were introduced into the House of Representatives.
Exercise of the provision, via the issue of a determination, has effect as if Schedule 1 to Appropriation Act (No. 1) 2004-05 were amended to make provision for the additional expenditure specified in the determination.
In an instrument dated 12 February 2003, the Minister for Finance and Administration 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 12 of Appropriation Act (No. 1) 2004-05.
Purpose of the instrument
The instrument determines that the administered expenses, Outcome 1 appropriation item for the Department of Transport and Regional Services in Appropriation Act (No. 1) 2004-05 be increased by $60,896,093.
Background
The background to the instrument is provided in the application made by the Department of Transport and Regional Services for funding from the Advance to the Finance Minister. The application is reproduced below.
APPLICATION FOR FUNDS - ADVANCE TO THE FINANCE MINISTER 2004-05
Agency: Department of Transport and Regional Services
Appropriation: Appropriation Act (No. 1) 2004-05
Description: Administered Expenses – Outcome 1
Description of Outcome: A better transport system for Australia
Source of Available Funds | 2002-03 | 2003-04 | 2004-05 |
$ | $ | $ | |
Appropriation Act No. 1 | 167,880,000 | 175,005,000 | 183,557,000 |
Appropriation Act No. 3 | 20,048,000 | 17,640,000 | 19,797,000 |
Appropriation Act No. 5 | 0 | 471,759,000 | 0 |
Retention from previous years | - | - | 5,143,919.51 |
TOTAL FUNDS AVAILABLE | 187,928,000 | 64,404,000 | 208,497,919.51 |
TOTAL EXPENDITURE | 162,378,442 | 645,999,882 | 165,708,063.58 |
TOTAL UNSPENT FUNDS | 25,549,558 | 18,404,118 | 42,789,855.93 |
Funds Required: $ 103,685,948.84
Funds Currently Unspent: $ 42,789,855.93
Amount required from AFM: $ 60,896,092.91
AFM Category: Appropriation Act (No. 1) 2004-05 Part 3 12 (1)(b)(ii)
Explanation of requirements from AFM:
This administered expense appropriation for Outcome 1 provides for a range of programmes, including: the Airport Lessee Companies – reimbursement of parking fees, Aviation security enhancements; Bass Strait Passenger Vehicle Equalisation Scheme; implementation of noise amelioration for Sydney and Adelaide Airports; contributions to various national and international organisations; Payment Scheme for Airservices Australia’s Enroute Charges; Remote Air Services Subsidy Scheme; Sydney West Airport – rental properties; Tasmanian Freight Equalisation and Wheat Freight Schemes; and the upgrade of the Mainline Interstate Railway Track programmes.
On 23 June 2005, the Government decided to provide a one-off grant to the Australian Rail Track Corporation of $100 million in 2004-05. Also, it is anticipated that invoices totalling up to $3.7 million for other administered programmes funded from the same appropriation will be processed before the end of the financial year which relate mainly to the three Tasmanian programmes. As DOTARS currently only has $42.8 million available, it is unable to make these payments, which total $103.7 million, and it is therefore seeking $60.9 million from the Advance to the Finance Minister to meet the shortfall.
Urgent:
The Government has decided to provide a one-off grant to the Australian Rail Track Corporation of
$100 million in 2004-05. DOTARS has insufficient remaining appropriation to make this payment and it therefore has an urgent need for cash to make up the deficit. The payments relating to the other items within the outcome, totalling up to $3.7 million must also be paid prior to 30 June because of programme commitments. In total, given that payments of $103.7 million must be made before the end of the financial year; an approval of $60.9 million from the Advance is required.
Unforeseen:
The need for the expenditure to occur arose as a result of the Government’s decision on 23 June 2005 to make an additional payment of $100 million to the Australian Rail Track Corporation in 2004-05. As that decision did not occur until after the finalisation of Appropriation Bill (No. 5) 2004-05, it was not possible to include this amount in that bill and the expenditure was therefore unforeseen.
Notes on the instrument
The instrument provides that the appropriation item listed in column 1 for the Department of Transport and Regional Services be increased by the amount listed in column 3. The instrument specifies that the additional amount is provided for the purpose of providing a one-off grant to the Australian Rail Track Corporation.