Explanatory Statement
Appropriation Act (No. 1) 2005-06, 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) 2005-2006”, dated 9 June 2006 and numbered 16 of 2005-2006.
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) 2005-06, the Advance to the Finance Minister 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:
(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 Appropriation Bill before the 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) 2005-06 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 Management Group, in the Department of Finance and Administration to exercise the power provided for under section 12 of Appropriation Act (No. 1) 2005-06.
Purpose of the instrument
The instrument determines that the Administered Expenses, Outcome 5 appropriation for the Department of Families, Community Services and Indigenous Affairs in Appropriation Act (No. 1) 2005-06 be increased by $5,160,059.
Background
The background to the instrument is provided in the application made by the Department of Families, Community Services and Indigenous Affairs for funding from the Advance to the Finance Minister. The application is reproduced below.
APPLICATION FOR FUNDS - ADVANCE TO THE FINANCE MINISTER 2005-2006
Agency: Australian Government Department of Families, Community Services and Indigenous Affairs
Appropriation: Appropriation Act (No. 1) 2005-06
Description: Administered expenses – Outcome 5
Description of Outcome: Strong and Resilient Communities
Source of Available Funds | 2003-2004 | 2004-2005 | 2005-2006 |
| $ | $ | $ |
Appropriation Bill No 1 |
|
| 66,973,000 |
Appropriation Bill No 3 |
|
| 1,614,000 |
Application for funds - 30 March 2006 |
|
| 12,201,000 |
Application for funds - 6 April 2006 |
|
| 16,805,593 |
Application for funds - 26 May 2006 |
|
| 2,749,996 |
TOTAL FUNDS AVAILABLE |
|
| 100,343,589 |
|
|
|
|
TOTAL EXPENDITURE |
|
| 100,333,648 |
|
|
|
|
TOTAL UNSPENT FUNDS |
|
| 9,941 |
Funds Required: $5,170,000
Funds Currently Unspent: $9,941
Amount required from AFM: $5,160,059
AFM Category: Appropriation Act (No. 1) 2005-2006 Part 3 12 (1)(b)(ii);
Explanation of requirements from AFM:
FaCSIA urgently requires funds to fulfill the Australian Government commitments to the items allocated under Outcome 5, until the anticipated release of funds of Appropriation Bill No 5 near the end of June 2006. FaCSIA is responsible for delivering the following:
- One-off Income Support Programme equivalent to the NewStart Allowance, for six months, to farmers and small business owners whose farms and businesses have been adversely affected by Cyclone Larry.
- Other FaCSIA commitments under Outcome 5.
The following calculations have been based upon the assumption that Royal Assent will be granted for Appropriation Bill No 5 on 23 June 2006.
The Centrelink daily requirements are driven by Cyclone Larry related payments. It is expected that approximately $113,000 per day will be required until the next anticipated release of funds. By extrapolating this for the next 11 week days, it is estimated that there will be Cyclone Larry related costs of approximately $1.25 million (11 x $113,000 = $1,243,000). In addition, FaCSIA is expecting to pay invoices totaling approximately $3.92 million by the end of the financial year.
Urgent:
Without a further allocation, current funding is likely to be exhausted by 9 June 2006. It would be highly undesirable for those eligible for the payments to be unable to receive their benefits.
Erroneous Omission or Unforeseen:
Cyclone Larry was an unexpected natural disaster. The magnitude of this event and the need in the community arising from damage to homes, businesses and farms could not have been predicted.
Notes on the instrument
The instrument provides that the appropriation item listed in column 1 for the Department of Families, Community Services and Indigenous Affairs be increased by the amount listed in column 3. The instrument specifies that the additional amount be provided for the purpose of meeting commitments for assistance to eligible people directly affected by Cyclone Larry.