Advance to the Finance Minister – section 12 of Appropriation Act (No. 1) 2005-2006 (No. 6 of 2005-2006)

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 22 March 2006 and numbered 6 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 3, 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 3 appropriation for the Department of Veterans’ Affairs in Appropriation Act (No. 1) 2005-06 be increased by $1,405,000. 

Background

The background to the instrument is provided in the application made by the Department of Veterans’ 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[D1]: Department of Veterans’ Affairs

Appropriation[D2]: Appropriation Act (No. 1) 2005-06

Description[D3]: Administered Expenses – Outcome 3

Description of Outcome[D4]: The service and sacrifice of the men and women who served Australia and its allies in wars, conflicts and peace operations are acknowledged and commemorated.

*Total funds available for this year has not been reduced to reflect the movement of funds from 2004-05 to 2005-06 totalling $5.736m approved by the Minister for Finance and Administration on 20 October 2005.  These funds will be appropriated in the 2005-06 Additional Estimates Appropriation Bills.

Funds Required[D7]:   $1,615,000

Funds Currently Unspent[D8]:     $210,000

Amount required from AFM:  $1,405,000

AFM Category[D9]:  Appropriation Act (No.1) 2005-06 Part 3 Section 12 (1) (b) (ii)

Explanation of requirements from AFM:

The Department of Veterans’ Affairs takes a lead role in recognising the service and sacrifice of Australian servicemen and women.  Outcome 3 promotes awareness of Australia’s wartime heritage and community involvement in commemorative events and initiatives.  It also provides for construction, preservation, renovation and maintenance of memorials, war graves, war cemeteries and gardens of remembrance.

In 2004-05, funding was provided for major events to commemorate 60th anniversary of the end of World War II in Europe and the Pacific of which $5.736m was approved by the Minister for Finance and Administration on 20 October 2005 to be moved to 2005-06 to complete payments for these initiatives.  Also, funding of $2.093m was approved at MYEFO (December 2005) for further site preparations at Gallipoli for Anzac Day 2006. 

Both sets of funding will not become available until the 2005-06 Additional Estimates Appropriations Bills are passed this Autumn. 

However, some of these funds are required beforehand to meet contractual payments for site preparations for 2006 Anzac day commemorations as well as to allow essential payments for normal operational activities to occur as funds have been significantly depleted to cover the finalisation of payments for initiatives from the 60th anniversary of the end of World war II.

The AFM is sought to cover the shortfall which will be recouped from the Appropriation Act (No.3) 2005-06.

Urgent:

This expenditure is urgent to:

1. allow essential payments for normal operational activities (e.g. contract payments for the construction, maintenance , management and security of memorials in Australia and overseas) to be made as funds have been significantly depleted to cover the finalisation payments for initiatives from the 60th anniversary of the end of World War II; and
2. commence site preparations for the Anzac Day commemorations. 

This expenditure is required before April 2006. There are no funds provided for in the Schedules to cover this urgent expenditure. 

Unforeseen :

This expenditure was unforseen because:

1. in respect to the major anniversary events there was considerable uncertainty about the timing of the payments between financial years covering the costs of the following:

• the production and distribution of commemorative medallions was not completed until this financial year;
• the grant application process involving from the Australian community to support these events were commenced in late May 2005 and not completed until this financial year; 
• the change in the timing of overseas mission to Papua New Guinea from June to September 2005 in order to co-incide commemorative events with the Governor General’s visit; and
• certain procurement elements of the early stages for the ‘Salute to Veterans’ in Canberra were not finalised until this year.

Unspent appropriated funds provided for in 2004-05 lapsed on 30 June 2005.  The movement of these funds to 2005-06 was approved by the Minister for Finance and Administration on 20 October 2005.

2.       the authority to spend the funds for next year’s Anzac Day commemorations was not provided until late in 2005, well after the Appropriations Bill (No.1) 2005-06 was passed by Parliament.  Also, the funds could not be incorporated in those Bills before being introduced into the House of Representatives.

Notes on the instrument

The instrument provides that the appropriation item listed in column 1 for the Department of Veterans’ Affairs be increased by the amount listed in column 3.  The instrument specifies that the additional amount is provided for the purpose of meeting payment commitments for 2006 Anzac Day site preparations, and normal operational expenses including; contract payments for construction; maintenance; management and security of memorials in Australia and overseas. 

[D1]1Type the full Name of Agency

[D2]1Type the title of the Appropriation requiring funding as published in Budget Paper No. 4

[D3]1Type the description of the Appropriation such as Departmental Outputs or Administered Expenses with Outcome No. where applicable.

[D4]1Type the full Description of Outcome as published in Budget Paper No. 4

[D5]1Full analysis of all sources of the funding available with a separate row to report each applicable funding source. Insert extra rows if necessary

Possible funding sources are:

 Appropriation Act No. 1;

 Appropriation Act No. 2;

 Appropriation Act No. 3;

 Appropriation Act No. 4;

 Advance to the Finance Minister;

 Departmental Items – Adjustments;

 Departmental Capital Items – Adjustments & Borrowings;

 Section 31 Revenue;

 Funding from Section 32 Adjustments;

 Funding from Previous Years’ Appropriations.

 Statement of Savings

[D6]1Total funds spent as at the time of the application (should not be less than amount drawn down in CAMM).

[D7]1Total anticipated expenditure.

[D8]1Total unspent funds.

[D9]1Refer to Budget Paper No. 4 Page 37 for the category in Act No. 1 and Page 180 for the category in Act No. 2