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 30 March 2006 and numbered 9 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 $12,201,000.
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: Families, Community Services and Indigenous Affairs
Appropriation: Appropriation Act (No. 1) 2005-06
Description: Administered expenses – Outcome 5
Description of Outcome: Stronger 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 |
|
|
|
|
TOTAL FUNDS AVAILABLE |
|
| 68,587,000 |
|
|
|
|
TOTAL EXPENDITURE |
|
| 52,899,000 |
|
|
|
|
TOTAL UNSPENT FUNDS |
|
| 15,899,000 |
Funds Required: $28,100,000.00
Funds Currently Unspent: $15,899,000.00
Amount required from AFM: $12,201,000.00
AFM Category: Appropriation Act (No. 1) 2005-2006 Part 3 12 (1)(b)(ii);
Explanation of requirements from AFM:
FACSIA requires funds urgently to fulfill the Australian Government announcement that ex-gratia assistance be made available to eligible people directly affected by Cyclone Larry where their principal place of residence has been destroyed or has been rendered uninhabitable.
The purpose of this ex-gratia assistance is to help individuals and families in recognition of the trauma and stress caused to people by the loss of their principal place of residence.
Given the devastation caused by Cyclone Larry the Prime Minister agreed to provide ex-gratia payments to assist those whose principal place of residence has been destroyed or rendered uninhabitable for a period of at least two weeks.
Finance has agreed to a cost of $20,000,000 for these payments.
Also required are funds for a one-off grant of $100,000 to the Queensland State Government Relief Fund, for victims of the cyclone.
Latest information to hand is that approximately 12,000 claims have been lodged, equating to approximately $14 million. On current trends, it is likely that the estimated cost will be an underestimate.
It is likely that sometime this week (week beginning 26 March 2006), that funds in Outcome 5 will be exhausted. It would be highly undesirable for those eligible for the payment to be unable to receive it.
Urgent:
Ex-gratia payments to families affected by the cyclone have been paid out since Friday 24 March. It is expected that claims will be made through this week and into next week. Without additional funding, it is likely that funds in Outcome 5 will be exhausted within the next two weeks.
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 could not have been predicted.