Advance to the Finance Minister – section 12 of Appropriation Act (No. 1) 2006-2007 (No. 2 of 2006-2007)

Administered by Department of Finance

Legislation au F2007L00280 Not in force Legislative Instrument

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Explanatory Statement

 

Appropriation Act (No. 1) 2006-2007, 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) 2006-2007”, dated 1 February 2007 and numbered 2 of 2006-2007.

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) 2006-2007, 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) 2006-2007 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) 2006-2007.

Purpose of the instrument

The instrument determines that the Administered Expenses – Outcome 3 appropriation for the Department of Foreign Affairs and Trade in Appropriation Act (No. 1) 2006-2007 be increased by $8,989,493.

Background

The background to the instrument is provided in the application made by the Department of Foreign Affairs and Trade for funding from the Advance to the Finance Minister.  The application is reproduced below.

 


APPLICATION FOR FUNDS - ADVANCE TO THE FINANCE MINISTER 2006-07

 

Agency: Department of Foreign Affairs and Trade (DFAT)

Appropriation: Appropriation Act (No. 1) 2006-2007

 

Description: Administered Expenses – Outcome 3

Description of Outcome: Public understanding in Australia and overseas of Australia’s foreign and trade policy and positive image of Australia internationally.

Source of Available Funds

2004-2005

2005-2006

2006-2007

 

$

 

 

 

 

 

 

Appropriation Act (No. 1)

48,621,000

28,846,000

4,241,000

Section 8 Retention

1,711,557

519,829

0

Advance to the Finance Minister

0

0

8,989,493

Other

1,997,380

1,017,078

0

Lapsed Appropriation

0

0

0

Appropriation Act (No. 3)

0

9,956,000

0

TOTAL FUNDS AVAILABLE

52,329,937

40,338,907

13,230,493

 

 

 

 

TOTAL EXPENDITURE

51,635,734

39,761,663

12,802,443*

 

 

 

 

TOTAL UNSPENT FUNDS

694,203

577,244

428,050

 

* cash spent as at 23 January 2007

Funds Required:         $   9,417,543

Funds currently unspent:        $      428,050

Amount required for AFM:        $   8,989,493

 


AFM Category:  Appropriation Act (No. 1) 2006-07 Part 3 12 (1)(b)(ii)

Explanation of requirements from AFM:

In December 2005 Cabinet selected the Australian Broadcasting Corporation (ABC) as the preferred provider for Australia’s television service to the Asia Pacific region.  The Department of Foreign Affairs and Trade (DFAT) reached agreement with the ABC on the terms of the contract for the delivery of the Australia Network programme in August 2006.  These terms include the schedule of payments and timing for payments.  The first payment under the contract was due on 8 August 2006, when the Australia Network programme commenced.  At the time of the budget process there was no agreement on financial or legal obligations and it was agreed that the funding would be resolved through Ministers.  The first and second financial instalments of the contract fall due before 2006-07 Additional Estimates.  An AFM provided DFAT with funding to meet the first payment in August 2006.  DFAT is now requesting funding to meet the second payment due on 4 February 2007 in accordance with the contract.

Urgent:

The Commonwealth’s previous five year contract with the ABC for the management of the Asia Pacific regional television service expired on the 7 August 2006.  The new contract came into effect on the 8 August 2006.

Appropriation Act (No.1) 2006-07 does not provide sufficient funding for Outcome 3 to cover the first and second instalments payable in accordance with the schedule of payments of the new contract.  Any payment delay could imperil the delivery of this programme to which the Australian Government has committed and consequently Australia’s image in the Asia Pacific region.  Additionally any delay would compromise Australia’s reputation to meet its financial obligations.

Unforeseen:

Following Cabinet’s decision, DFAT initiated negotiations in order to deliver the new Australia Network television service to the Asia Pacific region.  Negotiations on the financial terms for the Australia Network contract were not completed until June 2006.  Accordingly, the expenditure obligation in relation to the first and second instalment payments to the ABC was not known at the time that Appropriation Bill (No.1) 2006‑07 was finalised in May 2006.

 

Notes on the instrument

The instrument provides that the appropriation item listed in column 1 for the Department Foreign Affairs and Trade be increased by the amount listed in column 3. The instrument specifies that the additional amount be provided to meet a commitment in relation to a contract payment to the Australian Broadcasting Corporation to provide Australian television in the Asia Pacific region.

 

 

 

Overview

The Appropriation Act (No. 1) 2006-2007 was enacted to provide the financial framework for the Commonwealth's annual budget, including appropriations for various government departments and agencies. This particular Act was introduced to address the issue of unforeseen and urgent expenditures that were not adequately covered in the initial appropriation schedule. The Act empowers the Finance Minister to issue an advance, up to a limit of $175 million, to meet such needs. The enacting body responsible for this legislation is the Parliament of Australia, with the policy objective being to ensure that the government can respond to urgent and unforeseen financial requirements without disrupting essential services and commitments. The explanatory statement pertains to an instrument dated 1 February 2007, which authorises an advance to the Finance Minister under Section 12 of the Appropriation Act (No. 1) 2006-2007. This provision allows for the issuance of funds up to $175 million if the Finance Minister determines that there is an urgent need for additional expenditure not accounted for in the appropriation schedule due to either an omission, understatement, or unforeseen circumstances. The instrument in question increases the Administered Expenses – Outcome 3 appropriation for the Department of Foreign Affairs and Trade by $8,989,493 to meet a contractual obligation for the Australia Network programme, which was unforeseen at the time of the initial appropriation.

Scope and Application

The Advance to the Finance Minister provision within the Appropriation Act (No. 1) 2006-2007, as specified in section 12, applies to the Finance Minister, who is authorised to issue funds up to a limit of $175 million under certain conditions. These conditions include the necessity for urgent expenditure not provided for in the Appropriation Act or due to unforeseen circumstances. The instrument dated 1 February 2007, numbered 2 of 2006-2007, grants the specified authority to the SES Band 2, Financial Management Group, in the Department of Finance and Administration to exercise the power. The application of this Act is geographically limited to the Commonwealth level and pertains to the allocation of funds to meet unforeseen and urgent expenditures, particularly as outlined in the appropriation for the Department of Foreign Affairs and Trade. The provision extends its application through subordinate instruments, such as the determination issued by the Finance Minister, which adjusts the appropriations in response to identified urgent needs. The instrument in question specifically addresses an urgent funding requirement for the Department of Foreign Affairs and Trade to meet the second instalment payment for the Australia Network television service contract with the Australian Broadcasting Corporation, highlighting the unforeseen nature of the expenditure due to the timing of the contract negotiations.

Key Provisions

The main operative sections of the Appropriation Act (No. 1) 2006-2007, particularly section 12, provide for an Advance to the Finance Minister, allowing the issuance of funds up to $175 million under specific conditions. These conditions include situations where there is an urgent need for expenditure not covered in Schedule 1, or the additional expenditure is unforeseen and could not be included in the Appropriation Bill before it was introduced into the House of Representatives. The issuance of funds from this Advance is authorised by the annual Appropriation Acts and is made available to the Finance Minister as a central contingency fund to ensure urgent funding is available to agencies throughout the financial year. The Act imposes several obligations on the parties involved, primarily the Finance Minister and the Department of Foreign Affairs and Trade (DFAT). The Finance Minister is required to ensure that the conditions for issuing funds from the Advance are met, meaning that any expenditure must be both urgent and unforeseen. For DFAT, the obligation lies in demonstrating the necessity for the additional funds through a formal application that meets the criteria set by the Act. The application must detail the urgency and unforeseen nature of the expenditure, supported by evidence such as contract agreements and financial obligations. The obligation also extends to ensuring that any expenditure is accurately reported and accounted for, in compliance with the appropriations outlined in the Act. Any breach of the conditions outlined in the Act may lead to both civil and criminal consequences. While the Act does not explicitly state maximum penalties for breaches, general legislative provisions under Australian law provide for potential penalties. Civil penalties could include fines or restitution, whereas criminal penalties might include imprisonment depending on the severity of the breach. Additionally, misuse of funds or failure to adhere to the reporting and accounting requirements could result in disciplinary actions against the responsible officials within the Department of Finance and Administration. The seriousness of the consequences underscores the importance of strict compliance with the provisions outlined in the Act.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.