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 27 June 2007 and numbered 8 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, in the current year, 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 Bill for this Act before that 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 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) 2006-2007.
Purpose of the instrument
The instrument determines that the Administered Expenses – Outcome 1 appropriation for the Department of Immigration and Citizenship in Appropriation Act (No. 1) 2006-2007 be increased by $1,250,000.
Background
The background to the instrument is provided in the application made by the Department of Immigration and Citizenship for funding from the Advance to the Finance Minister. The application is reproduced below.
APPLICATION FOR FUNDS - ADVANCE TO THE FINANCE MINISTER 2006-2007
Agency: Department of Immigration and Citizenship
Appropriation: Appropriation Act (No. 1 ) 2006-2007
Department of Immigration and Multicultural Affairs
Description: Administered expenses – Outcome 1
Description of Outcome: Contributing to Australia’s society and its economic advancement
through the lawful and orderly entry and stay of people
Source of Available Funds | 2004-05 | 2005-06 | 2006-07 |
$ | $ | $ | |
Appropriation Act (No. 1) | 102,930,000 | 75,242,000 | 44,209,000 |
Appropriation Act (No. 3) | 336,000 |
|
|
Appropriation Act (No. 5) |
|
| 261,000 |
TOTAL FUNDS AVAILABLE | 103,266,000 | 75,242,000 | 44,470,000 1 |
|
|
|
|
TOTAL EXPENDITURE | 53,992,010 | 44,341,990 | 42,277,293 1 |
|
|
|
|
TOTAL UNSPENT FUNDS | 49,273,990 | 30,900,010 | 2,192,707 |
1 up to and including 25 June 2007 net of 2005-06 sec 8 funding and expenditure
Funds Required: $ 3,442,707
Funds Currently Unspent: $ 2,192,707
Amount required from AFM: $ 1,250,000
AFM Category: Appropriation Act (No. 1) 2006-2007 Part 3 12 (1)(b)(ii)
Explanation of requirements from AFM:
The additional funding from the Advance to the Finance Minister is required to cover operational costs of the Offshore Processing Centre in Nauru during 2006-07.
DIAC’s Administered Expenses appropriation for Outcome 1 includes the line item Offshore management of asylum seekers. This item, which includes a provision of $22.093 million for 2006-07, provides funding for the maintenance of the Offshore Processing Centres on Nauru and Manus Island. The Centres are under the control of the International Organization for Migration and have effectively been vacant since late 2005. The 2006-07 Budget provision was to maintain the Centres in a mothballed, ready response capacity only. No funding was provided to cover operational costs in 2006-07 as any new unauthorised boat arrivals/asylum seekers would be accommodated and processed at the Australian Government operated facilities on Christmas Island (funded from DIAC’s Departmental outputs appropriation).
In late 2006 the Government announced that eight Rohingyan unauthorised boat arrivals who arrived in Australia in August 2006 would be transferred to Nauru for processing of their asylum claims. The operational cost to manage the Rohingyan caseload was assessed as minor and could be accommodated within the 2006-07 Budget funding provision for Nauru.
In March 2007 the Government announced that the 82 Sri Lankan’s intercepted off Christmas Island in February 2007 would also be transferred to Nauru for processing of their asylum claims. The duration of their stay on Nauru, and the associated operational costs for the Nauru centre in 2006-07 were not known up to the time Appropriation Bill No. 5 was closed for further funding bids.
The 2006-07 Budget was framed on the basis that all new unauthorized boat arrivals will be processed on Christmas Island. While the decision to transfer processing to Nauru will result in additional operational costs for Nauru, there will be corresponding savings from the Departmental appropriation for processing on Christmas Island.
If additional funding is not provided the Commonwealth will not be able to pay accounts due before 30 June 2007.
Urgent:
The current unspent funding available against this appropriation is expected to be exhausted during the last week in June. As at 25 June 2007 DIAC had a balance of funds of $2.192 million available and an estimated $3.442 million in accounts payable before 30 June 2007.
Unforeseen :
Funding in 2006-07 for the centre in Nauru was intended to cover mothballed maintenance only. It was not foreseen at the time the Appropriations Bills No.1 and No. 3 were finalised that the government would send the additional asylum seekers to Nauru to have their claims processed. Similarly it was not possible to estimate the additional funding required for the Nauru operations at the time Appropriation Bill No. 5 was finalised.
Signed by Acting Chief Finance Officer | |
NAME: (block capitals please) | NHAN VO-VAN |
SIGNATURE: |
|
DATE: | 25 June 2007 |