Explanatory Statement
Appropriation Act (No. 2) 2007-2008, 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. 2) 2007-2008”, dated 11 February 2008 and numbered 5 of 2007-2008.
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. 2) 2007-2008, 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 $215 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 2 of Appropriation Act (No. 2) 2007-2008 were amended to make provision for the additional expenditure specified in the determination.
Purpose of the instrument
The instrument determines that the Administered payments to States, ACT, NT and local government – Outcome 1 appropriation for the Department of Agriculture, Fisheries and Forestry in Appropriation Act (No. 2) 2007-2008 be increased by $73,226,278. The additional amount is provided to assist primary producers and small businesses adversely affected by drought and for payments to the States under the Emergency Animal Disease Response Agreement for the eradication of equine influenza.
Background
The background to the instrument is provided in the application made by the Department of Agriculture, Fisheries and Forestry for funding from the Advance to the Finance Minister. The application is reproduced below.
APPLICATION FOR FUNDS - ADVANCE TO THE FINANCE MINISTER 2007-2008
Agency: Australian Government Department of Agriculture, Fisheries and Forestry
Appropriation: Appropriation Act (No. 2) 2007-2008
Description: Administered Payments to the States, ACT, NT and local government - Outcome 1
Description of Outcome: More sustainable, competitive and profitable Australian agricultural, food, fisheries and forestry industries
Source of Available Funds | 2005-2006 | 2006-2007 | 2007-2008 |
$ | $ | $ | |
Retained prior year Appropriations |
| 14,394,145 |
|
Appropriation Act (No. 2) | 309,807,000 | 360,106,000 | 489,495,000 |
Appropriation Act (No. 4) | 334,137,000 | 222,469,000 | - |
Appropriation Act (No. 6) |
| - | - |
Advance to the Finance Minister |
| 57,110,565 |
|
Section 32 transfer |
| (23,894,000) |
|
Section 32 transfer |
| 2,375,000 |
|
TOTAL FUNDS AVAILABLE | 643,944,000 | 632,560,710 | 489,495,000 |
|
|
|
|
TOTAL EXPENDITURE | 485,632,153 | 617,380,399 | 475, 47,278 |
|
|
|
|
TOTAL UNSPENT FUNDS | 158,311,847 | 15,180,311 | 14,023,722 |
Funds Required: $87,250,000
Funds Currently Unspent $14,023,722
Amount required from AFM: $73,226,278
AFM Category: Appropriation Act (No. 2) 2007-2008 Part 3 Section 12 (1)(b)(ii)
Explanation of requirements from AFM:
The Department of Agriculture, Fisheries and Forestry (the Department) requires funds from the Advance to the Finance Minister to allow payments in February 2008 of funds for the various Administered Programs under Appropriation Act (No. 2) 2007-2008 and for new measures that have been approved by Government since May 2007.
There have been a number drought related and equine influenza assistance packages since the finalisation of Appropriation Bill (No. 2) 2007-2008 and subsequently approved as part of the 2007-08 MYEFO process. Significant funds have been expended in providing for these, particularly for the Drought exceptional circumstances interest rate subsidies assistance, Equine Influenza Emergency Animal Disease Response Agreement, the National Action Plan for Salinity and Water Quality and the National Landcare programs. The Department is therefore seeking additional funds totaling $73.226 million to allow payments to continue to be made for programs under Appropriation Act (No.2) 2007-2008 during February 2008 prior to the anticipated availability of funding from the supplementary additional estimates appropriations bill: Appropriation (Drought and Equine Influenza Assistance) Bill (No. 2) 2007-2008 which is not expected to be available before late February 2008.
Urgent:
The Department is planning to make an estimated $87.250 million in payments in February 2008. As at 31 January 2008, the Department has funding available of $14.023 million. Payments for a number of programs are due in February 2008 and are almost exclusively for reimbursement to States for expenditure already incurred on behalf of the Commonwealth.
Unforeseen:
Since the 2007-08 Budget, there has been a significant increase in the take up of drought assistance announced by the Government. There has also been the widespread outbreak of equine influenza with considerable funding being provided to assist the horse industry cope with the economic consequences. These were unforeseen at the time of the preparation of the 2007-08 Budget and no funding was provided for these additional requirements.
Signed By Chief Finance Officer
| |
NAME: | JOHN BRIDGE |
SIGNATURE: |
|
DATE: | 7 February 2008 |