Advance to the Finance Minister – Section 13 of Appropriation Act (No. 1) 2009-2010 (No. 2 of 2009-2010)

Overview

The Appropriation Act (No. 1) 2009-2010, enacted by the Australian Parliament, introduced the Advance to the Finance Minister (AFM) provision to address urgent and unforeseen expenditure that was not anticipated when the Appropriation Act was passed. Specifically, section 13 of this Act allows the Finance Minister to issue an advance of up to $295 million to cover such expenditures, provided certain criteria are met. This legislative tool was introduced to ensure that the government can respond to unexpected situations without waiting for a new appropriation to be legislated. The explanatory statement regarding the instrument indicates that the purpose of this particular determination was to provide an additional $6,440,080 to the Department of Health and Ageing to fund the government's response to the H1N1 influenza pandemic, which was announced after the initial appropriation bill was prepared and introduced into Parliament. This provision ensures that the government can efficiently allocate funds to address critical and emergent needs as they arise.

Scope and Application

The Appropriation Act (No. 1) 2009-2010, through its Section 13, empowers the Finance Minister to issue advances to facilitate urgent and unforeseen expenditure that was not contemplated by Parliament at the time of the Act's passage. This authority allows the Finance Minister to issue additional funds up to a limit of $295 million if they are satisfied that there is an urgent need for expenditure not sufficiently provided for in Schedule 1 of the Appropriation Act. The provision applies to the Commonwealth of Australia, extending to all federal government departments and agencies, and is exercised through the issue of a determination that has the effect of amending Schedule 1 of the Appropriation Act to include the additional expenditure. In this instance, the instrument determines an increase of $6,440,080 for the Department of Health and Ageing to fund the Government’s response to the H1N1 pandemic, an urgent requirement that arose after the preparation and introduction of the Appropriation Bill (No. 1) 2009-2010 into Parliament. The exercise of this power is subject to the conditions specified in subsections 13(1)(a) and (b) of the Act, and if the expenditure is subsequently included in another appropriation bill, the appropriation in that bill will be reduced by the amount determined under Section 13.

Key Provisions

Section 13 of the Appropriation Act (No. 1) 2009-2010 allows the Finance Minister to issue an advance to cover urgent and unforeseen expenditures that were not anticipated when the Act was passed. This provision is limited to a maximum of $295 million. The Finance Minister can exercise this power if they are satisfied that there is an urgent need for expenditure not provided for or insufficiently provided for in Schedule 1 of the Act. The Finance Minister’s satisfaction must be based on the circumstances specified in subsections 13(1)(a) and (b) of the Act. In this case, the additional expenditure was required due to the government’s response to the H1N1 pandemic, which was announced after the Appropriation Bill (No. 1) 2009-2010 was prepared and introduced into Parliament. The Act imposes specific obligations on the Finance Minister when exercising the power under section 13. The Finance Minister must ensure that the additional funds are necessary and urgent, and that they align with the qualifying circumstances set out in the Act. The Minister must also be satisfied that the expenditure is not already covered or sufficiently provided for in the Act. Once the Finance Minister determines that these conditions are met, the additional funds can be issued from the Advance to the Finance Minister (AFM). This determination effectively amends Schedule 1 of the Act to include the additional expenditure. In the case of the Department of Health and Ageing, the Finance Minister determined that an additional $6,440,080 be allocated to Outcome 14 to fund the government’s response to the H1N1 influenza pandemic. This determination was made on the basis that the pandemic response was an urgent and unforeseen expenditure not initially provided for in the Act. The determination has the legal effect of amending Schedule 1 to include this additional expenditure. Failure to comply with the requirements of section 13 could result in legal consequences, although the Act does not specify penalties for breaches. However, misuse of the AFM could potentially lead to legal scrutiny and political accountability, as the power is discretionary and subject to ministerial satisfaction. The Act does not explicitly outline civil or criminal penalties for breaches, but the misuse of public funds or improper exercise of statutory powers could result in broader legal and political repercussions. Section 13(2) of the Act also provides that if an amount for a particular expenditure is already provided for in Schedule 1 and the Finance Minister determines an amount from the AFM for the same expenditure, the appropriation in the Act will be reduced by that amount. This means that the $6,440,080 determined under section 13 will reduce the appropriation in the Act by the same amount, ensuring that the total expenditure does not exceed the authorised limit.