Explanatory Statement
Appropriation Act (No. 1) 2009-2010, Section 13 – 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 13 of Appropriation Act (No. 1) 2009-2010”, dated 24 May 2010 and numbered 4 of 2009-2010.
The legislative authority under which the instrument is made
The Advance to the Finance Minister (AFM) is a provision contained in the annual Appropriation Acts. It enables the Finance Minister to facilitate urgent and unforeseen expenditure that was not within the contemplation of Parliament when the Appropriation Act was passed and is therefore not provided for in Schedule 1 of the Appropriation Act.
The Advance to the Finance Minister is provided for under section 13 of Appropriation Act (No. 1) 2009-2010. The discretionary power is exercisable upon the Finance Minister’s satisfaction of the matters specified in section 13. This section indicates that amounts can be issued from the Advance to the Finance Minister, up to a limit of $295 million, if the Finance Minister is satisfied that there is an urgent need for expenditure, in the current year, that is not provided for, or is insufficiently provided for, in Schedule 1 of that Act. The qualifying circumstances on the discretion of the Finance Minister to issue additional amounts under this provision are contained in subsections 13(1) (a) and (b) of that Act. The application from the Department of Immigration and Citizenship has satisfied the Finance Minister that the additional expenditure was not provided for because of unforeseen circumstances.
Exercise of the power via the issue of a determination has effect as if Schedule 1 of Appropriation Act (No. 1) 2009-2010 were amended to make provision for the additional expenditure specified in the determination.
Purpose of the instrument
The instrument determines that the Administered Item for Outcome 4 for the Department of Immigration and Citizenship in Appropriation Act (No. 1) 2009-2010 be increased by $72,572,000. The additional amount is provided to enable the Department of Immigration and Citizenship to meet expected increased costs for irregular maritime arrivals (IMA) during May and June 2010.
Background
The background to the instrument is provided in the revised application made by the Department of Immigration and Citizenship for funding from the Advance to the Finance Minister, reproduced below.
APPLICATION FOR ADVANCE TO THE FINANCE MINISTER – 2009-2010
Agency: Department of Immigration and Citizenship
Appropriation: Appropriation Act (No. 1) 2009-2010
Description: Increased Irregular Maritime Arrivals
Administered Annual Appropriation
Outcome: Outcome 4: Lawful stay of visa holders and access to citizenship rights for eligible people through promotion of visa compliance responsibilities, status resolution, citizenship acquisition integrity, case management, removal and detention, and policy advice and program design.
Source of Available Appropriations | 2007-2008 | 2008-2009 | 2009-2010 |
| $ | $ | $ |
Appropriation Act (No. 1) | | | 157,776,000 |
Appropriation Act (No. 3) | | | 25,146,000 |
Section 11, 2008-09 retained prior year appropriations | | 21,434,303 | |
TOTAL APPROPRIATIONS AVAILABLE | | 21,434,303 | 182,922,000 |
| | | |
TOTAL AMOUNT SPENT | | 21,434,303 | 172,625,911 |
TOTAL UNSPENT APPROPRIATIONS | | | $10,296,089 |
Appropriation Required: $82,868,089
Appropriations Available: $10,296,089
Amount required from AFM: $72,572,000
AFM Category:
This request is unforeseen and is in accordance with Appropriation Act (No. 1) 2009-2010, Part 3, section 13 (1)(b)”.
Explanation of requirements from AFM:
Urgent:
The Department is close to exhausting all relevant available appropriations to fund its commitment to IMAs. Uncommitted funds from within the outcome will be used to cover increased IMA expenditure for the period to 20 May 2010. After this time, it is expected that all uncommitted funds within Outcome 4 will be exhausted.
In the event that the program has insufficient funds to make payments for increased IMA costs, this would result in the position of DIAC being unable to meet its legal obligations to pay accommodation providers and other contractors. Such an outcome would also result in reduced public confidence in the Government’s administration of IMAs.
Unforeseen:
The cost of reception and processing of IMAs is dependent on the number of new arrivals. As this is difficult to predict, the Government has agreed to provide the Department with a base funding provision and to subsequently adjust that funding to meet the actual costs of managing the IMAs throughout the year. The growth in IMA and resulting accommodation issues was not anticipated at Budget
Forecast to 30 June 2010:
Based on current trends, projected actual expenditure that will be required to meet IMA costs in 2009-10 is approximately $83 million (necessitating an increase in appropriation funding of $72.6 million for the 2009-10 financial year).
Signed By Chief Finance Officer, Department of Immigration and Citizenship |
NAME: (block capitals please) | Stephen Sheehan |
SIGNATURE: | |
DATE: | 20 May 2010 |
Overview
The Appropriation Act (No. 1) 2009-2010 was enacted to provide for the appropriation of Commonwealth revenue and the application and management of Commonwealth expenditure. This Act was introduced to address the need for flexibility in managing government finances, allowing for the provision of additional funds when unforeseen and urgent circumstances arise that were not contemplated at the time of the Act's passage. The Act empowers the Finance Minister to issue an advance under certain conditions, ensuring the government can meet unexpected financial obligations without needing to seek parliamentary approval each time. The policy objective is to provide a mechanism for urgent and unforeseen expenditure that ensures the government can respond promptly to changing circumstances while maintaining fiscal discipline and parliamentary oversight.
The Appropriation Act (No. 1) 2009-2010 was enacted by the Parliament of Australia, reflecting the legislative process required to manage the nation's finances effectively. Section 13 of this Act provides the Finance Minister with the discretion to issue an advance, up to a specified limit, if satisfied that there is an urgent need for expenditure not provided for in the Act. This discretionary power is intended to ensure that the government can address unforeseen circumstances without delay, thereby maintaining public confidence and meeting legal obligations. The provision for an advance is exercised through the issuance of a determination, which has the effect of amending the Act to include the additional expenditure.
Scope and Application
The Advance to the Finance Minister provision contained in the Appropriation Act (No. 1) 2009-2010 enables the Finance Minister to facilitate urgent and unforeseen expenditure that was not within the contemplation of Parliament when the Appropriation Act was passed, and is therefore not provided for in Schedule 1 of the Act. This Act applies to the Finance Minister, who exercises this discretionary power under section 13 of the Act if satisfied that there is an urgent need for expenditure not provided for, or insufficiently provided for, in Schedule 1. The Finance Minister may issue amounts from the Advance to the Finance Minister, up to a limit of $295 million, in these circumstances. In this particular case, the Department of Immigration and Citizenship applied for additional funding to meet the increased costs for irregular maritime arrivals during May and June 2010. The Finance Minister determined that the Administered Item for Outcome 4 for the Department of Immigration and Citizenship in the Appropriation Act (No. 1) 2009-2010 be increased by $72,572,000 to meet the additional expenditure.
The Act applies nationally within the Commonwealth of Australia and extends to subordinate instruments, which may further define the scope and application of the Act. There are no stated exclusions, exemptions, or thresholds within the Act itself, but the exercise of the power through the issue of a determination has the effect as if Schedule 1 of the Appropriation Act (No. 1) 2009-2010 were amended to make provision for the additional expenditure specified in the determination. The background to this specific instrument is provided in the revised application made by the Department of Immigration and Citizenship for funding from the Advance to the Finance Minister, which indicates that the additional funding is required due to unforeseen circumstances and to meet the urgent need for additional expenditure for irregular maritime arrivals during May and June 2010.
Key Provisions
The Appropriation Act (No. 1) 2009-2010 contains a provision, known as the Advance to the Finance Minister (AFM), which is crucial for managing urgent and unforeseen expenditures that Parliament did not anticipate when the Act was passed. Specifically, section 13 of the Act allows the Finance Minister to issue funds up to a limit of $295 million if they are satisfied that there is an urgent need for expenditure not covered or insufficiently covered in Schedule 1 of the Act (section 13(1)(a) and (b)). This discretionary power is exercised by issuing a determination, which has the effect of amending Schedule 1 to include the specified additional expenditure. The Act enables the Finance Minister to address sudden and unexpected costs that are critical and require immediate attention.
Under this Act, the Finance Minister is required to assess whether the criteria for urgent and unforeseen expenditure are met before issuing funds. This involves a detailed evaluation of the necessity and urgency of the expenditure in question, as well as ensuring that the expenditure aligns with the provisions of section 13. The Department of Immigration and Citizenship, in this case, must provide a thorough application explaining the unforeseen circumstances and the urgency of the additional funding required. The Finance Minister must then be satisfied with the application before proceeding with the issuance of funds from the AFM.
Failure to comply with the requirements of the Act can result in significant consequences. The Act does not explicitly state penalties for non-compliance, but any misuse of the AFM could lead to scrutiny and potential legal action for mismanagement of public funds. In addition, if the Finance Minister issues funds without proper justification or outside the limits specified in the Act, it could result in financial mismanagement charges, which may have both civil and criminal implications depending on the severity of the breach. The maximum penalties for such breaches would typically be determined by relevant financial and administrative laws applicable at the time.