Advance to the Finance Minister – Section 13 of Appropriation Act (No. 1) 2009-2010 (No. 5 of 2009-2010)

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 8 June 2010 and numbered 5 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 2 for the Department of Agriculture, Fisheries and Forestry (DAFF) in Appropriation Act (No. 1) 2009-2010 be increased by $1,808,382. The additional amount is provided to enable DAFF to meet new costs relating to the Export Certification Reform Package.

Background

The background to the instrument is provided in the application made by DAFF for funding from the Advance to the Finance Minister, reproduced below.

APPLICATION FOR ADVANCE TO THE FINANCE MINISTER – 2009–2010

Agency: Department of Agriculture, Fisheries and Forestry

Appropriation: Appropriation Act (No. 1) 2009-2010

Description: Quarantine Services (Administered)

 Administered Annual Appropriation

Outcome: Outcome 2: Safeguard Australia’s animal and plant health status to maintain overseas markets and protect the economy and environment from the impact of exotic pests and diseases, through risk assessment, inspection and certification, and the implementation of emergency response arrangements for Australian agricultural, food and fibre industries.

Appropriation Required: $ 2,644,856 

Appropriations Available: $     836,474    

Amount required from AFM: $  1,808,382

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:

The Department of Agriculture, Fisheries and Forestry (the Department) requires funds from the
Advance to the Finance Minister to allow payments in June 2010, for a new Government measure that
was approved in June 2009 with conditions that were not satisfied in time for inclusion in the 2009-10 portfolio additional estimates statements. The Export Certification Reform Package is within Outcome
2, Quarantine Services (Administered) Appropriation Act (No. 1) 2009–2010.

Funding for the Export Certification Reform Package (ECRP) was agreed by Government on 4 June
2009. The package was developed to provide transitional support to industry to adjust to the lapsing of
the export subsidy. Administered funding of $1.811 million in 2009–10 ($8.411 million over two
years) was costed for this program. Funding was subject to increased fee regulations not being disallowed by the Senate. As the disallowance period did not expire until 11 May 2010, funding could not be incorporated in portfolio additional estimates for 2009–10. As no further appropriation bills are
planned for 2009–10 the $1.811 million has not been appropriated and an alternate funding
mechanism is required.

Urgent:

The department is close to exhausting total available appropriation in Outcome 2 with only
$0.836 million available in the Plant and Animal Health program (administered) remaining. A
monthly payment to CSIRO – Contribution to the operating costs of the Australian Animal Health Laboratory of $0.597 million will be made within the next 2 weeks and a payment for Commonwealth contribution to the operating costs of Animal Health Australia (AHA) of $0.318 million is due in June. Payments totaling $0.189 million for ECRP have already been paid out of the Plant and Animal Health program and require to be reimbursed back into the program before 30 June 2010, to cover the last
payment to AHA.  

A total of $1.808 million is due to be paid out prior to 30 June 2010 from the full amount of
$1.811 million costed against the ECRP. Payments totaling $0.189 million for ECRP have already
been paid out of the Plant and Animal Health program and require reimbursement back into the
program before 30 June 2010, to cover the last payment to AHA.

Unforeseen:

The department requested the $1.811 million at 2009-10 additional estimates however this was not
agreed as the funding was conditional of fee increases passing through the Senate. The disallowance
period for these instruments did not expire until 11 May 2010. We could not foresee that this funding
would be required until after this date.