Explanatory Statement

Appropriation Act (No. 1) 2010-2011, 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) 2010-2011”, dated 8 March 2011 and numbered 1 of 2010-2011.

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) 2010-2011. 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 Prime Minister and Cabinet (PM&C) has satisfied the Finance Minister that the additional expenditure was not provided for because of erroneous omission.

Exercise of the power via the issue of a determination has effect as if Schedule 1 of Appropriation Act (No. 1) 2010-2011 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 PM&C in Appropriation Act (No. 1) 2010-2011 be increased by $30,701,000. The additional amount is provided to enable the Department of the Prime Minister and Cabinet to meet a shortfall of funding for expenditure relating to the transfer of responsibility for cultural affairs, including movable cultural heritage and support for the arts.

Background

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

APPLICATION FOR ADVANCE TO THE FINANCE MINISTER 

2010-2011

Agency: Department of the Prime Minister and Cabinet

Appropriation: Appropriation Act (No. 1) 2010-2011

Description: Administered item

Outcome: Outcome 2 – Participation in, and access to, Australia’s arts and culture through developing and supporting cultural expression

Appropriation Required: $ 111,833,373.88

Appropriations Available: $ 65,446,693.46

Amount required from AFM: $ 30,701,000.00

AFM Category:

Erroneous omission – “Appropriation Act (No. 1) 2010-2011, Part 3, section 13 (1)(a)”

Explanation of requirements from AFM:

In the Appropriation Bill (No. 1) 2010-2011, $66,574,000 was omitted from Outcome 5 for the Department of Sustainability, Environment, Water, Population and Communities (SEWPaC) and included against Outcome 1 for SEWPaC. 

The Administrative Arrangement Order of 14 September 2010 transferred the responsibility for cultural affairs, including movable cultural heritage and support for the arts from SEWPaC – Outcome 5 to the Department of the Prime Minister and Cabinet (PM&C).  The Financial Management and Accountability Act 1997 (FMA Act), s32 transfer of appropriation funding from SEWPaC to PM&C excluded the amount of $66,574,000 against Outcome 1.

Additional funding of $35,873,000 to partially meet the shortfall of $66,574,000 will be provided in Appropriation Bill (No. 3) 2010-2011.  The remaining shortfall of $30,701,000 is sought in this application to ensure payments can be made until Appropriation Bill (No. 3) 2010-2011 receives royal assent.  The total funding intended for this function for 2010-11 remains unchanged.

Urgent:

The FMA Act, s32 transfer dated 21 January 2011 provided $29,573,693.  It is forecast that an additional $30,701,000 will be required until Appropriation Bill (No. 3) 2010-2011 receives royal assent.

Erroneous Omission:

The expenditure was provided for in SEWPaC’s 2010-11 Portfolio Budget Statements.  The incorrect categorisation against Outcomes has prevented the transfer of available funds under the FMA Act, s32.