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 6 June 2011 and numbered 3 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 Australian Electoral Commission (AEC) has satisfied the Finance Minister that the additional expenditure was not provided for as it was unforseen.

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 Departmental Item for the AEC in Appropriation Act (No. 1) 2010-2011 be increased by $5,100,000. The additional amount is provided to enable the Australian Electoral Commission to meet a shortfall of funding for expenditure relating to the increased volume of electoral transactions in the previous election and accelerated preparations for the next federal election under the likely hood that it will occur within the normal three year cycle.

 Background

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

APPLICATION FOR ADVANCE TO THE FINANCE MINISTER  2010-2011

Agency: Australian Electoral Commission

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

Description: Departmental

Outcome: Outcome 1 – Maintain an impartial and independent electoral system for eligible voters through active electoral roll management, efficient delivery of polling services and targeted education and public awareness programs.

Appropriation Required: $ 30,021,796

Appropriations Available: $ 23,821,796

Amount required from AFM: $ 6,200,000

AFM Category:

Unforeseen – “Appropriation Act (No. 1) 2010-2011, Part 3, section 13 (1)(b)” or “Appropriation Act (No. 2) 2010-2011, Part 3, section 15 (1)(b)” >

Explanation of requirements from AFM:

The amount requested from AFM will be spent on staff salaries, property costs and other ongoing 2010 election and election readiness expenditure expected to the end of the financial year. This is due to the fact that the unexpected expenditure on election readiness for the financial year has been funded through the AEC’s existing cash reserves.

Urgent:

The AEC requires additional funding urgently due to the expectation that it will exhaust its available appropriation balance by the end of May 2011and therefore not in the position to pay employee and supplier costs. It also impacts the ability of the agency to be election ready in the event of an event occurring.

Unforeseen:

The unforseen expenditure in relation to election readiness is a result of a hung parliament in the 2010 election and the increased likelihood that there will be another election before 2013-14.

Unforseen expenditure for the 2010 Election has also impacted the AEC’s cash reserve. The Rowe case was to be funded through existing appropriations as a request for additional funding was rejected. The impact of the unprecedented number of enrolment forms to be processed (563k) that was received by the AEC before the election, the increase in number of pre-poll voters as well as the increase in contractor rates have significantly added to the unforseen expenditure in contractor costs.