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 24 June 2011 and numbered 5 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 is contained in subsections 13(1)(a) and (b) of that Act.  The application from the Department of the Prime Minister and Cabinet (PM&C) has satisfied the Finance Minister that the additional expenditure was not provided for because it was unforeseen.

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 3 for PM&C in Appropriation Act (No. 1) 2010-2011 be increased by $3,130,000.  The additional amount is provided to enable PM&C to fund early event planning activity and contribute to the establishment of the Local Organising Committee for the 2011-2012 budget measure ‘Supporting football in the lead up to the 2015 Asian Cup’. This measure has expenditure implications in the 2010-11 financial year that were unforeseen at the time of the 2010-11 Appropriation Bills (No.1) and (No. 3).

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 3 – Improved opportunities for community participation in sport and recreation, and excellence in high-performance athletes, including through investment in sport infrastructure and events, research and international cooperation.

1 Total Available Appropriation takes into account declared offsets of $1.7 million and movement of administered funds to 2011-12 of $3.046 million and Advance from the Finance Minister pending approval from the Minister for Finance.

2 Includes the Advance from the Finance Minister No. 1 which is pending approval from the Minister for Finance. Funds for this advance have been committed and an invoice has been received from the parties to the funding agreement.

Appropriation Required: $15,284,309.57

Appropriations Available1: $ 12,154,309.57

Amount required from AFM: $ 3,130,000.00

1 Includes the Advance from the Finance Minister No. 1 which is pending approval from the Minister for Finance. Funds for this advance have been committed and an invoice has been received from the parties to the funding agreement.

AFM Category:

-          unforeseen – “Appropriation Act (No. 1) 2010-2011, Part 3, section 13 (1)(b)

Explanation of requirements from AFM:

The 2011-12 Budget included the measure ‘Supporting football in the lead up to the 2015 Asian Cup’. This measure included expenditure of $3.130 million in 2010-11 for the establishment of the Local Organising Committee (‘the LOC’).

An AFM is required to resource this measure as it is unlikely that there will be any opportunity for funds to be appropriated through Appropriation Act (No. 5) or (No. 6). Therefore, there is no other mechanism by which the Department can receive the appropriation required in order to meet the conditions of the funding agreements with the LOC in the current financial year.

Urgent:

Additional funding is required in 2010-11 as announced in the 2011-12 Budget. This funding is required urgently in order to fund early event planning activity and to contribute to the establishment of the LOC in the 2010-11 financial year. No further opportunities for the appropriation of funds are available in 2010-11.

Unforeseen:

The expenditure was provided for in the 2011-12 Budget as a measure. This measure has expenditure implications in the 2010-11 financial year that were unforseen at the time of the 2010-11 Appropriation Bills (No.1) and (No.3).