Overview

The Advance to the Finance Minister (AFM) is a provision included in the annual Appropriation Acts, enabling the Finance Minister to facilitate urgent and unforeseen expenditure not contemplated by Parliament when the Appropriation Act was passed. This provision is specified in section 13 of the Appropriation Act (No. 1) 2011-2012, allowing the Finance Minister to issue up to $295 million in additional funds if there is an urgent need for expenditure not provided for or insufficiently provided for in the Act’s Schedule 1. The Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) applied for additional funding from the AFM to cover unforeseen expenditure for the No Interest Loan Scheme subsidies under the Home Energy Saver Scheme. The required funds were not available from existing appropriations or underspends, hence the need for an AFM to ensure timely payments before 30 June 2012. This provision supports the government's commitment to urgent and unforeseen payments that were not within the original budget allocations.

Scope and Application

The instrument, "Advance to the Finance Minister – Section 13 of Appropriation Act (No. 1) 2011-2012", pertains to an appropriation made to the Finance Minister under the authority of the Appropriation Act (No. 1) 2011-2012. This legislation provides the Finance Minister with the discretionary power to issue advances for urgent and unforeseen expenditure that was not accounted for in the original appropriation schedule. The provision is capped at $295 million and is subject to the Finance Minister's satisfaction that there is an urgent need for the expenditure, which is not or is insufficiently provided for in the appropriation schedule. In this instance, the Department of Families, Housing, Community Services and Indigenous Affairs has sought additional funding to cover the No Interest Loan Scheme subsidies under the Home Energy Saver Scheme, amounting to $17.61 million. This funding is deemed necessary due to unforeseen circumstances and is to be disbursed before the end of the financial year. The issuance of the advance operates as if the appropriation schedule were amended to include the specified expenditure. The instrument is exempt from disallowance and does not require a Human Rights Impact Statement as per the applicable legislative instruments.

Key Provisions

The key operative sections of the Advance to the Finance Minister (AFM) under the Appropriation Act (No. 1) 2011-2012 (sections referenced in parentheses) include section 13, which allows the Finance Minister to issue funds for urgent and unforeseen expenditures that were not contemplated when the Appropriation Act was passed. This discretionary power is exercisable 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 the Act (section 13(1)). The issuance of funds under this provision is subject to a limit of $295 million. The instrument dated 28 June 2012, numbered 5 of 2011-2012, determines that the Administered Item for Outcome 3 for the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) will cover No Interest Loan Scheme subsidies under the Home Energy Saver Scheme. The obligations and requirements imposed by the Act on the parties involved, particularly FaHCSIA, include ensuring that the additional expenditure is not provided for due to unforeseen circumstances and that the expenditure is urgent and necessary before 30 June 2012. FaHCSIA must demonstrate that the funds are required to make a payment of $20.61 million to the Home Energy Saver Scheme No Interest Loan Scheme (HESS NILS) subsidies sub-program within the Financial Management program. This payment is to be delivered to Good Shepherd Microfinance to provide subsidies to vulnerable Australians for purchasing more energy-efficient household goods and appliances. The obligation extends to showing that the available appropriations are insufficient to meet the payment, thereby necessitating the AFM. FaHCSIA must also ensure that current commitments are met before the fiscal year-end. The Act imposes specific penalties and consequences for breaches of its provisions, although the maximum penalties are not detailed in the explanatory statement. The instrument is exempt from disallowance under subsection 44(2) of the Legislative Instruments Act 2003, and thus, a statement of compatibility under the Human Rights (Parliamentary Scrutiny) Act 2011 is not required. The consequences for misuse or improper issuance of funds under this Act would likely involve financial repercussions for the parties involved, including possible recovery of misused funds, disciplinary actions, and potential legal proceedings. However, the exact penalties are not specified in the explanatory statement, and further legal reference would be required for precise details.