Advance to the Finance Minister - section 13 of Appropriation Act (No. 2) 2004-2005 (No. 3 of 2004-2005)

Explanatory Statement

Appropriation Act (No. 2) 2004-05, 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. 2) 2004-05”, dated 7 February 2005 and numbered 3 of 2004-2005.

The legislative authority under which the instrument is made

The Advance to the Finance Minister is a central contingency fund to provide urgent appropriation to agencies through the year where existing appropriation proves insufficient or a new appropriation is required. The fund is authorised by the annual Appropriation Acts.

In Appropriation Act (No. 2) 2004-05, the contingency fund is provided for under section 13. This section indicates that amounts can be issued from the Advance to the Finance Minister, up to a limit of $215 million, if the Finance Minister is satisfied that:

(a)   There is an urgent need for expenditure that is not provided for, or is insufficiently provided for, in Schedule 2 (which sets out the amounts appropriated); and

(b)   The additional expenditure is not provided for, or is insufficiently provided for, in Schedule 2:

(i)               Because of an erroneous omission or understatement; or

(ii)               Because the additional expenditure was unforeseen until after the last day on which it was practicable to provide for it in the Appropriation Bills before those Bills were introduced into the House of Representatives.

Exercise of the provision via the issue of a determination, has effect as if Schedule 2 Appropriation Act (No. 2) 2004-05 were amended to make provision for the additional expenditure specified in the determination.

In an instrument dated 12 February 2003, the Finance Minister has authorised the person holding the position of SES Band 2, Financial Reporting and Cash Management Division, in the Department of Finance and Administration to exercise the power provided for under section 13 of Appropriation Act (No. 2) 2004-05.

Purpose of the instrument

The instrument determines that the Specific Purpose Payments Outcome 2 appropriation item for the Department of Communications, Information Technology and the Arts in Appropriation Act (No. 2) 2004-05 be increased by $287,201. 

Background

The background to the instrument is provided in the application made by the Department of Communication, Information Technology and the Arts for funding from the Advance to the Finance Minister.  The application is reproduced below.

APPLICATION FOR FUNDS - ADVANCE TO THE FINANCE MINISTER 2004-05

Agency: Department of Communications, Information Technology and the Arts 

Appropriation: Appropriation Act (No. 2) 2004-05

Description: Specific Purpose Payments – Outcome 2

Description of Outcome: Development of a stronger and internationally competitive Australian sports  sector and encouragement of greater participation in sport by all Australians             

Funds Required:   $ 287,201

Funds Currently Unspent:  $ Nil

Amount required from AFM:  $ 287,201

AFM Category:  Appropriation Act (No. 2) 2004-05 Part 3 13 (1)(b)(ii)

Explanation of requirements from AFM: The Australian Government agreed in September 2004 to provide up to $350,000 to the New South Wales Government as its contribution towards national welcome home parades for Australia’s Olympic and Paralympic Teams. It was agreed that the New South Wales Government would meet the cost of the parades in the first instance and send an invoice covering the Australian Government’s contribution. In line with this approach, the Department of Communications, Information Technology and the Arts (DCITA) received an invoice from the New South Wales Government in December 2004, seeking payment of $287,201 by 20 January 2005.

DCITA does not currently have any appropriation from which it can pay the New South Wales Government invoice. Furthermore, while DCITA is expected to receive funding for the welcome home parades at 2004-05 Additional Estimates, the monies are unlikely to be available to DCITA until late March 2005. Accordingly, funding of $287,201 is required from the Advance to the Finance Minister pending Additional Estimates, to ensure timely payment of the Australian Government’s contribution to the parades.

Urgent: As DCITA does not have any existing appropriation from which it can meet the Australian Government’s contribution to the welcome home parades and Additional Estimates funding for the parades is unlikely to become available until late March 2005, DCITA requires funding from the Advance to the Finance Minister to ensure timely payment to the New South Wales Government.

Unforeseen: The Australian Government agreed to contribute to the welcome home parades in September 2004. Accordingly, the need for expenditure of $287,201 was unforeseen at the time that Appropriation Bill (No. 2) 2004-05 was prepared in May 2004.

Notes on the instrument

The instrument provides that the appropriation item listed in column 1 for the Department of Communications, Information Technology and the Arts be increased by the amount listed in column 3.  The instrument specifies that the additional amount is provided for the purpose of paying a New South Wales Government invoice seeking the Australian Government’s contribution to the cost of welcome home parades for Australia’s Olympic and Paralympic Teams.