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Advance to the Finance Minister – section 13 of Appropriation Act (No. 2) 2005-2006 (No. 10 of 2005-2006)

Advance to the Finance Minister – section 13 of Appropriation Act (No. 2) 2005-2006 (No. 10 of 2005-2006)

Administered by Department of Finance

Legislation au F2006L01085 Not in force Legislative Instrument

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Explanatory Statement

Appropriation Act (No. 2) 2005-06, 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) 2005-2006”, dated 4 April 2006 and numbered 10 of 2005-2006.

The legislative authority under which the instrument is made

The Advance to the Finance Minister is a provision authorised by the annual Appropriation Acts and made available to the Finance Minister as a central contingency fund to provide urgent funding to agencies throughout the financial year.

In Appropriation Act (No. 2) 2005-06, the Advance to the Finance Minister 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 Bill before the Bill was introduced into the House of Representatives.

Exercise of the provision via the issue of a determination, has effect as if Schedule 2 of Appropriation Act (No. 2) 2005-06 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 Management Division, in the Department of Finance and Administration to exercise the power provided for under section 13 of Appropriation Act (No. 2) 2005-06.

Purpose of the instrument

The instrument determines that the Administered Assets and Liabilities appropriation for the Department of Environment and Heritage in Appropriation Act (No. 2) 2005-06 be increased by $166,668.

Background

The background to the instrument is provided in the application made by the Department of Environment and Heritage for funding from the Advance to the Finance Minister. The application is reproduced below.

APPLICATION FOR FUNDS - ADVANCE TO THE FINANCE MINISTER 2005-2006

Agency: Department of Environment & Heritage

Appropriation: Appropriation Act (No. 2) 2005-06

Description: Administered Assets and Liabilities

Description of Outcome: (no outcome)

Source of Available Funds	2003-2004	2004-2005	2005-2006
	$	$	$
Appropriation Act No. 41	0	0	127,000
Appropriation Act No. 21	0	0	0
Retained by AusIndustry2	0	0	0
TOTAL FUNDS AVAILABLE3	0	0	0

TOTAL EXPENDITURE4	0	0	0

TOTAL UNSPENT FUNDS5	0	0	0

1 Appropriations to the REEF programme were reclassified in the 2005-06 Additional Estimates process, from expenses (Act 1) to capital (Acts 2 & 4). Only the unspent portion of the 2005-06 appropriation was reclassified.

2 DEH has delegated administration of the REEF programme to AusIndustry, which has in turn delegated management of the REEF to a private fund manager. The fund manager may at times return funds (sourced ultimately from appropriations to DEH) to AusIndustry, which AusIndustry retains until the fund manager calls for further funds, at which time AusIndustry returns these funds to the fund manager.

3 The Act 4 appropriation will not be available until Act 4 is passed (refer to note 1).

4 As REEF programme appropriations were reclassified in the 2005-06 Additional Estimates process (refer to note 1), no expenditure has been made against Acts 2 or 4.

5 This figure will differ from the figure in CBMS, as it includes funds drawn by DEH, but retained by AusIndustry (refer to note 2).

Funds Required: $166,668

Funds Currently Unspent: $ 0

Amount required from AFM: $166,668

AFM Category: Appropriation Act (No. 2) 2005-2006 Part 3 13 (1)(b)(ii)

Explanation of requirements from AFM:

The Renewable Energy Equity Fund (REEF) programme provides funding for the Government’s two-thirds shareholding of the CVC REEF Ltd venture capital fund, which invests in small, innovative renewable energy companies. The remaining third of the fund is provided by the private sector.

The Department of Environment and Heritage (DEH) has received from the REEF fund manager a call for $166,668, which exceeds the funds available to DEH for the REEF programme in 2005-06. An amount of $127,000 is unspent from the 2005-06 appropriation for this programme, but as it was reclassified in the 2005-06 Additional Estimates process, it will not be available until Appropriation Act (No. 4) 2005-06 is passed. DEH has no other administered capital funds to draw upon. DEH therefore requires an AFM of $166,668.

Urgent:

DEH received a call for funds from the fund manager of the REEF programme, via AusIndustry, on 28 March 2006. Under the MOU between AusIndustry and the AGO (a division of DEH), DEH must pay AusIndustry within seven days. In accordance with the subscriber agreement between AusIndustry and the fund, AusIndustry must pay the fund within 14 days.

Unforeseen:

Under the 10-year REEF program, the Government has a contractual obligation to provide the total of the Government’s share ($17.723 million) to the fund, without reference to the size or timing of payments, which are determined by the fund manager as per their needs, and unrelated to Government annual appropriations to the DEH for the REEF programme. As a commercial venture capital fund, CVC REEF Ltd's needs are driven by investment opportunities and are unpredictable. While it was foreseeable that the fund may at some time make a call in excess of the annual appropriation to DEH, the specific size and timing of such a call was not foreseeable.

Notes on the instrument

The instrument provides that the appropriation item listed in column 1 for the Department of Environment and Heritage be increased by the amount listed in column 3. The instrument specifies that the additional amount be provided for the purpose of meeting a current Australian Government commitment under the Renewable Energy Equity Fund (REEF) programme.

Overview

The Appropriation Act (No. 2) 2005-06 was enacted to provide the necessary financial framework for the Commonwealth's budget allocations and contingencies for the 2005-2006 financial year. One of the key provisions of this Act is Section 13, which authorises an advance to the Finance Minister as a contingency fund to address urgent and unforeseen expenditures not accounted for in the initial appropriation schedules. This mechanism was designed to ensure that the government can respond promptly to unexpected financial requirements, thereby maintaining the operational continuity of various agencies. The policy objective behind this provision is to provide flexibility and responsiveness in the face of unforeseen circumstances that could otherwise disrupt the delivery of public services. The explanatory statement outlines a specific instance where the Advance to the Finance Minister was utilised to fund an urgent requirement by the Department of Environment and Heritage (DEH). In this case, the DEH needed an additional $166,668 to meet its obligations under the Renewable Energy Equity Fund (REEF) programme. This sum was required to meet a call from the REEF fund manager, which was both urgent and unforeseen, given the unpredictable nature of investment opportunities in the renewable energy sector. The provision of this funding ensures that the government can uphold its commitments to the REEF programme, thereby supporting small, innovative renewable energy companies and contributing to broader policy objectives related to sustainable energy development.

Scope and Application

The Appropriation Act (No. 2) 2005-06, as detailed in the instrument dated 4 April 2006, provides for the Advance to the Finance Minister, a contingency fund of up to $215 million that the Finance Minister can utilise to address unforeseen or urgent expenditures not covered by the initial appropriation schedules. The Act applies to the Finance Minister and any other entity that may receive funding from this contingency pool, contingent on the Minister's assessment of the urgency and unforeseen nature of the expenditure. The provision is available nationally, as it pertains to Commonwealth-wide appropriations. The instrument specifically authorises an increase of $166,668 to the Administered Assets and Liabilities appropriation for the Department of Environment and Heritage, necessitated by a funding call from the Renewable Energy Equity Fund (REEF) programme, which was not foreseen at the time of the initial appropriation. The authority to exercise this provision has been delegated to a specified official within the Department of Finance and Administration. This instrument acts as if Schedule 2 of the Appropriation Act (No. 2) 2005-06 were amended to include the additional expenditure, thereby extending the application of the Act to cover this particular situation.

Key Provisions

The main sections of the Appropriation Act (No. 2) 2005-06, specifically section 13, establish a framework for the Advance to the Finance Minister. This provision allows the Finance Minister to issue funds up to a maximum of $215 million in cases where there is an urgent need for expenditure not provided for in Schedule 2 of the Act. The Finance Minister can exercise this authority if the additional expenditure is either due to an erroneous omission or understatement in Schedule 2, or if the expenditure was unforeseen until after the last practicable opportunity to include it in the Appropriation Bill (sections 13(1)(a) and (b)). The instrument dated 4 April 2006 further specifies that the additional expenditure authorised under this section is treated as if it had been included in Schedule 2 of the Act (section 13(2)). The Act imposes specific obligations on the Finance Minister when exercising the power under section 13. The Finance Minister must be satisfied that the conditions outlined in section 13(1) are met before issuing funds from the Advance to the Finance Minister. This means the Finance Minister must ensure there is an urgent need for the expenditure and that this need is not already provided for in Schedule 2. Additionally, the Finance Minister must consider whether the additional expenditure was due to an erroneous omission or understatement in Schedule 2, or if it was unforeseen until after the last practicable opportunity to include it in the Appropriation Bill. The instrument dated 12 February 2003 authorises the SES Band 2 officer from the Financial Reporting and Management Division in the Department of Finance and Administration to exercise this power on behalf of the Finance Minister. Failure to comply with the provisions of the Act, or misuse of the Advance to the Finance Minister, could result in various legal consequences. While the Act itself does not specify particular offences or penalties for breaches, misuse of public funds or failure to adhere to the conditions set out in section 13 could potentially lead to disciplinary action, financial penalties, or other civil or criminal consequences under broader legislative frameworks such as the Public Governance, Performance and Accountability Act 2013. The exact penalties would depend on the nature and severity of the breach, as well as other relevant laws and regulations.

Area of Law: Finance & Banking Law
Instrument: Statutory Instrument
Concepts: Definitions & Interpretation; Offence Provisions; Reporting & Disclosure Obligations

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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