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 27 June 2006 and numbered 17 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 Administered Expenses – Outcome 1, appropriation for the Department of Environment and Heritage in Appropriation Act (No. 2) 2005-06 be increased by $5,073,000.
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 the Environment and Heritage
Appropriation: Appropriation Act (No. 2) 2005-06
Description: Administered expenses – Specific Payments to the States and Territories
Description of Outcome: Outcome 1 – “The environment, especially those aspects that are matters of national environmental significance, is protected and conserved.”
Source of Available Funds | 2003-04 | 2004-05 | 2005-06 |
$ | $ | $ | |
Appropriation Act No. 2 | 1,530,000 | 23,774,951 | 33,340,000 |
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|
|
|
TOTAL FUNDS AVAILABLE | 1,530,000 | 23,774,951 | 33,340,000 |
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|
|
TOTAL EXPENDITURE | 1,530,000 | 23,621,541 | 32,913,000 |
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|
|
|
TOTAL UNSPENT FUNDS | $Nil | $Nil1 | 427,000 |
1 Lapsed appropriation was $153,410.
Funds Required: $5,500,000
Funds Currently Unspent: $ 427,000
Amount required from AFM: $5,073,000
AFM Category: Appropriation Act (No. 2) 2005-2006 Part 3 13 (1)(a) and (b)
Explanation of requirements from AFM:
On 13 May 2005 the Prime Minister and the Premier of Tasmania signed the Supplementary Tasmanian Regional Forest Agreement, also known as The Tasmanian Community Forest Agreement. The agreement outlines the establishment of a new market based program (The Forest Conservation Fund) to protect and manage 45,600 hectares of forest on private land.
Funding for the Tasmanian Community Forest Agreement is currently in the Contingency Reserve (CR) under the administrative control of the Department of Finance and Administration. The funding was placed in the CR due to the market sensitivities involved with the pending land purchases and the need for details of the program to remain commercial in confidence.
The Supplementary Tasmanian Regional Forest Agreement (between the State of Tasmania and the Commonwealth of Australia) provides details of a commitment that the Commonwealth is to make a payment to the Tasmanian Government in paragraph 26:
“The Commonwealth will provide one-off funding to the State of $5.5 million in 2005-06 from program funding…”
Agreement has been subsequently reached on 16 June 2006 to make the $5.5m payment.
A tax invoice is now to hand for the payment.
The Department of the Environment and Heritage (DEH) has an obligation to make this payment prior to 30 June 2006.
Urgent:
Consistent with the Supplementary Tasmanian Regional Forest Agreement the Minister for the Environment and Heritage has now entered into a formal agreement with the Tasmanian Minister for Primary Industries and Water to provide the one-off payment of $5.5m in 2005-06 as outlined above.
Unforeseen:
Delays in the release of the strategic plan for the Forest Conservation Fund program and the Tasmanian election earlier in the year have delayed the implementation of the program. As a consequence the signing of the agreement “in relation to Funding for ongoing monitoring and management support services to owners of covenanted land participating in the Forest Conservation Fund was not signed until 16 June 2006.
Funding for the Tasmanian Community Forest Agreement is currently in the CR under the administrative control of the Department of Finance and Administration. The next available opportunity for appropriation of this programme funding to the Department of the Environment and Heritage is in 2006-2007.
There is no other available Bill 2 funding in 2005-06 to meet this contractual obligation.
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 to meet a commitment from the Commonwealth to provide a one-off payment to the State for the funding of ongoing monitoring and management support services to owners of forested land protected by covenants.