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 18 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 1 (which sets out the amounts appropriated); and
(b) The additional expenditure is not provided for, or is insufficiently provided for, in Schedule 1:
(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 1 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 Management Group, 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 Expenses – Outcome 1 appropriation for the Department of Transport and Regional Services in Appropriation Act (No. 2) 2005-06 be increased by $23,200,122.
Background
The background to the instrument is provided in the application made by the Department of Transport and Regional Services 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 Transport and Regional Services
Appropriation: Appropriation Acts (No. 2) 2005-06 and (No. 6) 2005-06
Description: Payments to States, ACT, NT and local government
Description of Outcome: Fostering an efficient, sustainable, competitive, safe and secure transport system
Source of Available Funds | 2003-2004 | 2004-2005 | 2005-2006 |
$ | $ | $ | |
Appropriation Act No. 2 | 0 | 0 | 1,625,469,000.00 |
Appropriation Act No. 6 | 0 | 0 | 1,759,989,000.00 |
TOTAL FUNDS AVAILABLE | 0 | 0 | 3,385,458,000.00 |
TOTAL EXPENDITURE | 0 | 0 | 952,166,820.00 |
TOTAL UNSPENT FUNDS | 0 | 0 | 2,433,291,180.00 |
Funds Required: $ 2,456,491,302
Funds Currently Unspent: $ 2,433,291,180
Amount required from AFM: $ 23,200,122
AFM Category: Appropriation Act (No. 2) 2005-2006 Part 3 13 (1)(b)(i)
Explanation of requirements from AFM:
The AusLink programme was established in 2005-06 under the AusLink (National Land Transport) Act 2005. The former National Highways and Roads of National Importance and associated programmes had been funded from and drawn down against former Australian Land Transport Development Act 1988 special appropriations without the need to classify payments as grant payments to and through state and territory governments (SPPs) or other payments. The AusLink programme involves: SPP payments; payments to local government councils (non-SPP); and other payments for research, development and innovation projects (non-SPP). Funding for the AusLink programme is provided from Appropriation Act s (No. 2) 2005-06, (No. 4) 2005-06 and (No.6) 2005-06 under the items ‘New Administered Expenses’; ‘Specific Payments to States and Territories’, and ‘Payments to States, ACT, NT and local government’.
Current appropriations for ‘New Administered Expenses’ and ‘Payments to States, ACT, NT and local government’ were based on an expected project allocations available during the 2006-07 Budget update. However, payments are made based on actual invoiced amounts. The final allocations between these categories are now known.
Also, for budgetary purposes all payments under the AusLink Roads to Recovery programme have been treated as payments to local government, which in 2005-06 are being funded under the ‘New Administered Expenses’ item in Appropriation Acts (No. 2) 2005-06. However, some of these payments are paid directly to the State and Territories ($11.5m), in particular to the ACT (in lieu of there being any "local government" bodies) and payments to SA Local Government Grants Commission, which administers a certain proportion of local government payments within the State.
The issues outlined above has resulted in additional funds being sought under the ‘Payments to States, ACT, NT and local government’ item with an equal and offsetting reduction under the ‘New Administered Expenses’ item which will lapse at year end. The total level of funding required under the aggregate AusLink programme will remain unchanged.
Urgent :
Payments under the programme are made on a regular basis. Although a small number of invoice remain outstanding, once received payment cannot be delayed due to the requirement of the funding agreements with recipients. At this time, we anticipate all claims will need to paid by 30 June 2006
Unforeseen :
The final allocation between state and non-state components cannot finalised until towards the end of the financial year when final invoices are processed.
Notes on the instrument
The instrument provides that the appropriation item listed in column 1 for the Department of Transport and Regional Services be increased by the amount listed in column 3. The instrument specifies that the additional amount be provided to meet a commitment in relation to payments to the States, ACT, NT and local government for the AusLink programme.