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 21 February 2006 and numbered 4 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 Cash 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 Specific Purpose Payments, Outcome 2 appropriation for the Department of Communications, Information Technology and the Arts in Appropriation Act (No. 2) 2005-06 be increased by $10,000,000.
Background
The background to the instrument is provided in the application made by the Department of Communications, 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 2005-06
Agency: Department of Communications, Information Technology and the Arts (DCITA)
Appropriation: Appropriation Act (No. 2) 2005-06
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
Source of Available Funds | 2003-04
| 2004-05 | 2005-06 |
$’000 | $’000 | $’000 | |
[D1] |
|
|
|
Appropriation Act No. 2 | 0 | 0 | 62,900 |
Appropriation Act No. 4 | 0 | 1,125 | not passed |
Appropriation Act No. 6 | 50,000 | 0 | N/A |
TOTAL FUNDS AVAILABLE | 50,000 | 1,125 | 62,900 |
|
|
|
|
TOTAL EXPENDITURE[D2] | 50,000 | 261 | 0 |
|
|
|
|
TOTAL UNSPENT FUNDS | 0 | 0 | 62,900 |
Funds Required: $ 72,900,000
Funds Currently Unspent: $ 62,900,000
Amount required from AFM: $ 10,000,000
AFM Category: Appropriation Act (No. 2) 2005-06 Part 3 Section 13 (1)(b)(ii)
Explanation of requirements from AFM: In the 2005-06 Budget, DCITA received a $62,900,000 Specific Purpose Payment (SPP) appropriation, representing the Commonwealth Government’s contribution towards a Second Funding Agreement with the Victorian Government for the Melbourne 2006 Commonwealth Games.
An additional SPP contribution of $10,000,000 was approved by the Prime Minister in July 2005, to be appropriated to DCITA at 2005-06 Additional Estimates, subject to the Victorian Government meeting certain conditions.
The Victorian Government has now complied with these conditions. On 6 February 2006, Cabinet endorsed these conditions as having been met. Payment of the full amount of $72,900,000 is now required before the end of February 2006.
Accordingly, funding of $10,000,000 is required from the Advance to the Finance Minister pending 2005‑06 Additional Estimates, to ensure timely payment of the full Second Funding Agreement amount by the Australian Government for the Melbourne 2006 Commonwealth Games.
DCITA does not currently have sufficient SPP appropriation from which it can pay the full amount for the Second Funding Agreement to the Victorian Government. Monies from 2005-06 Additional Estimates are unlikely to be available to DCITA until after the payment is due.
Urgent: as DCITA does not have sufficient existing SPP appropriation from which it can meet the Australian Government’s full contribution to the Melbourne 2006 Commonwealth Games Second Funding Agreement and 2005-06 Additional Estimates funding is unlikely to become available until after the payment is due, DCITA requires funding from the Advance to the Finance Minister pending passage of the 2005‑06 Additional Estimates Bills to ensure timely payment to the Victorian Government.
Unforeseen: In July 2005, the Prime Minister agreed to contribute an additional $10,000,000 to the Melbourne 2006 Commonwealth Games Opening Ceremony. Accordingly, the need for the additional expenditure of $10,000,000 was unforeseen at the time that Appropriation Bill (No. 2) 2005-06 was prepared in May 2005.
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 meeting the Commonwealth Government’s contribution towards a Second Funding Agreement with the Victorian Government for the Melbourne 2006 Commonwealth Games.
[D1]1Full analysis of all sources of the funding available with a separate row to report each applicable funding source. Insert extra rows if necessary
Possible funding sources are:
Appropriation Act No. 1;
Appropriation Act No. 2;
Appropriation Act No. 3;
Appropriation Act No. 4;
Advance to the Finance Minister;
Departmental Items – Adjustments;
Departmental Capital Items – Adjustments & Borrowings;
Section 31 Revenue;
Funding from Section 32 Adjustments;
Funding from Previous Years’ Appropriations.
Statement of Savings
[D2]1Total funds spent as at the time of the application (should not be less than amount drawn down in CAMM).