Explanatory Statement
Appropriation Act (No. 1) 2008-2009, Section 14 – 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 14 of Appropriation Act (No. 1) 2008-2009”, dated 25 June 2009 and numbered 8 of 2008-2009.
The legislative authority under which the instrument is made
The Advance to the Finance Minister (AFM) is a provision contained in the annual Appropriation Acts. It enables the Finance Minister to facilitate urgent and unforeseen expenditure that was not within the contemplation of Parliament when the Appropriation Act was passed and is therefore not provided for in Schedule 1 of the Appropriation Act.
In Appropriation Act (No. 1) 2008-2009, the Advance to the Finance Minister is provided for under section 14. The discretionary power is exercisable upon the Finance Minister’s satisfaction of the matters specified in section 14. This section indicates that amounts can be issued from the Advance to the Finance Minister, up to a limit of $295 million, if the Finance Minister is satisfied that there is an urgent need for expenditure, in the current year, that is not provided for, or is insufficiently provided for, in Schedule 1 of that Act. The qualifying circumstances on the discretion of the Finance Minister to issue additional amounts under this provision is contained in subsections 14(1)(a) and (b) of that Act. This application satisfied the Finance Minister that the additional expenditure was not provided for because of unforeseen circumstances.
Exercise of the power via the issue of a determination has effect as if Schedule 1 of Appropriation Act (No. 1) 2008-2009 were amended to make provision for the additional expenditure specified in the determination.
Purpose of the instrument
The instrument determines that the Administered Item for Outcome 4 for the Department of Families, Housing, Community Services and Indigenous Affairs in Appropriation Act (No. 1) 2008‑2009 be increased by $10,539,463. The additional amount is provided to enable ex-gratia payments to victims of the Victorian bushfires and Queensland floods.
Background
The background to the instrument is provided in the application made by the Department of Families, Housing, Community Services and Indigenous Affairs for funding from the Advance to the Finance Minister. The application is reproduced below.
APPLICATION FOR FUNDS - ADVANCE TO THE FINANCE MINISTER 2008‑09
Agency: Department of Families, Housing, Community Services and Indigenous Affairs
Appropriation: Appropriation Act (No. 1) 2008‑2009
Description: Administered expenses
Description of Outcome: Outcome 4 - Strong and resilient communities – Services and assistance that: help homeless people and low-income households to gain affordable and appropriate housing; promote community partnerships; and encourage participation in the local community by individuals, families, business and government
Source of Available Funds | 2006-07 | 2007-08 | 2008-09 |
Appropriation Act (No. 1) | 137,352,000 | 110,572,000 | 178,632,000 |
Appropriation (Economic Security Strategy) Act (No. 1) 2008‑09 | - | - | 6,430,000 |
Appropriation Act (No. 3) | - | 35,764,000 | 1,160,000 |
Appropriation Act (No. 5) | - | - | 11,091,000 |
Retained Prior Years Appropriation | - | 1,928,326 | 1,905,775 |
TOTAL FUNDS AVAILABLE | 137,352,000 | 146,336,000 | 199,218,775 |
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TOTAL EXPENDITURE | 92,453,074 | 115,841,678 | 164,391,902 |
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TOTAL UNSPENT FUNDS | 44,898,926 | 30,494,322 | 34,826,873 |
Funds Required (as at 24 June 2009): $45,366,336
Funds Currently Unspent: $34,826,873
Amount required from AFM: $10,539,463
AFM Category: Appropriation Act (No. 1) 2008-09 Part 3 14 (1)(b)
Explanation of requirements for AFM:
FaHCSIA requires funds urgently to fulfil the Australian Government commitments to victims of the Victorian bushfires and Queensland floods. FaHCSIA is responsible for delivering six of the announced initiatives:
- Emergency relief of $5 million in 2008‑09 to meet the need for immediate assistance for families affected by the recent natural disasters in Victoria and Queensland.
- Income Recovery Subsidy for employees, small business persons, and farmers who lost income as a direct result of the Victorian bushfires.
- Income Recovery Subsidy for employees, small business persons, and farmers who lost income as a direct result of the North Queensland floods.
- Income Recovery Subsidy for employees, small business persons, and farmers who lost income as a direct result of the North‑West Queensland floods.
- Ex gratia assistance to victims of the Victorian Bushfires for funeral, memorial, and other costs.
- Provision of $5,000 for funeral/memorial and any related costs (such as anniversary expenses) for the immediate families of Australians killed in the floods in North Queensland caused by Tropical Cyclone Ellie.
Urgent:
Ex-gratia payments to families, businesses and farms described above to those affected by the disasters have been paid out since 8 February 2009. It is expected that claims will continue to be made over the next 4 working days. The ex-gratia payments have recently been funded from within the Homelessness and Housing program. Without additional funding, it is likely that funds in Outcome 4, from which the remaining ex-gratia and Homelessness and Housing payments must be made, will be exhausted by 30 June 2009. This AFM is necessary in order to avoid being unable to make required payments to those eligible.
Unforeseen:
The Victorian bushfires and Queensland floods were unexpected natural disasters. The magnitude of these events and the need in the community arising from damage to homes, businesses, and farms could not have been predicted.