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Advance to the Finance Minister – Section 15 of Appropriation Act (No. 2) 2008-2009 (No. 9 of 2008-2009)

Advance to the Finance Minister – Section 15 of Appropriation Act (No. 2) 2008-2009 (No. 9 of 2008-2009)

Administered by Department of Finance

Legislation au F2009L02601 Not in force Legislative Instrument

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Explanatory Statement

Appropriation Act (No. 2) 2008-2009, Section 15 – 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 15 of Appropriation Act (No. 2) 2008-2009”, dated 25 June 2009 and numbered 9 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 2 of the Appropriation Act.

In Appropriation Act (No. 2) 2008-2009, the Advance to the Finance Minister is provided for under section 15. The discretionary power is exercisable upon the Finance Minister’s satisfaction of the matters specified in section 15. This section indicates that amounts can be issued from the Advance to the Finance Minister, up to a limit of $380 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 2 of that Act. The qualifying circumstances on the discretion of the Finance Minister to issue additional amounts under this provision is contained in subsections 15(1)(a) and (b) of that Act. This application satisfied the Finance Minister that the additional expenditure was not provided for because of an erroneous omission.

Exercise of the power via the issue of a determination has effect as if Schedule 2 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 State, ACT, NT and local government item for Outcome 1 for the Department of Infrastructure, Transport, Regional Development and Local Government in Appropriation Act (No. 2) 2008‑2009 be increased by $29,016,740. The additional amount is provided to enable payments under the Nation Building Program.

Background

The background to the instrument is provided in the application made by the Department of Infrastructure, Transport, Regional Development and Local Government for funding from the Advance to the Finance Minister. The application is reproduced below.

APPLICATION FOR ADVANCE TO THE FINANCE MINISTER - 2008-2009

Agency: Department of Infrastructure, Transport, Regional Development and Local Government

Appropriation: Appropriation Act (No. 2) 2008-2009

Description: Payments to States, ACT, NT and local government

Outcome: Outcome 1: Assisting the Government to provide, evaluate, plan and invest in infrastructure across industry sectors.

Source of Available Appropriations	2006-2007	2007-2008	2008-2009
	$	$	$
Appropriation Act (No. 2) 2008-2009	0	0	2,471,297,000
Appropriation (Nation Building and Jobs) Act (No. 2) 2008-2009	0	0	230,000,000
Appropriation Act (No. 6) 2008-2009	0	0	391,989,000

TOTAL APPROPRIATIONS AVAILABLE	0	0	3,093,286,000

TOTAL AMOUNT SPENT	0	0	2,916,065,575

TOTAL UNSPENT APPROPRIATIONS

177,220,425

Appropriations Required: $206,237,165

Appropriations Available: $177,220,425

Amount required from AFM: $ 29,016,740

AFM Category: Appropriation Act (No. 2) 2008-2009 Part 3 15(1)(b)

Explanation of requirements from AFM:

The Nation Building Program and the Nation Building Plan for the Future initiatives contribute to the Government’s commitment to support employment through small to medium scale infrastructure projects and building the nations long term economic capacity. These initiatives aim to increase the efficiency and safety of Australia’s land transport infrastructure whilst strengthening the Australian economy.

The program includes payments to States and Territories, Local Governments and to Commercial Entities for land transport infrastructure projects. The mix of grant recipients results in payments from a combination of appropriations between Appropriation Act (No. 1) and Appropriation Act (No. 2). The program includes predicting the expense profiles for construction projects and the mix of payments between appropriations. The nature of the program makes it difficult to accurately determine the final outcome of the program until close to the end of the financial year when final claims from recipients are received and assessed. The AFM is required to facilitate the payments of $29.017 million under the Nation Building Program for Appropriation Act (No. 2)2008-09.

Urgent:

The Department requires AFM as there are insufficient appropriations available to make grant payments to meet the Government’s contractual obligations under the Nation Building Program for projects under Appropriation Act (No. 2)2008-09.

Current funding under Appropriation Act (No.2) 2008-09 for Outcome 1 totals only $3,093.3 million and is provided for the suite of Nation Building Programs with payments to the States and Territories. To date, $2,916.1million has been paid, with the remaining payments of $206.2 million to be made before 30 June 2009.

In Error

The need for expenditure to occur is a result of an error in profiling the correct appropriation mix for the Nation Building Program when the last bills for 2008-09 were tabled in February 2009. Although the program is not fully spent in Appropriation Bill (No. 1), the final outcome reveals a shortfall under Appropriation Act (No.2). The error occurs due to the final outcome of expenditure not being known until late in the financial year combined with the nature of construction projects which makes the accuracy of predicting expenditure difficult to determine.

Overview

The Appropriation Act (No. 2) 2008-2009, enacted by the Parliament of Australia, was introduced to address the need for flexibility in government spending to accommodate unforeseen or urgent expenditures that were not initially anticipated during the appropriation process. The Act includes the provision for an Advance to the Finance Minister (AFM) under Section 15, which empowers the Finance Minister to authorize additional spending up to $380 million for such urgent needs. The policy objective is to ensure that the government can meet its obligations and respond to critical situations without the delays inherent in the standard legislative processes for budget amendments. The explanatory statement regarding the Advance to the Finance Minister (AFM) under Section 15 of the Appropriation Act (No. 2) 2008-2009 outlines the circumstances under which the Finance Minister can issue additional funds to the Department of Infrastructure, Transport, Regional Development and Local Government. This was necessitated by an erroneous omission in the appropriation mix for the Nation Building Program, which led to an urgent need for $29,016,740 to fulfill contractual obligations for infrastructure projects. The additional funding was approved to ensure that the government could continue to support employment and economic growth through infrastructure investments, despite the initial shortfall in appropriations.

Scope and Application

The Advance to the Finance Minister (AFM) provision within the Appropriation Act (No. 2) 2008-2009 enables the Finance Minister to address urgent and unforeseen expenditures not initially contemplated by Parliament when the Act was passed. This discretionary power, specified in section 15, allows the issuance of up to $380 million if the Minister determines that there is an urgent need for expenditure not accounted for in Schedule 2 of the Act. The instrument, dated 25 June 2009, was enacted to increase the State, ACT, NT, and local government item for Outcome 1 of the Department of Infrastructure, Transport, Regional Development and Local Government by $29,016,740, facilitating payments under the Nation Building Program. The necessity for this additional funding arose from an erroneous omission in the appropriation profiling for the Nation Building Program, necessitating the AFM to cover the shortfall. This application satisfied the Finance Minister that the additional expenditure was not provided for due to an error in the appropriation profiling. The exercise of this power via a determination effectively amends Schedule 2 of the Appropriation Act (No. 1) 2008-2009 to include the additional expenditure.

Key Provisions

The primary operative sections of the Appropriation Act (No. 2) 2008-2009, specifically Section 15, empower the Finance Minister to issue an advance of up to $380 million if there is an urgent and unforeseen need for expenditure that was not accounted for in the appropriation schedule. This section, referred to as the Advance to the Finance Minister (AFM), is a tool to address situations where urgent needs arise that were not contemplated at the time the Appropriation Act was passed. The Finance Minister’s authority under section 15(1)(a) and (b) to issue additional amounts is contingent on the urgent necessity for expenditure that is not provided for, or is insufficiently provided for, in the Schedule 2 of the Act. In this instance, the Finance Minister determined that an additional $29,016,740 was needed to cover payments under the Nation Building Program, a program designed to support employment through infrastructure projects. The Act imposes obligations on the Finance Minister to assess whether the circumstances warrant the issuance of an advance under section 15. This involves a determination that the expenditure is urgent and unforeseen, and that it falls outside the scope of the appropriations already provided for in Schedule 2. The Finance Minister must also ensure that the total amount of the advance does not exceed the specified limit of $380 million. The obligation extends to the issuing of a determination that has the effect of amending Schedule 2 to include the additional expenditure. Breach of the provisions or misuse of the Advance to the Finance Minister can lead to legal consequences. While the Act does not explicitly state penalties for misuse, it is implied that any improper use of the AFM could result in legal action. The misuse could be seen as a breach of the public trust and could potentially lead to civil or criminal penalties, depending on the extent of the misuse and the discretion of the courts. The maximum penalty would depend on the specific legal charge brought, but could include fines or imprisonment for criminal offences, or damages for civil actions. The Act also imposes reporting and transparency requirements on the government. The issuance of an advance under section 15 must be accompanied by an explanatory statement detailing the reasons for the advance and the expenditure for which it is being used. This ensures that there is a clear record of the circumstances that necessitated the advance and the manner in which the funds are to be used, thereby maintaining accountability and transparency in government spending.

Area of Law: Finance & Banking Law
Instrument: Statutory Instrument
Concepts: Definitions & Interpretation; Offence Provisions; Administrative Discretion

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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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