Explanatory Statement
Appropriation Act (No. 3) 2003-04, Section 10 – Reduction of Appropriations from Prior Years Upon Request
The instrument to which this explanatory statement relates
This explanatory statement relates to an instrument (the instrument) entitled “Determination to Reduce Appropriation Upon Request”, dated 21 January 2005 and numbered 1 of 2004-2005.
The legislative authority under which the instrument is made
Section 10 of Appropriation Act (No. 3) 2003-04 enables the Finance Minister to make a determination reducing departmental appropriations for financial years 1999‑2000, up to and including Appropriation Act (No. 1) 2003-04, upon receipt of a written request from the Minister responsible or, in the case of an agency in the Finance portfolio, the Chief Executive.
The provision was included in Appropriation Act (No. 3) 2003-04 to enable excess departmental appropriation items for prior years, which do not automatically lapse, to be extinguished. Excess appropriation may arise where, for example:
- An amount is reclassified and appropriated again under another kind of appropriation;
- Efficiency savings result in a programme costing less than expected; or
- A programme under Government policy is abolished prior to the appropriation being expensed.
A determination issued by the Finance Minister pursuant to section 10 of Appropriation Act (No. 3) 2003-04 cannot reduce an appropriation item by more than the lesser of the amount requested by the responsible Minister or Chief Executive (as appropriate), and the balance of the appropriation item remaining in the Consolidated Revenue Fund.
Purpose of the instrument
The instrument directs that departmental outputs appropriation provided to the Australian Prudential Regulation Authority in 2001-02 be reduced by $2.1 million.
Background
The Minister for Revenue and Assistant Treasurer, the Hon Mal Brough, MP, wrote to the Minister for Finance and Administration on 5 August 2004 seeking a determination to reduce the Australian Prudential Regulation Authority’s departmental appropriation for 2001-02 by $2.1 million. The amount was appropriated in 2001-02 to provide for increased prudential supervision of superannuation in 2001-02, but was not spent. The Australian Prudential Regulation Authority has confirmed that there is no reasonable prospect of using the appropriation for the purpose of this measure. The measure has since been implemented using ongoing funding, making the $2.1 million surplus to requirements.
Notes on the instrument
The instrument provides that 2001-02 departmental outputs appropriation for the Australian Prudential Regulation Authority be reduced in response to a request made by the Minister in column 4 by the amount listed in column 6.