Explanatory Statement
Appropriation Act (No. 1) 2005-2006, Section 9 – Reduction of Appropriations Upon Request
Appropriation Act (No. 2) 2005-2006, Section 11, Reduction of Appropriations 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 20 June 2006 and numbered 10 of 2005-2006.
The legislative authority under which the instrument is made
Section 9 of Appropriation Act (No. 1) 2005-2006 enables the Finance Minister to make a determination reducing departmental appropriations in that Act, upon receipt of a written request from the Minister responsible or, in the case of an agency in the Finance portfolio, the Chief Executive.
Section 11 of Appropriation Act (No. 2) 2004-2005 enables the Finance Minister to make a determination reducing non-operating appropriations made under that Act, 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 provisions were included in the Appropriation Acts to enable excess departmental and non operating appropriation items, 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; and
- A programme under Government policy is abolished prior to the appropriation being expensed.
A determination issued by the Finance Minister pursuant to section 9 of Appropriation Act (No. 1) 2005-2006 or section 11 of Appropriation Act (No. 2) 2004-2005 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 for the Australian Federal Police in Appropriation Act (No.1) 2005-2006 be reduced by $165,700,000 and equity injections in Appropriation Act (No. 2) 2005-2006 be reduced by $17,000,000.
Background
On 6 June 2006, the Acting Minister for Justice and Customs wrote to the Minister for Finance and Administration seeking a reduction of the Australian Federal Police’s departmental outputs in Appropriation Act (No.1) 2005-2006 by $165,700,000 and equity injections in Appropriation Act (No.2) 2005-2006 by $17,000,000. These reductions relate to cost savings in the Enhanced Cooperation Program with Papua New Guinea and various components of the aviation security-related funding.
Notes on the instrument
The instrument provides that the appropriation items in column 1 for the agency in column 2 be reduced in response to a request made by the Minister in column 4 by the amounts listed in column 6.