Explanatory Statement
Appropriation Act (No. 3) 2003-2004, Section 10 – Reduction of Appropriations Upon Request
Appropriation Act (No. 1) 2004-2005, Section 9, 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 22 June 2006 and numbered 12 of 2005-2006.
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 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.
Section 9 of Appropriation Act (No. 1) 2004-05 enables the Finance Minister to make a determination reducing departmental 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 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 10 of Appropriation Act (No. 3) 2003-2004 or section 9 of Appropriation Act (No.1) 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 Electoral Commission in Appropriation Act (No.1) 2003-2004 be reduced by $2,085,423 and Appropriation Act (No. 1) 2004-2005 be reduced by $3,290,678.
Background
On 5 June 2006, the Electoral Commissioner wrote to the Minister for Finance and Administration seeking a reduction of the Australian Electoral Commission departmental outputs appropriation in Appropriation Act (No.1) 2003-2004 by $2,085,423 and departmental outputs in Appropriation Act (No.1) 2004-2005 by $3,290,678. These reductions relate to funds appropriated for implementing recommendations from the Joint Standing Committee on Electoral Matters report on the 2001 federal election, these recommendations have been superseded by further recommendations made in 2004, which subsequently received additional 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 officer in column 4 by the amounts listed in column 6.
Overview
The explanatory statement relates to the "Determination to Reduce Appropriation Upon Request" dated 22 June 2006, which was made under the authority of sections 10 and 9 of the Appropriation Act (No. 3) 2003-2004 and the Appropriation Act (No. 1) 2004-2005, respectively. These sections empower the Finance Minister to reduce departmental appropriations upon receiving a written request from the relevant Minister or Chief Executive. This legislative framework was introduced to address the issue of excess departmental appropriations that do not automatically lapse, such as instances where funds are reclassified, efficiency savings reduce the cost of a program, or a government policy leads to the abolition of a program before the appropriation is expensed. The purpose of the instrument is to reduce the departmental outputs appropriation for the Australian Electoral Commission by specified amounts in response to a request from the Electoral Commissioner. The reductions pertain to funds previously allocated for implementing recommendations from a 2001 report, which have since been superseded by newer recommendations with additional funding.
Scope and Application
The instrument, titled “Determination to Reduce Appropriation Upon Request”, applies to the Australian Electoral Commission and pertains to the reduction of departmental appropriations under the Appropriation Act (No. 3) 2003-2004 and the Appropriation Act (No. 1) 2004-2005. Specifically, it involves a reduction of appropriations in response to a written request made by the relevant Minister or the Chief Executive of an agency in the Finance portfolio. This determination is made pursuant to Sections 10 and 9 of the respective Appropriation Acts, which empower the Finance Minister to adjust appropriations based on the request and the remaining balance in the Consolidated Revenue Fund. The scope of this Act is limited to the Australian Electoral Commission and its appropriations for the specified financial years, with the reductions being made to account for superseded recommendations and their associated funding requirements. The instrument does not extend to other departments or entities, nor does it set any exclusions or thresholds beyond those stipulated in the primary legislation.
Key Provisions
The main sections of the legislation that pertain to the reduction of appropriations are Section 10 of the Appropriation Act (No. 3) 2003-2004 and Section 9 of the Appropriation Act (No. 1) 2004-2005. These sections empower the Finance Minister to reduce departmental appropriations following a written request from the relevant Minister responsible for the department or, in the case of an agency within the Finance portfolio, the Chief Executive. This authority is intended to address excess appropriations that do not automatically lapse, such as when funds are reclassified or when efficiency savings reduce the cost of a program below the original appropriation. Additionally, it applies to instances where a program is terminated before the appropriation is fully expensed.
The obligations and requirements imposed by these sections on the parties governed by the Act are quite straightforward. The Finance Minister must adhere to the request's terms, ensuring that the reduction does not exceed either the amount requested by the Minister or Chief Executive or the remaining balance of the appropriation item in the Consolidated Revenue Fund. The requesting party must provide a written request detailing the specific appropriation item and the amount to be reduced, thereby formalising the process and ensuring transparency in the reduction of funds.
Under these sections, there are no explicit criminal or civil penalties for breaches of the requirements, as the provisions focus on the procedural aspects of reducing appropriations. However, any misuse or mismanagement of funds due to improper reductions could potentially lead to administrative or disciplinary actions against the responsible officials, depending on the specific circumstances and any additional internal policies or regulations that may apply. The primary consequence of a breach would be the potential for the improper allocation of public funds, which could attract scrutiny from oversight bodies and lead to corrective measures.