Explanatory Statement
Appropriation Act (No. 4) 2003-2004, subsection 12(2) – Reduction of appropriations from prior years upon request
Appropriation Act (No. 1) 2005-2006, subsection 9(1) – 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 26 June 2007 and numbered 12 of 2006-2007.
The legislative authority under which the instrument is made
Section 12 of Appropriation Act (No. 4) 2003-2004 enables the Finance Minister to make a determination reducing an administered assets and liabilities item or an other departmental item for an entity upon receipt of a written request from the Minister responsible or, in the case of an entity for which the Finance Minister is responsible, the Chief Executive.
Section 9 of Appropriation Act (No. 1) 2005-2006 enables the Finance Minister to make a determination reducing a departmental item for an entity upon receipt of a written request from the Minister responsible or, in the case of an entity for which the Finance Minister is responsible, the Chief Executive.
The provisions were included in the Appropriation Acts to enable excess departmental appropriation items 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.
In accordance with subsections 12(7) and 12(8) of Appropriation Act (No. 4) 2003-2004 and subsections 9(5) and 9(6) of Appropriation Act (No. 1) 2005-2006, a determination issued by the Finance Minister 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 equity injections for the Australian Taxation Office (ATO) in Appropriation Act (No. 4) 1999-2000 be reduced by $11,165,000. The instrument also directs that departmental items for the ATO in Appropriation Act (No. 1) 2005-2006 be reduced by $705,000.
Background
On 30 May 2007, the Minister for Revenue and Assistant Treasurer (the Minister) wrote to the Minister for Finance and Administration seeking a reduction of the ATO’s equity injections in Appropriation Act (No. 4) 1999-2000 by $11,165,000. This reduction is the net result of an increase in equity due to new measures and a decrease due to outsourcing of the ATO’s information technology infrastructure.
The Minister is also seeking a reduction of the ATO’s departmental items in Appropriation Act (No. 1) 2005-2006 by $705,000. This reduction relates to unspent advertising funds for the 30% Child Care Tax Rebate and Superannuation Choice campaigns in 2005-2006.
Notes on the instrument
The instrument provides that the appropriation item in column 1 for the entity in column 2 is reduced in response to a request made by the Minister in column 4 by the amounts listed in column 6.
In accordance with the Legislative Instruments Act 2003, the ATO has been consulted in the preparation of this instrument.