Explanatory Statement
Appropriation Act (No. 3) 2003-2004, subsection 10(2) – 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 26 June 2007 and numbered 15 of 2006-2007.
The legislative authority under which the instrument is made
Section 10 of Appropriation Act (No. 3) 2003-2004 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 the Finance Minister is responsible for, 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 10(6) and 10(7) of Appropriation Act (No. 3) 2003-2004, 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 departmental items for the Commonwealth Scientific and Industrial Research Organisation (CSIRO) in Appropriation Act (No. 1) 2001-2002 be reduced by $2,222,000. The instrument also directs that departmental items for CSIRO in Appropriation Act (No. 1) 2002-2003 be reduced by $365,000.
Background
On 23 May 2007, the Minister for Education, Science and Training (the Minister) wrote to the Minister for Finance and Administration seeking a reduction of CSIRO’s departmental items in Appropriation Act (No. 1) 2001-2002 by $2,222,000 and Appropriation Act (No. 1) 2002-2003 by $365,000. The reasons for these reductions are as follows.
- Savings of $998,000 in 2001-2002 relating to the sale and lease back of the North Ryde property as per the ‘supplementation for commercial rents and sales’ costs measure of 2000-2001. A variation in the Capital Use Charge of $1,224,000 in 2001-2002 due to the use of actual net assets for the calculation compared to estimated net assets; and
- A net change of $365,000 in 2002-2003 due to a revised estimate of rental, outgoings and sale costs arising out of the sale and lease back of properties under the ‘supplementation for commercial rents and sales costs’ measure offset by an increase in appropriation due to a change in indexation.
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, CSIRO has been consulted in the preparation of this instrument.