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 20 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 Department of Immigration and Citizenship (DIAC) be reduced by a total of $238,397,702 as follows:
- Appropriation Act (No. 1) 2000-2001 be reduced by $99,783,000;
- Appropriation Act (No. 1) 2001-2002 be reduced by $71,987,517;
- Appropriation Act (No. 1) 2002-2003 be reduced by $30,275,413; and
- Appropriation Act (No. 1) 2003-2004 be reduced by $36,351,772.
Background
On 22 May 2007, the Minister for Immigration and Citizenship (the Minister) wrote to the Minister for Finance and Administration seeking approval for a determination to reduce DIAC’s departmental items for the financial years 2000-2001 to 2003-2004.
The following reductions were requested:
- Appropriation Act (No. 1) 2000-2001 – $99,783,000 relating to reduced workloads under funding agreements requiring any excess funding to be returned;
- Appropriation Act (No. 1) 2001-2002 - $25,156,000 relating to reduced workloads under funding agreements requiring any excess funding to be returned and $46,831,517 not required to address the offshore processing of unauthorised arrivals;
- Appropriation Act (No. 1) 2002-2003 - $30,275,413, which is the net result of excess funding not required to address the offshore processing of unauthorised arrivals and additional funding provided for increased workloads under funding agreements; and
- Appropriation Act (No. 1) 2003-2004 - $14,627,772 not required to address the offshore processing of unauthorised arrivals and $21,724,000 for measures to reopen an Australian office in Iraq and provide for leased facilities in Brisbane, Perth and Darwin that were not implemented in
2003-2004.
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, DIAC has been consulted in the preparation of this instrument.