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.
Overview
The Determination to Reduce Appropriation Upon Request was made under section 10 of the Appropriation Act (No. 3) 2003-2004, which empowers the Finance Minister to reduce a departmental item for an entity upon receipt of a written request from the responsible Minister or Chief Executive. This legislation was enacted to address the issue of excess appropriations that may arise due to various circumstances such as reclassification of amounts, efficiency savings, or the abolition of a programme prior to the appropriation being expensed. The policy objective is to ensure that any unutilised funds are properly accounted for and returned to the Consolidated Revenue Fund. On 22 May 2007, the Minister for Immigration and Citizenship requested a reduction in appropriations for the Department of Immigration and Citizenship for the financial years 2000-2001 to 2003-2004, leading to the instrument reducing these appropriations by a total of $238,397,702.
Scope and Application
The "Determination to Reduce Appropriation Upon Request" instrument, dated 26 June 2007, applies specifically to the Department of Immigration and Citizenship (DIAC) and pertains to the reduction of departmental appropriation items from various financial years. This instrument was enacted under Section 10 of the Appropriation Act (No. 3) 2003-2004, which empowers the Finance Minister to adjust departmental appropriations upon receiving a formal request from the relevant Minister or Chief Executive. The purpose of this instrument is to facilitate the reduction of excess appropriations that may arise from reclassifications, efficiency savings, or the abolition of government programs. The reductions are limited to the lesser of the requested amount or the balance remaining in the Consolidated Revenue Fund. The instrument specifically reduces the appropriation items for DIAC by a total of $238,397,702 across several financial years, in response to a request made by the Minister for Immigration and Citizenship. This reduction is in accordance with the provisions set out in the Appropriation Act and follows consultation with DIAC as required by the Legislative Instruments Act 2003.
Key Provisions
The main sections of the Determination to Reduce Appropriation Upon Request (F2007L02094) focus on reducing the appropriations of the Department of Immigration and Citizenship (DIAC) for specified financial years, as requested by the Minister for Immigration and Citizenship. Specifically, section 10(2) of the Appropriation Act (No. 3) 2003-2004 empowers the Finance Minister to make such reductions upon receiving a written request from the relevant Minister or Chief Executive. The determination outlines specific reductions to appropriations from financial years 2000-2001 to 2003-2004, totalling $238,397,702, as per the request submitted by the Minister for Immigration and Citizenship on 22 May 2007.
The Act imposes certain obligations and requirements on the parties involved. The Minister for Immigration and Citizenship is required to submit a formal written request to the Minister for Finance and Administration, detailing the reasons for the requested appropriation reductions. This request must be accompanied by a detailed justification of the proposed reductions, including any relevant funding agreements and operational changes within DIAC. The Finance Minister, upon receiving such a request, is obligated to review the proposal and, if deemed appropriate, issue a determination reducing the appropriations as requested, but not exceeding the requested amount or the balance available in the Consolidated Revenue Fund.
Failure to comply with the requirements set out in the Act may lead to various legal consequences. While the Act itself does not explicitly state the penalties for non-compliance, breaches of such legislative instruments could potentially result in civil or administrative penalties under the relevant legislation. Additionally, if the reductions were to be made without proper authorisation or in excess of the allowable limits, it could lead to financial mismanagement charges, which might be pursued under other relevant Australian legislation, such as the Public Governance, Performance and Accountability Act 2013. The specific penalties could include fines and, in severe cases, criminal charges against the responsible officials.