Explanatory Statement
Appropriation Act (No. 1) 2005-06, Section 9 – Reduction of Appropriations Upon Request
Appropriation Act (No. 2) 2005-06, Section 11, 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 21 April 2006 and numbered 4 of 2005-2006.
The legislative authority under which the instrument is made
Section 9 of Appropriation Act (No. 1) 2005-06 enables the Finance Minister to make a determination reducing departmental appropriations in 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 11 of Appropriation Act (No. 2) 2005-06 enables the Finance Minister to make a determination reducing non-operating 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 9 of Appropriation Act (No. 1) 2005-06 or section 11 of Appropriation Act (No. 2) 2005-06 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 appropriation for the Australian Communications and Media Authority in Appropriation Act (No. 1) 2005-06 be reduced by $2,988,000, and Equity Injections in Appropriation Act (No.2) 2005-06 be reduced by $8,488,000.
Background
On 26 February 2006, the Minister for Communications, Information Technology and the Arts, wrote to the Minister for Finance and Administration seeking a reduction of the Department of Communications, Information Technology and the Arts’ departmental outputs appropriation in Appropriation Act (No. 1) 2005-06 by $2,988,000, and Equity Injections Appropriation Act (No. 2) 2005-06 by $8,488,000. These funds were appropriated to the former Australian Communications Authority for postal functions. Appropriations provided to the Australian Communications Authority have become appropriations of the Australian Communications and Media Authority. The postal functions that these appropriation items were provided for are not performed by the Australian Communications and Media Authority, and as a result the appropriations are in excess of the Australian Communications and Media Authorities requirements.
Notes on the instrument
The instrument provides that the appropriation items in column 1 for the Australian Communications and Media Authority be reduced in response to a request made by the Minister in column 4 by the amounts listed in column 6.