Explanatory Statement
Appropriation Act (No. 1) 2006-2007, 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 29 February 2008 and numbered 4 of 2007-2008.
The legislative authority under which the instrument is made
Section 9 of Appropriation Act (No. 1) 2006-2007 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 subsection 9(1) of Appropriation Act (No. 1) 2006-2007, 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 the departmental item for the Office of Film and Literature Classification (OFLC) in Appropriation Act (No. 1) 2006-2007 be reduced by $880,220.
Background
On 22 January 2008, the Attorney-General wrote to the Minister for Finance and Deregulation seeking a reduction of OFLC’s departmental items under Appropriation Act (No. 1) 2006-2007 by $880,220. This reduction is sought to recognise the lower than expected revenue generated in 2006-07 associated with classification activities undertaken by OFLC.
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 amount listed in column 6.
In accordance with the Legislative Instruments Act 2003, OFLC was consulted in the preparation of this instrument.
Overview
The Appropriation Act (No. 1) 2006-2007 was enacted to provide the necessary framework for the appropriation of public money by the Commonwealth of Australia. This Act addresses the need to manage and reallocate budgetary resources effectively, particularly in instances where departmental appropriations are higher than required due to reclassification, efficiency savings, or policy changes that lead to the abolition of programs before their appropriations are expensed. The Appropriation Act (No. 1) 2006-2007 was enacted by the Parliament of Australia to provide the Commonwealth with the authority to allocate funds for government operations and to manage budgetary surpluses or deficits effectively. The policy objective of this Act is to ensure fiscal responsibility and transparency in the allocation and expenditure of public funds. This includes the ability to reduce appropriations when circumstances change, such as when programs generate less revenue than anticipated, thereby preventing the unnecessary accumulation of funds in the Consolidated Revenue Fund.
Scope and Application
The instrument, a "Determination to Reduce Appropriation Upon Request", dated 29 February 2008, relates to the Appropriation Act (No. 1) 2006-2007 and was made under the authority granted by Section 9 of the Act. This determination specifically reduces the departmental appropriation item for the Office of Film and Literature Classification (OFLC) by $880,220, in response to a written request from the Attorney-General to the Minister for Finance and Deregulation. The reduction recognises the lower-than-expected revenue generated by OFLC's classification activities during the 2006-07 financial year. The scope of the Act allows the Finance Minister to make such determinations upon receiving a written request from the responsible Minister or Chief Executive, ensuring that excess appropriations are extinguished where circumstances warrant it. The reduction cannot exceed the amount requested or the balance remaining in the Consolidated Revenue Fund. This instrument adheres to the Legislative Instruments Act 2003, which requires consultation with the affected entity, OFLC, in its preparation.
Key Provisions
The main operative sections of the instrument (subsection 9(1) of Appropriation Act (No. 1) 2006-2007) allow the Finance Minister to reduce a departmental appropriation upon a written request from the relevant Minister or Chief Executive. This is aimed at addressing situations where there is excess appropriation due to reclassifications, efficiency savings, or policy changes. The instrument in question specifically reduces the Office of Film and Literature Classification (OFLC) departmental items by $880,220 following a request by the Attorney-General on 22 January 2008. This reduction acknowledges the lower-than-expected revenue generated by OFLC in 2006-07.
The Act imposes specific obligations on the parties involved. The Finance Minister must ensure that any reduction of an appropriation item does not exceed the lesser of the amount requested by the Minister or Chief Executive, and the balance remaining in the Consolidated Revenue Fund. Additionally, entities like OFLC must be consulted in the preparation of such instruments, ensuring transparency and fairness in the process. The Act also mandates that any determination must be in writing and must adhere to the provisions outlined in the Legislative Instruments Act 2003.
In terms of consequences, the Act does not explicitly detail offences, penalties, or specific civil or criminal consequences for breaches. However, the integrity of the appropriation process is paramount, and any improper reductions could lead to legal scrutiny or administrative reviews. The instrument itself ensures that the reduction does not exceed the allowable limits, thus mitigating potential risks of overstepping the legislative bounds. The focus remains on fiscal responsibility and ensuring that appropriations are managed efficiently and accurately.