Explanatory Statement
Appropriation Act (No. 1) 2005-06, Section 9 – 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 27 April 2006 and numbered 6 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.
The provision was included in Appropriation Act (No. 1) 2005-06 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 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 Film, Television and Radio School in Appropriation Act (No. 1) 2005-06 be reduced by $152,000.
Background
On 22 December 2005, the Minister for Communications, Information Technology and the Arts, wrote to the Minister for Finance and Administration seeking a reduction of the Australian Film, Television and Radio School’s departmental outputs appropriation in Appropriation Act (No. 1) 2005-06 by $152,000. This amount relates to funds appropriated in excess of requirements for the relocation of Australian Film, Television and Radio School.
Notes on the instrument
The instrument provides that the appropriation items in column 1 for the Australian Film, Television and Radio School be reduced in response to a request made by the Minister in column 4 by the amounts listed in column 6.
Overview
The Appropriation Act (No. 1) 2005-06 was enacted to provide the financial framework for the Commonwealth’s budgetary and financial management for the 2005-06 financial year. One of its objectives was to enable the reduction of departmental appropriations in response to changes in operational requirements or unforeseen savings. This was intended to address the problem of excess appropriations that do not automatically lapse, which can occur due to various reasons such as reclassification of funds, efficiency savings, or the abolition of government programs before their appropriations are expensed. The Act empowers the Finance Minister to make determinations reducing these appropriations upon a written request from the relevant Minister or Chief Executive. The explanatory statement pertains to a specific determination reducing the departmental outputs appropriation for the Australian Film, Television and Radio School by $152,000, following a request from the Minister for Communications, Information Technology and the Arts.
Scope and Application
The "Determination to Reduce Appropriation Upon Request" instrument, made under the legislative authority of Section 9 of the Appropriation Act (No. 1) 2005-06, pertains to the reduction of departmental appropriations within the Act. This determination allows the Finance Minister to adjust appropriations following a written request from the responsible Minister or Chief Executive, such as the Chief Executive in the case of agencies within the Finance portfolio. This authority exists to address instances where departmental appropriations exceed requirements, potentially due to reclassification, efficiency savings, or policy changes resulting in unused funds. The instrument specifically reduces the departmental outputs appropriation for the Australian Film, Television and Radio School by $152,000, as requested by the Minister for Communications, Information Technology and the Arts, reflecting an over-appropriation for the relocation of the school. The reduction is limited to the lesser of the requested amount and the remaining balance in the Consolidated Revenue Fund.
Key Provisions
The main operative sections of the Determination to Reduce Appropriation Upon Request (2005-2006) relate to section 9 of the Appropriation Act (No. 1) 2005-06. This section empowers the Finance Minister to reduce departmental appropriations within the Act, upon receipt of a written request from the responsible Minister or the Chief Executive of an agency within the Finance portfolio. This legislative provision was intended to allow for the extinguishing of excess departmental appropriation items that do not automatically lapse. The instrument in question directs a reduction of $152,000 in the departmental outputs appropriation for the Australian Film, Television and Radio School.
The Act imposes certain obligations and requirements on the parties involved. Firstly, any reduction of appropriations must be requested in writing by the relevant Minister or Chief Executive. This written request must specify the amount by which the appropriation is to be reduced. Furthermore, the reduction cannot exceed the lesser of the amount requested or the balance of the appropriation item remaining in the Consolidated Revenue Fund. This ensures that the reduction is both legitimate and within the bounds of available funds.
Failure to comply with the provisions of the Appropriation Act (No. 1) 2005-06, including any reduction of appropriations, may result in civil or criminal consequences. The specific consequences for non-compliance are not detailed in the explanatory statement, but they may include fines, imprisonment, or other penalties as prescribed by law. The maximum penalties would depend on the nature and severity of the breach, as well as any relevant legislation governing the specific circumstances. It is important for parties involved to adhere to the requirements of the Act to avoid potential legal ramifications.