Explanatory Statement
Appropriation Act (No. 1) 2006-2007, Subsection 9(1) – Reduction of Appropriations Upon Request
Appropriation Act (No. 2) 2006-2007, Subsection 11(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 4 April 2007 and numbered 8 of 2006-2007.
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 agency in the Finance portfolio, the Chief Executive.
Section 11 of Appropriation Act (No. 2) 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 agency in the Finance portfolio, 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(5) and subsection 9(6) of Appropriation Act (No. 1) 2006-2007 and subsection 11(5) and subsection 11(6) of Appropriation Act (No. 2) 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 departmental items for Centrelink in Appropriation Act (No. 1) 2006-2007 be reduced by $75,469,000 and equity injections in Appropriation Act (No. 2) 2006-2007 be reduced by $54,928,000.
The instrument also directs that departmental items for Medicare Australia in Appropriation Act (No. 1) 2006-2007 be reduced by $26,306,000 and equity injections in Appropriation Act (No. 2) 2006-2007 be reduced by $3,094,000.
Background
On 14 March 2007, the Minister for Human Services wrote to the Minister for Finance and Administration seeking reductions in Centrelink and Medicare Australia’s appropriations. Specifically, the Minister requested that Centrelink’s departmental items in Appropriation Act (No. 1) 2006-2007 be reduced by $75,469,000 and equity injections in Appropriation Act (No. 2) 2006-2007 be reduced by $54,928,000. The Minister also requested that Medicare Australia’s departmental items in Appropriation Act (No. 1) 2006-2007 be reduced by $26,306,000 and equity injections in Appropriation Act (No. 2) 2006-2007 be reduced by $3,094,000. These reductions were requested due to the transfer of responsibility for project management and procurement of the Health and Social Services (HSS) Access Card project to the Department of Human Services.
Notes on the instrument
The instrument provides that the appropriation items in column 1 for the agencies in column 2 are 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, Centrelink and Medicare Australia have been consulted in the preparation of this instrument.