Explanatory Statement
The instrument to which this explanatory statement relates
This explanatory statement relates to an instrument (the instrument) entitled “Determination to Reduce Appropriations Upon Request (No. 12 of 2007-2008) dated 24 June 2008.
The legislative authority under which the instrument is made
Subsection 9(2) of Appropriation Act (No. 1) 2005-2006, Appropriation Act (No. 1) 2006-2007 and Appropriation Act (No. 1) 2007-2008 enables the Minister for Finance and Deregulation (Finance Minister) to make a Determination reducing a departmental item for an entity, by the amount specified in the Determination, upon receipt of a written request from the Chief Executive of an entity for which the Finance Minister is responsible.
The provision was 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 program under Government policy is abolished prior to the appropriation being expensed.
In accordance with subsection 9(5) of Appropriation Act (No. 1) 2005-2006, Appropriation Act (No. 1) 2006-2007 and Appropriation Act (No. 1) 2007-2008, a determination issued by the Finance Minister under subsection 9(1) cannot reduce an appropriation item by greater than the lesser of the amount requested by the responsible Chief Executive, and the balance of the appropriation item remaining in the Consolidated Revenue Fund.
Purpose of the instrument
The instrument determines that the appropriation items for the entities listed in the Schedules are reduced by the amounts indicated in Column 5 of each provision.
Background
The Chief Executive identified in Column 4 of each provision wrote to the Minister for Finance and Deregulation requesting a determination to reduce the departmental item appropriations for the entities listed in Column 1.
Notes on the instrument
The Schedules to the instrument list the entities to which a determination applies. The entities are listed alphabetically, by portfolio.
Each entity’s reduction determination table is contained within an individual provision. Each provision provides that the entity in column 1, has the appropriation item in column 2, under the legislative authority in column 3, through the request by the Chief Executive in Column 4, reduced, by the amount in column 5.
The instrument reflects entity and portfolio names contained in the appropriation Acts under which reductions are made, noting that these may have subsequently been changed by, for example, machinery of government changes
In accordance with the Legislative Instruments Act 2003, each entity identified in Column 1 of the instrument was consulted in the preparation of this instrument.
Disallowance
Subsection 9(9) of the Appropriation Acts that this determination is made under provides that a determination made under subsection 9(2) is a legislative instrument and despite subsection 44(2) of the Legislative Instruments Act 2003, (which provides that Instruments made under Annual Appropriation Acts are not subject to disallowance under section 42 of the Legislative Instruments Act 2003) section 42 of that Act applies to this Determination
Overview
The Determination to Reduce Appropriations Upon Request (No. 12 of 2007-2008) was enacted in 2008 to facilitate the reduction of departmental appropriations that were in excess due to various reasons such as reclassification, efficiency savings, or the abolition of a government program. This instrument, issued under the legislative authority of the Appropriation Act (No. 1) 2005-2006, Appropriation Act (No. 1) 2006-2007, and Appropriation Act (No. 1) 2007-2008, enables the Minister for Finance and Deregulation to reduce appropriations upon a written request from the Chief Executive of a relevant entity. The purpose of this instrument is to ensure that excess appropriations are extinguished and to provide a mechanism for the orderly reduction of these items, ensuring that the balance of appropriations does not exceed the requested amount or the remaining balance in the Consolidated Revenue Fund. Each entity involved was consulted in the preparation of this instrument, and it is subject to disallowance under the Legislative Instruments Act 2003.
Scope and Application
The instrument, dated 24 June 2008, pertains to a determination made under the authority of subsection 9(2) of the Appropriation Acts (No. 1) 2005-2006, 2006-2007, and 2007-2008, enabling the Minister for Finance and Deregulation to reduce departmental appropriation items for specified entities upon request from their respective Chief Executives. This legislation applies to entities whose Chief Executives have submitted written requests for a reduction in their appropriation items. The instrument outlines the specific entities and the extent of the reduction, as detailed in the Schedules, reflecting the entities' names and portfolio allocations as listed in the relevant appropriation Acts. Notably, each entity listed in the Schedules was consulted during the instrument's preparation, in accordance with the Legislative Instruments Act 2003. The reductions are constrained by the lesser of the requested amount or the remaining balance of the appropriation item within the Consolidated Revenue Fund, and despite the general exclusion of disallowance for instruments under annual appropriation acts, this determination is subject to disallowance under section 42 of the Legislative Instruments Act 2003.
Key Provisions
The main operative sections of this instrument (F2008L02323) are those which specify the reductions to appropriation items for various entities as listed in the schedules. These sections, referencing Column 5 of each provision, dictate the exact amount by which each appropriation item is reduced. The reductions are authorised under subsection 9(2) of the Appropriation Acts (No. 1) 2005-2006, 2006-2007, and 2007-2008, and are carried out upon written request from the Chief Executive of the respective entities. This legislative action aims to manage and adjust departmental appropriations to reflect changes such as reclassification of funds, efficiency savings, or policy changes that lead to unutilised appropriations.
The obligations and requirements imposed by this Act on the parties it governs primarily involve the process of requesting and processing the reduction of appropriation items. The Chief Executives of the entities must submit a formal written request to the Minister for Finance and Deregulation, which must be in line with the provisions outlined in the Appropriation Acts. The Minister, upon receiving such a request, must then issue a determination that reduces the appropriation by an amount not exceeding the request or the remaining balance of the appropriation item in the Consolidated Revenue Fund, as per subsection 9(5). This ensures that any reductions are both legitimate and within legal limits.
For breaches of the provisions stipulated in this instrument, there are potential civil and criminal consequences. The instrument itself does not specify penalties but refers to the broader legislative framework under which it operates. Under the Legislative Instruments Act 2003, the instrument is subject to disallowance, meaning Parliament has the authority to review and potentially annul the determination. Such disallowance would require parliamentary action, and the process is detailed within the Legislative Instruments Act 2003. This oversight mechanism ensures that the exercise of power by the Minister is checked and balanced within the legislative framework.