The instrument to which this explanatory statement relates

Determination to Reduce Appropriations Upon Request (No. 2 of 2010-2011)

Date instrument was made

20 October 2010

The legislative authority under which the instrument is made

Subsection 10(2) of Appropriation Act (No. 1) 2009‑2010 enables the Minister for Finance and Deregulation to make a determination reducing a departmental item for an agency by the amount specified in the determination, upon receipt of a written request from the Minister responsible for that agency.

A determination made under subsection 10(2) is a Legislative Instrument and is disallowable.

Purpose and effect of the instrument

Schedule 1, Item 1 of the Instrument determines that the departmental item for Centrelink in Appropriation Act (No. 1) 2009‑2010 be reduced by $121,604,393.

The effect of this Instrument is to reduce the departmental item for Centrelink in Schedule 1 of Appropriation Act (No. 1) 2009-2010 by the amount of $121,604,393.

Background

The Minister for Human Services wrote to the Finance Minister on 28 September 2010 requesting a determination to reduce Centrelink’s departmental item under Appropriation Act (No. 1) 2009-2010.

A portion of Centrelink’s departmental appropriation is based on the Centrelink Funding Model that uses forecasts of client numbers to derive an estimate of salary and supplier expenses expected to be incurred in the Budget year.

The Minister for Human Services advised that $121,604,393 of the 2009-10 departmental appropriation derived by the Centrelink Funding Model is surplus to requirements. The surplus is a result of actual customer numbers being lower than forecast for 2009-10.

Notes on the Instrument

The Schedule to the Instrument contains a table listing the affected agency in column 1, the appropriation Act and appropriation item in column 2, which through the request by the responsible Minister in column 3, is reduced by the amount in column 4.

In accordance with the Legislative Instruments Act 2003, Centrelink was consulted in the preparation of this Instrument.