EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
The instrument to which this explanatory statement relates | Determination to Reduce Appropriations Upon Request
(No. 7 of 2011-2012) |
Date instrument was made | 9 December 2011 |
The legislative authority under which the instrument is made | Subsection 10(2) of Appropriation Act (No. 1) 2010-2011 enables the Finance Minister to make a determination reducing the 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. Subsection 13(2) of Appropriation Act (No. 2) 2010-2011 enables the Minister for Finance and Deregulation (Finance Minister) to make a determination reducing an other departmental item (Equity Injections) for an agency by the amount specified in the Determination, upon receipt of a written request from the Minister responsible for that agency. Subsection 13(2) of Appropriation Act (No. 4) 2010-2011 enables the Minister for Finance and Deregulation (Finance Minister) to make a determination reducing an other departmental item (Equity Injections) for an agency by the amount specified in the Determination, upon receipt of a written request from the Minister responsible for that agency. Determinations made under this subsection are legislative instruments and are disallowable. |
Purpose and effect of the instrument | The purpose of the instrument is to reduce appropriation items that the Minister for Defence has advised the Finance Minister were agreed by Government as a reduction to Department of Defence (Defence) expenditure for 2010-11. Schedule 1 determines that the departmental item for Defence in Appropriation Act (No. 1) 2010-2011 be reduced by $1,111,633,000. Schedule 2 determines that the other departmental item (Equity Injections) for Defence in Appropriation Act (No. 2) 2010-2011 be reduced by $822,254,000. Schedule 3 determines that the other departmental item (Equity Injections) for Defence in Appropriation Act (No. 4) 2010-2011 be reduced by $112,800,000. |
Background | The Minister for Defence wrote to the Finance Minister on 26 September 2011 requesting a determination to reduce appropriation items provided to Defence in 2010-11, consistent with Government decisions made and announced in the context of the 2011-12 Budget. The reduction in expenditure relates to re-aligning Defence expenditure for Capital Investment Reprogramming, reduced operating expenditure, savings as a result of a lower purchase cost for the C17 Globemaster III aircraft and a handback related to foreign exchange adjustments. In addition, the Minister for Defence requested further reductions related to the end of financial year reconciliations for Defence Operations and foreign exchange, both of which are appropriated to Defence (including DMO) under the “no win/ no-loss” funding arrangements. |
Notes on the Instrument | The Schedules to the Instrument contain tables 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, Defence was consulted in the preparation of this Instrument. |
Human Rights Impact Statement | This determination reduces appropriated money from Appropriation Act (No. 1) 2010-11, Appropriation Act (No. 2) 2010-2011 and Appropriation Act (No. 4) 2010-2011. This determination does not engage any of the applicable rights or freedoms outlined in the Human Rights (Parliamentary Scrutiny) Act 2011. This determination is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 as it does not raise any human rights issues. |
Overview
The Determination to Reduce Appropriations Upon Request (No. 7 of 2011-2012) was enacted on 9 December 2011 under the authority of the Minister for Finance and Deregulation, pursuant to subsection 10(2) of the Appropriation Act (No. 1) 2010-2011, and subsections 13(2) of the Appropriation Act (No. 2) and Appropriation Act (No. 4) 2010-2011. This legislative instrument responds to a request by the Minister for Defence to adjust appropriations for the Department of Defence in the 2010-11 financial year, reflecting government decisions communicated in the 2011-12 Budget. The reductions were implemented to align with changes in capital investment reprogramming, lower operating expenditures, savings from a reduced purchase cost for the C17 Globemaster III aircraft, a handback related to foreign exchange adjustments, and end-of-year reconciliations for Defence Operations and foreign exchange. The objective of this determination is to ensure that the appropriations reflect the actual expenditure as decided by the government, thus maintaining fiscal discipline and transparency in budget management.
Scope and Application
The Determination to Reduce Appropriations Upon Request (No. 7 of 2011-2012) applies to the Department of Defence, which is the affected agency in this instance. The determination reduces the departmental and other departmental items (Equity Injections) within the Appropriation Acts (No. 1, No. 2, and No. 4) for the 2010-2011 financial year, specifically by $1,111,633,000, $822,254,000, and $112,800,000 respectively. This reduction is based on a request from the Minister for Defence, as authorised by subsections 10(2) and 13(2) of the Appropriation Act (No. 1) 2010-2011, and Appropriation Act (No. 2) and (No. 4) 2010-2011. The instrument has a national jurisdictional reach as it pertains to Commonwealth appropriations. There are no stated exclusions or exemptions, and the thresholds for the reductions are specified in the Schedules to the Instrument. The applicability of this Act can be extended or restricted through subordinate instruments, although such extensions or restrictions are not elaborated upon in the explanatory statement.
Key Provisions
The main operative sections of this legislation, the Determination to Reduce Appropriations Upon Request (No. 7 of 2011-2012), are found in the schedules, which list the specific appropriations to be reduced. Schedule 1 reduces the departmental item for the Department of Defence (Defence) by $1,111,633,000 under the Appropriation Act (No. 1) 2010-2011, while Schedule 2 and 3 reduce the other departmental items (Equity Injections) for Defence by $822,254,000 and $112,800,000 respectively under the Appropriation Act (No. 2) 2010-2011 and Appropriation Act (No. 4) 2010-2011. These reductions are made following a written request from the Minister for Defence to the Finance Minister, as authorised by subsections 10(2), 13(2), and 13(2) of the respective Appropriation Acts.
The Act imposes several obligations and requirements on the parties involved. Firstly, it requires the Minister for Defence to submit a written request to the Finance Minister if there is a need to reduce Defence expenditure. The Finance Minister, upon receiving this request, must then make a determination that reduces the appropriations as specified in the request. Additionally, the Act mandates that the Department of Defence be consulted in the preparation of this instrument, as required by the Legislative Instruments Act 2003. This ensures that the reductions are agreed upon and properly documented.
There are no direct offences, penalties, or civil/criminal consequences outlined in this Determination itself. However, the determinations made under this Act are legislative instruments and are subject to disallowance. This means that if the determination is not approved by Parliament within the prescribed period, it ceases to have effect. The primary consequence of not adhering to the process outlined in the Act would be the inability to legally effectuate the required reductions in appropriations, which could have broader financial and operational implications for the Department of Defence.