EXPLANATORY STATEMENT
STATUTORY RULES NO. 431 OF 1984
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
The attached Statutory Rules amend the Finance Regulations which were made under sub-section 71(1) of the Audit Act 1901.
The amendments increase the prescribed thresholds set in those Regulations which deal with the purchase of supplies for and by the Commonwealth. The increases in part compensate for changes which have occurred in the money values of those thresholds last prescribed in 1980 and also provide a margin for any changes which might otherwise be required in the next few years.
The amendments are as follows.
REGULATION 51 - QUOTATIONS
Regulation 51 required that at least three representative quotations for supplies should, whenever possible, be obtained where supplies were estimated to cost more than $200. The quotations could be oral where the estimated cost did not exceed $500 but above that amount the quotations had to be in writing. The amendments increase the prescribed amounts to $500 and $1000 respectively to take account of changes in money values since the amounts were last increased in 1980.
REGULATION 52 - TENDERS
Regulation 52 provided that contracts should not be entered into, or orders placed, for supplies estimated to cost more than $10,000, unless tenders had first been publicly invited for those supplies. The threshold amount of $10,000 has been increased to $20,000 to take account of changes in money values since the amount was last increased in 1980.
REGULATION 53
Regulation 53 provided that details of any contracts entered into for supplies costing in excess of $1000 were to be published in the Gazette. That amount has now been increased to $2000.
REGULATION 60
Regulation 60 provided that petty expenditure could be incurred without acquittance, up to a value of $10. Acquittances are now required for petty expenditure in excess of $20.
Overview
The Statutory Rules No. 43 of 1984, issued under the authority of the Minister for Finance, amend the Finance Regulations made pursuant to the Audit Act 1901. These amendments address the need to adjust the prescribed thresholds in the Finance Regulations to reflect changes in monetary values since the last updates in 1980 and to provide a buffer against potential future changes. The problem these amendments aim to resolve is the incongruity between the original thresholds and the current economic conditions, ensuring that the procurement processes remain relevant and effective.
The policy objective, as indicated in the explanatory statement, is to update the financial thresholds to account for inflation and economic fluctuations, thereby maintaining the integrity and efficiency of Commonwealth procurement practices. By increasing the amounts for which quotations and tenders are required and adjusting the threshold for publishing contract details and petty expenditure, the amendments seek to uphold the principles of transparency, competition, and fiscal responsibility in government spending.
Scope and Application
The Statutory Rules 1984, issued under the authority of the Minister for Finance, amend the Finance Regulations made under the Audit Act 1901. These amendments primarily adjust the prescribed thresholds for various procurement processes within the Commonwealth. The changes aim to compensate for the changes in money values since the last update in 1980, and also to provide a buffer against future inflationary adjustments. The amended thresholds now require at least three quotations for supplies estimated to cost more than $500, with the requirement for written quotations applying to costs exceeding $1000. Contracts for supplies estimated to cost more than $20,000 must now undergo public tender, and details of contracts exceeding $2000 must be published in the Gazette. Additionally, acquittances are now required for petty expenditure exceeding $20. These amendments apply to all Commonwealth entities and conduct related to the procurement of supplies, affecting the entire geographic and jurisdictional reach of the Commonwealth.
Key Provisions
The Statutory Rules No. 431 of 1984 amend the Finance Regulations under the Audit Act 1901, primarily adjusting monetary thresholds for various procurement-related activities. Regulation 51 (2) now requires at least three representative quotations for supplies estimated to cost more than $500, with written quotations needed if the estimated cost exceeds $1000. Regulation 52 (2) mandates that contracts or orders for supplies estimated to cost more than $20,000 must be preceded by a public tender process. Regulation 53 (1) necessitates the publication of details for any contracts over $2000 in the Gazette, while Regulation 60 (1) requires acquittances for petty expenditure exceeding $20.
Entities governed by these Regulations must ensure compliance with the updated thresholds. This includes obtaining at least three quotations for larger purchases, adhering to public tender requirements for significant contracts, and publishing relevant contract details in the Gazette for larger procurements. Additionally, any petty expenditure exceeding $20 must be documented with an acquittance. Failure to comply with these requirements can lead to administrative repercussions or legal consequences.
Breach of these provisions may result in civil or criminal penalties, depending on the nature and severity of the violation. For instance, if an entity fails to follow the public tender process for contracts exceeding $20,000, it may face legal action, including fines or other penalties as prescribed by law. Similarly, not obtaining necessary quotations or failing to publish contract details as required can lead to enforcement actions. The specific penalties for breaches are not detailed in the Statutory Rules but are governed by the overarching legislation and regulations, which may include fines or other administrative actions.