Overview

The Financial Management and Accountability Act 1997 (FMA Act) was enacted by the Parliament of Australia to provide a framework for the financial management of the Commonwealth. The Act was introduced to address the need for a coherent and transparent system for the management of public funds. One of the mechanisms introduced by the FMA Act is the establishment of Special Accounts, which allow for the segregation of funds within the Consolidated Revenue Fund for specific purposes. However, the FMA Act also provides for the abolition of such Special Accounts under certain conditions, as outlined in Determination 2005/01. This determination was made by the Minister for Finance and Administration to abolish the Commonwealth Bank of Australia Public Share Offer Account, which had been established to manage funds related to the public share offer of the Commonwealth Bank of Australia. The decision to abolish this Special Account was made as all funds within it had been expended and no further funds could be credited to it, and was supported by the agency managing the account. This determination was not subject to disallowance by either House of Parliament, as required by section 22 of the FMA Act, and came into effect on the date signed by the Finance Minister.

Scope and Application

The Financial Management and Accountability Act 1997 Determination 2005/01, issued under the authority of the Minister for Finance and Administration, provides for the abolition of the Commonwealth Bank of Australia Public Share Offer Account. This Determination operates within the Commonwealth, applying to the specific Special Account established under the FMA Act. Special Accounts, which allow for the allocation and expenditure of funds from the Consolidated Revenue Fund for specified purposes, are established by a determination that outlines the amounts that may be credited and the purposes for which they may be debited. This particular Special Account is being abolished because all funds within it have been expended, and no further amounts can be credited. The abolition of the Special Account is effective from the date signed by the Finance Minister, and no parliamentary approval is required as the Determination does not establish or vary a Special Account. The Department of Finance and Administration, the agency affected by this instrument, was consulted and agrees with the form of the instrument, and no further consultation was deemed necessary as the instrument pertains solely to internal government mechanisms.

Key Provisions

The key operative sections of this Determination, as outlined in the Explanatory Statement, are sections 20(3) and 22 of the Financial Management and Accountability Act 1997 (FMA Act). Section 20(3) provides the authority for the Finance Minister to establish or abolish a Special Account through a determination. In this case, section 20(3) is used to abolish the Commonwealth Bank of Australia Public Share Offer Special Account, which is detailed in Determination 2005/01 (section 2). Section 22 of the FMA Act requires the Finance Minister to table a copy of any determination that establishes or varies a Special Account in each House of Parliament. However, it is noted that determinations abolishing Special Accounts are not subject to this requirement (section 2). The Act imposes specific obligations on the Finance Minister and the agency managing the Special Account. The Finance Minister must make a determination under section 20(3) to abolish a Special Account when all amounts in the account have been expended and no further credits can be made (section 2). The agency managing the Special Account, in this case, the Department of Finance and Administration, must request the abolition of the account when it is no longer needed (section 3). The Explanatory Statement also indicates that the Department of Finance and Administration was provided with drafts of the instrument and agrees with its form (section 3). In terms of offences, penalties, or consequences, the Explanatory Statement does not explicitly state any criminal or civil penalties for breaching the provisions of this Determination or the FMA Act in relation to Special Accounts. However, it is worth noting that the FMA Act provides for general penalties for breaches of financial management and accountability provisions, which may include fines or imprisonment for serious offences. The maximum penalties would depend on the specific breach and relevant sections of the FMA Act. In conclusion, Determination 2005/01 under the FMA Act abolishes the Commonwealth Bank of Australia Public Share Offer Special Account due to the completion of all transactions within the account. The Finance Minister is required to make this determination under section 20(3) of the FMA Act, and the affected agency must request the abolition of the account. Although no specific penalties are outlined in this Determination, breaches of the FMA Act may result in fines or imprisonment, depending on the severity of the offence.