EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Administration
Financial Management and Accountability Act 1997
Determination 2005/20 to abolish a Special Account
Purposes of Determination 2005/20
The attached instrument makes a determination under subsection 20(3) of the Financial Management and Accountability Act 1997 (FMA Act) to abolish the Employment Entitlements Support Scheme Account.
Special Accounts generally
In accordance with the Constitution, all revenues or moneys raised or received by the Government of the Commonwealth form one Consolidated Revenue Fund (CRF) and may not be spent unless under an appropriation by the Parliament for the purposes of the Commonwealth. A Special Account is established by a determination that sets out the amounts that may be credited and the purposes for which it may be debited. Special Accounts established by determination are supported by an appropriation under section 20 of the FMA Act. In effect, Special Accounts allow amounts from the CRF to be spent on a purpose specified in the Special Account.
Determinations that establish Special Accounts, or vary determinations that establish Special Accounts, are subject to section 22 of the FMA Act. Section 22 of the FMA Act requires the Finance Minister to table a copy of the establishing or varying determination in each House of Parliament. Either House may disallow a determination within five sitting days of tabling. If the determination is not disallowed, it comes into effect on the calendar day after the last day on which it could have been disallowed. Determinations that abolish Special Accounts are not subject to section 22 of the FMA Act and hence do not require tabling in Parliament.
Operation of Determination 2005/20
This Determination abolishes the Employment Entitlements Support Scheme Account, with effect from the date signed by the Finance Minister.
Reasons for abolishing the Special Account
The Special Account is no longer required as the activity to which it relates has concluded. Consequently, the agency managing the Special Account has requested that it be abolished.
Consultation
The Department of Employment and Workplace Relations is the agency affected by this instrument. The Agency was provided with drafts of the instrument and agrees with the form of the instrument. As the instrument is for internal machinery of government purposes only, no consultation was considered necessary with other persons (see sections 17 and 18 of the Legislative Instruments Act 2003).
Overview
The Financial Management and Accountability Act 1997, as supplemented by Determination 2005/20, addresses the necessity of managing government finances through the establishment and eventual abolition of Special Accounts within the Consolidated Revenue Fund. This Act was enacted to ensure that all government revenues and expenditures are properly authorised and accounted for, aligning with constitutional requirements and parliamentary oversight. Determination 2005/20, issued under the authority of the Minister for Finance and Administration, aims to abolish the Employment Entitlements Support Scheme Account. This Special Account, established to manage specific financial activities, is no longer necessary as its related activities have concluded. The determination effectively removes the legal framework for the account's existence, streamlining financial management processes and ensuring that government funds are allocated efficiently in line with current needs.
Scope and Application
The Financial Management and Accountability Act 1997 Determination 2005/20, issued under the authority of the Minister for Finance and Administration, pertains specifically to the abolition of the Employment Entitlements Support Scheme Account. This Special Account was established to manage specific financial transactions related to employment entitlements, which have now concluded, leading to the account's redundancy. The Determination operates under the Financial Management and Accountability Act 1997, which mandates that the Minister must make determinations for the establishment or variation of Special Accounts, with these determinations being subject to disallowance by either House of Parliament unless disallowed within a specific timeframe. However, determinations that abolish Special Accounts, like this one, are exempt from this disallowance process. The abolition of the Employment Entitlements Support Scheme Account takes effect from the date signed by the Minister, effectively ceasing its operations and ceasing the need for any further appropriations or financial oversight related to it. The Department of Employment and Workplace Relations, as the affected agency, was consulted and agrees with the terms of this Determination.
Key Provisions
The main operative sections of Determination 2005/20 (paragraphs 3 and 4) pertain to the abolition of the Employment Entitlements Support Scheme Account. This determination is made under subsection 20(3) of the Financial Management and Accountability Act 1997 (FMA Act). The determination formally removes the Special Account, effective from the date signed by the Finance Minister. The Employment Entitlements Support Scheme Account was established to manage specific financial activities, but its purpose has been completed, leading to its abolition. This abolition is in line with the general principle that all government revenues must be part of the Consolidated Revenue Fund (CRF) and can only be spent under an appropriation by Parliament.
The obligations and requirements imposed by this Act on the parties involved include the formal abolition of the Employment Entitlements Support Scheme Account. The Finance Minister has the authority to sign the determination, which then comes into effect on the specified date. The Department of Employment and Workplace Relations, as the affected agency, has been consulted and agrees with the form of the instrument. The Act mandates that any determination establishing or varying a Special Account must be tabled in each House of Parliament, but this requirement does not apply to determinations that abolish such accounts. This means that while establishing or altering a Special Account requires parliamentary scrutiny, abolishing one does not.
There are no specific offences, penalties, or consequences outlined for breaching the provisions of this determination. The determination itself is an administrative action to abolish a Special Account and does not detail punitive measures for non-compliance. However, any misuse of funds or improper financial management that might arise from the operation of Special Accounts would be subject to the general provisions of the FMA Act and other relevant financial management regulations, which could include significant penalties for breaches of financial governance.