EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Administration

Financial Management and Accountability Act 1997

Determination 2006/13  — Energy Special Account Variation 2006

Purposes of Determination 2006/13

The attached instrument makes a determination under section 20 of the Financial Management and Accountability Act 1997 (FMA Act) to vary the Energy Special 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.

Regulation 10 of the Legislative Instruments Regulations 2004 preserves the disallowance provisions under section 22 of the FMA Act by exempting Special Account determinations from subsections 57(2) and 57(5) of the Legislative Instruments Act 2003.

Special Accounts can be abolished by a determination of the Finance Minister.  However, there is no requirement to table the determination to abolish a Special Account and, therefore, it has immediate effect.

Operation of the Determination 2006/13

Purpose of the Energy Special Account

The Energy Special Account was established to enable a secretariat within the Australian Government to manage the Ministerial Council for Energy’s (MCE) work programme.

The Council of Australian Governments established the MCE in June 2001 to provide effective policy leadership to meet the opportunities and challenges facing the energy sector and to oversee the continued development of national energy policy. The Council comprises energy Ministers from Commonwealth, State and Territory governments.

The Special Account was required, as the jurisdiction that previously managed funds for the MCE work programme relinquished the role, and the Commonwealth Government took over the function.

Each jurisdiction, including the Commonwealth Government, contributes funds to the MCE’s work.  Amounts contributed are held in the Special Account until required.

Effect of this determination

The Energy Special Account is varied by this determination (determination 2006/13) to allow amounts received for the purposes of the Energy Special Account, from contributors other than the State and Territory governments, to be credited to the Special Account and to allow residual amounts to be repaid to contributors when those amounts are no longer required.

The variation will also allow New Zealand to participate and contribute to energy efficiency activities and enable jointly funded projects between government and industry. The ability for residual amounts to be repaid to contributors will allow greater flexibility in managing the Energy Special Account.

Consultation

The Department of Industry, Tourism and Resources 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).

Estimates of transactions on the Energy Special Account