EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Administration

Financial Management and Accountability Act 1997

Determination 2006/16 to establish a Special Account

Purposes of Determination 2006/16

The attached instrument makes a determination under subsection 20 (1) of the Financial Management and Accountability Act 1997 (FMA Act) to establish a Special Account entitled Other Trust Moneys – Australian Trade Commission Special Account.  It also specifies the nature of amounts that may be credited to, and the purposes for which amounts may be debited from, the Other Trust Moneys – Australian Trade Commission 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 determination.

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.

Operation of the Determination 2006/16

Purpose of the Other Trust Moneys – Australian Trade Commission Special Account

The determination is required in order to establish a Special Account, to enable the Australian Trade Commission to temporarily hold amounts on behalf of persons or entities that are not subject to the FMA Act.

Other Trust Moneys Special Accounts provide agencies with an ability to hold amounts on behalf of others and the appropriation to expend these amounts.  Typically Other Trust Moneys Special Accounts are used to accommodate small amounts of miscellaneous moneys. For example, the Other Trust Moneys Special Account may be used to provide an appropriation to allow moneys found by Commonwealth officials to be paid to their rightful owner once the owner has been identified.  It may also be used to hold amounts received from Comcare in relation to employees entitled to receive workers’ compensation payments.

At the commencement of the FMA Act on 1 January 1998, a determination of the Finance Minister created Other Trust Moneys Special Accounts for all agencies that existed at that time.  The Australian Trade Commission will become an FMA Act agency on 1 July 2006 and has identified amounts that it will be required to hold in an Other Trust Moneys Special Account.

This determination will commence on 1 July 2006, as specified in clause 2, to enable the Special Account’s establishment to coincide with the responsible agency’s expected prescription date under the FMA Act.

Should the Australian Trade Commission change its name, due to a change in legislation or for some other reason, it is intended that the Special Account be retained by the successor agency.  This will enable the amounts in the Special Account at that time to remain with the relevant agency.

Clause 5 specifies the purposes for which a Special Account can be debited.

• Paragraph 5(a) describes the primary purpose for expenditure of amounts from the Special Account.
• Paragraph 5(b) allows the Special Account to be debited, in a manner that would otherwise be permitted by section 28 of the FMA Act. It is included to simplify accounting for these transactions.

Consultation

The Australian Trade Commission 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 Other Trust Moneys – Australian Trade Commission Special Account

1. There are no estimates provided for the 2005-2006 financial year as the Other Trust Moneys-Australian Trade Commission Special Account did not exist in that financial year.