EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Administration
Financial Management and Accountability Act 1997
Determination 2006/17 to vary and abolish a Special Account
Purposes of Determination 2006/17
The attached instrument makes a determination under section 20 of the Financial Management and Accountability Act 1997 (FMA Act) to vary and subsequently abolish the Artbank 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 also be abolished by a determination of the Finance Minister. However, there is no requirement to table such a determination.
Operation of Determination 2006/17
Purpose of the Artbank Account
A new Special Account, entitled Art Rental Special Account (‘the new Account’), is required in order to give effect to changes that are required to the Artbank Account, but which are not practical to make by variation to the Artbank Account due to the way in which the Initial Determination to establish Components of the Commercial Activities Fund (Initial Determination) was structured.
The current purpose of the Artbank Account is:
For expenditure on programs and operations of ARTBANK.
Changes required
A clause has been inserted into the Initial Determination to allow amounts to be debited from the Artbank Account and credited to the new Account.
Limitations in the structure of the Initial Determination
It is not practical to vary the Initial Determination signed by the delegate of the Minister for Finance and Administration on 31 December 1997 (establishing a Artbank Reserve as a component of the Commercial Activities Fund). This is because the format of the determination constrains the amount of information that can be included. Accordingly, a new Account is being established (Determination 2006/18) to provide for the continuation of the activities of the Artbank Account, the incorporation of the necessary changes, and to ensure that the determination is as clear and informative as possible.
Effect of this determination
The Artbank Account is being varied by this determination (Determination 2006/17) to enable its balance to be credited to the new Account. Once the balance of the Artbank Account reaches zero, clause 4 of the determination will abolish the Artbank Account.
Consultation
The Department of Communications, Information Technology and the Arts is the agency affected by this instrument. The agency was provided with drafts of the instrument before it was finalised 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 Artbank Account
| Opening Balance 2005-06 $’000 | Credits 2005-06 $’000 | Debits 2005-06 (1) $’000 | Closing Balance 2005-06 $’000 |
Artbank Account | 1,909 | 2,834 | 4,743 | 0 |
1. Balance debited from the Artbank Account and credited to the new Account.
Overview
The Financial Management and Accountability Act 1997 (FMA Act) was enacted to provide a framework for the financial management and accountability of Commonwealth entities. The Act seeks to ensure that public funds are managed efficiently, effectively, and in accordance with the law. Determination 2006/17, issued under section 20 of the FMA Act by the Minister for Finance and Administration, aims to vary and abolish the Artbank Account, which was previously established as a Special Account. The policy objective of this determination is to facilitate the necessary changes to the Artbank Account by establishing a new Art Rental Special Account, thereby ensuring that the account's operations remain clear and well-defined. This change is necessary due to the structural constraints of the Initial Determination that established the Artbank Account as a component of the Commercial Activities Fund. The determination was subject to the disallowance provisions under section 22 of the FMA Act, which requires the Finance Minister to table a copy of the establishing or varying determination in each House of Parliament, allowing for a period during which either House may disallow the determination. Once the Artbank Account's balance is credited to the new Account and reaches zero, the Artbank Account will be abolished under clause 4 of the determination.
Scope and Application
The Financial Management and Accountability Act 1997 Determination 2006/17 pertains to the variation and eventual abolition of the Artbank Account, a Special Account under the control of the Commonwealth of Australia. This determination applies to the Artbank Account and its associated operations, which are overseen by the Department of Communications, Information Technology and the Arts. The primary purpose of this determination is to facilitate the necessary changes to the Artbank Account that are not feasible through a simple variation due to structural constraints in the original determination establishing the Artbank Reserve as part of the Commercial Activities Fund. Consequently, a new Special Account, the Art Rental Special Account, is established to continue the activities of the Artbank Account while incorporating required changes. This determination, once enacted, will allow the balance of the Artbank Account to be transferred to the new Account until the former’s balance reaches zero, at which point it will be abolished. The Finance Minister has the authority to make such determinations, which must be tabled in Parliament unless they pertain to the abolition of an account, in which case no tabling is required.
Key Provisions
The main operative sections of Determination 2006/17, made under section 20 of the Financial Management and Accountability Act 1997 (FMA Act), establish a new Special Account called the Art Rental Special Account (section 2). This new account replaces the existing Artbank Account, which was established by a previous determination. The purpose of the new account is to allow for the continuation of the Artbank activities, while incorporating necessary changes that could not be achieved by varying the existing Artbank Account due to structural constraints in the original determination (section 3). Once the balance of the Artbank Account reaches zero, the Artbank Account will be abolished (section 4).
The Act imposes obligations on the Finance Minister to establish, vary, or abolish Special Accounts through a determination, as outlined in section 20 of the FMA Act. This determination must be tabled in both Houses of Parliament, and either House may disallow it within five sitting days (section 22). If not disallowed, the determination comes into effect on the day after the last possible day for disallowance. Special Account determinations are exempt from certain disallowance provisions under the Legislative Instruments Act 2003, as per Regulation 10 of the Legislative Instruments Regulations 2004. The Finance Minister is also responsible for ensuring that the new Art Rental Special Account operates in accordance with the legislative requirements and that the transition from the Artbank Account to the new account is managed effectively.
There are no explicit offences, penalties, or consequences outlined for breaches of this determination itself. However, any failure to comply with the provisions of the FMA Act or the legislative instruments regulations could potentially lead to broader legal consequences. These might include civil or administrative penalties for improper financial management or breaches of parliamentary procedures. The overarching legislative framework, including sections 20 and 22 of the FMA Act, ensures that the Finance Minister's actions are subject to parliamentary scrutiny and oversight, which serves as a check against non-compliance.