Overview

The Financial Management and Accountability Act 1997 (FMA Act) was enacted to establish a framework for the financial management of the Commonwealth. The Act aims to ensure that the Commonwealth's financial resources are managed in a manner that is accountable, transparent, and efficient. This legislation addresses the need for a robust system of financial controls and accountability mechanisms to oversee the use of public funds. The FMA Act is administered by the Parliament of Australia, and its policy objective is to provide a legal basis for sound financial management practices within the government. In 2006, a determination was made under section 20 of the FMA Act to vary and subsequently abolish the Centrelink Special Account, as detailed in Determination 2006/47 issued by the Minister for Finance and Administration. This determination was necessitated by the need to establish a new Special Account, the Commonwealth Social Services Special Account, to accommodate changes that were not feasible to implement through a variation of the existing Centrelink Special Account. The structural limitations of the original determination, signed on 6 August 1999, made it impractical to incorporate the required changes. Consequently, the Centrelink Special Account was varied to allow its balance to be credited to the new Account, and once the balance reached zero, the Centrelink Special Account was abolished. The affected agency, Centrelink, was consulted and concurred with the form of the instrument, and no further consultation was deemed necessary due to the internal nature of the changes.

Scope and Application

The Financial Management and Accountability Act 1997 Determination 2006/47 is a legislative instrument issued by the Minister for Finance and Administration, which varies and abolishes the Centrelink Special Account. This determination applies to the Centrelink Special Account, which is an account established under the Financial Management and Accountability Act 1997, and is used for expenditure by Centrelink in accordance with its functions. The determination allows for the crediting of the Centrelink Special Account balance to the new Commonwealth Social Services Special Account. The determination is applicable to the Commonwealth of Australia and is subject to disallowance by either House of Parliament within five sitting days of tabling. The new Commonwealth Social Services Special Account is established to provide for the continuation of the activities of the Centrelink Special Account and to incorporate necessary changes that cannot be made to the original determination due to its format. This determination does not require consultation with other persons as it is for internal machinery of government purposes only.

Key Provisions

The key operative sections of Determination 2006/47 under the Financial Management and Accountability Act 1997 (FMA Act) revolve around the variation and subsequent abolition of the Centrelink Special Account (section 20), and the establishment of a new Commonwealth Social Services Special Account (section 20). 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, with either House having the power to disallow the determination within five sitting days of tabling. If not disallowed, the determination comes into effect on the calendar day after the last day on which it could have been disallowed (section 22). This determination allows for the transfer of the Centrelink Special Account’s balance to the new Account, with clause 4 stipulating the abolition of the Centrelink Special Account once its balance reaches zero. Determination 2006/47 imposes specific obligations on the Finance Minister, requiring the establishment of a new Special Account and the abolition of the Centrelink Special Account once its balance reaches zero. This process must be carried out in compliance with section 20 of the FMA Act, which mandates the tabling of the determination in Parliament (section 22). The determination also ensures that Centrelink, the agency affected by these changes, is 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, consistent with sections 17 and 18 of the Legislative Instruments Act 2003. Breach of the obligations and requirements outlined in Determination 2006/47 could result in civil or criminal consequences, although specific penalties are not detailed in the text. Under the FMA Act, penalties for non-compliance can include fines and imprisonment, but the exact penalties would depend on the nature and severity of the breach. The determination, however, does not specify the penalties for non-compliance with its provisions. The Finance Minister’s actions in tabling and potentially disallowing the determination also have legislative oversight mechanisms in place to ensure adherence to parliamentary procedures and requirements.