EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Administration

Financial Management and Accountability Act 1997

Determination 2007/14 to establish a Special Account

Purposes of Determination 2007/14

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 Expositions 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 Expositions 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 such a determination.

Operation of Determination 2007/14

Purpose of the Expositions Special Account

The determination will establish a single Special Account for the Department of Foreign Affairs and Trade to secure and manage moneys for Australia’s participation at the Shanghai 2010 exposition and future expositions.

The Department of Foreign Affairs and Trade is responsible for managing Australia’s participation at international expositions and will use the Special Account to administer financial transactions in relation to these expositions.

Reasons for establishing a new Special Account

The Expositions Special Account is required because the non-lapsing nature of an administered Special Account is better suited to managing such expositions as an exposition is a discrete business activity that extends over a number of years.  In addition, a Special Account would provide greater transparency for sponsorship provided by Commonwealth and state governments and the private sector and overall project performance and accountability.

Clause 5(1) specifies the purposes for which a Special Account can be debited.

• Paragraphs 5(1) (a) describes the primary purposes for which expenditure can be made from the Special Account.
• Paragraph 5(1) (b) allows incidental costs, including such items as auditing, reporting, budgeting, accounting and information technology services incurred in the course of operating the Special Account, to be debited from the Special Account.
• Paragraph 5(1) (c) allows the balance of the Special Account to be reduced without a notional or real payment occurring.
• Paragraph 5(1) (d) allows amounts to be debited where an Act or other law requires or permits.

Consultation

The Department of Foreign Affairs and Trade is the agency affected by this instrument, and 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 Expositions Special Account