EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Determination 2008/11 to abolish the Federation Fund –Department of Communications, Information Technology and the Arts Special Account
The attached Determination is made under subsections 20 (3) of the Financial Management and Accountability Act 1997 (FMA Act) to abolish the Federation Fund – Department of Communications, Information Technology and the Arts 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. The determination may prescribe a later date upon which the Special Account can be relied upon.
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 the standard disallowance provisions 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 2008/11
The Federation Fund - Department of Communications, Information Technology and the Arts Special Account was an element of the Federation Fund originally announced in the 1997-98 Budget.
The purpose of the Special Account was ‘for the expenditure on substantial capital projects throughout Australia which will mark the Centenary of Federation and make a significant and lasting contribution to the Australian community’.
All projects approved for funding through this Special Account have now either been completed or have ceased and there is longer a requirement to expend the balance standing to the credit of the Special Account. Consequently, the Government supported the proposal to return the residual balance to the Budget. This return was affected on 29 April 2008.
Effect of this determination
The Federation Fund –Department of Communications, Information Technology and the Arts Special Account is being abolished by this determination as the purposes have been achieved and the balance is zero.
Consultation
The Department of Broadband, Communications and the Digital Economy is the agency affected by this instrument. As the instrument is for internal machinery of government purposes only, no consultation was considered necessary with other persons (in accordance with the provisions of section 18 of the Legislative Instruments Act 2003).
Estimates of transactions of the Federation Fund –Department of Communications, Information Technology and the Arts Special Account
| Opening Balance 2007-08 $’000 | Credits 2007-08 $’000 | Debits 2007-08 $’000 | Closing Balance 2007-08 $’000 |
Federation Fund –Department of Communications, Information Technology and the Arts Special Account | 1,800 | 0 | 1,800 | 0 |
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Overview
The Financial Management and Accountability Act 1997 (FMA Act) governs the financial management practices of the Australian Commonwealth government, including the establishment and operation of Special Accounts. Determination 2008/11, made by the Minister for Finance and Deregulation under the authority of the FMA Act, abolishes the Federation Fund – Department of Communications, Information Technology and the Arts Special Account. This Special Account was initially established to fund substantial capital projects commemorating the Centenary of Federation. Given that all projects have been completed or ceased, and the balance standing to the credit of the Special Account has been returned to the Budget, the determination to abolish the Special Account is made to reflect the current financial standing and the completion of its original purpose. The Minister for Finance and Deregulation's determination is subject to the legislative framework outlined in the FMA Act, including the process for disallowance if either House of Parliament objects within the stipulated timeframe.
Scope and Application
The Financial Management and Accountability Act 1997 Determination 2008/11, issued under the authority of the Minister for Finance and Deregulation, pertains to the abolition of the Federation Fund – Department of Communications, Information Technology and the Arts Special Account. This determination applies specifically to the entity known as the Department of Broadband, Communications and the Digital Economy, and it involves the cessation of a Special Account that was established to fund substantial capital projects marking the Centenary of Federation. The scope of the Act ensures that all revenues and moneys raised by the Commonwealth government form a single Consolidated Revenue Fund (CRF), which cannot be spent without parliamentary appropriation. Special Accounts, such as the one abolished by this determination, allow for specific spending purposes within the CRF, subject to parliamentary oversight and disallowance provisions. This particular Special Account has fulfilled its intended purpose, and with all projects completed, the residual balance has been returned to the Budget. The abolition of the Special Account does not require tabling in Parliament as it involves internal machinery of government purposes, and no further consultation was deemed necessary.
Key Provisions
Section 20(3) of the Financial Management and Accountability Act 1997 (FMA Act) provides the authority for the Minister for Finance and Deregulation to make determinations regarding the establishment, variation, or abolition of Special Accounts. Determination 2008/11, issued under this subsection, pertains specifically to the abolition of the Federation Fund – Department of Communications, Information Technology and the Arts Special Account. This determination is grounded in the understanding that all government revenues are consolidated into the Consolidated Revenue Fund (CRF), which cannot be spent without parliamentary appropriation. A Special Account, therefore, allows for specific purposes to be funded from the CRF, subject to a determination made by the Minister.
The obligations imposed by this Act on the entities involved are primarily procedural and administrative. The Minister for Finance and Deregulation must ensure that any determination establishing or varying a Special Account is tabled in both Houses of Parliament (section 22 of the FMA Act). If neither House disallows the determination within five sitting days, it comes into effect on the date specified or the day after the disallowance period ends. Special Account determinations are also exempt from the standard disallowance provisions of the Legislative Instruments Act 2003, preserving the specific parliamentary process outlined in the FMA Act. The Department of Broadband, Communications and the Digital Economy, being the affected agency, must comply with these procedural requirements and ensure that the Special Account is appropriately abolished once its purposes have been fulfilled.
Breaching the obligations set forth in the FMA Act and the Legislative Instruments Act 2003 can have significant consequences. For instance, if the Minister fails to table a determination as required by section 22 of the FMA Act, or if the disallowance period is not adhered to, this could result in legal challenges regarding the validity of the Special Account. While specific penalties for these breaches are not detailed in the determination, general administrative consequences could include the need for corrective action to ensure compliance with parliamentary procedures. Furthermore, failure to properly manage or abolish a Special Account when its purpose has been fulfilled could lead to inefficient use of public funds, potentially resulting in broader fiscal mismanagement issues.
In summary, Determination 2008/11 to abolish the Federation Fund – Department of Communications, Information Technology and the Arts Special Account is grounded in the legislative framework provided by the FMA Act and the Legislative Instruments Act 2003. It imposes specific procedural obligations on the Minister for Finance and Deregulation and the affected department, ensuring that the Special Account is appropriately managed and abolished once its purpose is fulfilled. While the determination does not specify penalties for breaches, adherence to these obligations is crucial to maintaining the integrity of the financial management processes within the Australian government.