Financial Management and Accountability Determination 2008/16 - Special Accounts Abolition

EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997

Determination 2008/16 to abolish six Special Accounts

Purposes of Determination 2008/16

The attached instrument makes a Determination under section 20 of the Financial Management and Accountability Act 1997 (FMA Act) to abolish six Special Accounts. The attached instrument varies the Determination entitled Initial Determination to Establish Components of the Reserve Money Fund made by the sub-delegate of the Minister for Finance and Administration under section 20 of the Financial Management and Accountability Act 1997 on 31 December 1997.

The attached instrument abolishes the Other Trust Moneys (OTM) Special Account and the Services for other Governments and Non-Agency Bodies (SOG) Special Account for each of the Department of the Prime Minister and Cabinet (PM&C), the Department of Education, Science and Training (DEST) and the Department of Employment and Workplace Relations (DEWR).

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 the 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 the Determination 2008/16

Reasons for abolishing the Special Accounts

The abovementioned OTM Special Accounts enabled the relevant agencies to temporarily hold moneys on trust or otherwise for the benefit of persons other than the Commonwealth. The abovementioned SOG Special Accounts enabled the relevant agencies to hold moneys in connection with services that were performed on behalf of other governments and bodies that are not FMA Act agencies.

The abovementioned Special Accounts are being abolished by this instrument because as part of simplifying the financial framework, the purposes of the separate OTM and SOG Special Accounts are being combined within a single similar purpose Special Account - a Services for Other Entities and Trust Moneys (SOETM) Special Account.  It is expected that the balances of the OTM and SOG Accounts will be transferred to the similar Special Account, thereby making the abovementioned OTM and SOG Accounts redundant.

Effect of this determination

Each of the six Special Accounts in Schedule 1 are abolished by this Determination (Determination 2008/16) from the time at which the balance of that Special Account reaches zero.

Consultation

PM&C and DEEWR are the Agencies affected by this instrument. These Agencies were provided with drafts of the instrument and agree 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 Special Accounts