EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997

Determination 2009/04 to vary and abolish a Special Account

Purposes of Determination 2009/04

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 Comcover 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 may be 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 the Determination 2009/04

Changes are required to be made to the existing Comcover Account, which was established by the Determination to Establish Component of the Reserved Money Fund (the initial determination), signed on 7 April 1998. However, it is not practical to make these changes to the Comcover Account because of the way in which the initial determination was structured. Therefore, a new Comcover Special Account is being established.

Effect of this determination

This determination (Determination 2009/04) varies the initial determination to allow the balance of the Comcover Account to be credited to the new Comcover Special Account. The Comcover Account will be abolished once its balance reaches zero.

Consultation

The Department of Finance and Deregulation is the agency affected by this instrument. The agency 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 Comcover Account