EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Determination 2009/06 – Special Accounts Abolition 2009
Purposes of Determination 2009/06
The attached instrument makes a determination under section 20 of the Financial Management and Accountability Act 1997 (FMA Act) to abolish three Special Accounts.
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 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, such a determination is not subject to parliamentary disallowance.
Operation of the Determination 2009/06
Reasons for abolishing the Special Accounts
The Special Accounts being abolished are administered by the Australian Bureau of Statistics (ABS), the Department of Infrastructure, Transport, Regional Development and Local Government (Infrastructure), and the Professional Services Review Scheme (PSR).
After reviewing their Special Accounts, ABS and PSR have advised that their respective Services for other Governments and Non-agency Bodies (SOG) Account is no longer required.
Infrastructure has advised that no further projects are required to be funded through the Federation Fund – Department of Transport and Regional Services Special Account. Therefore, no further calls are to be made on the residual balance which will be returned to the Budget.
Effect of this determination
The SOG Special Accounts managed by ABS and PSR, and the Federation Fund – Department of Transport and Regional Services Special Account managed by Infrastructure, are abolished by this determination (Determination 2009/06).
Consultation
ABS, PSR and Infrastructure are the agencies affected by this instrument. The 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 in the Special Account
| Opening Balance 2008-09 $’000 | Credits 2008-09 $’000 | Debits 2008-09 $’000 | Closing Balance 2008-09 $’000 |
Australian Bureau of Statistics - Services for other Governments and Non-agency Bodies Account | 0 | 0 | 0 | 0 |
Professional Services Review Scheme - Services for other Governments and Non-agency Bodies Account | 0 | 0 | 0 | 0 |
Federation Fund – Department of Transport and Regional Services Special Account | 15,000 | 0 | 15,000 | 00 |
Overview
The Financial Management and Accountability Act 1997 (FMA Act) was enacted by the Australian Parliament to provide a framework for the financial management and accountability of Commonwealth entities. This Act, and its subsequent determinations, aim to ensure that the Commonwealth's finances are managed effectively and in accordance with legislative requirements. One such determination is the Determination 2009/06 – Special Accounts Abolition 2009, made by the Minister for Finance and Deregulation under section 20 of the FMA Act. This determination abolishes three Special Accounts that were previously established to manage specific appropriations for certain entities. The policy objective behind this abolition is to streamline financial management processes and remove unnecessary administrative burdens by closing accounts that are no longer required for their original purposes. The affected entities, including the Australian Bureau of Statistics, the Department of Infrastructure, Transport, Regional Development and Local Government, and the Professional Services Review Scheme, have all concurred with the closure of their respective Special Accounts, thereby facilitating more efficient financial governance.
Scope and Application
The Financial Management and Accountability Act 1997 Determination 2009/06, titled "Special Accounts Abolition 2009," applies to the entities administering the Special Accounts that are being abolished, specifically the Australian Bureau of Statistics, the Department of Infrastructure, Transport, Regional Development and Local Government, and the Professional Services Review Scheme. This determination concerns the abolition of three Special Accounts: the Services for other Governments and Non-agency Bodies (SOG) Account managed by the Australian Bureau of Statistics and the Professional Services Review Scheme, and the Federation Fund – Department of Transport and Regional Services Special Account managed by the Department of Infrastructure, Transport, Regional Development and Local Government. The accounts are being abolished as no further need for them has been identified by the respective agencies. The determination operates under the authority of the Minister for Finance and Deregulation and is not subject to disallowance by either House of the Parliament. This determination has a national jurisdictional reach within Australia, affecting Commonwealth entities and their financial management practices. There are no exclusions, exemptions, or thresholds specified in this determination; it directly targets the identified Special Accounts for abolition. Subordinate instruments may further extend or detail the application of this determination within the framework of the Financial Management and Accountability Act 1997.
Key Provisions
The main operative sections of this Determination 2009/06 under the Financial Management and Accountability Act 1997 (FMA Act) (section 20) involve the abolition of three Special Accounts. These accounts were previously established to manage specific funds and expenditures as outlined in the determinations. The affected accounts are the Services for other Governments and Non-agency Bodies (SOG) Account managed by the Australian Bureau of Statistics (ABS) and the Professional Services Review Scheme (PSR), as well as the Federation Fund – Department of Transport and Regional Services Special Account managed by the Department of Infrastructure, Transport, Regional Development and Local Government (Infrastructure) (section 22).
The obligations imposed by the Act on the parties involved are primarily administrative in nature. For instance, the Finance Minister is obligated to make a determination to abolish the Special Accounts and to ensure that these accounts are no longer used for any financial transactions (section 20). Additionally, the affected agencies (ABS, PSR, and Infrastructure) must agree with the form of the instrument and provide the necessary information regarding the accounts being abolished. The Finance Minister must also ensure that the abolishing determination is made in accordance with the requirements of the FMA Act and that it is not subject to disallowance by either House of the Parliament (section 22).
There are no specific offences, penalties, or civil/criminal consequences outlined in the Determination 2009/06 for breach of the Act's provisions. However, the Act does provide for general penalties for breaches of its provisions. For example, section 48 of the FMA Act provides that any person who contravenes a provision of the Act is liable to a penalty of up to 50 penalty units (currently AUD 5,300). In the case of a corporation, the maximum penalty is up to 250 penalty units (currently AUD 26,500). These penalties can be increased if the offence is committed recklessly or with intent to defraud. It is important to note that the abolition of the Special Accounts by this determination is not subject to disallowance by either House of the Parliament (section 22).
In summary, the Determination 2009/06 under the FMA Act serves to abolish three Special Accounts previously established to manage specific funds and expenditures. The determination imposes obligations on the Finance Minister and the affected agencies to ensure that the accounts are no longer used for any financial transactions. While there are no specific offences, penalties, or consequences outlined in the determination for breach of the Act's provisions, the general penalties for breaches of the FMA Act are applicable.