EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997

Determination 2009/08 to establish the Indigenous Employment Special Account

Purposes of Determination 2009/08

The attached instrument makes a determination under section 20 of the Financial Management and Accountability Act 1997 (FMA Act) to establish a Special Account entitled the Indigenous Employment 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 Indigenous Employment 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 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 Determination 2009/08

The Northern Territory Flexible Funding Pool Special Account (NTFFP Special Account) was established on 21 September 2007 to enable the Department of Families, Community Services and Indigenous Affairs (FAHCSIA) to manage a single funding pool for resourcing employment initiatives delivered by a number of Commonwealth agencies, initially only in the Northern Territory.

The Government decided to broaden the geographic range of activities funded through the NTFFP Special Account from March 2009. This was done through Determination 2009/03 as an interim measure, which varied the purposes for which amounts could be debited from the NTFFP Special Account. However, Determination 2009/03 did not change the name of the NTFFP Special Account. This was to ensure that the name remained consistent with section 15 of the Appropriation Act (No. 1) 2008-2009, which refers to the current title of the NTFFP Special Account.

This determination (Determination 2009/08) establishes a replacement Indigenous Employment Special Account with a name that better reflects the nature of activities to be funded through the Special Account. The expenditure purposes of this Indigenous Employment Special Account mirror those of the NTFFP Special Account.

Determination 2009/09, entitled Northern Territory Flexible Funding Pool Special Account Variation and Abolition 2009 varies the NTFFP Special Account to allow its balance to be credited to the new Indigenous Employment Special Account. There may be two Special Accounts with the same purpose, operating for a short period of time until the crediting has occurred. Clause 4 of Determination 2009/09 provides that the NTFFP Special Account will be abolished when its balance reaches zero. From 1 July 2009, the Appropriation Acts are planned to refer to the Indigenous Employment Special Account, not the NTFFP Special Account.

Commencement of this determination

This determination (Determination 2009/08), if not disallowed, commences on 1 July 2009.

Consultation

FAHCSIA 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 Indigenous Employment Special Account