EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997

Determination 2009/09 to vary and abolish the Northern Territory Flexible Funding Pool Special Account

Purposes of Determination 2009/09

The attached instrument makes a determination under section 20 of the Financial Management and Accountability Act 1997 (FMA Act) to vary the Northern Territory Flexible Funding Pool Special Account (NTFFP Special Account). This instrument varies the determination entitled Financial Management and Accountability Determination 2007/21 – Northern Territory Flexible Funding Pool Special Account Establishment 2007, made on 11 September 2007 (as varied by Financial Management and Accountability Determination 2009/03 – Northern Territory Flexible Funding Pool Special Account Variation 2009, made on 28 January 2009), which established the NTFFP 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 the determination 2009/09

Reasons for varying the Special Account

The NTFFP Special Account, which is administered by the Department of Families, Community Services and Indigenous Affairs (FAHCSIA), was established to enable FAHCSIA to manage a single funding pool for resourcing employment initiatives delivered by a number of Commonwealth agencies.

Determination 2009/03 varied the NTFFP Special Account as an interim measure to broaden the geographic scope of the primary purpose clause. As a result of Determination 2009/03, the name ‘NTFFP Special Account’ no longer represents the geographic area where payments from the NFFP Special Account can be made.

It was not feasible to change the name of the NTFFP Special Account with Determination 2009/03 because section 15 of the Appropriation Act (No1) 2008-2009 references the NTFFP Special Account.

Effect of this determination

For greater transparency and accountability the new Indigenous Employment Special Account is being established, and the Appropriation Act (No. 1) 2009-2010 which will commence on 1 July 2009 offers an opportunity to insert a reference to the more transparent Indigenous Employment Special Account.

This determination (Determination 2009/09) varies the NTFFP Special Account to allow its balance to be credited to the new Indigenous Employment Special Account. There may therefore be two Special Accounts with the same purpose operating for a short period of time, until the balance is credited. Clause 4 of Determination 2009/09 provides that the NTFFP Special Account will be abolished when its balance reaches zero.

Commencement of this determination

This determination (Determination 2009/09), if not disallowed, will commence 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 NTFFP Special Account