EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997

Determination 2009/21 to establish a Special Account

Purposes of Determination 2009/21

The attached instrument makes a determination under subsection 20 (1) of the Financial Management and Accountability Act 1997 (FMA Act) to establish a Special Account, entitled Clean Energy Initiative 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 Clean Energy Initiative 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 the purposes 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 Determination 2009/21

Purpose of the Clean Energy Initiative Special Account

The Determination will establish a Special Account for the Government’s Clean Energy Initiative.

The purpose of this Special Account is to meet costs and expenses related to initiatives to support the growth of clean energy generation and new technologies, and to reduce carbon emissions.  For example, the Clean Energy Initiative Special Account may be used to fund projects related to solar power, renewable energy sources or to explore new technologies.

Typically, the Special Account will be used to fund initiatives that have been approved in accordance with the Commonwealth Procurement Guidelines.

Subclause 5(1) specifies the purposes for which amounts may be debited from the Special Account.

• Paragraph 5(1)(a) describes the primary purposes for which expenditure can be made from the Special Account.
• Paragraph 5(1)(b) allows costs for activities that are incidental to one or more of the purposes mentioned in paragraph 5 (1) (a) to be debited from the Special Account.
• Paragraph 5(1)(c) allows the balance of the Special Account to be reduced without a notional or real payment occurring.
• Paragraph 5(1)(d) allows the Special Account to be debited, in a manner that would otherwise be permitted by section 28 of the FMA Act. It is included to simplify accounting for these transactions.

Subclause 5(2) allows incidental costs, including such items as auditing, reporting, budgeting, accounting and information technology services incurred in the course of operating the Special Account, to be debited from the Special Account, except where these activities are Budget funded.

Consultation

The Department of Resources, Energy and Tourism 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 Clean Energy Initiative Special Account