EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Determination 2010/03 to abolish a Special Account
Purposes of Determination 2010/03
The attached instrument makes a determination under subsection 20 (3) of the Financial Management and Accountability Act 1997 (FMA Act) to abolish the Other Trust Moneys Account (OTM Account), administered by the Australian Bureau of Statistics.
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 2010/03
Reasons for abolishing the Special Account
A new Special Account, entitled the Services for Other Entities and Trust Moneys – Australian Bureau of Statistics Special Account (SOETM Special Account), will be established in order to give effect to changes that are required to the OTM Account, but which are not practicable to be made by variation to the OTM Account due to the way in which its establishing determination was structured.
It is expected that the balance of the OTM Account will be transferred to the SOETM Special Account upon its creation, thereby making the OTM Account redundant.
Limitations in the structure of the Initial Determination
It is not practicable to vary the Initial Determination signed by the delegate of the Minister for Finance and Administration on 31 December 1997, which established the OTM Account. This is because the format of the determination constrains the amount of information that can be included. Accordingly, a new Special Account is being established (Determination 2010/04) to provide for the continuation of the activities of the OTM Account, and to bring it in line with the structure of similar Special Accounts managed by a number of other agencies.
Effect of this Determination
The OTM Account, administered by the Australian Bureau of Statistics, is abolished by this Determination with effect from the time at which the balance of the Special Account reaches zero.
Consultation
The Australian Bureau of Statistics 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 Other Trust Moneys Account
| 2009-10 ($’000) |
| Opening Balance | Credits | Debits(1) | Closing Balance |
Other Trust Moneys Account | 138 | 3 | 141 | 0 |
(1) Includes the balance debited from the OTM Account and credited to the new SOETM Special Account.
Overview
The Financial Management and Accountability Act 1997 was enacted to ensure proper financial management and accountability within the Australian government. The Act provides a framework for the management of the Commonwealth’s finances, including the establishment and operation of Special Accounts to manage specific revenue or expenditures. Determination 2010/03, issued by the Minister for Finance and Deregulation, was introduced to address the impracticality of modifying the existing Other Trust Moneys Account (OTM Account) due to structural constraints in its original determination. This determination abolished the OTM Account, which was administered by the Australian Bureau of Statistics, and established a new Services for Other Entities and Trust Moneys – Australian Bureau of Statistics Special Account (SOETM Special Account) to continue its activities. The OTM Account was to be abolished once its balance reached zero, and its remaining balance was expected to be transferred to the new account. The decision to abolish the OTM Account and establish the SOETM Special Account was made in consultation with the Australian Bureau of Statistics, which agreed with the form of the instrument.
Scope and Application
The Determination 2010/03, issued under the Financial Management and Accountability Act 1997 (FMA Act), serves to abolish the Other Trust Moneys Account (OTM Account) managed by the Australian Bureau of Statistics (ABS). The OTM Account, a Special Account established to manage specific financial transactions, is being abolished due to structural limitations in its original determination that prevent necessary changes from being implemented. Instead, a new Special Account, the Services for Other Entities and Trust Moneys – Australian Bureau of Statistics Special Account (SOETM Special Account), will be established to continue the functions of the OTM Account, bringing it in line with the structure of similar Special Accounts managed by other agencies. This determination applies specifically to the ABS and its financial operations, with the effect of abolishing the OTM Account once its balance reaches zero. The decision to abolish the OTM Account was made in consultation with the ABS, and no further consultation was deemed necessary as the instrument pertains to internal machinery of government purposes only. The new SOETM Special Account will assume the balance and activities of the OTM Account, ensuring continuity in the management of trust monies and related services.
Key Provisions
The Determination 2010/03 under the Financial Management and Accountability Act 1997 (FMA Act) (paragraph 1) abolishes the Other Trust Moneys Account (OTM Account), which was administered by the Australian Bureau of Statistics (ABS). This determination is made under subsection 20(3) of the FMA Act and is effective from the time when the balance of the OTM Account reaches zero (paragraph 3). The OTM Account, which was established by a prior determination, is being abolished because it is not practicable to vary the original determination due to its structure, which limits the information that can be included (paragraph 5). Instead, a new Special Account, the Services for Other Entities and Trust Moneys – Australian Bureau of Statistics Special Account (SOETM Special Account), will be established to continue the activities of the OTM Account (paragraph 6).
The Act imposes specific obligations on the parties involved. The Finance Minister is responsible for making determinations to establish, vary, or abolish Special Accounts (paragraph 2). When a determination is made to establish or vary a Special Account, the Finance Minister must table a copy of the determination in each House of the Parliament (paragraph 2). Either House may disallow the determination within five sitting days of tabling (paragraph 2). If the determination is not disallowed, it comes into effect on the day after the last day on which it could have been disallowed (paragraph 2). Special Accounts can be abolished by a determination of the Finance Minister, and such a determination is not subject to parliamentary disallowance (paragraph 2).
The determination does not specify any offences, penalties, or consequences for breach. However, the Legislative Instruments Regulations 2004 exempt Special Account determinations from certain disallowance provisions under the Legislative Instruments Act 2003 (paragraph 2). The ABS, the agency affected by this determination, was provided with drafts of the instrument and agrees with its form (paragraph 7). As the instrument is for internal machinery of government purposes, no consultation was considered necessary with other persons (paragraph 7).