EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Financial Management and Accountability (Local Hospital Networks Special Account)
Determination 2013/01 (the Determination)
Purpose of the Determination
The Determination is made under subsection 20(1) of the Financial Management and Accountability Act 1997 (FMA Act) and establishes a new Special Account, the Local Hospital Networks Special Account (the LHN 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 to the Special Account and the purposes for which the Special Account 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 under subsection 20(1) of the FMA Act or vary Special Accounts under subsection 20(2) of the FMA Act are subject to the tabling and disallowance procedures in section 22 of the FMA Act. Section 22 of the FMA Act requires the Finance Minister to table a copy of the determination in each House of the Parliament. Either House may pass a resolution disallowing a determination within five sitting days of tabling. If the determination is not disallowed, it comes into effect on the day immediately after the last day on which it could have been disallowed.
Subsection 20(6) of the FMA Act exempts determinations that establish Special Accounts under subsection 20(1) of the FMA Act or vary Special Accounts under subsection 20(2) of the FMA Act from the operation of Part 6 (sunsetting) of the Legislative Instruments Act 2003.
Subsection 20(7) of the FMA Act exempts determinations that abolish Special Accounts under subsection 20(3) of the FMA Act from the operation of section 42 (disallowance) and Part 6 (sunsetting) of the Legislative Instruments Act 2003.
A Statement of Compatibility with Human Rights is not required for this determination. Subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 requires a Statement of Compatibility with Human Rights for all legislative instruments subject to disallowance under section 42 of the Legislative Instruments Act 2003. While determinations made or varied under subsections 20(1) or 20(2) of the FMA Act are subject to disallowance under section 22 of the FMA Act they are not subject to disallowance under section 42 of the Legislative Instruments Act 2003. Determinations made under subsection 20(3) of the FMA Act are exempt from disallowance under subsection 20(7) of the FMA Act, as such a Statement of Compatibility with Human Rights is not required.
Operation of this Determination
This Determination establishes a Special Account to manage Commonwealth payments to support Local Hospital Networks (LHNs) (clause 4).
LHNs are defined in the Determination as the bodies listed in Reports prepared by the Administrator of the National Health Funding Pool under section 240 of the National Health Reform Act 2011. Essentially, LHNs provide the following public hospital services:
- All admitted and non-admitted services
- All emergency department services provided by a recognised emergency department
- Other outpatient, mental health, sub-acute services and other services that could reasonably be considered a public hospital service.
Credits to the LHN Special Account
Clause 5 of the Determination provides that an amount received from any person for the purposes of the LHN Special Account may be credited to the LHN Special Account. However, as acknowledged by the Note to clause 5, there is another mechanism by which amounts can be credited to the LHN Special Account and it is anticipated that the mechanism referred to in that Note will be relied on in order to credit amounts to the LHN Special Account in this case.
Section 14 of Appropriation Act (No. 1) of 2012-13 (the Appropriation Act) provides that, if any of the purposes of a Special Account is a purpose that is covered by an item (whether or not the item expressly refers to the Special Account) in the Act, then amounts may be debited against the appropriation for that item and credited to that Special Account.
In the event that the balance of an item in Schedule was insufficient for such a possibility, consideration could be given to increasing that item by utilising the Advance to the Finance Minister, which is set out in section 13 of the Appropriation Act.
Purposes of the LHN Special Account
The purposes of the LHN Special Account are set out in clause 6 of the Determination. The main purpose of the LHN Special Account is to make grants of financial assistance directly to LHNs, in accordance with agreements entered into between LHNs and the Commonwealth, being grants for the provision of hospital and pharmaceutical benefits and medical and dental services (as those terms are used in s 51(xxiiiA) of the Constitution).
Constitutional power
Clause 7 of the Determination sets out the constitutional powers on which the Commonwealth relies in making the Determination.
Consultation and Impact
The Department of Health and Ageing, the Department of the Prime Minister and Cabinet and the Treasury were consulted in the preparation of this determination. As the determination is for internal machinery of government purposes only, no consultation was necessary with other persons (see sections 17 and 18 of the Legislative Instruments Act 2003).
There is no net impact on the Budget bottom line over the forward estimates.