EXPLANATORY STATEMENT
Financial Management and Accountability Act 1997, Section 31
Agreements for “Net Appropriations”
The instrument to which this explanatory statement relates
This explanatory statement relates to an instrument (the instrument) made under section 31 of the Financial Management and Accountability Act 1997 (FMA Act), which is entitled Financial Management and Accountability Net Appropriation Agreement for the Department of Foreign Affairs and Trade Variation 2008, commencing upon registration on the Federal Register of Legislative Instruments (FRLI).
The legislative authority under which the instrument is made
Section 31 of the FMA Act enables the Minister for Finance and Deregulation (the Finance Minister) to enter into agreements with other Ministers for the purposes of items in Appropriation Acts that are marked “net appropriation”.
Section 31 of the FMA Act, together with certain standard provisions of the annual Appropriation Acts, (for example, section 10 of Appropriation Act (No.1) 2004-2005), allows departmental (and in select cases, administered) appropriation items to be increased by amounts received by an agency as specified in the agreement.
Subsection 31(3) of the FMA Act provides that an agreement may be for any period (that is, it need not relate to a particular Appropriation Act or Acts), including a period longer than a financial year. Generally agreements continue until circumstances require their renewal.
Subsection 31(4) of the FMA Act enables the Finance Minister to cancel or vary an agreement at any time without the consent of the other party.
Purpose and operation of the instrument
On 4 April 2008 the Department of Finance and Deregulation varied the Net Appropriation Agreement for Foreign Affairs and Trade by the Financial Management and Accountability Net Appropriation Agreement for the Department of Foreign Affairs and Trade Variation 2008. The effect of the instrument is to cover relevant receipts received by the agency on or after 16 August 2007.
The retrospective clause was included in the instrument to reflect the commencement date of the Expositions Special Account.
Prior to 1 January 2008, variations to Net Appropriation Agreements were achieved by creating new Net Appropriations Agreements for the Agency concerned. However, as of 1 January 2008 the FMA Act was amended so that no further new Net Appropriation Agreements can be made. Existing Agreements can be varied until new FMA Regulations are put in place regarding section 31. These new Regulations are expected to commence on 1 July 2008. After the new Regulations are in place, there will no longer be Net Appropriation Agreements or variations to these to be registered on FRLI.
Notes on the instrument
Specific provisions within the annual Appropriation Acts give effect to the instrument. Therefore, the instrument only has effect while the relevant specific provisions exist in the annual Appropriation Acts.
Consultation
The Department of Foreign Affairs and Trade is the agency affected by this instrument. The agency was consulted in the drafting 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).