EXPLANATORY STATEMENT
Financial Management and Accountability Act 1997,
Net Appropriation Agreement (Department of the Environment and Heritage) Variation (2005)
The instrument to which this explanatory statement relates
This explanatory statement relates to an instrument, made under section 31 of the Financial Management and Accountability Act 1997 (FMA Act), entitled “Financial Management and Accountability Net Appropriation Agreement (Department of the Environment and Heritage) Variation (2005)” (the instrument).
The legislative authority under which the instrument is made
Section 31 of the FMA Act enables the Minister for Finance and Administration (the Finance Minister) to enter into agreements for the purposes of items in Appropriation Acts that are marked “net appropriation” (net appropriation agreements).
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) 2005-2006, provides for appropriation items to be increased by amounts received by an agency for items specified in the agreement, allowing amounts equivalent to the receipts to be spent.
Subsection 31(3) of the FMA Act provides that an agreement may be for any period, including a period longer than a financial year. An agreement need not relate to a particular Appropriation Act or Acts. 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
The instrument varies the operation of the current net appropriation agreement for the Department of the Environment and Heritage (DEH). The variation effected by the instrument allows DEH’s current net appropriation agreement to capture receipts of the National Oceans Office (NOO), retained by NOO in reliance on a net appropriation agreement that had expired. It is necessary to vary the agreement for DEH, as responsibility for NOO was transferred to DEH on 4 November 2004.
The instrument commences upon registration on the Federal Register of Legislative Instruments. The instrument does not authorise past spending by NOO in reliance on the expired agreement, or by DEH, following the transfer of responsibility.
The effect of the instrument will be to provide DEH with an appropriation authority to spend amounts equivalent to receipts received by NOO (and subsequently transferred to DEH) in purported reliance on an expired net appropriation agreement. The instrument authorises only future spending of past receipts. The instrument will ensure that DEH is placed in the position it would have been in, had all amounts transferred from NOO been credited to NOO’s available appropriation pursuant to a valid net appropriation agreement.
Consultation
The Department of Finance and Administration (Finance) has consulted with DEH regarding the effect of this instrument.
The Australian Government Solicitor was consulted for technical advice on the instrument.
As the instrument is for internal machinery of government purposes only, no consultation, beyond that identified above, was considered necessary (see sections 17 and 18 of the Legislative Instruments Act 2003).
Additional Information
Agreements made under section 31 of the FMA Act are not subject to the parliamentary disallowance and sunsetting provisions of the Legislative Instruments Act 2003: see item 19 in subsection 44(2) and item 17 in subsection 54(2) of the Legislative Instruments Act 2003.