Financial Management and Accountability Net Appropriation Agreement (The Office of the Renewable Energy Regulator) Variation 2006

Overview

The Financial Management and Accountability Act 1997 was enacted to address the need for robust financial management and accountability in the Australian government. The Act was introduced by the Australian Parliament with the policy objective of ensuring that public funds are managed efficiently and effectively, and that the government is held accountable to the public for the use of these funds. Section 31 of the Act provides the Minister for Finance and Administration the authority to enter into agreements with other ministers concerning items in Appropriation Acts that are designated as “net appropriation”. These agreements can be for any period, including beyond a single financial year, and can be varied or cancelled by the Finance Minister at any time without the consent of the other party. The Financial Management and Accountability Net Appropriation Agreement (The Office of the Renewable Energy Regulator) Variation 2006 was introduced to include additional eligible receipts into the Net Appropriation Agreement for The Office of the Renewable Energy Regulator, thus broadening the scope of the agreement.

Scope and Application

The Financial Management and Accountability Net Appropriation Agreement (The Office of the Renewable Energy Regulator) Variation 2006, made under section 31 of the Financial Management and Accountability Act 1997, applies to the Office of the Renewable Energy Regulator. This variation to the original Net Appropriation Agreement, which was altered on 19 April 2006, serves to expand the eligible receipts that can be included in the appropriation process. The types of receipts now eligible include those from the sale of goods, provision of staff, payment for associated benefits, sale of minor departmental assets, subsidies and grant monies, court-awarded costs, amounts received from the Australian Taxation Office, sponsorships and grants, donations, financial incentives from leasing arrangements, and payments under the ADF Reserves Employer Support Payment Scheme. These agreements, which can span any period including beyond a financial year, are subject to cancellation or variation by the Minister for Finance and Administration at any time. The variation is effective only during the period when the relevant provisions exist in the annual Appropriation Acts, and it does not require parliamentary disallowance or sunsetting as it is not subject to the provisions of the Legislative Instruments Act 2003.

Key Provisions

The main operative sections of this legislation (section 31 of the Financial Management and Accountability Act 1997) provide a framework for the Minister for Finance and Administration to enter into agreements with other Ministers for items marked as "net appropriation" in Appropriation Acts. This allows for the increase of departmental appropriation items by amounts received by an agency as specified in the agreement (section 31(3) of the FMA Act). The agreements can be for any period, including periods longer than a financial year, and can be cancelled or varied at any time by the Finance Minister without the consent of the other party (subsection 31(4) of the FMA Act). The obligations and requirements imposed by the Act on the parties involved include the need for the agreement to be in line with specific provisions within the annual Appropriation Acts. The Office of the Renewable Energy Regulator, which is the agency affected by this instrument, was consulted during the drafting of the instrument. As this instrument is for internal machinery of government purposes only, no further consultation was considered necessary with other parties (sections 17 and 18 of the Legislative Instruments Act 2003). The legislation does not explicitly state any offences, penalties, or civil/criminal consequences for breach. However, the 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, as stated in items 19 in subsection 44(2) and item 17 in subsection 54(2) of the Legislative Instruments Act 2003. This means that the agreements have a level of autonomy from parliamentary oversight, but the consequences of any breach would likely be determined by the terms of the specific agreement and any relevant agreements or legislation.