Financial Management and Accountability (Variation and Abolition of Special Accounts of the Department of Human Services) Determination 2011/12

EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997

Financial Management and Accountability (Variation and Abolition of Special Accounts of the Department of Human Services) Determination 2011/12

Purpose of the Determination

The instrument is made under subsection 20(2) of the Financial Management and Accountability Act 1997 (FMA Act) and varies the following Special Accounts:

1. Other Trust Moneys – Department of Human Services Special Account;
2. Commonwealth Service Delivery Agency Other Trust Moneys Account (operated by Centrelink), and
3. Services for Other Entities and Trust Moneys – Medicare Australia 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 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.

Operation of this Determination

The instrument abolishes three Special Accounts which will become redundant to requirements, following a merger of Medicare Australia and Centrelink with the Department of Human Services (DHS), which is expected to occur on 1 July 2011. 

The Determination will allow any remaining balance to be debited from the:

• Other Trust Moneys – Department of Human Services Special Account; and
• Commonwealth Service Delivery Agency Other Trust Moneys Account (operated by Centrelink); and
• Services for Other Entities and Trust Moneys – Medicare Australia Special Account

to be credited to the new Services for Other Entities and Trust Monies – Department of Human Services Special Account.  Subsequently, the above listed three Special Accounts will be abolished on the earlier of when the balances reach zero and 31 December 2011.  Any balance existing on 31 December 2011 will be remitted to the CRF.

Effect of this Determination

There may be four Special Accounts with similar purposes operating for a short period of time, until remaining balances are credited to the Services for Other Entities and Trust Monies – Department of Human Services Special Account.

Consultation

DHS, Medicare Australia and Centrelink are Agencies affected by this instrument.  The Agencies were provided with drafts of the instrument and agree with the form of the instrument.  DHS supplied data for the “Table of Balances and Transactions” (below).  As the instrument 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).

Table of Balances and Transactions of the abolished Special Accounts

The table below outlines the estimated financial implicatons of the determination on the balance of the Special Accounts. 

Note: these figures are actuals for the 2010-2011 Financial Year provided by each of responsible Agencies.  As such, these figures may differ from the budgeted amounts published in Agency Resourcing Budget Paper No. 4 2010-2011.

(1)    Reflects the net result of credits and debits to the Special Account for the 2010-2011 Financial Year

(2)    Reflects the anticipated amount to be transferred to a replacement SOETM for DHS.