EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
FMA Act (Variation and abolition of Special Account) Determination 2013/03
This determination (the Determination) is made under subsections 20(2) and 20(3) of the Financial Management and Accountability Act 1997 (FMA Act). The Determination varies and aoblishes the Minting and Coinage Special Account. Section 48A of the Legislative Instruments Act 2003 applies to the Determination.
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 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.
Exemption from Statement of Compatibility with Human Rights
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.
Purposes of the Determination
The Determination varies the Minting and Coinage Special Account (the Special Account) to allow the Royal Australian Mint to be able to pay amounts to another Special Account. Should the Royal Australian Mint Special Account determination (2013/04) not be disallowed by the Parliament, it is expected that the Mint would transfer to it the entire balance of the Special Account, and manage all future operations using the Royal Australian Mint Special Account.
Consequently, the Determination commences after both the following events have occurred: the Determination takes effect in accordance with subsection 22 (4) of the FMA Act, and the Royal Australian Mint Special Account commences.
The Determination provides that the Special Account is abolished either on the day its balance reaches zero, or 31 December 2013.
Consultation
The Department of the Treasury and the Royal Australian Mint were consulted. As the instrument is for internal machinery of government purposes only, no consultation was necessary with other persons outside the Commonwealth (see sections 17 and 18 of the Legislative Instruments Act 2003).
Table of Balances and Transactions
The table below outlines the financial implications of the Determination. There is no net change to the Commonwealth’s fiscal and underlying cash balances.
Special Account | 2013-2014 ($’000) |
Opening Balance | Credits | Debits | Closing Balance |
Minting and Coinage Special Account | 9,723 | 0 | -9,723 | 0 |
Note: these figures are indicative only and may vary from the Agencies’ actuals published in the Portfolio Budget Statements and Annual Reports.
Overview
The Financial Management and Accountability Act 1997 (FMA Act) was enacted to ensure the proper management and accountability of Commonwealth financial resources. The 2013/03 FMA Act (Variation and abolition of Special Account) Determination was introduced by the Minister for Finance and Deregulation, under subsections 20(2) and 20(3) of the FMA Act, to address the need for restructuring and eventual abolition of the Minting and Coinage Special Account. This was done to facilitate the transfer of its functions to a newly established Royal Australian Mint Special Account. The determination was made to streamline the management of Commonwealth funds and enhance accountability. The Department of the Treasury and the Royal Australian Mint were consulted in the development of this Determination, which does not require a Statement of Compatibility with Human Rights as it is exempt from disallowance under the Legislative Instruments Act 2003. The Determination is intended to abolish the Minting and Coinage Special Account once its balance reaches zero or by 31 December 2013, whichever occurs first.
Scope and Application
The FMA Act (Variation and abolition of Special Account) Determination 2013/03 applies specifically to the Minting and Coinage Special Account within the Commonwealth of Australia, governing its variation and subsequent abolition. This legislation is an instrument made under the authority of the Financial Management and Accountability Act 1997 and serves to alter the operational framework of the Minting and Coinage Special Account. The determination allows the Royal Australian Mint to transfer funds to another designated Special Account, facilitating a streamlined financial management structure. The Determination becomes effective upon its tabling in the Parliament and subsequent non-disallowance within the stipulated five sitting days, as outlined in section 22 of the FMA Act. Notably, the abolition of the Special Account is contingent upon its balance reaching zero or by 31 December 2013, whichever occurs first. This Determination does not necessitate a Statement of Compatibility with Human Rights due to its exemption under the Human Rights (Parliamentary Scrutiny) Act 2011. It is pertinent to internal government operations, thus no external consultation was mandated beyond the Department of the Treasury and the Royal Australian Mint. The financial implications of the Determination are reflected in the table, indicating no net change to the Commonwealth's fiscal balances.
Key Provisions
The main operative sections of the FMA Act (Variation and abolition of Special Account) Determination 2013/03 (the Determination) are sections 20(2) and 20(3), which allow for the variation and abolition of a Special Account under the Financial Management and Accountability Act 1997 (FMA Act). This particular Determination varies and abolishes the Minting and Coinage Special Account. The Special Account is a mechanism that allows certain amounts from the Consolidated Revenue Fund (CRF) to be spent on specified purposes as outlined in the determination. The Determination requires the Royal Australian Mint to be able to transfer amounts from the Minting and Coinage Special Account to another Special Account, namely the Royal Australian Mint Special Account, which is established under a separate determination (2013/04). The Special Account is abolished either when its balance reaches zero or on 31 December 2013.
The Determination imposes specific obligations on the Royal Australian Mint to manage its operations using the Royal Australian Mint Special Account once the Determination takes effect and the Royal Australian Mint Special Account commences. The Mint must transfer the entire balance of the Minting and Coinage Special Account to the new account and cease using the old account. Additionally, the Finance Minister is required to table a copy of the Determination in each House of the Parliament within the prescribed period, and either House may pass a resolution disallowing the 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.
Failure to comply with the requirements set out in the Determination could result in civil or criminal consequences, depending on the nature of the breach. However, the Determination itself does not specify any particular offences, penalties, or consequences for breach. The FMA Act provides for general offences and penalties related to financial management and accountability, but these would need to be considered in conjunction with other relevant legislation. The maximum penalties for breaches of the FMA Act can vary widely, depending on the specific offence and the circumstances of the case, and could include fines and imprisonment.