EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance
Public Governance, Performance and Accountability Act 2013
PGPA Act Determination (DFAT SOETM Special Account 2019)
Purpose of this determination
This determination is made under subsection 78(1) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) to establish the DFAT SOETM Special Account 2019 (the special account) for the Department of Foreign Affairs and Trade (the Department).
The special account is being established to enable the Department to continue to hold and expend amounts on behalf of persons, governments and bodies including:
- under delegated cooperation arrangements with likeminded donors;
- financial contributions held on trust for the G’Day USA Program.
This special account is generally intended to replace the Services for Other Entities and Trust Moneys – Foreign Affairs and Trade Special Account (SOETM special account), which is due to sunset on 1 October 2019.
Once the special account is established, the legislative instrument establishing the SOETM special account will be repealed and an amount equivalent to the amount standing to the credit of the SOETM special account immediately before its repeal will be credited to the special account as its opening balance.
The operating context of special accounts
A special account may be established, varied or revoked under the PGPA Act: by a determination made by the Minister for Finance (under section 78) or by an Act (see section 80).
A special account is an appropriation mechanism that sets aside amounts within the Consolidated Revenue Fund (CRF) for spending on specified purposes. The purposes of a special account are set out in the establishing determination or Act.
In accordance with section 81 of the Constitution, all revenues or moneys raised or received by the Commonwealth Executive Government form one CRF. Section 83 of the Constitution provides that such money may not be drawn from the Treasury except under an appropriation made by law.
- A special account enables revenues or moneys raised or received to be set aside for the purposes of that special account.
- Payments made for the purposes of a special account are supported by an appropriation in the PGPA Act; subsection 78(4) for a special account established by a determination or subsection 80(1) for a special account established by an Act.
Special account determinations
Special account determinations are legislative instruments under the Legislation Act 2003. Special account determinations may be varied or revoked by a subsequent determination being made in accordance with subsection 78(3) of the PGPA Act.
In accordance with subsection 79(3) of the PGPA Act, the Finance Minister must table a copy of such determinations in each House of the Parliament. Subsection 79(4) of the PGPA Act provides that special account determinations are subject to disallowance by either House of the Parliament. The disallowance period starts on the day a special account determination is tabled in the House and ends on the fifth sitting day after the determination was tabled in that House.
If neither House passes a resolution to disallow a special account determination, under subsection 79(5) it comes into effect on the day immediately after the last day on which it could have been disallowed, or on a later day if specified in the determination.
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 Legislation Act 2003. While determinations made or varied under subsections 78(1) or 78(3) of the PGPA Act are subject to disallowance under section 79 of the PGPA Act, subsection 79(2) provides that they are not subject to disallowance under section 42 of the Legislation Act 2003. As such, a Statement of Compatibility with Human Rights is not required.
Consultation
The Department was consulted in the preparation of this determination.
Overview
The Public Governance, Performance and Accountability Act 2013 (PGPA Act) provides a framework for the financial management of the Commonwealth and its entities, including the establishment of special accounts to manage funds for specific purposes. The PGPA Act Determination (DFAT SOETM Special Account 2019) was introduced to establish the DFAT SOETM Special Account 2019 for the Department of Foreign Affairs and Trade, enabling it to continue holding and expending funds on behalf of various entities, including under delegated cooperation arrangements and for financial contributions held on trust for the G’Day USA Program. This special account replaces the existing Services for Other Entities and Trust Moneys – Foreign Affairs and Trade Special Account, which was set to sunset on 1 October 2019. The special account is established under subsection 78(1) of the PGPA Act and is an appropriation mechanism that sets aside funds within the Consolidated Revenue Fund for specified purposes, subject to disallowance by either House of the Parliament if not passed within the disallowance period. The Minister for Finance, under the authority of the PGPA Act, made this determination to address the need for a continued mechanism to manage these funds effectively and in accordance with legislative requirements.
Scope and Application
The DFAT SOETM Special Account 2019 Determination is a legislative instrument established under subsection 78(1) of the Public Governance, Performance and Accountability Act 2013 to set up a special account for the Department of Foreign Affairs and Trade. This account is intended to replace the existing Services for Other Entities and Trust Moneys – Foreign Affairs and Trade Special Account (SOETM special account) that is set to expire on 1 October 2019. The new special account will allow the Department to continue to manage and expend funds on behalf of various entities, including governments and bodies, under specific arrangements such as delegated cooperation with likeminded donors and the G’Day USA Program. Once established, the SOETM special account will be repealed, and the balance of funds will be transferred to the new special account. This special account operates under the provisions of the PGPA Act, which allows the establishment, variation, or revocation of such accounts by a Minister for Finance determination or by an Act, ensuring that funds within the Consolidated Revenue Fund are allocated for specified purposes. The special account determinations, as legislative instruments, are subject to parliamentary scrutiny and disallowance procedures, although they are not subject to disallowance under the Legislation Act 2003, thus exempting them from requiring a Statement of Compatibility with Human Rights.
Key Provisions
The Public Governance, Performance and Accountability Act 2013 PGPA Act Determination (DFAT SOETM Special Account 2019) (F2019L01057) establishes a special account for the Department of Foreign Affairs and Trade, replacing the existing Services for Other Entities and Trust Moneys – Foreign Affairs and Trade Special Account (SOETM special account) (section 1). This special account is established to enable the Department to hold and expend amounts on behalf of persons, governments, and bodies under delegated cooperation arrangements with likeminded donors and financial contributions held on trust for the G’Day USA Program (section 1). Once established, the legislative instrument establishing the SOETM special account will be repealed and the equivalent amount will be credited to the new special account as its opening balance (section 1).
The special account operates as an appropriation mechanism within the Consolidated Revenue Fund, set aside for specific spending purposes outlined in the establishing determination (section 4). The purposes of the special account are detailed in the determination and include continuing the activities of the previous SOETM special account (section 4). The establishment, variation, or revocation of special accounts are governed by section 78 and section 80 of the PGPA Act, with the Minister for Finance having the authority to make these determinations (section 4). These determinations are legislative instruments under the Legislation Act 2003 and are subject to disallowance by either House of the Parliament (section 4).
The obligations imposed by the Act on the Department of Foreign Affairs and Trade include the requirement to manage the special account in accordance with the purposes specified in the determination (section 4). The Department must ensure that all transactions within the special account are for the specified purposes and comply with any applicable financial management policies and procedures (section 4). The Finance Minister must table a copy of the determination in each House of the Parliament, and the determination is subject to disallowance during a specified period (section 4). If neither House passes a resolution to disallow the determination, it comes into effect on the day immediately after the disallowance period or on a later day if specified in the determination (section 4).
There are no specific offences, penalties, or civil/criminal consequences mentioned for breach of the provisions in this determination. However, any breach of the PGPA Act or associated regulations could result in administrative or financial penalties as prescribed by other relevant legislation. The determination itself does not specify any particular penalties but aligns with the broader framework of financial management and accountability under Australian law (section 4).