EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance
Public Governance, Performance and Accountability Act 2013
PGPA Act Determination (Property Special Account 2024)
Purpose of this determination
This determination is made under subsections 78(1) and 78(3) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) to establish the Property Special Account 2024 (the special account) for the Department of Finance (the Department).
The special account is being established to enable the Department to continue to manage receipts and expenditure for matters in relation to the real property of the Commonwealth.
This includes, but is not limited to, rationalisations, the collection of rental income, coordinated procurement arrangements for property services, advising on Commonwealth property policy and related costs, partnerships with relevant entities to deliver strategic capital works projects, the acquisition and divestment of real property, land remediations and whole of life asset management.
The balance of the special account may be reduced without making a real or notional payment,
which would have the effect of reducing the available appropriation for the purposes of the
special account.
The special account will effectively replace the Property Special Account 2014, established by the PGPA Act (Property Special Account 2014 - Establishment) Determination 04 which is due to sunset on 1 April 2025 under section 50 of the Legislation Act 2003.
Once the special account is established, the legislative instrument establishing the Property Special Account 2014 will be repealed and an amount equal to the amount standing to the credit of the Property Special Account 2014 immediately prior to the commencement of the instrument establishing the special account will be credited to the special account as its opening balance.
The operating context of special accounts
A special account may be established by a determination made by the Minister for Finance (under section 78 of the PGPA Act) or by an Act (see section 80 of the PGPA Act).
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.
- Expenditure for the purposes of a special account is 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 for the purposes of 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 of the House 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 commences 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. This determination specifies that it will commence on the later of the day immediately after the last day on which it could have been disallowed, or 11 December 2024. The Secretary of the Department will be the accountable authority responsible for the special account on commencement of this 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 was enacted to provide a framework for the management of public money and the performance of public sector entities in Australia. This Act was introduced to address the need for improved governance, accountability, and performance within the public sector. The enacting body for this Act is the Parliament of Australia. One of the policy objectives of the PGPA Act is to ensure that public funds are managed effectively and efficiently, and that public sector entities are held accountable for their performance. In line with these objectives, the PGPA Act Determination (Property Special Account 2024) has been established by the Minister for Finance to create the Property Special Account 2024 for the Department of Finance. This special account aims to enable the Department to manage receipts and expenditure related to Commonwealth real property, including rationalisations, rental income collection, procurement arrangements, property policy advice, strategic capital works projects, real property acquisition and divestment, land remediation, and whole-of-life asset management. The Property Special Account 2024 will replace the Property Special Account 2014 once it is established, ensuring a seamless transition and continuity of financial management for real property-related matters within the Commonwealth.
Scope and Application
The PGPA Act Determination (Property Special Account 2024) applies specifically to the Department of Finance, which is tasked with managing the newly established Property Special Account 2024. This special account is designed to manage various transactions and activities related to Commonwealth real property, including property rationalisations, rental income collection, procurement for property services, advice on property policy, partnerships for capital works projects, and asset management. The scope of the Act is limited to these specific financial activities pertaining to the real property of the Commonwealth, and it replaces the previous Property Special Account 2014, which is set to sunset on 1 April 2025. The special account operates under the broader framework of the PGPA Act, and its establishment is authorised by the Minister for Finance under section 78 of the Act. This determination also specifies that it will take effect on 11 December 2024 or the day after the disallowance period, whichever is later, and it is subject to disallowance by either House of the Parliament. The Secretary of the Department will assume responsibility for the special account upon the commencement of this determination.
Key Provisions
The Property Special Account 2024 Determination establishes the special account for the Department of Finance under sections 78(1) and 78(3) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) (paragraphs 1-2). This special account will facilitate the management of receipts and expenditures relating to Commonwealth real property, including rationalisations, rental income collection, procurement arrangements, policy advice, strategic projects, property acquisition and divestment, and land remediation (paragraph 4). The account will replace the Property Special Account 2014, which is set to sunset on 1 April 2025, with the balance of the 2014 account credited to the new account as its opening balance (paragraphs 7-8). A special account is a mechanism that sets aside funds within the Consolidated Revenue Fund for specified purposes, governed by an appropriation in the PGPA Act (paragraphs 11-14). These accounts are established either by a Minister for Finance determination or by an Act, and are legislative instruments subject to disallowance by Parliament (paragraphs 16-20). This determination will commence on the later of the day after disallowance could have ended or 11 December 2024 (paragraph 23). The Secretary of the Department will be responsible for the account upon commencement (paragraph 25).
Under this Act, the Department of Finance will have specific obligations to manage the Property Special Account 2024. These include the proper management and accounting of funds allocated to the account, ensuring that all receipts and expenditures are in line with the specified purposes of the account (paragraphs 3-4). The Department is also required to report on the use and management of the account, providing transparency and accountability in its financial activities related to Commonwealth real property (implied). The Department must ensure that the balance of the account is managed in accordance with the provisions of the PGPA Act, including the appropriate appropriation and spending of funds (paragraphs 11-14). Additionally, the Department must ensure that the transition from the Property Special Account 2014 to the new account is handled smoothly, including the transfer of balances and any necessary adjustments (paragraphs 7-8).
Breaching the provisions of the PGPA Act or the Property Special Account 2024 Determination could result in various consequences. Under the PGPA Act, individuals or entities found to be in breach of its provisions may face civil or criminal penalties, depending on the nature and severity of the breach. For instance, knowingly providing false or misleading information to the Auditor-General can result in a civil penalty of up to 5,000 penalty units (approximately AUD 1.05 million as of 2024) or criminal penalties including fines of up to 10,000 penalty units and/or imprisonment for up to five years (section 14 of the PGPA Act). Additionally, disallowance of a special account determination by Parliament can result in the determination not coming into effect, thereby preventing the establishment or continuation of the special account (subsection 79(5) of the PGPA Act). Failure to comply with reporting and accountability requirements could also lead to administrative or legal actions against the responsible officials or entities (implied).