EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation (the Minister)
Financial Management and Accountability Act 1997
Financial Management and Accountability Regulations 1997
The Determination to which this Explanatory Statement relates
This Explanatory Statement relates to a determination made under subregulation 15 (3) of the Financial Management and Accountability Regulations 1997 (FMA Regulations), which is entitled Retained Agency Receipts Determination 2012/01: Department of Agriculture, Fisheries and Forestry (the Determination).
The legislative authority under which the Determination is made
Subsections 31 (1) and 31 (2) of the Financial Management and Accountability Act 1997 (FMA Act) provide that the most recent departmental item for an Agency is taken to be increased by an amount equal to the amount received by the Agency, prescribed by the FMA Regulations for the purposes of section 31 of the FMA Act. The amount as prescribed may then be spent in accordance with the purposes of other departmental appropriations, without further authorisation of the Parliament.
Regulation 15 of the FMA Regulations sets out the kinds of amounts prescribed for the purposes of section 31 of the FMA Act. Item 3 of the table under subregulation 15 (3) provides that amounts of a prescribed kind include an amount that relates to the operation of a scheme determined in writing by the Minister. Subregulation 15 (8) provides that a determination under this item is a legislative instrument.
Purpose and Operation of the Determination
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) operates as part of the Department of Agriculture, Fisheries and Forestry (DAFF). ABARES undertakes research and analysis, and provides advice to the Government and other clients on issues affecting Australia’s agriculture, fisheries and forestry industries.
ABARES is partially funded from annual administered appropriations and partially from receipts collected on a fee-for-service basis from clients.
The Determination establishes a scheme that allows DAFF to increase its departmental appropriation to cover the costs of research, analysis and advice on issues affecting Australia’s agriculture, fisheries and forestry industries, that is:
- undertaken by ABARES;
- funded from Outcome 1 of DAFF’s administered appropriation item, up to a maximum of $2.5 million each financial year; and
- conducted from 1 July 2012 until 30 June 2016.
The scheme requires that DAFF provide the Minister with a statement by 1 September following each financial year the determination is in effect. The statement must show for the previous financial year:
- the total amounts received in accordance with this scheme; and
- the departmental activities these receipts were allocated to.
Statement of Compatibility with Human Rights
The Determination is compatible with human rights, in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. The Determination engages the human right to an adequate standard of living including food, water and housing. DAFF’s Outcome 1, in summary, aims to achieve sustainability for Australia’s primary industries to promote better resource management practices, innovations, self-reliance and improved access to international markets. The research, analysis and advice conducted by ABARES to be funded under the scheme may affect Australia’s economy and resources and could impact on the realisation of the right to an adequate standard of living in the future. As such, the Determination promotes the human right to an adequate standard of living, including food, water and housing.
Notes on the Determination
The Determination is a legislative instrument subject to section 42 (disallowance) and Part 6 (sunsetting) of the Legislative Instruments Act 2003.
Consultation
DAFF was consulted on the drafting of the Determination. Wider consultation was not necessary as the Determination is of an internal machinery of government nature.
Table of Balances and Transactions
The table below outlines the estimated fiscal and underlying cash impact of DAFF’s Outcome 1 administered appropriations to be allocated to ABARES-related departmental activites under the scheme:
$m | 2012-13 | 2013-14 | 2014-15 | 2015-16 | 2016-17 |
Department of Agriculture, Fisheries and Forestry – administered | 2.5 | 2.5 | 2.5 | 2.5 | 0 |
Department of Agriculture, Fisheries and Forestry – departmental | -2.5 | -2.5 | -2.5 | -2.5 | 0 |
Department of Agriculture, Fisheries and Forestry – net fiscal balance/underlying cash impact | 0 | 0 | 0 | 0 | 0 |
Note: these figures are estimates and may differ from amounts published in future Agency Resourcing Tables – Budget Paper No. 4, Portfolio Budget Statements and Annual Reports.
Overview
The Financial Management and Accountability Act 1997 (FMA Act) was enacted to ensure sound financial management and accountability within the Australian Government. This Act was introduced to address the need for clear guidelines and regulations on financial management practices, particularly concerning the allocation and expenditure of funds. The Act was enacted by the Australian Parliament, aiming to provide a robust framework for financial governance and to enhance the transparency and efficiency of public sector financial management. One of its key objectives is to ensure that public funds are managed responsibly and in accordance with the law. The Financial Management and Accountability Regulations 1997 complement the Act by providing detailed rules and procedures for its implementation. The 2012 Retained Agency Receipts Determination 2012/01 for the Department of Agriculture, Fisheries and Forestry is an example of how these regulations are applied to allow the department to increase its departmental appropriation to cover specific activities, such as research and analysis conducted by the Australian Bureau of Agricultural and Resource Economics and Sciences, thereby promoting better resource management and sustainability in Australia’s primary industries.
Scope and Application
The Retained Agency Receipts Determination 2012/01: Department of Agriculture, Fisheries and Forestry is a legislative instrument that applies to the Department of Agriculture, Fisheries and Forestry (DAFF) and specifically its Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES). The Determination provides a scheme allowing DAFF to increase its departmental appropriation to cover costs of research, analysis and advice related to Australia's agriculture, fisheries and forestry industries, up to a maximum of $2.5 million each financial year from 1 July 2012 to 30 June 2016. The Determination is made under the Financial Management and Accountability Act 1997 and Regulations, and is compatible with human rights as it engages the right to an adequate standard of living. The Determination applies within the Commonwealth jurisdiction and is subject to disallowance and sunsetting under the Legislative Instruments Act 2003.
Key Provisions
The Retained Agency Receipts Determination 2012/01: Department of Agriculture, Fisheries and Forestry establishes a scheme allowing the Department of Agriculture, Fisheries and Forestry (DAFF) to increase its departmental appropriation to cover the costs of research, analysis, and advice conducted by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) (section 1). This funding is sourced from Outcome 1 of DAFF’s administered appropriation item, capped at $2.5 million annually, and is valid from 1 July 2012 to 30 June 2016 (section 1). This scheme enables DAFF to spend the received funds in alignment with the purposes of other departmental appropriations, without requiring further parliamentary authorisation (sections 1, 31(1) and 31(2) of the Financial Management and Accountability Act 1997). DAFF is required to provide the Minister with an annual statement by 1 September, detailing the total amounts received under the scheme and how these funds were allocated to departmental activities for the previous financial year (section 1).
The obligations under this Determination include the provision of a detailed annual statement to the Minister by DAFF, which must include information about the total amounts received under the scheme and how these funds were allocated to departmental activities for the previous financial year (section 1). This reporting requirement ensures transparency and accountability in the use of funds received under the scheme. DAFF must also ensure that the funds are used solely for the purposes specified in the Determination, which is to cover the costs of research, analysis, and advice on issues affecting Australia’s agriculture, fisheries, and forestry industries (section 1).
Failure to comply with the obligations outlined in the Determination may result in civil or criminal consequences, though specific penalties are not detailed in the Explanatory Statement. However, it is noted that the Determination is a legislative instrument and is subject to the provisions of the Legislative Instruments Act 2003, including disallowance and sunsetting provisions (section 1). This implies that there are potential legal ramifications for non-compliance, although the exact penalties are not specified within the scope of this Determination. The compatibility of the Determination with human rights, as affirmed in the Statement, underscores the importance of adhering to the outlined provisions to ensure the promotion of human rights, particularly the right to an adequate standard of living (section 1).