Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2019-2020-2021-2022
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SUPPLY (PARLIAMENTARY DEPARTMENTS) BILL (NO. 1) 2022-2023
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for Finance,
Senator the Honourable Simon Birmingham)
Table of Acronyms and Defined Terms
AAA Actual Available Appropriation
AI Act Acts Interpretation Act 1901
APO Advance to the responsible Presiding Officer
Commonwealth An entity as defined in section 10 of the PGPA Act
entity
CRF Consolidated Revenue Fund
Finance Minister Minister for Finance
GST Goods and Services Tax
non-corporate A non-corporate Commonwealth entity as defined in
entity the PGPA Act, or the High Court of Australia
PGPA Act Public Governance, Performance and Accountability
Act 2013
portfolio Portfolio Budget Statements
statements
Explanatory Memorandum to Supply (Parliamentary Departments) Bill (No. 1) 2022-2023
House of Representatives 1
Outline
Supply (Parliamentary Departments) Bill
(No. 1) 2022-2023
General Outline
1 This Explanatory Memorandum accompanies the Supply (Parliamentary
Departments) Bill (No. 1) 2022-2023 (the Bill).
2 The main purpose of the Bill is to propose appropriations from the
Consolidated Revenue Fund (CRF) for expenditure in relation to the
Parliamentary Departments.
3 The Bill proposes appropriations broadly equivalent to 5/12ths of the
estimated 2022-23 annual appropriations for expenditure in relation to the
Parliamentary Departments, excluding Budget measures.
4 Annual appropriations for expenditure in relation to the Parliamentary
Departments for the balance of 2022-23, being an amount broadly equivalent to
7/12ths of those appropriations for 2022-23 plus Budget measures, are proposed in
the Appropriation (Parliamentary Departments) Bill (No. 1) 2022-2023.
5 Appropriations for the ordinary annual services of the Government must be
contained in a separate Bill from other appropriations in accordance with
sections 53 and 54 of the Australian Constitution. Consequently, the Bill proposes
appropriations for the Parliamentary Departments, which are not for the ordinary
annual services of the Government.
6 Annual appropriations that are for the ordinary annual services of the
Government are proposed in the Supply Bill (No. 1) 2022-2023. Other annual
appropriations that are not for the ordinary annual services of the Government are
proposed in the Supply Bill (No. 2) 2022-2023. The Supply Bills (Nos. 1 and 2)
2022-2023 are on the same proportional basis as this Bill.
7 The Portfolio Budget Statements (portfolio statements) are published and
tabled in the Parliament in relation to the Appropriation (Parliamentary
Departments) Bill (No. 1) 2022-2023. The portfolio statements are taken to cover
both the Bill and the Appropriation (Parliamentary Departments) Bill (No. 1)
2022-2023. This Explanatory Memorandum should be read in conjunction with
the various 2022-23 portfolio statements for the Parliamentary Departments,
which contain details on the appropriations set out in the Schedules of the Bills.
Structure of the Bill
8 The Bill provides for the appropriation of specified amounts for expenditure
by the Parliamentary Departments.
Explanatory Memorandum to Supply (Parliamentary Departments) Bill (No. 1) 2022-2023
House of Representatives 2
Outline
9 Part 1 of the Bill deals with definitions, the interpretative role of the
portfolio statements and the concept of notional transactions. Part 2 of the Bill
proposes appropriations to make payments of the amounts in Schedule 1 for
departmental items (clause 7), administered items (clause 8), administered assets
and liabilities items (clause 9) and other departmental items (clause 10). Part 3 of
the Bill specifies the Advance to the responsible Presiding Officer (APO)
provision (clause 11).
10 Part 4 of the Bill deals with credits to special accounts (clause 12), provides
for amounts to be appropriated as necessary (clause 13), and specifies when the
Bill is repealed (clause 14). In addition to the APO provision in Part 3, clause 13
of the Bill recognises that the appropriations in the Bill may also be varied by the
Public Governance, Performance and Accountability Act 2013 (PGPA Act).
Financial Impact
11 The Bill, if enacted, would appropriate the amounts specified in Schedule 1
as set out in clause 6.
Explanatory Memorandum to Supply (Parliamentary Departments) Bill (No. 1) 2022-2023
House of Representatives 3
Statement of Compatibility with Human Rights
Statement of Compatibility with Human Rights
1 The Bill seeks to appropriate money for expenditure by the Parliamentary
Departments.
2 Accordingly, the Bill performs an important constitutional function, by
authorising the withdrawal of money from the CRF for the broad purposes
identified in the Bill.
3 However, as the High Court has emphasised, beyond this, Appropriation
Acts do not create rights and nor do they, importantly, impose any duties.
4 Given that the legal effect of Appropriation Bills is limited in this way, the
Bill is not seen as engaging, or otherwise affecting, the rights or freedoms relevant
to the Human Rights (Parliamentary Scrutiny) Act 2011.
5 Detailed information on the relevant appropriations, however, is contained
in the portfolio statements.
Explanatory Memorandum to Supply (Parliamentary Departments) Bill (No. 1) 2022-2023
House of Representatives 4
Notes on clauses
Notes on clauses
Part 1--Preliminary
Clause 1--Short title
1 Clause 1 specifies that the short title of the Bill, once enacted, will be the
Supply (Parliamentary Departments) Act (No. 1) 2022-2023.
Clause 2--Commencement
2 Clause 2 provides for the Bill to commence as an Act on the later of either
1 July 2022 or the day of the Royal Assent.
Clause 3--Definitions
3 Subclause 3(1) defines the key terms used in the Bill, such as "administered
item" and "special account". Each Parliamentary Department is a non-corporate
Commonwealth entity (non-corporate entity) for the purposes of the PGPA Act.
4 Subclause 3(2) confirms that, for the purposes of other laws, the Bill when
enacted is to be regarded as an Appropriation Act.
Clause 4--Portfolio statements
5 Clause 4 declares that the portfolio statements are relevant documents for
the purposes of section 15AB of the Acts Interpretation Act 1901 (AI Act).
Paragraph 15AB(2)(g) of the AI Act provides for material to be considered in the
interpretation of an Act if the material is declared by the Act to be a relevant
document for the purposes of section 15AB of the AI Act.
6 The purpose of the portfolio statements is to provide information on the
proposed allocation of resources to the outcomes of the Parliamentary
Departments. The term "portfolio statements" is defined in subclause 3(1) to mean
the Portfolio Budget Statements tabled in relation to the Appropriation
(Parliamentary Departments) Bill (No. 1) 2022-2023.
Clause 5--Notional transactions between entities that are part
of the Commonwealth
7 Clause 5 provides that notional transactions between non-corporate entities
are to be treated as if they are real transactions. Notional transactions, therefore,
require the debiting of an appropriation made by Parliament. The payments of the
amounts in Schedule 1 from one non-corporate entity to another do not require, in
a constitutional sense, an appropriation, because both non-corporate entities
operate within the CRF. For reasons of financial discipline and transparency, the
practice has arisen for these payments between non-corporate entities to be treated
as though they required an appropriation, and to debit an appropriation when such
notional payments are made. This is consistent with section 76 of the PGPA Act.
Explanatory Memorandum to Supply (Parliamentary Departments) Bill (No. 1) 2022-2023
House of Representatives 5
Notes on clauses
8 When a non-corporate entity makes a payment, whether to another
non-corporate entity or another part of the same non-corporate entity (such as a
different "business unit" within the entity), it is to be treated as a "real" payment.
This means that the appropriation made by Parliament is extinguished by the
amount of the notional payment, even though no payment is actually made from
the CRF. Similarly, a notional receipt in such a situation is to be treated by the
receiving non-corporate entity (where relevant) as if it were a real receipt. This
does not mean every internal transfer of public money involves a notional
payment and receipt.
Part 2--Appropriation items
Clause 6--Summary of appropriations
9 Clause 6 sets out the total of the appropriations in Schedule 1 of the Bill.
The amounts in Schedule 1 may be increased by a determination under clause 11
(Advance to the responsible Presiding Officer).
10 The amounts in Schedule 1 of the Bill may be adjusted further in accordance
with sections 74 to 75 of the PGPA Act. Specifically:
• Section 74 of the PGPA Act, when read with Rule 27 of the Public
Governance, Performance and Accountability Rule 2014, permits
non-corporate entities to retain certain types of receipts by adding them to
their most recent departmental item or other type of appropriation in an
Appropriation Act when prescribed.
• Appropriations may be adjusted by amounts recoverable by a non-corporate
entity from the Australian Taxation Office for Goods and Services Tax
(GST), in accordance with section 74A of the PGPA Act. The amounts
specified in Schedule 1 exclude recoverable GST. The appropriations shown
represent the net amount that Parliament is asked to allocate to particular
purposes.
• Section 74A has the effect of increasing an appropriation by the amount of
the GST qualifying amount arising from payments in respect of the
appropriation. As a result, there is sufficient appropriation for payments
under an appropriation item, provided that the amount of those payments,
less the amount of recoverable GST, can be met from the initial amount
shown against the item in Schedule 1. Section 74A also applies to notional
transactions between and within non-corporate entities.
• Items may be adjusted to take into account the transfer of functions between
non-corporate entities, in accordance with section 75 of the PGPA Act. It is
possible that adjustments under section 75 may result in new items and/or
outcomes being created in an Appropriation Act.
Explanatory Memorandum to Supply (Parliamentary Departments) Bill (No. 1) 2022-2023
House of Representatives 6
Notes on clauses
11 Additionally, the Finance Minister may manage the payment from items in
the Bill to the Parliamentary Departments using a discretionary power under
section 51 of the PGPA Act. Section 51 allows the Finance Minister to manage
the timing and the amount of appropriated money to be made available to a
Commonwealth entity (an entity as defined in section 10 of the PGPA Act),
except as required by law.
Clause 7--Departmental items
12 Clause 7 provides that the amount specified in a departmental item for a
Parliamentary Department may be applied for the departmental expenditure of the
Parliamentary Department. Clause 3 defines:
• "departmental item" to be the total amount set out in Schedule 1 in relation
to a Parliamentary Department under the heading "Departmental"; and
• "expenditure" to be payments for expenses, acquiring assets, making loans
or paying liabilities.
13 While the departmental items in Schedule 1 may be divided between
outcomes, the different amounts against outcomes are notional. The total
appropriation for departmental expenses represents the departmental item.
14 Departmental items involve costs over which a Parliamentary Department
has control. Departmental appropriations can be used to make any payment
related to the functions of the Parliamentary Department including on purposes
covered by other items whether or not they are in the Act for a Parliamentary
Department. Expenditure typically covered by departmental items includes:
• employee expenses, suppliers and other operational expenses (e.g. interest
and finance expenses); and
• the acquisition and capitalised maintenance of departmental assets valued at
$10 million or less.
15 The cash to meet departmental expenses may be required at times other than
when the expenses are incurred. Departmental items are available until they are
spent, or until the Act through which they were appropriated is repealed. Annual
Appropriation Acts have a lifespan of up to three years after which they
automatically repeal.
Clause 8--Administered items
16 Subclause 8(1) provides for the appropriation of administered amounts to be
applied by a Parliamentary Department for the purpose of contributing to the
outcome for an administered item. An "administered item" is defined in clause 3
to be the amount set out in Schedule 1 opposite an outcome for a Parliamentary
Department under the heading "Administered". Administered amounts are
appropriated separately for each outcome, so, unlike departmental items, the split
across outcomes is not notional. This makes it clear what the funding is intended
to achieve.
Explanatory Memorandum to Supply (Parliamentary Departments) Bill (No. 1) 2022-2023
House of Representatives 7
Notes on clauses
17 The purposes for which each administered item can be spent are further set
out in subclause 8(2). Subclause 8(2) provides that where the portfolio statements
indicate a particular activity is in respect of a particular outcome, then expenditure
on that activity is taken to be expenditure for the purpose of contributing to
achieving that outcome.
18 Administered items are those administered by a Parliamentary Department.
on behalf of the Government (e.g. certain grants, benefits and transfer payments).
These payments are usually made pursuant to eligibility rules and conditions
established by the Government or the Parliament. Specifically, administered items
are tied to outcomes (departmental items are not).
Clause 9--Administered assets and liabilities items
19 Clause 9 provides amounts in Schedule 1 to acquire new administered
assets, enhance existing administered assets and/or discharge administered
liabilities relating to activities administered by the Parliamentary Departments.
Administered assets and liabilities appropriations are provided for functions
managed by a Parliamentary Department. Administered assets and liabilities items
can also be applied for any outcomes of a Parliamentary Department.
Clause 10--Other departmental items
20 Clause 10 appropriates departmental non-operating appropriations in the
form of equity injections, over which the Parliamentary Departments also exercise
control. This clause provides that the amount specified in other departmental
items for a Parliamentary Department may be applied for the departmental
expenditure of the Parliamentary Department. In short, "equity injections" can be
provided to non-corporate entities to, for example, enable investment in assets to
facilitate departmental activities.
21 Other departmental items are not expressed in terms of a particular financial
year and do not automatically lapse. For example, equity injection appropriations
provide funding for the full costs of acquiring new assets some of which might not
be incurred until a later financial year. Other departmental items are available
until they are spent, or the Act through which they were appropriated is repealed.
Annual Appropriation Acts have a lifespan of up to three years after which they
automatically repeal.
Explanatory Memorandum to Supply (Parliamentary Departments) Bill (No. 1) 2022-2023
House of Representatives 8
Notes on clauses
Part 3--Advance to the responsible Presiding Officer
Clause 11--Advance to the responsible Presiding Officer
22 Clause 11 of the Bill enables the responsible Presiding Officer to allocate
additional amounts for items when satisfied that there is an urgent need for
expenditure and the existing appropriation in the current year is not provided for,
or is insufficiently provided for. The allocated amount is referred to as the
Advance to the responsible Presiding Officer (APO). Subclause 11(1) establishes
the criteria about which the responsible Presiding Officer must be satisfied before
determining to add an amount to an item of a Parliamentary Department.
23 The responsible Presiding Officer will only consider issuing an amount
under subclause 11(1) if satisfied there is an urgent need for expenditure that is
not provided for, or is insufficiently provided for, in Schedule 1, because of an
omission or understatement, or because of unforeseen circumstances.
24 Subclause 11(2) enables the responsible Presiding Officer to make a
determination to allocate an amount from the APO to an existing item in
Schedule 1, to a new item not already in Schedule 1, or to a new outcome.
25 Subclauses 11(3) to 11(6) provide the total amounts that can be determined
under the APO provisions in the Bill, once enacted, and the Appropriation
(Parliamentary Departments) Act (No. 1) 2022-2023 are:
• $300,000 for the Department of the Senate;
• $300,000 for the Department of the House of Representatives;
• $1 million for the Department of Parliamentary Services; and
• $300,000 for the Parliamentary Budget Office.
26 Subclause 11(7) provides that, should both the Bill and the Appropriation
(Parliamentary Departments) Bill (No. 1) 2022-2023 be enacted, the amounts
specified in subsections 11(3) to (6) of the Appropriation (Parliamentary
Departments) Act (No. 1) 2022-2023 are to be disregarded. Instead, the amounts
specified in subsections 11(3) to (6) of the Supply (Parliamentary Departments)
Act (No. 1) 2022-2023 are the total amounts available to be determined under the
APO provisions. The practical effect is that if both Bills become Acts during the
term of this Parliament, then the APO under those respective Acts cannot be
granted beyond a total of $1.9 million.
27 It should be noted that Appropriation (Parliamentary Departments) Act
(No. 1) 2022-2023 and Appropriation (Parliamentary Departments) Bill (No. 1)
2022-2023 are defined in subclause 3(1) to refer only to the version of that
legislation introduced in the present Parliament (known as the 46th Parliament). If
that appropriation legislation lapses because of the calling of a Federal Election,
subsection 11(7) of the Supply (Parliamentary Departments) Act (No. 1)
2022-2023 would not apply.
Explanatory Memorandum to Supply (Parliamentary Departments) Bill (No. 1) 2022-2023
House of Representatives 9
Notes on clauses
28 If in the next Parliament (the 47th Parliament) another Bill is introduced with
the same title, that is Appropriation (Parliamentary Departments) Bill (No. 1)
2022-2023, that legislation would not be covered by subsection 11(7) of the
Supply (Parliamentary Departments) Act (No. 1) 2022-2023, because it would fall
outside the definition in the Supply Bill (that is, it would not be associated with
the 46th Parliament).
29 Subclause 11(8) provides that a determination under subclause 11(2) is a
legislative instrument, which must be tabled in Parliament. It is not subject to
section 42 (disallowance) of the Legislation Act 2003 as this would frustrate the
purpose of the provision, which is to provide additional appropriation for urgent
expenditure. Further, an APO is not subject to Part 4 of Chapter 3 (sunsetting) of
the Legislation Act 2003; legislative instruments enabled by the Bill, once
enacted, automatically repeal when the Act itself repeals (see clause 14).
Part 4--Miscellaneous
Clause 12--Crediting amounts to special accounts
30 Clause 12 provides that if the purpose of an item in Schedule 1 is also the
purpose of a special account (regardless of whether the item expressly refers to the
special account), then amounts may be debited against the appropriation for that
item and credited to the special account. Special accounts may be established
under the PGPA Act by a determination of the Finance Minister (section 78) that
is disallowable by Parliament or by another Act (sections 79 and 80). The
determination or Act that establishes the special account will specify the purposes
of the special account.
Clause 13--Appropriation of the Consolidated Revenue Fund
31 Clause 13 provides that the CRF is appropriated as necessary for the
purposes of the Bill. Significantly, this clause means that there is an appropriation
in law when the Act commences. That is, the appropriations are not made or
brought into existence just before they are paid, but when the Act commences.
This clause indicates that the amounts appropriated may be affected by the
PGPA Act, in particular sections 74 to 75 (see clause 6), after the Act commences.
Clause 14--Repeal of this Act
32 Clause 14 provides that the Bill, once enacted, will repeal at the start of
1 July 2025.
Explanatory Memorandum to Supply (Parliamentary Departments) Bill (No. 1) 2022-2023
House of Representatives 10
Notes on clauses
Schedule 1--Services for which money is appropriated
33 Schedule 1 specifies the services of the Parliamentary Departments for
which amounts will be appropriated. Schedule 1 contains a summary table which
lists the total amounts for the Parliamentary Departments and separate tables
detailing the appropriations for each Parliamentary Department. More details
about the appropriations in Schedule 1 are contained in the portfolio statements
and the second reading speech for the Bill.
34 Schedule 1 includes, for information purposes, a figure for the previous
financial year labelled "Actual Available Appropriation (italic figures) -
2021-2022". The Actual Available Appropriation (AAA) is an estimate that does
not affect the amount available at law. That figure provides a comparison with the
proposed appropriations.
35 The AAA is calculated for each item by adding the amounts appropriated
in the previous financial year's annual Appropriation Acts, plus any AFMs, and
any adjustments under sections 51 and 75 of the PGPA Act. In some instances, the
figure may also be affected by limits applied administratively by the Department
of Finance. In addition, where an entity's outcome structure has changed since the
last Appropriation Act, only ongoing outcomes may be shown in the Bill.
Explanatory Memorandum to Supply (Parliamentary Departments) Bill (No. 1) 2022-2023
House of Representatives 11