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Appropriation Bill (No. 2) 1997-98
Date Introduced: 13 May 1997
House: House of Representatives
Portfolio: Finance
Commencement: Royal Assent
To appropriate $5 866 977 000 for expenditure on capital works and services, payments to the States and Territories, and for other services during the 1996-97 financial year. The Bill appropriates $ 1 000 000 000 for the Federation Fund Trust Account.
The Information Research Services publication Budget Review 1997-98 contains a detailed analysis of the Budget and its impact on particular departments and programs. It should be read in conjunction with this Digest.
Budget Outlays - refer to the net cost to the taxpayer of providing government services. Appropriations/payments out of the CRF are adjusted to take account (for example) of many government receipts. Hence a hypothetical government program 'XYZ' may have a total appropriation of $600 million but this may only represent budget outlays of $500 million if the 'XYZ' receives income of $100 million from other (non budget) sources.
Running costs - are the full current and minor capital costs incurred by a department or agency in providing government services for which the department or agency is responsible. For many departments, staff salaries will represent the largest proportion of such costs. Borrowings - Borrowings allow agencies to bring forward some future years appropriation to be spent in an earlier year. This is intended to provide agencies with the flexibility to respond to changing spending priorities; and a mechanism to meet unforeseen costs. Borrowings are arranged either through annual appropriation or additional estimates Bills, such as is the case with this Bill, with a consequent reduction in a future appropriation, or through the Provision for Running Costs Borrowing (PRCB) where the borrowing does not coincide with an appropriation Bill.
Agencies are allowed to borrow up to 10% of the total running costs budget from any one year. Running Costs Borrowings (PRCB) - The PRCB is a reserve that agencies can draw on to borrow running costs funds from future appropriation where it is not viable to wait until the passage of the next Appropriation Bill. Agencies can borrow from the PRCB if: there is a legitimate reason to borrow running costs; the agency has a running costs appropriation; the borrowings are repaid in full from some future appropriation; and sufficient funds are available.
The major part of funds to be appropriated go to the Department of Health and Family Services, a total of $1 539 755 000. This principally consists of $1 403 132 000 for payments to the States and Territories.
Comment: Payments to the States and Territories (Division 891 at pp. 33-35 of the Bill) comprise a number of items, the main ones being health advancements ($113 787 000), health care access ($283 609 000), assistance for people with disabilities ($316 084 000), home and community care ($476 329 0000) and housing and crisis accommodation ($128 173 000). Major Budget measures within Division 891 (figures obtained by subtracting 1997-98 appropriation from 1996-97 estimated expenditure): +$2 728 000 in payments for special health programs (e.g. blood transfusion services, imported blood and blood related products, and artificial limbs scheme); -$8 305 000 in grants for provision of health services; -$4 816 000 for medicare agreements - other health services; +3 048 for University Departments of Rural Health; +$1 586 000 for the national youth suicide prevention strategy; +6 309 000 for assistance for people with disabilities; -$2 893 000 for supported accommodation assistance under the Supported Accommodation Assistance Act 1994; - $518 000 for referral services for women escaping domestic violence in rural and remote areas; +$1 430 000 for the supported accommodation assistance program - national case management and data strategies; +$5 010 000 in alternative funding arrangements for rural obstetric services; and -$52 580 000 for the Commonwealth dental program for health card holders. Major Budget measures within Division 892 - Other Services (p. 35 of the Bill) include (figures obtained by subtracting 1997-98 appropriation from 1996-97 estimated expenditure): -$6 057 000 for hearing services - payments for contestable services through a voucher system; +$5 050 000 for acute health care - microeconomic reform initiatives; +$5 252 000 for improving access of Aboriginal people to primary care; and +$6 878 000 for aged care accreditation and quality assurance.
Comment: Payments to the States and Territories (Division 949 at p. 43 of the Bill) comprises a number of items, the main ones being compensation for extension of fringe benefits to pensioners and older long-term allowees and beneficiaries ($116 452 000), social housing subsidy program ($2 130 000), and Commonwealth State housing agreement ($975 048 000).
The third highest amount allocated, $1 002 889, is for the Department of Prime Minister and Cabinet. This principally consists of $1 001 000 000 under Division 939 (at p. 42 of the Bill) for Other Services.
Comment: Other Services (Division 939) comprises two items, the principal being Centenary of Federation. An amount of 1 000 000 000 will be appropriated for this item for payment to the Federation Fund Trust Account. The purpose of the Federation Fund (FF) is to finance a number of major projects of national significance, in order to both mark the Centenary of Federation and contribute to the building of required infrastructure for the coming century. The FF will be established as a separate Trust Account within the Commonwealth Public Account with total funds of the amount appropriated by this Bill. The projects are to be well advanced but not necessarily completed by the Centenary of Federation in 2001, and will be selected on the basis that they will generate jobs in the construction phase and make a significant ongoing contribution to Australia and the Australian economy. For example, it has already been decided to draw upon the FF from 1998-99 onwards to finance the cost of constructing the National Museum of Australia and the associated building for the Australian Institute of Aboriginal and Torres Strait Islander Studies. An amount of $1 000 000 is also appropriated under Division 939 for assistance to improve the integration of young offenders into education, training, employmentand community life.
Comment: The Advance to the Minister for Finance is a form of contingency fund which is kept topped-up via provisions in the Appropriation Bills and the Supply Bills. The Advance is only used to provide funding for any unforeseen and urgent expenditures. These may arise if there are unforeseen shortfalls in funding for programs for which an appropriation already exists, or may relate to totally new programs. Monies may also be provided out of the Advance to cover payments which must be made pending the Minister for Finance's authorisation for the issue of Warrant authority. (A Warrant is a document provided by the Minister for Finance to the Secretary of a Department authorising the drawing of monies from the Commonwealth Public Account. The Warrant in effect ensures or attests that the making of any payment is covered by a lawful appropriation.)
The effect of clause 3 is to authorise the Minister for Finance to issue from the Consolidated Revenue Fund a total of $5 866 977 000 for the year ending 30 June 1998 (Schedule 2 gives a portfolio and program breakup of the proposed expenditure).
Clause 4 deals with payments to the States and Territories. Schedule 2 deals with payments to the States and Territories by each Department. Payments detailed in Schedule 2 must be made on terms and conditions determined by the specified Minister.
Part 2 of the Bill foreshadows certain technical amendments to the proposed Appropriation Act (No. 2) 1997-98 contingent on the passage of the Government's proposed public sector financial management reforms. The necessary legislation which, amongst other things, will replace the Audit Act 1901.
Ian Ireland
26 June 1997
Bills Digest Service
Information and Research Services
This Digest does not have any official legal status. Other sources should be consulted to determine whether the Bill has been enacted and, if so, whether the subsequent Act reflects further amendments.
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ISSN 1328-8091
© Commonwealth of Australia 1997
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Published by the Department of the Parliamentary Library, 1997.
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Last updated: 14 July 1997