EXPLANATORY STATEMENT

Select Legislative Instrument 2005 No. 74

Issued by the authority of the Minister for Finance and Administration

Financial Management and Accountability Act 1997

 

Financial Management and Accountability Amendment Regulations 2005 (No. 2)

 

Subsection 65(1) of the Financial Management and Accountability Act 1997 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The Act provides a framework for the proper management of public money and public property that applies to Chief Executives and officials of Agencies.

The Regulations update the Financial Management and Accountability Regulations 1997 by:

·        prescribing the Defence Materiel Organisation (DMO) for the purposes of the Act. As a prescribed Agency, the DMO would be financially autonomous from the Department of Defence and accountable under the Act for the proper management of public money and public property within its control or custody. This separate financial identity would allow the DMO to support Defence capabilities through the efficient and effective acquisition and through-life support of materiel; and

·        removing the reference to the Aboriginal and Torres Strait Islander Commission (ATSIC) due to its abolition by the Aboriginal and Torres Strait Islander Commission Amendment Act 2005.

Further details of the Regulations are set out in the Attachment.

The Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.

The Amendment Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003 (Legislative Instruments Act).

 

In relation to section 17 of the Legislative Instruments Act, the Department of Defence was consulted on the proposed Regulations prescribing the DMO. No consultation was undertaken in relation to the proposed Regulation deprescribing ATSIC, as the proposed Regulation is a consequence of the Aboriginal and Torres Strait Islander Commission Amendment Act 2005. The Office of Regulation Review has advised that the preparation of a Regulation Impact Statement is not required as the proposed Regulations are unlikely to have a direct or significant indirect impact on business.

 

The Regulations commence:

• on the day they are registered - regulations 1 to 3 and Schedule 1 (removing ATSIC); and
• on July 1 2005 - Schedule 2 (prescribing DMO).

 

ATTACHMENT

 

Details of the Financial Management and Accountability Amendment Regulations 2005 (No. 2)

 

Regulation 1 - Name of Regulations

 

This regulation provides that the title of the Regulations is the Financial Management and Accountability Amendment Regulations 2005 (No. 2).

 

Regulation 2 - Commencement

 

This regulation provides for the Regulations to commence on the day after they are registered on the Federal Register of Legislative Instruments.

 

Regulation 3 - Amendment of Financial Management and Accountability Regulations 1997

 

This regulation provides that the Financial Management and Accountability Regulations 1997 (the Principal Regulations) are amended as set out in Schedule 1.

 

Schedule 1 - Amendments

 

Item [1] - Subregulation 23 (3)  - Disposal of property found on Commonwealth premises etc

 

Subregulation 23 (3) is amended to remove reference to the need to pay the proceeds of the sale of certain property found on Commonwealth premises into the Consolidated Revenue Fund (CRF). This reference is not correct as the proceeds of the sale would automatically form part of the CRF when received by the Commonwealth, regardless of whether or not the Commonwealth has credited or paid that money to a fund which is designated as the CRF.  This operational concept of the CRF, referred to as the "self-executing" CRF, was introduced by the Financial Management Legislation Amendment Act 1999, and is further reflected in recent amendments made to primary legislation by the Financial Framework Legislation Amendment Act 2005.

 

Item [2] - Schedule 1, Part 2, item 201 - Abolition of ATSIC

 

The Aboriginal and Torres Strait Islander Commission (ATSIC) is abolished by the Aboriginal and Torres Strait Islander Commission Amendment Act 2005 (the ATSIC Amendment Act). The ATSIC Amendment Act received the Royal Assent on 22 March 2005, and Schedules 1 and 2 of the ATSIC Amendment Act, which have the effect of abolishing ATSIC, took effect on 24 March 2005. Consequently, it is necessary to remove ATSIC from the list of prescribed Agencies set out at Schedule 1 to the Principal Regulations.  This item would remove item 201 from Part 2 of Schedule 1 to the Principal Regulations.  Item 201 prescribes ATSIC and the Chief Executive Officer of ATSIC for the purposes of the Financial Management and Accountability Act 1997.