Appropriation Bill (No 3) 2016-2017 [2017] AUSStaCSBSD 59 (22 March 2017)

• Appropriation Bill (No. 3) 2016-2017
• Parliamentary scrutiny—ordinary annual services of the government

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Appropriation Bill (No. 3) 2016-2017

Purpose	This bill provides for additional appropriations from the Consolidated Revenue Fund for the ordinary annual services of the government in addition to the appropriations provided for by the Appropriation Act (No. 1) 2016-2017 and the Supply Act (No. 1) 2016-2017
Portfolio	Finance
Introduced	House of Representatives on 9 February 2017

Parliamentary scrutiny—ordinary annual services of the government

1.2 The committee first considered this bill and, in particular, the potential inappropriate classification of new measures as ordinary annual services of the government in Scrutiny Digest No. 2 of 2017.^[1]

1.3 Following receipt of further advice, the committee takes this opportunity to revise and replace the list of items identified as potentially being inappropriately classified as ordinary annual services, as listed on pages 3–4 of Scrutiny Digest No. 2 of 2017.^[2]

1.4 The committee considers that the following item may have been inappropriately classified as ordinary annual services of the government and therefore improperly included in Appropriation Bill (No. 3) 2016-2017 as this expenditure appears to relate to a new policy not previously authorised by special legislation:

• Onshore Gas Social and Economic Research Fund—establishment – $4 million over 4 years.^[3]

1.5 In addition, the following items may also be considered as being inappropriately classified as ordinary annual services of the government in the event that Appropriation Bill (No. 3) 2016-2017 is considered and passed by the Senate prior to the relevant authorising legislation:

• Rural Health Commissioner and Pathway for Rural Professionals—establishment – $4.4 million over four years;^[4]

• Seasonal Work Incentives for Job Seekers—trial – $27.5 million over two years.^[5]

1.6 The government has previously advised the committee that it will continue to prepare appropriation bills in a manner consistent with the view that only administered annual appropriations for new outcomes (rather than appropriations for expenditure on new policies not previously authorised by special legislation) should be classified as non-ordinary annual services expenditure.

1.7 The committee again notes that this approach to the classification of items that constitute ordinary annual services of the government is not consistent with the Senate resolution of 22 June 2010 relating to the classification of ordinary annual services expenditure in appropriation bills.^[6]

1.8 The committee reiterates its agreement with the comments made on this matter by the Senate Standing Committee on Appropriations and Staffing, and in particular that the division of items in appropriation bills since the adoption of accrual budgeting has been based on a mistaken assumption that any expenditure falling within an existing outcome should be classified as ordinary annual services expenditure.

1.9 The committee draws the 2010 Senate resolution to the attention of Senators and notes that the inappropriate classification of items in appropriation bills undermines the Senate's constitutional right to amend proposed laws appropriating revenue or moneys for expenditure on all matters not involving the ordinary annual services of the government. Such inappropriate classification of items impacts on the Senate's ability to effectively scrutinise proposed appropriations as the Senate may be unable to distinguish between normal ongoing activities of government and new programs or projects.

1.10 The committee draws this matter to the attention of Senators as it appears that the initial expenditure in relation to some items in the latest set of appropriation bills may have been inappropriately classified as ordinary annual services (and therefore improperly included in Appropriation Bill (No. 3) 2016-2017 which should only contain appropriations that are not amendable by the Senate).

1.11 The committee will continue to draw this important matter to the attention of Senators where appropriate in the future.

The committee draws Senators' attention to this matter, as the current approach to the classification of ordinary annual services expenditure in appropriation bills may be considered to insufficiently subject the exercise of legislative power to parliamentary scrutiny, in breach of principle 1(a)(v) of the committee's terms of reference.

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[1] Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest No. 2 of 2017, 15 February 2017, pp 1-5.

[2] In this regard it appears that the following items have not been (as originally identified) inappropriately classified as ordinary annual services of the government: 'Launch into Work pilot—establishment', and the 'Royal Commission into the Protection and Detention of Children in the Northern Territory'.

[3] Mid-Year Economic and Fiscal Outlook 2016-17, p. 179.

[4] Mid-Year Economic and Fiscal Outlook 2016-17, p. 173. The proposed authorising legislation for this item is the Health Insurance Amendment (National Rural Health Commissioner) Bill 2017.

[5] Mid-Year Economic and Fiscal Outlook 2016-17, p. 195. The proposed authorising legislation for this item is Schedule 12 to the Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017.

[6] Journals of the Senate, 22 June 2010, pp 3642–3643.