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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
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Purpose
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This bill seeks to appropriate an additional $744 million out of the
Consolidated Revenue Fund for certain expenditure in relation
to the coronavirus
economic response
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Portfolio
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Finance
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Introduced
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House of Representatives on 23 March 2020
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1.15 Clause 12 seeks to enable the Finance Minister to provide additional funds to entities when he or she is satisfied that there is an urgent need for expenditure that is not provided for, or is insufficiently provided for, in Schedule 1. This additional appropriation is referred to as the Advance to the Finance Minister (Advance).
1.16 Subclause 12(2) enables the Finance Minister to make a determination that has the effect of allocating additional amounts, up to a total of $1.2 billion as specified by subclause 12(3), to the appropriations outlined in Schedule 1. Subclause 12(4) provides that a determination under subclause 12(2) is a legislative instrument, which must therefore be registered and tabled in Parliament. However, these determinations are not subject to parliamentary disallowance. The explanatory memorandum suggests that allowing these determinations to be disallowable 'would frustrate the purpose of the provision, which is to provide additional appropriation for urgent expenditure'.[13]
1.17 In relation to the significant amount available under the Advance provision, the explanatory memorandum states that:
The quantum of the Advance to the Finance Minister provision has been determined by extrapolating the Coronavirus related Advances to the Finance Minister approved since the beginning of March 2020 through until the end of the 2019-20 financial year. The quantum of the Advance to the Finance Minister also takes into consideration the evolving nature of the Coronavirus outbreak, the associated uncertainty around what may be required as part of the Government’s response and the likely need for the Government to act quickly. While this new Advance to the Finance Minister provision is significant, it will be limited to Coronavirus response requirements only (including responses to health and economic impacts).[14]
1.18 The committee notes that clause 12 (the Advance provision) allows the Finance Minister to allocate additional funds to entities up to a total of $1.2 billion via non-disallowable delegated legislation and that it therefore delegates significant legislative power to the Executive. While this does not amount to a delegation of the power to create a new appropriation, one of the core functions of the Parliament is to authorise and scrutinise proposed appropriations. High Court jurisprudence has emphasised the central role of the Parliament in this regard. In particular, while the High Court has held that an appropriation must always be for a purpose identified by the Parliament, '[i]t is for the Parliament to identify the degree of specificity with which the purpose of an appropriation is identified'.[15] The Advance provision in this bill leaves the allocation of the purpose of certain appropriations in the hands of the Finance Minister, rather than the Parliament. In this instance, however, the committee notes that use of the Advance provision in this bill will be limited to coronavirus response measures.
1.19 Since the bill received the Royal Assent on 24 March 2020, the Finance Minister has made two Advance determinations under the Act allocating the entire $1.2 billion available under the Advance provision in the bill:
• Advance to the Finance Minister Determination (No. 3 of 2019‑2020) ($800 million, registered on 3 April 2020);[16] and
• Advance to the Finance Minister Determination (No. 4 of 2019-2020) ($400 million, registered on 10 April 2020).[17]
1.20 Both determinations increased appropriations for the Department of Health to enable the department to fund the further procurement of masks and other emergency medical equipment in response to the COVID-19 outbreak.
1.21 The committee notes that this issue also arises in relation to the Appropriation (Coronavirus Economic Response Package) Bill (No. 1) 2019-2020.[18] The total amount that can be determined under the Advance provision in the No. 1 bill is $800 million.
1.22 As Advance to the Finance Minister determinations are not subject to disallowance, the primary accountability mechanism in relation to Advances (beyond the initial passage of the authorising provision) is an annual report tabled in Parliament on the use of the Advance. These reports are considered in the Senate,[19] and are published on the Department of Finance website.[20] The committee draws these reports, and the information provided in the explanatory statements to the Advance to the Finance Minister Determinations No. 3 and No. 4 of 2019‑2020 which allocate an additional $1.2 billion in funding to the Department of Health, to the attention of Senators.
1.23 The committee also draws this matter to the attention of the Senate Select Committee on COVID-19.
[12] Clause 10. The committee draws senators' attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv) and (v).
[13] Explanatory memorandum, p. 203.
[14] Explanatory memorandum, p. 190.
[15] Combet v Commonwealth (2005) 224 CLR 494, 577 [160]; Wilkie v Commonwealth [2017] HCA 40; (2017) 263 CLR 487, 532 [91].
[16] https://www.legislation.gov.au/Details/F2020L00402.
[17] https://www.legislation.gov.au/Details/F2020L00421.
[18] Appropriation (Coronavirus Economic Response Package) Bill (No. 1) 2019-2020, clause 10.
[19] Journals of the Senate, 3 April 2019, p. 4847. See also Rosemary Laing (ed), Odgers' Australian Senate Practice: As Revised by Harry Evans, Department of the Senate, 14th Edition, 2016, pp. 395-396.
[20] See https://www.finance.gov.au/publications/advance_to_the_finance_minister/.
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URL: http://www.austlii.edu.au/au/other/AUSStaCSBSD/2020/64.html