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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
This chapter considers the responses of ministers to matters previously raised by the committee.
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Purpose
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Appropriation Bill (No. 1) 2021-2022 seeks to appropriate money out of the
Consolidated Revenue Fund for the ordinary annual services of the
government
Appropriation Bill (No. 2) 2021-2022 seeks to appropriate money out of the
Consolidated Revenue Fund for certain expenditure
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Portfolio
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Finance
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Introduced
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House of Representatives on 11 May 2021
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Bill status
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Act
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2.1 In Scrutiny Digest 8 of 2021 the committee requested the minister's advice as to:
• whether the additional transparency measures applying in relation to AFM determinations made since the 2020-2021 supply bills will continue in relation to AFM determinations made under Appropriation Bill (No. 1) 2021 2022 and Appropriation Bill (No. 2) 2020 2021; and
• whether information about AFM transparency measures can be included in the explanatory materials to future appropriation bills.[2]
Minister's response[3]
2.2 The minister advised:
The transparency measures have worked well and will apply to allocations from the Advance to Finance Minister provisions in the 2021-22 Appropriation Acts.
Detail on the transparency measures applying to Advance to the Finance Minister provisions will be included in the Explanatory Memoranda to future Appropriation Bills. Particular transparency approaches that were introduced following the onset of the COVID-19 pandemic began as undertakings between the Government and the Opposition. The new information that will be added to the Explanatory Memorandum will give clarity that relevant transparency measures are appropriately considered as undertakings to the Parliament and will be continuing practices.
Committee comment
2.3 The committee thanks the minister for this response. The committee welcomes the minister's advice that details of the transparency measures applying to Advance to the Finance Minister provisions will be added to explanatory memoranda to future appropriation bills. The minister advised that this information will clarify that the relevant transparency measures should be considered as undertakings to the Parliament and will be continuing practices.
2.4 The committee thanks the minister for his proposal to include details of the transparency measures applying to Advance to the Finance Minister provisions in explanatory memoranda to future appropriation bills.
2.5 In light of the information provided and the minister's undertaking, the committee makes no further comment on this matter.
Parliamentary scrutiny—measures marked 'not for publication'[4]
2.6 In Scrutiny Digest 8 of 2021 the committee requested the minister's advice as to whether:
• any of the items marked as nfp in Budget Paper No. 2 or the PBS are included in the summary of appropriations at clause 6 of the bills or in the appropriation items in Schedule 1 to Appropriation Bill (No. 1) 2021-2022 and Schedule 2 to Appropriation Bill (No. 2) 2021-2022; and
• if so, why it is considered necessary and appropriate to ask the Parliament to authorise appropriations without clear information about the amounts that are to be appropriated under each individual Budget measure.[5]
Minister's response
2.7 The minister advised:
Items are included in the summary of appropriations at clause 6 of Appropriations Bills (Nos. 1 and 2) 2021-2022.
It is longstanding practice to identify measures in Budget Paper No. 2 as 'not for publication' where disclosure of amounts would be prejudicial to national security, legal sensitivities or for commercial-in-confidence reasons. The relevant Appropriation Act introduced with the Budget will reflect the amount for such a measure within an outcome against the particular agency responsible for its delivery.
It is necessary to include amounts in the Appropriation Bills to ensure agencies are resourced to implement these measures. Excluding these items from the Bills could result in funding not being available until the next set of Appropriation Bills commenced. Due to the biannual timing of the Appropriation Bills, this could result in many months passing between a specific event and funding being available.
Committee comment
2.8 The committee thanks the minister for this response. The committee notes the minister's advice that at least some of the items marked as 'not for publication' within the portfolio budget statements are included within the summary of appropriations at clause 6 of Appropriations Bills (Nos. 1 and 2) 2021-2022.
2.9 The minister further advised that it is a longstanding practice to identify certain budget measures as not for publication where disclosure of amounts would be prejudicial to national security, legal sensitivities or for commercial-in-confidence reasons. The minister advised that excluding items marked as 'not for publication' from the bills could result in funding not being available until the next set of Appropriation Bills commenced.
2.10 While acknowledging that marking measures as 'not for publication' is a longstanding practice, from a scrutiny perspective, the committee is concerned that the Parliament is being asked to authorise appropriations without clear information about the amounts that are to be appropriated under each individual Budget measure. In this context, the committee notes that the appropriation process is intended to 'give expression to the foundational principle of representative and responsible government that no money can be taken out of the consolidated Fund into which the revenues of the State have been paid, excepting under a distinct authorization from Parliament itself'.[6] The committee is concerned that the inclusion of 'not for publication' measures in the proposed appropriations set out in appropriation bills undermines this foundational principle.
2.11 The committee notes that the explanations for why measures are marked as 'not for publication' are usually quite limited, for example, that funding for a measure is not for publication due to commercial sensitivities. Noting the importance of appropriate parliamentary scrutiny of proposed appropriations, the committee considers that more detailed reasons for marking measures as 'not for publication' should be included in future Budget papers accompanying Appropriation Bills.
2.12 The committee therefore requests the minister's further advice as to whether, in the future, Budget Paper No. 2 and the portfolio budget statements can contain:
• more thorough explanations for why funding for measures are marked as 'not for publication'; and
• where appropriate, at least a high-level indication of the amount of funding that is allocated to a measure (for example, 'not more than $50 million').
2.13 In Scrutiny Digest 8 of 2021 the committee requested the minister's advice as to the level of expected expenditure in 2021-22 under the grants programs specified at clause 13 of Appropriation Bill (No. 2) 2021-2022. The committee also requested that future explanatory memoranda to appropriation bills containing debit limit provisions include this information to assist in ensuring meaningful parliamentary oversight of the debit limits for these grant programs.[8]
Minister's response
2.14 The minister advised:
Details of expenditure for this item is shown in the Department of the Treasury's Portfolio Budget Statements (PBS) for the 2021-22 Budget. The estimated expenditure levels under these programs were:
• General purpose financial assistance: $2.7 billion, compared with the debit limit of $5.0 billion;
o See page 29 of the PBS – this figure is the sum of all items listed under the COAG Reform Fund in Program 1.4;
• National partnership payments: $17.1 billion, compared with the debit limit of $25.0 billion;
o See pages 33-41 of the PBS – Table 2.2.
These debit limits are set higher to ensure the Government has appropriate provisions in place to fund existing undertakings to the states, new programs that may be required between estimates updates, and to respond to major unexpected events such as large-scale natural disasters. Generally the debit limits are set for the financial year in Appropriation Bill No. 2, with no further updates throughout the financial year. If necessary these limits can be reset in Appropriation Bill No. 4 through the Additional Estimates process.
Additional information about the expected level of expenditure against debit limits can be included in the Explanatory Memoranda to future Appropriation Bills where appropriate.
Committee comment
2.15 The committee thanks the minister for this response. The committee notes the minister's advice that the expected level of expenditure in 2021-22 in relation to general purpose financial assistance payments is $2.7 billion (compared with the debit limit of $5 billion) and, in relation to national partnership payments, is $17.1 billion (compared with a debit limit of $25 billion). The minister advised that debit limits are set higher to ensure the government has appropriate provisions in place to fund existing undertakings and to respond to major unexpected events. The minister also advised that, if necessary, debit limits can be reset in Appropriation Bill No. 4 through the additional estimates process.
2.16 The committee welcomes the minister's advice that additional information about the expected level of expenditure against debit limits can be included in the explanatory memoranda to future Appropriation Bills where appropriate.
2.17 In order to clarify this matter, the committee requests the minister's further advice as to the circumstances, if any, in which the expected level of expenditure against debit limits will not be included in the explanatory memoranda to future Appropriation Bills.
[1] Clause 10 of Appropriation Bill (No. 1) 2021-2022; Clause 12 of Appropriation Bill (No. 2) 2021‑2022. The committee draws senators' attention to these provisions pursuant to Senate Standing Order 24(1)(a)(iv) and (v).
[2] Senate Scrutiny of Bills Committee, Scrutiny Digest 8 of 2021, pp. 8–11.
[3] The minister responded to the committee's comments in a letter dated 3 August 2021. A copy of the letter is available on the committee's website: see correspondence relating to Scrutiny Digest 12 of 2021 available at: www.aph.gov.au/senate_scrutiny_digest.
[4] Clauses 4 and 6 and Schedule 1 to Appropriation Bill (No. 1) 2021-2022; Clauses 4 and 6 and Schedule 2 to Appropriation Bill (No. 2) 2021-2022. The committee draws senators' attention to these provisions pursuant to Senate Standing Order 24(1)(a)(v).
[5] Senate Scrutiny of Bills Committee, Scrutiny Digest 8 of 2021, pp. 11–12.
[6] Wilkie v Commonwealth [2017] HCA 40; (2017) 263 CLR 487, 523 [61].
[7] Clause 13 of Appropriation Bill (No. 2) 2021-2022. The committee draws senators' attention to this provision pursuant to Senate Standing Order 24(1)(a)(v).
[8] Senate Scrutiny of Bills Committee, Scrutiny Digest 8 of 2021, pp. 14–16.
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