Appropriation Bill (No 1) 2021-2022 Appropriation Bill (No 2) 2021-2022 - Commentary on Ministerial Responses [2021] AUSStaCSBSD 261 (1 December 2021)

• Chapter 2
• Commentary on ministerial responses
• Appropriation Bill (No. 1) 2021-2022
• Appropriation Bill (No. 2) 2021-2022
• Parliamentary scrutiny—measures marked 'not for publication'1

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Chapter 2

Commentary on ministerial responses

2.1 This chapter considers the responses of ministers to matters previously raised by the committee.

Appropriation Bill (No. 1) 2021-2022
Appropriation Bill (No. 2) 2021-2022

Purpose	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.
Portfolio/Sponsor	Finance
Introduced	House of Representatives on 11 May 2021
Bill status	Act

Parliamentary scrutiny—measures marked 'not for publication'^[1]

2.2 The committee initially scrutinised this bill in Scrutiny Digest 8 of 2021.^[2] The committee considered the minister's first response in Scrutiny Digest 13 of 2021 and requested the minister's advice.^[3] The committee considered the minister's second response in Scrutiny Digest 16 of 2021 and requested the minister's further advice as to whether future Department of Finance guides on preparing portfolio budget statements can include guidance that:

• as a default, the full amount of funding allocated to each Budget measure should be published within the statements;

• any decision not to publish the total amount for a Budget measure must be weighed against the significance of abrogating Parliament's fundamental scrutiny role over the appropriation of money from the Consolidated Revenue Fund; and

• where a measure is marked as NFP, at least a high-level explanation should be included within the portfolio budget statements for why this is appropriate.

2.3 The committee also requests the minister's further advice as to:

• why it is not possible to provide at least a high-level indication of the amount of funding allocated to an NFP measure; and

• the rationale for not publishing the full amount of funding in relation to the Rum Jungle Rehabilitation project or the Independent Review into Commonwealth Parliamentary Workplaces.

Minister's response^[4]

2.4 The minister advised:

The committee therefore requests the minister's advice as to whether future Department of Finance guides on preparing portfolio budget statements can include guidance that:
• as a default, the full amount of funding allocated to each Budget measure should be published within the statements;
• any decision not to publish the total amount for a Budget measure must be weighed against the significance of abrogating Parliament's fundamental scrutiny role over the appropriation of money from the Consolidated Revenue Fund; and
• where a measure is marked as ‘nfp’, at least a high-level explanation should be included within the Portfolio Budget Statements (PBS) for why this is appropriate.
The Department of Finance will update its guidance to entities on the preparation of the PBS to reflect the Committee's comments.
The committee also requests the minister's further advice as to:
• why it is not possible to provide at least a high-level indication of the amount of funding allocated to a ‘nfp’ measure; and
• the rationale for not publishing the full amount of funding in relation to the Rum Jungle Rehabilitation project or the Independent Review into Commonwealth Parliamentary Workplaces.
This general issue has been addressed twice already by the Minister for Finance in correspondence on 3 August 2021 and 9 September 2021.
Identifying an indicative amount in relation to measures marked 'nfp' would risk potentially misrepresenting the amount of funding that the Government is prepared to spend or receive. This could unduly influence potential suppliers when responding to a tender request, diminishing the capacity of the Commonwealth to achieve a value for money outcome.
As an example, if the Government disclosed an amount greater than what it was prepared to pay, there is a risk that tenderers might increase their bids accordingly. Where these responses exceeded available funding, the Government would be forced to choose between diverting funding from other priorities or discontinuing the tender process, wasting its own resources and those of tenderers. This would be an unsatisfactory outcome.
Alternatively, if the Government disclosed an amount less than what it was prepared to fund, there is a likelihood that tenderers might not bid due to the project being considered uneconomical or the expectations of the Commonwealth being considered unrealistic.
Funding for the Rum Jungle Rehabilitation project and the Independent Review into Commonwealth Parliamentary Workplaces was disclosed as ‘nfp’ due to commercial sensitivities associated with these projects.
Further to the questions, the committee may note that while their report identifies the term ‘nfp’ appearing 229 times in the 2021-22 Budget Paper 2, those entries relate to only 18 measures in that Budget classified in this way. A word count is not a useful indicator, because Budget Paper 2 uses that abbreviation up to 11 times for each measure (every measure has its own narrative description plus a financial table covering the current financial year and the forward estimate years and the same data entries are repeated in a summary table). Some measures also are listed against more than one agency, where there are shared administrative responsibilities. It remains the case that nfp entries are only used for a very small number of Budget measures and that will continue to be the case.

Committee comment

2.5 The committee thanks the minister for this response. The committee welcomes the minister's advice that the Department of Finance will update its guidance to entities on the preparation of the portfolio budget statements (PBS) to reflect the committee's comments.

2.6 The minister also advised that identifying an indicative amount in relation to measures marked not for publication (NFP) was not appropriate as doing so could potentially misrepresent the amount of funding that the government is prepared to spend or receive. The minister advised that this could unduly influence potential suppliers when responding to a tender request, diminishing the capacity of the Commonwealth to achieve a value for money outcome. To this end, the minister advised that, for example, providing a high-level indication of the amount of funding allocated to a measure could encourage tenderers to increase their bids, thereby forcing the government to choose between diverting funding from other priorities or discontinuing the tender process, wasting its own resources and those of tenderers. The minister advised that, alternatively, if the government disclosed an amount less than what it was prepared to fund, there is a likelihood that tenderers might not bid due to the project being considered uneconomical or the expectations of the Commonwealth being considered unrealistic.

2.7 The minister also advised that funding for the Rum Jungle Rehabilitation project and the Independent Review into Commonwealth Parliamentary Workplaces was disclosed as NFP due to commercial sensitivities associated with these projects.

2.8 Finally, the minister advised that while NFP appears 229 times in the 2021-22 Budget Paper No. 2, those entries relate to only 18 measures which are classified as not for publication. The minister advised that a word count is not a useful indicator, because Budget Paper No. 2 uses the abbreviation NFP up to 11 times for each measure and measures can be listed against more than one agency where administrative responsibilities are shared. The minister advised that NFP entries are only used for a very small number of Budget measures and that this will continue to be the case into the future.

2.9 While acknowledging this advice, the committee reiterates its concerns that there has been a significant upwards trend in the number of NFP measures being included in Budget Paper No. 2 and the PBS. An examination of either the number of references to NFP made within the Budget papers or to the number of individual measures within each Budget makes this clear. For example, the minister noted that 18 individual measures within Budget Paper No. 2 for the 2021-22 Budget are marked as NFP. However, there appear to be 20 individual measures within Budget Paper No. 2 for the 2021-22 Budget for which at least some of the total funding amount over the forward estimates is classified as not for publication.^[5] In any event, by contrast, there were a total of 21 individual measures marked as NFP within the six Budget Paper No. 2 documents between the 2002-03 and 2007-08 budgets. In many cases, Budget documents from this earlier period contained only a single measure marked as NFP while recent Budget documents have contained a significantly higher number.

2.10 The committee reiterates its comments that the mere existence of a commercial element in relation to a Budget measure is likely not sufficient, of itself, as a justification for not publishing any of the funding amount for that measure. The lack of detailed explanation makes it difficult for the Parliament and others to interrogate the rationale behind the classification of a measure as NFP. The committee considers that high-level explanations as to why a measure may be marked as NFP, beyond simply stating that commercial elements apply, could be included within the Budget documents without compromising commercial sensitivities.

2.11 The committee also notes that it remains unclear why it is not appropriate to publish a high-level indication of the amount of funding set aside for the Rum Jungle Rehabilitation project and the Independent Review into Commonwealth Parliamentary Workplaces. While acknowledging the minister's advice in relation to this matter, the committee considers that it would be possible to introduce broad categories indicating at a high level how much funding is being allocated to a NFP measure without compromising the tendering process. Broad categories indicating funding ceilings that apply generally to the Budget papers as a whole and with disclaimers attached explaining the meaning behind each given figure would not compromise the tendering process but would provide some level of scrutiny to the Parliament over the amounts of appropriation that Parliament is being asked to authorise. In addition, these disclaimers could be communicated directly to tenderers during the tendering process.

2.12 The committee welcomes the minister's undertaking to update future guidance to entities on the preparation of the portfolio budget statements to reflect the committee's scrutiny concerns as outlined at paragraph 2.50 of Scrutiny Digest 16 of 2021. Specifically, that future Department of Finance guides on preparing portfolio budget statements include guidance that:

• as a default, the full amount of funding allocated to each Budget measure should be published within the statements;

• any decision not to publish the total amount for a Budget measure must be weighed against the significance of abrogating Parliament's fundamental scrutiny role over the appropriation of money from the Consolidated Revenue Fund; and

• where a measure is marked as NFP, at least a high-level explanation should be included within the portfolio budget statements for why this is appropriate.

2.13 The committee will continue to consider this important matter in its scrutiny of future Appropriation bills.

2.14 In relation to these particular bills, in light of the fact that both bills have already passed both Houses of the Parliament the committee makes no further comment on this matter.

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[1] 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).

[2] Senate Scrutiny of Bills Committee, Scrutiny Digest 8 of 2021, pp. 11-12.

[3] Senate Scrutiny of Bills Committee, Scrutiny Digest 13 of 2021, pp. 21-23.

[4] The minister responded to the committee's comments in a letter dated 8 November 2021. A copy of the letter is available on the committee's website: see correspondence relating to Scrutiny Digest 17 of 2021 available at: www.aph.gov.au/senate_scrutiny_digest.

[5] The following is a complete list of every measure for which at least some of the total funding amount is listed as 'not for publication' in Budget Paper No. 2 for the 2021-22 Budget: A Roadmap for Respect — Respect@Work response implementation; Adult Migrant English Program — new delivery model; Cashless Debit Card — Jobs Fund and Income Management extension; Child Migrant Litigation Claims — contribution; COVID-19 Response Package — aviation and tourism support — continued; COVID-19 Response Package — vaccine purchases and rollout; COVID-19 Vaccine Manufacturing Capabilities; Decommissioning Costs — Laminaria-Corallina oil fields and associated infrastructure; Enhanced Trade and Strategic Capability; Garden Point Mission — settlement of claims; GovERP — Common Corporate Australian Public Service System; Global Service Centre — continuation; Improving Access to Medicines — Pharmaceutical Benefits Scheme new and amended Listings; Murray-Darling Basin — managing water resources; National Redress Scheme — further support; Oil Stocks and Refining Capacity in Australia; Parliamentary Staff and Parliamentarians — Independent Review into Commonwealth Parliamentary Workplaces and additional support measures; Progressing the Davis Aerodrome Project; Rum Jungle Rehabilitation Project; SME Recovery Loan Scheme.