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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
Chapter 2
Commentary on ministerial responses
2.1 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) 2023-2024 seeks to appropriate money out of the
Consolidated Revenue Fund for the ordinary annual services of the
government.
Appropriation Bill (No. 2) 2023-2024 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 9 May 2023
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Bill status
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Finally passed both Houses on 22 June 2023
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2.2 Clause 10 of Appropriation Bill (No. 1) 2023-2024 (Appropriation Bill No. 1) enables the Finance Minister to allocate additional funds to entities when satisfied that there is an urgent need for expenditure and the existing appropriations are inadequate. The allocated amount is referred to as the Advance to the Finance Minister (AFM). The additional amounts are allocated by a determination made by the Finance Minister (an AFM determination). AFM determinations are legislative instruments, but they are not subject to disallowance.
2.3 Subclause 10(2) of Appropriation Bill No. 1 provides that, when the Finance Minister makes such a determination, the Appropriation Bill has effect as if it were amended to make provision for the additional expenditure. Subclause 10(3) caps the amounts that may be determined under the AFM provision in Appropriation Bill No. 1 at $400 million. Identical provisions appear in Appropriation Bill (No. 2) 2023-2024 (Appropriation Bill No. 2), with a separate $600 million cap in that bill.[3]
2.4 The amount available under the AFM provisions in these bills is closer to the levels available under previous annual appropriation bills before the COVID-19 pandemic.[4] However, while the explanatory memorandum states the bills 'return the AFM provisions to conventional (pre-2020) levels',[5] the committee notes that the AFM provisions in Appropriation Act (No. 1) 2019-2020 and Appropriation Act (No. 2) 2019-2020 together set a limit of $675 million which is typical of AFM provisions in other pre-pandemic appropriation bills, while the caps in Appropriation Bills Nos. 1 and 2 together add up to $1 billion. The committee notes that no explanation has been given in the explanatory memorandum as to why a higher amount than typical pre-pandemic levels is needed.
2.5 In Scrutiny Digest 6 of 2023 the committee requested the minister's detailed advice as to why the caps to the additional amounts that may be allocated by the Finance Minister (AFM) in Appropriation Bills (No. 1) and (No. 2) 2023‑2024 are significantly higher than the pre-pandemic AFM caps.[6]
Minister for Finance's response[7]
2.6 The Minister for Finance (the minister) advised that prior to the extraordinary arrangements introduced in 2020, and since 2008-09, the AFM provision in Appropriation Act (No. 1) was conventionally set at $295 million, and in Appropriation Act (No. 2) at $380 million.
2.7 The minister also advised that the 2023-2024 AFM provisions compared to the conventional (pre-2020) provisions include 'an appropriate increase to reflect the passage of time since the normal levels were last adjusted in 2008-09'. The minister concluded that she was 'satisfied that the AFM provisions...are not significantly higher than the AFM provisions in AFM pre-pandemic years'.
Committee comment
2.8 The committee thanks the minister for this response.
2.9 The committee welcomes the additional information that the AFM provisions have been adjusted for the first time since 2008-09. The committee considers that it would have been helpful for this information to have been included in the explanatory memorandum to the bill, noting that the explanatory memorandum as presented to the Parliament only indicated that the amounts in the AFM provisions had been returned to 'conventional (pre-2020) levels'.
2.10 The committee reiterates its view that in allowing the Finance Minister to allocate additional funds to entities via non-disallowable delegated legislation, the AFM provisions delegate significant legislative power to the executive, and that its scrutiny concerns are heightened given the non-disallowable nature of the determinations. Therefore, the provision of information in explanatory material provides the Parliament with important details to assist with scrutiny of AFM provisions. As such, an explanation of why the amount had been adjusted is information that should have been provided to assist with transparency and accountability.
2.11 The committee will continue to closely consider these important matters in its scrutiny of future Appropriation bills.
2.12 In light of the fact that both bills have already passed both Houses of the Parliament, the committee makes no further comment on the matter.
[1] This entry can be cited as: Senate Standing Committee for the Scrutiny of Bills, Appropriation Bill (No. 1) 2023-2024, Appropriation Bill (No. 2) 2023-2024, Scrutiny Digest 8 of 2023; [2023] AUSStaCSBSD 126.
[2] Clause 10 of the Appropriation Bill (No. 1) 2023-2024; clause 12 of the Appropriation Bill (No. 2) 2023‑2024. The committee draws senators' attention to these provisions pursuant to Senate standing order 24(1)(a)(iv) and (v).
[3] Clause 12 of the Appropriation Bill (No. 2) 2023-2024.
[4] For example, subsection 10(3) of Appropriation Act (No. 1) 2019-2020 set a cap of $295 million and subsection 12(3) of Appropriation Act (No. 2) 2019-2020 set a cap of $380 million. Compare Appropriation Act (No. 1) 2020-2021, Appropriation Act (No. 2) 2020-2021, Appropriation Act (No. 1) 2021-2022, Appropriation Act (No. 2) 2021-2022, Appropriation (Coronavirus Response) Act (No. 1) 2021-2022, Appropriation (Coronavirus Response) Act (No. 2) 2021-2022, Appropriation Act (No. 1) 2022-2023 and Appropriation Act (No. 2) 2022-2023 which set Advance to the Finance Minister caps at $4 billion, $6 billion, $2 billion, $3 billion, $2 billion, $3 billion, $2.4 billion and $3.6 billion respectively.
[5] Explanatory memorandum, p. 9.
[6] Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 6 of 2023 (14 June 2023) pp. 5–8.
[7] The minister responded to the committee's comments in a letter dated 26 June 2023. A copy of the letter is available on the committee's website: see correspondence relating to Scrutiny Digest 8 of 2023 available at: www.aph.gov.au/senate_scrutiny_digest.
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URL: http://www.austlii.edu.au/au/other/AUSStaCSBSD/2023/126.html