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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
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) 2024-2025 seeks to appropriate money out of the
Consolidated Revenue Fund for the ordinary annual services
of the government.
Appropriation Bill (No. 2) 2024-2025 seeks to appropriate money out of the
Consolidated Revenue Fund for certain expenditure, and
for related purposes.
Appropriation Bill (No. 5) 2023-2024 seeks to appropriate additional money
out of the Consolidated Revenue Fund for the ordinary annual
services of the
government, in addition to the appropriations provided for by Appropriation Act
(No. 1) 2023-2024 and Appropriation Act (No. 3) 2023-2024.
Appropriation Bill (No. 6) 2023-2024 seeks to appropriate additional money
out of the Consolidated Revenue Fund for certain expenditure,
in addition to the
appropriations provided for by Appropriation Act (No. 2) 2023-2024 and
Appropriation Act (No. 4) 2023-2024.
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Portfolio
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Finance
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Introduced
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House of Representatives on 14 May 2024
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Bill status
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Received the Royal Assent on 26 June 2024
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2.2 Clause 10 of 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) 2024-2025 (Appropriation Bill No. 2), with a separate $600 million cap in that bill.[94] The amount available under the AFM provisions in these bills together add up to $1 billion. The explanatory memoranda do not provide any justification as to why this amount is considered appropriate.
2.4 In Scrutiny Digest 7 of 2024 the committee requested the minister’s advice as to:
• how the combined cap of $1 billion to the additional amounts that may be allocated by the Finance Minister (AFM) in Appropriation Bills (No.1) and (No. 2) 2024-2025 was determined;
• whether alternative approaches could be considered in striking the appropriate balance between the necessity of the Parliament authorising and scrutinising expenditure and addressing genuine emergency situations; and
• whether explanatory statements to AFMs could include a statement justifying the urgent need for expenditure that is not provided for, or is insufficiently provided for, by the relevant appropriation bills. [95]
2.5 The minister advised that the AFM provisions in the current appropriation bills reflect the standard levels of appropriation from the pre-COVID era as adjusted for the passage of time.
2.6 While confirming that AFM determinations are exempt from disallowance, the minister drew the committee’s attention to Senate standing order 23(4A), which enables the Senate Standing Committee for the Scrutiny of Delegated Legislation to scrutinise exempt instruments. Further, the minister noted that detail of the justification for such exemptions are set out in the explanatory memoranda to the relevant bills, and that explanatory statements to AFM instruments also include justifications for the urgent expenditure.
2.7 The committee thanks the minister for this advice. However, the committee does not consider that this response directly addresses its questions and concerns in relation to the use of AFM determinations.
2.8 The committee had sought advice as to how the total expenditure cap of $1 billion had been formulated. While the minister advised that the amount of the cap across Appropriations Bills Nos 1 and 2 is consistent with pre-COVID era figures, the minister has not provided any details as to how the $1 billion figure was reached.
2.9 The committee had also sought advice as to whether any alternative approaches could be considered in striking the appropriate balance between the necessity of the Parliament authorising and scrutinising expenditure and addressing genuine emergency situations. The minister’s response, that the Senate Standing Committee for the Scrutiny of Delegated Legislation is empowered to scrutinise instruments exempt from disallowance, does not, in the committee’s view, give appropriate consideration to this important issue.
2.10 However, in light of the fact that the bills have received the Royal Assent the committee makes no further comment in relation to this matter.
2.11 Clause 4 of both Appropriation Bill (No. 1) and Appropriation Bill (No. 2) provide that portfolio budget statements (PBS) are relevant documents for the purposes of section 15AB of the Acts Interpretation Act 1901. That is, clause 4 provides that the PBS may be considered in interpreting the provisions of each bill. Moreover, the explanatory memoranda to the bills state that they should be read in conjunction with the PBS.
2.12 Noting the important role of the PBS in interpreting these Appropriation Bills, the committee has scrutiny concerns in relation to the inclusion of measures within the PBS that are marked as ‘not for publication’ (nfp), meaning that the proposed allocation of resources to those budget measures is not published within the PBS. Various reasons are provided for marking a measure as nfp, including that aspects of the relevant program are commercial-in-confidence or relate to matters of national security.
2.13 In Scrutiny Digest 3 of 2024, the committee requested the minister’s advice as to whether future guides could include guidance that, where a measure is marked as nfp, as much detail should be provided as is necessary to substantiate the decision to not publish the financial details for the measure due to the public interest.[98] The minister responded advising that they had asked the department to ‘consider, where possible, enhancing the guidance on information which may be provided...’.[99] The committee noted in Scrutiny Digest 7 of 2024 that this recent commitment has likely not yet been implemented, as the level of explanation provided within the PBS remains high-level.[100] For example, the majority of explanations for measures marked as nfp within the 2024-25 portfolio statements merely state that the funding for a measure is not for publication due to commercial-in-confidence considerations, or due to national security reasons.[101]
2.14 In Scrutiny Digest 7 of 2024 the committee:
• reiterated its significant concerns on the Parliament authorising appropriations without clarity as to the amounts appropriated under each individual budget measure. These concerns were heightened due to the committee’s observation of an upwards trend in the number of measures marked ‘not for publication’ (nfp);
• reiterated its view that, notwithstanding the welcome guidance in the Department of Finance’s Guide to Preparing the 2024-25 Portfolio Budget Statements, it would be appropriate to include more detailed explanations within the portfolio budget statements explaining why it is appropriate to mark a measure as nfp, where possible; and
• affirmed that it will continue to consider this important matter in its scrutiny of future Appropriation bills.[102]
2.15 Although the committee did not seek any further advice on this issue, the minister provided the committee an update on a previous undertaking to consider enhancing the guidance provided for describing not for publication measures in portfolio budget statements. To this end, the minister advised that measures marked as nfp in the 2024-25 portfolio budget statements include additional detail in their description.
2.16 The committee thanks the finance minister for providing this additional information. However, the committee’s assessment of measures marked as nfp in the 2024-25 portfolio budget statements is that their descriptions do not appear to contain any substantially different or improved information to assist the committee in considering the appropriateness of such budget allocations from being withheld from the Parliament and the public.
2.17 However, in light of the fact that the bills have received the Royal Assent the committee makes no further comment in relation to this matter. The committee will continue to assess the justifications and appropriateness of measures marked as ‘not for publication’ in future Appropriation bills.
[93] This entry can be cited as: Senate Standing Committee for the Scrutiny of Bills, Appropriation Bill (No. 1) 2024-2025, Scrutiny Digest 9 of 2024; [2024] AUSStaCSBSD 152.
[94] Clause 12 of Appropriation Bill (No. 2) 2024-2025.
[95] Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 7 of 2024 (26 June 2024), pp. 2-16.
[96] The minister responded to the committee’s comments in a letter dated 16 July 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 9 of 2024).
[97] Clauses 4 and 6 and Schedule 1 to Appropriations Bill (No. 1) 2024-2025; clauses 4 and 6 and Schedule 2 to Appropriation Bill (No. 2) 2024-2025. The committee draws senators’ attention to these provisions pursuant to Senate standing order 24(1)(a)(v).
[98] Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 3 of 2024 (28 February 2024) pp. 16–17.
[99] Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 4 of 2024 (20 March 2024) p. 20.
[100] Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 7 of 2024 (26 June 2024), pp. 2-16.
[101] Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 7 of 2024 (26 June 2024), pp. 2-16.
[102] Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 7 of 2024 (26 June 2024), pp. 2-16.
[103] The minister responded to the committee’s comments in a letter dated 16 July 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 9 of 2024).
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URL: http://www.austlii.edu.au/au/other/AUSStaCSBSD/2024/152.html