Expenditure and taxation in delegated legislation [2023] AUSStaCSDLM 37 (8 March 2023)

• Chapter 6
• Expenditure and taxation in delegated legislation
• Commonwealth expenditure
• Instruments specifying expenditure under the Financial Framework (Supplementary Powers) Act 1997 and Industry Research and Development Act 1986
• Instruments providing for Commonwealth grants to states and territories under the Federal Financial Relations Act 2009
• General revenue assistance – section 9, Federal Financial Relations Act
• Specific purpose payments – section 16, Federal Financial Relations Act

Chapter 6

Expenditure and taxation in delegated legislation

6.1 This Chapter identifies the instruments which the committee has resolved to draw to the attention of the Senate under standing order 23(4) in the interests of promoting appropriate parliamentary scrutiny and control of Commonwealth expenditure in delegated legislation.^[1]

Commonwealth expenditure

6.2 This section contains two broad categories of expenditure-related instruments:

• instruments specifying Commonwealth expenditure under the Financial Framework (Supplementary Powers) Act 1997 and the Industry Research and Development Act 1986; and

• instruments providing grants to the states and territories under the Federal Financial Relations Act 2009.

Instruments specifying expenditure under the Financial Framework (Supplementary Powers) Act 1997 and Industry Research and Development Act 1986

6.3 The Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) and the Industry Research and Development Act 1986 (the IRD Act) authorise the Commonwealth to spend public money on grants and programs specified in instruments made under those Acts. Consequently, the specification of expenditure in an instrument made under these Acts effectively authorises the Commonwealth to spend public monies on the relevant grant or program. The scrutiny of these instruments is a key aspect of parliamentary scrutiny and control of Commonwealth expenditure.^[2] Accordingly, the committee has resolved to draw the Senate's attention to Commonwealth expenditure authorised by delegated legislation made under the FF(SP) Act and IRD Act under Senate standing order 23(4).^[3]

6.4 The table below lists the expenditure specified in legislative instruments made under the FF(SP) Act and IRD Act registered in the relevant period.

Instrument	Amount	Grant/Program
Industry Research and Development (Supporting Australia’s Textiles, Clothing and Footwear Industry Program) Instrument 2023 [F2023L00117]	$6.1 million over 2022-26	Supporting Australia's Textiles, Clothing and Footwear Industry Program

Instruments providing for Commonwealth grants to states and territories under the Federal Financial Relations Act 2009

6.5 The Federal Financial Relations Act 2009 (the Federal Financial Relations Act) is a key source of legislative authority for funding provided by the Commonwealth to the states and territories. It empowers the relevant minister to make determinations providing for payments of general revenue assistance to the states and territories (under section 9) and specific purposes agreed with a state or territory (under section 16). Such instruments are not subject to disallowance by Parliament.^[4]

6.6 The Annual Appropriation Acts set a debit limit on the total amounts that can be provided in general revenue assistance and specific purpose payments under sections 9 and 16 of the Federal Financial Relations Act. The Appropriation Act (No. 2) 2021-2022 sets these limits at $5 billion and $25 billion, respectively. Noting the significant amount of expenditure which the relevant minister may determine subject to these limits, together with the non-disallowable status of the determinations, the committee has resolved to draw these instruments to the attention of the Senate under standing order 23(4).

6.7 The following tables list instruments providing for Commonwealth grants pursuant to the Federal Financial Relations Act framework registered in the relevant period.

General revenue assistance – section 9, Federal Financial Relations Act

Instrument	Amount	Description
Federal Financial Relations (General Purpose Financial Assistance—2022-23 Payment No. 8) Determination 2023 [F2023L00109]	$160 396 820.31	Determines amounts of general purpose financial assistance to be paid to Western Australia and the Australian Capital Territory.

Specific purpose payments – section 16, Federal Financial Relations Act

Instrument	Amount	Description
Federal Financial Relations (National Partnership Payments—2022-23 Payment No. 8) Determination 2023 [F2023L00088]	$569 051 207.15	Determines amounts of financial assistance to be paid to the states, the Australian Capital Territory or the Northern Territory to: support the delivery of agreed outputs or projects; facilitate state and territory reforms; and reward states and territories for nationally significant reforms.

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[1] Details of all instruments which the committee has resolved to draw to the attention of the Senate under standing order 23(4) are published on the committee's website.

[2] For further information see the committee's guideline on Scrutiny of Commonwealth expenditure and Chapter 7 of the report of the committee's inquiry, Parliamentary scrutiny of delegated legislation.

[3] Details of all instruments which authorise Commonwealth expenditure are published on the committee's website.

[4] Federal Financial Relations Act 2009, sections 9(5) and 16(5).