Bills Digest No. 153, 2012–13

20 June 2013

Statute Stocktake (Appropriations) Bill 2013

Leah Ferris
Law and Bills Digest Section 

Date introduced: 15 May 2013

House: House of Representatives

Portfolio: Finance and Deregulation

Commencement: This Act commences on Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill's home page, or through http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation. When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at http://www.comlaw.gov.au/.

Purpose of the Bill

The purpose of the Statute Stocktake (Appropriations) Bill 2013 (the Bill) is to repeal 84 annual Appropriations Acts from 1 July 1999 to 30 June 2010.

In particular, the Bill will repeal:

·         28 Appropriation Acts for the ordinary annual services of government

·         28 Appropriation Acts that are other than for the ordinary annual services of government[1]

·         15 Appropriation Acts which relate to the services of the various Parliamentary Departments and

·         13 Appropriation Acts in relation to supplementary estimate Appropriations.[2]

Background

Basis of Policy Commitment

The Government has stated that this Bill ‘forms part of an on-going process to clean up the statute book by repealing legislation that is redundant, or would be better addressed in up-to-date legislation’.[3]

History of events

While Statute Law Revision Acts have long been used by governments as a way of repealing redundant legislation,[4] the practice of repealing past appropriation acts has been specifically adopted by this Government.

A relevant history regarding the Government’s commitment to review and repeal redundant legislation was set out in the Bills Digest for the Statute Stocktake Bill (No. 1) 2011:[5]

On 16 April 2006, Mr Lindsay Tanner, the then Opposition Shadow Minister for Finance, re-released a discussion paper entitled Operation Sunlight which aimed to enhance budget transparency and accountability by certain measures such as tightening the outcomes and outputs framework and improving the readability and usefulness of budget papers.[6] On 24 March 2008, as Minister for Finance, he then asked Senator Andrew Murray to review Operation Sunlight (the Murray Review) with terms of reference for the review to consider:

·          existing financial reporting arrangements and the reforms announced in Operation Sunlight

·          the recommendations that were made by the Senate Finance and Public Administration Committee in its report Transparency and Accountability of Commonwealth in Public Funding and Expenditure, March 2007 and

·          consistent with the Government’s commitments to reducing unnecessary regulation and red tape, any current arrangements within the financial framework that can be simplified or removed without detriment to appropriate levels of accountability.[7]

Recommendation 12 of the Murray Review recommended, in part:

·          that Special/Standing Appropriations and their continued operation be given greater attention whereby:

(a) the Government conduct a housekeeping exercise and repeal standing appropriations that are redundant

(b) at least annually Finance undertake a review of these appropriations and report to Parliament as to whether there is a continuing need for the appropriations and/or the legislation within which those appropriations clauses reside.[8]

The Government response noted this recommendation and agreed that Standing Appropriations should be regularly reviewed.[9]

Accordingly, the Government committed to review and repeal redundant provisions as part of the process of cleaning up the statute book in relation to the financial regulatory framework. It undertook to conduct housekeeping exercises and to repeal redundant standing appropriations.

This Bill is consistent with the Government’s commitment to implement Recommendation 12 of the Murray Review.

Committee consideration

Senate Standing Committee for the Scrutiny of Bills

At the time of writing the Digest, the Senate Standing Committee for the Scrutiny of Bills has yet to report on this Bill.

Parliamentary Joint Committee on Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act.[10]

The Government considers that the Bill is compatible:

The High Court has emphasised that Appropriation Acts do not create rights and nor do they, importantly, impose any duties.

Given that the legal effect of Appropriation Acts is limited in this way, the repeal of Appropriation Acts is not seen as engaging, or otherwise affecting, the rights or freedoms relevant to the Human Rights (Parliamentary Scrutiny) Act 2011.[11]

In considering this Bill, the Parliamentary Joint Committee on Human Rights noted that ‘the Bill does not appear to give rise to human rights concerns’.[12]

Policy position of non-government parties

The Coalition, while supporting this Bill, has argued that this is a ‘simple housekeeping Bill’ and does not provide for any significant measures with respect to deregulation.

In his second reading speech the Member for Wright, Mr Scott Buchholz, commented that:

We support this piece of legislation because we support the diligence of the department in their rotational housekeeping process. It is a good piece of legislation because it does tidy up dormant and ineffective pieces of legislation. What it does not do is cut red tape for the business sector.[13]

This view was also shared by the Member for Goldstein, Mr Andrew Robb:

While this initiative is certainly worthwhile, it is a long bow for the government to draw to assert that this forms part of a substantive deregulation agenda. While the repeal of the acts will reduce the size of the statute book, measured in inches, it will not result in any easing of the Commonwealth regulatory burden on business, measured in billions of dollars.[14]

Financial implications

The Explanatory Memorandum notes:

The proposed amendments have no financial impact. Much of the unspent appropriations in the 84 old annual Appropriation Acts are redundant. Minor amounts that may not be redundant will be considered for re-appropriation through standard appropriation options, noting that expenditure is already forecast in the forward estimates.[15]

Main issues

The Explanatory Memoranda provides that ‘the amounts appropriated by the old Annual Appropriation Acts have been spent, exhausted, lapsed, or to a minor extent, will be considered for re-appropriation through the Budget process’.[16] It is not clear from the Explanatory Memorandum which departments/agencies have unspent appropriations that may be affected by these amendments.

The Government has stated that ‘no agency will be denied access to appropriations from this Bill, to the extent that old appropriation amounts may potentially need to be re-appropriated through other processes’.[17] It would appear from this statement that any agencies/departments that are affected by these amendments will still retain any funding received under the old appropriation Bills. However, it is unclear whether or not they will need to make a case as to why they should retain the funding or what the process will be to ensure the funds are retained.

Key provisions

Appropriation Legislation

Odgers’ Australian Senate Practice sets out the various categories of appropriation Bills:

·         annual appropriation Bills (usually called Appropriation Bill (No. 1), Appropriation Bill (No. 2) and Appropriation (Parliamentary Departments) Bill), which appropriate money for the services of the Government and the Parliament for the financial year

·         additional appropriation Bills (usually called Appropriation Bill (No. 3), Appropriation Bill (No. 4) and Appropriation (Parliamentary Departments) Bill (No. 2)), which appropriate additional funds for the services of the Government and the Parliament for the financial year

·         supply Bills (usually called Supply Bill (No. 1), Supply Bill (No. 2) and Supply (Parliamentary Departments) Bill), which appropriate money for the services of the Government and the Parliament for the period from the beginning of the financial year until the annual appropriation bills are passed, and which are subsumed by the annual appropriation bills (following a change in the budget cycle in 1994, these Bills are not necessarily required) and

·         special appropriation Bills, appropriating money for special purposes, including Bills which make continuing and indefinite appropriations.[18]

The Acts being repealed by this Bill fall within the first two categories. The Government has stated that by repealing these Acts, a number of pieces of delegated legislation will also be able to be repealed.[19]

Annual and Additional Appropriation Acts–Government

Items 1–56 of the Bill repeal 56 annual and additional Appropriations Acts from Appropriation Act (No. 1) 1999–2000 to Appropriation Act (No. 4) 2009–2010.

In particular, the Bill repeals 22 annual Appropriation Acts (Appropriation Acts (No. 1) and (No. 2)) and 34 additional Appropriation Acts (22 Appropriation Acts (No. 3) and (No. 4) and 12 Appropriation Acts (No. 5) and (No. 6)).

Until 30 June 1999, any unspent appropriations lapsed at the end of the financial year and had no continuing effect.[20] Therefore all Appropriations Acts from 1901 to 1998–99 are now redundant. Since 1934, five Acts have repealed Appropriation or Supply Acts that have been either spent or have lapsed, with the effect being that all such Acts from 1901 to 1983-84 have been repealed and removed from the statute book.[21]

In 1999–2000, accrual budgeting was introduced, which resulted in accrual appropriations now not lapsing at the end of the financial year.[22] The Statute Stocktake (Appropriations) Act (No. 1) 2012 repealed all Appropriations Acts from 1984–85 to 1998–99.[23]

This Bill will repeal the remaining Appropriations Acts from 1999–2000 to 2009–2010.

Annual and Additional Appropriation Acts— Parliamentary Departments

Items 65–79 of the Bill repeal 15 annual and additional appropriations acts from Appropriation (Parliamentary Departments) Act 1999–2000 to Appropriation (Parliamentary Departments) Act (No. 1) 2009–2010.

For the last 30 years, the annual and additional appropriations for the various Parliamentary Departments have been kept separate from the appropriations for the other departments and agencies.[24] Instead of being contained within the annual Appropriations Bills, they are instead provided for in the Appropriation (Parliamentary Departments) Bills.

The history behind this approach is set out in Odgers’ Australian Senate Practice:

During the debate leading up to the Compact of 1965, it was pointed out that appropriations for the two Houses of the Parliament should not be regarded as ordinary annual services of the government, or, indeed, services of the government. The services of the Houses were not ordinary annual services of the government nor services of the government as such, and it was therefore highly anomalous to have parliamentary appropriations contained in the two appropriation bills in this way.

Until 1982 appropriations for the services of the two Houses of the Parliament were contained in the appropriation bills for the services of the government, and were divided between the bill not amendable by the Senate, containing appropriations for the ordinary annual services of the government, and the amendable bill, containing other appropriations.

The Senate Select Committee on Parliament’s Appropriations and Staffing was appointed to consider issues relating to the control by the Houses of their own appropriations and staffing, and reported in 1981. One of the recommendations of the committee was that there be a separate parliamentary appropriations bill. This recommendation was adopted in 1982, and since that time a third annual appropriation bill has been introduced, the Appropriation (Parliamentary Departments) Bill. As this bill is not for the ordinary annual services of the government it is amendable by the Senate.[25]

This Bill will repeal the various Appropriation (Parliamentary Departments) Bills from 1999–2000 to 2009–10.

Supplementary Additional Estimates

Items 57–64 and 80–84 repeal 13 Acts which relate to supplementary estimates appropriations.

An explanation of supplementary additional estimates was set out in the Bills Digest for the Appropriation Bill (No. 5) 2011–2012:

In some years, the Government may decide to introduce further Appropriation Bills following the additional estimates process. When this occurs, this is often done at the same time as the next year’s Budget Bills are tabled. Additional Appropriation Bills tabled late in the year allow the Government to fund new programs announced in the Budget, but which commence before the start of the next financial year, and make other technical adjustments in anticipation of the next year’s Budget.[26]

For example, the Appropriation (Nation Building and Jobs) Act (No. 1) 2008–2009 and the Appropriation (Nation Building and Jobs) Act (No. 2) 2008–2009, which are repealed by items 61 and 62 of the Bill, relate to the Government’s Nation Building and Jobs plan, which was aimed at providing economic growth during the global financial downturn.[27] The Appropriation (Water Entitlements) Act 2009–2010 and the Appropriation (Water Entitlements and Home Insulation) Act 2009–2010, which are repealed by items 83 and 84 of the Bill, appropriate money for ‘rebate payments under the Home Installation Program and administrative costs for water buy backs within the Murray-Darling Basin system’.[28] The Appropriations (Tsunami Financial Assistance) Act
2004–2005 and the Appropriations (Tsunami Financial Assistance and Australia-Indonesia Partnership) Act 2004–2005, which are repealed by items 81 and 82 of the Bill, relate to aid given to Indonesia in response to the 2004 Boxing Day tsunami.[29]

Concluding comments

While this Bill performs an uncontroversial role in repealing redundant legislation, further clarification as to the extent that various departments/agencies will be affected by the repeal of Acts with unspent appropriations would prove useful.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

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ISSN 1328-8091

[1].              See: Department of Finance and Deregulation, Annual appropriation rules-summarised, Department of Finance and Deregulation website, accessed 17 June 2013. ‘Appropriation Act (No. 2), and comparable annual appropriation Acts, provides funding for services other than the ordinary annual services of government. An agreement between the Senate and the Government, the Compact of 1965 (as amended), provides that the following purposes of expenditure are not for the ordinary annual services of government (appropriation items in brackets):

·          Specific Purpose Payments (Payments to the states and territories under section 96 of the Constitution, to the ACT and NT and payments to local government)

·          administered operating costs that fall within an outcome not previously authorised by Parliament (New Administered Outcomes) and

·          non-operating costs (Equity Injections and Administered Assets and Liabilities).’

[2].              Explanatory Memorandum, Statute Stocktake (Appropriations) Bill 2013, p. 4, accessed 14 June 2013.

[3].              D Bradbury, ‘Second reading speech: Statute Stocktake (Appropriations) Bill 2013’, House of Representatives, Debates, 15 May 2013, p. 13, accessed 14 June 2013.

[4].              Explanatory Memorandum, Statute Stocktake (Appropriations) Bill 2013, op. cit., p. 5.

[5].              D Spooner, Statute Stocktake Bill (No. 1) 2011, Bills Digest, 123, 2010–11, Parliamentary Library, Canberra, 2011, pp. 2–3, accessed 14 June 2013.

[6].              A Murray, Review of operation sunlight: overhauling budgetary transparency, Canberra, June 2008, p. 3 and Appendix 1, accessed 14 June 2013.

[7].              Ibid.

[8].              Ibid., p. 10.

[9].              Australian Government, Government response to operation sunlight: overhauling budgetary transparency, June 2008, Canberra, accessed 14 June 2013.

[10].              Explanatory Memorandum, Statute Stocktake (Appropriations) Bill 2013, op. cit., p. 3.

[11].              Ibid.

[12].              Parliamentary Joint Committee on Human Rights, Seventh Report of 2013, Joint Committee, Canberra, 5 June 2013, p. 37, accessed 14 June 2013.

[13].              S Buchholz, ‘Second reading speech: Statute Stocktake (Appropriations) Bill 2013’, House of Representatives, Debates, 29 May 2013, p. 135, accessed 14 June 2013.

[14].              A Robb, ‘Second reading speech: Statute Stocktake (Appropriations) Bill 2013’, House of Representatives, Debates, 29 May 2013, p. 133, accessed 14 June 2013.

[15].              Explanatory Memorandum, Statute Stocktake (Appropriations) Bill 2013, op. cit., p. 2.

[16].              Ibid.

[17].              D Bradbury, ‘Second reading speech: Statute Stocktake (Appropriations) Bill 2013’, op. cit., p. 13.

[18].              JR Odgers, Australian Senate practice, thirteenth edn, Department of the Senate, Canberra, 2012, p. 367, accessed 14 June 2013.

[19].              Explanatory Memorandum, Statute Stocktake (Appropriations) Bill 2013, op. cit., p. 2.

[20].              Until the end of 1997, the lapsing of uncommitted annual appropriations occurred through section 36 of the Audit Act 1901, and from the 1 January 1998 until the 30 June 1999, through section 29 of the Financial Management and Accountability Act 1997: Explanatory Memorandum, Statute Stocktake (Appropriations) Bill (No. 1) 2012, p. 4, accessed 14 June 2013.

[21].              The relevant repealing Acts are set out in the Explanatory Memorandum for the Statute Stocktake (Appropriations) Bill (No. 1) 2012: ibid.

[22].              Ibid., p. 5.

[23].              Statute Stocktake (Appropriations) Act (No. 1) 2012, accessed 14 June 2013.

[24].              JR Odgers, Australian Senate practice, op. cit., pp. 402–403.

[25].              Ibid.

[26].              D Weight, Appropriation Bill (No. 5) 2011-2012, Bills Digest, 135, 2011–12, Parliamentary Library, Canberra, 2012, pp. 5–6, accessed 14 June 2013.

[27].              Appropriation (Nation Building and Jobs) Act (No. 1) 2008-2009 and Appropriation (Nation Building and Jobs) Act (No. 2) 2008-2009, accessed 14 June 2013.

[28].              Appropriation (Water Entitlements) Act 2009-2010 and Appropriation (Water Entitlements and Home Insulation) Act 2009-2010, accessed 14 June 2013. Information about these Bills has been taken from the Appropriation (Water Entitlements and Home Insulation) Bill 2009-2010 homepage, accessed 14 June 2013.

[29].              Appropriations (Tsunami Financial Assistance) Act 2004-2005 and Appropriations (Tsunami Financial Assistance and Australia-Indonesia Partnership) Act 2004-2005, accessed 14 June 2013.