Bills Digest no. 112 2014–15
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WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Liz Wakerly
Economics Section
9 June 2015
Contents
The Bills Digest at a glance
Structure of
the Bill
Background
Statement of
Compatibility with Human Rights
Financial
implications
Key issues
and provisions
Date introduced: 12
May 2015
House: House of
Representatives
Portfolio: Finance
Commencement: 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 the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
Sections 81 and 83 of the Australian
Constitution provide that there must be an appropriation, made by law, for
the purposes of the Commonwealth, before money may be drawn from the Consolidated
Revenue Fund (CRF).[1]
The Appropriation (Parliamentary Departments) Bill (No. 1)
2015–2016 (the Bill) seeks to appropriate $233.4 million from the CRF for
the four parliamentary departments:
- Department
of the Senate—$21.5 million
- Department
of the House of Representatives—$22.1 million
- Department
of Parliamentary Services—$182.4 million and
- Parliamentary
Budget Office—$7.4 million.
This Bill is divided into a number of parts:
- Part
1 of the Bill defines terms, provides that the Portfolio Budget Statements are
aids to the interpretation of the Bill under the Acts Interpretation Act
1901 and provides that notional transactions between non‑corporate
entities of the Commonwealth are to be treated as being real transactions[2]
- Part
2 proposes appropriations to make payments of the amounts in Schedule 1 for
departmental, administered, administered assets and liabilities and other
departmental items
- Part
3 specifies the way in which the amounts in Schedule 1 may be adjusted
through an Advance to the responsible Presiding Officer and
- Part
4 deals with miscellaneous items.
An explanation of the operation of each part is outlined
at page two of the Explanatory Memorandum to the Bill.[3]
An appropriation is the legal release of monies from the CRF.[4]
The annual Appropriation Acts are the authoritative sources for details of
annual appropriations provided to departments. The Acts take precedence over
budget papers, Portfolio Budget Statements and other associated materials.
Following a recommendation from the Parliament’s
Appropriations and Staffing Report of the Senate Select Committee,
appropriations for parliamentary departments are removed from the Bill for the
ordinary annual services of the Government and included in a separate
Parliamentary Appropriations Bill.[5]
There are certain unique constitutional and presentational
requirements that a Bill proposing to appropriate monies must satisfy. Further
information is contained in, for example, Bills Digest No. 110, Appropriation
Bill (No. 5) 2014–2015 [and] Appropriation Bill (No. 6) 2014–2015.[6]
The Government states that the ‘Appropriation Bill is not
seen as engaging, or otherwise affecting, the rights or freedoms relevant to
the Human Rights (Parliamentary Scrutiny) Act 2011’.[7]
At the time of writing, the Bill had not been considered by
the Parliamentary Joint Committee on Human Rights.[8]
The Bill seeks to appropriate $233,415,000 from the CRF.[9]
Table 1 compares actual available appropriations for 2014–15 with proposed
appropriations for 2015–16.
Table 1: Comparison of proposed 2015–16 appropriations
with actual available appropriations for 2014–15
|
|
2014–15
($’000)
|
2015–16
($’000)
|
|
Department of the Senate
|
20,627
|
21,503
|
|
Department of the House of Representatives
|
21,146
|
22,134
|
|
Department of Parliamentary Services
|
271,370
|
182,368
|
|
Parliamentary Budget Office
|
7,013
|
7,410
|
|
Total: parliamentary departments
|
320,156
|
233,415
|
Source: Appropriation (Parliamentary Departments) Bill (No. 1)
2015
–2016, Schedule 1.
Under the Appropriation (Parliamentary Departments) Act
(No. 2) 2014–2015, $113,837,000 was appropriated from the CRF for the Department
of Parliamentary Services to improve security in Parliament House.[10]
Advance to the responsible
Presiding Officer
The Advance to the responsible Presiding Officer (APO) enables the
Presiding Officer to provide additional appropriations when the Presiding
Officer is satisfied that there is an urgent need for expenditure and the
existing appropriation is inadequate either because the expenditure was omitted
or understated or due to unforeseen circumstances.[11]
The maximum amount under these advances is $300,000 for
the Department of the Senate, the Department of the House of Representatives and
the Parliamentary Budget Office; and $1 million for the Department of
Parliamentary Services. These amounts are the same as those contained in the Appropriation
(Parliamentary Departments) Act (No. 1) 2013–2014 and the Appropriation
(Parliamentary Departments) Act (No. 1) 2012–2013 (excluding the
Parliamentary Budget Office which commenced operations in 2012–13).[12]
No APOs were provided to the parliamentary departments in either 2013–14 or
2012–13.[13]
Agency resourcing
From the Department of the Senate Portfolio Budget
Statement (PBS):
The appropriation for the department in the 2015–16 Budget is
$21.5m, compared with $20.6m in 2014–15.
The change in the appropriation comprises an increase of $1.7
million (ongoing funding of $0.2m to meet increased fringe benefits tax
liabilities and one-off program funding from the Contingency Reserve of $1.5m
for secretariat support for committees) offset by a decrease of $0.64m
(cessation of dedicated funding for the Parliamentary Joint Select Committee on
the Constitutional Recognition of Aboriginal and Torres Strait Islander
Peoples).[14]
The Department of the House of Representatives PBS reports
that:
The Department has received supplementary departmental
funding totalling $2.328m across five years, commencing 2014–15 of which $1.5m
reflects additional requirements in the Department’s support for committees.
This increase in funding is very welcome, although there will still be pressure
on resources and, at this stage, the forward years 2017–18 and 2018–19 will see
a return to a decline of appropriation in real terms. For the budget and
forward year one, continued expenditure restraint will be required to enable
the Department to deliver effective services which can reasonably be expected
of us and remain within budget.
From 1 April 2015, as a result of the implementation of paid
parking within the Parliamentary triangle, the Department is liable for the
payment of Fringe Benefit Tax for employees who access the private car parks at
Parliament House. The balance of the additional funding through the budget
($0.828m) will meet the liability from 1 July 2015.
As foreshadowed in previous statements, the middle period of
the Parliamentary cycle is characterised by high levels of activity across all
areas of the Department resulting in increased supplier and employee expenses.
As a result, the Department has estimated it will make a small loss of
$0.138m before depreciation ($0.822m after depreciation) for 2014–15.
The Department has sufficient cash reserves to fund the loss without any
immediate impact on its sustainability in the short term.
The estimates for the budget year and three forward years
show a break even position. At this stage it is difficult to predict with
certainty what the outcome for these years will be other than that the
Department’s budget will continue to be under pressure, although the additional
funding referred to above in the budget year and forward year one will assist
in supporting our existing levels of service. The Department will continue to
seek efficiencies and these will contribute to strengthening the Department’s
financial position.[15]
In the Department of Parliamentary Services PBS,
departmental funding has reportedly increased by $0.7 million in 2015–16 and
approximately $0.5 million per year across the forward estimates:
This increase is due to the additional $1.1 million in
operating funding allocated in the 2015–16 budget with a similar amount
allocated each year across the Forward Estimates. The additional funding is
partially offset by a reduction in funding due to changes in price parameters.
The additional revenue from Government has been allocated to
both supplier and employee expenses and DPS is forecasting a balanced income
statement result in 2015–16 and across the Forward Estimates (excluding
depreciation and amortisation, for which the department is not appropriated).
The departmental depreciation and amortisation estimate has
been increased by $3.3 million per annum in line with actual achievement.
The administered suppliers estimate for 2015–16 has increased
by $3.3 million and approximately $4.0 million per annum across the Forward
Estimates for operating costs associated with the capital works programme.
...
An additional $19.7 million was allocated to the administered
capital budget as part of the 2015–16 budget.
DPS was allocated an additional $1.3 million in 2015–16 and
$0.7 million in 2016–17 for the departmental capital budget.[16]
In some cases, non-corporate Commonwealth entities (NCEs) can
receive money from various sources that may be retained and spent by the NCE.
Examples of such receipts are money received as payment for services provided
by the NCE and money received as repayment of an earlier amount paid by the
Commonwealth. The authority to retain and spend such amounts is provided in
section 74 of the Public Governance, Performance and Accountability Act 2013
(PGPA Act) and section 27 of the Public Governance, Performance and
Accountability Rule 2014 (PGPA Rule).[17]
As a general principle, the PGPA Rule allows an
entity to retain sufficient amounts to cover activities for which it has not
received other appropriations by Parliament. As at May 2015, the Department of
Parliamentary Services proposed a total of $8,259,000 in section 74 retained
revenue receipts for 2015–16.[18]
Additional funding (of $3,450,000 ) will be provided by
the Government to the Department of Parliamentary Services over four years 2015–16
to 2018–19 to support capital works addressing ‘critical failures and long term
under investment identified in the Building Condition Assessment Report for
Parliament House’.[19]
The Parliamentary Budget Office received a special
appropriation at the time of its establishment in July 2012. The special
appropriation is recognised as revenue in the year the funds are spent.
According to the Parliamentary Budget Office PBS:
[t]he PBO is budgeting for a surplus of $0.4 million for
2015–16 as a result of recognising the use of funds from the PBO’s special
appropriation as revenue to complete projects which will be capitalised rather
than expensed.
From 2016–17 onwards the PBO is budgeting for a break-even
operating result, after non-appropriation expenses such as depreciation are
removed.[20]
Many of the key provisions of Appropriation Acts are
similar from year to year.
Part 1 – Preliminary
Clauses 1, 2, and 3 are formal or
technical clauses, such as when the Bill commences and the definitions used.
Clause 4 declares that the PBSs are relevant
documents under paragraph 15AB(2)(g) of the Acts Interpretation Act 1901
that may be used to interpret provisions of the Bill (or the proposed Act).[21]
The purpose of the PBSs is to provide information on the proposed allocation of
resources to the outcomes of the parliamentary departments.
Clause 5 ensures that payments between NCEs result
in a debit from the appropriation for the paying NCE (to ensure consistency
with section 76 of the PGPA Act).
Part 2 – Appropriation items
Clause 6 sets out the total appropriations in
Schedule 1 of the Bill. The amounts in Schedule 1 of the Bill may be further
adjusted in accordance with sections 74 and 75 of the PGPA Act:
- departmental
items may be increased to take into account certain other amounts received by a
parliamentary department if those receipts are prescribed by the PGPA Rule
in accordance with section 74 of the PGPA Act
- appropriations
may be adjusted by amounts recoverable by an NCE from the Australian Taxation
Office for Goods and Services Tax (GST) (the amounts in Schedule 1 exclude
recoverable GST) and
- items
may be adjusted to take into account the transfer of functions between NCEs.
Total appropriations include amounts for departmental
items (clause 7), administered items (clause 8), administered
assets and liabilities items (clause 9) and other departmental items (clause
10).
Part 3 – Advance to the responsible
Presiding Officer
Clause 11 enables the responsible Presiding Officer
to provide additional appropriations for items when satisfied there is an
urgent need for that expenditure and the existing appropriation is inadequate.
The total amounts that can be determined under the APO provision are provided
in subclauses 11(3) to 11(6). Subclause 11(7) provides that a
determination under clause 11 is a legislative instrument which is not
subject to disallowance or sunsetting.
Part 4 – Miscellaneous
Clause 12 provides for crediting amounts to special
accounts. A special account may be established under the PGPA Act by an
Act (section 80) or a determination of the Finance Minister (section 78) that
is disallowable by Parliament (section 79). The determination or Act that
establishes the special account will specify the purposes of the special
account.
Clause 13 appropriates funds from the CRF as necessary
for the purposes of the Bill. There is an appropriation in law when the Act
commences. The amounts appropriated by the Bill may be affected by the PGPA
Act (sections 74 to 75 – see clause 6) after the Bill receives
Royal Assent.
Clause 14 specifies that the Bill, once enacted, is
repealed at the start of 1 July 2018.
Schedule 1 – Services for which
money is appropriated
Schedule 1 to the Bill provides details of the
appropriations for each parliamentary department (see Table 1 of this Digest).
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Constitution,
sections 81 and 83, accessed 29 May 2015.
[2]. Acts Interpretation Act
1901 (Cth), accessed 4 June 2015.
[3]. Explanatory
Memorandum, Appropriation
(Parliamentary Departments) Bill (No. 1) 2015-2016, p. 2, accessed 4 June
2015.
[4]. Department
of Finance, ‘Summary
of annual appropriations’, Department of Finance website, accessed
22 May 2015.
[5]. Senate
Standing Committee on Appropriations and Staffing, Parliament’s
appropriations and staffing: report of the Senate Select Committee,
Parliamentary paper no. 151/1981, The Senate, Canberra, 1981, accessed 29 May
2015.
[6]. T
Dale, D Weight and D Mather, Appropriation
Bill (No. 5) 2014–2015 [and] Appropriation Bill (No. 6) 2014–2015,
Bills digest, 110, 2014–15, Parliamentary Library, Canberra, 2015, accessed 29
May 2015.
[7]. Explanatory
Memorandum, Appropriation
(Parliamentary Departments) Bill (No. 1) 2015–2016, op. cit., p. 4.
[8]. Parliament
of Australia, ‘Parliamentary
Joint Committee on Human Rights: committee reports‘, Australian Parliament
website, accessed 1 June 2015.
[9]. Appropriation
(Parliamentary Departments) Bill (No. 1) 2015–2016, clause 6.
[10]. Appropriation
(Parliamentary Departments) Act (No. 2) 2014–2015, clause 6,
accessed 1 June 2015.
[11]. As
defined in clause 3 of the Bill, the responsible Presiding Officer is
the President of the Senate for the Department of the Senate, the Speaker for
the House of Representatives, and the President and the Speaker together for
both the Department of Parliamentary Services and the Parliamentary Budget
Office.
[12]. Appropriation
(Parliamentary Departments) Act (No. 1) 2013–2014, section 13, Appropriation (Parliamentary
Departments) Act (No. 1) 2012–2013, section 13, both accessed 2 June
2015.
[13]. Australian
Government, Report
on advances provided under the Annual Appropriation Acts 2012–13,
Department of Finance, accessed 2 June 2015. No advances were provided in
2013–14; as a result a report on advances provided under the Annual
Appropriation Acts 2013–14 was not produced: Department of Finance, ‘Advance
to the Finance Minister’, Department of Finance website, accessed
5 June 2015.
[14]. Australian
Government, Portfolio
budget statements 2015–16: budget related paper no. 1.17B, May 2015, p.
3, accessed 2 June 2015.
[15]. Australian
Government, Portfolio
budget statements 2015–16: budget related paper no. 1.17A, May 2015,
pp. 8–9, accessed 2 June 2015.
[16]. Australian
Government, Portfolio
budget statements 2015–16: budget related paper no. 1.17C, May 2015,
pp. 19–20, accessed 2 June 2015.
[17]. Public Governance,
Performance and Accountability Act 2013 (Cth); Public Governance,
Performance and Accountability Rule 2014 (Cth), both accessed 2 June
2015.
[18]. Portfolio
budget statements 2015–16: budget related paper no. 1.17C, op. cit., p. 10,
accessed 2 June 2015.
[19]. Australian
Government, Budget
measures: budget paper no. 2: 2015–16, p. 199, accessed 2 June 2015.
[20] Australian
Government, Portfolio
budget statements 2015–16: budget related paper no. 1.17D, p. 16,
accessed 2 June 2015.
[21]. Acts Interpretation Act
1901 (Cth), section 15AB, accessed 2 June 2015.
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