Bills Digest no. 45 2013–14
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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.
Tarek Dale
Economics Section
25 February 2014
Contents
The Bills Digest at a glance
Purpose of the Bill
Structure of the Bill
Background
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions
Schedule 1 – Service for which money is appropriated
Other provisions
Date introduced: 13 February 2014
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 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/.
This Bill provides $5.4 million in departmental appropriations to the Department of Parliamentary Services as a one-off measure to meet operational expenses.
Background
In addition to the appropriation Bills included as part of the Budget process, a subsequent appropriation can be made where it is deemed necessary.
The Department of Parliamentary Services has faced funding constraints and increased demand for services. The Parliamentary Secretary to the Minister of Finance has stated that this appropriation will enable the Department of Parliamentary Services to ‘maintain the provision of core services to support the operation of parliament’.[1]
The structure of the Bill
Schedule 1 of the Bill provides for a one-off increase in funding for 2013–14. The rest of the Bill (Parts 1–4) deals with procedural aspects of an appropriation Bill.
The purpose of the Appropriation (Parliamentary Departments) Bill (No. 2) 2013–2014 (the Bill) is to appropriate an additional $5,359,000 as a one off-measure to cover operational costs of the Department of Parliamentary Services during 2013–14.
Parts 1–4 of the Bill deal with procedural aspects of the appropriation. Schedule 1 specifies the amount to be appropriated for the Department of Parliamentary Services.
Annual and special appropriations
The Australian Constitution section 83 states ‘No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law’.[2]
Ordinarily, Parliament passes three appropriation Bills as part of the Government’s budget process. This includes the annual Appropriation (Parliamentary Departments) Bill (No. 1), which is in a separate appropriation Bill because of the separation between Parliament and the Executive, and because the Parliamentary Departments are administered under their own legislation, separate from the Public Service Act 1999 (Cth).[3]
However funding requirements may change after a Budget is brought down, and the Government ‘may agree to additional funding if the amounts in the Appropriation Acts introduced with the Budget are inadequate.’[4] This process is called additional estimates, and in a given year, additional appropriations for Parliamentary Departments are incorporated into an Appropriation (Parliamentary Departments) Bill (No. 2). Prior to this Bill, the most recent instance of a second appropriation Bill for Parliamentary Departments was the Appropriation (Parliamentary Departments) Bill (No. 2) 2004–2005. That was to provide an additional $0.349m – the largest component of the funds being for the operation of the Citizenship Visits Program, which provided a subsidy for secondary and final year primary school students travelling more than 1,000 kilometres to visit Parliament House for a school excursion.[5]
Funding for the Department of Parliamentary Services
The departmental appropriation provided in this Bill is a one-off measure for the Department of Parliamentary Service’s operating costs for the 2013–14 financial year.
As described in its annual report, the ‘role of the Department of Parliamentary Services is to support the work of the Parliament, maintain Parliament House, and to make the building and parliamentary activity accessible’.[6]
The case for the appropriation is that the Department faces budget constraints and a rising demand for services, which has resulted in significant challenges to the Department’s ability to provide services to clients.
Budget constraints
In real terms, the Department’s budget has decreased significantly since its formation, and has also been subject to public service efficiency dividends. In November 2013 Senate Budget Estimates, Department Secretary Carol Mills noted that the ‘department’s operational budget has not increased significantly since 2004–05, when it was formed. In fact, in real terms, it had reduced by more than 22 per cent over this period’.[7] In operating Parliament House the Department was subject to the additional 2.5 per cent dividend in 2012–13, unlike the courts and a number of national cultural institutions which received exemptions.[8] Efficiency dividends, arguably, impact more heavily on smaller agencies.[9]
Rising demand for the Department’s services and other cost challenges
The Department has also faced rising demand for the Department’s services, and associated increases in costs, some of which are largely driven by external factors. Among these factors are increased levels of Parliamentary activity, a higher number of visitors and users in Parliament House, changes to how Information and Communication Technology (ICT) services are delivered, and costs associated with a restructure following a Parliamentary committee review.[10]
Using the volume of legislation passed by the Parliament as an indicator, the level of Parliamentary activity has increased, and although varying over time, shows an increase over the 40th Parliament (the first during which the Department operated).
Figure 1 Government Bills presented and Acts passed
Source: Parliamentary Library estimates.
There are also changes in the number of visitors and users in Parliament House. In 2004–05, 107,831 students participated in school tours, which had grown to 126,128 by 2012–13, an increase of 17 per cent.[11] Increased numbers of visitors and users in Parliament House also increase the associated costs. Despite increased efficiency measures, electricity usage increased from 91,222 GJ in 2004–05 to 142,225 GJ in 2012–13, likely reflecting increased usage by building occupants.[12]
Following a review in 2012 of information and communications technology, in July 2013, ‘DPS took over full responsibility for parliamentary ICT and has introduced a new flexible model for the provision of ICT services to parliament and to individual parliamentarians’.[13] This new responsibility has involved an increase in service provision to clients.
Since the 2012 inquiry into the Department,[14] the Department has also been undergoing a change process to improve its structure, function, and service to clients. The Secretary noted in November 2013 Senate estimates:
Since the beginning of 2012-13 the department has been vigorously pursuing a transformational change agenda to reshape DPS into a more professional, outward-looking and service-focused department. The last financial year was therefore one of very significant transition across many areas of the department, marked by changes in senior management, functional realignments and an increased focus on quality service delivery.[15]
Declines in the ability of the Department to effectively provide services
The combination of budget constraints and increased demand for services means there are significant challenges to the Department’s ability to maintain a high standard of service to clients.
At 30 June 2005, the Department had 960 staff,[16] and at 30 June 2012 there were 832 staff.[17] This decline in staffing numbers, although likely reflecting a number of factors, including the achievement of greater efficiency where possible, may have an impact on the delivery of service to clients including Members, Senators, and the general public.
The Department’s annual reports provide indices on a range of issues, including the physical integrity of the building and its surrounds, listed by reference to design integrity, building condition, engineering systems and landscape condition. Over recent years the results as measured in the annual reports (particularly the index for landscape condition) have deteriorated to a certain extent, reflecting the challenge of managing rising costs with constrained resources (figure 2 below).
In his second reading speech the Parliamentary Secretary to the Minister for Finance stated:
This Bill, if passed, would provide the Department of Parliamentary Services with additional funding of $5.4 million to assist in meeting operating expenditure and to maintain the provision of core services to support the operation of parliament. The department's operating expenditure includes responses to recent reviews of its operations, including in relation to the management of capital works and the provision of information, communications and technology services.[18]
Figure 2 Performance indices
Source: Finance and Public Administration Legislation Committee, The performance of the Department of Parliamentary Services: final report, The Senate, Canberra, November 2012, Table 3.1; Department of Parliamentary Services (DPS), Annual report 2012–13, DPS, Canberra, 2013, pp. 175–176, accessed 24 February 2014.
The Bill will appropriate $5,359,000 to the Department of Parliamentary Services.
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. The Explanatory Memorandum 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’.[19]
Schedule 1 to the Bill provides the amount of the appropriation for the Department of Parliamentary Services: $5,359,000. The amount ($5.359m) is a net increase, after a funding increase of $5.5m, and a reduction in funding to match a reduction in costs of $0.141m (associated with ‘Microsoft volume sourcing arrangements’).[20]
The Department of Parliamentary Services’ Portfolio Additional Estimates Statement for 2013–14 shows an increase of $3.3m for ‘employee benefits’, and an increase of $2.059m for suppliers, over the initial 2013–14 Portfolio Budget Statement.[21]
Part 1 – Preliminary
Clauses 1–5 are formal or technical clauses, such as when the Bill commences, and the definitions used. Clause 4 provides that the Portfolio Budget Statements and Additional Estimates Statements for the Parliamentary departments are extrinsic materials that may be used to interpret provisions of the Bill (or the proposed Act).[22]
Part 2 – Appropriated items
Clause 6 states that the total appropriation in the Bill is $5,359,000.
Part 3 – Adjusting appropriated items
Clause 11 provides that the responsible Presiding Officer[23] may request the Finance Minister to make written determinations to reduce the appropriation for departmental items, administered assets and liabilities items and other departmental items in the budget of a Parliamentary department by an amount specified in the relevant determination. The written determination would be a legislative instrument and may be subject to Parliamentary disallowance under section 42 of the Legislative Instruments Act 2003 (Cth), but would not be subject to the sunsetting provisions in Part 6 of that Act (subclause 11(7)).[24] In short, this means that the Finance Minister’s determinations are disallowable by Parliament, but if they are not disallowed they will not expire.
Clause 12 allows for a reduction of the appropriation for administered items. Under this provision, if the relevant Parliamentary department’s annual report specifies that the amount required for the item is less than originally anticipated, the appropriation is taken to have been reduced to the lesser amount. Subclause 12(2) enables the Finance Minister to make written determinations relating to the proposed reduction. Again, the written determination would be a legislative instrument and may be subject to Parliamentary disallowance under section 42 of the Legislative Instruments Act, but would not be subject to the sunsetting provisions in Part 6 of that Act (subclause 12(3)). Again, this means that the Finance Minister’s determinations are disallowable by Parliament, but if they are not disallowed they will not expire.
Section 13 of the Appropriation (Parliamentary Departments) Act (No. 1) 2013–2014 (Cth) specifies that a responsible Presiding Officer can make a determination for an additional appropriation where there is an urgent need for expenditure that is not provided for because of an erroneous omission or understatement, or because the expenditure was unforeseen.[25] The amount of that additional appropriation is capped in that Act at $300,000 for each of the Department of the Senate, the Department of the House of Representative and the Parliamentary Budget Office, and $1 million for the Department of Parliamentary Services.
Subclause 13(1) of the Bill specifies that the caps are reset, so that the same caps apply after the commencement of the Act, regardless of any amounts previously appropriated under subsections 13(3), (4), (5) and (6) of the Appropriation (Parliamentary Departments) Act (No. 1) 2013–2014.
Subclause 13(2) specifies that if a responsible Presiding Officer has already made an appropriation under section 13 of the Appropriation (Parliamentary Departments) Act (No. 1) 2013–14 that is also appropriated for under this Bill, then the amount appropriated in this Bill is reduced by the advanced amount (but not below nil).
Determinations under section 13 of the Appropriation (Parliamentary Departments) Act (No. 1) 2013–2014 are legislative instruments, but are subject to neither disallowance nor sunsetting under section 42 and Part 6 respectively of the Legislative Instruments Act.
Part 4 – Miscellaneous
Clause 14 provides for crediting amounts to Special Accounts. A ‘special account’ is one established under the Financial Management and Accountability Act 1997 (FMA Act) (Cth) by the Finance Minister, or established under another Act.[26]
Clause 15 appropriates funds from the Consolidated Revenue Fund as necessary for the purpose of the proposed Act, including the operation of the proposed act as affected by the FMA Act.
Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.
[6]. Department of Parliamentary Services (DPS), Annual report 2012–13, DPS, Canberra, 2013, p. 5, accessed 24 February 2014.
[7]. C Mills (Secretary, Department of Parliamentary Services), Evidence to Finance and Public Administration Legislation Committee, Official committee Hansard, 18 November 2013, p. 26, accessed 24 February 2014.
[9]. Ibid., Horne, p. 12; see also Joint Committee of Public Accounts and Audit, The efficiency dividend and small agencies: size does matter, House of Representatives, Canberra, December 2008, p. 102, accessed 24 February 2014. The Committee defined small agencies as those with annual expenses of less than $150m (p. 99).
[11]. Department of Parliamentary Services (DPS), Annual report 2005–06, DPS, Canberra, 2006, p. 96; DPS, Annual report 2012–13, DPS, Canberra, 2013, p. 173, accessed 24 February 2014.
[12]. Department of Parliamentary Services (DPS), Annual report 2004–05, DPS, Canberra, 2005, p. 67; DPS, Annual report 2012–13, DPS, Canberra, 2013, p. 63, accessed 24 February 2014.
[13]. C Mills (Secretary, Department of Parliamentary Services), Evidence to Finance and Public Administration Legislation Committee, Official committee Hansard, 18 November 2013, p. 25, accessed 24 February 2014.
[23]. As defined in clause 3 of the Bill, the responsible Presiding Officer: for the Department of the Senate is the President of the Senate; for the Department of the House of Representatives is the Speaker of the House; and for the Department of Parliamentary Services and the Parliamentary Budget Office is both the President and the Speaker together.
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