Bills Digest No. 77,
2018–19
PDF version [633KB]
Paula Pyburne
Law and Bills Digest Section
3
April 2019
Contents
Purpose of the Bills
Structure of the Bills
Background
Committee consideration
Policy position of non-government
parties/independents
Financial implications
Statement of Compatibility with Human
Rights
Key issues and provisions
Date introduced: 2
April 2019
House: House of
Representatives
Portfolio: Finance
Commencement: the
later of Royal Assent or 1 July 2019
Links: The links to the
Bills, their Explanatory Memoranda and second reading speeches can be found
on the homepages for the Supply
Bill (No. 1) 2019–2020; the Supply
Bill (No. 2) 2019–2020; and the Supply
(Parliamentary Departments) Bill (No. 1) 2019–2020 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 Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at April 2019.
Purpose of
the Bills
This Bills Digest refers to three Bills.
The purpose of Supply Bill (No. 1) 2019-2020 (Supply
Bill No. 1) is to propose appropriations in the amount of $40,757,931,000 from
the Consolidated Revenue Fund (CRF) which are broadly equivalent to 5/12ths of
the estimated 2019–2020 annual appropriations for the ordinary annual services
of the Government—excluding Budget measures. The balance of the annual
appropriations for the ordinary annual services of the Government for 2019–2020,
including Budget measures for that year are contained in Appropriation
Bill (No. 1) 2019–2020 (Appropriation Bill No. 1).[1]
The purpose of Supply Bill (No. 2) 2019-2020
(Supply Bill No. 2) is to propose appropriations in the amount of $4,813,161,000
from the CRF which are broadly equivalent to 5/12ths of the estimated 2019–2020
annual appropriations that are not for the ordinary annual services of the
Government. The balance of the annual appropriations that are not for the
ordinary annual services of the Government for 2019–2020, including Budget
measures for that year are contained in Appropriation
Bill (No. 2) 2019-2020 (Appropriation Bill No. 2).[2]
The purpose of Supply (Parliamentary Departments) Bill
(No. 1) 2019-2020 (Parliamentary Departments Supply Bill) is to propose
appropriations in the amount of $101,156,000 from the CRF which are broadly
equivalent to 5/12ths of the estimated 2019–2020 annual appropriations for
expenditure in relation to the Parliamentary Departments—excluding Budget
measures. The balance of the annual appropriations for the Parliamentary
departments for 2019–2020, including Budget measures for that year are
contained in Appropriation
(Parliamentary Departments) Bill (No. 1) 2019-2020.[3]
Due to the speed with which the Bills are expected to pass
both the House of Representatives and the Senate, this Bills Digest merely sets
out the nature of the Bills and the rationale for their introduction. Analysis
of the contents of the various Portfolio Budget Statements will be prepared
separately by the Parliamentary Library.
Structure
of the Bills
Part 1 of each of the Bills deals with preliminary
matters, including when the Acts commence, and how to interpret them.
Part 2 of each Bill outlines the quantum and types
of appropriation from the CRF.
Part 3 of Supply Bill No. 1 and Supply Bill No. 2
establishes the Advance to the Finance Minister (AFM) for 2019–2020, whereas Part
3 of the Parliamentary Departments Supply Bill establishes the Advance to
the responsible Presiding Officer for 2019–2020.
Part 4 of the Supply Bill No. 2 deals with the
drawing right limits (an administrative restriction on spending, but not an
appropriation).
Part 4 of the Supply Bill No. 1 and the
Parliamentary Departments Supply Bill and Part 5 of the Supply Bill No.
2 provide for several technical matters, including but not limited to details
relating to special accounts and formally appropriating the amounts required
from the CRF.
Schedule 1 of the Supply Bill No. 1 and the
Parliamentary Departments Supply Bill and Schedule 2 of the Supply Bill
No. 2 provide details about the appropriations to both non-corporate entities
and to corporate entities as defined by the Public Governance,
Performance and Accountability Act 2013 (PGPA Act).
Schedule 1 of the Supply Bill No. 2 lists the
Ministers responsible for determinations of payments to, or for, the states, Australian
Capital Territory, Northern Territory and local government.
Background
About appropriations
An appropriation is the legal release of monies from the Consolidated
Revenue Fund (CRF).[4]
Appropriation Acts, however, do not create a source of power for the
Commonwealth to spend money; they merely release that money from the CRF. The
Commonwealth’s power to spend money must be found in other parts of the Constitution.[5]
Under the terms of the Constitution, there are
certain unique requirements that a Bill proposing to appropriate monies from
the CRF must satisfy.
Constitutional requirements
Section 81 of the Constitution provides that:
All revenues or moneys raised or received by the Executive
Government of the Commonwealth shall form one Consolidated Revenue Fund [CRF],
to be appropriated for the purposes of the Commonwealth ...[6]
Section 83 of the Constitution provides that no
money may be withdrawn from the CRF ‘except under appropriation made by law’.[7]
The effect of these two sections is that all monies received by the
Commonwealth must be paid into the CRF, and must not be spent before there is
an appropriation authorising specific expenditure.
The ‘ordinary annual services
of Government’ versus ‘other’ services of Government
Section 54 of the Constitution requires that there
be a separate law appropriating funds for the ‘ordinary annual services of the
Government’, and that other matters must not be dealt with in the same Bill.[8]
However, what constitutes the ‘ordinary annual services of the Government’ and
the ‘other’ services of the Government is not defined in the Constitution.
A working distinction between ordinary and other annual
services was agreed in a ‘Compact’ between the Senate and the Government in
1965.[9]
Several amendments have been made to the Compact since 1965, and in 2010 the
Senate Standing Committee on Appropriations and Staffing recommended the Senate
restate the Compact in a consolidated form.[10] On 22
June 2010, the Senate resolved as follows:
(1) To
reaffirm its constitutional right to amend proposed laws appropriating revenue
or moneys for expenditure on all matters not involving the ordinary annual
services of the Government.
(2) That appropriations for expenditure on:
(a) the construction of
public works and buildings;
(b) the acquisition of
sites and buildings;
(c) items
of plant and equipment which are clearly definable as capital expenditure (but
not including the acquisition of computers or the fitting out of buildings);
(d) grants to the states
under section 96 of the Constitution;
(e) new policies not
previously authorised by special legislation;
(f) items regarded as
equity injections and loans; and
(g) existing asset
replacement (which is to be regarded as depreciation),
are not appropriations for the ordinary annual services of
the Government and that proposed laws for the appropriation of revenue or moneys
for expenditure on the said matters shall be presented to the Senate in a
separate appropriation bill subject to amendment by the Senate.
(3) That, in respect of payments to international
organisations:
(a) the
initial payment in effect represents a new policy decision and therefore should
be in Appropriation Bill (No. 2); and
(b) subsequent
payments represent a continuing government activity of supporting the
international organisation and therefore represent an ordinary annual service
and should be in Appropriation Bill (No. 1).
(4) That
all appropriation items for continuing activities for which appropriations have
been made in the past be regarded as part of ordinary annual services.[11]
Adherence to the Compact has not always been strict, and
the High Court has held that any disagreements between the Houses are not
justiciable.[12]
Any disputes, therefore, are to be determined between the Houses themselves.
The
rationale for the supply bills
On 27 November 2018, the Prime Minister, Scott Morrison, announced
that the Government would be handing down its budget on 2 April 2019.[13]
The need for Supply Bills arises because of the Prime
Minister’s intention to advise the Governor-General to prorogue the Parliament
by proclamation, formally ending the 45th Parliament. It is expected that a
Federal election will be held in May 2019.
Supply Bills
A Supply Bill generally provides for interim
appropriations out of the Consolidated Revenue Fund to fund the core activities
of the government until the passage of the annual Appropriation Bills. The
introduction of Supply Bills was a common occurrence from Federation until
1993, as the practice of successive Commonwealth governments was to deliver the
Budget and table the annual Appropriation Bills after the commencement of the
financial year on 1 July. Since 1994, however, the Commonwealth has
generally delivered the Budget and tabled the annual Appropriation Bills in
May, prior to the commencement of the next financial year.[14]
Most recent use—2016
The most recent introduction of Supply Bills
into Parliament was on 2 May 2016.[15] The
need for Supply Bills in that case arose because of the timing of the 2016
Federal Election, which rendered the delivery of a Budget in May 2016
impractical.
In that case, the Bills proposed to
appropriate 5/12ths of the annual funding required. This provided for funding
until the end of November 2016, by which time it was anticipated that the
annual Appropriation Bills would have come into force.
The current Bills also appropriate 5/12ths
of the annual funding required. Speaking in relation to Supply Bill No. 1,
Special Minister of State, Alex Hawke stated:
I wish to emphasise that this Bill
seeks provision only to fund government expenditure on an interim basis until
budget appropriation Bills have passed. Consistent with convention, the Supply
Bills do not include funding for budget measures.
This arrangement allows for
Appropriation Bill (No. 1) 2019-2020, or a similar bill, to be passed by the
next parliament, if necessary.[16]
Committee
consideration
At the time of writing this Bills Digest none of the Bills
had been referred to Committee for inquiry and report.
Senate
Standing Committee for the Scrutiny of Bills
At the time of writing this Bills Digest the Senate Standing
Committee for the Scrutiny of Bills had not commented on the Bills.
Policy
position of non-government parties/independents
Whilst members of non-government parties have signalled
their reactions to certain measures in the Budget, none have indicated that
they will reject the Bills.
Financial
implications
The Supply Bill No. 1 seeks to appropriate approximately
$40.8 billion from the CRF. The Supply
Bill No. 2 seeks to appropriate approximately $4.8 billion from the CRF.
The Parliamentary Departments Supply Bill seeks to appropriate approximately $101
million from the CRF.
The total amount of money sought to be appropriated by the
three Bills is $45.7 billion.
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed
the Bills’ compatibility with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of that Act. The
Government considers that the Bills are compatible.[17]
Parliamentary
Joint Committee on Human Rights
At the time of writing this Bills Digest the Parliamentary
Joint Committee on Human Rights had not commented on the Bills.
Key issues
and provisions
Supply
Bill No. 1
Clauses 6–9 of Supply Bill No. 1 outline the
quantum and types of appropriation from the CRF.
Clause 10 of Supply Bill No. 1 establishes the
Advance to the Finance Minister for 2019–2020. The Advance to the Finance
Minister is the appropriation of monies to the Finance Minister without any
particular outcome or purpose specified. The Advance to the Finance Minister is
established in both Supply Bill No. 1 and Supply Bill No. 2. The amount of
appropriation allocated to the Advance to the Finance Minister each year has
typically been limited to $295 million for the ordinary annual services of
Government. This is the amount allocated in subclause 10(3) of Supply Bill No.
1. The Finance Minister tables an annual report in Parliament on the use of the
Advance to the Finance Minister.[18]
Clauses 11–13 of the Supply Bill No. 1 provide for
several technical matters, including, amongst other things, details relating to
special accounts and formally appropriating the amounts required from the CRF.
Schedule 1 of the Supply Bill No. 1 provides
details about the appropriations to both non-corporate entities and to
corporate entities as defined by the PGPA Act.
The table below sets out in summary form, the amounts in
Schedule 1 to Supply Bill No. 1, approximates the total for 2019–2020 and
compares it to the appropriation in 2018–2019. When considering the figures in
the table, it should be kept in mind that the appropriation set out in Supply
Bill No. 1 is generally based on 5/12ths of the estimated 2019–2020 annual
appropriation.
Table 1: Comparison with 2018–2019
| Portfolio |
Appropriation in Supply Bill (No. 1) 2019–2020
(Supply for 5/12ths of year) |
Appropriation in Supply Bill (No. 1) 2019–2020,
converted to 12/12ths (full year) |
Appropriation in Appropriation Act (No. 1) 2018–2019[19] |
Actual Available Appropriation 2018–2019[20] |
| |
$’000 |
$’000 |
$’000 |
$’000 |
| Agriculture and Water Resources |
343,701 |
824,882 |
923,182 |
921,407 |
| Attorney‑General |
535,129 |
1,284,309 |
1,694,585 |
1,216,925 |
| Communications and the Arts |
1,009,200 |
2,422,080 |
2,408,736 |
2,408,736 |
| Defence |
14,609,955 |
35,063,892 |
33,727,136 |
33,727,136 |
| Education and Training |
962,043 |
2,308,903 |
2,274,824 |
2,243,130 |
| Environment and Energy |
618,817 |
1,485,160 |
1,435,805 |
1,417,885 |
| Finance |
303,832 |
729,196 |
987,744 |
987,744 |
| Foreign Affairs and Trade |
2,665, 905 |
6,398,172 |
6,229,440 |
6,216,854 |
| Health |
5,076,934 |
12,184,641 |
12,109,357 |
12,070,202 |
| Home Affairs |
2,646,048 |
6,350,515 |
5,525,285 |
6,045,525 |
| Industry, Innovation and Science |
941, 073 |
2,193,775 |
4,452,114 |
2,258,441 |
| Infrastructure, Regional Development and Cities |
917,766 |
2,202,638 |
2,132,903 |
2,132,903 |
| Jobs and Small Business |
920,030 |
2,208,072 |
4,532,420 |
2,258,045 |
| Prime Minister and Cabinet |
848, 817 |
2,037,160 |
2,113,706 |
2,057,777 |
| Social Services |
6,390,494 |
15,337,185 |
10,047,572 |
14,538,841 |
| Treasury |
1,968,187 |
4,723,648 |
4,635,238 |
4,629,766 |
|
Total[21]
|
40,757,931
|
97,754,228
|
95,230,047 |
95,131,317
|
Supply
Bill No. 2
Clauses 6–11 of the Supply Bill No. 2 outline the
quantum and types of appropriation from the consolidated revenue fund.
Clause 12 establishes the Advance to the Finance
Minister for 2019–20. (See discussion about the Advance to the Finance Minister
in relation to Supply Bill No. 1 above.) The amount of appropriation allocated
to the Advance to the Finance Minister each year has typically been limited to
$380 million for the other annual services of Government. This is the amount
allocated in subclause 12(3) of Supply Bill No. 2.
The money in the Supply Bill No. 2 is appropriated to
incorporated and non-incorporated Government entities according to Schedule
2 of that Bill as either:
- grants
to the states, territories and local governments (see also clause 16 below)
- new
administered programs or
- non-operating
(or ‘capital’) appropriations.
These three types of appropriations cannot be included in
the Supply Bill No. 1 as they do not relate to the ‘ordinary annual services of
Government’.
Clause 13 of Supply Bill No 2 sets appropriation
limits for provisions of specific Acts. Clause 14 provides that the debt
limits, set under clause 13, are adjusted to take into account any GST
liability that may arise in relation to particular payments.
Clauses 15–17 of the Supply Bill No. 2 provide for
several technical matters. In particular, clause 16 of the Supply Bill No. 2
seeks to ensure that payments made by the states, territories and local
governments from financial assistance provided by the Commonwealth accord with
the conditions established by the Minister listed in Schedule 1.
The table below sets out in summary form, the amounts in
Schedule 2 to Supply Bill No. 2, approximates the total for 2019–20 and
compares it to the appropriation in 2018–19.
Table 2: Comparison with 2018–2019
| Portfolio |
Appropriation in Supply Bill (No. 2) 2019–2020
(Supply for 5/12ths of year) |
Appropriation in Supply Bill (No. 1) 2019–2020,
converted to 12/12ths (full year) |
Appropriation in Appropriation Act (No. 2) 2018–2019[22] |
Actual Available Appropriation 2018–2019[23] |
| |
$’000 |
$’000 |
$’000 |
$’000 |
| Agriculture and Water Resources |
213,058 |
511,339 |
699,995 |
699,995 |
| Attorney‑General |
4,544 |
10,905 |
11,305 |
5,938 |
| Communications and the Arts |
1,258,940 |
3,021,456 |
5,105,444 |
5,105,444 |
| Defence |
1,729,357 |
4,150,456 |
3,184,629 |
3,184,629 |
| Education and Training |
31,742 |
76,180 |
72,878 |
72,878 |
| Environment and Energy |
101,462 |
243,508 |
223,085 |
223,085 |
| Finance |
64,616 |
155,078 |
233,235 |
233,235 |
| Foreign Affairs and Trade |
290,854 |
698,049 |
81,378 |
81,378 |
| Health |
23,029 |
55,269 |
83,440 |
83,440 |
| Home Affairs |
70,897 |
170,152 |
192,787 |
185,759 |
| Human Services[24] |
|
|
110,967 |
|
| Industry, Innovation and Science[25] |
36,719 |
88,125 |
|
59,491 |
| Infrastructure, Regional Development and Cities |
850,013 |
2,040,031 |
2,445,090 |
2,520,469 |
| Jobs and Small Business |
3,765 |
9,036 |
75,881 |
16,390 |
| Prime Minister and Cabinet |
12,340 |
29,616 |
39,722 |
39,722 |
| Social Services |
46,885 |
112,524 |
29,777 |
140,744 |
| Treasury |
74,940 |
179,856 |
414,373 |
414,373 |
|
Total[26]
|
4,813,161
|
11,551,580
|
13,003,986
|
13,066,970
|
Parliamentary
Departments Supply Bill
Clause 3 of the Parliamentary Departments Supply Bill
defines the term responsible presiding officer as being:
(a) in relation to the Department of the Senate—the
President of the Senate
(b) in relation to the Department of the House of
Representatives—the Speaker of that House
(c) in
relation to the Department of Parliamentary Services—the President and the
Speaker together or
(d) in relation to the Parliamentary Budget
Office—the President and the Speaker together.
Clauses 6–10 of the Parliamentary Departments
Supply Bill outline the quantum and types of appropriation from the
consolidated revenue fund.
Clause 11 establishes the Advance to the responsible
Presiding Officer for 2019–2020. The amount of appropriation is limited as
follows:
- for
the Department of the Senate—$300,000
- for
the Department of the House of Representatives—$300,000
- for
the Department of Parliamentary Services—$1 million and
- for
the Parliamentary Budget Office—$300,000.
Clauses 12–14 of the Parliamentary Departments
Supply Bill provides for several technical matters, including details relating
to special accounts, formally appropriating the amounts required from the CRF,
and the repeal of the Act at the start of 1 July 2022.
The table below sets out in summary form, the amounts in
Schedule 2 to the Parliamentary Departments Supply Bill, approximates the total
for 2019–2020 and compares it to the appropriation in 2018–19.
Table 3: Comparison with 2018–2019
| Department |
Appropriation in Parliamentary Departments Supply Bill
(Supply for 5/12ths of year) |
Appropriation in Parliamentary Departments Supply Bill,
converted to 12/12ths (full year) |
Appropriation in Appropriation (Parliamentary
Departments) Act (No. 1) 2018–2019[27] |
Actual Available Appropriation 2018–2019[28] |
| |
$’000 |
$’000 |
$’000 |
$’000 |
| Department of the Senate |
9,940 |
23,856 |
24,238 |
24,238 |
| Department of the House of Representatives |
10,436 |
25,046 |
26,063 |
25,063 |
| Department of Parliamentary Services |
77,967 |
187,120 |
193,320 |
193,320 |
| Parliamentary Budget Office |
2,813 |
6,751 |
7,238 |
7,238 |
|
Total
|
101,156
|
242,774
|
249,859
|
249,859
|
[1]. A
Hawke, ‘Second
reading speech: Supply Bill (No. 1) 2019–2020’, House of Representatives, Debates,
2 April 2019, p. 51. Parliament of Australia, ‘Appropriation
Bill (No. 1) 2019-2020 homepage’, Australian Parliament website.
[2]. A
Hawke, ‘Second
reading speech: Supply Bill (No. 2) 2019–2020’, House of Representatives, Debates,
2 April 2019, p. 52. Parliament of Australia, ‘Appropriation
Bill (No. 2) 2019-2020 homepage’, Australian Parliament website.
[3]. A
Hawke, ‘Second
reading speech: Supply (Parliamentary Departments) Bill (No. 1) 2019-2020’,
House of Representatives, Debates, 2 April 2019, p. 53. Parliament of
Australia, ‘Appropriation
(Parliamentary Departments) Bill (No. 1) 2019-2020 homepage’, Australian Parliament
website.
[4]. Department
of Finance (DoF), Guide
to appropriations—RMG 100, DoF website, last updated 3 December 2018.
[5]. Pape
v Commissioner of Taxation (2009) 238 CLR 1, [2009] HCA 23.
[6]. Constitution, section
81.
[7]. Constitution,
section 83.
[8]. Constitution, section
54: ‘The proposed law which appropriates revenue or moneys for the ordinary
annual services of the Government shall deal only with such proposed
appropriation’.
[9]. J
Odgers, H Evans and R Laing, Odgers’
Australian Senate practice, 14th edn, Department of the Senate,
Canberra, 2016, chapter 13.
[10]. Senate
Standing Committee on Appropriations and Staffing, 50th
report: ordinary annual services of the government, The Senate, Canberra, June 2010.
[11]. Australia,
Senate, Journals,
127, 2008–10, 22 June 2010, pp. 3642–3643.
[12]. Osborne
v Commonwealth (1911) 12 CLR 321, [1911]
HCA 19 per Griffith CJ at [336].
[13]. S
Morrison (Prime Minister), Transcript
of press conference, Canberra, 27 November 2018.
[14]. D
Weight, ‘Supply
Bills—a reprise’, FlagPost, Parliamentary Library blog, 29 April 2015.
[15]. P
Hendy, ‘Second
reading speech: Supply Bill (No. 1) 2016–2017’, House of Representatives, Debates,
2 May 2016, p. 3945.
[16]. A
Hawke, ‘Second
reading speech: Supply Bill (No. 1) 2019–2020’, op. cit.
[17]. The
Statement of Compatibility with Human Rights can be found at page 4 of the Explanatory
Memorandum to Supply Bill No. 1, at page 4 of the Explanatory
Memorandum to Supply Bill No. 2 and at page 4 of the Explanatory
Memorandum to the Parliamentary Departments Supply Bill.
[18]. Department
of Finance (DoF), ‘Advance
to the Finance Minister’, DoF website, last updated 13 February 2019.
[19]. Appropriation Act
(No. 1) 2018–2019, Schedule 1.
[20]. Supply
Bill (No. 1) 2019–2020, Schedule 1.
[21]. Note
that there may some variations in totals due to rounding.
[22]. Appropriation Act
(No. 2) 2018–2019, Schedule 2.
[23]. Supply
Bill (No. 2) 2019–2020, Schedule 2.
[24]. Note
that there was an appropriation to the Human Services portfolio in the Appropriation Act
(No. 2) 2018–2019. A corresponding amount is represented as an equity
injection to the Department of Human Services in the Social Services portfolio
statement in Schedule 2 to Supply Bill No. 2.
[25]. Monies
were allocated to the Department of Industry, Innovation and Science under the
Jobs and Innovation portfolio in the Appropriation Act
(No. 2) 2018–2019.
[26]. Note
that there may some variations in totals due to rounding.
[27]. Appropriation
(Parliamentary Departments) Act (No. 1) 2018–2019, Schedule 1.
[28]. Supply
(Parliamentary Departments) Bill (No. 1) 2019–2020, Schedule 1.
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