Senator CHRIS EVANS (10:39 AM) —I move:

Fixed income—uninvested money

Fixed-income percentage

—————

Statement pursuant to the order of the Senate of 26 June 2000

This amendment is circulated as a request because it provides for an amount of money representing interest to be credited to the Account and therefore available to be paid out for the purposes of the Account. Clause 8 of the bill provides for amounts to be paid out of the Account in accordance with funding agreements, and for a reference to an amount paid out of the Account to be a reference to an amount paid out of the Consolidated Revenue Fund (CRF). The amendment will therefore have the effect of allowing more funds to be paid out of the CRF, thereby increasing the demand on the appropriation and therefore the “proposed charge or burden on the people” within the meaning of the third paragraph of section 53 of the Constitution.

Section 21 of the Financial Management and Accountability Act 1997 (FMA Act) provides that if an Act other than the FMA Act establishes a Special Account for identified purposes, then the CRF is appropriated for expenditure for those purposes. It is therefore a standing appropriation for the purposes of Special Accounts of this kind. Clause 8 of the bill also constitutes an appropriation because it provides authority for money to be drawn from the CRF and therefore comes within the definition of “appropriation” in section 5 of the FMA Act.

—————

Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000

The Senate has long accepted that an amendment should take the form of a request if it would have the effect of increasing expenditure out of an appropriation in the bill or a standing appropriation in a statute amended by the bill. The Senate has also accepted amendments as requests where the standing appropriation was not in the statute to be amended by the bill but in a closely related statute which, in those cases, was part of the new tax system legislation. In this case the appropriation is a combination of provisions in the bill itself and in a statute referred to in the bill and which applies to it. The request is therefore in accordance with the precedents of the Senate.

This request of the House of Representatives seeks to deliver the government's promise that the full equivalent of the increase in excise collected on draught beer since 1 July 2001, less the $5 million allocated to the Historic Hotels initiative, will be appropriated and allocated to the foundation. It is there in black and white with the Prime Minister's signature on the agreement. This is an important request. We are trying to ensure that the government fulfils its commitment. The government is trying to be a little mean and tricky, I might suggest, with the mechanism it has devised by moving the money to the foundation and trying to spread the payments over four years. The effect will be to deny the foundation the full value of the money and prevent it earning a further $13 million in interest over the next four years. The foundation is being denied a significant amount of money by this mechanism. The government has decided to make payments annually to the foundation with money it has already collected but to make the smaller payments in the early years. On a rough calculation, we arrived at a figure of about $13 million worth of interest. The opposition has two issues with this. One is the question about whether the full excise that was collected has been paid over. We argue that it has not been. Given that and given the agreement between the Democrats and the government that the appropriate amount is $115 million, we then find there is a mechanism which effectively denies the foundation the full value of that.

I note that the Democrats have circulated a similar request to the one moved by me on behalf of the Australian Labor Party. I think the difference goes to the question of whether the interest accrues continually or only over three years. I will leave it for Senator Lees to explain the differences. We think this is an important request to ensure that the full benefit of the money wrongly collected from Australian beer drinkers is passed on to the foundation. There is no reason why the government should reap a windfall profit from that money by its failure to pay it immediately. On our calculations, that is another $13 million that could be used appropriately for the foundation. I would urge the chamber to support the request moved by the Australian Labor Party. I will be clearer, when Senator Lees has spoken to her amendment, as to the difference between the two requests.