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Tuesday, 12 May 2009
Page: 3540


Mr TANNER (Minister for Finance and Deregulation) (8:06 PM) —I move:

That this bill be now read a second time.

I rise to introduce Appropriation Bill (No. 2) 2009-2010, which, together with Appropriation (Parliamentary Departments) Bill (No. 1) 2009-2010, is one of the principal pieces of legislation underpinning the government’s budget.

Appropriation Bill (No. 2) 2009-2010 proposes appropriation for agencies to meet:

  • payments direct to local government, and some national partnership payments through the states, the Australian Capital Territory and the Northern Territory;
  • requirements for departmental equity injections, loans and previous years’ outputs; and
  • requirements to create or acquire administered assets and to discharge administered liabilities.

Appropriation Bill (No. 2) 2009-2010 seeks approval for appropriations from the Consolidated Revenue Fund totalling $10.6 billion.

The implementation of the Federal Financial Relations Act 2009 has important implications for the Commonwealth’s arrangements for payments to the states and territories and for Appropriation Bill (No. 2).

With the commencement of COAG’s federal financial framework reforms on 1 January 2009, most of the annual appropriations for payments to the states and territories will no longer be proposed in Appropriation Bill (No. 2). Instead, those payments will be made under the Federal Financial Relations Act 2009. Appropriation Bill (No. 2) will continue to propose appropriations for payments direct to local government and payments through the states and territories for non-government schools that are not paid from the Schools Assistance Act 2008 or the COAG Reform Fund.

The Federal Financial Relations Act implements the centralised payments arrangement agreed by COAG and payments to the states and territories are now contained in one piece of Commonwealth legislation. This streamlining will improve public transparency of these payments and the ability of the parliament to scrutinise the payment arrangements.

Appropriation Bill (No. 2) also contains an important new provision that will provide parliament with a transparent mechanism to oversee the rate at which amounts committed to the nation-building funds and to the COAG Reform Fund are expended.

The government intends that payments from the three nation-building funds and the COAG Reform Fund will be transparent and subject to parliamentary scrutiny. Accordingly, the Nation-building Funds Act and the Federal Financial Relations Act 2009 provide a mechanism to specify maximum limits, called the ‘general drawing rights limits’, on the amounts that can be paid out from each of the four special accounts in a financial year.

It is important to note that bill 2 will not appropriate amounts to be paid from the various funds. The intention of specifying general drawing rights limits is to set maximum limits on the amounts that may be covered by drawing rights issued by the finance minister under the Financial Management and Accountability Act 1997, for the purposes to which the limits apply.

As part of the government’s Operation Sunlight program to increase the transparency of the budget, Budget Paper No. 4 contains a new table providing details of all special accounts authorised under the Financial Management and Accountability Act. The new table shows, by portfolio and agency, estimated balances and flows for the budget year and for the previous year.

In addition, for the first time Budget Paper No. 4 contains separate estimates of receipts that agencies may retain and spend under section 31 of the Financial Management and Accountability Act or which bodies under the Commonwealth Authorities and Companies Actmay spend in accordance with their enabling legislation. A separate column shows the estimated special account receipts from non-appropriated sources.

This means that Budget Paper No. 4 now contains complete estimates of agency funding identified by each source of appropriation. More detail on these changes is provided in the introduction to the budget paper.

Agencies’ outcome statements have been revised to make them better targeted to improve budget transparency and accountability. The changes to outcomes provide greater clarity in terms of the results agencies are seeking to achieve. These improvements do not create new outcomes or change the purposes for which the appropriations are provided. Accordingly, the administered expense appropriations for the revised outcomes are proposed in bill 1.

Details of the proposed appropriations are set out in schedule 2 to the bill, the main features of which were outlined in the budget speech delivered by my colleague the Treasurer earlier this evening.

I commend the bill to the House.

Debate (on motion by Mr Pyne) adjourned.