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Appropriation Bill (No. 2) 2016-2017

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2016

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

 

 

Appropriation Bill (No. 2) 2016-2017

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the Minister for Finance,

Senator the Honourable Mathias Cormann)

 

 



 

Table of Acronyms and Defined Terms

 

 

AAO

Administrative Arrangements Order

AFM

Advance to the Finance Minister

AI Act

Acts Interpretation Act 1901

BAF

Building Australia Fund

COAG

Council of Australian Governments

Commonwealth entity

An entity as defined in section 10 of the PGPA Act

CRF

Consolidated Revenue Fund

EIF

Education Investment Fund

Finance Minister

Minister for Finance

GST

Goods and Services Tax

MoG

Machinery of Government

non-corporate entities

Non-corporate Commonwealth entities as defined in the PGPA Act or the High Court

OPH

Old Parliament House

PGPA Act

Public Governance, Performance and Accountability Act 2013

PGPA Rule

Public Governance, Performance and Accountability Rule 2014

portfolio statements

Portfolio Budget Statements

 



 



Appropriation Bill (No. 2) 2016-2017

General Outline                       

1                This Explanatory Memorandum accompanies Appropriation Bill (No. 2) 2016-2017 (the Bill).

2                The main purpose of the Bill is to propose appropriations from the Consolidated Revenue Fund (CRF) for services that are not the ordinary annual services of the Government.

3                The Bill proposes appropriations broadly equivalent to 7/12 ths of the estimated 2016-2017 annual appropriations that are not for the ordinary services of the Government, plus Budget measures for the full year of 2016-2017. Supply Act (No. 2) 2016-2017 appropriates the CRF for the residual 5/12 ths , less any Budget measures, to ensure that there are adequate appropriations for the first part of 2016-2017 for activities that are not for the ordinary annual services of the Government.

4                The Bill is in substantially the same terms, and has essentially the same effect, as the Appropriation Bill (No. 2) 2016-2017 that was introduced with that name into the 44 th  Parliament on 3 May 2016 but which lapsed on the dissolution of the two Houses on 9 May 2016 (the lapsed Bill). A small number of changes have been required to the Bill to take account of administrative rearrangements since 3 May 2016. These changes are detailed at paragraphs 71 to 78 below.

5                Appropriations for the ordinary annual services of the Government must be contained in a separate Bill from other appropriations in accordance with sections 53 and 54 of the Australian Constitution (the Constitution). Consequently, the Bill proposes appropriations that are not for the ordinary annual services of the Government. Annual appropriations that are for the ordinary annual services of the Government are proposed in Appropriation Bill (No. 1) 2016-2017. Other annual appropriations that are not for the ordinary annual services of the Government are proposed in Appropriation (Parliamentary Departments) Bill (No. 1) 2016-2017 . Appropriation Bill (No. 1) 2016-2017 and Appropriation (Parliamentary Departments) Bill (No. 1) 2016-2017 are on the same proportional basis of 2016-2017 estimates as for this Bill. Together these three Bills are termed the Appropriation Bills.

6                The Portfolio Budget Statements (portfolio statements) were published and tabled in the 44 th  Parliament in relation to the lapsed Bill. This Explanatory Memorandum should be read in conjunction with the various 2016-2017 portfolio statements, which contain details on the appropriations set out in the Schedules of the Bills. The portfolio statements are taken to cover both the Bill and Supply Act (No. 2) 2016-2017 .

Structure of appropriations in the Bill

7                The Bill provides for the appropriation of specified amounts for expenditure by Australian Government entities, primarily being non-corporate Commonwealth entities (non-corporate entities) under the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

8                Part 1 of the Bill deals with definitions, the interpretative role of the portfolio statements and the concept of notional transactions. Part 2 of the Bill proposes appropriations to make payments of the amounts in Schedule 2 for State, ACT, NT and local government items (clause 7), administered items (clause 8 ), administered assets and liabilities items (clause 9), other departmental items (clause 10 ) and corporate entity items (clause 11). Part 3 of the Bill specifies a way in which the amounts in Schedule 2 may be adjusted (clause 12).

9                Part 4 deals with the debit limits applicable for the current year (current year is defined in clause 3 of the Bill) to the Building Australia Fund and the Education Investment Fund established by the Nation-building Funds Act 2008 .

10            This Part also deals with the debit limits, for the current year, for the purposes of section 9 and section 16 of the Federal Financial Relations Act 2009 , which is detailed under the subheadings “General purpose financial assistance” and “National partnership payments”. Part 4 also deals with adjustments to the debit limit for the Goods and Services Tax (GST).

11            Part 5 deals with credits to special accounts (clause 15), the conditions that apply to payments of State, ACT, NT and local government items (clause 16 and Schedule 1), provides for amounts to be appropriated as necessary (clause 17) and specifies when the Bill is repealed (clause 18). In addition to the adjustment provision in Part 3, clause 17 of the Bill recognises that the appropriations proposed in the Bill may also be varied by the PGPA Act .

Financial Impact

12            The Bill, if enacted, would appropriate the amounts specified in Schedule 2.





Statement of compatibility with human rights

1                The Bill seeks to appropriate money for services that are not considered to be the ordinary annual services of the Government.

2                Accordingly, the Bill performs an important constitutional function, by authorising the withdrawal of money from the CRF for the broad purposes identified in the Bill.

3                However, as the High Court has emphasised, beyond this, Appropriation Acts do not create rights and nor do they, importantly, impose any duties.

4                Given that the legal effect of Appropriation Bills is limited in this way, the Bill is not seen as engaging, or otherwise affecting, the rights or freedoms relevant to the Human Rights (Parliamentary Scrutiny) Act 2011 .

5                Detailed information on the relevant appropriations, however, is contained in the portfolio statements.

 



 



Notes on clauses

Part 1—Preliminary

Clause 1—Short title

1                This clause specifies that the short title of the Bill, once enacted, will be Appropriation Act (No. 2) 2016-2017 .

Clause 2—Commencement

2                Clause 2 provides for the Bill to commence as an Act on the day of the Royal Assent.

Clause 3— Definitions

3                Clause 3 defines the key terms used in the Bill, such as “administered item”, “corporate entity”, “non-corporate entity”, “other departmental item”, and “State, ACT, NT and local government item”.

Clause 4—Portfolio statements

4                Clause 4 declares that the portfolio statements are relevant documents under paragraph 15AB(2)(g) of the Acts Interpretation Act 1901 (AI Act). Paragraph 15AB(2)(g) provides for material to be considered in the interpretation of an Act if the material is declared by the Act to be relevant material for the purposes of section 15AB of the AI Act.

5                The purpose of the portfolio statements is to provide information on the proposed allocation of resources to Government outcomes by Commonwealth entities within each portfolio. The term “portfolio statements” is defined in the Bill, at clause 3, to mean the Portfolio Budget Statements 2016-17.

Clause 5—Notional transactions between entities that are part of the Commonwealth

6                Clause 5 provides that notional transactions between non-corporate entities are to be treated as if they are real transactions. Notional transactions, therefore, require the debiting of an appropriation made by Parliament. The payments of the amounts in Schedule 2 from one non-corporate entity to another do not require, in a constitutional sense, an appropriation, because both non-corporate entities operate within the CRF. For reasons of financial discipline and transparency, the practice has arisen for these payments between non-corporate entities to be treated as though they required an appropriation, and to debit an appropriation when such notional payments are made. This is consistent with section 76 of the PGPA Act.

7                When a non-corporate entity makes a payment, whether to another non-corporate entity or another part of the same non-corporate entity (such as a different “business unit” within the entity), it is to be treated as a “real” payment. This means that the appropriation made by Parliament is extinguished by the amount of the notional payment, even though no payment is actually made from the CRF. Similarly, a notional receipt in such a situation is to be treated by the receiving non-corporate entity (where relevant) as if it were a real receipt. This does not mean every internal transfer of public money involves a notional payment and receipt.

Part 2—Appropriation items

Clause 6—Summary of appropriations

8                Clause 6 sets out the total of the appropriations in Schedule 2 of the Bill. As indicated, that total is broadly equivalent to 7/12 ths of the estimated 2016-2017 annual appropriations that are not for the ordinary annual services of the Government, plus Budget measures for that period. The amount set out in clause 6 also provides for the total appropriation for payment to Old Parliament House (OPH) for 2016-17 due to the amount appropriated to OPH in Supply Act (No. 2) 2016-2017 not being accessed (see paragraphs 73 and 74 below).

9                The amounts in Schedule 2 may be adjusted under Part 3 of the Bill. Items may be increased by a determination under clause 12 (Advance to the Finance Minister).

10            The amounts in Schedule 2 of the Bill may be adjusted further in accordance with sections 74 to 75 of the PGPA Act. Specifically:

·                 Section 74 of the PGPA Act, when read with Rule 27 of the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule), permits non-corporate entities to retain certain types of receipts by adding them to their most recent departmental item or other type of appropriation in an Appropriation Act when prescribed.

·                 Appropriations may be adjusted by amounts recoverable by a non-corporate entity from the Australian Taxation Office for Goods and Services Tax (GST), in accordance with section 74A of the PGPA Act . The amounts specified in Schedule 2 exclude recoverable GST. The appropriations shown represent the net amount that Parliament is asked to allocate to particular purposes.

Section 74A has the effect of increasing an appropriation by the amount of the GST qualifying amount arising from payments in respect of the appropriation. As a result, there is sufficient appropriation for payments under an appropriation item, provided that the amount of those payments, less the amount of recoverable GST, can be met from the initial amount shown against the item in Schedule 2. Section 74A also applies to notional transactions between and within non-corporate entities.

·                 Items may be adjusted to take into account the transfer of functions between non-corporate entities, in accordance with section 75 of the PGPA Act. It is possible that adjustments under section 75 may result in new items and/or outcomes being created in an Appropriation Act.

Clause 7—State, ACT, NT and local government items

11            Clause 7 provides administered appropriations for financial assistance to the States, ACT, NT and local governments. State, ACT, NT and local government items are appropriated separately for outcomes, making it clear what the funding is intended to achieve. The amount specified in Schedule 2 for an outcome may be applied by a non-corporate entity for the purpose of making payments to any of the States, ACT, NT or local government authorities for the purpose of achieving that outcome.

12            Clauses 7 and 16 delegate Parliament’s power under section 96 of the Constitution to impose terms and conditions on payments of financial assistance to the States to the responsible Ministers listed in Schedule 1 of the Bill. Schedule 1 also lists the Ministers who may determine the amounts and timing of those payments. These payments are usually made pursuant to eligibility rules and conditions established by the Government or Parliament.

13            Specifically, the Finance Minister manages payments to State, ACT, NT and local governments using a discretionary power under section 51 of the PGPA Act. Section 51 allows the Finance Minister to manage the timing and the amount of appropriated money to be made available to State, ACT, NT and local governments, except as required by law.

Clause 8—Administered items

14            Subclause 8(1) provides for the appropriation of new administered outcome amounts to be applied by a non-corporate entity for the purpose of contributing to the outcome for a non-corporate entity. An “administered item” is defined in clause 3 to be an amount set out in Schedule 2 opposite an outcome for a non-corporate entity under the heading “New Administered Outcomes”. New Administered Outcomes are those administered by a non-corporate entity on behalf of the government (e.g. certain grants, benefits and transfer payments).

15            As with administered items in Appropriation Bill (No. 1) 2016-2017 , New Administered Outcomes are appropriated separately for outcomes. This is unlike departmental items, where the split across outcomes is not notional, and makes it clear what the funding is intended to achieve. Schedule 2 specifies how much can be expended on each outcome.

16            New Administered Outcomes are typically proposed when:

·                 a non-corporate entity seeks administered operating appropriations for the first time (including existing non-corporate entities that have received departmental operating appropriations in the past);

·                 annual administered operating appropriations are proposed for the first time, for programs previously funded by special appropriations; and

·                 a non-corporate entity’s outcomes are changed to reflect new program objectives, strategies and/or activities.

17            The purposes for which each administered item can be spent are further set out in subclause 8(2). Subclause 8(2) provides that where the portfolio statements indicate a particular activity is in respect of a particular outcome, then expenditure on that activity is taken to be expenditure for the purpose of contributing to achieving that outcome.

18            New Administered Outcomes are those administered by a non-corporate entity on behalf of the Government (e.g. certain grants, benefits and transfer payments). These payments are usually made pursuant to eligibility rules and conditions established by the Government or the Parliament. Specifically, administered items are tied to outcomes (departmental items are not).

19            The Finance Minister manages payments from administered items by non-corporate entities using a discretionary power under section 51 of the PGPA Act. Section 51 allows the Finance Minister to manage the timing and the amount of appropriated money to be made available to a Commonwealth entity, except as required by law.

Clause 9—Administered assets and liabilities items

20            Clause 9 provides amounts in Schedule 2 to acquire administered assets, enhance existing administered assets and/or discharge administered liabilities relating to activities administered by non-corporate entities on behalf of the Government. Administered assets and liabilities appropriations are provided for functions managed by a non-corporate entity on behalf of the Government. Administered assets and liabilities items can be applied for any outcomes of the non-corporate entity in Schedule 2 of the Bill, or Schedule 1 to Appropriation Bill (No. 1) 2016-2017.

21            The Finance Minister manages payments from administered assets and liabilities items by non-corporate entities using a discretionary power under section 51 of the PGPA Act. Section 51 allows the Finance Minister to manage the timing and the amount of appropriated money to be made available to a Commonwealth entity, except as required by law.

Clause 10—Other departmental items

22            Clause 10 appropriates departmental non-operating appropriations in the form of equity injections, over which the non-corporate entity also exercises control. This clause provides that the amount specified in other departmental items for a non-corporate entity may be applied for the departmental expenditure of the entity. In short, “equity injections” can be provided to non-corporate entities to, for example, enable investment in assets to facilitate departmental activities and for designated collecting institutions to purchase heritage and cultural assets .

23            Other departmental items are not expressed in terms of a particular financial year. For example, equity injection appropriations provide funding to meet the cost expected to be incurred in the Budget year to acquire a new asset, however, for a number of reasons, some part of the appropriation might not be required until a later financial year. Other departmental items are available until they are spent, or the Act through which they were appropriated is repealed. Appropriation Acts have a lifespan of up to three years after which they automatically repeal.

24            The Finance Minister manages the payment from other departmental items by non-corporate entities using a discretionary power under section 51 of the PGPA Act. Section 51 allows the Finance Minister to manage the timing and the amount of appropriated money to be made available to a Commonwealth entity, except as required by law.

Clause 11—Corporate entity items

25            Clause 11 provides for appropriations of money for corporate entities to be paid from the CRF by the relevant Department. Clause 11 provides that payments for corporate entities must be used for the purposes of those entities.

26            A “corporate entity” is defined in clause 3 to be a corporate Commonwealth entity or a Commonwealth company within the meaning of the PGPA Act. Many corporate entities receive funding from appropriations. However, these entities are legally separate from the Commonwealth, and as a result, do not debit appropriations or make payments from the CRF.

27            Corporate entity payments are initiated by requests to the relevant portfolio Departments from the corporate entities. The Finance Minister manages appropriations for corporate entities through a discretionary power to control the timing and amount made available under section 51 of the PGPA Act. Corporate entities hold the amounts paid to them on their own account.

28            Subclause 11(2) provides that if a corporate entity is subject to another Act that requires amounts appropriated by Parliament for the purposes of that entity to be paid to the entity, then the full amount of the corporate entity payment must be paid to the entity. The purpose of subclause 11(2) is to clarify that subclause 11(1) is not intended to qualify any obligations in other legislation regulating a corporate entity, where that other legislation requires the Commonwealth to pay the full amount appropriated for the purposes of the entity.

29            In addition to the annual appropriations, some corporate entities may also receive public money from related entities such as a portfolio Department and from special appropriations managed by those Departments. Many corporate entities also receive funds from external sources.

Part 3—Advance to the Finance Minister

Clause 12—Advance to the Finance Minister

30            Clause 12 of the Bill enables the Finance Minister to provide additional appropriations for items when satisfied there is an urgent need for expenditure, and the existing appropriation is inadequate. This additional appropriation is referred to as the Advance to the Finance Minister (AFM). Subclause 12(3) provides that the total amount that can be determined under the AFM provisions in the Bill and Supply Act (No. 2) 2016-2017 is $380 million.

31            Subclause  12 (1) establishes the criteria about which the Finance Minister must be satisfied before determining to add an amount to an item of an entity.

32            The Finance Minister will only consider issuing an amount under subclause  12 (1) if satisfied there is an urgent need for expenditure that is no t provided for, or is insufficiently provided for, in Schedule 2, because of an omission or understatement, or because of unforeseen circumstances. Generally, the other appropriation adjustment options in Part  3 of the Bill or under sections 74 to 75 of the PGPA Act must have been exhausted before the Finance Minister will make a determination under subclause  12(2) .

33            Subclause  12 (2) enables the Finance Minister to make a determination to add an amount from the AFM to an item in Schedule  2 , to a new item not already in Schedule 2, or to a new outcome.

34             Subclause 12(4) provides that the AFM provisions of Supply Act (No. 2) 2016-2017 must be read subject to the stipulation in subclause 12(3) of the Bill that the total amount that can be determined under the AFM provisions in the Bill and Supply Act (No. 2) 2016-2017 is $380 million.

35            A further AFM provision will be requested in the Additional Estimates Appropriation Bills for the cur rent year if pressures at that time suggest the AFM in this Bill will be close to being exhausted before the end of the financial year.

36            Subclause  12 (5) provides that a determination under subclause  12 (2) is a legislative instrument, which must be tabled in Parliament, but is not subject to disallowance or sunsetting.

37            A determination under subclause 12(2) is not subject to section 42 (disallowance) of the Legislation Act 2003 as this would frustrate the purpose of the provision, which is to provide additional appropriation for urgent expenditure. Further, an AFM is not subject to Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 , because the amount allocated from the AFM would be extinguished when it is spent.

Part 4—Debit limits

Clause 13—Debit limits

38            Parliament may approve annual debit limits for the following special appropriations:

·                 the amounts that may be debited or spent from two special accounts established by the Nation-building Funds Act 2008; and

·                 the amounts that may be spent for general purpose financial assistance or national partnership payments under the Federal Financial Relations Act 2009 .

39            Specifying a debit limit in clause 13 is an effective mechanism to manage expenditure of public money as the official or Minister making a payment of public money cannot do so without this authority. The purpose of doing so is to provide Parliament with a transparent mechanism by which it may review the rate at which amounts are committed for expenditure.

40            Note that clause 13 is not an appropriation for either of the Nation-building Funds Act 2008 or the Federal Financial Relations Act 2009 .

41            The debit limits in the Bill are broadly equivalent to 7/12 ths of the special appropriations estimated for 2016-2017 expenditure under these Acts. The Education Investment Fund debit limit makes allowance for project milestone payments.

42            In accordance with Supply Act (No. 2) 2016-2017 , the debit limits specified for a particular purpose in subclauses 13(1) to (4) of the Bill are to be added together with the relevant debit limits in Supply Act (No. 2) 2016-2017 to provide the total amount that can be debited for a particular purpose for the current year.

Nation-building Funds Act 2008

43            For the purposes of section 109 of the Nation-building Funds Act 2008 , subclause 13(1) provides the debit limit for the Building Australia Fund (BAF) for the current year.

44            The BAF is established under section 12 of the  Nation-building Funds Act 2008. It consists of the investments of the BAF and the BAF Special Account, which is a special account recognised under section 80 of the PGPA Act and established under section 13 of the  Nation-building Funds Act 2008 . The debit limit applies to the main purposes of the BAF, namely making payments in relation to the creation or development of transport infrastructure, communications infrastructure, energy infrastructure and water infrastructure. The debit limit does not apply to payments for eligible Nation Broadband Network matters.

45            For the purposes of section 199 of the Nation-building Funds Act 2008 , subclause 13(2) provides the debit limit for the Education Investment Fund (EIF) for the current year.

46            The EIF is established under section 131 of the Nation-building Funds Act 2008. It consists of the investments of the EIF and the EIF Special Account, which is a special account recognised under section 80 of the PGPA Act and established under section 132 of the  Nation-building Funds Act 2008 . The debit limit applies to the main purposes of the EIF, namely making payments in relation to the creation or development of higher education infrastructure, research infrastructure, vocational education and training infrastructure, and eligible education infrastructure, as well as any transitional Higher Education Endowment Fund payments.

47            It is important to note that the Bill will not appropriate amounts to be paid from the BAF or EIF. The intention for specifying debit limits in subclauses 13(1) and 13(2) is to set maximum limits on the amounts that may be covered for the current year, for the purposes to which the limits apply.

48            The debit limits for the current year for the BAF and EIF are specific to the current year applicable to this Act and will not limit the debit limits that may be specified in regard to any other year.

Federal Financial Relations Act 2009

49            For the purposes of paragraph 9(3) of the Federal Financial Relations Act 2009 , subclause 13(3) provides the debit limit for general purpose financial assistance for the current year.

50            This debit limit applies for the current year to the amount that the Treasurer can credit to the Council of Australian Governments (COAG) Reform Fund and the total amount that can be debited from that Fund for the purposes of making a grant of general purpose financial assistance to a State, the Australian Capital Territory or the Northern Territory.

51            The COAG Reform Fund was established by section 5 of the COAG Reform Fund Act 2008 , which is a special account under section 80 of the PGPA Act. The purposes of the COAG Reform Fund Special Account are provided at section 6 of the COAG Reform Fund Act 2008 .

52            If a debit limit is not indicated in an Appropriation Act for the purposes of paragraph 9(3) of the Federal Financial Relations Act 2009 for a financial year, amounts cannot be credited to the COAG Reform Fund under paragraph 9(2)(a) of the Federal Financial Relations Act 2009 , and amounts must not be debited from the COAG Reform Fund for the purposes to which the limit applies.

53            For the purposes of paragraph 16(3) of the Federal Financial Relations Act 2009 , subclause 13(4) provides the debit limit for national partnership payments for the current year.

54            This debit limit applies for the current year to the amount that the Treasurer can credit to the COAG Reform Fund and the total amount that can be debited from that Fund for the purposes contained in paragraphs 16(1)(a) to (c) inclusive of the Federal Financial Relations Act 2009 . These purposes relate to making a grant of financial assistance to a State to support the delivery by the State of specified outputs or projects, facilitate reforms by the State, or reward the State for nationally significant reforms.

55            If a debit limit is not indicated in an Appropriation Act for the purposes of paragraph 16(3) of the Federal Financial Relations Act 2009 for a financial year, amounts cannot be credited to the COAG Reform Fund under paragraph 16(2)(a) of the Federal Financial Relations Act 2009 and amounts must not be debited from the COAG Reform Fund for the purposes to which the limit applies.

56            It is important to note that the Bill will not appropriate amounts to be paid under sections 9 and 16 of the Federal Financial Relations Act 2009 . The intention for specifying debit limits in subclauses 13(3) and 13(4) is to set maximum limits on the amounts that may be covered for the current year, for the purposes to which those limits apply.

Clause 14—Adjustments for GST

57            The effect of this clause will be to increase a debit limit by the amount of any GST qualifying amount in respect of an amount paid from a fund named in clause 13.

58            Some payments from the BAF, EIF and the COAG Reform Fund may include a GST qualifying amount and the relevant debit limit is adjusted accordingly. The appropriation itself is not affected by clause 14, because it is increased by the operation of section 74A of the PGPA Act. Essentially, clause 14 clarifies that the amounts specified for the debit limits for 2016-17 are exclusive of any GST qualifying amounts that may arise in respect of acquisitions made in reliance on that limit.

Part 5—Miscellaneous

Clause 15—Crediting amounts to special accounts

59            Clause 15 provides that if the purpose of an item in Schedule 2 is also the purpose of a special account (regardless of whether the item expressly refers to the special account), then amounts may be debited against the appropriation for that item and credited to the special account. Special accounts may be established under the PGPA Act by a determination of the Finance Minister (section 78) that is disallowable by Parliament or by another Act (sections 79 and 80). The determination or Act that establishes the special account will specify the purposes of the special account.

Clause 16—Conditions etc. applying to State, ACT, NT and local government items

60            Clause 16 deals with Parliament’s power under section 96 of the Constitution to provide financial assistance to the States. Clause 16 delegates the power to the responsible Ministers listed in Schedule 1 of the Bill, by providing the Ministers named in Schedule 1 with the power to determine:

·                 conditions under which payments to the States, ACT, NT and local government may be made: clause  16 (2)(a); and

·                 the amounts and timing of those payments: clause  16 (2)(b).

61            Subclause 16 (4) provides that determinations made under subclause  16 (2) are not legislative instruments, because these determinations are not altering the appropriations approved by Parliament. Determinations under subclause  16 (2) are administrative in nature and will simply determine how appropriations for State, ACT, NT and local government items will be paid.

62            Determinations under clause 16 or its equivalent are rare. Most payments to the States and Territories are governed by, and appropriated through, the Federal Financial Relations Act 2009 . For the payments to the States, ACT, NT and local government in an even-numbered Appropriation Act, generally other legislative or agreed frameworks determine how the payments are made and when, such as the Local Government (Financial Assistance) Act 1995 or a National Agreement. Many of these arrangements can be found on the Federal Financial Relations website ( http://www.federalfinancialrelations.gov.au/ ).

63            Although financial assistance is provided to the ACT, NT and local governments without reference to section 96 of the Constitution, those payments are administered in the same way. Therefore, the Ministers identified in Schedule 1 may set the amounts and timing and impose terms and conditions on those payments. Subclause 16(5) also notes that clause 16 will not limit the powers of the Commonwealth under section 96 of the Constitution to provide financial assistance to a State which is not appropriated by a State, ACT, NT and local government item.

64            In the Bill, appropriations to the States, ACT, NT and local government are sought for the Department of Agriculture and Water Resources against Outcome 3, the Attorney-General’s Department against Outcome 1, the Department of Education and Training against Outcome 1, the Department of Infrastructure and Regional Development against Outcome 1 and Outcome 3 and the Department of the Prime Minister and Cabinet against Outcome 2. Further information may also be found in the portfolio statements for the respective portfolios. The most recent detailed estimates of Commonwealth payments to the States, Territories and local governments from 2015-16 to 2019-20 may be found in Budget Paper No. 3: Federal Financial Relations 2016-17 which is available at http://www.budget.gov.au/ .

Clause 17—Appropriation of the Consolidated Revenue Fund

65            Clause 17 provides that the CRF is appropriated as necessary for the purposes of the Bill. Significantly, this clause means that there is an appropriation in law when the Act commences. That is, the appropriations are not made or brought into existence just before they are paid, but when the Act commences. This clause indicates that the amounts appropriated may be affected by the PGPA Act, in particular sections 74 to 75 (see clause 6), after the Act commences.

Clause 18—Repeal of this Act

66            Clause 18 specifies that the Bill, once enacted, will repeal at the start of 1 July 2019.

Schedule 1—Payments to or for the States, ACT, NT and local government

67            In accordance with clause  16 , Schedule 1 lists the Ministers responsible for determinations on payments to or for the States, ACT, NT and local government.

Schedule 2—Services for which money is appropriated

68            Schedule 2 specifies the services for which amounts will be appropriated by the Bill. Schedule 2 contains a summary table which lists the total amounts for each portfolio. A separate summary table is included with further detail for each portfolio, with other tables detailing the appropriations for each Commonwealth entity.

69            Schedule 2 includes, for information purposes, a figure for the previous financial year printed in italics and labelled the “Actual Available Appropriation (italic figures) - 2015-2016”. The Actual Available Appropriation is an estimate that does not affect the amount available at law. That figure provides a comparison with the proposed appropriations for entities receiving appropriations. It is calculated for each item by adding the amounts appropriated in the previous year’s annual Appropriation Acts, amounts adjusted under certain provisions of the PGPA Act plus adjustments such as AFMs. In addition, where an entity’s outcome structure has changed since the last Appropriation Act, only ongoing outcomes are shown in the Bill. In some instances, the figure may also be affected by limits applied administratively by the Department of Finance. For these reasons, the Actual Available Appropriation figures may be different from the sum of amounts provided in earlier Appropriation Acts.

70            More details about the appropriations in Schedule  2 are contained in the portfolio statements and the second reading speech for the Bill.

Merger of the CrimTrac Agency with the Australian Crime Commission

71            The functions of the CrimTrac Agency have been merged into the Australian Crime Commission (ACC) through the Australian Crime Commission Amendment (National Policing Information) Act 2016, which received the Royal Assent on 5 May 2016 and came into effect on 1 July 2016.

72                 This merger has resulted in the CrimTrac Agency’s outcome statement being transferred to the ACC as Outcome 2, along with the proposed appropriation.

Change in governance structure of Old Parliament House

73                 OPH became a corporate entity through the Public Governance, Performance and Accountability (Establishing Old Parliament House) Rule 2016 made on 6 May 2016 and which came into effect on 1 July 2016.

74                 The proposed non-operating appropriation to the Department of Communications and the Arts for payment to OPH provides for the total appropriation for 2016-17. The non-operating appropriation provided to OPH as a non-corporate entity in Supply Act (No. 2) 2016-2017 has not been accessed.

Machinery of Government changes

75                 Since the commencement of Supply Act (No. 2) 2016-2017 there have been changes to Departments pursuant to the Machinery of Government (MoG) changes from the Administrative Arrangements Order (AAO) amendment made on 19 July 2016.

76                 On 19 July 2016, the Governor-General in Council acting on the Prime Minister’s recommendation under section 64 of the Constitution renamed the Department of State, the Department of the Environment to the Department of the Environment and Energy.

77            Consequently, Schedule 2 to the Bill refers to the Environment and Energy Portfolio and to the Department of the Environment and Energy.

78            The AAO amendment will be implemented through determinations to be made under section 75 of the PGPA Act. The MoG changes also resulted in the transfer of legislative responsibility and full details of the changes as expressed in the 19 July 2016 AAO amendment can be found at: https://www.dpmc.gov.au/resource-centre/government/aao-amendment-19-july-2016 .