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Thursday, 13 April 1989
Page: 1498


Senator WALSH (Minister for Finance)(10.04) —I move:

That the Bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows-

Appropriation Bill (No. 3) 1988-89, together with Appropriation Bill (No. 4) and the Appropriation (Parliamentary Departments) Bill (No. 2), which I shall introduce shortly, comprise the additional estimates for 1988-89.

In these Bills, Parliament is asked to appropriate moneys to meet essential and unavoidable expenditures additional to the appropriations made for 1988-89 under Appropriation Acts (Nos. 1 and 2) and the Appropriation (Parliamentary Departments) Act.

These additional appropriations are required to meet commitments that have been approved by the Government since the Budget as well as requirements of an on-going nature.

The principal factors underlying the requirements include certain unavoidable cost and price increases and other parameter changes since the Budget was prepared. Although the Budget figuring contained allowances for prospective wage and salary increases, those amounts were not then appropriated, and funds are now required to meet the impact of the national wage case decision.

Of the additional appropriations in the three additional Estimates Bills totalling $683.9m, $609.9m is sought in Appropriation Bill No. 3, $68.4m in Appropriation Bill No. 4 and $5.7m in the Appropriation (Parliamentary Departments) Bill No. 2.

These amounts are offset in part by savings in the appropriations made by Appropriation Acts (Nos. 1 and 2) and the Appropriation (Parliamentary Departments) Act, 1988-89 reflecting the Government's continued determination to improve the efficiency of ongoing programs. These savings, amounting to $425.7m are detailed under the relevant appropriation headings in the document, ``Statement of savings expected in annual appropriations'', which has been distributed to senators. In addition, a clause which has the effect of reducing an appropriation for the Defence Service Homes Corporation made by Appropriation Act (No. 2) by $40.5m is included in Appropriation Bill (No. 4).

After allowance for this reduction and prospective savings, the appropriations now sought represent a net increase of $217.8m in expenditures financed from annual appropriations. As a proportion of total estimated outlays-encompassing both annual and standing appropriations-this increase amounts to 0.3 per cent.

I now outline some of the main areas in respect of which the Government has found it necessary to seek additional provisions in the Appropriation Bill (No. 3) 1988-89 to meet expenditure for the ordinary annual services of the Government.

One hundred and thirty million dollars is included to cover the costs of the national wage case. Other significant amounts provided in the running costs appropriations include $35m for early retirement; these funds have been `borrowed' by departments and agencies under the negative carryover provisions of the running costs appropriations.

With regard to the defence portfolio, gross additional estimates of $241.2m are sought in Appropriation Bill (No. 3), significantly offset by savings of $145.5m giving a net increase of $95.7m in Consolidated Revenue Fund expenditures.

The gross figures included $122m for running costs, reflecting the impact of the national wage case and other awards on civilian and defence personnel salaries and allowances; a provision of $14.9m for redundancies; and $20.6m increase in the provision for fringe benefits tax. Other costs of $47.7m not provided for at Budget time are associated with the establishment of Australian Defence Industries Pty Ltd. The additional funding of $9.1m provided for defence housing, largely reflects increases in market rents to be paid by defence to the Defence Housing Authority. In summary, and taking account of all transactions contributing to the defence function, total defence outlays are estimated to increase by $79.6m.

Appropriation Bill (No. 3) also provides $50m for the Australian Trade Commission to meet eligible grants under the Export market development grant scheme. The additional funds are estimated to be sufficient to enable settlement of all grants that are expected to be processed and hence payable by 30 June.

I commend the Bill to the Senate.

Debate (on motion by Senator Reid) adjourned.