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Wednesday, 4 April 1973
Page: 1069

Mr CREAN (Melbourne Ports) (Treasurer) - I move:

That the Bill be now read a second time.

This Bill is a machinery measure which is necessary to meet legal and constitutional requirements associated with the Government's end-of-year financial transactions. Honourable members will be aware that the Australian Government's transactions are recorded in 3 separate funds - the Consolidated Revenue Fund, the Loan Fund and the Trust Fund. Current estimates of the Government's financial transactions indicate that expenditures in 1972-73 on items presently being charged to the Consolidated Revenue Fund will exceed receipts of that Fund. However, expenditures from the Consolidated Revenue Fund cannot be appropriated in excess of receipts of that Fund; a deficit, therefore, cannot be incurred.

The normal procedure followed in the past to cope with a situation in which there was a prospective deficit in the Consolidated Revenue Fund has been to charge some expenditures which would normally be met from that Fund to another fund. This Bill is designed to permit such a procedure. The Bill authorises that borrowings be made for defence purposes so that defence expenditures in the remaining months of the year can then be charged to the Loan Fund rather than the Consolidated Revenue Fund, thus utilising funds available in the Loan Fund and avoiding a deficit in the Consolidated Revenue Fund. The Bill does not, I should stress, seek to authorise any additional expenditures; its purpose is simply to re-allocate part of expenditures on defence services specified in the relevant Appropriation Acts for 1972-73 from the Consolidated Revenue Fund to the Loan Fund.

While it is clear that, on the basis of the 1972-73 Budget provisions and subsequent measures, Consolidated Revenue Fund expenditures will exceed Consolidated Revenue Fund receipts in 1972-73 by a significant margin it is not possible at this stage to forecast precisely the likely Consolidated Revenue Fund deficit. Much will depend on the flow of tax payments, which is only now gathering momentum and therefore difficult to forecast with a high degree of accuracy. The Bill before the House would provide authority for borrowings up to $300m - a figure which is considered adequate to meet any deficit in the Consolidated Revenue Fund that can reasonably be foreseen at this time. Finally, I would emphasise again that the proposed Act is a machinery measure of a kind taken in past years when a similar situation has arisen. It does not authorise any increase in expenditures. Its essential purpose is to re-allocate expenditures approved by Parliament between the Consolidated Revenue Fund and the Loan Fund. I commend the Bill to honourable members.

Debate (on motion by Mr Bonnett) adjourned.

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