Title Appropriation Bill (No. 4) 2021-2022
Database Explanatory Memoranda
Date 10-05-2022 09:21 AM
Source House of Reps
System Id legislation/ems/r6842_ems_29e0cab0-f80b-41a4-a49d-477206d5e155

Appropriation Bill (No. 4) 2021-2022























Appropriation Bill (No. 4) 2021-2022















(Circulated by the authority of the Minister for Finance,

Senator the Honourable Simon Birmingham)



Table of Acronyms and Defined Terms




Actual Available Appropriation


Advance to the Finance Minister

AI Act

Acts Interpretation Act 1901


Budget Appropriation

Commonwealth entity

An entity as defined in section 10 of the PGPA Act

Corporate entity

A corporate Commonwealth entity or a Commonwealth company within the meaning of the PGPA Act


Consolidated Revenue Fund

Finance Minister

Minister for Finance


Goods and Services Tax

Non-corporate entity

A non-corporate Commonwealth entity within the meaning of the PGPA Act, or the High Court


Public Governance, Performance and Accountability Act 2013

portfolio statements

Portfolio Budget Statements and Portfolio Additional Estimates Statements



Appropriation Bill (No. 4) 2021-2022

General Outline                       

1               This Explanatory Memorandum accompanies the Appropriation Bill (No. 4) 2021-2022 (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 in addition to amounts appropriated through Appropriation Act (No. 2) 2021-2022 and the Appropriation (Coronavirus Response) Bill (No. 2) 2021‑2022.

3               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 the Appropriation Bill (No. 3) 2021-2022. Together these two Bills are termed the Additional Estimates Appropriation Bills.

4               The Portfolio Additional Estimates Statements are published and tabled in the Parliament in relation to the Bill. This Explanatory Memorandum should be read in conjunction with the various 2021-22 portfolio statements (being the Portfolio Budget Statements that accompanied the 2021‑22 Budget and the Portfolio Additional Estimates Statements) which contain details on the appropriations set out in the Schedules of the Bills.

Structure of the Bill

5               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).

6               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 1 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 the Advance to the Finance Minister (AFM) provision (clause 12).

7               Part 4 deals with the debit limits for the national partnership payments and provides for amounts to be appropriated as necessary (clause 13). Part 5 deals with crediting amounts to special accounts (clause 15) and specifies when the Bill is repealed (clause 18). In addition to the AFM 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                       

8               The Bill, if enacted, would appropriate the amounts specified in Schedule 2 as set out in clause 6.


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, the Appropriation Acts do not ordinarily confer authority to engage in executive action. In particular, they do not ordinarily confer legal authority to spend. To the extent that any item of the Bill might be read as purporting to confer such authority, the Government does not rely on the item to provide it.

4               Given that the legal effect of the 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               Clause 1 specifies that the short title of the Bill, once enacted, will be the Appropriation Act (No. 4) 2021-2022.

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”, “non-corporate entity”, and “State, ACT, NT and local government item”.

Clause 4—Portfolio statements

4               Clause 4 declares that the portfolio statements are relevant documents under subsection 15AB(2)(g) of the Acts Interpretation Act 1901 (AI Act) which 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 (that accompanied the Appropriation Bills tabled at the last Budget) and the Portfolio Additional Estimates Statements tabled in relation to the Bill.

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 1 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. The amounts in Schedule 2 may be increased by a determination under clause 12 (AFM).

9               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, 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 1 exclude recoverable GST. The appropriations shown represent the net amount that the 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 1. 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.

10           Additionally, the Finance Minister manages the payment from items in the Bill 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 (an entity as defined in section 10 of the PGPA Act), except as required by law.

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 each outcome, making it clear what the funding is intended to achieve. The amount specified in Schedule 1 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           Clause 7 delegates the Parliament’s power under section 96 of the Constitution to impose terms and conditions on payments of financial assistance to the States. These payments are usually made pursuant to eligibility rules and conditions established by the Government or the Parliament.

13           Additional information on payments to the States, Territories and local government can be found in the portfolio statements of the relevant entities. These documents can be found at www.budget.gov.au.

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”. As with administered items in the Appropriation Bill (No. 3) 2021-2022, New Administered Outcomes are appropriated separately for outcomes, making it clear what the funding is intended to achieve.

15           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.

16           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).

17           New Administered Outcomes are typically proposed when a non-corporate entity’s outcomes are changed to reflect new program objectives, strategies and/or activities; and/or

·                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); and/or

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

Clause 9—Administered assets and liabilities items

18           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 of the Appropriation Act (No. 1) 2021-2022 or in Schedule 2 to the Appropriation Act (No. 2) 2021‑2022.

Clause 10—Other departmental items

19           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. For example, “equity injections” can be provided to non-corporate entities to enable investment in assets to facilitate departmental activities and for Designated Collecting Institutions to purchase heritage and cultural assets.

20           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. Annual Appropriation Acts have a lifespan of up to three years after which they are automatically repealed.

Clause 11—Corporate entity items

21           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.

22           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.

23           Corporate entity payments are initiated by requests to the relevant portfolio Departments from the corporate entity. 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, except as required by law. Corporate entities hold the amounts paid to them on their own account.

24           Subclause 11(2) provides that if a corporate entity is subject to another Act that requires amounts appropriated by the 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.

25           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.

26           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

27           The Advance to the Finance Minister (AFM) is a mechanism provided under clause 12 of the Appropriation Act (No. 2) 2021-2022 (the Act). Clause 12 permits the Finance Minister, by legislative instrument, to effectively amend Schedule 2 to the Act to make provision for certain urgent expenditure up to a total limit of $3,000 million.

28           Subclause 12(1) has the effect that a determination can only be made under subclause12(2) if the Finance Minister is satisfied there is an urgent need for expenditure, in the current year, that is not provided for, or is insufficiently provided for, in Schedule 2 of the Act either:

(a)               because of an erroneous omission or understatement (see subclause12(1)(a)), or

(b)               because the expenditure was unforeseen until after the last day on which it was practicable to provide for it in the Bill for the Act introduced into the House of Representatives (see subclause 12(1)(b)).

29           The AFM is an important mechanism which provides the Government with the capacity to respond to urgent and unforeseen pressures such as those that emerged throughout the COVID-19 pandemic without impinging on the important role of the Parliament in its consideration of other legislation.

30           The AFM contained in the Appropriation Act (Nos.1 and 2) 2021-2022 provide for the AFM provisions of $5 billion ($2 billion in Act 1 and $3 billion in Act 2). These provisions commenced on 1 July 2021.

31           These extraordinary AFM provisions take into consideration the unique and evolving nature of the COVID-19 pandemic. The extraordinary AFM provisions ensure the Government is able to respond to urgent and unforeseen expenditure requirements across the remainder of 2021-22, where it is not possible or not practical to pass further Appropriation Acts.

32           The AFM determinations are legislative instruments under the Legislation Act 2003, registered on the Federal Register of Legislation (legislation.gov.au) and tabled in the Parliament.

33           Appropriation Act (No.2) 2021-2022 provides that AFM determinations are not subject to disallowance. This reflects the need for entities to have certainty of appropriation when making expenditures.

Effect of an AFM determination

34           An AFM determination does not authorise expenditure on a particular purpose. It increases an existing multi-purpose line item appropriation (departmental or administered) in the Appropriation Act that covers expenditure on a range of different programs.

Why the AFM determinations are exempt from disallowance

35           The disallowance of an AFM determination will not invalidate expenditure that has already been made in reliance upon it. However, it will leave entities short of the funds that they need to carry out their other ordinarily budgeted expenditure in what remains of a financial year.

36           Disallowance of an AFM determination would reduce an entity’s appropriation to its original level. Yet the urgent expenditure it has already undertaken validly prior to disallowance, in reliance upon the determination, would count towards the newly reduced appropriation. The reason why this occurs is because an AFM determination does not authorise expenditure on a particular purpose. It increases an existing multi-purpose line item appropriation (departmental or administered) in the Appropriation Act that covers expenditure on a range of different programs. If a House disallows the determination it reverses the increase and impairs the funding remaining for other programs that are unrelated to the AFM.

37           Accordingly, disallowance would leave the entity with a shortfall in the appropriation available to fund the ongoing expenditure for which the Government originally budgeted and which the Parliament approved when it passed the Appropriation Act. Because of the unavoidable negative impacts that disallowance of an AFM would cause to the routine operations of the Government, there is a bipartisan consensus that the AFM determinations should be exempt from disallowance. 

Accountability and transparency arrangements for the AFM determinations

38           Recent extraordinary AFM provisions have been supported by strong accountability and transparency arrangements including:

(a)               registration of each AFM determination with an explanatory statement on the Federal Register of Legislation (legislation.gov.au);

(b)               a media release by the Finance Minister in weeks when AFMs are issued;

(c)               a commitment for the Finance Minister to seek the concurrence of the Shadow Minister for Finance, on behalf of the Opposition, for any proposed AFM allocation over $1 billion;

(d)               an annual report on AFM allocations tabled in the Parliament; and

(e)               subsequent assurance reviews of those annual reports by the Australian National Audit Office (ANAO) on an annual basis.

39           These measures will continue throughout the remainder of 2021-22, consistent with the arrangements that have applied to other AFMs during the COVID-19 pandemic.

40           Clause 12 of the Bill provides that irrespective of the amounts issued from the AFM before the commencement of the Bill, the amount available under clause  12 of the Appropriation Act (No. 2) 2021-2022 will be restored to the original amount of $3,000 million. The clause ensures that there will be sufficient scope to provide amounts from the AFM for the remainder of the financial year.

41           Subclause 12(1) of the Bill specifies that if the Finance Minister has determined under subclause 12(2) of the Appropriation Act (No. 2) 2021-2022 to increase an amount in Schedule 2 of the Appropriation Act (No. 2) 2021-2022 from the AFM, then the amount is to be disregarded for the purposes of subclause 12(3) of the Appropriation Act (No. 2) 2021-2022 when the Bill commences. From the date this Bill commences as an Act the total amount that can be determined under the AFM will again be $3,000 million.

42           Subclause 12(2) of the Bill prevents appropriations for the same expenditure from both the AFM and the Bill. Subclause 12(2) ensures that if Schedule 2 of the Bill provides an amount for a particular expenditure and, on or after 1 February but prior to the commencement of the Bill, the Finance Minister determines an amount from the AFM under section 12 of the Appropriation Act (No. 2) 2021‑2022 for the same expenditure (the advanced amount), then the appropriation in the Bill will be reduced by the amount of the advanced amount. The appropriated amount cannot be reduced below nil.

43           For example, if the Bill provides $20 million for a program and an advanced amount of $5 million is determined by the Finance Minister under the Appropriation Act (No. 2) 2021-2022 for a particular payment under that program, then the amount appropriated by the Bill, once enacted, will be reduced by $5 million (i.e. appropriating only $15 million for the program).

44           The Finance Minister may continue to make determinations under subclause 12(2) of the Appropriation Act (No. 2) 2021-2022 to add an amount from the AFM to an item of a Commonwealth entity if the criteria in subclause 12(1) of that Act are satisfied.

Part 4—Debit Limits

Clause 13 – Debit Limits

45           Through the Appropriation Act (No. 2) 2021-2022 the Parliament has already approved annual debit limits for the amounts that may be spent for general purpose financial assistance or national partnership payments under the Federal Financial Relations Act 2009 (FFR Act). These debit limits are:

(a)          General purpose financial assistance – the debit limit for the current year for the purposes of section 9 of the FFR Act is $5,000,000,000; and

(b)          National partnership payments – the debit limit for the purposes of section 16 of the FFR Act is $25,000,000,000.

46           These debit limits were set to ensure the Government had appropriate provisions in place to fund existing undertakings to the States, new programs that may be required between Appropriation Bills, and to respond to major unexpected events such as large-scale natural disasters.

47           Due to the ongoing nature of the COVID-19 pandemic, the latest forecast for payments under section 16 of the FFR Act indicate that by 30 June 2022 the total is likely to be just under the debit limit established in the Appropriation Act (No. 2) 2021-2022, leaving limited capacity to make other unforeseen payments. Accordingly, the Bill proposes that the national partnership payments debit limit for the purposes of section 16 of the FFR Act is increased on a one-off basis to $35,000,000,000 in total, from its current level of $25,000,000,000. This revised debit limit will be available when the Bill commences as an Act, through to the end of this financial year (30 June 2022).

48           The current limit was set at $25 billion in 2014-15 and has remained constant since. Since 2014-15, headroom between spending under section 16 and the debit limit has generally been between $10 billion and $15 billion, to mitigate the risk of reaching the limit and to allow for the possibility of unexpected expenditure.

49           At the time the Appropriation Bill (No. 2) 2021-2022 was considered, the Australian Government estimated that national partnership payments under section 16 of the FFR Act would be $15.8 billion in 2021-22. However, at the 2021-22 Mid-Year Economic and Fiscal Outlook (MYEFO), the revised estimates were that national partnership payments would be $24.1 billion by 30 June 2022. This is close to the existing debit limit and would leave insufficient capacity to make other exceptional or unforeseen payments.

50           The main driver of the increase in payments since the last Budget is that, in response to COVID‑19 outbreaks and lockdowns in 2021‑22, the Australian Government jointly funded business support payments, administered by each of the States and Territories, with costs being shared on a 50:50 basis. At the 2021‑22 MYEFO update, the Australian Government estimated that its share of business support programs across all jurisdictions would constitute $7.3 billion. This was all additional to expected payments at the time the relevant debit limit was initially set.

51           Increasing the debit limit to $35 billion on a temporary basis, through to the end of the financial year, would restore the gap between spending under section 16 and the debit limit, to a level consistent with the Australian Government’s practice since 2014-15. It would ensure that the Australian Government has appropriate provisions in place to respond to any further unexpected events, such as natural disasters. This headroom does not remove any of the usual requirements in relation to Commonwealth expenditure, including in relation to legal authority to make expenditure.

52           Specifying a debit limit in the Appropriation Act (No.2) 2021-2022 is an effective mechanism to manage the overall value of expenditure of public money as the official or Minister making a payment of public money cannot approve amounts that go beyond the extent approved by Parliament.

53           For the purposes of subclause 16(3) of the FFR Act, subclause 13(2) provides the revised debit limit for national partnership payments for the remainder of 2021-22 financial year. The one-off increase for the remainder of this year reflects unique circumstances and is therefore not intended to set a new benchmark for future years. Assessments will be made for future Appropriation Bills, to ensure that the limit is appropriately reassessed and re-based if necessary to account for both expected payments and an appropriate contingency for major unexpected events such as large-scale natural disasters.

54           This debit limit applies temporarily for 2021-22 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 contained in subclause 16(1)(a) to (c) inclusive of the FFR Act. 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 subclause 16(3) of the FFR Act for a financial year, amounts cannot be credited to the COAG Reform Fund under subclause 16(2)(a) of the FFR Act 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 this Bill does not appropriate amounts to be paid under section 16 of the FFR Act. The intention for specifying debit limits is to set maximum limits on the amounts that may be covered for the 2021-22 financial year, for the purposes to which those limits apply.

57           The latest expected levels of expenditure can be found in Treasury’s Portfolio Additional Estimates Statements for 2021-22 under Programs 1.4 and 1.9. The relevant tables include payments that are categorised as general purpose assistance and national partnership payments, including payments both subject to the debit limits and outside the debit limits.

Clause 14—Adjustments for GST

58           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.

59           Some payments from 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 2021‑22 are exclusive of any GST qualifying amounts that may arise in respect of acquisitions made in relation to that limit.

Part 5 – Miscellaneous

Clause 15—Crediting amounts to special accounts

60           Clause 15 provides that if the purpose of an item in Schedule 1 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 the 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

61           Clause 16 deals with the 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: subclause 16(2)(a); and

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

62           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 the 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.

63           Determinations under clause 16 or its equivalent are rare. Most payments to the States and Territories are governed by, and appropriated through, the FFR Act. 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/).

64           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.

65           In the Bill, appropriations to the States, ACT, NT and local government are sought for the Department of Education, Skills and Employment against Outcome 1, the Department of Infrastructure, Transport, Regional Development and Communications against Outcome 1 and Outcome 3, and the National Indigenous Australians Agency against Outcome 1.

66           Further information may also be found in the portfolio statements for the respective portfolios which are available at www.budget.gov.au.

Clause 17—Appropriation of the Consolidated Revenue Fund

67           Clause 15 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

68           Clause 16 specifies that the Bill, once enacted, will repeal at the start of 1 July 2024.

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

69           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

70           Schedule 2 specifies the appropriations proposed for the other than ordinary annual services of the Government. Schedule 2 contains a summary table which lists the total amounts for each portfolio. A separate summary table is included for each portfolio, with other tables detailing the appropriations for each Commonwealth entity. More details about the appropriations in Schedule 2 are contained in the portfolio statements and the second reading speech for the Bill.

71           Schedule 2 includes, for information purposes, the amount appropriated in the Appropriation Act (No. 2) 2021-2022 which is printed in italics and labelled as “Budget Appropriation (italic figures) – 2021-2022”, and a figure for the previous financial year labelled “Actual Available Appropriation (light figures) – 2020‑2021”. The Budget Appropriation (BA) and Actual Available Appropriation (AAA) are estimates that do not affect the amount available at law. These figures provide a comparison with the proposed appropriations.

72           The BA and AAA are calculated for each item by adding the amounts appropriated in the relevant financial year’s annual Appropriation Acts, plus any AFMs, and any adjustments under sections 51 and 75 of the PGPA Act. In some instances, the figures may also be affected by limits applied administratively by the Department of Finance. In addition, where an entity’s outcome structure has changed since the last Appropriation Act, only ongoing outcomes may be shown in the Bill.