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2022-2023
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
APPROPRIATION (PARLIAMENTARY DEPARTMENTS) BILL (NO. 2)
2022-2023
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for Finance,
Senator the Honourable Katy Gallagher)
Table of Acronyms and Defined Terms
AAA Actual Available Appropriation
AI Act Acts Interpretation Act 1901
APO Advance to the responsible Presiding Officer
Commonwealth An entity as defined in section 10 of the PGPA Act
entity
CRF Consolidated Revenue Fund
Finance Minister Minister for Finance
GST Goods and Services Tax
non-corporate A non-corporate Commonwealth entity as defined in
entity the PGPA Act, or the High Court of Australia
PGPA Act Public Governance, Performance and Accountability
Act 2013
portfolio Portfolio Budget Statements and Portfolio Additional
statements Estimates Statements
Explanatory Memorandum to Appropriation (Parliamentary Departments) Bill (No. 2) 2022-2023
House of Representatives 1
Outline
Appropriation (Parliamentary Departments)
Bill (No. 2) 2022-2023
General Outline
1 This Explanatory Memorandum accompanies the Appropriation
(Parliamentary Departments) Bill (No. 2) 2022-2023 (the Bill).
2 The main purpose of the Bill is to propose appropriations from the
Consolidated Revenue Fund (CRF) for expenditure in relation to the
Parliamentary Departments.
3 In accordance with sections 53 and 54 of the Australian Constitution,
appropriations for the ordinary annual services of the Government must be
contained in a separate Bill from other appropriations. Consequently, annual
appropriations that are for the ordinary annual services of the Government are
proposed in the Appropriation Bill (No. 3) 2022-2023. The Bill, together with the
Appropriation Bill (No. 3) 2022-2023 and Appropriation Bill (No. 4) 2022-2023
(the Additional Estimates Bills), propose additional annual appropriations for
2022-23 for expenditure in relation to Government decisions which have been
made since the October 2022-23 Budget.
4 The Additional Estimates Bills supplement annual appropriations provided
in the Supply Acts (Nos. 1 to 4 and Parliamentary Departments Nos. 1 and 2)
2022-2023 and Appropriation Acts (Nos. 1 and 2 and Parliamentary Departments
No. 1) 2022-2023.
5 The Portfolio Additional Estimates Statements are published and tabled in
the Parliament in relation to the Additional Estimates Bills. This Explanatory
Memorandum should be read in conjunction with the various 2022-23 portfolio
statements (being the Portfolio Budget Statements that accompanied the October
2022-23 Budget and the Portfolio Additional Estimates Statements), which
contain details on the appropriations set out in the Schedules to the Bills.
Structure of the Bill
6 The Bill provides for the appropriation of specified amounts for expenditure
by the Parliamentary Departments. The only Parliamentary Department included
in the Bill is the Department of the House of Representatives.
7 Part 1 of the Bill deals with definitions, the interpretative role of the
portfolio statements and the concept of notional transactions.
8 Part 2 of the Bill proposes appropriations to make payments of the amounts
in Schedule 1 for departmental items (clause 7), administered items (clause 8),
administered assets and liabilities items (clause 9) and other departmental items
(clause 10).
Explanatory Memorandum to Appropriation (Parliamentary Departments) Bill (No. 2) 2022-2023
House of Representatives 2
Outline
9 Part 3 of the Bill deals with credits to special accounts (clause 11), provides
for amounts to be appropriated as necessary (clause 12), and specifies when the
Bill is repealed (clause 13). Clause 13 of the Bill recognises that the
appropriations in the Bill may be varied by the Public Governance, Performance
and Accountability Act 2013 (PGPA Act).
10 The Bill does not contain an Advance to the responsible Presiding Officer
provision.
Financial Impact
11 The Bill, once enacted, will appropriate the amounts specified in Schedule 1
as set out in clause 6.
Explanatory Memorandum to Appropriation (Parliamentary Departments) Bill (No. 2) 2022-2023
House of Representatives 3
Statement of Compatibility with Human Rights
Statement of Compatibility with Human Rights
1 The Bill seeks to appropriate money for expenditure by the Parliamentary
Departments.
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 Acts 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.
Explanatory Memorandum to Appropriation (Parliamentary Departments) Bill (No. 2) 2022-2023
House of Representatives 4
Notes on Clauses
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 (Parliamentary Departments) Act (No. 2) 2022-2023.
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"
and "special account". Each Parliamentary Department is a non-corporate
Commonwealth entity (non-corporate entity) for the purposes of the PGPA Act.
Clause 4--Portfolio statements
4 Clause 4 declares that the portfolio statements are relevant documents for
the purposes of section 15AB of the Acts Interpretation Act 1901 (AI Act).
Paragraph 15AB(2)(g) of the AI Act provides for material to be considered in the
interpretation of an Act if the material is declared by the Act to be a relevant
document 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
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 the 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.
Explanatory Memorandum to Appropriation (Parliamentary Departments) Bill (No. 2) 2022-2023
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Notes on Clauses
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 the 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 1 to the Bill.
The amounts in Schedule 1 may be adjusted 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.
Clause 7--Departmental items
9 Clause 7 provides that the amount specified in a departmental item for a
Parliamentary Department may be applied for the departmental expenditure of the
Parliamentary Department. Clause 3 defines:
Explanatory Memorandum to Appropriation (Parliamentary Departments) Bill (No. 2) 2022-2023
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Notes on Clauses
• "departmental item" to be the total amount set out in Schedule 1 in relation
to a Parliamentary Department under the heading "Departmental"; and
• "expenditure" to be payments for expenses, acquiring assets, making loans
or paying liabilities.
10 While the departmental items in Schedule 1 may be divided between
outcomes, the different amounts against outcomes are notional. The total
appropriation for departmental expenses represents the departmental item.
11 Departmental items involve costs over which a Parliamentary Department
has control. Departmental appropriations can be used to make any payment
related to the functions of the Parliamentary Department including on purposes
covered by other items whether or not they are in the Act for a Parliamentary
Department. Expenditure typically covered by departmental items includes:
• employee expenses, suppliers and other operational expenses (e.g. interest
and finance expenses); and
• costs associated with the replacement of minor departmental assets valued at
$10 million or less and the capitalised maintenance of minor departmental
assets valued at $10 million or less.
12 The cash to meet departmental expenses may be required at times other than
when the expenses are incurred. Departmental items are available until they are
spent, or until the Act through which they were appropriated is repealed. Annual
Appropriation Acts have a lifespan of up to three years after which they
automatically repeal.
Clause 8--Administered items
13 Subclause 8(1) provides for the appropriation of administered amounts to be
applied by a Parliamentary Department for the purpose of contributing to the
outcome for an administered item. An "administered item" is defined in clause 3
to be the amount set out in Schedule 1 opposite an outcome for a Parliamentary
Department under the heading "Administered". Administered amounts are
appropriated separately for each outcome, so, unlike departmental items, the split
across outcomes is not notional. This makes it clear what the funding is intended
to achieve.
14 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.
15 Administered items are those administered by a Parliamentary Department
on behalf of the Government (e.g. certain grants, benefits and transfer payments).
These payments are usually made pursuant to eligibility rules and conditions
Explanatory Memorandum to Appropriation (Parliamentary Departments) Bill (No. 2) 2022-2023
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Notes on Clauses
established by the Government or the Parliament. Specifically, administered items
are tied to outcomes (departmental items are not).
Clause 9--Administered assets and liabilities items
16 Clause 9 provides amounts in Schedule 1 to acquire new administered
assets, enhance existing administered assets and/or discharge administered
liabilities relating to activities administered by the Parliamentary Departments.
Administered assets and liabilities appropriations are provided for functions
managed by a Parliamentary Department. Administered assets and liabilities items
can also be applied for any outcomes of a Parliamentary Department.
Clause 10--Other departmental items
17 Clause 10 appropriates amounts for other departmental expenditure under
the heading "Equity Injections", over which the Parliamentary Departments
exercise control. This clause provides that the amount specified in other
departmental items for a Parliamentary Department may be applied for the
departmental expenditure of the Parliamentary Department.
18 Equity Injection appropriations may be used to make payments related to
enhancing the Parliamentary Department's asset base or reducing prior year
liabilities, and would not generally include other (operating) expenditure.
Expenditure that may be typically covered includes:
• the acquisition and construction costs associated with new departmental
assets, for example, the construction of a new building that will facilitate
departmental activities;
• the replacement of major departmental assets valued at more than
$10 million, for example, the development of a departmental software
application valued at more than $10 million to replace an existing software
application; and
• the reduction of prior year liabilities, for example, the payment of liabilities
incurred in a prior year relating to remediation costs to restore sites.
19 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
automatically repeal.
Explanatory Memorandum to Appropriation (Parliamentary Departments) Bill (No. 2) 2022-2023
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Notes on Clauses
Part 3--Miscellaneous
Clause 11--Crediting amounts to special accounts
20 Clause 11 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 12--Appropriation of the Consolidated Revenue Fund
21 Clause 12 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 13--Repeal of this Act
22 Clause 13 provides that the Bill, once enacted, will be repealed at the start
of 1 July 2025.
Explanatory Memorandum to Appropriation (Parliamentary Departments) Bill (No. 2) 2022-2023
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Notes on Clauses
Schedule 1--Services for which money is appropriated
23 Schedule 1 specifies the services of the Parliamentary Departments for
which amounts will be appropriated. Schedule 1 contains a summary table which
lists the total amounts for the Parliamentary Departments and separate tables
detailing the appropriations for each Parliamentary Department. More details
about the appropriations in Schedule 1 are contained in the portfolio statements
and the second reading speech for the Bill.
24 Schedule 1 includes, for information purposes, a figure for the previous
financial year labelled "Actual Available Appropriation (italic figures) -
2021-2022". The Actual Available Appropriation (AAA) is an estimate that does
not affect the amount available at law. That figure provides a comparison with the
proposed appropriations.
25 The AAA is calculated for each item by adding the amounts appropriated in
the previous financial year's annual Appropriation Acts, plus any Advances to the
Responsible Presiding Officer, and any adjustments under section 75 of the PGPA
Act. In some instances, the figure 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. For these reasons, the Actual Available
Appropriation figures may be different from the sum of amounts provided in
earlier Appropriation Acts.
Explanatory Memorandum to Appropriation (Parliamentary Departments) Bill (No. 2) 2022-2023
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