EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Administration

Financial Management and Accountability Act 1997

Determination 2005/40 to vary a Special Account

The attached instrument makes a determination under subsection 20 (2) of the Financial Management and Accountability Act 1997 (FMA Act) to vary a previous Special Account Determination.  This variation is in relation to the Determination titled Determination by the Minister for Finance and Administration under section 20 of the Financial Management and Accountability Act 1997, made on 14 June 2002, that established the CSS (Commonwealth Superannuation Scheme) Special Account. 

Special Accounts Generally

In accordance with the Constitution, all revenues or moneys raised or received by the Government of the Commonwealth form one Consolidated Revenue Fund (CRF) and may not be spent unless under an appropriation by the Parliament for the purposes of the Commonwealth.  This determination varies a Special Account.  Special Accounts varied by determination are supported by an appropriation under section 20 of the FMA Act.  In effect, Special Accounts allow amounts from the CRF to be spent on a purpose specified in the Special Account.

The Minister for Finance and Administration must table a copy of a determination relating to a Special Account in each House of Parliament.  Either House may disallow a determination within five sitting days of tabling.  If the determination is not disallowed, it comes into effect on the calendar day after the last day on which it could have been disallowed.  (Regulation 10 of the Legislative Instruments Regulations 2004 preserves the disallowance provisions under section 22 of the FMA Act by exempting Special Account determinations from subsections 57(2) and 57(5) of the Legislative Instruments Act 2003.)

The notes to the determination identify legislation and other laws that allow or require amounts to be credited to, or debited from, the Special Account.

Operation of the Determination 2005/40

Reasons for varying the Special Account

This determination varies a Determination by the Minister for Finance and Administration under section 20 of the Financial Management and Accountability Act 1997, which established the CSS Special Account. 

A review of all Special Accounts is being carried out, which will:

·        change the purpose clauses of Special Accounts so the purposes, for which Special Accounts can be debited, are described accurately and precisely; and

·        move all Special Accounts to a new, reader-friendly template, in preparation for placement on the Federal Register of Legislative Instruments. 

The current purposes of the Special Account are:

(a)           the administration of the CSS Scheme by the CSS Board;

(b)            the performance of any other function conferred on the CSS Board under legislation; or

(c)             the management and investment of the CSS Fund by the CSS Board, where a corresponding amount has been or is to be credited to the Account from the CSS Fund in respect of such expenditure. 

Changes required

The changes are not intended to broaden or narrow the scope of the current primary purpose or the Special Account.  Rather, the purpose clauses have been adapted to the new template in such a way as to reflect the continuing policy that, moneys from employer contributions which are received by ComSuper are spent on the administration of the CSS Scheme, ensuring that moneys from the super fund itself are only spent on the investment and management of that fund. 

As part of a programme to enhance the clarity of Special Account determinations and to remove any areas of doubt over the scope of the purposes of Special Accounts, the following changes are also being incorporated within the determinations of all Special Accounts, where appropriate, and where the need for other variations arise:

·                    a provision to debit amounts relating to incidental activities.  This allows administration costs, including such items as auditing, reporting, budgeting, accounting and information technology services incurred in the course of operating the Special Account, to be debited from the Special Account.  The existing purpose clause would often allow the debiting of the Special Account for these costs, depending on the degree of directness of connection of the costs with other purposes of the Special Account.  The inclusion of the new incidental clause removes the need to obtain legal advice on the degree of directness of connection for individual transactions;

·                    a capacity to return excess amounts to the Budget (that is, reduce the balance of the Special Account without a real or notional payment).  This provision does not allow amounts to be transferred to another Special Account, or to be allocated for any other purpose, that is not consistent with the purposes of the Special Account;

·                    a clause to allow for amounts to be repaid when another Act or law allows it.  This has always been permitted by section 28 of the FMA Act, but is now included in determinations to simplify accounting for these transactions; and

·                    notes that identify general credits and debits that can be made to Special Accounts, for information purposes, in reliance on other laws.

Effect of this determination

This determination varies a Determination by the Minister for Finance and Administration under section 20 of the Financial Management and Accountability Act 1997, which established the CSS Special Account, to make its purposes and appearance consistent with a new template for all Special Account determinations.  The compiled determination will be in format that makes the determination as clear and informative as possible.

Consultation

The CSS Board is the agency affected by this instrument.  The agency was provided with drafts of the instrument before it was finalised and agrees with the form of the instrument.  No community consultation was carried out as the instrument is for machinery of government purposes only (see sections 17 and 18 of the Legislative Instruments Act 2003).

Estimates of transactions on the CSS Special Account