EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997

Determination 2008/11 to abolish the Federation Fund –Department of Communications, Information Technology and the Arts Special Account

The attached Determination is made under subsections 20 (3) of the Financial Management and Accountability Act 1997 (FMA Act) to abolish the Federation Fund – Department of Communications, Information Technology and the Arts 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.  A Special Account is established by a determination that sets out the amounts that may be credited and the purposes for which it may be debited.                Special Accounts established 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 determination.

Determinations that establish Special Accounts, or vary determinations that establish Special Accounts, are subject to section 22 of the FMA Act. Section 22 of the FMA Act requires the Finance Minister to table a copy of the establishing or varying determination 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. The determination may prescribe a later date upon which the Special Account can be relied upon.

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 the standard disallowance provisions of the Legislative Instruments Act 2003.

Special Accounts can be abolished by a determination of the Finance Minister.  However, there is no requirement to table such a determination.

Operation of Determination 2008/11

The Federation Fund - Department of Communications, Information Technology and the Arts Special Account was an element of the Federation Fund originally announced in the 1997-98 Budget.

The purpose of the Special Account was ‘for the expenditure on substantial capital projects throughout Australia which will mark the Centenary of Federation and make a significant and lasting contribution to the Australian community’.

All projects approved for funding through this Special Account have now either been completed or have ceased and there is longer a requirement to expend the balance standing to the credit of the Special Account. Consequently, the Government supported the proposal to return the residual balance to the Budget. This return was affected on 29 April 2008.

Effect of this determination

The Federation Fund –Department of Communications, Information Technology and the Arts Special Account is being abolished by this determination as the purposes have been achieved and the balance is zero.

Consultation

The Department of Broadband, Communications and the Digital Economy is the agency affected by this instrument. As the instrument is for internal machinery of government purposes only, no consultation was considered necessary with other persons (in accordance with the provisions of section 18 of the Legislative Instruments Act 2003).

Estimates of transactions of the Federation Fund –Department of Communications, Information Technology and the Arts Special Account