EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997

Determination 2009/14 – Special Accounts Abolition 2009

Purposes of Determination 2009/14

The attached instrument makes a determination under section 20 of the Financial Management and Accountability Act 1997 (FMA Act) to abolish two Special Accounts for the Department of Defence – the Services for other Governments and Non-agency Bodies Account and the Other Trust Moneys 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 may be 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 the purposes 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 the 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.

Special Accounts can be abolished by a determination of the Finance Minister.  However, such a determination is not subject to parliamentary disallowance.

Operation of the Determination 2009/14

Reasons for abolishing the Special Account

The abovementioned Special Accounts are being abolished by this instrument because, as part of a program to simplify the financial framework, the purposes of the separate Other Trust Moneys (OTM) and Services for other Governments and Non‑agency Bodies (SOG) Special Accounts are being combined within a single similar purpose Special Account – a Services for Other Entities and Trust Moneys (SOETM) Special Account – which is being established by Determination 2009/15.  It is expected that the balances of the OTM and SOG Accounts will be transferred to the similar SOETM Special Account upon its creation, thereby making the abovementioned OTM and SOG Accounts redundant.

Effect of this determination

Each Special Account in Schedule 1 is abolished by this Determination from that time at which the balance of that Special Account reaches zero.

Consultation

The Department of Defence is the agency affected by this instrument. The agency was provided with drafts of the instrument and agrees with the form of the instrument. As the instrument is for internal machinery of government purposes only, no consultation was considered necessary with other persons (see sections 17 and 18 of the Legislative Instruments Act 2003).

Estimates of transactions in the Special Accounts