EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997

Financial Management and Accountability (Abolition of 26 Special Accounts) Determination 2011/01

Purpose of the Determination

The Determination is made under subsection 20(3) of the Financial Management and Accountability Act 1997 (FMA Act) and abolishes the following 26 Special Accounts:

1.             Asia/Pacific Group on Money Laundering Special Account;

2.             International Marketing of Education Special Account;

3.             Safety and Quality in Health Care Special Account;

4.             Supported Accommodation Assistance Program Data and Program Evaluation Fund Special Account

5.             Other Trust Moneys Account - Australian Competition and Consumer Commission;

6.             Services for other Governments and Non-agency Bodies Account - Australian Competition and Consumer Commission;

7.             Other Trust Moneys Account - Australian Federal Police;

8.             Services for other Governments and Non-agency Bodies Account - Australian Federal Police;

9.             Other Trust Moneys Account - Attorney-General's Department;

10.         Services for other Governments and Non-agency Bodies Account - Attorney-General's Department;

11.         Other Trust Moneys Account - AusAID;

12.         Services for other Governments and Non-agency Bodies Account - AusAID;

13.         Other Trust Moneys Account - Comsuper;

14.         Services for other Governments and Non-agency Bodies Account - Comsuper;

15.         Other Trust Moneys Account - Department of Agriculture, Fisheries and Forestry;

16.         Services for other Governments and Non-agency Bodies Account - Department of Agriculture, Fisheries and Forestry;

17.         Other Trust Moneys Account - Department of Health and Ageing;

18.         Services for other Governments and Non-agency Bodies Account - Department of Health and Ageing;

19.         Other Trust Moneys Account - Department of Infrastructure and Transport;

20.         Services for other Governments and Non-agency Bodies Account - Department of Infrastructure and Transport;

21.         Other Trust Moneys Account - Department of Innovation, Industry, Science and Research;

22.         Services for other Governments and Non-agency Bodies Account - Department of Innovation, Industry, Science and Research;

23.         Other Trust Moneys Account - Department of the House of Representatives;

24.         Services for other Governments and Non-agency Bodies Account - Department of the House of Representatives;

25.         Other Trust Moneys Account - IP Australia; and

26.         Services for other Governments and Non-agency Bodies Account - IP Australia.

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 this Determination

The determination abolishes 26 Special Accounts which are no longer required.  Twenty-two of these Special Accounts are standard purpose accounts named Other Trust Moneys Accounts (OTM) or Services for other Governments and Non‑agency Bodies Accounts (SOG).  The remaining four Special Accounts are specific purpose accounts and are listed below:

1.             International Marketing of Education Special Account, managed by the Department of Education, Employment and Workplace Relations;

2.             Asia/Pacific Group on Money Laundering Special Account, managed by the Australian Federal Police;

3.             Safety and Quality in Health Care Special Account, managed by the Department of Health and Ageing; and

4.             Supported Accommodation Assistance Program Data and Program Evaluation Fund Special Account, managed by the Department of Families, Housing, Community Services and Indigenous Affairs. 

The Special Accounts in the determination are abolished at a time specified in the Schedule in which they are mentioned, which is as follows:

1.             Schedule 1 – the Special Accounts are abolished at the time the determination commences.

2.             Schedule 2 – the Special Accounts are abolished on the earlier of the time when the balance of the appropriation reaching zero and 30 June 2011.

3.             Schedule 3 – the Special Accounts are abolished on the earlier of the time when the balance of the appropriation reaching zero and 31 December 2011.

Reasons for abolishing the Special Accounts

Six of the 26 Special Accounts that would be abolished by the Determination are redundant to requirements and therefore, should be abolished.

The remaining 20 Special Accounts that would be abolished by the Determination (asterisked in the table below) are standard purpose accounts (OTM and SOG).  These Special Accounts are to be replaced with 10 new Special Accounts named Services for other Entities and Trust Moneys Special Account (SOETM), which combine the standard purposes of the OTM and SOG into a single Special Account.  Most agencies subject to the FMA Act administer a standard purpose SOETM Special Account to provide an additional level of separation in managing money which is held on trust or which comprises trust-like characteristics.

Consultation

The Agencies affected by this determination include the Australian Competition and Consumer Commission; Australian Federal Police; Attorney-General's Department; AusAID; Comsuper; Department of Agriculture, Fisheries and Forestry; Department of Families, Housing, Community Services and Indigenous Affairs; Department of Health and Ageing; Department of Education, Employment and Workplace Relations; Department of Infrastructure and Transport; Department of Innovation, Industry, Science and Research; Department of the House of Representatives; and IP Australia.  These Agencies were given an opportunity to comment on drafts of the instrument and to supply estimates for the “Balances and Transactions Table”.

As the instrument is for internal machinery of government purposes only, no consultation was necessary with other persons (see sections 17 and 18 of the Legislative Instruments Act 2003).

Table of estimated Balances and transactions of the abolished Special Accounts

The table below outlines the estimated financial implications of the determination on the balance of the Special Accounts. 

Note: these figures are actuals for the 2010-2011 Financial Year provided by each of responsible Agencies.  As such, these figures may differ from the budgeted amounts published in Agency Resourcing Budget Paper No. 4 2010-2011.

⁽¹⁾       Reflects the net result of credits and debits to the Special Account for the 2010-2011 Financial Year

⁽²⁾       Reflects the amount released to the Consolidated Revenue Fund as a result of this determination. 

Note that it is anticipated that the accounts marked with an asterisk (*) will have their balances transferred to a new SOETM Account for the responsible Agency.