Explanatory Memorandum
(Circulated by authority of the Minister for Finance and Administration, Senator the Honourable Nick Minchin)General outline and financial impact statement
General outline
1. The Financial Framework Legislation Amendment Bill 2004 (FFLA Bill) proposes amendments to 112 Acts and the repeal of 28 Acts.
2. The main purposes of the proposed amendments are to:
- •
- align the financial management provisions of 85 Acts with provisions of the Financial Management and Accountability Act 1997 (FMA Act) which were amended by the Financial Management Legislation Amendment Act 1999 (FMLA Act 99). The amendments to the FMA Act were part of the adoption, by the Commonwealth, of the accrual budgeting and reporting framework on 1 July 1999;
- •
- add to the information requirements for a determination made by the Minister for Finance and Administration (Finance Minister) that establishes a Special Account under section 20 of the FMA Act;
- •
- transfer from the Treasurer to the Finance Minister powers and functions, in 25 Acts, to approve investments, money raising and guarantees for specific entities that are legally separate from the Commonwealth, and to provide the Finance Minister with power to delegate these powers and functions;
- •
- update, clarify and align other financial management and reporting provisions.
3. Acts proposed for repeal are redundant. If they were not repealed they would require amendment as a consequence of the FMLA Act 99.
4. The amendments and repeals of Acts are contained in three Schedules:
- •
- Schedule 1 covers amendments relating to the FMLA Act 99 and Special Accounts;
- •
- Schedule 2 covers other amendments; and
- •
- Schedule 3 covers the repeal of Acts.
5. Passage of the FFLA Bill is required to facilitate the adoption of appropriate administrative practices through clearer legislative provisions generally.
6. The Joint Committee of Public Accounts and Audit (JCPAA) examined an earlier exposure draft of the FFLA Bill in 2003 and recommended that it be introduced into Parliament as soon as feasible. The FFLA Bill has been updated by reference to the Government's response to the report of the JCPAA and for other developments.
Financial Impact Statement
7. The proposed amendments and repeals have no financial impact.
Inquiry by the Joint Committee of Public Accounts and Audit
8. On 18 February 2003 an Exposure Draft of the Financial Framework Legislation Amendment Bill (Draft FFLA Bill) was released by the Finance Minister for public comment and an inquiry conducted by the JCPAA.
9. On 20 August 2003 the JCPAA tabled in Parliament report 395, Inquiry into the Draft Financial Framework Legislation Amendment Bill (JCPAA Report 395). The Report made a number of recommendations and conclusions proposing and supporting changes.
10. On 26 June 2004 the Government tabled its response to JCPAA Report 395 agreeing to most of the recommendations and conclusions. The Government response is recorded at Attachment A of this Explanatory Memorandum. Comments that provide links between the Government's response and parts of this Explanatory Memorandum are recorded in Attachment B of this Explanatory Memorandum.