Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I rise to introduce the Appropriation Bill (No. 3) 2008-2009. There are two additional estimates bills this year: Appropriation Bill (No. 3) and Appropriation Bill (No. 4). I shall introduce the latter bill shortly.

The additional estimates bills seek appropriation authority from parliament for the additional expenditure of money from the Consolidated Revenue Fund in order to meet requirements that have arisen since the last budget. The total additional appropriation being sought through additional estimates bills No. 3 and No. 4 this year is $3.1 billion, or about 4.1 per cent of total annual appropriations.

Turning to Appropriation Bill (No. 3), the total appropriation being sought this year is $2.05 billion. This proposed appropriation arises from changes in the estimates of program expenditure due to variations in the timing of payments and forecast increases in program take-up, reclassifications and from policy decisions taken by the government since the last budget.

I now outline the major appropriations proposed in the bill.

AusAID will be provided with an additional $157.2 million as part of the government’s commitment to increase Australia’s overseas development assistance over the longer term.

Of this amount, $150 million will be contributed to the World Bank, as follows:

• $50 million for the trust fund established to respond to the global food price crisis. This fund will be used to help stimulate agricultural production in developing countries adversely affected by higher global food prices. Activities supported by the multidonor trust fund will include improving access for small farmers to seed and fertiliser for the upcoming planting season; and
• $100 million will be contributed to the Clean Technology Fund, which will offer development finance at highly concessional rates for transformative investments in low-carbon technologies by developing countries in the transportation and power sectors and in energy efficient buildings, industry and agriculture.

AusAID will also be appropriated $1.6 million to develop a policy framework that enables the government to rapidly deploy and sustain a trained civilian contingent in response to natural and man-made disasters in developing countries, and a further $5.6 million, including some capital, for a facility in Indonesia that will promote increased cooperation in responding to disasters.

An additional appropriation of $87.8 million is proposed for the Department of Defence to reimburse it for the cost of extending Australia’s military participation in stabilisation and reconstruction activities in Iraq to 30 June 2009.

The Department of Defence will also be provided with $153 million to meet additional costs arising from movements in the exchange rate, while an amount of $29.4 million is proposed to cover unavoidable overspends on operations in the previous financial year, which are funded by the government on a no-win no-loss basis.

In addition, the Department of Defence will be provided with $307 million to address pressures in a number of areas, including the Graded Other Ranks Pay Structure Review, superannuation, rental allowances and higher fuel costs. This funding is matched by reduced estimates for Defence in later years.

For the Department of Climate Change, an additional $13.95 million is provided for a national advertising campaign to raise public awareness of climate change and the Carbon Pollution Reduction Scheme. The campaign is being conducted through print, radio and television advertisements, a new website and publications for schools and households. The campaign aims to increase community understanding of the causes and impacts of climate change on Australia and to encourage participation in the development of the Carbon Pollution Reduction Scheme.

The government will provide an additional $21.3 million to the Department of Health and Ageing, including $3.9 million that has been reclassified from Appropriation Act (No. 2), to increase the number of organ donations and transplantations across Australia by implementing a comprehensive set of initiatives including:

• dedicated organ donation specialist doctors and other staff to work closely with emergency department and intensive care unit teams in selected public and private hospitals across Australia;
• additional staffing, bed and infrastructure costs associated with organ donations in hospitals;
• raising community awareness and building public confidence in organ donation and transplantation; and
• counselling and support of potential donor families.

As part of this package, the government will establish the Australian Organ and Tissue Donation and Transplantation Authority, which will commence on 1 January 2009. The authority will coordinate clinicians and other hospital staff dedicated to organ and tis-sue donation in hospitals across Australia, and will also oversee a new national network of state and territory organ and tissue donation agencies. Of the total appropriation propo-sed for the Department of Health and Ageing for this package, $4.9 million will be set aside to fund the operations of the new authority.

The Department of Health and Ageing will also be provided with an additional $7.5 million in 2008-09 to increase the number of places available under the Prevocational General Practice Placements Program, which provides opportunities for junior doctors to gain clinical experience in primary care with the aim of encouraging them to take up general practice as a career. This amount will be funded by bringing forward unallocated fund-ing from the Better Outcomes for Hospital and Community Health program from fut-ure years.

The government has agreed to return $21.4 million to the diagnostic imaging industry as part of the recently expired memorandum of understanding between the Commonwealth and the industry. The MOU managed the delivery of Medicare funded diagnostic imaging services. This amount represents the estimated shortfall in expenditure on diagnostic services over the life of the agreement. An amount of $11.4 million is proposed for the Department of Health and Ageing to return to the industry in 2008-09, while the balance will be returned next financial year.

The Department of Health and Ageing will also be appropriated an additional $14.4 million to meet the costs associated with an increased uptake of the breast cancer drug Herceptin, provided under the Herceptin program.

The government will provide the Department of Human Services with an additional $39 million for the Job Capacity Assessment program. The additional funding is required to meet higher than expected demand for assessments, and will provide for an additional 139,000 assessments to be undertaken in 2008-09.

The Department of the Environment, Water, Heritage and the Arts will be provided $101 million to meet the increased demand for household rebates under the Solar Homes and Communities Plan. Of this amount, $48.8 million will be brought forward from 2009-10, while $52.2 million is additional funding. The program provides rebates of up to $8,000 for the installation of solar power panels in homes and grants for up to half the cost of a two-kilowatt system for community buildings.

The government will provide $61.6 million to assist small block irrigators in the Murray-Darling Basin affected by drought who wish to cease irrigation farming but stay on the farm. The program provides taxable exit grants of up to $150,000 to eligible irrigators with permanent water entitlements of at least 10 megalitres, on properties of 15 hectares or less, who sell their water entitlements to the Commonwealth and cease irrigation farming. The program also provides two complementary taxable grants of up to $10,000 each for advice and training, and removal of permanent plantings and other production related infrastructure.

Of the total amount proposed for this program, the Department of the Environment, Water, Heritage and the Arts will receive $57.1 million. This will be funded by bringing forward an equivalent amount from 2009-10 from the Sustainable Rural Water Use and Infrastructure Program. In addition, the Department of Agriculture, Fisheries and Forestry will be provided with $4.5 million, including $4 million for Centrelink to deliver the program.

The government proposes to provide $59.4 million to the Department of Agriculture, Fisheries and Forestry to meet commitments for which funding was provided last financial year, but because of program delays, payments cannot be made until the current year. Of this amount:

$43.4 million is proposed to fund drought assistance grants to irrigators in the Murray-Darling Basin. Claims submitted under this program were not finalised by the end of 2007-08, and a reappropriation of unspent funding is required to clear the backlog.

$16 million is proposed for the Tasmanian Community Forest Agreement to enable the department to meet commitments that were entered into in 2007-08.

An additional $93.3 million is proposed for the Department of Innovation, Industry, Science and Research to meet the increased cost of the LPG vehicle scheme arising from additional customers who are expected to access the scheme in 2008-09. The LPG vehicle scheme is designed to encourage the uptake of LPG as an alternative transport fuel and to assist families facing high petrol prices.

The Department of Innovation, Industry, Science and Research will also receive an additional $37 million for the Ethanol Production Grants program to meet an anticipated increase in expenditure due to the New South Wales government’s two per cent ethanol mandate; expansions at the Manildra facility at Nowra and CSR’s facility at Sarina; and a new ethanol production facility at Dalby.

The government will provide $16.4 million in 2008-09 to implement the Automotive Industry Structural Adjustment Program. Of this total, $7.9 million will be provided to the Department of Innovation, Industry, Science and Research to encourage automotive industry consolidation by providing targeted assistance to address some of the costs of mergers. This is aimed at minimising company closures and achieving economies of scale.

The program will also provide labour market structural adjustment assistance, under which the Department of Education, Employment and Workplace Relations will receive $8.5 million to provide displaced workers with training and other assistance to get them into alternative employment. Assistance will be available to workers who have been made redundant from 1 November 2008.

The Department of Education, Employment and Workplace Relations will also receive $24 million in conditional funding to support the ongoing operations of loss-making centres currently operated by ABC Learning. This funding aims to provide certainty in the provision of child care at affected ABC Learning Centres until at least 31 December 2008.

The government proposes to reallocate $99.4 million for the Department of Resources, Energy and Tourism to establish a global carbon capture and storage institute. The institute will accelerate the take-up of carbon-capturing projects by facilitating demonstration projects and identifying and supporting necessary research on related topics, including regulatory settings and regulatory frameworks. Funding in 2008-09 will be provided by the redirection of amounts from the National Low Emissions Coal Initiative, formerly known as the National Clean Coal Fund. This additional funding is also partially offset by savings in other programs.

The government will provide $21.5 million in 2008-09 and $83 million over four years to Australia’s financial regulators to maintain the strength of Australia’s financial system during the global financial crises.

This initiative will provide the Australian Prudential Regulation Authority with an additional $9 million in 2008-09 to meet the increased demands being placed on it to undertake a range of additional supervisory services. The Australian Securities and Investments Commission will receive an additional $10 million to undertake market monitoring and enforcement activities, while the Department of the Treasury will receive $2.5 million to ensure Australia’s regulatory environment continues to be world’s best practice and to pursue reform of the global financial architecture.

The government commissioned Sir Peter Gershon to undertake a review of the Australian government’s use of information and communications technology, hereafter referred to as ICT. The government asked Sir Peter to consider, in particular, the efficiency and effectiveness of current ICT usage; whether the government is realising the greatest return from its investments in ICT; and the scope to increase agency ICT capability in order to alleviate pressures caused by ICT skill shortages.

The government has agreed to the review’s recommendations and the Department of Finance and Deregulation will receive $13.5 million in 2008-09 to implement them.

In addition, the government proposes to provide the Department of Finance and Deregulation with a total $10.2 million, including $6.1 million in capital funding, to establish a national intergovernmental telepresence system between the Commonwealth and the states and territories. The proposal will provide high-quality, secure telepresence video facilities connecting the Commonwealth and state and territory governments. The system will be used in interjurisdictional meetings, including Council of Australian Governments and ministerial council meetings.

The Department of Foreign Affairs and Trade will receive:

• an additional appropriation of $18.8 million to account for the impact of foreign exchange fluctuations on its ability to make payments to both international peace-keeping organisations and other international organisations on behalf of the Australian government; and
• an additional $28 million to ensure that work can commence on the construction and fit-out of the Australian Pavilion at the Shanghai 2010 World Expo. Of this amount, $16 million will be brought forward from 2010.

An amount of $39.7 million is sought for the Department of Infrastructure, Transport, Regional Development and Local Government. Of this amount:

• $8 million is proposed to endow a major university to establish a new centre of excellence for local government, to showcase innovation and best practice across local government and to encourage the wider adoption of innovative practices and solutions; and
• there is an additional $25.1 million, which represents the reappropriation of unspent program funds from 2007-08 required to fulfil program commitments, including under the Regional Partnerships and Better Regions programs.

A total of $11.8 million will be provided to the Attorney-General’s Department to reimburse the department for costs incurred through the provision of services to the Indian Ocean and Jervis Bay Territories such as utilities, infrastructure and health services.

The appropriations that I have outlined so far are proposed to meet additional funding requirements that have arisen since the last budget. There is a further category of requirement for additional appropriation, referred to as a ‘reclassification of appropriation’, that is also proposed in Appropriation Bill (No. 3).

These amounts need to be re-appropriated to align the purpose of the proposed spending with the correct appropriation type. The additional appropriations are fully offset by savings against the original appropriations and thus do not lead to additional expenditure.

I now outline a number of material reclassifications proposed in Appropriation Bill (No. 3):

• The Department of Defence will be provided with $278 million in departmental outputs appropriation to more correctly align its appropriations with its work program. This additional amount will be fully offset by reductions in its non-operating appropriations.
• The Department of Families, Housing, Community Services and Indigenous Affairs will be provided with $70 million for the Australian Remote Indigenous Accommodation Program. This amount represents a reclassification of appropriation from the states, territories and local government item to allow the department to make payments directly to non-government organisations.
• The Bureau of Meteorology will be provided with $20 million for the Modernisation and Extension of Hydrologic Monitoring Systems Program. This amount has been reclassified from payments to the states, territories and local government item to an administered expenses appropriation in Appropriation Bill (No.3) so that both public and private sector entities may participate in a merit based, competitive tender process for grants to assist modernisation and extension of their water resource monitoring systems.
• An additional $23.7 million is included in Appropriation Bill (No. 3) for the Department of Education, Employment and Workplace Relations as a result of the government’s decision to reclassify program payments relating to the National Skills and Workplace Development Agreement from special appropriations to an annual administered expenses appropriation. The reclassification will enable the department to continue to make payments for the National Training System.

The Department of Broadband, Communications and the Digital Economy will be provided with $10 million of departmental outputs appropriation to meet the projected additional costs associated with the National Broadband Network project. This funding, which is for costs associated with the conduct and assessment of the request for proposal process, will be made available by reclassifying administered expense appropriations provided for the Connect Australia program.

The remaining amounts that appear in Appropriation Bill (No. 3) relate to estimates variations, minor reclassifications and other minor measures.

I would like to turn now to changes we propose for the Advance to the Finance Minister, known as the AFM. Section 14 of Appropriation Act (No. 1) 2008-09 enables the finance minister to provide additional appropriation when satisfied that there is an urgent need for expenditure, and the existing appropriation is inadequate.

Based on current indications, we expect demand for issues from the advance to be greater than the $295 million provided in Appropriation Act (No. 1) and the $380 million provided in Appropriation Act (No. 2). It is important that the government can maintain its ability to issue amounts from the advance in the event that there is an urgent need for expenditure. Accordingly, clause 13 of Appropriation Bill (No. 3) provides that, irrespective of the amounts issued from the advance, at the commencement of Appropriation Act (No. 3), the amount available to be issued will be restored to the original limit of $295 million. A similar clause has been added to Appropriation Bill (No. 4) which will restore the limit to $380 million.

In addition, a new clause is included in bills (No. 3) and (No. 4) providing that where amounts included in those bills have also been subject to an issue from the advance, for example, where an amount is determined after the additional estimates bills are finalised, then the appropriation in the bill will be reduced by the amount of the advance. This change will prevent appropriations for the same expenditure from both the advance and the bill.

In the last budget, the drafting of the legislation text contained in the appropriation acts was simplified to streamline certain provisions and remove redundant references. Those changes have also been made for the additional estimates bills.

These proposed improvements are canvassed in the explanatory memoranda.

I commend the bill to the House.

Debate (on motion by Mr Randall) adjourned.