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.

It is with pleasure that I introduce Appropriation Bill (No. 3) 2007-2008.

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 Nos 3 and 4 this year is $3.3 billion, or about 4.8 per cent of total annual appropriations.

I should add that in addition to appropriation bills Nos 3 and 4, I will also be introducing another two appropriation bills to meet additional expenses relating to drought and equine influenza assistance measures announced by the previous government after the last budget. The amounts to meet these additional measures would normally be included in the additional estimates bills; however, as the funding for these measures is required urgently, a second set of bills has been prepared which can be given faster passage in the parliament—the Appropriation (Drought and Equine Influenza Assistance) Bills.

Before I turn to the detail of the additional appropriation being sought in Appropriation Bill (No. 3), I want to speak about the government’s savings initiatives and their effect on the additional estimates appropriations. The government has commenced the hard work of identifying savings and offsets of the previous government’s spending so that they may be redirected to better and more effective program priorities. Today I am delivering a modest initial instalment on the government’s election promise of savings.

During the election campaign we promised to require government departments and agencies to deliver an additional two per cent efficiency dividend in the 2008-09 financial year. The first part-year instalment on that promise will be achieved this financial year, with an estimated saving in expenses against annual departmental appropriations of around $100 million in 2007-08. These savings have served partially to offset an increase in departmental appropriations in the additional estimates. Efficiency dividend savings are estimated to increase to around $430 million in 2008-09.

Of course, it is not only the public sector that has been called upon to find economies. The government has applied this requirement to itself and to members of parliament generally by requiring a 30 per cent reduction in ministerial and opposition staff, yielding a net saving of $15.4 million this year.

Significant administrative efficiencies will arise this year from the transition from Australian workplace agreements to collective enterprise agreements and statutory individual contracts. The Workplace Authority will achieve a funding reduction of $30 million in 2007-08 as a result of the simplified administration.

We are also delivering the first instalment on our promise to redirect savings in annual appropriations to superior policy outcomes including, to name but a few:

• Redirecting the savings from cancelling the previous government’s Skills for the Future program work skill vouchers to fund our better plan for more vocational education and training places as part of our Skilling Australia for the Future program. A part-year saving of $16.3 million will be achieved this year;
• Abolishing the Access Card project providing a saving this year of $250.6 million; and
• Abolishing Australian industry productivity centres, saving $10.2 million this year and redirect the savings to a better targeted program.

Amongst the measures announced by the previous government that we will not be proceeding with are contributions to the Rugby League Hall of Fame and the Australian Rugby Academy, producing a cash saving to the budget this year of $35 million, while a review of the Renewable Remote Power Generation Program has identified a saving this year of $33 million.

These savings, and many others, have served to contain the additional appropriation sought in these bills.

Turning now to Appropriation Bill (No. 3), the total appropriation being sought this year is $2.4 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 items provided for in the bill.

As a first step in attacking Australia’s skills deficit the Department of Education, Employment and Workplace Relations will be provided with $242.1 million to enable the following programs to proceed:

• $100 million to establish the National Secondary Schools Computer Fund, which will provide for grants of up to $1 million for schools to assist them to provide for new or upgraded information and communications technology for secondary school students in years 9 to 12;
• $33.3 million for the government’s Skilling Australia for the Future program which will provide a total of 450,000 additional training places over four years at a cost of $1.3 billion. Funding in 2007-08 will deliver 20,000 vocational education and training places that are aimed at people currently outside the workforce. This program will commence in the beginning of April 2008;
• $92.6 million to meet additional costs associated with the previous government’s Skills for the Future program and to extend that program until our new program commences in April; and
• $16.2 million to establish the Television Technical Operators College and the WesTrac National Skills Training Centre of Excellence.

The Department of Education, Employment and Workplace Relations will also be provided with $22.7 million to provide assistance to schools in declared Exceptional Circumstances areas to increase equitable access to high-quality education opportunities.

The government will provide a net increase of $45.7 million in 2007-08 to establish the Workplace Authority, which will undertake pre-lodgement assessment of workplace agreements and provide a comprehensive information and education service about pay and conditions to help employers and employees better understand the workplace relations system.

$15 million will be provided to establish the Office of the Workplace Ombudsman, which will perform the workplace relations compliance role formerly undertaken by the Office of Workplace Services. The additional resources will ensure timely investigations of the expanded number of claims.

Additional funding of $60.75 million is proposed for the Department of Education, Employment and Workplace Relations to reimburse it for the communications campaign to raise public awareness of the services provided by the Office of the Workplace Ombudsman and the Workplace Authority, which concluded in October 2007.

The Department of Infrastructure, Transport and Regional Development and Local Government has been provided with $2.5 million to establish Infrastructure Australia to ensure genuine rigour and accountability in infrastructure spending. Infrastructure investments will be subject to expert analysis. If a government chooses to invest in a project for political rather than economic reasons everyone will know about it. Infrastructure Australia will develop a national approach to tackling infrastructure bottlenecks.

The Department of Innovation, Industry, Science and Research will be provided with $15.2 million to introduce the Enterprise Connect program, replacing the previous government’s Australian Industry Productivity Centres.

Additional funding is proposed for the Department of Health and Ageing for the following:

• $14 million to provide a package of incentives to support the take-up of Medicare Easyclaim by patients attending participating general practices and specialist practices;
• $33.1 million to provide up-front capital grants and recurrent funding for the establishment of 31 GP Super Clinics around Australia, and to provide incentive payments to GPs and allied health providers to relocate to these clinics;
• $11.7 million to establish a specialist training school at Greenslopes Private Hospital at the University of Queensland; and
• $31.6 million for investing in hospitals and community health under the Better Outcomes for Hospitals and Community Health program. This includes funds for specific commitments announced during the election such as $10 million for the Flinders Medical Centre clinical teaching facilities upgrade.

The Department of the Environment, Water, Heritage and the Arts will receive the following additional amounts:

• $50.8 million additional funding for the Great Barrier Reef Marine Park Structural Adjustment Package;
• an additional $31.8 million to provide rebates to households for installing solar hot water heaters to encourage improved energy efficiency in homes;
• an additional $50.8 million for the National Solar Schools Plan to encourage improved energy and water efficiency in schools; and
• an additional $15.2 million to take early action on the National Plan for Water Security. This proposal will accelerate investment in water savings infrastructure and the purchase of water allocations by bringing forward spending from 2011-12.

The National Water Commission will receive an additional $25 million to assist groundwater licence holders in New South Wales to adjust to reductions in water access entitlements.

The Department of Families, Housing, Community Services and Indigenous Affairs will be provided with $189.8 million to assist people with disabilities, their families and carers. This includes annual tax-free payments of $1,000 for each child under the age of 16 with a disability for whom the carer is receiving Child Carer Allowance and $9 million to increase the support available to people in disability business services.

The Department of Immigration and Citizenship will be provided with:

• an additional $18 million to upgrade the Border Control System. This funding will enable enhanced electronic connectivity between the department and the Australian Security Intelligence Organisation; improved analysis and security checking of travellers to Australia; and higher quality data matching systems;
• a further $81.6 million through the DIAC funding model for increases in the volume of DIAC’s transactions, including visa applications (mainly student and skilled migrant) during 2007-08.
• The Department of Defence’s appropriation is largely the result of a reclassification of appropriations and other estimates variations, including:
• $402 million to cover an increase in depreciation expense. This increase in funding is fully offset by a reduction in the department’s capital funding appropriation from Appropriation Act 2, thereby making the reclassification budget neutral;
• $38.8 million for Stage 2 of the Enhanced Land Force Initiative; and
• $70.6 million for additional costs incurred for Operation Astute in East Timor in 2006-07.

The balance of the amount in Appropriation Bill (No. 3) relates to estimates variations, reclassifications and other minor measures.

The appropriation bills are structured according to the Administrative Arrangement Orders announced on 3 December 2007 and 25 January 2008. Members will notice that in the case of some functions transferred between agencies, the recipient agency has been assigned the same outcome as the agency from which the activity was transferred. This ensured that valid outcomes existed against which funds could be appropriated within the additional estimates timeline and in the context of the large number of administrative arrangement changes. Following additional estimates, agencies will be able to seek amendments to outcomes statements so that these can be more fully integrated into their agency outcome and program structure.

We have inserted a new provision in Appropriation Bill (No. 3)—section 12—to facilitate the achievement of whole-of-government outcomes relating to Indigenous employment initiatives. The new provision will provide relevant agencies with the necessary appropriation in order to spend amounts received from the Northern Territory Flexible Funding Pool Special Account. Participating agencies will be identified in an annual determination by the finance minister. The Flexible Funding Pool model was adopted to permit the reallocation of funds between participating agencies, where required, to more effectively meet employment objectives relating to the Northern Territory Emergency Response.

We have also taken the opportunity to make changes to the appropriation bills to clarify the relationship between annual appropriation acts and certain provisions in the Financial Management and Accountability Act 1997, which can change amounts appropriated by, and issued under, the annual appropriation acts. The FMA Act provisions in question are sections 30, 30A, 31 and 32, which relate to re-imbursements and other amounts received by agencies, handling goods and services tax issues and changes to appropriations that flow from a change of agency functions, such as the new administrative arrangements made after the election.

The changes proposed are particularly important following commencement of the Financial Framework Legislation Amendment Act (No. 1) 2007 which altered sections 31 and 32 so that they directly change the amounts of appropriation provided in the annual appropriation acts.

We are proposing to expand the explanatory detail provided in note 2 to section 6 of the bills and also expand the detail provided in the appropriation clause in each bill. These changes are not designed to alter the substantive law, but to make clear that the appropriation acts are subject to the relevant FMA Act provisions.

A number of other minor technical improvements have been made to the bills to ensure consistency with the drafting of other legislation.

The previous government decided to abolish the statement of savings and to remove departmental savings from Appropriation Bill (No. 3). This statement merely replicated information already provided in the Mid-Year Economic and Fiscal Outlook. It was also somewhat misleading, as most of the items presented were actually reallocations of funding across programs or years and did not represent reductions in agency appropriations. Consequently, I am not tabling a statement of savings document with these additional estimates bills. Also, the proposed Appropriation Bill (No. 3) does not show agencies which are not expected to spend all of their departmental outputs appropriation for 2007-08. The government has decided that detail on savings measures agreed since the 2007-08 budget will be provided in tables in the portfolio additional estimates statements.

I commend the bill to the House.

Debate (on motion by Mr Hunt) adjourned.