Appropriation (2016/17 Confirmation and Validation) Bill

  • enacted

Appropriation (2016/17 Confirmation and Validation) Bill

Government Bill

24—1

Explanatory note

General policy statement

It is a basic constitutional principle that the Government can spend public money and incur expenses and capital expenditure and make capital injections only in accordance with appropriations or other authorities by or under an Act of Parliament and in an otherwise lawful manner.

However, Parliament has, in the Public Finance Act 1989 (the Act), conferred limited authority on the Governor-General by Order in Council to vary appropriations made by Parliament and on the Minister of Finance to approve expenditure in excess of an existing appropriation by Parliament. Any other unappropriated expenditure or unauthorised capital injection must be validated by an Appropriation Act.

Confirming Public Finance (Transfers Between Outputs) Order 2017

Section 26A of the Act authorises the Governor-General by Order in Council to direct that an amount appropriated in a Vote for an output expense be transferred to another output expense appropriation in that Vote. There are 3 restrictions. First, the transfer must not increase that appropriation for the financial year by more than 5%. Secondly, there must not have been any other transfer under section 26A of the Act to that appropriation during the financial year. Thirdly, the total amount appropriated for all output expense appropriations for that Vote for the financial year must remain unaltered. A clause that confirms those Orders in Council must be included in an Appropriation Bill that applies to that financial year.

This Bill confirms the Public Finance (Transfers Between Outputs) Order 2017, which was made under section 26A of the Act (clause 5).

Confirming unappropriated expenditure

Section 4 of the Act prohibits the incurring of expenses or capital expenditure, except as expressly authorised by an appropriation, or other authority, by or under an Act. Sections 8 and 9 of the Act require appropriations to be limited to a specified amount and limited to the scope of the appropriation.

Section 26B of the Act authorises the Minister of Finance to approve the incurring of expenses or capital expenditure in the last 3 months of the financial year in excess, but within the scope, of an existing appropriation by Parliament. This is subject to a limit that is the greater of $10,000 and 2% of the total amount appropriated for that appropriation by all Appropriation Acts for that financial year. The approval must be given not later than 3 months after the end of the financial year concerned. Expenses and capital expenditure incurred under the approval must be confirmed in an Appropriation Bill that applies to that financial year.

This Bill confirms expenses incurred for the 2016/17 financial year with the approval of the Minister of Finance under section 26B of the Act (clause 6). Details of this confirmation are set out in Schedule 1.

Validating unappropriated expenditure

Section 26C of the Act requires the incurring of expenses or capital expenditure without appropriation, or other authority, by or under an Act to be validated by an Act of Parliament.

For the 2016/17 financial year, certain expenses and capital expenditure were incurred that require validation by this Bill in accordance with section 26C of the Act. Clause 7 validates these expenses and capital expenditure, the details of which are set out in Schedules 2 to 5.

Schedule 2 contains details of expenses that were incurred in excess, but within the scope, of existing appropriations and without the authority of an Imprest Supply Act. Schedule 3 contains details of expenses that were incurred not within the scope of any existing appropriations and without the authority of an Imprest Supply Act. Schedule 4 contains details of capital expenditure that was incurred not within the scope of any existing appropriations and with the authority of an Imprest Supply Act. Schedule 5 contains details of expenses that were incurred in advance of appropriation and without the authority of an Imprest Supply Act.

Clause 9 validates certain expenses that were incurred by the Department of Internal Affairs for the 2015/16 financial year and that require validation in accordance with section 26C of the Act and that have not been previously validated.

Validating unauthorised capital injections

Section 12A of the Act prohibits the making of capital injections to a department (other than an intelligence and security department) or an Office of Parliament unless the capital injection is authorised under an Appropriation Act (subject to section 25A of the Act which permits the Minister of Finance to approve unauthorised capital injections to meet emergencies). Section 26CA of the Act requires a capital injection that is made in contravention of section 12A to be validated by an Act of Parliament.

Clause 8 validates a capital injection made in the 2016/17 financial year for the purposes of section 26CA of the Act.

Departmental disclosure statement

A departmental disclosure statement is not required for this Bill.

Clause by clause analysis

Clause 1 is the Title clause.

Clause 2 is the commencement clause. The Bill comes into force on the day after the date on which it receives the Royal assent.

Clause 3 states the purpose of the Bill, which is to confirm and validate matters relating to the 2016/17 financial year and to validate a matter relating to the 2015/16 financial year.

Clause 4 is an interpretation clause.

Clause 5 confirms the Public Finance (Transfers Between Outputs) Order 2017. That order, which came into force on 30 June 2017, directed that fiscally neutral transfers be made decreasing the amounts appropriated for certain output expense appropriations and increasing the amounts appropriated for certain other output expense appropriations.

Clause 6 confirms the incurring of expenses for the 2016/17 financial year in excess, but within the scope, of existing appropriations in accordance with the approval of the Minister of Finance under section 26B of the Public Finance Act 1989. The expenses confirmed by this clause are set out in Schedule 1.

Clause 7 validates, for the purposes of section 26C of the Public Finance Act 1989, the incurring of expenses and capital expenditure by departments for the 2016/17 financial year without appropriation, or other authority, by or under an Act. The expenses and capital expenditure validated by this clause are set out in Schedules 2 to 5.

Clause 8 validates, for the purposes of section 26CA of the Public Finance Act 1989, a capital injection that was made to the Department of Conservation in the 2016/17 financial year without authority under an Appropriation Act or an approval under section 25A of the Public Finance Act 1989.

Clause 9 validates, for the purposes of section 26C of the Public Finance Act 1989, the incurring of expenses by the Department of Internal Affairs for the 2015/16 financial year without appropriation, or other authority, by or under an Act. The expenses relate to travel by staff of members of the Executive.

1 Title

This Act is the Appropriation (2016/17 Confirmation and Validation) Act 2018.

2 Commencement

This Act comes into force on the day after the date on which it receives the Royal assent.

3 Purpose

The purpose of this Act is—

(a)

to confirm and validate matters relating to the 2016/17 financial year; and

(b)

to validate a matter relating to the 2015/16 financial year.

4 Interpretation

(1)

In this Act,—

2015/16 financial year means the financial year ending with 30 June 2016

2016/17 financial year means the financial year ending with 30 June 2017.

(2)

Terms or expressions used and not defined in this Act but defined in the Public Finance Act 1989 have, in this Act, the same meanings as in the Public Finance Act 1989.

2016/17 financial year

5 Confirmation of Order in Council directing transfer of amounts between output expense appropriations

The Public Finance (Transfers Between Outputs) Order 2017 is confirmed.

6 Confirmation of expenses incurred in excess of existing appropriations and approved by Minister of Finance

(1)

The incurring of expenses approved by the Minister of Finance under section 26B of the Public Finance Act 1989 for the 2016/17 financial year and described in subsections (2) and (3) is confirmed.

(2)

The expenses are the expenses incurred in excess, but within the scope, of the existing appropriations set out in column 3 of Schedule 1.

(3)

The amounts of the approved expenses are shown in column 4 of Schedule 1 alongside the existing appropriation for which the approval was given.

7 Validation of unappropriated expenses and capital expenditure for 2016/17 financial year

(1)

The incurring of expenses or capital expenditure by a department in the circumstances set out in subsection (2), (3), (4), or (5) is validated for the purposes of section 26C of the Public Finance Act 1989.

(2)

The circumstances in this subsection are that,—

(a)

for the 2016/17 financial year, the department incurred expenses in excess, but within the scope, of the existing appropriations set out in column 3 of Schedule 2 alongside that department; and

(b)

the expenses referred to in paragraph (a) were not incurred under the authority of an Imprest Supply Act.

(3)

The circumstances in this subsection are that,—

(a)

for the 2016/17 financial year, the department incurred expenses, not within the scope of any existing appropriation, against the categories of expenses set out in column 3 of Schedule 3 alongside that department; and

(b)

the expenses referred to in paragraph (a) were not incurred under the authority of an Imprest Supply Act.

(4)

The circumstances in this subsection are that,—

(a)

for the 2016/17 financial year, the department incurred capital expenditure, not within the scope of any existing appropriation, against the categories of capital expenditure set out in column 3 of Schedule 4 alongside that department; and

(b)

the capital expenditure referred to in paragraph (a) was incurred under the authority of an Imprest Supply Act.

(5)

The circumstances in this subsection are that,—

(a)

for the 2016/17 financial year, the department incurred expenses in advance of the appropriations set out in column 3 of Schedule 5 alongside that department; and

(b)

the expenses referred to in paragraph (a) were not incurred under the authority of an Imprest Supply Act.

(6)

In this section,—

capital expenditure means the amount of capital expenditure set out in column 4 of Schedule 4 alongside the relevant department

department means a department specified in column 1 of, as appropriate, Schedule 2, 3, 4, or 5

expenses means the amount of expenses set out in column 4 of, as appropriate, Schedule 2, 3, or 5 alongside the relevant department.

8 Validation of unauthorised capital injection for 2016/17 financial year

(1)

The making of the capital injection set out in subsection (2) is validated for the purposes of section 26CA of the Public Finance Act 1989.

(2)

The capital injection is the capital injection of $2,050,000 that—

(a)

was made to the Department of Conservation in the 2016/17 financial year; and

(b)

was made without authority under an Appropriation Act; and

(c)

was not made under the authority of an Imprest Supply Act.

2015/16 financial year

9 Validation of unappropriated expenses for 2015/16 financial year

(1)

The incurring of expenses by the Department of Internal Affairs in the circumstances set out in subsection (2) is validated for the purposes of section 26C of the Public Finance Act 1989.

(2)

The circumstances are that,—

(a)

for the 2015/16 financial year, the Department of Internal Affairs incurred expenses of $2,584,000 for Vote Internal Affairs against the category of non-departmental other expenses “Members of the Executive - Travel”; and

(b)

the expenses referred to in paragraph (a)

(i)

were not within the scope of any existing appropriation; and

(ii)

were not incurred under the authority of an Imprest Supply Act.

Schedule 1 Confirmation of expenses incurred in excess, but within scope, of existing appropriations for 2016/17 financial year with approval of Minister of Finance

s 6

Column 1Column 2Column 3Column 4
Administering departmentVoteAppropriation
Amount
$(000)
Police, New ZealandPoliceDepartmental Output Expenses
Case Resolution and Support to Judicial Process483
General Crime Prevention Services251
Investigations1,283
Police Primary Response Management1,469
Specific Crime Prevention Services and Maintenance of Public Order531
Multi-Category
Policy Advice and Ministerial Services (Departmental Output Expenses)10

Schedule 2 Validation of expenses incurred in excess, but within scope, of existing appropriations and without authority of Imprest Supply Act for 2016/17 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteAppropriation
Amount
$(000)
Business, Innovation and Employment, Ministry ofBuilding and HousingDepartmental Output Expenses
Residential Tenancy and Unit Title Services597
Labour MarketNon-Departmental Output Expenses
Workplace Relations and Safety - Employment Relations Education Contestable Fund223
Culture and Heritage, Ministry forArts, Culture and HeritageDepartmental Output Expenses
First World War Centenary8,584

Schedule 3 Validation of expenses incurred not within scope of existing appropriations and without authority of Imprest Supply Act for 2016/17 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteCategory of expenses
Amount
$(000)
Internal Affairs, Department ofInternal AffairsNon-Departmental Other Expenses
Members of the Executive - Travel2,511
Transport, Ministry ofTransportNon-Departmental Output Expenses
Restoration of State Highway 1 between Picton and Christchurch - Operating72,651

Schedule 4 Validation of capital expenditure incurred not within scope of existing appropriations and with authority of Imprest Supply Act for 2016/17 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteCategory of capital expenditure
Amount
$(000)
Transport, Ministry ofTransportNon-Departmental Capital Expenditure
Restoration of Main North Line between Picton and Christchurch30,000

Schedule 5 Validation of expenses incurred in advance of appropriation and without authority of Imprest Supply Act for 2016/17 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteAppropriation
Amount
$(000)
Business, Innovation and Employment, Ministry ofBuilding and HousingNon-Departmental Output Expenses
Canterbury Earthquakes: Emergency and Temporary Accommodation245