Appropriation (2018/19 Confirmation and Validation) Bill

Appropriation (2018/19 Confirmation and Validation) Bill

Government Bill

227—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 only in accordance with appropriations made by 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 must be validated by an Appropriation Act.

Confirming Public Finance (Transfers Between Outputs) Order 2019

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 2019, 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 2018/19 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 2018/19 financial year, certain expenses were incurred that require validation by this Bill in accordance with section 26C of the Act. Clause 7 validates these expenses, the details of which are set out in Schedules 2 to 4, as follows:

  • Schedule 2 contains details of expenses 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 expenses incurred in advance of appropriation and without the authority of an Imprest Supply Act.

The Bill also validates expenses—

  • incurred in the 2014/15, 2015/16, 2016/17, and 2017/18 financial years by the New Zealand Defence Force in respect of Vote Defence Force in excess of existing appropriations (clause 8 and Schedule 5):

  • incurred in the 2014/15, 2015/16, 2016/17, and 2017/18 financial years by Ministry of Education in respect of Vote Education without an appropriation (clause 9).

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 2018/19 financial year and to validate matters relating to the 2014/15, 2015/16, 2016/17, and 2017/18 financial years.

Clause 4 is an interpretation clause.

Clause 5 confirms the Public Finance (Transfers Between Outputs) Order 2019. That order, which came into force on 30 June 2019, 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 2018/19 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 by departments for the 2018/19 financial year without appropriation, or other authority, by or under an Act. The expenses validated by this clause are set out in Schedules 2 to 4.

Clause 8 validates expenses incurred by the New Zealand Defence Force in the 2014/15, 2015/16, 2016/17, and 2017/18 financial years without appropriation, or other authority, by or under an Act. The expenses validated by this clause are set out in Schedule 5.

Clause 9 validates expenses incurred by the Ministry of Education in the 2014/15, 2015/16, 2016/17, and 2017/18 financial years without appropriation, or other authority, by or under an Act.

Hon Grant Robertson

Appropriation (2018/19 Confirmation and Validation) Bill

Government Bill

227—1

The Parliament of New Zealand enacts as follows:

1 Title

This Act is the Appropriation (2018/19 Confirmation and Validation) Act 2020.

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 to—

(a)

confirm and validate matters relating to the 2018/19 financial year; and

(b)

to validate matters relating to the 2014/15, 2015/16, 2016/17, and 2017/18 financial years.

4 Interpretation

(1)

In this Act,—

2014/15 financial year means the financial year ending with 30 June 2015

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

2017/18 financial year means the financial year ending with 30 June 2018

2018/19 financial year means the financial year ending with 30 June 2019.

(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.

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

The Public Finance (Transfers Between Outputs) Order 2019 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 2018/19 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 for 2018/19 financial year

(1)

The incurring of expenses by a department in the circumstances set out in subsection (2), (3), or (4) 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 2018/19 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 2018/19 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 2018/19 financial year, the department incurred expenses in advance of the appropriations set out in column 3 of Schedule 4 alongside that department; and

(b)

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

(5)

In this section,—

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

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

8 Validation of unappropriated expenses incurred by New Zealand Defence Force for 2014/15 to 2017/18 financial years

(1)

The incurring of expenses by the New Zealand Defence Force for Vote Defence Force in the circumstances set out in subsection (2) is validated.

(2)

The circumstances are that,—

(a)

for a financial year, the New Zealand Defence Force incurred expenses in excess, but within the scope, of an existing appropriation; and

(b)

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

(3)

In this section,—

existing appropriation means an appropriation specified in column 2 of Schedule 5 and made by the Appropriation Acts specified in column 4 of that schedule

expenses means the amount of expenses set out in column 3 of Schedule 5 alongside the relevant appropriation

financial year means a financial year specified in column 1 of Schedule 5.

9 Validation of unappropriated expenses incurred by Ministry of Education for 2014/15 to 2017/18 financial years

(1)

The incurring of expenses by the Ministry of Education for Vote Education in the circumstances set out in subsection (2) is validated.

(2)

The circumstances are that—

(a)

the amount of the expenses is—

(i)

for the 2014/15 financial year, $2,895,000:

(ii)

for the 2015/16 financial year, $2,247,000:

(iii)

for the 2016/17 financial year, $3,401,000:

(iv)

for the 2017/18 financial year, $2,969,000; and

(b)

the expenses were incurred in the operation of a school risk management scheme having effect under section 78D of the Education Act 1989; and

(c)

the expenses—

(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 2018/19 financial year with approval of Minister of Finance

s 6

Column 1Column 2Column 3Column 4
Administering departmentVoteAppropriation
Amount
$(000)
Conservation, Department ofConservationDepartmental Output Expenses
Management of Recreational Opportunities2,911
Foreign Affairs and Trade, Ministry of Foreign Affairs and TradeDepartmental Output Expenses
Consular Services315
Policy Advice and Representation - Other Countries1,479
Health, Ministry ofHealthNon-Departmental Output Expenses
National Disability Support Services6,690

Schedule 2 Validation of expenses incurred in excess, but within scope, of existing appropriations and without authority of Imprest Supply Act for 2018/19 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteAppropriation
Amount
$(000)
Business, Innovation, and Employment, Ministry ofBuilding and HousingNon-Departmental Other Expenses
Housing Infrastructure Fund - Fair Value Write Down151,862
Defence Force, New ZealandDefence ForceDepartmental Output Expenses
Army Capabilities Prepared for Joint Operations and Other Tasks5,521
Multi-Category Appropriation
Protection of New Zealand and New Zealanders3,070
Environment, Ministry for theEnvironmentNon-Departmental Other Expenses
Waste Disposal Levy Disbursements to Territorial Local Authorities489

Schedule 3 Validation of expenses incurred not within scope of existing appropriations and without authority of Imprest Supply Act for 2018/19 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteCategory of expenses
Amount
$(000)
Education, Ministry ofEducationNon-Departmental Output Expenses
School Risk Management Scheme2,401
Health, Ministry ofHealthNon-Departmental Other Expenses
Write-off of Crown Investments22,588
Prime Minister and Cabinet, Department of thePrime Minister and CabinetNon-Departmental Other Expenses
Settlement of Legal Dispute500
Social Development, Ministry of Social DevelopmentBenefits or Related Expenses
Winter Energy Payment3,373

Schedule 4 Validation of expenses incurred in advance of appropriation and without authority of Imprest Supply Act for 2018/19 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteAppropriation
Amount
$(000)
Business, Innovation, and Employment, Ministry ofBuilding and Housing Non-Departmental Other Expenses
Remediation of Facades and Parapets of Unreinforced Masonry Buildings in at risk areas926
Multi-Category Appropriation
Business, Science and InnovationRegional Economic Development: Provincial Growth Fund2,527

Schedule 5 Validation of expenses incurred by New Zealand Defence Force in excess, but within scope, of existing appropriations and without authority of Imprest Supply Act for 2014/15 to 2017/18 financial years

s 8

Column 1Column 2Column 3Column 4
YearAppropriationAmount
$(000)
Authority for appropriation
Departmental Output Expenses
2014/15Air Force Capabilities Prepared for Joint Operations and Other Tasks5,143Authority provided by section 6 of the Appropriation (2014/15 Estimates) Act 2014 and varied by section 6 of the Appropriation (2014/15 Supplementary Estimates) Act 2015
2014/15Army Capabilities Prepared for Joint Operations and Other Tasks8,572Authority provided by section 6 of the Appropriation (2014/15 Estimates) Act 2014 and varied by section 6 of the Appropriation (2014/15 Supplementary Estimates) Act 2015
2014/15Navy Capabilities Prepared for Joint Operations and Other Tasks1,361Authority provided by section 6 of the Appropriation (2014/15 Estimates) Act 2014 and varied by section 6 of the Appropriation (2014/15 Supplementary Estimates) Act 2015
2015/16Air Force Capabilities Prepared for Joint Operations and Other Tasks4,919Authority provided by section 6 of the Appropriation (2015/16 Estimates) Act 2015 and varied by section 6 of the Appropriation (2015/16 Supplementary Estimates) Act 2016
2015/16Navy Capabilities Prepared for Joint Operations and Other Tasks2,570Authority provided by section 6 of the Appropriation (2015/16 Estimates) Act 2015 and varied by section 6 of the Appropriation (2015/16 Supplementary Estimates) Act 2016
2016/17Air Force Capabilities Prepared for Joint Operations and Other Tasks3,496Authority provided by section 6 of the Appropriation (2016/17 Estimates) Act 2016 and varied by section 6 of the Appropriation (2016/17 Supplementary Estimates) Act 2017
2016/17Navy Capabilities Prepared for Joint Operations and Other Tasks369Authority provided by section 6 of the Appropriation (2016/17 Estimates) Act 2016 and varied by section 6 of the Appropriation (2016/17 Supplementary Estimates) Act 2017
2017/18Air Force Capabilities Prepared for Joint Operations and Other Tasks1,425Authority provided by section 6 of the Appropriation (2017/18 Estimates) Act 2017 and varied by section 6 of the Appropriation (2017/18 Supplementary Estimates) Act 2018
Multi-Category Appropriation
2015/16Protection of New Zealand and New Zealanders29Authority provided by section 6 of the Appropriation (2015/16 Estimates) Act 2015 and varied by section 6 of the Appropriation (2015/16 Supplementary Estimates) Act 2016
2016/17Protection of New Zealand and New Zealanders1,791Authority provided by section 6 of the Appropriation (2016/17 Estimates) Act 2016 and varied by section 6 of the Appropriation (2016/17 Supplementary Estimates) Act 2017
2017/18Protection of New Zealand and New Zealanders4,156Authority provided by section 6 of the Appropriation (2017/18 Estimates) Act 2017 and varied by section 6 of the Appropriation (2017/18 Supplementary Estimates) Act 2018