General policy statement

Imprest supply is the statutory mechanism that allows Parliament to provide the Government with the authority to incur expenses and capital expenditure in advance of appropriation by way of an Appropriation Act.

This Imprest Supply Bill provides the sole financial authority from the start of the 2013/14 financial year until the Appropriation (2013/14 Estimates) Bill is passed. The amounts this Bill seeks are sufficient to provide supply until the end of August 2013.

The financial authorities provided in this Bill are repealed on the coming into force of the Appropriation (2013/14 Estimates) Bill (the rest of this Bill is repealed on the close of 30 June 2014). Appropriations for expenses and capital expenditure incurred under the authority of this Bill must be sought in an Appropriation Act that comes into force on or before 30 June 2014. If this is not done, those expenses and capital expenditure will require validation in an Appropriation (Financial Review) Act in accordance with section 26C of the Public Finance Act 1989.

In this Bill, imprest is calculated separately for expenses and capital expenditure, except in relation to intelligence and security departments. The expenses and capital expenditure to be incurred by those departments are included within the imprest sought for expenses in this Bill.

Imprest sought for expenses in this Bill covers the following appropriation types:

• output expenses:

• benefits or other unrequited expenses:

• other expenses:

• expenses and capital expenditure to be incurred by each intelligence and security department.

Imprest sought for capital expenditure in this Bill covers the appropriations for capital expenditure.

The amounts of supply for expenses and capital expenditure are calculated on the basis of one-sixth (2 months' worth) of the relevant annual appropriations included in the 2013/14 Estimates, adjusted for uneven timing, plus an allowance for multi-year appropriations and a general contingency provision to cover risks that may eventuate.

The authority sought this year for expenses includes upfront funding for Votes ACC, Arts, Culture and Heritage, Commerce, Education, Energy, Housing, Internal Affairs, Lands, Revenue, Sport and Recreation, and Transport. The amount of authority for expenses has been calculated as follows:

The authority sought this year for capital expenditure includes upfront funding for Votes Defence Force, Education, Housing, and Justice. The amount of authority for capital expenditure has been calculated as follows:

In addition, this Bill seeks approval for the net asset holdings of departments (other than intelligence and security departments) and Offices of Parliament to exceed the amounts confirmed in Schedule 4 of the Appropriation (2012/13 Supplementary Estimates) Act 2013 by no more than $800 million in aggregate.

Clause by clause analysis

Clause 1 is the Title clause.

Clause 2 states that the Bill comes into force on 1 July 2013.

Clause 3 relates to the repeal of the Bill. Clauses 6, 7, and 10 (which provide an authority to incur expenses and capital expenditure in advance of appropriation, and for the amount of net asset holding in a department or an Office of Parliament to exceed the projected balance for that department or Office of Parliament) are repealed on the coming into force of the first Appropriation Act for the 2013/14 financial year. The rest of the Bill is repealed on the close of 30 June 2014. This difference in timing is because of the obligation in clause 8(1) for all expenses and capital expenditure incurred under this Act to be appropriated in an Appropriation Act that comes into force on or before 30 June 2014, and the consequences that will result from clause 9 if this does not occur.

Clause 4 is a purpose provision. The purposes of the Bill are—

• to authorise expenses and capital expenditure to be incurred by the Crown and Offices of Parliament during the 2013/14 financial year in advance of appropriation by way of an Appropriation Act; and

• to enable the net asset holdings of departments (other than intelligence and security departments) and Offices of Parliament to exceed the amounts confirmed in the Appropriation (2012/13 Supplementary Estimates) Act 2013.

Clause 5 is an interpretation provision.

Clause 6 seeks authority to incur expenses (including expenses and capital expenditure to be incurred by each intelligence and security department) of up to $14,500 million in advance of appropriation.

Clause 7 seeks authority to incur capital expenditure of up to $1,400 million in advance of appropriation.

Clause 8 provides that all expenses and capital expenditure incurred under clauses 6 and 7 must be appropriated in an Appropriation Act that comes into force on or before 30 June 2014. Until that Act comes into force, those expenses or that capital expenditure may be incurred as if they had been incurred in accordance with one of the separate appropriations specified in section 7(1) of the Public Finance Act 1989.

Appropriations for most of the amounts included in this Bill are being sought in the Appropriation (2013/14 Estimates) Bill.

Clause 9(1) provides that the authority given by this Act to incur expenses or capital expenditure in advance of appropriation is an authority under an Act for the purposes of sections 4(1) and 26C(1) of the Public Finance Act 1989. If this clause did not provide for this, then incurring expenses or capital expenditure in advance of appropriation, even though it would be done in accordance with this Act, would be a breach of section 4(1) of the Public Finance Act 1989 and would be unlawful and would require validation under section 26C of that Act.

Clause 9(2) goes on to provide, however, that the authority provided under subclause (1) ceases to apply if expenses or capital expenditure that are incurred under this Act are not appropriated in an Appropriation Act that comes into force on or before 30 June 2014 (as is required by clause 8(1)). In these circumstances (as noted above), the expenses or capital expenditure in question will have been incurred in breach of section 4(1) of the Public Finance Act 1989 and will be unlawful and will require validation under section 26C of that Act.

Clause 10 seeks approval for the net asset holdings of departments and Offices of Parliament to exceed the amounts confirmed in the Appropriation (2012/13 Supplementary Estimates) Act 2013 (as those amounts are set out in accordance with section 23(1)(c) of the Public Finance Act 1989).

The aggregate of the net asset holdings of departments and Offices of Parliament that exceed the projected balance of net assets for those departments or Offices of Parliament at the end of the 2012/13 financial year (as set out in the Appropriation (2012/13 Supplementary Estimates) Act 2013) together with the total net asset holding of any department that is not listed in that Act must not exceed the aggregate of the projected balance of net asset holdings of those departments and Offices of Parliament by more than $800 million.

Clause 10 also specifies that, for the purposes of that clause, the amount of net asset holding in a department or an Office of Parliament does not include any operating surplus retained in accordance with section 22(1) of the Public Finance Act 1989 or any remeasurement as set out in section 22(2) of that Act.

Nothing in clause 10 applies to intelligence and security departments because sections 22(3) and 23 of the Public Finance Act 1989 do not apply to those departments.

Section 22(3) of the Public Finance Act 1989 states that the amount of net asset holding in a department must not exceed the most recent projected balance of net assets for that department as set out in an Appropriation Act in accordance with section 23(1)(c) of the Public Finance Act 1989. Section 26E(1)(b) and (4) of the Public Finance Act 1989 means that section 22(3) of that Act also applies to Offices of Parliament. Clause 10 overrides section 22(3) of the Public Finance Act 1989.