Appropriation (2019/20 Confirmation and Validation) Bill

  • enacted

Appropriation (2019/20 Confirmation and Validation) Bill

Government Bill

10—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 2020

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%. Second, there must not have been any other transfer under section 26A of the Act to that appropriation during the financial year. Third, 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 2020, which was made under section 26A of the Act (clause 5).

Confirming approved 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 2019/20 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 2019/20 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, as follows:

  • Schedule 2 contains details of expenses incurred in excess, but within the scope, of existing appropriations and with the authority of an Imprest Supply Act:

  • Schedule 3 contains details of expenses incurred in excess, but within the scope, of existing appropriations and without the authority of an Imprest Supply Act:

  • Schedule 4 contains details of expenses and capital expenditure incurred not within the scope of any existing appropriations and without the authority of an Imprest Supply Act:

  • Schedule 5 contains details of expenses incurred in advance of appropriation and without the authority of an Imprest Supply Act.

The Bill also validates expenses and capital expenditure incurred in the 2015/16, 2016/17, 2017/18, and 2018/19 financial years by the following departments in excess of any existing appropriation and without the authority of an Imprest Supply Act:

  • Ministry for the Environment, in respect of Vote Environment (clause 9):

  • Ministry of Education, in respect of Vote Tertiary Education (clause 10):

  • Ministry of Foreign Affairs and Trade, in respect of Vote Foreign Affairs and Trade (clause 11).

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 2019/20 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 2019/20 financial year and to validate matters relating to the 2015/16, 2016/17, 2017/18, and 2018/19 financial years.

Clause 4 is an interpretation clause.

Clause 5 confirms the Public Finance (Transfers Between Outputs) Order 2020. That order, which came into force on 30 June 2020, 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 2019/20 financial year in excess, but within the scope, of an existing appropriation 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 2019/20 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 a capital injection made in the 2019/20 financial year for the purposes of section 26CA of the Act.

Clause 9 validates expenses incurred by the Ministry for the Environment in the 2015/16, 2016/17, 2017/18, and 2018/19 financial years without appropriation, or other authority, by or under an Act.

Clause 10 validates expenses incurred by the Ministry of Education in the 2015/16, 2016/17, 2017/18, and 2018/19 financial years without appropriation, or other authority, by or under an Act.

Clause 11 validates capital expenditure incurred by the Ministry of Foreign Affairs and Trade in the 2015/16, 2016/17, 2017/18, and 2018/19 financial years without appropriation, or other authority, by or under an Act.

Hon Grant Robertson

Appropriation (2019/20 Confirmation and Validation) Bill

Government Bill

10—1

Contents

Explanatory note
1Title
2Commencement
3Purpose
4Interpretation
5Confirmation of Order in Council directing transfer of amounts between output expense appropriations
6Confirmation of expenses incurred in excess of existing appropriation and approved by Minister of Finance
7Validation of unappropriated expenses and capital expenditure for 2019/20 financial year
8Validation of unauthorised capital injection for 2019/20 financial year
9Validation of unappropriated expenses incurred by Ministry for the Environment for 2015/16 to 2018/19 financial years
10Validation of unappropriated expenses incurred by Ministry of Education for 2015/16 to 2018/19 financial years
11Validation of unappropriated capital expenditure incurred by Ministry of Foreign Affairs and Trade for 2015/16 to 2018/19 financial years

The Parliament of New Zealand enacts as follows:

1 Title

This Act is the Appropriation (2019/20 Confirmation and Validation) Act 2021.

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 2019/20 financial year; and

(b)

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

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

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

2019/20 financial year means the financial year ending with 30 June 2020.

(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 2020 is confirmed.

6 Confirmation of expenses incurred in excess of existing appropriation 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 2019/20 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 appropriation set out in column 3 of Schedule 1.

(3)

The amount of the approved expenses is 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 2019/20 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 2019/20 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 incurred under the authority of an Imprest Supply Act.

(3)

The circumstances in this subsection are that,—

(a)

for the 2019/20 financial year, the department incurred expenses in excess, but within the scope, of the existing appropriations 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 2019/20 financial year, the department incurred expenses or capital expenditure, not within the scope of any existing appropriation, against the categories of expenses or capital expenditure set out in column 3 of Schedule 4 alongside that department; and

(b)

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

(5)

The circumstances in this subsection are that,—

(a)

for the 2019/20 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, 4, or 5 alongside the relevant department.

8 Validation of unauthorised capital injection for 2019/20 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 $139,000 that—

(a)

was made to the New Zealand Customs Service in the 2019/20 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.

9 Validation of unappropriated expenses incurred by Ministry for the Environment for 2015/16 to 2018/19 financial years

(1)

The incurring of expenses by the Ministry for the Environment for Vote Environment 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 2015/16 financial year, $14,000:

(ii)

for the 2016/17 financial year, $14,000:

(iii)

for the 2017/18 financial year, $51,000:

(iv)

for the 2018/19 financial year, $1,707,000; and

(b)

the expenses were incurred in paying part of a Waste Disposal Levy to territorial local authorities other than in accordance with the statutory eligibility requirements; 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.

10 Validation of unappropriated expenses incurred by Ministry of Education for 2015/16 to 2018/19 financial years

(1)

The incurring of expenses by the Ministry of Education for Vote Tertiary 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 2015/16 financial year, $9,000:

(ii)

for the 2016/17 financial year, $908,000:

(iii)

for the 2017/18 financial year, $3,214,000:

(iv)

for the 2018/19 financial year, $816,000; and

(b)

the expenses were incurred in making payments from the Export Education Levy Fund relating to international students following the collapse of private training establishments; 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.

11 Validation of unappropriated capital expenditure incurred by Ministry of Foreign Affairs and Trade for 2015/16 to 2018/19 financial years

(1)

The incurring of capital expenditure by the Ministry of Foreign Affairs and Trade for Vote Foreign Affairs and Trade in the circumstances set out in subsection (2) is validated.

(2)

The circumstances are that—

(a)

the amount of the capital expenditure is,—

(i)

for the 2015/16 financial year, $4,000:

(ii)

for the 2016/17 financial year, $12,000:

(iii)

for the 2017/18 financial year, $1,000:

(iv)

for the 2018/19 financial year, $12,000; and

(b)

the capital expenditure was incurred in providing recoverable financial assistance to New Zealanders in distress overseas; and

(c)

the capital expenditure—

(i)

was not within the scope of any existing appropriation; and

(ii)

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

Schedule 1 Confirmation of expenses incurred in excess, but within scope, of existing appropriation for 2019/20 financial year with approval of Minister of Finance

s 6

Column 1Column 2Column 3Column 4
Administering departmentVoteAppropriation
Amount
$(000)
Crown Law OfficeAttorney-GeneralDepartmental Output Expenses
Legal Advice and Representation449

Schedule 2 Validation of expenses incurred in excess, but within scope, of existing appropriations and with authority of Imprest Supply Act for 2019/20 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteAppropriation
Amount
$(000)
Conservation, Department ofConservation Non-Departmental Other Expenses
Payment of Rates on Properties for Concessionaires32
Inland Revenue DepartmentRevenueNon-Departmental Other Expenses
Initial Fair Value Write-Down Relating to Student Loans15,118

Schedule 3 Validation of expenses incurred in excess, but within scope, of existing appropriations and without authority of Imprest Supply Act for 2019/20 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteAppropriation
Amount
$(000)
Business, Innovation and Employment, Ministry ofBuilding and ConstructionMulti-Category
Policy Advice and Related Outputs558
Conservation, Department of ConservationDepartmental Output Expenses
Management of Historic Heritage344
Non-Departmental Other Expenses
Payment to Facilitate the Transfer of Assets as Part of a Treaty of Waitangi Settlement2,000
Culture and Heritage, Ministry forArts, Culture and HeritageNon-Departmental Other Expenses
Depreciation on Crown Owned Assets2,275
Development and Maintenance of War Graves, Historic Graves and Monuments6,713
Environment, Ministry for theEnvironmentNon-Departmental Other Expenses
Environmental Legal Assistance158
Inland Revenue DepartmentRevenueBenefits or Related Expenses
Paid Parental Leave Payments5,146
Non-Departmental Other Expenses
Impairment of Debt and Debt Write-Offs676,751
Justice, Ministry ofJusticeNon-Departmental Other Expenses
Impairment of Legal Aid Debt2,510
New Zealand Defence ForceDefence ForceBenefits or Related Expenses
Assessments, Treatment and Rehabilitation136
Veterans Support Entitlement1,523
Prime Minister and Cabinet, Department of thePrime Minister and CabinetNon-Departmental Other Expenses
COVID-19: Civil Defence Emergency Management Group Welfare Costs3,794

Schedule 4 Validation of expenses and capital expenditure incurred not within scope of existing appropriations and without authority of Imprest Supply Act for 2019/20 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteCategory of expenses or capital expenditure
Amount
$(000)
Business, Innovation and Employment, Ministry ofBusiness, Science and InnovationNon-Departmental Output Expenses
Promotion of New Zealand within the domestic tourism market, using an appropriation limited to overseas markets2,043
Culture and Heritage, Ministry forArts, Culture and HeritageMulti-Category
COVID-19: Media Sector Response and Recovery121
Defence, Ministry ofDefenceNon-Departmental Other Expenses
Expenses incurred on capital infrastructure projects1,354
Environment, Ministry for theEnvironmentNon-Departmental Other Expenses
Waste Disposal Levy Disbursements to Territorial Local Authorities1,347
Foreign Affairs and Trade, Ministry ofForeign Affairs and TradeNon-Departmental Capital Expenditure
Consular Loans2,179
Housing and Urban Development, Ministry ofHousing and Urban DevelopmentNon-Departmental Capital Expenditure
Deferred settlement terms constituting lending14,843
Prime Minister and Cabinet, Department of thePrime Minister and CabinetNon-Departmental Output Expenses
Publicity campaign: “Unite against COVID-19”18,000

Schedule 5 Validation of expenses incurred in advance of appropriation and without authority of Imprest Supply Act for 2019/20 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteAppropriation
Amount
$(000)
Business, Innovation and Employment, Ministry ofBusiness, Science and InnovationNon-Departmental Output Expenses
Energy and Resources: Oil Field Decommissioning151,841
Science and Innovation: Repayable Grants for Start-Ups669
Corrections, Department ofCorrectionsDepartmental Other Expenses
Transfer of Auckland Prison Wastewater Assets9,077