Appropriation (2021/22 Estimates) Bill

  • enacted

Appropriation (2021/22 Estimates) Bill

Government Bill

39—1

Explanatory note

General policy statement

Appropriation is the statutory mechanism by which Parliament authorises the Government to incur expenses and capital expenditure. Other than permanent appropriations provided for in other legislation, appropriations are provided by Appropriation (Estimates) and Appropriation (Supplementary Estimates) Bills.

This Bill seeks parliamentary authorisation of the individual appropriations contained in The Estimates of Appropriations for the Government of New Zealand for the Year Ending 30 June 2022 (B.5) (the Estimates) presented to the House of Representatives as part of the 2021 Budget documentation.

In this Bill, the individual appropriations in summarised form are set out in Schedules 1 and 2. The provisions of the Bill ensure that the scope of each appropriation as set out in the Estimates forms part of the legal appropriation. The Public Finance Act 1989 requires separate appropriations for—

  • each category of output expenses; and

  • each category of benefits or related expenses; and

  • each category of borrowing expenses; and

  • each category of other expenses; and

  • each category of capital expenditure; and

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

  • each multi-category appropriation.

Section 6 of the Public Finance Act 1989 provides ongoing authority for public money to be spent for the purpose of meeting expenses or capital expenditure incurred in accordance with an appropriation, the payment of goods and services tax in respect of those expenses or that capital expenditure, the repayment of debt, and the settlement of liabilities.

This Bill also seeks parliamentary authorisation for the capital injections contained in the Estimates. Section 12A of the Public Finance Act 1989 provides that the Crown must not make a capital injection 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. By requiring capital injections to be authorised, Parliament retains control over the level of net assets that departments and Offices of Parliament may hold.

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 provides that the Bill (except clause 7 and Schedule 2) applies to the 2021/22 financial year.

Clause 4 is an overview clause.

Clause 5 is an interpretation provision.

Clauses 6 and 7 are the principal appropriation clauses of the Bill.

Clause 6 authorises, for the 2021/22 financial year, the appropriations set out in Schedule 1.

Clause 7 authorises the multi-year appropriations set out in Schedule 2. Section 10 of the Public Finance Act 1989 provides that an Appropriation Act may authorise expenses or capital expenditure to be incurred for more than 1 financial year as long as the authority (which lapses at the end of the period specified in the Appropriation Act) does not apply for more than 5 financial years.

Section 9 of the Public Finance Act 1989 concerns the scope of appropriations. Clauses 6 and 7, when read together with the definition of “scope shown in the Estimates” in clause 5(1), each describe where the scope of each appropriation authorised under those clauses is set out, making the scope of each appropriation (as set out in the Estimates) part of the legal appropriation.

Clause 8 and Schedule 3 specify the appropriations to which output expenses may be charged under section 21 of the Public Finance Act 1989. This means that, provided the other requirements in section 21 of the Public Finance Act 1989 are met, output expenses may be incurred up to the amount of third-party revenue expected to be earned by the relevant class of outputs during the 2021/22 financial year.

Clause 9 authorises, for the 2021/22 financial year, the capital injections set out in Schedule 4.

Clause 10 and Schedule 5 repeal spent Appropriation Acts.