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.

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 2021, which was made under section 26A of the Act (clause 5).

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 2020/21 financial year, certain expenses and capital expenditure were incurred that require validation by this Bill in accordance with section 26C of the Act. Clause 6 validates these expenses and capital expenditure, the details of which are set out in Schedules 1 to 3, as follows:

• Schedule 1 contains details of expenses incurred in excess, but within the scope, of existing appropriations and without the authority of an Imprest Supply Act:

• Schedule 2 contains details of expenses incurred not within the scope of any existing appropriations and without the authority of an Imprest Supply Act:

• Schedule 3 contains details of expenses and capital expenditure incurred without 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, 2018/19, and 2019/20 financial years by the following departments not within the scope of any existing appropriation and without the authority of an Imprest Supply Act:

• Inland Revenue Department (clause 7):

• Ministry of Business, Innovation, and Employment (clause 8):

• Ministry of Education (clauses 9 and 10).

A departmental disclosure statement is not required for this Bill.