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 to vary, by Order in Council, 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 for an output expense appropriation in a Vote 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 2025, which was made under section 26A of the Act (clause 5).

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 and capital expenditure incurred for the 2024/25 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.

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 2024/25 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 and 3 as follows:

• Schedule 2 contains details of expenses that were incurred in excess of existing appropriations:

• Schedule 3 contains details of expenses and capital expenditure that were incurred without appropriation or other authority (including expenses and capital expenditure incurred outside the scope of an existing appropriation and expenses and capital expenditure incurred without appropriation at all).

This Bill also validates capital expenditure incurred in the 2023/24 financial year by the Ministry of Business, Innovation, and Employment without appropriation, or other authority, by or under an Act.

A departmental disclosure statement is not required for this Bill.