Appropriation (2014/15 Confirmation and Validation) Bill

Government Bill

117—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 2015

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%. Secondly, there must not have been any other transfer under section 26A of the Act to that appropriation during the financial year. Thirdly, 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 2015, which was made under section 26A of the Act (clause 5).

Confirming unappropriated expenditure approved by Minister of Finance

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 2014/15 financial year with the approval of the Minister of Finance under section 26B of the Act (clause 6). Details of those confirmations 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.

During the 2014/15 financial year, some 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 4.

Schedule 2 contains details of expenses incurred in excess, but within the scope, of existing appropriations and without the authority of an Imprest Supply Act. Schedule 3 contains details of expenses and capital expenditure that were incurred not within the scope of any existing appropriation and without the authority of an Imprest Supply Act. Schedule 4 contains details of expenses and capital expenditure incurred in advance of appropriation and without the authority of an Imprest Supply 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 financial matters relating to the 2014/15 financial year.

Clause 4 is an interpretation clause.

Clause 5 confirms the Public Finance (Transfers Between Outputs) Order 2015. That order, which came into force on 30 June 2015, 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 2014/15 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 in the 2014/15 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 4.

1 Title

This Act is the Appropriation (2014/15 Confirmation and Validation) Act 2015.

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 confirm and validate matters relating to the 2014/15 financial year.

4 Interpretation

(1)

In this Act, 2014/15 financial year means the financial year ending with 30 June 2015.

(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 2015 is confirmed.

6 Confirmation of expenses incurred in excess of existing appropriations 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 2014/15 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 appropriations set out in column 3 of Schedule 1.

(3)

The amounts of the approved expenses are 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 incurred

(1)

The incurring of expenses or capital expenditure by a department in the circumstances set out in subsection (2) is validated for the purposes of section 26C of the Public Finance Act 1989.

(2)

The circumstances are that,—

(a)

for the 2014/15 financial year, the department incurred—

(i)

expenses in excess, but within the scope, of the existing appropriations set out in column 3 of Schedule 2 alongside that department; or

(ii)

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 3 alongside that department; or

(iii)

expenses or capital expenditure in advance of the appropriations 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.

(3)

In this section,—

capital expenditure means the amount of capital expenditure set out in column 4 of, as appropriate, Schedule 3 or 4 alongside the relevant department

department means a department specified in column 1 of, as appropriate, Schedule 2, 3, or 4

expenses means the amount of expenses set out in column 4 of, as appropriate, Schedule 2, 3, or 4 alongside the relevant department.

Schedule 1 Confirmation of expenses incurred in excess of existing appropriations during 2014/15 financial year with approval of Minister of Finance

s 6

Column 1Column 2Column 3Column 4
Administering departmentVoteAppropriation
Amount
$(000)
Education, Ministry of EducationNon-Departmental Other Expenses
Early Childhood Education16,029
Police, New ZealandPoliceDepartmental Output Expenses
General Crime Prevention Services647
Investigations2,044
Police Primary Response Management2,272
Transport, Ministry ofTransportNon-Departmental Other Expenses
SuperGold Card - public transport concessions for cardholders16

Schedule 2 Validation of expenses incurred in excess, but within scope, of existing appropriations and without authority of Imprest Supply Act during 2014/15 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteAppropriation
Amount
$(000)
Business, Innovation, and Employment, Ministry ofCommerce and Consumer AffairsNon-Departmental Output Expenses
Enforcement of Dairy Sector Regulation and Auditing of Milk Price Setting82
Culture and Heritage, Ministry forArts, Culture and HeritageNon-Departmental Output Expenses
Protection of Taonga Tūturu50
Justice, Ministry ofJusticeNon-Departmental Output Expenses
Legal Aid4,805
Parliamentary ServiceParliamentary ServiceNon-Departmental Other Expenses
Travel of former MPs118
Prime Minister and Cabinet, Department of theCanterbury Earthquake RecoveryNon-Departmental Other Expenses
Impairment of Improvements24,390

Schedule 3 Validation of expenses and capital expenditure incurred not within scope of existing appropriations and without authority of Imprest Supply Act during 2014/15 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteCategory of expenses or capital expenditure
Amount
$(000)
Business, Innovation, and Employment, Ministry ofCommerce and Consumer AffairsNon-Departmental Other Expenses
Impairment of Debts Owed to the Crown18
HousingDepartmental Output Expenses
Policy Advice and Related Outputs52
LabourNon-Departmental Other Expenses
Impairment of Debts Owed to the Crown18
TourismNon-Departmental Other Expenses
Impairment of Debts Owed to the Crown41
Crown Law OfficeAttorney-GeneralDepartmental Output Expenses
Conduct of Criminal Appeals from Crown Prosecutions61
Prime Minister and Cabinet, Department of the Canterbury Earthquake RecoveryNon-Departmental Other Expenses
Crown Asset Depreciation453
Cost of Vesting Land to the Christchurch City Council4,119
Transport, Ministry ofTransportNon-Departmental Capital Expenditure
Rail - KiwiRail Holdings Limited Loans10,750

Schedule 4 Validation of expenses and capital expenditure incurred in advance of appropriation and without authority of Imprest Supply Act during 2014/15 financial year

s 7

Column 1Column 2Column 3Column 4
Administering departmentVoteAppropriation
Amount
$(000)
Prime Minister and Cabinet, Department of theCanterbury Earthquake RecoveryNon-Departmental Capital Expenditure
Christchurch Bus Interchange3,505
Multi-Category
Procurement and Preparation of Land and Other Assets for the Development of Anchor Projects
Non-Departmental Other Expenses
Procurement of Land and Assets - Operating4,582
Social Development, Ministry ofSocial DevelopmentNon-Departmental Output Expenses
Short-term Housing in Canterbury131
Transport, Ministry ofTransportNon-Departmental Capital Expenditure
Rail - KiwiRail Equity Injection1,535