Comparison of Delegation of Powers – FMA Act to PGPA Act
Delegation under PGPA Act
and Rules
Delegation under FMA Act and
Regulations
Comments
Banking
 Section 53(1): banking by the Commonwealth in
Australia – non-Finance accountable authorities
(non-corporate)
 Section 53(1): banking by the Commonwealth
outside Australia – various non-Finance
accountable authorities (non-corporate)
Banking
 Section 8: to enter into arrangements with banks
– non-Finance chief executives
 Section 8: to enter into arrangements with banks
– Future Fund chief executive
 Section 8: to enter into arrangements with banks
(overseas) – various chief executives
 Section 9: to open and maintain bank accounts in
Australia – non-Finance chief executives
 Section 9: to open and maintain bank accounts in
Australia – Future Fund chief executive
 Section 9: to open and maintain overseas bank
accounts - various chief executives
The Finance Minister’s banking powers under the PGPA Act are similar to the powers under the
FMA Act. The proposed delegation for bank accounts in Australia has been streamlined, with the
detailed banking processes removed from the delegation instrument and included instead in a
separate draft guidance document.
Borrowing
 Section 56(2): for overseas overdrafts – DFAT
accountable authority
 Section 56(2): for credit cards – non-Finance
accountable authorities (non-corporate)
Borrowing
 Section 38(1) for overseas overdrafts: DFAT
chief executive
 Section 38(2) for credit cards: non-Finance chief
executives
The Finance Minister’s powers to borrow on behalf of the Commonwealth under the PGPA Act
are unchanged from those under the FMA Act. No change to the current delegation is proposed.
All accountable authorities can enter into arrangements for the use of Commonwealth credit
cards and the accountable authority of the Department of Foreign Affairs and Trade has the
additional power in relation to overseas overdrafts.
Investment
 Section 58: various non-Finance accountable
authorities (non-corporate)
Investment
 Section 39: various chief executives
The Finance Minister’s powers to invest on behalf of the Commonwealth under the PGPA Act
are unchanged from those under the FMA Act. No change to the current delegation is proposed
where selected accountable authorities have been given the power to invest in relation to
specified special accounts.
Indemnities
 Section 60: non-Finance accountable authorities
(non-corporate) (up to specified thresholds)
The delegation to open and maintain bank accounts outside Australia has been tightened to limit
this power to countries specified in the instrument rather than the current broad power to open
and maintain bank accounts overseas generally.
The PGPA Act contains a new power of the Finance Minister for giving indemnities, guarantees,
and warranties on behalf of the Commonwealth.
It is proposed to delegate the power to enter into routine, low risk indemnities to accountable
authorities. This is consistent with the current delegation under FMA Regulation 10 for
indemnities except that the threshold has been increased from $20m to $30m to bring it into line
with current Budget thresholds. Other differences to the current delegation under FMA
Regulation 10 are:
(a)
to allow accountable authorities to give indemnities above the specified thresholds
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Comparison of Delegation of Powers – FMA Act to PGPA Act
Delegation under PGPA Act
and Rules
Delegation under FMA Act and
Regulations
Comments
without the approval of the Finance Minister where the indemnities have been explicitly
agreed by Cabinet; and
(b) no restrictions on the length of the timeframe of the arrangement containing the
indemnity has been proposed in the delegation (currently 22 years for departmental items
and 10 years for administered items under FMA Regulation 10), consistent with the
principle that only significant items (in terms of risk and amount), will need the Finance
Minister’s approval.
Waiver of debts
 Section 63(1): ASIC and Comsuper accountable
authorities
 Section 63: non-Finance accountable authorities
(payments by instalments of deferral of time
only)
Waiver of debts
 Section 34(1)(a): ASIC and Comsuper chief
executives
 Section 34(1)(c): non-Finance chief executives
 Section 34(1)(d): non-Finance chief executives
Like section 34 of the FMA Act, the PGPA Act provides the Finance Minister with the power to
waive an amount owing to the Commonwealth or otherwise modify the terms and conditions on
which the amount is to be paid. No substantive change is proposed to the current delegation of
the Finance Minister’s power. All non-corporate Commonwealth entity accountable authorities
can modify the terms of payment of an amount owing to the Commonwealth. In addition, the
accountable authorities of the Australian Securities and Investments Commission and ComSuper
have limited powers to waive debts.
It is proposed that the interest rate required to be applied to outstanding amounts be increased to
the 90 day bank-accepted bill rate (it is currently ‘the 90 day bank-accepted bill rate ...less 10
basis points’) to better reflect the opportunity cost of unpaid amounts due to the Commonwealth.
Gifts
 Section 66*: non-Finance accountable authorities
(non-corporate)
*There is a proposed amendment to section 66 of the
PGPA Act which would provide the Finance Minister
with the power to authorise the gifting of relevant
property for non-corporate Commonwealth entities.
This would provide the Finance Minister with the
same power currently provided under the FMA Act.
Gifts
 Section 43(b): non-Finance chief executives
The proposed delegation of this power is slightly broader in scope than the current FMA
delegation in that it allows accountable authorities to gift low value, surplus items where it is:
(a)
uneconomical to otherwise dispose of them, or
(b)
it is consistent with Commonwealth policy objectives.
Accountable authorities will need to apply this power in the context of their broader duties under
the PGPA Act (e.g. the duty to promote the proper use and management of public resources), and
the requirement under the delegation not to set an undesirable precedent.
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Comparison of Delegation of Powers – FMA Act to PGPA Act
Delegation under PGPA Act
and Rules
Payment of amount owed at time of death
 Section 25 (Rule): non-Finance accountable
authorities (non-corporate)
Delegation under FMA Act and
Regulations
Comments
Outsiders handling public money
 Section 12: non-Finance chief executives
‘Outsider’ arrangements under section 12 of the FMA Act are now dealt with under the ‘other
CRF money’ provisions in the PGPA framework (section 105 of the PGPA Act and section 29 of
the draft PGPA Rule). These provisions place requirements on accountable authorities rather
than providing the Finance Minister with a power. No delegation is required.
Drawing Rights (issuing, revoking or amending)
 Section 27(1)&(4): non-Finance chief executives
Delegations for drawing rights (FMA Act section 27) are not required as they are not a feature of
the PGPA framework. Accountable authorities will be responsible for ensuring appropriate
internal controls are in place for their entities for making payments under the PGPA framework.
Arrangements for which there is insufficient
appropriation
 Regulation 10: non-Finance chief executives (up
to specified thresholds)
No direct replacement of this requirement under the PGPA framework, but see:
Payments pending probate
 Regulation 30: non-Finance chief executives
There is no proposed change to the delegation of the power to make payments of amounts owed
to persons at the time of their death (section 25 of the PGPA Rule and FMA Regulation 30).
(a) above for the new requirement for indemnities under PGPA Act section 60, and
(b) the duties of accountable authorities. The PGPA Act places principles-based
requirements for financial management on all accountable authorities. This includes
the duty to govern the entity (PGPA Act section 15), which includes promoting the
financial sustainability of the entity and considering the effect of decisions on public
resources generally. The draft guidance material issued by Finance for section 15
points out that in meeting these obligations, an accountable authority should consider
whether proposed commitments can be met from known appropriations, and whether,
by entering into long-term commitments, they are locking away future flexibility to
accommodate new policy and program priorities. The accountable authority would be
expected to implement internal controls to support this duty (PGPA Act section 16).
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