❓ An opposition MP questions the Minister for Regional Development about changes to Royalties for Regions funding in the 2020-21 budget, including shifts from the consolidated fund, details on 'Administered Items', reasons for a forecast cut, and the calculation of underspend provisions. The Minister provides explanations, denying shifts from the consolidated fund and justifying the underspend provision approach.
AnsweredQoN 1146Legislative Council
QuestionView source ↗
ROYALTIES FOR REGIONS —
2020–21 STATE BUDGET
1146. Hon MARTIN ALDRIDGE to the Minister for Regional Development:
I refer to the royalties for
regions expenditure found in budget paper No 3 starting from page 171.
(1) Please
identify any projects or initiatives that prior to the 2020–21 budget
were funded by the consolidated fund and are now funded by the royalties for
regions fund.
(2) Please
provide a detailed breakdown of the line item ''Administered Items''
in 2020–21 and across the forward estimates.
(3) Why is there
a forecast cut of $10 million to the administration of the fund in 2021–22
that is sustained across the forward estimates?
(4) How is the
underspend provision calculated and why has it not been forecast in the last
two years of the forward estimates?
2020–21 STATE BUDGET
1146. Hon MARTIN ALDRIDGE to the Minister for Regional Development:
I refer to the royalties for
regions expenditure found in budget paper No 3 starting from page 171.
(1) Please
identify any projects or initiatives that prior to the 2020–21 budget
were funded by the consolidated fund and are now funded by the royalties for
regions fund.
(2) Please
provide a detailed breakdown of the line item ''Administered Items''
in 2020–21 and across the forward estimates.
(3) Why is there
a forecast cut of $10 million to the administration of the fund in 2021–22
that is sustained across the forward estimates?
(4) How is the
underspend provision calculated and why has it not been forecast in the last
two years of the forward estimates?
AnswerView source ↗
I thank the member for the
question.
(1) There are no
new items in the 2020–21 royalties for regions budget that were
previously funded by the consolidated account.
(2) The
administered items budget line provides funding mainly for commitments that
require further planning to deliver the proposals. It is not appropriate to
provide a funding breakdown until projects are properly scoped and costed.
(3) Rather than
an apparent cut being forecast to the administration line item, the budgeted
funding of $94.8 million for 2020–21
is slightly higher than it would ordinarily be. This funding level reflects
that some operational funds have been
brought forward from 2021–22 to 2020–21 to support critical
industry programs and also that some program funding was carried over
from 2019–20 to 2020–21.
(4) The
underspend provision recognises that historically there has been an underspend
in the royalties for regions annual budget.
Although I understand that it was the standard practice for the previous
government to include an underspend
provision for all years of the budget, this has the potential to build up a significant unfunded liability. We consider it is financially responsible to
include an underspend provision for only the first two years of the forward
estimates.
question.
(1) There are no
new items in the 2020–21 royalties for regions budget that were
previously funded by the consolidated account.
(2) The
administered items budget line provides funding mainly for commitments that
require further planning to deliver the proposals. It is not appropriate to
provide a funding breakdown until projects are properly scoped and costed.
(3) Rather than
an apparent cut being forecast to the administration line item, the budgeted
funding of $94.8 million for 2020–21
is slightly higher than it would ordinarily be. This funding level reflects
that some operational funds have been
brought forward from 2021–22 to 2020–21 to support critical
industry programs and also that some program funding was carried over
from 2019–20 to 2020–21.
(4) The
underspend provision recognises that historically there has been an underspend
in the royalties for regions annual budget.
Although I understand that it was the standard practice for the previous
government to include an underspend
provision for all years of the budget, this has the potential to build up a significant unfunded liability. We consider it is financially responsible to
include an underspend provision for only the first two years of the forward
estimates.
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