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Periods of Appropriation

Annual Appropriations

Most appropriations are limited to one year, consistent with the annual Budget cycle. In these cases, a Minister must request an appropriation for proposed expenditure each year. The sums to be appropriated are included in the Estimates and, when passed by Parliament, are specified in an Appropriation Act.

Multi-year Appropriations (MYA)

Multi-year appropriations allow Parliament to authorise spending over periods longer than one year. The maximum term specified in legislation for a multi-year appropriation is five years. Multi-year appropriations (MYAs) are commonly used to fund long-term projects, such as the Census of Population and Dwellings or Crown contributions to joint ventures at airports. MYAs can also be used for contestable funds and the provision of overseas development assistance.

MYAs are a valuable tool where the costs of projects are certain but the spread of costs across years is not.

Permanent Legislative Authority (PLA)

Permanent legislative authority is authorised by legislation other than an Appropriation Act and continues in effect until revoked by Parliament. Generally, the authorising legislation will impose limits on the scope of the appropriation and not its amount. For those appropriations with limits set in cash terms, section 11(2) of the Public Finance Act requires that they be reported on an accrual basis. The usual legislative wording allows for expenses to be incurred for the purpose specified in the legislation “without further appropriation than this section”. Details of permanent appropriations are included in ‘Details of Annual and Permanent Appropriations' in the Estimates and Supplementary Estimates for each Vote for completeness, though the dollar amount specified is a forecast rather than a limit.

Examples of how PLAs have been used in practice include:

  • where a measure of constitutional independence from government control is required, eg, to pay judges’ salaries
  • to ensure continuity of supply for ‘essential’ services or transactions, such as debt servicing
  • to settle liabilities created under legislation, such as repayment of government debts, tax credits and payment of tax refunds
  • to assure overseas lenders that they will be repaid.

PLAs are also used to authorise the development or replacement of departmental assets, funded from a department's balance sheet.

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