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Appendix A: The Public Finance Act 1989

The Public Finance Act sets the legal framework for the financial management system. It controls the financial activity of the Government and the manner in which Parliament oversees the Executive's expenditure. It provides the basis for appropriation, managing financial resources, and reporting by the Government.

The Public Finance Act consists of eight parts.

Appropriations

Part 1 outlines the appropriation mechanism and the degree of management flexibility that will be allowed. In most instances, Parliament must pass an Appropriation Act before public resources can be consumed. The first Appropriation Bill for each year must be introduced before 31 July.

Fiscal Responsibility

Part 2 establishes the principles of fiscal responsibility, and mandates transparent reporting of fiscal strategy, budget policy and fiscal outcomes extending out ten (Fiscal Strategy Report) to forty years into the future (Statement of Long-term Fiscal Position). See Appendix B.

Reporting by the Government, Departments and Crown Entities

Parts 3 to 5 establish minimum financial reporting requirements for departments and the Government as a whole. Reporting requirements for Crown entities are part of the Crown Entities Act.

Loans and Securities

Part 6 provides controls and procedures for raising loans, issuing securities and giving guarantees.

Trust Money

Part 7 provides controls and procedures for managing money held by the Crown as trustee.

General Provisions

Part 8 contains a number of miscellaneous provisions.

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