Portfolio Budget Statements 2006-07

Environment and Heritage Portfolio
Budget initiatives and explanations of appropriations specified by outcomes and outputs by agency
Budget Related Paper No. 1.7
ISBN 1 741 77538 8

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Agency Budget Statements (continued)
Department of the Environment and Heritage (continued)

Tables in this section

Table 4.3 - Australian Government Indigenous Expenditure

Section 4 - Other Reporting Requirements

4.1 Purchaser-Provider Arrangements
4.2 Cost Recovery Arrangements
4.3 Australian Government Indigenous Expenditure (AGIE)

4.1: Purchaser-Provider Arrangements

DEPARTMENT OF THE ENVIRONMENT AND HERITAGE
DEPARTMENT OF AGRICULTURE, FISHERIES AND FORESTRY
NATURAL HERITAGE TRUST

Cross agency overview

The Australian Government has previously provided over $1.3 billion to extend the Natural Heritage Trust (NHT) for six years from 2002–03 to 2007–08. The 2006–07 Budget allows for expenditure of $300 million for the Trust in 2006–07.

The Department of the Environment and Heritage (DEH) and the Department of Agriculture, Fisheries and Forestry (DAFF) have a cross–portfolio arrangement to administer the NHT. The NHT expenditure package is a $3 billion investment which is promoting an integrated, long–term approach to the conservation and sustainable management of Australia's land, water, native vegetation and biodiversity.

The NHT has three overarching objectives. These are:

Biodiversity conservation – the conservation of Australia's biodiversity through the protection and restoration of terrestrial, freshwater, estuarine and marine ecosystems and habitat for native plants and animals;
Sustainable use of natural resources – the sustainable use and management of Australia's land, water and marine resources to maintain and improve the productivity and profitability of resource based industries; and
Community capacity building and institutional change – support for individuals, landholders, industry and communities with skills, knowledge, information and institutional frameworks to promote biodiversity conservation and sustainable resource use and management.

Responsibility

The Minister for the Environment and Heritage and the Minister for Agriculture, Fisheries and Forestry jointly determine policy and major funding allocations from within the NHT.

DEH and DAFF have established a cross–portfolio unit, the Australian Government Natural Resource Management Team, to jointly implement the NHT.

Control arrangements

DEH and DAFF are jointly responsible for the administration of the NHT, through the joint Australian Government Natural Resource Management Team.

Resourcing

The NHT’s financial resources are included in the agency report of the Environment and Heritage portfolio.

Administered expenses for the NHT in 2006–07 is $300 million. DEH will provide DAFF (through Section 31 of the Financial Management and Accountability Act 1997) $7.3 million in 2006–07 to fund the administration costs incurred in implementing the NHT.

Performance against outcomes of purchased outputs

Quantity

The number of investment strategies that are prepared, evaluated and for which funding is agreed and specified in financial agreements.
The number of individuals/community groups supported through Australian Government Envirofund grants.

Quality

Investment strategies address nationally agreed Natural Resource Management (NRM) priorities to address identified NRM issues.

Efficiency

All investments approved by Ministers in 2006-07 are delivered through appropriate financial agreements and provided with funding in accordance with NHT accountability and acquittal procedures, to meet the NHT's objectives.
Monitoring and evaluation arrangements are in place for each level of the NHT and reports show progress against targets.

DEPARTMENT OF THE ENVIRONMENT AND HERITAGE
DEPARTMENT OF AGRICULTURE, FISHERIES AND FORESTRY
NATIONAL ACTION PLAN FOR SALINITY AND WATER QUALITY

DEH and DAFF have a cross–portfolio arrangement in respect of the administration of the National Action Plan Salinity and Water Quality (NAP). The NAP is a $1.4 billion Australian Government–State and Territory programme that, over eight years, will continue to fund the development of integrated regional/catchment natural resource management plans and implementation of targeted high priority actions to address salinity, particularly dryland salinity, and deteriorating water quality in priority regions across Australia.

The goal of the NAP is to motivate and enable regional communities to use coordinated and targeted action to:

prevent, stabilise and reverse trends in salinity, particularly dryland salinity, affecting the sustainability of production, conservation of biological diversity and the viability of our infrastructure; and
improve water quality and secure reliable allocations for human uses, industry and the environment.

Responsibility

The Minister for the Environment and Heritage and the Minister for Agriculture, Fisheries and Forestry jointly determine policy and major funding allocations from within the NAP.

DEH and DAFF have established a cross– portfolio unit, the Australian Government Natural Resource Management Team, to jointly implement the NAP.

Control arrangements

DAFF is responsible for the financial management of the NAP.

DEH and DAFF are jointly responsible for the administration of the NAP, through the joint Australian Government Natural Resource Management Team.

Resourcing

Total funding for the NAP in 2006–07 is $163.6 million which will be appropriated directly to DAFF. DAFF will provide DEH (through Section 31 of the Financial Management and Accountability Act 1997) $0.87 million in 2006–07 to fund administration costs incurred in implementing the NAP.

Performance against outcomes and outputs

Quantity

The number of investment strategies that are prepared, evaluated and for which funding is agreed and specified in financial agreements.

Quality

Investment strategies address nationally agreed NRM priorities to address identified NRM issues

Efficiency

All investments approved by Ministers in 2006-07 are delivered through appropriate financial agreements and provided with funding in accordance with NAP accountability and acquittal procedures, to meet the NAP's objectives.
Monitoring and evaluation strategy are in place for each level of the NAP and reports show progress against targets.

DEPARTMENT OF THE ENVIRONMENT AND HERITAGE
DIRECTOR OF NATIONAL PARKS

Cross agency overview

DEH has a purchaser–provider arrangement for the provision of corporate services under a Memorandum of Understanding with the Director of National Parks (DNP).

The Secretary of DEH allocates funds to DNP for the outcome: conservation and appreciation of Commonwealth reserves.

Responsibility

The Secretary of DEH is responsible for ensuring that the funds appropriated for the purchase of DNP’s outputs are provided to the Australian National Parks Fund. DNP is responsible to the Minister for the Environment and Heritage and the Parliamentary Secretary to the Minister for the Environment and Heritage.

Control arrangements

DNP is a Commonwealth authority and is subject to the Commonwealth Authorities and Companies Act 1997.

Resourcing

DEH will provide funding to DNP of $43.8 million in 2006–07.

Performance against outcomes and outputs

Refer to the DNP’s Budget Statements of this document, page 178.

DEPARTMENT OF THE ENVIRONMENT AND HERITAGE
OFFICE OF THE RENEWABLE ENERGY REGULATOR

Cross agency overview

DEH has a cross agency agreement with the Office of the Renewable Energy Regulator (ORER) whereby DEH provides a range of corporate services on a commercial basis.

Responsibility

The Secretary of DEH is responsible for ensuring that the agreed transactional corporate services are provided to ORER.

Control arrangements

DEH is subject to the provisions of Financial Management and Accountability Act 1997.

Performance against outcomes and outputs

Refer to ORER’s Budget Statements of this document, page 144.

4.2: Cost Recovery Arrangements

DEH is committed to implementing the Australian Government’s Cost Recovery Policy. In accordance with this policy, DEH will adhere to the Australian Government's cost recovery guidelines when:

undertaking reviews consistent with the Australian Government's five–year review schedule for existing cost recovery arrangements;
new cost recovery arrangements are proposed;
considering amendments to existing arrangements; and
periodic reviews of cost recovery arrangements are required.

Summary of Environment and Heritage Portfolio Cost Recovery Impact Statement

DEH has undertaken a cost recovery review, as part of a broader review of cost recovery arrangements within the Environment and Heritage Portfolio. This review delivers on the Australian Government requirement that existing cost recovery arrangements be reviewed at least every five years.

The review found that DEH has applied the cost recovery principles appropriately, noting that only a small proportion of DEH’s overall departmental resourcing is subject to the Cost Recovery Policy. The review confirmed that fees and charges collected by DEH are generally levied on a full-cost recovery basis, as required by the Cost Recovery Policy, with a number of charges levied on a partial-cost recovery basis. Consistent with the requirements of the Cost Recovery Policy, partial cost recovery is generally implemented where:

emerging markets would be significantly impacted through the implementation of cost recovery;
the Australian Government has endorsed community service obligations; or
partial cost-recovery more effectively promotes Australian Government policy objectives.

The cost recovery review found that fees collected by DEH are fully compliant with the Government’s Cost Recovery Policy, with the exception of fees charged under the Environment Protection (Sea Dumping) Act 1981 (Sea Dumping Act) and the Fuel Quality Standards Act 2000 (FQS Act), which have not kept pace with costs in administering the legislation (due to general price increases) and need to be increased.

Review Date

All fees and charges levied by DEH will be reviewed at least every five years, consistent with the requirements of the Cost Recovery Policy and more frequently as required under legislation.

Cost Recovery under the Fuel Quality Standards Act 2000 (FQS Act)

The FQS Act provides for a nationally consistent approach to transport fuel quality and delivers significant air quality gains of an estimated $3.4 billion in avoided health costs to 2020, together with improved vehicle operation. Applications can be made under the FQS Act to vary fuel standards.

The 2005 statutory review of the Fuel Act recognised the complexity and resource intensive nature of processing applications. The cost recovery review found that fees and charges presently do not align with the resource costs involved in administering the FQS Act. Consequently, a 2006–07 Budget measure (refer to page 22) will increase fees charged under the FQS Act from 2007-08. DEH will consult with affected stakeholders during 2006-07.

Consistent with the current approach, the new charging schedule for processing applications recognises the relative complexity of applications, with the simple applications to be charged at $2,500 and for highly complex applications involving fuel of over 100 megalitres, up to $130,000.

Cost Recovery under Environment Protection (Sea Dumping) Act 1981

The Sea Dumping Act meets Australia's international responsibilities under the London Convention of 1972 and the 1996 Protocol to the London Convention, ratified by Australia in 2001. Under the Sea Dumping Act, DEH regulates the dumping of wastes at sea.

The cost recovery review found that fees charged for dumping permits, which have been in place since 2001, do not sufficiently cover expenses incurred by DEH in administering the legislation. Reflecting the requirements of the Government’s cost recovery policy, a 2006-07 Budget measure (refer to page 22) will increase fees charged under the Sea Dumping Act from 2006-07. DEH will consult with affected stakeholders in 2006-07 on the new fee structure.

The new fee structure will be as follows:

dumping of dredge spoil (small scale), $12,450;
dumping of dredge spoil (large scale), $24,700;
creation of artificial reefs, $10,000;
sea disposal for decommissioned offshore oil and gas platforms, $12,650;
human burial at sea, $1,650; and
variations to permits levied under the Sea Dumping Act, $850.

4.3: Australian Government Indigenous Expenditure (AGIE)

Table 4.3: Australian Government Indigenous Expenditure
Outcome	Appropriations				Other $'000 (E)	Total $'000 (F)=(D)+(E)
Outcome	Bill No. 1 $'000 (A)	Bill No. 2 $'000 (B)	Special Approp $'000 (C)	Total Approp $'000 (D)	Other $'000 (E)	Total $'000 (F)=(D)+(E)
Outcome 1
Department of the Environment and Heritage
Administered 2006-07	8,643	-	-	8,643	-	8,643
Administered 2005-06	7,808	-	-	7,808	-	7,808
Departmental 2006-07	2,045	-	-	2,045	-	2,045
Departmental 2005-06	2,192	-	-	2,192	-	2,192
Total Outcome 2006-07	10,688	-	-	10,688	-	10,688
Total Outcome 2005-06	10,000	-	-	10,000	-	10,000
Outcome2
Department of the Environment and Heritage
Administered 2006-07	-	-	-	-	-	-
Administered 2005-06	-	-	-	-	-	-
Departmental 2006-07	-	-	-	-	-	-
Departmental 2005-06	-	-	-	-	-	-
Total Outcome 2006-07	-	-	-	-	-	-
Total Outcome 2005-06	-	-	-	-	-	-
Total Administered 2006-07	8,643	-	-	8,643	-	8,643
Total Administered 2005-06	7,808	-	-	7,808	-	7,808
Total Departmental 2006-07	2,045	-	-	2,045	-	2,045
Total Departmental 2005-06	2,192	-	-	2,192	-	2,192
Total AGIE 2006-07	10,688	-	-	10,688	-	10,688
Total AGIE 2005-06	10,000	-	-	10,000	-	10,000

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