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Future Fund Bill 2006

Part 1 Introduction

   

1   Short title

                   This Act may be cited as the Future Fund Act 2005 .

2   Commencement

             (1)  Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1.  Sections 1 and 2 and anything in this Act not elsewhere covered by this table

The day on which this Act receives the Royal Assent.

 

2.  Sections 3 to 85

A single day to be fixed by Proclamation.

However, if any of the provision(s) do not commence within the period of 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period.

 

3.  Schedules 1, 2 and 3

At the same time as the provision(s) covered by table item 2.

 

Note:          This table relates only to the provisions of this Act as originally passed by the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.

             (2)  Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act.

3   Object

             (1)  The object of this Act is to strengthen the Commonwealth’s long-term financial position by establishing the Future Fund.

             (2)  The Future Fund will make provision for unfunded superannuation liabilities that will become payable during a period when an ageing population is likely to place significant pressure on the Commonwealth’s finances.

4   Simplified outline

                   The following is a simplified outline of this Act:

•      This Act sets up the Future Fund.

•      The Future Fund Board of Guardians is responsible for deciding how to invest the Future Fund.

•      Investments of the Future Fund will consist of financial assets.

•      The Board is bound by an Investment Mandate given to it by the responsible Ministers.

•      The Future Fund Management Agency is responsible for assisting and advising the Board.

5   Definitions

                   In this Act:

actuary means a person who is a Fellow or an Accredited Member of the Institute of Actuaries of Australia.

Agency means the Future Fund Management Agency established by section 74.

asset means:

                     (a)  any kind of real or personal property; or

                     (b)  any legal or equitable estate or interest in real or personal property; or

                     (c)  any legal or equitable right.

balance of the Fund means the sum of:

                     (a)  amounts standing to the credit of the Fund Account; and

                     (b)  the value of investments of the Fund.

bank has the same meaning as in the Financial Management and Accountability Act 1997 .

Board means the Future Fund Board of Guardians established by section 34.

Board member means a member of the Board, and includes the Chair.

business judgment means any decision to take or not take action in respect of a matter relevant to the operations of the Board.

Chair means the Chair of the Board.

Commonwealth authority has the same meaning as in the Commonwealth Authorities and Companies Act 1997 .

Commonwealth company has the same meaning as in the Commonwealth Authorities and Companies Act 1997.

Commonwealth-owned financial asset means a financial asset held by the Commonwealth.

derivative means a derivative (within the meaning of Chapter 7 of the Corporations Act 2001 ) that is a financial asset.

designated actuary has the meaning given by clause 2 of Schedule 3.

dishonest means:

                     (a)  dishonest according to the standards of ordinary people; and

                     (b)  known by the person to be dishonest according to the standards of ordinary people.

Finance Minister has the same meaning as in the Financial Management and Accountability Act 1997 .

financial asset has the meaning given by section 6.

foreign listed company means a company:

                     (a)  any of the shares of which are listed for quotation in the official list of a stock exchange in a foreign country; and

                     (b)  none of the shares of which are listed for quotation in the official list of a stock exchange in Australia.

Fund means the Future Fund established by section 11.

Fund Account means the Future Fund Special Account established by section 12.

funded component of a superannuation benefit means the part (if any) of the superannuation benefit that, for actuarial purposes, is treated as the funded component. For this purpose, disregard Schedule 2.

GFS Australia means the publication of the Australian Bureau of Statistics known as Australian System of Government Finance Statistics: Concepts, Sources and Methods, as updated from time to time. This updating takes 2 forms:

                     (a)  from time to time, a new version of the publication is produced;

                     (b)  from time to time, material in the current version of the publication is updated by other publications of the Australian Bureau of Statistics.

GFS system has the same meaning as in GFS Australia.

investment means any mode of application of money or financial assets for the purpose of gaining a return (whether by way of income, capital gain or any other form of return).

investment function of the Board means:

                     (a)  a function or power conferred on the Board by section 16, 17, 23, 25, 27 or 28; or

                     (b)  a right or power conferred on the Board in its capacity as the holder of an investment of the Fund.

investment manager means a person or body (other than the Agency) who undertakes to do any or all of the following:

                     (a)  invest amounts on behalf of the Board;

                     (b)  manage the investment of funds on behalf of the Board;

                     (c)  acquire derivatives on behalf of the Board;

                     (d)  manage derivatives on behalf of the Board;

                     (e)  enter into securities lending arrangements on behalf of the Board;

                      (f)  realise financial assets on behalf of the Board;

                     (g)  perform custodial functions in relation to the financial assets of the Board.

Investment Mandate has the meaning given by subsection 18(3).

investment of the Fund means a financial asset that, under a provision of this Act, is taken to be an investment of the Fund.

involved , in relation to a contravention, has the same meaning as in the Commonwealth Authorities and Companies Act 1997 .

nominated Minister has the meaning given by section 83.

person (except in Division 7 of Part 4) includes a partnership.

Note:          See also paragraph 22(1)(a) of the Acts Interpretation Act 1901 .

realise includes redeem or dispose of.

responsible Ministers means:

                     (a)  the Treasurer; and

                     (b)  the Finance Minister.

securities lending arrangement means an agreement of the kind known as a securities lending arrangement.

South Australian railways arrangement means an arrangement between the Commonwealth and South Australia dealing with employer superannuation liabilities arising in relation to former employees of the South Australian railways.

superannuation benefit means a pension, allowance or other benefit payable under:

                     (a)  the Superannuation Act 1922 ; or

                     (b)  the Superannuation Act 1976 ; or

                     (c)  the scheme established under the Superannuation Act 1990 ; or

                     (d)  the Parliamentary Contributory Superannuation Act 1948 ; or

                     (e)  the scheme established under the Military Superannuation and Benefits Act 1991 ; or

                      (f)  the Defence Forces Retirement Benefits Act 1948 ; or

                     (g)  the Defence Force Retirement and Death Benefits Act 1973 ; or

                     (h)  the Judges’ Pensions Act 1968 ; or

                      (i)  section 4, 4A or 4AA of the Governor-General Act 1974 .

superannuation liability means a liability to make a payment of a superannuation benefit.

target asset level declaration means a declaration under subclause 3(1) of Schedule 3.

Tasmanian railways arrangement means an arrangement between the Commonwealth and Tasmania dealing with employer superannuation liabilities arising in relation to former employees of the Tasmanian railways.

unfunded superannuation liability means:

                     (a)  so much of a superannuation liability as is not attributable to the funded component of a superannuation benefit; or

                     (b)  an amount payable by the Commonwealth under a South Australian railways arrangement; or

                     (c)  an amount payable by the Commonwealth under a Tasmanian railways arrangement.

value means market value. For this purpose, disregard anything that would prevent or restrict conversion of a financial asset to money.

6   Financial assets

                   A reference in this Act to a financial asset is a reference to:

                     (a)  an asset that, in accordance with GFS Australia, is treated as a financial asset for the purposes of the GFS system in Australia; or

                     (b)  an asset specified in regulations made for the purposes of this paragraph;

but does not include a reference to an asset that, under the regulations, is taken to be a non-financial asset for the purposes of this Act.

Note:          For specification by class, see subsection 13(3) of the Legislative Instruments Act 2003 .

7   Crown to be bound

             (1)  This Act binds the Crown in each of its capacities.

             (2)  This Act does not make the Crown liable to be prosecuted for an offence.

8   Extension to external Territories

                   This Act extends to every external Territory.

9   Extra-territorial application

                   This Act extends to acts, omissions, matters and things outside Australia (unless the contrary intention appears).