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Higher Education Endowment Fund Bill 2007

Part 2 The Higher Education Endowment Fund

Division 1 Introduction

10   Simplified outline

                   The following is a simplified outline of this Part:

•      This Part sets up the Higher Education Endowment Fund.

•      The Higher Education Endowment Fund consists of:

               (a)     the Higher Education Endowment Fund Special Account; and

              (b)     the investments of the Higher Education Endowment Fund.

•      An initial amount of $5 billion must be credited to the Fund Account.

•      The responsible Ministers may determine that additional amounts are to be credited to the Fund Account.

•      Amounts may be debited from the Fund Account in accordance with the purposes of the Fund Account.

•      The main purposes of the Fund Account are:

               (a)     to make grants of financial assistance to eligible higher education institutions in relation to capital expenditure; and

              (b)     to make grants of financial assistance to eligible higher education institutions in relation to research facilities.



 

Division 2 Establishment of the Higher Education Endowment Fund etc.

11   Establishment of the Higher Education Endowment Fund

             (1)  The Higher Education Endowment Fund is established by this section.

             (2)  The Higher Education Endowment Fund consists of:

                     (a)  the Higher Education Endowment Fund Special Account; and

                     (b)  the investments of the Fund.

12   Establishment of the Higher Education Endowment Fund Special Account

             (1)  The Higher Education Endowment Fund Special Account is established by this section.

             (2)  The Fund Account is a Special Account for the purposes of the Financial Management and Accountability Act 1997 .

Note 1:       Fund Account means the Higher Education Endowment Fund Special Account—see section 5.

Note 2:       An Appropriation Act may contain a provision to the effect that, if any of the purposes of a Special Account is a purpose that is covered by an item in the Appropriation Act (whether or not the item expressly refers to the Special Account), then amounts may be debited against the appropriation for that item and credited to that Special Account.



 

Division 3 Credits of amounts to the Higher Education Endowment Fund

13   Initial credit of $5 billion to the Fund Account

             (1)  As soon as practicable after the commencement of this Act, the responsible Ministers must:

                     (a)  by writing, determine that $5 billion is to be credited to the Fund Account on a specified day; or

                     (b)  by writing, determine that $5 billion is to be credited to the Fund Account in specified instalments on specified days.

             (2)  A determination under subsection (1) is irrevocable.

             (3)  A determination under subsection (1) is a legislative instrument, but section 42 (disallowance) of the Legislative Instruments Act 2003 does not apply to the determination.

14   Subsequent credits of amounts to the Fund Account—determinations by the responsible Ministers

             (1)  The responsible Ministers may, by writing, determine that:

                     (a)  a specified amount is to be credited to the Fund Account on a specified day; or

                     (b)  a specified amount is to be credited to the Fund Account in specified instalments on specified days.

Note:          For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901 .

             (2)  A determination under subsection (1) is a legislative instrument, but section 42 (disallowance) of the Legislative Instruments Act 2003 does not apply to the determination.

15   Credit of amounts to the Fund Account—gifts

             (1)  The Future Fund Board may accept a gift of money made for the purposes of the Fund if the acceptance of the gift is authorised under subsection (2).

             (2)  The Education Minister may, by writing, authorise the acceptance under subsection (1) of a specified gift.

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

             (3)  An amount accepted under subsection (1) is to be credited to the Fund Account.

             (4)  An instrument under subsection (2) is a legislative instrument, but section 42 (disallowance) of the Legislative Instruments Act 2003 does not apply to the instrument.



 

Division 4 Debits of amounts from the Higher Education Endowment Fund

16   Purposes of the Fund Account

Grants purposes and purposes related exclusively to the Fund

             (1)  Each of the following is a purpose of the Fund Account:

                     (a)  making grants of financial assistance to eligible higher education institutions in relation to capital expenditure, so long as the grants are authorised under subsection 45(1);

                     (b)  making grants of financial assistance to eligible higher education institutions in relation to research facilities, so long as the grants are authorised under subsection 45(2);

                     (c)  paying the costs of, or incidental to, the acquisition of financial assets under section 22;

                     (d)  paying expenses of an investment of the Fund;

                     (e)  paying the costs of, or incidental to, the acquisition of derivatives under section 31;

                      (f)  paying or discharging the costs, expenses and other obligations incurred by the Future Fund Board under a contract between the Future Fund Board and an investment manager engaged under subsection 34(1);

                     (g)  paying or discharging the costs, expenses and other obligations incurred in connection with the establishment, maintenance or operation of a bank account of the Future Fund Board, where the bank account relates exclusively to the Fund;

                     (h)  paying a premium in respect of a contract of insurance entered into by the Future Fund Board exclusively in connection with the Fund;

                      (i)  paying or discharging any other costs, expenses, obligations or liabilities incurred by the Future Fund Board exclusively in connection with the Fund.

Note:          See section 21 of the Financial Management and Accountability Act 1997 (debits from Special Accounts).

             (2)  Paragraph (1)(a) does not limit paragraph (1)(b).

             (3)  Paragraph (1)(b) does not limit paragraph (1)(a).

Purposes not related exclusively to the Fund

             (4)  Each of the following is a purpose of the Fund Account:

                     (a)  paying or discharging the costs, expenses and other obligations incurred in connection with the establishment, maintenance or operation of a bank account of the Future Fund Board, where those costs, expenses or obligations are not covered by:

                              (i)  paragraph (1)(g); or

                             (ii)  paragraph 2(1)(g) of Schedule 2 to the Future Fund Act 2006 ;

                     (b)  paying a premium in respect of a contract of insurance entered into by the Future Fund Board, where the premium is not covered by:

                              (i)  paragraph (1)(h); or

                             (ii)  paragraph 2(1)(h) of Schedule 2 to the Future Fund Act 2006 ;

                     (c)  paying or discharging any other costs, expenses, obligations or liabilities incurred by the Future Fund Board, where the costs, expenses, obligations or liabilities are not covered by:

                              (i)  a paragraph of subsection (1); or

                             (ii)  a paragraph of subclause 2(1) of Schedule 2 to the Future Fund Act 2006 ;

                     (d)  paying remuneration and allowances of Future Fund Board members;

                     (e)  paying remuneration, and other employment-related costs and expenses, in respect of members of the staff of the Agency;

                      (f)  paying or discharging the costs, expenses and other obligations incurred by the Commonwealth under a contract entered into under section 78 or 82 of the Future Fund Act 2006 ;

                     (g)  paying or discharging the costs, expenses and other obligations incurred by the Commonwealth in connection with the operation of the Agency.

Note:          See section 21 of the Financial Management and Accountability Act 1997 (debits from Special Accounts).

17   Future Fund Board must ensure that there is sufficient money in the Fund Account to cover authorised grants etc.

                   The Future Fund Board must take all reasonable steps to ensure that the amount of money standing to the credit of the Fund Account is sufficient to cover the debit of amounts for grants authorised, or proposed to be authorised, under subsection 45(1) or (2).

Note:          This may require the Future Fund Board to realise an investment of the Fund in accordance with section 23.



 

Division 5 Transfers between the Higher Education Endowment Fund and the Future Fund

18   Transfers from the Future Fund to the Higher Education Endowment Fund

             (1)  If an amount is debited from the Fund Account for a purpose mentioned in subsection 16(4), the Finance Minister may, by writing, direct that a specified amount is to be:

                     (a)  debited from the Future Fund Special Account; and

                     (b)  credited to the Fund Account;

on a specified day.

             (2)  The specified amount must not exceed the amount debited from the Fund Account as mentioned in subsection (1).

             (3)  A direction under subsection (1) is not a legislative instrument.

19   Transfers from the Higher Education Endowment Fund to the Future Fund

             (1)  If an amount is debited from the Future Fund Special Account for a purpose mentioned in subclause 2(2) of Schedule 2 to the Future Fund Act 2006 , the Education Minister may, by writing, direct that a specified amount is to be:

                     (a)  debited from the Fund Account; and

                     (b)  credited to the Future Fund Special Account;

on a specified day.

             (2)  The specified amount must not exceed the amount debited from the Future Fund Special Account as mentioned in subsection (1).

             (3)  A direction under subsection (1) is not a legislative instrument.