Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Loan Bill 1995 [and] Appropriation Bill (No.1) 1995-96 [and] Appropriation Bill (No.2) 1995-96



Download PDFDownload PDF

House: House of Representatives

Portfolio: Finance

Commencement: Royal Assent or 1 July 1995, whichever is the later.

Purpose

To provide for the financing of a prospective deficit in the Consolidated Revenue Fund (CRF).

Background

The Commonwealth Public Account, which is the main bank account of the Commonwealth, consists of the CRF, the Loan Fund and the Trust Fund. The CRF is the main working account of the Commonwealth and its main sources of receipts are income tax, sales tax, payroll tax, customs duties, excise and other departmental receipts. The main payments from the CRF are for payments to or for other levels of government; social welfare and health benefits: defence services; departmental expenditure on running expenses, works and other services; and interest payments and sinking fund contributions.

All money raised by loans upon the public credit of the Commonwealth Government is placed to the credit of the Loan Fund. Loan money is raised under the authority of an Act and no loan money is spent, except under the authority of Parliament in the form of a loan appropriation. The main payments from the Loan Fund have been to finance the repayment of maturing loans, for defence purposes, or to reimburse the CRF under the authority of a Loan Act. Payments from the Loan Fund are also sometimes made to the States for civil works and education programs, and as advances for housing under dual appropriation legislation.

The Trust Fund contains money held in trust for people and authorities other than the Commonwealth Government; working accounts covering certain factories, stores and services; other money held in trust under the authority of Parliament to meet future expenditure; and funds and accounts not part of the accounts of the Minister for Finance but which, because of their enabling legislation, are part of the Trust Fund.

Funds in the CRF are appropriated by annual Appropriation Acts and special and standing appropriations under specific Acts. Standing appropriations generally refer to open-ended appropriations while special appropriations usually refer to a specified amount.

A budget surplus of $0.7 billion is estimated for 1995-96, compared to an estimated deficit of $12.2 billion for 1994-95. 1 The Budget deficit will give rise to a deficit in the CRF of approximately $2.059 billion in 1995-96 compared with a deficit in the CRF of approximately $19.4 billion in 1994-95. 2

Main Provisions

The term 'current financial year' is defined by clause 3 to be the year ending 30 June 1996.

Clause 4 will authorise the Treasurer to borrow funds, by the issue of bonds or Treasury Bills, for defence services during the current financial year.

Clause 5 provides that funds raised under clause 4 are only to be spent on defence services and borrowing costs.

Clause 6 will authorise the Treasurer to borrow, during the financial year, funds to supplement the CRF. The amount borrowed is not to exceed the deficit in the CRF and borrowing costs, is to be raised by the issue of bonds or Treasury Bills and be within limits approved by the Loan Council. Funds so borrowed are only to be used to make payments to the CRF and to meet borrowing costs ( clause 7).

Endnotes

1. Budget Statements 1995-96, Budget Paper No. 1, p. 1-1.

2. The Commonwealth Public Account 1995-96, Budget Paper No. 2, p. 248.

Ian Ireland (06 2772438)

Bills Digest Service 26 May 1995

Parliamentary Research Service

This Digest does not have any legal status. Other sources should be consulted to

determine whether this Bill has been enacted and, if so, whether the subsequent Act reflects further amendments.

Commonwealth of Australia 1995

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members and Senators of the Australian Parliament in the course of their official duties.