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International Monetary Agreements Amendment Bill 2009

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2008-2009

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

INTERNATIONAL MONETARY AGREEMENTS AMENDMENT BILL 2009

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

(Circulated by the authority of the

Treasurer, the Hon Wayne Swan MP)

 



T able of contents

General outline................................................................................................. 1

 

Do not remove section break.



International Monetary Agreements Amendment Bill 2009

The purpose of this Bill is to amend the International Monetary Agreements (IMA) Act 1947 to alter the definition of the International Monetary Fund Articles of Agreement (‘Fund Agreement’) and the definition of World Bank Articles of Agreement (‘Bank Agreement’) to include any amendments of the relevant Articles of Agreement that enter into force for Australia without the need for further legislative changes when these amendments are made.

The proposed Bill will simplify the process for Australia to accept amendments to the Fund and Bank Agreements that have recently been agreed by members of the International Monetary Fund (IMF) and World Bank, as well as any future amendments, while retaining policy and parliamentary scrutiny. 

Currently, an IMA Amendment Act is required to change the IMA Act to reflect any amendments to the Fund and Bank Agreements.  However, this legislative process is largely an administrative task.

The Treasurer, as Australia’s Governor of the IMF and World Bank, is required to vote on any proposed changes to the Articles of Agreement of either institution.

The Agreements, which are schedules to the Act, constitute international treaties for Australia and, as such, irrespective of the requirement for legislation, any amendments to the treaties will still require tabling in Parliament for consideration by the Joint Standing Committee on Treaties.

Amendments to the Fund Agreement and the Bank Agreement have recently been approved by the Boards of Governors of the IMF and World Bank.  These include amendments to increase the number of basic votes allocated to each member of the IMF and World Bank, provide for a second Alternate Executive Director for large constituencies at the IMF and expand the investment authority of the IMF.

The amendments in this Bill will enact any amendments to the Fund Agreement and the Bank Agreement for Australia, including those recently approved as identified above, upon their entry into force.

Date of effect : The amendments in this Bill will apply from the date it receives Royal Assent.

Proposal announced On 28 April 2008, the IMF Board of Governors approved amendments to the Fund Agreement to increase the number of basic votes allocated to each member and provide for a second Alternate Executive Director for large constituencies at the IMF.

On 5 May 2008, the IMF Board of Governors approved amendments to the Fund Agreement to expand the investment authority of the IMF.  This is part of broader reform of the IMF’s income model, including deriving income from investment of the proceeds of the sale of part of the IMF’s gold holdings.

On 30 January 2009, the Board of Governors of the World Bank approved amendments to the Bank Agreement to increase the number of basic votes allocated to each member — thereby increasing the voting share of developing and transition countries in the World Bank.

The Treasurer, as Governor for Australia of the IMF and World Bank, voted in favour of each of these proposed amendments.

Amendments to the Fund and Bank Agreements enter into force for all members, whether or not they have accepted the amendments, following certification by the IMF or World Bank, by formal communication, that three fifths of the members, having 85 per cent of the total voting power, have accepted the amendments. 

Financial impact : This Bill will have no financial impact. 

Regulation : No compliance costs are expected to result from entry into force of this Bill. 

Notes on individual clauses

Clause 1 — Short title

1.1                   This clause provides the short title by which the Act may be cited.

Clause 2 — Commencement

1.2                   This clause provides that the proposed amendments will commence on the day on which the Act receives the Royal Assent.

Clause 3 — Schedule(s)

1.3                   This clause makes it clear that the International Monetary Agreements Act 1947 is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

 

S chedule 1 — Amendmen ts

Item 1 — Subsection 3(1) (at the end of the definition of Bank Agreement )

1.4                   This item extends the definition of Bank Agreement (currently defined as the Articles of Agreement of the International Bank for Reconstruction and Development set out in Schedule 2 of the Act, as amended in accordance with a Board of Governors resolution set out in Schedule 3) to also include any other amendments of the Articles of Agreement that have entered into force for Australia.

Item 2 — Subsection 3(1) (at the end of the definition of Fund Agreement )

1.5                   This item extends the definition of Fund Agreement (currently defined as the Articles of Agreements of the International Monetary Fund set out in Schedule 1 of the Act) to also include any other amendments of the Articles of Agreement that have entered into force for Australia.

Item 3 — Application

1.6                   This item specifies that the amendments made by this Schedule apply in relation to amendments that enter into force for Australia on or after the commencement of this item (regardless of whether the amendments were proposed before, on or after that commencement).