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Financial Framework Legislation Amendment Bill (No. 1) 2012

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2010-2011-2012

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

Financial Framework

Legislation Amendment Bill (No. 1) 2012

 

 

 

 

 

 

Explanatory Memorandum

 

 

 

 

 

 

 

(Circulated with the authority of the

Minister for Finance and Deregulation,

 Senator the Hon Penny Wong)

 

 

 

 

 

 

 

 

 

 



 

TABLE OF CONTENTS

 

Table of abbreviations and common terms................................................... iii

I. GENERAL OUTLINE................................................................................... 1

Main features of the FFLA Bill 2012............................................................. 1

Financial Impact Statement........................................................................... 2

Statement of Compatibility with Human Rights............................................ 2

II. NOTES ON CLAUSES................................................................................ 4

Long title....................................................................................................... 4

Clause 1: Short title....................................................................................... 4

Clause 2: Commencement.............................................................................. 4

Clause 3: Schedules....................................................................................... 5

III. OVERVIEW OF AMENDMENTS IN SCHEDULES.............................. 7

Schedule 1: Amending the Auditor-General Act 1997 .................................... 7

Schedule 2: Amending the Commonwealth Authorities and Companies Act 1997 ....           7

Schedule 3: Amending the Financial Framework Legislation Amendment Act 2010 ....       7

Schedule 4: Amending the Financial Management and Accountability Act 1997 .... 8

Schedule 5: Repealing the Appropriation (Development Bank) Act 1975 and the Car Dealership Financing Guarantee Appropriation Act 2009 ............................. 8

IV. NOTES ON SCHEDULE 1 - Amending the Auditor-General Act 1997 ... 9

Auditor-General may audit any company that the Commonwealth controls. 9

Application.................................................................................................. 10

V. NOTES ON SCHEDULE 2 - Amending the Commonwealth Authorities and Companies Act 1997 ............................................................................................................ 11

Budget estimates to be prepared as directed by the Finance Minister.......... 11

Application: Budget estimates..................................................................... 12

Notifying the responsible Minister of decisions regarding significant events 12

Application: decisions regarding significant events..................................... 13

Transitional arrangements: decisions regarding significant events............... 14

VI. NOTES ON SCHEDULE 3 - Amending the Financial Framework Legislation Amendment Act 2010 ........................................................................................ 15

Misdescribed provisions: “and” and “or”.................................................... 15

VII. NOTES ON SCHEDULE 4 - Amending the Financial Management and Accountability Act 1997 .................................................................................... 17

Commencement of Special Account determinations.................................... 17

Drawing rights: focus on payments............................................................. 18

Drawing rights: removal of penalty............................................................. 20

Commonwealth to set off amounts owed with amounts payable................ 21

Clarification of the Finance Minister’s delegation powers........................... 22

Minor amendments to update headings....................................................... 23

VIII. NOTES ON SCHEDULE 5 - Repealing redundant Acts..................... 25

Repealing the Appropriation (Development Bank) Act 1975 ........................ 25

Repealing the Car Dealership Financing Guarantee Appropriation Act 2009 25

 



 

 

Table of abbreviations and common terms

 

 

Abbreviation or

common term

Full term or description

Auditor-General Act

Auditor-General Act 1997

APS

Australian Public Service

CAC Act

Commonwealth Authorities and Companies Act 1997

CAC Amendment Act

Commonwealth Authorities and Companies Amendment Act 2008

CAC Bill

Commonwealth Authorities and Companies Bill 1996

CAC Orders

Finance Minister’s Orders issued under section 48 of the CAC Act that detail information to be included in the annual report of operations, and which comprise the Commonwealth Authorities (Annual Reporting) Orders 2011 and the Commonwealth Companies (Annual Reporting) Orders 2011

CAC Regulations

Commonwealth Authorities and Companies Regulations 1997

Chief Executive

Chief Executive, for a prescribed Financial Management and Accountability Act 1997 (FMA Act) Agency under the Financial Management and Accountability Regulations 1997 , means the person identified by the regulations as the Chief Executive of the Agency, or, for any other FMA Act Agency, means the person who is the Secretary of the relevant Department for the purposes of the Public Service Act 1999 or the Parliamentary Service Act 1999

Commonwealth authority

Body corporate that is established by Commonwealth legislation for a public purpose, and which holds money on its own account (as defined in section 7 of the CAC Act)

Commonwealth company

Company registered under the Corporations Act 2001 that the Commonwealth controls (as defined in section 34 of the CAC Act)

CRF

Consolidated Revenue Fund

FFLA Act 2008

Financial Framework Legislation Amendment Act 2008

FFLA Act 2010

Financial Framework Legislation Amendment Act 2010

FFLA Bill

Financial Framework Legislation Amendment Bill

FFLA Bill 2012

Financial Framework Legislation Amendment Bill (No. 1) 2012

Finance Minister

The Minister who administers the Financial Management and Accountability Act 1997

FMA Act

Financial Management and Accountability Act 1997

FMA Bill

Financial Management and Accountability Bill 1996

FMA Regulations

Financial Management and Accountability Regulations 1997

FMLA Act

Financial Management Legislation Amendment Act 1999

ICCPR

International Covenant on Civil and Political Rights

Item

An item of a Schedule of the FFLA Bill 2012

Tax Bonus Case

Pape v Commissioner of Taxation (2009) 238 CLR 1

 



Financial Framework Legislation Amendment Bill (No. 1) 2012

 

 

I. GENERAL OUTLINE

 

Main features of the FFLA Bill 2012

1.               The Financial Framework Legislation Amendment Bill (No. 1) 2012 (FFLA Bill 2012) would, if enacted, amend 4 Acts and repeal 2 Acts across 3 portfolios to clarify the Commonwealth’s financial framework and amend the governance and financial arrangements of existing Government bodies, among other related measures.

2.               Specifically, the FFLA Bill 2012 would, if enacted:

·                  Amend the Auditor-General Act 1997 (Auditor-General Act) to clarify that the Auditor-General may accept an appointment under the Corporations Act 2001 as the auditor of any company that the Commonwealth controls, within the expanded meaning of that concept that was added in 2008 to the Commonwealth Authorities and Companies Act 1997 (CAC Act);

·                  Amend the CAC Act so that:

-    directors of Commonwealth authorities and wholly-owned Commonwealth companies (other than Government Business Enterprises) would prepare Budget estimates, as directed by the Finance Minister (rather than their responsible Minister), consistent with long-standing administrative practices; and

-    directors of Commonwealth authorities and wholly-owned Commonwealth companies notify the responsible Minister of their actual decisions (rather than just proposals) about certain significant events (such as creating a subsidiary);

·                  Amend 2 misdescribed provisions in the Financial Framework Legislation Amendment Act 2010 (FFLA Act 2010), which sought to update section 27A of the CAC Act (to replace references to “at common law and in equity” and “at common law or in equity” with the phrase “under the general law”);

·                  Amend the Financial Management and Accountability Act 1997 (FMA Act) to:

-    clarify the ability to set a future commencement date for Special Account determination, by ensuring that it may commence on a day specified in the determination, where that day is later the passage of 5 sitting days allowed for a disallowance resolution in each House of Parliament;

-    focus the operation of drawing rights on payments (rather than debiting, or requesting the debiting of, an appropriation) and also remove the penalty from the role of drawing rights, given their basic administrative role;

-    insert a new section 35 to enable the Commonwealth to set-off, in whole or in part, an amount owing to the Commonwealth by a person with an amount owing by the Commonwealth to the same person, and make regulations with respect to this section;

-    limit the scope of the ability of the Finance Minister to delegate certain powers to officials; and

-    update and align related financial management provisions; and

·                  Repeal 2 redundant special appropriations to clean up the statute book and improve the regulatory framework of the Commonwealth.  The appropriations to be repealed are the:

-    Appropriation (Development Bank) Act 1975 ; and

-    Car Dealership Financing Guarantee Appropriation Act 2009 .

3.               The FFLA Bill 2012 is the ninth Financial Framework Legislation Amendment Bill (FFLA Bill) since 2004, and forms part of the ongoing program to address financial framework issues as they arise, and assist in ensuring that specific provisions in existing legislation remain clear and up-to-date.  These changes have been developed in collaboration with the relevant Ministers and their Departments.

4.               A total of 6 out of 9 FFLA Bills have become law, with the first and the sixth FFLA Bills lapsing upon the prorogation of the Australian Parliament for the 2004 and 2010 federal elections.  The first FFLA Bill focussed primarily on amending legislation to reflect the creation of Special Accounts in the Financial Management Legislation Amendment Act 1999 .  Later FFLA Bills have covered a range of matters including financial management provisions, governance structures and legislative anomalies.  The FFLA Bill 2012 continues this active program to improve the Commonwealth’s financial framework on an ongoing basis, as issues emerge and solutions are identified.

 

Financial Impact Statement

5.               The proposed amendments have no financial impact.  The amendments are aimed at improving financial legislation, which may lead to productivity gains for a number of FMA Act agencies and CAC Act bodies.

 

Statement of Compatibility with Human Rights

6.               The FFLA Bill 2012 seeks to make beneficial changes to financial and related legislation by amending 4 Acts and repealing 2 Acts across 3 portfolios (the Prime Minister and Cabinet, Treasury, and Finance and Deregulation portfolios).

7.               The proposed amendments do not engage any of the applicable rights or freedoms outlined in the Human Rights (Parliamentary Scrutiny) Act 2011 , such as encompassed in the International Covenant on Civil and Political Rights (ICCPR).

8.               The proposed amendments do not limit any human rights, nor propose any offences or penalties.  Indeed, the proposed amendment to section 26 of the FMA Act removes an offence and penalty from that Act.

9.               This Bill is therefore compatible with the human rights and freedoms recognised or declared in the international instruments listed in subsection 3(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 .

 

II. NOTES ON CLAUSES

 

10.          The structure of the Financial Framework Legislation Amendment Bill (No. 1) 2012 (FFLA Bill 2012) comprises the long title, one clause that provides the short title and then 2 clauses that refer to the 5 Schedules that contain the substantive amendments to other Acts.  These notes describe the content and effect of the long title and the 3 clauses.

 

Long title

11.          The long title of the FFLA Bill 2012 provides that it is a Bill for an Act to amend the law relating to the Commonwealth’s financial framework and governance arrangements, and for other purposes. 

12.          The Australian Constitution provides direction on the nature and expenditure of the Commonwealth.  The Commonwealth’s financial framework and governance arrangements are made up of various Acts of Parliament, which concern, mostly, the control of public resources. 

13.          The Financial Management and Accountability Act 1997 (FMA Act) and the Commonwealth Authorities and Companies Act 1997 (CAC Act) are the principal Acts that legislate the Commonwealth financial framework.  Additional Acts provide, in part, financial and governance arrangements for specific agencies.  Such additional Acts include the Acts including special appropriations that Schedule 5 of the FFLA Bill 2012 would repeal.

14.          Further information about the structure of the Australian Government and related governance policies is contained in the List of Australian Government Bodies and Governance Relationships and the Governance Arrangements for Australian Government Bodies , through the website listing publications by the Department of Finance and Deregulation ( www.finance.gov.au ).  A single page listing FMA Act agencies (by portfolio) and a page listing CAC Act bodies (by portfolio) is published under the name of the “Flipchart” in the publications of the Department of Finance and Deregulation ( www.finance.gov.au ).

 

Clause 1: Short title

15.          This clause provides that, if the FFLA Bill 2012 is enacted, it may then be cited as the Financial Framework Legislation Amendment Act (No. 1) 2012 .

 

Clause 2: Commencement

16.          This clause provides that if the FFLA Bill 2012 is passed:

·                  Clauses 1 to 3 would commence on the day that the FFLA Bill 2012 receives Royal Assent;

·                  Items in Schedule 1 , regarding the Auditor-General Act 1997 (Auditor-General Act), would commence on a single day fixed by Proclamation within 6 months from the date of Royal Assent, otherwise they would commence 6 months after the date of Royal Assent.  This would allow for related guidance materials to be updated;

·                  Items in Schedule 2, Part 1 , regarding the preparation of budget estimates by bodies under the CAC Act, would commence the day after the FFLA Bill 2012 receives Royal Assent;

·                  Items in Schedule 2, Part 2 , regarding the notification of decisions about significant events by bodies under the CAC Act, would commence on a single day fixed by Proclamation within 6 months from the date of Royal Assent, otherwise they would commence 6 months after the date of Royal Assent.  This would allow sufficient time to update any relevant guidance materials;

·                  Items 1 and 2 in Schedule 3 , regarding the Financial Framework Legislation Amendment Act 2010 (FFLA Act 2010), would commence immediately after the time that items 7 and 8 of Schedule 5 in the FFLA Act 2010 commenced (respectively).  That date was 1 March 2011 for both items 7 and 8 of Schedule 5 in the FFLA Act 2010.  Retrospective commencement of these items would ensure that the misdescriptions in items 7 and 8 of Schedule 5 in the FFLA Act 2010 would be corrected and would apply immediately after those items became law.  This retrospective commencement of these items would not affect any entrenched or fundamental rights, but would serve to correct that minor misdescription in the FFLA Act 2010;

·                  Items in Schedule 4 , regarding the amendments to the FMA Act (such as the introduction of a provision to allow for set off), would commence the day after the FFLA Bill 2012 receives Royal Assent; and

·                  Items in Schedule 5 , regarding the repeal of the Appropriation (Development Bank) Act 1975 and the Car Dealership Financing Guarantee Appropriation Act 2009 , would commence on the day that the FFLA Bill 2012 receives Royal Assent.

 

Clause 3: Schedules

17.          This clause provides that each Act, as specified in one of the 5 Schedules to the FFLA Bill 2012, is to be amended or repealed as set out in the applicable items in that Schedule of the FFLA Bill 2012. 

18.          Clause 3 also provides that any other item in a Schedule has effect according to its terms, which relates to provisions such as application provisions. 

19.          Briefly, the Schedules in the FFLA Bill 2012, in consecutive order, would amend or repeal the following Acts:

·                  Schedule 1 would amend the Auditor-General Act;

·                  Schedule 2 would amend the CAC Act;

·                  Schedule 3 would amend the FFLA Act 2010;

·                  Schedule 4 would amend the FMA Act ; and

·                  Schedule 5 would repeal the Appropriation (Development Bank) Act 1975 and the Car Dealership Financing Guarantee Appropriation Act 2009 .



III. OVERVIEW OF AMENDMENTS IN SCHEDULES

 

20.          The following overview of amendments proposed in Schedules 1 to 5 of the Bill is provided in general terms, rather than by item number.  

21.          Parts IV to VIII of this Explanatory Memorandum contain a description of the Schedules of the Bill, organised by item number.

 

Schedule 1: Amending the Auditor-General Act 1997

22.          Schedule 1 amends the Auditor-General Act 1997 (Auditor-General Act) to clarify that the Auditor-General may accept an appointment under the Corporations Act 2001 as the auditor of any company that the Commonwealth controls, within the expanded meaning of Commonwealth “control” that was added in 2008 to the Commonwealth Authorities and Companies Act 1997 (CAC Act).

 

Schedule 2: Amending the Commonwealth Authorities and Companies Act 1997 ....

23.          Schedule 2 amends the CAC Act to ensure that directors of Commonwealth authorities and wholly-owned Commonwealth companies (other than Government Business Enterprises) prepare Budget estimates as directed by the Finance Minister (rather than their responsible Minister), consistent with long-standing administrative practices.

24.          This Schedule also seeks to ensure that, from 1 July 2012, directors of Commonwealth authorities (including interjurisdictional authorities) and wholly-owned Commonwealth companies notify the responsible Minister of decisions (rather than just proposals) about certain significant events (such as creating a subsidiary).

 

Schedule 3: Amending the Financial Framework Legislation Amendment Act 2010 ....

25.          Schedule 3 amends 2 misdescribed provisions in the Financial Framework Legislation Amendment Act 2010 (FFLA Act 2010).  The 2 misdescribed provisions sought to update section 27A of the CAC Act by replacing references to “at common law and in equity” (and “at common law or in equity”) with the phrase “under the general law”. 

26.          These misdescriptions transposed the placement of the words “and” and “or”, which meant that the intended amendments made by these provisions did not initially take effect as intended.

 

Schedule 4: Amending the Financial Management and Accountability Act 1997 ....

27.          Schedule 4 amends the Financial Management and Accountability Act 1997 (FMA Act) to:

·                  clarify the ability to set a future commencement date for Special Account determination, by ensuring that it may commence on a day specified in the determination, where that day is later the passage of 5 sitting days allowed for a disallowance resolution in each House of Parliament ;

·                  focus the operation of drawing rights on payments (rather than debiting, or requesting the debiting of, an appropriation) and also remove the penalty from the role of drawing rights, given their administrative and practical role ;

·                  insert a new section 35 to enable the Commonwealth to set-off, in whole or in part, an amount owing to the Commonwealth by a person with an amount owing by the Commonwealth to the same person, and to enable the making of regulations with respect to helping implement this section over time;

·                  limit the scope of the ability of the Finance Minister to delegate certain powers to officials ; and

·                  update and align related financial management provisions.

 

Schedule 5: Repealing the Appropriation (Development Bank) Act 1975 and the Car Dealership Financing Guarantee Appropriation Act 2009

28.          Schedule 5 repeals the Appropriation (Development Bank) Act 1975 and the Car Dealership Financing Guarantee Appropriation Act 2009 given that the appropriations contained in these Acts, as well as both Acts in their entirety, are now redundant .

 



IV. NOTES ON SCHEDULE 1 - Amending the Auditor-General Act 1997

 

29.          This Schedule seeks to amend the Auditor-General Act 1997 (Auditor-General Act) to clarify that the Auditor-General may accept an appointment under the  Corporations Act 2001 as the auditor of any company that the Commonwealth controls, within the current meaning of the Commonwealth Authorities and Companies Act 1997 (CAC Act).  In short, this ensures that the Auditor-General Act is realigned with the wording used in the CAC Act.

30.          The following detailed explanation of the amendments proposed in Schedule 1 is provided by reference to the items in sequential order.

 

Auditor-General may audit any company that the Commonwealth controls

31.          On commencement on 1 January 1998, both the Auditor-General Act (paragraph 21(1)(c)) and the CAC Act (section 34) made reference to a “company in which the Commonwealth has a controlling interest.”  The Commonwealth Authorities and Companies Amendment Act 2008 (CAC Amendment Act) updated section 34 of the CAC Act to refer, instead, to a “Corporations Act company that the Commonwealth controls”.  The CAC Amendment Act also inserted a definition of the meaning of “controls”, as set out presently in subsection 34(1A). 

32.          The change to the CAC Act in 2008 from the expression “controlling interest” to the defined term “controls” provided a clearer, and slightly broader, definition of the companies captured by the CAC Act.  The intention was to avoid doubt by helping to ensure that a company, which the Commonwealth effectively controlled, could not evade the scope of the CAC Act, due to any potentially narrow interpretations of the phrase “controlling interest”.

33.          In short, the definition of “controls” in the updated section 34 of the CAC Act covers 3 potential tests for control, of which only one test previously was covered by the original phrase of “controlling interest” (regarding paragraph (b) in relation to being able cast more than half the votes at a general meeting of the company).

34.          When the CAC Amendment Act updated section 34 of the CAC Act, paragraph 21(1)(c) of the Auditor-General Act was not updated at the same time, even though it continued to refer to the original test in the CAC Act of a “company in which the Commonwealth has a controlling interest”.

35.          Item 1 amends the Auditor-General Act to bring paragraph 21(1)(c) into line with the broader test of “controls” that now appears in section 34 of the CAC Act.

36.          Specifically, Item 1 first repeals paragraph 21(1)(c) of the Auditor-General Act (which provides that the Auditor-General may accept appointment under the Corporations Act 2001 as the auditor of “any other company in which the Commonwealth has a controlling interest”). 

37.          The use of the word “other” distinguishes paragraph 21(1)(c) companies from Commonwealth companies (or subsidiaries of Commonwealth companies) referred to in paragraph 21(1)(b)).  While the relevant distinction may be relatively minor, that distinction has existed since the commencement of the Auditor-General Act, so it is prudent to ensure that the scope of the role of the Auditor-General is not diminished by the proposed amendment.

38.          Item 1 then inserts a new paragraph 21(1)(c) into the Auditor-General Act to provide that the Auditor-General may accept an appointment as the auditor of “any other company that the Commonwealth controls (as defined in section 34 of the Commonwealth Authorities and Companies Act 1997 ).”  This then ensures that the broader definition of “controls” has replaced more restricted definition of “controlling interest” that appears in paragraph 21(1)(c) currently.

Application

39.          Item 2 provides that the amendment made by item 1 applies to appointments accepted on or after the commencement of item 1 .  As noted under the heading “Clause 2: Commencement” above, item 1 would commence on a single day fixed by Proclamation within 6 months from the date of Royal Assent, or would commence 6 months after the date of Royal Assent.



 

V. NOTES ON SCHEDULE 2 - Amending the Commonwealth Authorities and Companies Act 1997

 

40.          This Schedule seeks to amend the Commonwealth Authorities and Companies Act 1997 (CAC Act) to ensure that directors of Commonwealth authorities and wholly-owned Commonwealth companies (other than Government Business Enterprises) prepare Budget estimates as directed by the Finance Minister.  This Schedule also seeks to ensure that, from 1 July 2012, directors of Commonwealth authorities (including interjurisdictional authorities) and wholly-owned Commonwealth companies notify the responsible Minister of decisions to undertake certain significant events.

41.          The following detailed explanation of the amendments proposed in Schedule 2 is provided by reference to the items in sequential order.

 

Budget estimates to be prepared as directed by the Finance Minister

42.          This amendment seeks to ensure that directors of Commonwealth authorities and wholly-owned Commonwealth companies (other than Government Business Enterprises) prepare Budget estimates, as directed by the Finance Minister (rather than their responsible Minister), consistent with long-standing administrative practice.

43.          Currently, section 14 of the CAC Act requires directors of Commonwealth authorities (other than Government Business Enterprises) to prepare Budget estimates as directed by the responsible Minister.  Items 1 to 3 amend section 14 of the CAC Act to omit references to the “responsible Minister”, wherever they appear, and to substitute these references with “Finance Minister”.  That is, items 1 to 3 ensure that the directors of Commonwealth authorities (other than Government Business Enterprises) prepare Budget estimates as directed by the Finance Minister.

44.          Similarly, section 39 of the CAC Act requires, currently, the directors of wholly-owned Commonwealth companies (other than Government Business Enterprises) to prepare Budget estimates as directed by the responsible Minister.  Items 4 to 6 amend section 39 of the CAC Act to omit all references to the “responsible Minister”, wherever they appears, and substitute these with references to the “Finance Minister”.  That is, items 4 to 6 ensure that the directors of wholly-owned Commonwealth companies (other than Government Business Enterprises) prepare Budget estimates as directed by the Finance Minister.

45.          These amendments seek to clarify sections 14 and 39 of the CAC Act as the Finance Minister has consistently been the Minister responsible for setting the requirements for collecting information from Budget estimates, from relevant Commonwealth authorities and wholly-owned Commonwealth companies, in relation to the preparation of the Commonwealth Budget.

 

Application: Budget estimates

46.          Item 7 provides that the amendments made by items 1 to 6 apply to Budget estimates for the financial year starting on or after 1 July 2012 (and any other period commencing after 1 July 2012) where a direction is given on or after the commencement of this Part. 

47.          As the Budget in relation to 2012-2013 will be introduced at the start of the Winter sittings in May 2012, items 1 to 7 , if enacted, would have immediate relevance and application to reinforcing existing practice in the current Budget process.

 

Notifying the responsible Minister of decisions regarding significant events

48.          Item 8 repeals and replaces section 15 of the CAC Act, which requires the directors of a Commonwealth authority to notify the responsible Minister when the Commonwealth authority proposes to do certain significant things.   Item 8 inserts a new section 15, which requires the directors of a Commonwealth authority to notify the responsible Minister when they decide that the authority is to do certain significant things.  This amendment provides that the directors of a Commonwealth authority are required to provide written particulars of the decision immediately to the responsible Minister.  This amendment clarifies when directors should notify the responsible Minister of significant events, by making it clear that notification is to occur immediately, once the board has decided that the authority is to do something significant.

49.          Item 9 makes an amendment that is consequential to item 8 by updating paragraph 33A(2)(b) of the CAC Act to omit “of a proposal mentioned in subsection 15(1)”, and substitute “under subsection 15(1)”.  This amendment is necessary to retain the alignment of subsection 33A(2)(b) with section 15, following the implementation of item 8 .

50.          Similar to the item 8 amendment, item 10 repeals and replaces section 40 of the CAC Act, which requires the directors of a wholly-owned Commonwealth company to notify the responsible Minister when the wholly-owned Commonwealth company  proposes to do certain significant things.  Item 10 inserts a new section 40, which requires the directors of a wholly-owned Commonwealth company to notify the responsible Minister when they decide that the company is to do certain significant things.  This amendment provides that the directors of a wholly-owned Commonwealth company are required to provide written particulars of the decision immediately to the responsible Minister.  This amendment clarifies when directors should notify the responsible Minister of significant events, by making it clear that notification is to occur immediately, once the board has decided that the company is to do something significant.

 

51.          A significant event, as set out in sections 15 and 40, includes:

·                  forming a company or participating in the formation of a company;

·                  participating in a significant partnership, trust, unincorporated joint venture or similar arrangement;

·                  acquiring or disposing of a significant shareholding in a company;

·                  acquiring or disposing of a significant business;

·                  commencing or ceasing a significant business activity; and

·                  making a significant change in the nature or extent of its interest in a significant partnership, trust, unincorporated joint venture or similar arrangement.

52.          The amendments in items 8 to 10 seek to bring about greater consistency in reporting requirements under the CAC Act.  In relation to section 15 of the CAC Act, the Explanatory Memorandum to the Commonwealth Authorities and Companies Bill 1996 (CAC Bill), which led to the CAC Act, stated that it was envisaged that the Finance Minister’s Orders would require notifications of significant events to be incorporated in the annual report of operations.

53.          The Finance Minister’s Orders, issued under section 48 of the CAC Act, are, currently, 2 instruments that detail the information to be included in the annual report of operations: the Commonwealth Authorities (Annual Reporting) Orders 2011 and the Commonwealth Companies (Annual Reporting) Orders 2011 (CAC Orders).  The CAC Orders require directors of Commonwealth authorities and wholly-owned Commonwealth companies to disclose the “decision-making process” when the board “decides” to enter into certain types of transactions.  These requirements regarding annual reporting were implemented following a recommendation in 2009 by the Senate Standing Committee on Finance and Public Administration, to improve transparency around the operations of CAC Act bodies.  Items 8 to 10 seek to strengthen this connection and increase the integrity of the reporting framework under the CAC Act, by creating consistent reporting obligations for directors of CAC Act bodies.  The words “decide” and “decision” are consistent with the wording used in the CAC Orders.

54.          This formal requirement in no way derogates from the ability of the board of a Commonwealth authority or wholly-owned Commonwealth company to inform the responsible Minister, at any earlier stage, of any potential or imminent matter that may lead to a decision to undertake a significant event.  Similarly, a CAC Act body may maintain a dialogue with its portfolio Department of State and any other relevant parts of the Commonwealth regarding any matters that may lead to a decision to undertake something significant.

 

Application: decisions regarding significant events

55.          Item 11 provides that the amendments made by items 8 to 10 , apply to decisions to undertake certain significant things, made on or after 1 July 2012.

 

Transitional arrangements: decisions regarding significant events

56.          Item 12 provides that any guidelines made under section 15 of the CAC Act and in force immediately prior to the commencement of Part 2 ( items 8 to 14 ) would continue to have effect as if they were issued under the new section 15 of the CAC Act (as made by item 8 ).

57.          Item 13 provides that any regulations made under section 33A of the CAC Act and in force immediately prior to the commencement of Part 2 ( items 8 to 14 ) would continue in force as if they were issued under the new section 33A of the CAC Act (as made by item 9 ).

58.          Item 14 provides that any guidelines made under section 40 of the CAC Act and in force immediately prior to the commencement of Part 2 ( items 8 to 14 ) would continue to have effect as if they were issued under the new section 40 of the CAC Act (as made by item 10 ).



 

VI. NOTES ON SCHEDULE 3 - Amending the Financial Framework Legislation Amendment Act 2010

 

59.          This Schedule seeks to amend 2 misdescribed provisions in the Financial Framework Legislation Amendment Act 2010 (FFLA Act 2010).  The 2 misdescribed provisions sought to update section 27A of the CAC Act by replacing references to “at common law and in equity” (and “at common law or in equity”) with the phrase “under the general law”.  These misdescriptions transposed the placement of the words “and” and “or”, which meant that these provisions did not take effect.

60.          The following detailed explanation of the amendments proposed in Schedule 3 is provided by reference to the items in sequential order.

 

Misdescribed provisions: “and” and “or”

61.          Item 1 corrects a minor error in item 7 of Schedule 5 of the FFLA Act 2010.  Item 7 sought to make a substantive change to subsection 27A(1) of the CAC Act, to omit “at common law or in equity” [emphasis added] and substitute that phrase with “under the general law”.  However, subsection 27A(1) refers to “at common law and in equity” [emphasis added].  As item 7 of the FFLA Act 2010 was misdescribed, subsection 27A(1) was not amended to remove the reference to “at common law and in equity” and replace that phrase with “under the general law”.  As noted at paragraph 150 of the Explanatory Memorandum to the FFLA Act 2010, the intention behind item 7 was to replace the reference to common law and equity with the phrase “under the general law”, which was defined in the CAC Act through item 1 of Schedule 5 of the FFLA Act 2010.  

62.          Accordingly, item 1 amends item 7 of Schedule 5 of the FFLA Act 2010 to omit “or” and substitute that word with “and”.  This change would enable the FFLA Act 2010 to amend subsection 27A(1) of the CAC Act to remove the reference to “at common law and in equity” and replace that phrase with “under the general law”.

63.            Item 2 corrects a minor error in item 8 of Schedule 5 of the FFLA Act 2010, which is similar to the minor error outlined above.  Item 8 sought to make a substantive changes to the note in subsection 27A(1) of the Commonwealth Authorities and Companies Act 1997 (CAC Act), to omit “at common law and in equity” [emphasis added] and substitute that phrase with “under the general law”.  However, the note to subsection 27A(1) refers to “at common law or in equity” [emphasis added].  As item 8 of the FFLA Act 2010 was misdescribed, the note to subsection 27A(1) was not amended to remove the reference to “at common law or in equity” and replace that phrase with “under the general law”.  As noted at paragraph 150 of the Explanatory Memorandum to the FFLA Act 2010, the intention behind item 8 was to replace the reference to common law and equity with the phrase “under the general law”.  

64.          Item 2 amends item 8 of Schedule 5 of the FFLA Act 2010 to omit “and” and substitute that word with “or”.  This change would enable the FFLA Act 2010 to amend the note to subsection 27A(1) of the CAC Act to remove the reference to “at common law or in equity” and replace that phrase with “under the general law”.

65.          In short, therefore, the proposed amendments to section 27A and the note to section 27A had transposed the words “and” and “or”, respectively.  This misdescription is rectified by the amendments in Schedule 3.

66.          The commencement of the correction applies retrospectively to the commencement date of the FFLA Act 2010, for the reasons set out under the heading “Clause 2: Commencement”, above.



 

VII. NOTES ON SCHEDULE 4 - Amending the Financial Management and Accountability Act 1997

 

67.          This Schedule seeks to amend the Financial Management and Accountability Act 1997 (FMA Act) to:

·                  clarify the commencement date for Special Account determinations;

·                  focus the operation of drawing rights on payments;

·                  remove the penalty relating to drawing rights ;

·                  insert a new section 35 to enable the Commonwealth to set off, in whole or in part, an amount owing to the Commonwealth by a person with an amount owing by the Commonwealth to the same person;

·                  clarify the Finance Minister’s delegation powers; and

·                  make minor amendments to update headings in the FMA Act.

68.          The following detailed explanation of the amendments proposed in Schedule 4 is provided in the 6 themes set out in the paragraph above (that is, the amendments will not be provided in sequential order, as set out in the notes on other Schedules elsewhere in this Explanatory Memorandum).

 

Commencement of Special Account determinations

69.          Item 3 amends subsection 22(4) of the FMA Act to enable the Finance Minister to clarify the day on which a Special Account determination made under section 20 of the FMA Act can commence.  Currently:

·                  the Finance Minister may establish a Special Account by making a legislative instrument under s 20 of the FMA Act (Special Account determination);

·                  subsection 22(2) of the FMA Act requires the Finance Minister to table the Special Account determination in each House of the Parliament;

·                  subsection 22(3) provides either House with 5 sitting days to move a motion disallowing the determination; and

·                  subsection 22(4) provides if no such resolution is passed by either House, the Special Account determination takes effect on the day immediately after the last day upon which such a resolution could have been passed.

70.          Item 3 amends subsection 22(4) to remove any doubt over whether a Special Account determination may operate from a date later than the last possible date of disallowance.  That is, the amendment to subsection 22(4) provides that a Special Account determination may take effect on a date specified in the determination that is later than the 5 sitting days after a motion of disallowance could be moved.  The reason for this clarification is that Special Accounts are often created so that they may be used by new Government agencies once established.  Accordingly, it is useful to have a Special Account determination start on the same day that the new Government Agency commences. 

71.          Regulation 10 and Schedule 4 of the Legislative Instruments Regulations 2004 note that the disallowance and commencement arrangements in section 22 of the FMA Act differ from the general disallowance arrangements set out in section 57 of the Legislative Instruments Act 2003 .

72.          Item 14 clarifies that the amendment made by item   3 applies to determinations to establish Special Accounts made on or after the commencement of that item. Clause 2 provides that, if passed, the amendment to subsection 22(4) would commence the day after the Financial Framework Legislation Amendment Bill (No. 1) 2012 (FFLA Bill 2012) receives Royal Assent.

 

Drawing rights: focus on payments

73.          The Financial Management and Accountability Act 1997 (FMA Act) introduced the phrase “drawing rights” in sections 26 and 27 of that Act.  The Explanatory Memorandum to the Financial Management and Accountability Bill 1996 (FMA Bill) stated that “the system of drawing rights proposed to be established under these clauses is intended to give operational substance to section 83 of the Constitution.”

74.          This was consistent with the view long held by the Commonwealth that sections 81 and 83 of the Australian Constitution conferred on the Commonwealth a substantive power to spend money from the Consolidated Revenue Fund (CRF) and the Treasury, and that sections 81 and 83 of the Constitution enabled such spending through the appropriations process.

75.          The Financial Management Legislation Amendment Act 1999 (FMLA Act) amended sections 26 and 27 of the FMA Act to refocus drawing rights again in relation to the change from accounting through funds to reflecting the concept of a single self-executing CRF.  In summary, this change reflected a statutory clarification in 1999 from the initial structure set out in the FMA Act for the first 18 months of its operation (whereby agencies had to manage amounts across a statutory “Consolidated Revenue Fund”, which differed from the CRF in the Constitution, as well as amounts in what were described as component of the Reserved Money Fund (RMF) and also the Commercial Activities Fund (CAF)). 

76.          The change from 1 July 1999 reflected a clearer approach, which is still applied today, of relying only on a self-executing concept of the CRF, as established by the Constitution.  This approach also used the concept of a Special Account (being an appropriation ledger of amounts from within the CRF) to replace the former “components” of the RMF or the CAF (which in turn had replaced the former concept of a trust account, within the Trust Fund, as established in the Audit Act 1901 ).

77.          Following this, in the case of Pape v Commissioner of Taxation (Tax Bonus Case) (2009) 238 CLR 1, the High Court of Australia found that sections 81 and 83 of the Australian Constitution do not confer on the Commonwealth a power to spend money.  The ability for the Commonwealth to spend money is found elsewhere in the Constitution, in particular the executive power of the Commonwealth in section 61 of the Constitution.

78.          Analysing drawing rights in light of the Tax Bonus Case, it is appropriate to refocus drawing rights onto the process of making payments, as proposed through item 1 and items 4 to 8 , and to provide the Finance Minister with a power to control that process, including, if necessary, the power to control the timing of discretionary Government expenditure.

79.          Item 4 amends paragraphs 26(b) and 26(c) to maintain that the concept of a drawing right for debiting an appropriation, or requesting the debit of an appropriation, only in relation to the 4 appropriations that operate in tandem with the concept of a “general drawing right limit”, as set annually through the Appropriation Act (No. 2) (and updated, within a financial year, where necessary, through the Appropriation Act (No. 4) ).

80.          Accordingly, the FFLA Bill 2012 seeks to reinforce the existing concept of a “general drawing right limit” that appears in design of the Special Accounts in the COAG Reform Fund Act 2008 and the 3 Special Accounts in the Nation-building Funds Act 2008 : the Building Australia Fund, Education Investment Fund and Health and Hospitals Fund.

81.          Item 1 captures these 4 Special Accounts within a new definition, “designated Special Account appropriation”, for the purposes of sections 26 and 27 of the FMA Act.  That is, item 1 would add a definition into section 5 of the FMA Act that a “designated Special Account appropriation” is an appropriation under section 21 of the FMA Act that relates to the following Special Accounts:

·                  The COAG Reform Fund established by the COAG Reform Fund Act 2008 ; and

·                  Special Accounts established by the Nation-building Funds Act 2008 .

82.          Item 2 removes the note to subsection 12(2).  This note referred to a drawing right issued under section 27 allowing an official or a Minister to debit an amount against an appropriation. 

83.          The amendments to sections 26 and 27 made by items   4 and 7 would mean that drawing rights are only issued in relation to debiting (or requesting the debiting) of an appropriation for a designated Special Account appropriation, so the note to subsection 12(2) no longer has general relevance.

84.          Item 7 makes similar amendments to paragraphs 27(1)(b) and 27(1)(c) to the amendments made by item 4 to paragraphs 26(1)(b) and 26(1)(c).  That is, item 7 inserts the use of the term “designated Special Account appropriation”, which item 1 defines in section 5 of the FMA Act.

85.          Item 8 replaces subsection 27(5) with an updated subsection that explains that a drawing right has no effect where it purports to authorise a payment of public money for which there is no available appropriation. 

86.          This also focuses the role of the drawing right on the concept of making a payment, rather than the internal procedural matter of debiting an appropriation.  The need for an appropriation would still apply for notional payments, through the continued operation of section 6 (which treats a notional payment between agencies, where both are within the Commonwealth, as equivalent to a real payment by an Agency to a recipient outside of the Commonwealth).

87.          Importantly, the changes proposed by these items would not affect the obligation on agencies to maintain proper accounts and records, under section 48 of the FMA Act, or the obligation to keeping track of amounts debited from appropriations (as also reflected in the Finance Minister’s Orders).

 

Drawing rights: removal of penalty

88.          Items 5 and 6 remove the penalty attached to section 26 of the FMA Act.  The penalty introduced in the FMA Act on 1 January 1998, and also as amended on 1 July 1999, has never been used for a prosecution.  When the penalty was initially designed, it related to whole-of-Government banking practices that have changed significantly, in particular through the introduction of “Agency banking” which was phased into use across the Australian Government from 1 July 1999.

89.          If an official has misused public money, then other substantive offences and penalties exist in the FMA Act (for example, regarding the misuse of the Commonwealth credit card), the Crimes Act 1914 and the Criminal Code Act 1995 (for example, regarding defrauding the Commonwealth or misuse of Commonwealth computers, etc.).

90.          Similarly, sanctions exist under the Public Service Act 1999 for Australian Public Service (APS) non-compliance with section 26.  The APS Code of Conduct (set out in section 13 of the Public Service Act 1999 ) provides that an APS employee must act with “care and diligence” and must “use Commonwealth resources in a proper manner”.  There are similar disciplinary arrangements for non-APS employees, such as parliamentary staff under the Parliamentary Service Act 1999 , or the significant disciplinary arrangements applicable to members of the Australian Defence Force or the Australian Federal Police.

91.          Accordingly, removing the penalty is consistent with the principle in the policy of the Attorney-General’s Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers .

92.          Item 5 would repeal the penalty from section 26.  Item 6 removes the note from section 26 to reflect the amendment in item 5 .

 

Commonwealth to set off amounts owed with amounts payable

93.          Item 10 inserts a new section 35 into the FMA Act to empower the Finance Minister, on behalf of the Commonwealth, to exercise a discretion to “set off” amounts owed to the Commonwealth with amounts payable to the Commonwealth. 

94.          Proposed subsection 35(1) provides that if an amount (or debt) is owed to the Commonwealth by a person (including a company or other entity), and another amount is owed by the Commonwealth to that same person, the Finance Minister may neutralise the amounts payable to the extent that set off is relevant. 

95.          Proposed subsection 35(2) provides that certain payments are exempt from being used for a set off action.  That is, amounts cannot be set off against payments by the Commonwealth that would be inalienable or absolutely inalienable (being wording that appears in legislation for entitlements to payments, such as section 1061EK of the Social Security Act 1991 , or section 66 of the Paid Parental Leave Act 2010 , which make an advance social security payment and a paid parental leave instalment “absolutely inalienable”).  The set off provision also does not apply to a payment, or right to receive a payment, that cannot, due to a Commonwealth Act, be assigned by the recipient to another person (such as section 126B of the First Home Saver Accounts Act 2008 , which states that payments from a First Home Save Account cannot be assigned).

96.          Proposed subsection 35(3) defines the terms “amount owing by the Commonwealth” and “amount owing to the Commonwealth” that are used in proposed subsection 35(1).  To avoid doubt, these terms are defined to include any amounts that are owed but are not yet due for payment.

97.          In the context of a current Budget deficit with a clear policy of returning to surplus, set off may provide a more cost effective mechanism to preserve public finances.  In short, less would need to be paid to a recipient than would have been the case if the Commonwealth needed to make its payment in full, without setting off the amount owing to the Commonwealth.

98.          The rationale behind the proposed section 35 is to provide the Finance Minister, on behalf of the Commonwealth, with the ability to recover debts in a cost neutral and more effective manner than exists currently at a whole-of-Government level.  The main current options involve, in the first instance, the obligation on Chief Executives to pursue a debt.  In certain circumstances a debt may be written off under section 47 of the FMA Act.  Where write off is not viable or possible, then the waiver mechanism may be invoked under section 34 of the FMA Act, which would mean that the debt would not be paid to the Commonwealth.  The set off provision is not to be confused with the ability in section 34 of the FMA Act to waive a debt on condition that a person agrees to pay an amount to the Commonwealth in specified circumstances, or otherwise allowing the payment by instalments.

99.          In addition to the existing legislative mechanisms, the proposed set off provision would provide a further avenue to handle debts, instead of having recourse to common law and the rules of equity.  Indeed, set off is not a new statutory concept at the Commonwealth level.  There are numerous set off provisions across the Commonwealth statute book (such as section 137 of the Clean Energy Act 2011 ).  It is proposed that section 35 would operate at a whole-of-Government level, allowing for more streamlined policy development with a centralised mechanism, and involving advice to the Finance Minister from her Department of State.

100.     The set off mechanism has a further potential use to benefit recipients of payments made by the Commonwealth that may have, in some way, been affected by non-compliance with statutory or other legal requirements.  In these situations, there may be a further and later mechanism for the Commonwealth to pay the recipient (such as a specific Act designed for that effect) and the new amount could potentially be used as a set off against any requirement that the recipient repay the initial amount (to the extent that the relevant amount is not inalienable).

101.     Item 13 amends the power to make regulations in section 65 of the FMA Act by adding a new subparagraph 65(2)(a)(iaa), which relates to the new section 35 of the FMA Act that is proposed through item 10 of the Financial Framework Legislation Amendment Bill (No. 1) 2012 (FFLA Bill 2012).  This new subparagraph allows for regulations to set requirements, if necessary, regarding reports from specified persons that might assist the Finance Minister to consider any set off arrangements above a particular amount.

 

Clarification of the Finance Minister’s delegation powers

102.     Item 12 repeals subsection 62(1) of the FMA Act and inserts a new subsection 62(1) that specifies that the Finance Minister cannot delegate any of the following powers or functions:

·                  the power to issue Special Instructions under section 16 of the FMA Act; or

·                  the power to make a determination under section 20 of the FMA Act; or

·                  a function under subsection 39A(1) of the FMA Act; or

·                  the power to make Orders under section 63 of the FMA Act.

103.     Currently, subsection 62(1) enables the Finance Minister to delegate any of her powers or functions under the FMA Act, except the power to make Orders or to delegate a function under subsection 39A(1).  New subsection 62(1) would also prevent the Finance Minister from delegating powers to issue Special Instructions under section 16 or make determinations under section 20.

104.     To date, the Finance Minister has not delegated the powers to issue Special Instructions under section 16 or make determinations under section 20.  This amendment seeks to preserve the intention of sections 16 and 20, which is that only the Finance Minister may issue Special Instructions and make Special Account determinations.  This amendment simply ensures that these powers are not delegated henceforth.

105.     Item 15 is a saving provision to ensure that all existing delegations would not be affected by item 12 and would continue until altered or revoked by the Finance Minister.

 

Minor amendments to update headings

106.     The note to item 2 of Schedule 8 of the Financial Framework Legislation Amendment Act 2010 (FFLA Act 2010) updated the heading to section 31 of the FMA Act from “ Relevant Agency receipts ” to “Retaining prescribed receipts” .  Section 31 enables agencies to receive and retain certain types of receipts that are prescribed in the FMA Regulations.  Agencies can add the prescribed receipts to their most recent departmental appropriation.  The heading to section 31was amended to clarify the purpose of that section, however, the heading to the corresponding provision in subsection 32A(4) was not updated at the same time.  Subsection 32A(4) clarifies when prescribed receipts are taken to be received and added to an Agency’s departmental appropriation. 

107.     Item 9 makes a minor amendment to make the heading to subsection 32A(4) consistent with the heading to section 31.  Item 9 repeals the heading “Relevant Agency receipts” and replaces it with “Retaining prescribed receipts”.

108.     Item 47 of Schedule 1 of the Financial Framework Legislation Amendment Act 2008 (FFLA Act 2008) made a change to the definition of “proper use” in subsection 44(3) to expand it from meaning “efficient, effective and ethical use” to “efficient, effective and ethical use that is not inconsistent with the policies of the Commonwealth”.  To include use “that is not inconsistent with the policies of the Commonwealth” in the heading to section 44, t he note to item 47 of Schedule 1 of the FFLA Act 2008 added “etc.” after the word “use”.  That is, the FFLA Act 2008 changed the heading to section 44 from “Promoting efficient, effective and ethical use of Commonwealth resources” to “Promoting efficient, effective and ethical use etc. of Commonwealth resources”.

109.     Later, item 5A of Schedule 8 of the Financial Framework Legislation Amendment Act 2010 (FFLA Act 2010) changed the definition of “proper use” to insert the word “economical” after the word “effective”.  In effect, the definition of “proper use” in section 44 became “proper use means efficient, effective, economical and ethical use that is not inconsistent with the policies of the Commonwealth”.   To avoid a particularly cumbersome heading to section 44 by including the word “economical” in the heading, the note to item 5A of Schedule 8 of the FFLA Act 2010 amended the heading to section 44 of the FMA Act from “Promoting efficient, effective and ethical use etc. of Commonwealth resources” to “Promoting proper use etc. of Commonwealth resources”. 

110.     However, as the inclusion of “etc.” in the heading was intended to encompass use “that is not inconsistent with the policies of the Commonwealth”, when the heading was revised through the FFLA Act 2010 to refer to “proper use”, retaining part of the definition of “proper use” by including “etc.” was made redundant.  Item 11 makes a minor change to the heading of section 44 to remove the redundant “etc.” from the heading.  Item 11 repeals the heading “Promoting proper use etc. of Commonwealth resources” and replaces this heading with “Promoting proper use of Commonwealth resources”.



VIII. NOTES ON SCHEDULE 5 - Repealing redundant Acts

 

111.     This Schedule seeks to repeal 2 redundant special appropriations in the Appropriation (Development Bank) Act 1975 and the Car Dealership Financing Guarantee Appropriation Act 2009 by repealing those Acts.

112.     The following detailed explanation of the amendments proposed in Schedule 5 is provided by reference to the items in sequential order.

 

Repealing the Appropriation (Development Bank) Act 1975

113.     Item 1 repeals the Appropriation (Development Bank) Act 1975 , which comprises the long title, section 1 that provides the short title of the Act, section 2 that provides the commencement of the Act, and then subsection 3(1) that contains the substance of the Appropriation (Development Bank) Act 1975 .

114.     Subsection 3(1) of the Appropriation (Development Bank) Act 1975 provides that the Treasurer may issue out of the Consolidated Revenue Fund (CRF) an amount, or amounts in total, not exceeding $20,000,000 for the purposes of section 85 of the Commonwealth Banks Act 1959 .  There is no further content in section 3.  The Financial Framework Legislation Amendment Act 2010 repealed subsection 3(2), which provided that the CRF could be appropriated to the extent necessary for the purpose of subsection 3(1).

115.     Section 85 of the Commonwealth Banks Act 1959 enabled the Treasurer to lend to the Commonwealth Development Bank of Australia amounts appropriated from the Parliament, as agreed to between the Treasurer and the Board of Directors of the Commonwealth Bank of Australia.  Section 85 of the Commonwealth Banks Act 1959 was repealed through the Commonwealth Bank Sale Act 1995 , which rendered subsection 3(1) of the Appropriation (Development Bank) Act 1975 obsolete.  Accordingly, the Appropriation (Development Bank) Act 1975 is now redundant and can be repealed in its entirety.

 

Repealing the Car Dealership Financing Guarantee Appropriation Act 2009

116.     Item 2 repeals the Car Dealership Financing Guarantee Appropriation Act 2009 .  This Act was established to support car dealerships at the beginning of the global financial crisis to help ensure their viability. 

117.     The Government provided a Commonwealth guarantee on securities provided to these dealerships to help ensure their continued financial viability.  There are no longer any active guarantees and the guarantees are no longer available to dealerships.  The  Car Dealership Financing Guarantee Appropriation Act 2009 is now obsolete and can be repealed in its entirety.