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Asset Recycling Fund Bill 2014

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2014

 

 

 

 

 

THE P A R L I A M ENT O F THE C O MM ON W E A L TH O F A U S T R A L I A

 

 

 

 

 

 

H OU S E OF R E P R E S E N T A T I VES

 

 

 

 

 

 

A SSE T R E C YC L I N G F U N D B I L L 2014

 

 

 

 

 

EX P L A N AT O R Y M E M O R A NDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

( Ci rc u l a t e d b y t h e a u t h o r i t y o f t he M i n i s t e r f o r F i n a n c e , S e n a t or t he H on M a t h i a s C o r m a nn)



 



T a bl e o f a b b r e vi a tio n s a n d c o m m o n t e r m s

 

 

 

 

 

A bb re v i a t i on or

c o m m on te r m

F u ll te r m or d e s cr ip t i on

A g e n c y

F u t u r e F und M a n a g e m e n t A g e n c y

A R F

m ea ns t he A ss e t R e c y cl i n g F und

A R F S p ec i a l A cc ount

m ea ns t he A ss e t R e c y cl i n g F und S p ec i a l A cc ount e s t a b li sh ed und e r s ec ti on 12

B A F

m ea ns t he B u i l d i n g A us t r a li a F und e s t a b li sh e d u nd e r t he

N a ti on - bu il d i ng Funds A c t 2008

C OAG R ef o r m F und

m ea ns t he F und e s t a b li s h e d und e r t he C O A G R e f o rm Fund

A c t 2008 f or t he pu r po s e of m a k i ng g ra n t s of f i n a n c i a l a ss i s t a n c e to t he S t a t e s a n d T err ito r i e s

D is a b ili t y C ar e A us t r a lia F und

Act

m ea ns t he D i sab ilit y C are Aus t ra li a Fund A c t 2013

E IF

m ea ns t he Ed u ca t i on I n v e st m e nt F und e s t a b li sh e d und e r t he

N a ti on - bu il d i ng Funds A c t 2008

F MA A c t

F i nan c i al M anag eme nt a nd A cc oun t ab ilit y A c t 1 9 97

F in a n c e Min i st e r

The Min i st e r w ho a dminis t er s t he F i nan ci al M an a g eme nt and

A cc oun t ab ilit y A c t 1997

F u t u r e F und Ac t

m ea ns t he Fu t ure Fund A c t 2006

F u t u r e F und B o ar d

F u t u r e F und B o ar d of G u ar d i a ns

F u t u r e F und S p ec i a l A c c ount

m ea ns t he F u t u r e F und S p ec i a l Acc ount e s t a b li sh e d b y s ec ti on 12 of t he Fu t ure Fund A c t 2006

I n fra st r u c tu r e Min i st e r

m ea ns t he Min i st e r w ho a dminis t er s t he I n f ras t ru c t ure

Aus t ra li a A c t 2008

I T A A

I n c o m e T ax As s e ss me nt A c t 1997

L e g i sl a tive I ns t r u m e n t s Ac t

L e g i s l a ti v e I ns t ru me n t s A c t 2003

Na tion - bu il d i ng F u n ds A c t

m ea ns t he N a ti on - bu il d i n g Funds A c t 2008

R e spons i b l e Min i st er s

m ea ns t he f ollo w i n g :

 

(a )       t he T rea s u rer

( b)       t he F in a n c e Min i st e r



 



 

A ss e t Re c y c l i n g F un d Bill 20 1 4

 

 

C o n t ext

 

The G ov er n m e nt i s d e li v er i ng a subs t a n ti a l i n fra s t r u c t u r e p ac k a g e i n t he 2 0 14 - 15

B u d g e t t o suppo r t ec ono mi c g r o w t h a nd im p r o v e t he l o n g t er m p r odu c ti v e ca p ac i t y of t he ec ono m y .

 

The I n f r a s t r u c t ur e Gr o w t h P ac k a g e i n c l u d e s a n A s s e t R e c y c li n g I n iti a tive th a t w ill p r ov i de f i n a n c i a l i n ce n ti v e s t o S t a te a nd T e r r ito r y g o v er n m e n t s to s e ll e x is ti ng a ss e t s a nd re i nv e st t he s a l e p r o c ee ds i n t o a dd iti on a l p r odu c ti ve ec ono m i c i n f ra s t r u c t u r e a nd p r ov i de a dd i t i on a l n e w i n v e st m e nt t o e x p e d it e n a t i on a l l y s i g n i f i ca nt in fra s t r u c tu re .

 

The A ss e t R e c y c l i n g F u n d (A R F ) w ill be s e t up t o fac il it a te t he G o v er n m e n t s i nv e st m e nt und e r t he I n f r a s t r u c t u r e G r o w t h P ac k a g e .

 

 

S u m m a r y

 

The B ill e st a blish e s t he A ss e t R e c y c li n g F und on1 J u l y 2014, w h i c h c ons i s t s o f :

 

•      t he A ss e t R e c y c li n g F u n d S p ec i a l Acc oun t ; a nd

•      t he i nv e st m e n t s of t he A s s e t R e c y c li n g F und.

 

The A R F i s a d e d i c at e d i nv e st m e nt v e h i c l e w i t h a f o c us on p r ov i d i n g f und i n g , f i n a n c i a l a ss i s t a n c e a nd i n ce n ti v e s t o t he St a t e s a n d T err it o r i e s t o crea t e n e w i n fra s t r u c t u r e t o boost ec ono mi c g r o w t h.

 

C r e dits

 

The ini ti a l s i z e of t he A ss e t R e c y c li n g F und a t c o mm e n c eme n t is $5.9 b ill i o n, c o m p r i s i ng am oun t s o f :

 

•      $2.4 b illi on fr om t he B u i l d i ng A us t ra lia F und ( B A F) ; a nd

•      $3.5 b illi on fr om t he Ed u ca ti on I nv e s t m e nt F und ( E I F) .

 

F u r t h e r cre d it s m a y b e m a de t o t he A ss e t R e c y cli n g F und i n t he f u t u re .

 

De bits

 

The F in a n c e Min i st e r ca n d i rec t in wr iting t h a t sp ec i f i e d a m oun t s b e d e b it e d fr om t he

A ss e t R e c y c li n g F und a n d cre d it e d t o:

 

•     t he C OA G R ef o r m F und f or m a k i n g g ra n t s o f f in a n c i a l a ssist a n c e to t he S t a t e s a nd T err it o r i e s f or e x p e n d it u r e on i n fra s t r u c t u r e u nd e r t he Na t i o n a l P a r t ne r s h i p A g r ee m e nt o n A ss e t R e c y c li n g a nd t h e Na ti on a l P ar t n er sh i p A g ree m e nt on L a nd T r a n spo r t I n fra s t r u c t u r e P r o j e c t s ;

 

•     t he C OA G R ef o r m F und f or m a k i n g o t h e r i n f r a s t r u c t u r e n a ti on a l p ar t n er sh i p g r a n t s; a nd

 

•      t he A ss e t R e c y c li n g F u n d I n fra s t r u c t u r e S p ec i a l A c c ount f or m a k i ng i n fra s t r u c t u r e p a y m e n t s.



I n ve s t me nt of t he Fund

 

The F u t u r e F und B o ar d w il l be re spons i b l e f o r d e c i d i ng how t o i nv e st t h e A ss e t R e c y cli n g F und i n line w ith t he ob j ec tive of e nh a n c i ng t he C o m m on w ea lth s a b ili t y t o m a ke g ra n t s of f i n a n c i a l a ss i s t a n c e t o t he St a t e s a nd T err it o r i e s a nd to m a ke i n fra s t r u c t u r e p a y m e n t s.

 

The re spons i b l e M i n i s t e r s ca n g i ve wr i t t e n d i r ec t i ons t o t he F u t u r e F und B o ar d r e g ar d i n g t h e p erf o r m a n c e of i nv e st m e n t s of t he A ss e t R e c y cli n g F und, i n t he f o r m of a n I nv e s tm e nt M a nd a t e .

 

Earn i ngs and ex p e ns e s

 

E ar n i n g s on i nv e st m e n t s of t he A ss e t R e c y cli n g F und w ill be re i nv e s t e d i n t he F und.

 

E x p e ns e s a s so c i a t e d w it h i nv e st m e nt a nd a d mi n i s t ra ti on of t he A ss e t R e c y c li ng F und b y t h e F u t u r e F und B o a r d w ill be m e t fr om t he F u nd.

 

R e por ti ng

 

The F i n a n c e M i n i s t e r i s r e spons i b l e f or r e po r ti n g a nd g i v i n g i n f o r m a ti on on t he A ss e t

R e c y cli n g F und a nd m a y s ee k re p o r t s a nd i n f o r m a t i on fr om t he F u t u r e F u n d B o ar d.



F i n a n cial I mp a c t S t a t e m e nt

 

 

The i n i t i a l cre d i t of f unds fr om t he B A F a nd t he E I F i n t o t h e A ss e t R e c y cli n g F und w il l not h a ve a d i rec t i m p ac t on und er l y i n g ca sh a n d f i s ca l b a l a n ce s, a s t h e se ar e a l rea d y p ar t o f , a nd re m a i n w ithin, t he C onso li d a te d R e v e nue F und ( C R F) .

 

The a ss e t s of t he F und a r e w it h i n t he C R F a nd a r e t h eref o r e i n c l ud e d i n t he

G ov er n m e n t s b a l a n c e s h ee t .

 

The i n t ere st ear n i n g s of t he F und h a v e a pos i ti ve i m p ac t on t he und er l y i n g ca sh a nd f i s ca l b a l a n ce s.   M a n a g em e nt fee s of t he F u t u r e F und B o ar d h a ve a n e g a t i v e im p act on t he und er l y i n g ca sh a n d f i s ca l b a l a n ce s.

 

The p a y m e n t s fr om t he F und w ill be m e t f r om t he ca pi t a l a nd n e t ear n i n g s ( i n t ere st ear n i n g s l e ss m a n a g e m e n t fee s) of t h e F und w it h p a y m e n t s t o o cc ur f r om w h e n t he F und i s e s t a b li sh e d. P a y m e n t s fr om t he F und w il l h a ve a n e g a ti ve im p ac t o n t he und er l y i n g ca sh a nd f i s c a l b a l a n ce s.

 

 

 

S t a t e m e n t o f C o m p a t i b il i t y w i t h H um a n R i gh ts

 

 

The p r ov i s i ons i n t he B il l do no t :

 

•      e ng a g e a n y o f t h e a pp l i c a b l e r i g h t s or f r ee do m s ou t li n e d i n t he H u m an R i g h t s ( Par li am e n t ary S c ru ti n y ) A c t 2011, su c h a s e n c o m p a ss e d i n t he I n t er n a ti o n a l C ov e n a nt on Ci v i l a nd P o li ti ca l R i g h t s; or

 

•     li mi t a n y hu m a n r i g h t s, n or p r opose a n y o ffe n ce s or p e n al ti e s.

 

Th i s B il l i s t h eref o r e c o m p a ti b l e w it h t he hu m a n r i g h t s a nd f r ee do m s rec o g n i s e d or d ec l a r e d i n t he i n t er n a t i o n a l i ns t r u m e n t s lis t e d in s ubs ec tion 3 ( 1) of t he H u m an R i gh t s ( Par li am e n t ary S c ru ti n y ) A c t 2011.



 



A S S E T R E C Y C LI N G F U ND B I L L 2014

 

 

N OT E S O N C L A U SE S

 

 

P a rt 1 P r e li m i n a r y

 

S ect i on 1 - Sh o r t Ti t l e

 

S ect i on 1 p r ov i d e s f or t he Ac t t o be c it e d a s t he A ss e t R ecyc li ng Fund A c t 2014. N o t e :   The s ec ti ons in t h e B ill w ill b ec o m e s ec t i ons of t he Ac t on R o y a l A ss e n t . S ect i on 2 - C o m m e n c e m e n t

S ect i on 2 p r ov i d e s th a t th e B ill c om m e n ce s on 1 J u l y 2014.

 

S ect i on 3 - S i m pli f i e d o u t l i n e

 

S ect i on 3 i s a n i n f o r m a t i on p r ov i s i on w h i c h i s i n t e nd e d t o p r ov i de a h i g h l e v e l i n t r odu c ti on t o t he p r ov i s i ons i n t he B ill, to a id rea d a b ili t y . The ou t li ne i s n ot i n t e nd e d t o be c o m p re h e ns i ve a nd shou l d not be r e li e d on i np l ac e of t h e s ubs t a n ti ve p r ov i s i ons i n t he B ill.

 

S ect i on 4 - D e f i ni t io n s

 

S ect i on 4 p r ov i d e s d ef i n iti ons of t he t er m s a nd e x p re ss i ons us e d i n t he B il l .

 

S ect i on 5 - Cr o w n t o b e b o un d

 

S ect i on 5 p r ov i d e s t h a t t he Ac t b i nds t he C r o w n i n eac h of it s ca p a c i ti e s b ut do e s not m a ke t h e C r o w n li a b l e t o be p r os ec u t e d f or a n o f f e n ce .

 

S ect i on 6 - E x te n s i on t o e x ter n al T err i t o r i es

 

S ect i on 6 p r ov i d e s t h a t t he Ac t e x t e nds t o e v e r y e x t er n a l T e r r it o r y .

 

S ect i on 7 - E x tr a - t err i t o r i al a ppli c a t i on

 

S ect i on 7 p r ov i d e s f or t he g e o g ra ph i ca l r eac h o f t h i s Ac t t o be w i de - a pp l y i n g bo t h w it h i n a nd ou t s i de of A us t ra li a - due t o t he poss i b i li t y th a t t h e A ss e t R e c y c l i ng F und m a y b e i nv e s t e d i n ov er s ea s m ar k e t s.

 

S ect i on 8 - A l ter n a t i ve c o n s t i t u t i o n al b as e s

 

S ect i on 8 d e t a il s t he c o n s t it u ti on a l b a s e s upon w h i c h t he m a k i n g o f i n fra s t r u c t u r e p a y m e n t s re l i e s.



S ect i on 9 - Ob ject

 

S ect i on 9 s e t s out t he ob j ec t s of t he B i l l , n a m e l y t o e nh a n c e t h e C o mm on w ea lth s a b ili t y to t ra ns f e r a m oun t s t o:

 

•     t he C OA G R ef o r m F und f or m a k i n g g ra n t s o f f in a n c i a l a ssist a n c e to t he S t a t e s a nd T err it o r i e s, f or e x p e n d it u r e on i n fra s t r u c t u r e u nd e r t he Na ti on a l P ar tn er sh i p A g r ee m e nt o n A ss e t R e c y c li n g a nd t h e Na tion a l P ar tn er sh i p A g ree m e nt on L a nd T r a n spo r t I n fra s t r u c t u r e P r o je c t s

 

•     t he C OA G R ef o r m F und f or m a k i n g o t h e r i n f r a s t r u c t u r e n a ti on a l p ar t n er sh i p g r a n t s; a nd

 

•     t he A ss e t R e c y c li n g F u n d I n fra s t r u c t u r e S p ec i a l A c c ount f or m a k i ng i n fra s t r u c t u r e p a y m e n t s.

 

P a rt 2 - A ss et R e c y c li n g F und

 

D i vis io n 1 - I n t r o d u ct i o n

 

S ect i on 10 - S i m pli f i e d o u t l i n e of t h i s P a r t

 

S ect i on 10 i s a n ov er v i e w of P ar t 2 t o a ssist w ith rea d a b ili t y .

 

D i vis io n 2 - E s t a b lis h m ent o f the A ss et R ec y c li n g F und e t c.

 

S ect i on 11 - E s t a bli s h m e n t of t h e A ss e t Rec y c l i n g F und

 

S ect i on 11 e s t a b li sh e s a f i n a n c i a l a ss e t f und - t he A ss e t R e c y c li n g F und - c ons i st i ng of a m oun t s cre d it e d t o a n A ss e t R e c y c li n g F und S p ec i a l Acc ount a nd i nv e s tm e n t s of t he A ss e t R e c y c li n g F u n d.

 

S ect i on 12 - E s t a b l i s h m e n t of t h e A ss e t Rec y c l i n g F un d Sp ec i al Acc o u nt

 

S ect i on 12 e s t a b li sh e s t he A ss e t R e c y c li n g F und S p ec i a l Acc ount- a S p e c i a l Acc ount f or t he pu r pos e s o f s ec ti on 21 of t he F MA A c t .

 

A S p ec i a l Acc ount i s a n a pp r op r i a ti on m ec h a n i sm t h a t s e t s a s i d e a n a m ou n t w it h i n t he C onso li d a t e d R e v e nue F u nd t o be e x p e nd e d f o r sp ec i f i c p u r pos e s. A n y a m oun t s cre d it e d t o t he A ss e t R e c y cli n g F und S p eci a l A c c ount ar e qu ara n ti n e d f r o m t he re st of t he C onso li d a t e d R e v e n u e F und a nd ca n on l y b e d e b it e d fr om t he A ss e t Re c y c l i n g F und f or t he p u r pos e s s e t out in t he B i l l .

 

The no t e i mm e d iat e l y f o l lo w i ng this s ec ti on i s i n c l ud e d t o a ss i st t he rea d e r b y c l ar i f y i n g th a t a m oun t s c ou l d be cre d i t e d t o t h e A ss e t R e c y c l i n g F und S p ec i a l Acc ount b y a n A p p r op r iati on Ac t .



D i vis io n 3 - C red i t s o f a m o un t s to t h e A s s e t R ec y c l i n g F und

 

S ect i on 13 - I ni t i al cred i t s t o Sp ec i al Acc o un t

 

The ini ti a l s i z e of t he A ss e t R e c y c li n g F und i s$5 . 9 billion, c o m p r isin g :

•      $2.4 b illi on fr om t he B u i l d i ng A us t ra l i a F und ( B A F) ; a nd

•      $3.5 b illi on fr om t he Ed u ca ti on I nv e s t m e nt F und ( E I F) .

 

S ect i on 13 e s t a b li sh e s a m ec h a n i sm f or a m oun t s t o be cre d it e d t o t h e A s s e t R e c y c l i n g F und S p ec i a l A cc ount a nd d e b it e d fr om t he B u il d i ng A us t r a li a F und S p e c i a l Acc ount a nd Edu ca ti on I n v e st m e n t F und S p ec i a l Acc ount r e sp ec ti v e l y .

 

The m ec h a n i sm is i n t e n d e d to g i ve f l e x i b i l i t y f or t he ini ti a l cre d it s t o be ma de up of ca sh a m oun t s i n t he B A F S p ec i a l Acc ount a nd E I F S p ec i a l A cc oun t , a s w e l l a s t he c u rre nt i nv e st m e n t s of t he B A F a nd E I F h e l d i n t h e n a m e of t h e F u t u r e F u n d B o ar d. I t i s not i n t e nd e d t h a t t h e F u t u r e F und B o ar d b e r e qu i re d t o rea li se i nv e s t m e n t s t o m a ke up t h e ini ti a l cre d i t s. The no t e s a t t he e nd o f s ub s ect i o n s 13 ( 1) a n d ( 2) a ssist

rea d er s b y refe rr i n g t h e m t o s ect i on 34 in re l a tion t o t he t ra ns fe r o f i nv e st m e n t s to t he

A ss e t R e c y c li n g F und.

 

S ect i on 14 - Sub s e qu en t cre d i t s of a m o un t s

 

S ect i on 14 p r ov i d e s t he m ec h a n i sm f or subs e q u e nt cre d it s t o be m a de t o t he A ss e t R e c y cli n g F und i n f u t u r e , e it h e r b y w a y o f a p ar ti c u l a r o n e- o f f a m ount or b y a s er i es of s e t i ns t a lm e n t s.

 

A m oun t s ar e cre d it e d b y a wr i tt e n d e t er mi n a t i on o f t he re spons i b l e M i n i st er s or th e i r d e le g a t e s. R e f e r t o s ect i o n s 56 a n d 57 f or d e l e g a t i on po wer s of t he F i n a n c e M i n i s t e r a nd t he T rea su rer.

 

Sub s ect i on 14 ( 3) p r ov i d e s th a t a d e t er min a tion to cre d i t a sp ec i f i e d a m ou n t to t he A ss e t R e c y c li n g F und S p ec i a l Acc ount i s a l e g i sl a t i ve i ns t r u m e nt f or t he p u r pos e s of t he L e g i sl a tive I ns t r u me n ts Ac t a nd, a s su c h, w il l b e t a b l e d i n t he P ar l i a m e nt a nd publ i sh e d on t he Fe d era l R e g i st e r o f L e g i sl a tive I n st r u m e n t s.

 

H o we v er , t he d e t er mi n a ti on, a s a mi n i s t er i a l d i rec t i on, i s not d i s a llo wa b l e . S u c h d e t er mi n a ti ons w ou l d usu a l l y b e r e g ar d e d a s a d m i n i s t ra ti v e , ra t h e r t h a n l e g i s l a ti v e , i n c h arac t er . I t i s not a p p r o p r i a t e t h a t t h e y b e d i s a ll o wa b l e a s t h e y ar e a on e- o ff i ns t r u m e nt m a de w h e n f u nds ar e a bout t o be cre di t e d. The s a m e a pp r o ac h wa s t a k en i n e qu i v a l e nt p r ov i s i ons i n t he F u t u r e F und A c t .



D i v i s i on 4 - De b i t s of a m o un t s f r o m t h e A s s e t Rec y c l in g F un d etc . Subd iv i s i o n A - P u r p o s es

S ect i on 15 - P u r p os e s o f t h e A ss e t Rec y c l in g F un d Sp ec i al Acc o un t - m a i n pu r p os e s

 

S ect i on 15 s e t s out t he m a i n pu r pos e s of t he A s s e t R e c y cli n g F und S p ec i a l Acc oun t . Th e se pu r pos e s ar e c ons i st e nt w ith t he ob j ec ts of t he B ill, n a m e l y :

 

 

•     t he C OA G R ef o r m F und f or m a k i n g g ra n t s o f f in a n c i a l a ssist a n c e to t he S t a t e s a nd T err it o r i e s f or e x p e n d it u r e on i n fra s t r u c t u r e u nd e r t he Na ti on al

P ar tn er sh i p A g r ee m e nt o n A ss e t R e c y c li n g a nd t h e Na tion a l P ar tn er sh i p

A g ree m e nt on L a nd T r a n spo r t I n fra s t r u c t u r e P r o je c t s;

 

•     t he C OA G R ef o r m F und f or m a k i n g o t h e r i n f r a s t r u c t u r e n a ti on a l p ar t n er sh i p g r a n t s; a nd

 

•   t he A ss e t R e c y c li n g F u n d I n fra s t r u c t u r e S p ec i a l Acc ount f or m a k i ng i n fra s t r u c t u r e p a y m e n t s.

 

S ect i on 16 - P u r p os e s o f t h e A ss e t Rec y c l in g F un d Sp ec i al Acc o un t - pu r p os e s re l a te d e x c lu s i v e l y t o t h e in v e s t m e n t s etc . of t h e A ss e t Rec y c l in g F und

 

S ect i o n s 16 re l a t e s to t he p a y m e nt of v ar i ous e x p e ns e s t h a t m a y b e i n c u r re d b y t h e F u t u r e F und B o ar d w h i c h re l a t e e x c l us i v e l y t o t h e i nv e st m e n t s of t he A s s e t R e c y c li n g F und, but w h i c h do not re l a t e t o t h e m a i n pu r pos e s of t he F und.   I t s e t s out t he ra n g e of t h e se a dd iti on a l pu r p o s e s f or w h i c h t he A ss e t R e c y cli n g F und m a y b e d e b i t e d.

 

S ect i on 17 - P u r p os e s o f t h e A ss e t Rec y c l in g F un d Sp e c i al Acc o un t - pu r p os e s n ot re l a te d e x c lu s i v e l y t o t h e A ss e t R ec y c l in g F un d

 

S ect i on 17 re l a t e s to t he p a y m e nt of v ar i ous e x p e ns e s t h a t m a y b e i n c u r re d b y t h e F u t u r e F und B o ar d i n r e s p ec t of it s b r o a d e r f un c t i ons und e r this B ill, a s we ll a s t he F u t u r e F und Ac t , t h e Na t i on - bu il d i n g F unds A c t a nd t he D is a b ili t y C ar e A u st ra lia F und Ac t I t s e t s out t he ra n g e of a dd iti on a l pu r p o s e s f or w h i c h t he A ss e t R e c y c li n g F und m a y b e d e b it e d i n r e sp ec t of c os t s t h a t ar e c o mm on acr oss eac h of t h e f unds f or w h i c h t he F u t u r e F und B o ar d h a s r e spons i b ili t y .

 

Subd iv i s i o n B - G r a n t s c h a nn e ll in g t h r o u g h C O A G Re f o r m F und

 

S ect i on 18 - C h a nn e l l i n g of S t a t e /T err i t o r y g r a n t s p ay m e n t s t h r o u gh t h e C O A G Re f o r m F und

 

S ect i on 18 p r ov i d e s th a t t he F in a n c e Min i st e r m a y d i rec t th a t a s p ec i f i e d a m ount w ill be d e b it e d fr om t he A s s e t R e c y c li n g F und S p ec i a l Acc ount a nd cre d it e d t o t he C OA G R ef o r m F und f o r t he pu r pos e s of m a k i n g a g r a nt o f f i n a n c i a l a ss i s t a n c e t o a St a t e or T err it o r y i n re l a ti on t o e xp e nd it u r e i n c u r r e d un d e r t he Na ti on a l P ar t n er sh i p

A g ree m e nt on A ss e t R e c y cli n g , t he N a ti on a l P ar t n er sh i p on L a nd T r a nsp o r t a nd

I n fra s t r u c t u r e P r o j ec t s, or a sp ec i f i e d i n fra s t r u c t u r e n a ti on a l p ar t n er sh i p g r a n t .



The F in a n c e Min i st er’ s d i rec tion is a d m i n i s t r a t i ve , ra th e r th a n l e g i sl a tiv e , in c h arac t e r a nd i s t h eref o r e not a le g i s l a ti ve i ns t r u m e nt f or t he pu r pos e s of t he L e g i s l a t i ve I n s t r u m e n t s Ac t . S ub s ect i on 18 ( 4) h a s b ee n i n c l u d e d t o a ss i st rea d er s.

 

Sub s ect i on 18 ( 5) re qu i r e s t he F i n a n c e M i n i s te r t o g i v e a c o p y of t h e d i rec t i on t o t he

M i n i s t e r w ho rec o mm e n d e d t he g ra n t .

 

S ect i on 19 - Rec o mm e n d a t i o n s a b o u t g r a n t s p a y m e n t s

 

S ect i on 19 re qu i re s t he M i n i s t e r re spons i b l e un d e r t he r e l e v a nt n a ti on a l p ar t n er sh i p a g ree m e nt t o rec o mm e nd t he sp ec i f ic a ti on of t he g ra n t . The r ec o mm e nd a ti o n b y t h e re l e v a nt M i n i s t e r to t he F in a n c e Min i st e r w il l ou tli ne t he ov e r al l p a y m e n t s f or eac h p r o j ec t a pp r o v e d b y t he G ov er n m e nt t o be f un d e d fr om t he F und.  Th i s rec o mm e nd a ti on r ef l ec t s ac c o u n t a b il i t y b y t he re l e v a nt M i n i s t e r r e g ar d i n g t he p a y m e n t s f or t he p r o j ec t g i v e n t h a t t he re l e v a nt Mi n i s t e r ( not t he F in a n c e Min i st er ) i s re spons i b l e f or t he f und i ng a g ree m e n t s re l a ti n g t o t he p r o j ec t s.

 

I t is i n t e nd e d th a t t he M i n i s t er’ s rec om m e n d a tion w ill be on e- o f f f or t he s p ec i f i e d p r o j ec t s (w h i c h c ou l d i n cl ude m o r e t h a n one p r o j e c t a t eac h t im e ) p r i or t o p a y m e n t s c o mm e n c i n g f o r a p r o j e c t , a nd t h a t on g o i n g m il e s t one p a y m e n t s w ill be m a n a g e d a t t he d e p ar tm e n t a l l e v e l . T he rec o mm e nd a ti on b y t h e re l e v a nt M i n i s t e r t o t he F i n a n ce Min i st e r i s t h eref o r e not r e qu i re d f o r i nd i v i du a l m il e s t one p a y m e n t s.

 

S ect i on 20 - De b it f r om t h e C O A G Re f o r m F u n d

 

S ect i on 20 ref l ec t s t he G ov er n m e n t s i n t e n ti on t h a t t he C O A G R ef o r m F un d op era t es a s a v e h i c l e t h r o u g h w h i c h p a y m e n t s fr om t he A s s e t R e c y c li n g F und w ill be d i s t r i bu t e d to S t a t e s a nd T err ito r i e s.

 

C ons i s t e nt w ith t h i s, t he T rea su r e r i s re qu i re d t o e nsu r e t h a t , a s soon a s p r ac ti ca b l e af t e r a n a m ount i s cre d it e d t o t he C OA G R ef o r m F und, t h a t t he a m ount i s d e b it e d f or t hepu r pos e s of m a k i n g t he g ra n t .

 

I f f or a n y rea son t he p a y m e nt ca nnot be m a d e , s ub s ect i on 20 ( 3) p r ov i d e s t he m ec h a n i sm f or its re t u r n to t he A ss e t R e c y c li n g F u nd S p ec i a l Acc oun t . The i n t e n t i on is th a t t he m on e y is re t u r n e d t o be i nv e s t e d b y t he F u t u r e F und B o ar d un ti l su c h t im e a s t he p a y m e nt ca n b e m a d e.

 

S ect i on 21 - G r a n t t o a S t a t e or Te rr i t o r y

 

S ect i on 21 i s c on cer n e d w it h g ra n t s o f f i n a n c i a l a ss i s t a n c e t o a St a t e or T e r r it o r y t h r ou g h t he C O A G R ef o r m F und i n re l a ti on t o e x p e nd it u r e i n c u r r e d un d e r t he Na tion a l P ar tn e r sh i p A g r ee m e nt on A ss e t R e c y c l i ng a nd t h e Na tion a l P ar t n er sh i p

A g ree m e nt on L a nd T r a n spo r t I n fra s t r u c t u r e P r o j e c t s a nd t he m a k i n g of I n f ra s t r u c t u r e n a ti on a l p ar t n er sh i p g r a n t s.

 

The no t e i m med i a t e l y f o l l o w i ng s ub s ect i on 21 ( 1) a ss i s t s t he rea d e r b y r efe r r i ng t o s ub s ect i on 20 ( 2 ) , w h i c h d ea l s w it h p a y m e n t s c h a n n e ll e d t h r o u g h t h e C O A G R ef o r m F und.



The s ec ti on p r ov i d e s t h a t t he t e r m s a nd c ond iti ons upon w h i c h a g r a nt i s ma de t o t he S t a t e s a nd T err it o r i e s ar e t o be s e t out i n a wr i tt e n a g ree m e nt b e t w ee n t h e C o mm on wea lt h a nd t he St a t e or T err it o r y , a nd t h a t su c h a n a g ree m e nt m a y be e n t e r e d i n t o b y a M i n i s t e r on b e h a l f of t he C o mm on wea l t h.

 

Subd iv i s i o n C - P a y m en t s c h a nn e ll i n g t h r o u gh t h e A ss e t R ec y c l in g F u n d

I n f r as tr u ct u r e Sp ec i al Acc o un t

 

S ect i on 22 - E s t a b l i s h m e n t of t h e A ss e t Rec y c l i n g F un d I n f r as tr u ct u r e Sp ec i al

Acc o un t

 

S ect i on 22 e s t a b li sh e s t he A ss e t R e c y c li n g F und I n fra s t r u c t u r e S p ec i a l A c c ount - a

S p ec i a l Acc ount f o r t he p u r pos e s of s ec ti on 21 of t he F MA A c t .

 

A S p ec i a l Acc ount i s a n a pp r op r i a ti on m ec h a n i sm t h a t s e t s a s i d e a n a m ou n t w it h i n t he C onso li d a t e d R e v e n u e F und t obe e x p e nd e d f or sp ec i f i c p u r pos e s. A n y a m oun t s cre d it e d t o t he A ss e t R e c y cli n g F und I n f ra s t r u c t u r e S p ec i a l A cc ount a r e q u ara n ti n ed fr om t he re st of t he C on s o li d a t e d R e v e nue F und a nd ca n on l y b e d e b it e d f o r t he pu r pose s e t out i n s ect i on 23 .

 

The no t e immed i at e l y f o l lo w i ng this s ec tion is in c l ud e d to a ssist t he rea d e r b y c l ar i f y i n g t h a t a m oun t s c ou l d be cre d it e d t o t he A s s e t R e c y cli n g F und I n f r a s t r u c t u r e S p ec i a l Acc ount b y a n A pp r op r i a ti on Ac t .

 

S ect i on 23 - P u r p ose of t h e A ss e t R ec y c l in g F u n d I n f r a s tr u ct u r e Sp ec i a l Acc o un t

 

S ect i on 23 p r ov i d e s t h a t t he pu r pose o f t he A ss e t R e c y cli n g F und I n fra s t r u c t u r e S p ec i a l Acc ount i s t o e n a b l e t he m a k i n g o f i n fra s t r u c t u r e p a y m e n t s, w h i c h m a y e it h er be b y w a y of a g ra nt o f f i n a n c i a l a ss i s t a n c e o r o t h e rw i s e.

 

The d ef i n iti on of i n fra s t r u c t u r e p a y m e n t s w ill a ll o w p a y m e n t s to be m a d e t o bod i e s o t h e r t h a n St a t e s, i n c l ud i ng T err it o r i e s a nd l o ca l g ov er n m e n t s.

 

S ect i on 24 - C h a nn e l l i n g of p ay m e n t s t h r o u gh t h e A ss e t Rec y c l in g F u n d

I n f r as tr u ct u r e Sp ec i al Acc o un t

 

S ect i on 24 p r ov i d e s t h a t t he F in a n c e Min i st e r m a y d i rec t th a t a s p ec i f i e d a m ount w ill bed e b it e d fr om t he A s s e t R e c y c li n g F und S p ec i a l Acc ount a nd cre d it e d t o t he A ss e t R e c y cli n g F und I n fra s t r u c t u r e S p ec i a l A cc ount f o r t he pu r pos e s of m a k i ng i n fra s t r u c t u r e p a y m e n t s.

 

The F i n a n c e M i n i st er’ s d i rec tion is a d m i ni s t r a t i v e , ra th e r th a n l e g i sl a tiv e , in c h arac t e r a nd i s t h eref o r e not a le g i s l a ti ve i ns t r u m e nt f or t he pu r pos e s of t he L e g i s l a t i ve I n s t r u m e n t s Ac t. D i rec t i o ns of t h i s t y pe a r e a d mi n i s t ra ti ve i n c h a r ac t e r b e c a use t h e y ar e m ere l y t h e a pp l i ca ti o n of a le g a l po w e r i n a p a r ti c u l a r ca s e ; t h e y do notd e t er mi ne or a lt e r t he c o n t e nt of t he l a w its e l f . Sub s ect i on 2 4 ( 4) h a s b ee n i n c l ud e d t o a ss i st rea d er s.

 

Sub s ect i on 24 ( 5) re qu i r e s t he F in a n c e M i n i s t e r t o g i v e a c o p y of t h e d i rec t i on t o t he

I n fra s t r u c t u r e M i n i s t er .



S ect i on 25 - Rec o mm e n d a t i o n s a b o u t p a y m en t s

 

S ect i on 25 re qu i re s t he I n fra s t r u c t u r e Min i st e r t o rec om m e nd t he s p ec i f i ca tion of t he p a y m e n t . T h e r ec o mm e n d a ti on b y t h e I n fra s t r u c t u r e Min i st e r to t he F in a n c e Min i st e r w il l ou tli ne t he ov era l l p a y m e n t s f or eac h p r o j ec t a pp r ov e d b y t he G ov er n m e nt t o be f und e d fr om t he F und.  T h i s rec om m e nd a t i on ref l e c ts acc o u n t a b i li t y b y t h e I n fra s t r u c t u r e Min i st e r r e g ar d i n g t h e p a y me n t s f o r t he p r o j ec t g iv e n th a t t he I n fra s t r u c t u r e Minis t e r ( n ot t he F i n a n c e M i n i s t er ) i s re spons i b l e f or t he f un d i ng a g ree m e n t s re la t i n g t o t h e p r o j ec t s.

 

I t is i n t e nd e d th a t t he I n f r a s t r u c t u r e Min i st er’ s r e c o m m e n d a t i o n w ill be on e - o f f f o r t he sp ec i f i e d p r o j ec t s (w h i c h c ou l d i n c l ude m o r e t h a n one p r o j ec t a t eac h t im e ) p r i or t o p a y m e n t s c o mm e n c i n g f o r a p r o j ec t , a nd t h a t o n g o i ng m il e s t one p a y m e n t s w il l be m a n a g e d a t t h e d e p ar t me n t a l l e v e l . The rec o m m e nd a ti on b y t h e I n fr a s t r u c t u r e M i n i s t e r to t he F in a n c e Min i st e r i s t h eref o r e not re qu i re d f or i nd i v i du a l m il e s t one p a y m e n t s.

 

S ect i on 26 - P a y m e n t s - d e b it f r om t h e A ss e t R e c y c l in g F un d I n f r as tr u c t u re

Sp ec i al Acc o un t

 

S ect i on 26 ref l ec t s t he G ov er n m e n t s i n t e nt i on th a t t he A ss e t R e c y c l i n g F u nd I n fra s t r u c t u r e S p ec i a l A c c ount op era t e s a s a v e h i c l e t h r ou g h w h i c h p a y m e n t s fr om t he A ss e t R e c y c li n g F und w i ll be d i s t r i bu t e d to rec i p i e n t s i n re sp ec t of i n f ra s t r u c t u r e p r o j ec t s.

 

C ons i s t e nt w ith t h i s, t he I n fra st r u c tu r e M inis t e r i s r e qu i re d t o e ns u r e t h a t , a s soon a s p rac ti ca b l e af te r a n a m o u nt i s cre d it e d t o t he A ss e t R e c y cli n g F und I n fra s t r u c t u r e S p ec i a l Acc oun t , t h a t t he a m ount i s d e b it e d f or t he pu r pos e s of m a k i n g t he p a y m e n t .

 

I f f or a n y rea son t he p a y m e nt ca nnot be m a d e , s ub s ect i on 26 ( 3) p r ov i d e s t he m ec h a n i sm f or its re t u r n to t he A ss e t R e c y c li n g F u nd S p ec i a l Acc oun t . The i n t e n t i on i s th a t t he m on e y is re t u r n e d t o be i nv e s t e d b y t he F u t u r e F und B o ar d un ti l su c h t im e a s t he p a y m e nt ca n b e m a d e.

 

S ect i on 27 - G r a n t t o a p er son o t h e r t h an a S t a te

 

S ect i on 27 i s c on cer n e d w it h a n i n fra s t r u c t u r e p a y m e n t , th a t is b y w a y o f a g ra nt o f f i n a n c i a l a ss i s t a n ce , t o a p er son o t h e r t h a n a St a t e .

 

The s ec ti on p r ov i d e s t h a t t he t er m s a nd c ond iti ons upon w h i c h t he g ra nt i s m a de a r e t o be s e t out i n a wr i tt e n a g ree m e nt b e t wee n t h e C o mm on wea lt h a nd t he r e c i p i e n t , a nd t h a t su c h a n a g r ee m e nt m a y b e e n t e r e d i n t o b y a M i n i s t e r on b e h al f o f t he C om m on wea lth.

 

S ect i on 28 - P a y m e n t t o a p er son o t h e r t h an a St a te

 

S ect i on 28 i s c on cer n e d w it h a n i n fra s t r u c t u r e p a y m e n t , th a t is o t h e r t h a n b y w a y o f a g r a nt of f i n a n c i a l a ss i s t a n ce , t o a p er son o t h e r t h a n a St a t e .



The s ec ti on p r ov i d e s t h a t t he t er m s a nd c ond iti ons upon w h i c h t he p a y m e nt i s m a de ar e t o be s e t out i n a wr i tt e n a g ree m e nt b e t w ee n t h e C o mm on wea lt h a nd t he rec i p i e n t , a nd t h a t su c h a n a g r ee m e nt m a y b e e n t e r e d i n t o b y a M i n i s t e r on b e h al f o f t he C om m on wea lth.

 

Subd iv i s i o n D - Ob l i ga t i on t o e n s u r e s u f f i c i e n t m o n e y

 

S ect i on 29 - F u t u r e F un d B oa r d m u st e n s u r e t h at t h er e i s s u f f i c i e n t m o n e y i n t he

A ss e t Rec y c l in g F un d S p ec i al Acc o un t t o c o v e r a u t h o r i s e d d e b i t s etc .

 

S ect i on 29 re qu i re s t he F u t u r e F und B o ar d t o t a ke a l l rea son a b l e s t e ps t o e n su r e t h a t t he a m ount of m on e y s t a nd i ng t o t he c r e d i t o f t h e A ss e t R e c y c li n g F und S p ec i al Acc ount i s su ff i c i e nt t o c ov e r a m oun t s t o be d e b i t e d fr om t he A ss e t R e c y c l i ng F und S p ec i a l Acc oun t .

 

The no t e immed i at e l y b e l ow this s ec tion a ss i s t s re a d er s t o und er s t a nd t he ob l i g a ti ons of t he F u t u r e F und B o ar d i n re sp ec t of t h i s re qu i r e m e n t .

 

D i vis io n 5 - I nt e r- f u nd tr a n s f e r s

 

Th i s s ec tion a l l o w s f or t ra ns fer s fr om t he A ss e t R e c y c li n g F und S p ec i a l A c c ount t o t he F u t u r e F und S p ec i a l Acc oun t .

 

S ect i on 30 - T r a n s f er s fr o m t h e A ss e t R ec y c l i n g F u n d t o t h e F u t ur e F u nd

 

S ect i o n s 30 a llo w s f or a m oun t s t o be t ra ns fer r e d b e t wee n t he A ss e t R e c y c l i ng F und a nd t he F u t u r e F und. T h epu r pose of t h i s i s t o e n a b l e re im bu r s e m e nt t o t he F u t u r e F und f or e x p e ns e s i n c u r r e d i n re l a ti on t o t he A ss e t R e c y c li n g F und t h a t h a v e b ee n d e b it e d fr om t he F u t u r e F und S p ec i a l A cc oun t .

 

The s ec ti on a llo w s t he F i n a n c e M i n i s t e r t o d i rec t o ne F und i s t o be d e b it e d a nd t he o t h e r F und cre d it e d b y a sp ec i f i e d a m oun t .

 

The F in a n c e Min i st er’ s d i rec tion is a d m i n i s t r a t i ve , ra th e r th a n l e g i sl a tiv e , in c h arac t e r a nd i s t h eref o r e not a le g i s l a ti ve i ns t r u m e nt f or t he pu r pos e s of t he L e g i s l a t i ve I n s t r u m e n t s Ac t. D i rec t i o ns of this t y p e a r e ad m i n i s t ra tiv e i n c h a r ac t e r b e c a use t h e y ar e m ere l y t he a ppl i ca tion of a l e g a l po w e r in a p a r ti c u l a r ca s e ; th e y do not d e t er mine or a lt e r t he c o n t e nt of t he l a w its e l f . Sub s ect i on 3 0 ( 3) h a s b ee n i n c l ud e d t o a ss i st rea d er s.

 

P a rt 3 I n v e s t m ent o f the A ss et R ec y c l i n g F und

 

S ect i on 31 - S i m pli f i e d o u t l i n e of t h i s P a r t

 

S ect i on 31 i s a n i n f o r m a t i on p r ov i s i on w h i c h p r o v i d e s a n ov er v i e w of P ar t 3 t o a ssist w ith rea d a b i l i t y .



S ect i on 32 - Ob ject s of i n v e s t m e n t of t h e A ss e t Rec y c l in g F und

 

Sub s ect i on 32 ( 1) i s i n t e n d e d t o re i n f o r c e t h a t a m o un t s ar e i nv e s t e d b y t he F u t u r e F und B o ar d f o r t he m a i n ob j ec t of e nh a n c i n g t he C om m on wea lth s a b i l i t y to p r ov i de g r a n t s o f f i n a n c i a l a ss i s ta n c e t o t he St a t e s a nd T er r it o r i e s, a nd i n fra s t r u c t u r e p a y m e n t s. Th a t i s, t he ob j ec ti ve o f t he F u t u r e F u n d B o ar d i n i nv e st i n g t he A ss e t R e c y cli n g F und i s c ons i s t e nt w it h t he ob j ec ti v e a n d m a i n pu r pos e s of t he A ss e t R e c y c l i n g F u n d i t s e l f .

 

Sub s ect i on 32 ( 2) s e ts o u t th a t t he a n c i ll a r y o b j ec t s of t he i nv e st m e nt of t he A ss e t R e c y c l i n g F u n d a r e f o r e nh a n c i n g t h e a b i li t y o f t h e C o mm on wea lt h a nd t he F u t u r e F und B o ar d t o d i s c h a r g e c os t s, e x p e ns e s, ob li g a ti o ns a nd li a bili ti e s a nd m a ke p a y m e n t s f or t he a n c i ll a r y pu r po s e s a s s e t out i n s ect i o n s 16 a n d 17 .

 

S ect i on 33 - I n v e s t m e n t of t h e A ss e t Rec y c l in g F und

 

S ect i on 33 i s m od e ll e d o n t he i nv e st m e nt po wer s und e r s ec ti on 39 of t he F MA Ac t . H o we v er , s ub s ect i on 33 ( 1) e x p a nds t hose po wer s t o sp ec i f i ca l l y p r ov i d e f o r t he i nv e s tm e nt of t he A ss e t R e c y c l i n g F u n d i na b r o a d ra n g e of f i n a n c i a l a ss e t s, w h i ch c ou l d i n c l ude ca sh, i n t e r e s t - b ear i n g s ec u r i ti e s a nd o t h e r d e b t - like s ec u r i ti e s. S p ec i f i c c ond iti ons on t he ac qu i si t i on of d er i v a ti v e s a r e s e p ara t e l y c o v e r e d i n s ect i on 43.  Th i s a pp r o ac h t o i nv e st m e nt of t he A ss e t R e c y cli n g F u nd i s c ons i s t e nt w i t h si m i l a r arra n g e m e n t s f or t he F u t u r e F und.

 

I nv e st m e n t s o f t he A ss e t R e c y c l i n g F u n d w il l b e m a de i n t he n a m e of t h e F u t u r e F und B o ar d (ra t h e r t h a n t he C o mm on wea lt h) t o re i n f o r c e t he pos i ti on t h a t t h e F u t u r e F und B o ar d m a n a g e s t h e A ss e t R e c y cli n g F und a t ar m s l e n g t h f r om t he G ov er n m e n t . H o we v er , b e n ef i c i a l o w n er sh i p of t he A ss e t R e c y c ling F und re m a i ns w it h t he C om m on wea lth a t a ll ti m e s.

 

Sub s ect i on 33 ( 3) p r ov i d e s t h a t a m oun t s i nv e s t e d i n f i n a n c i a l a ss e ts ar e i nv e st m e n t s of t he A ss e t R e c y c li n g F und a nd, a s su c h, m a y b e rea li s e d, d i spos e d of o r r e d ee m e d b y t h e F u t u r e F und B o a r d.

 

S ect i on 34 - A ll o c a t i on of in v e s t m e n t s t o t h e A s s e t Rec y c l in g F un d

 

S ect i on 34 re l a t e s to t he i n iti a l cre d i t s to t he A ss e t R e c y c l i n g F u n d ( al so s e e

s ect i on 13 ) a nd a pp li e s i f t he a m ount t ra ns f erre d t o t he A ss e t R e c y c li n g F un d S p ec i al

Acc ount und e r s ect i on 1 3 is l e ss th a n t he f u l l i n it i a l cre d i t o f :

 

•     $2.4 b illi on fr om t he B A F ; a nd

•      $3.5 b illi on fr om t he E I F .

 

The s ec ti on s e t s out t he m ec h a n i sm f or a t ra ns f e r of e x i st i ng i nv e st m e n t s, r a t h e r t h a n m on e y i n t h e B A F S p ec i a l Acc ount a nd E I F S p ec i a l Acc oun t . I t i s i n t e n d e d t h a t t he F u t u r e F und B o ar d w ou l d w o r k out w h a t a m oun t s h a ve b ee n t ra ns f er r e d t o t he A ss e t R e c y cli n g F und S p ec i a l Acc ountund e r s ect i on 1 3 a nd t h e n d e t er mi ne s u f f i c i e nt i nv e st m e n t s t o m a ke up t he b a l a n c e of t he i n iti a l c re d it s fr om t he B A F a nd E I F , re sp ec ti v e l y .



Th e se i nv e st m e n t s w il l t h e n cea se t o be a s s e t s o f t h e B A F a nd E I F a nd w il l b ec o m e i nv e st m e n t s of t he A ss e t R e c y cli n g F und.

 

The pu r pose of t h e m ec h a n i sm i s t o p r ov i de f l e x i b i li t y t o t he F u t u r e F und B o ar d, so a s not t o re qu i r e t h a t i nv e s t m e n t s be rea li s e d f or t he pu r pos e s of t he i n iti a l c r e d it s of t he A ss e t R e c y c li n g F und.

 

The d e t er mi n a ti ons of t h e F u t u r e F und B o ar d a r e a dminis t ra t i v e , ra th e r th a n l e g i s l a ti v e , in c h arac t e r a nd ar e th er e f o r e not l e g i s l a tive i n s t r u m e n t s f or t he pu r po s e s of t he L e g i sl a tive I ns t r u m e n t s A c t. D i rec t i ons of this t y p e a r e a dm i n i s t r a t i v e i n c h a rac t e r b eca use t h e y a r e m ere l y t he a pp li ca ti on of a l e g a l po w e r i n a p ar t i c u la r ca s e ; th e y do

not d e t er mine or a lt e r t he c on t e nt o f t he l a w its e l f . Sub s ect i o n s 3 4 ( 3)

a n d 34 ( 6) h a ve b ee n i n c l ud e d t o a ss i st rea d er s.

 

S ect i on 35- M a n ag e m en t of in v e s t m e n t s of t h e A ss e t Rec y c l in g F und

 

Sub s ect i o n s 35 ( 1) a n d ( 2) p r ov i de t h a t i n c o m e d er i v e d fr om a n i nv e st m e nt of t he A ss e t R e c y c li n g F und, i n c l ud i ng a re t u r n of ca p i t a l or a no t h e r f o r m of f i n a n c i a l d i s t r i but i on, m ust be cre d it e d t o t he A ss e t R e c y cl i n g F und S p ec i a l A cc oun t . Th i s i s c ons i s t e nt w it h t he re qu i r e m e n t s und e r s ec ti ons 81 a nd 83 of t he C ons tit u t i on (w h i c h, i n effec t , p r ov i de t h a t p u b li c m o n e y f o r m s p ar t of t he C onso li d a t e d R e v e n u e F und a nd ca non l y be sp e nt i f a u t ho r i s e d b y a n a p p r op r i a ti o n m a de b y l aw) .   I n p rac t ic e , a n y m on e y t h a t h a s not b ee n i nv e s t e d m ust be h e l d i n a n o ff i c i a l b a nk a c c oun t . The re qu i re m e nt t o ho l d t he m on e y i n a n o ff i c i a l b a n k acc ount i s c ov ere d i n t he F MA A c t .

 

Sub s ect i o n s 35 ( 3) t o ( 5) re l a te to t he arra n g e m e n t s th a t w ill a p p l y in re l a t i o n to t he rea lis a tion of a s s e t s. W h i l e s ub s ect i o n s 35 ( 3) t o ( 4) ar e s e l f e x p l a n a t o r y , s ub s ect i on 35 ( 5) a ll o w s t he F u t u r e F und B o ar d t o a u t ho r i s e , p r i or t o a n i n v e st m e nt m a tu r in g , th a t t he p r o c e e ds of this i nv e st m e nt be a u tom a ti c al l y r e i nv e st e d w ith t he

s a m e e n ti t y . Th i s a vo i ds t he n ee d f o r t he p r o cee ds of rea li s a ti on of t he in v e s t m e nt t o be t rea t e d a s pub li c m on e y a nd cre d it e d t o t h e C o n so li d a t e d R e v e nue F und on l y t o be t h e n rea p p r op r i a t e d a nd r e i nv e s t e d. A n y r e i nv e s t m e nt i s a n i nv e st m e nt of t he A ss e t R e c y c l i n g F u n d.

 

Sub s ect i on 35 ( 6) p r ov i d e s t h a t s ec ti on 39 of t he F MA Ac t d o e s not a pp l y t o a n i nv e st m e nt of t he A ss e t R e c y c l i n g F u n d.  S ec ti on 3 9 of t he F MA A c t a u t h o r i s e s t he F i n a n c e M i n i s t e r t o i nv e s t pub li c m o n e y i n on l y a l im it e d ra n g e o f i nv e st m e n t s, su c h a s g o v er n m e nt bonds a nd b a nk d e pos it s. H o we v e r , s ect i on 33 ( 1) p r ov i d e s f or t he i nv e st m e nt of t he A ss e t R e c y c l i n g F u n d i na b r o a d e r ra n g e o f f i n a n c i a l a s s e t s, w h i ch c ou l d i n c l ude ca sh, i n t e r e s t - b ear i n g s ec u r i ti e s a nd o t h e r d e b t - like s ec u r i ti e s.

 

S ect i on 36 - A ss e t Rec y c l in g F un d I n v e s t m e n t M a nd a t e

 

I t i s a pp r op r i a t e t h a t t he G ov er n m e n t , a s o w n e r of t he A ss e t R e c y cli n g F u n d, h a sa m ec h a n i sm f or ar ti c u l a t i n g its ov e r a ll e x p e c t a t i ons f or how t he A ss e t R e c y c l i ng F und w il l be i nv e s t e d a nd m a n a g e d b y t h e F u t u r e F und B o ar d. S ect i on 36 e s t a b l i sh e s a fra m e w o r k t h a t e n a b l e s t he G ov er n m e nt t o g i v e s t ra te g i c g u i d a n c e t o t he F u t u r e F und B o ar d w h i l e p re s er v i n g t he B o ar d s r o l e i n m a n a g i ng t h e i nv e st m e nt o f t he A ss e t R e c y c l i n g F u n d a t ar m s l e n g t h f r om t he G ov er n m e n t . Th i s a pp r o ac h i s c o n s i s t e nt w ith th a t e x i st i ng i n re l a t i on t o t he F u t u r e F u n d.



Sub s ect i on 36 ( 1) p r ov i d e s t h a t t he re spons i b l e M i n i s t er s h a ve t h e po w e r t o g i v e t h e F u t u r e F und B o ar d w r i t t e n d i rec ti ons i n re l a ti on t o t he p erf o r m a n c e o f it s i nv e st m e nt f un c ti ons a nd t he e x erc i s e of it s po wer s. T h e re s p ons i b l e Min i st er s m ust i s sue a t l ea st onesu c h d i r ec ti on a nd t o p r ov i de c l ar i t y a nd cer t a i n t y t o t he F u t ur e F und B o ar d.

N o t e th a t t he A ss e t R ecy c l in g Fun d in ve s t m en t f u n c ti on i s d ef i n e d i n s ect i on 4 .

 

Sub s ect i on 36 ( 2) p r ov i d e s t h a t a n y d i r ec ti on i ss u e d und e r s ub s ect i on 29 ( 1) h a s e f fe ct sub j ec t to t he lim it a t i ons s e t out in s ect i on 37 - L i m it a tion on A ss e t R e c y c l i ng F und I nv e st m e nt M a nd a t e.

 

The fac t t h a t a d i r e c ti on h a s a l rea d y b ee n i ssu e d d o e s not p r oh i b i t t he re sp on sible Min i st er s fr o m i ssu i ng a d dition a l d i rec t i ons. A l l o f th e se d i rec t i ons to g e t h e r c o m p r i se t he I n v e st m e nt M a nd a t e ( s e e s ub s ect i o n s 36 ( 1) a n d 36 ( 4 ) ).

 

W hile t he re spons i b l e M i n i st er s ca n i ssue n e w d i r e c t i ons a t a n y t im e , t h e in t e nt i on i s th a t t he I n v e st m e nt M a nd a te w ill re f l ec t t he n a tu r e of t he G ov er n m e n t s p o li c y . A n y n e wd i rec ti ons w il l t h e r e f o r e on l y b e i ssu e d i n l i g h t of s i g n i f i ca nt po li c y c h a n g e s or m a t er i a l c h a n g e s i n t he i n v e st m e nt e nv i r on m e nt f ace d b y t h e A ss e t R e c y c l i ng F und.

 

Sub s ect i on 36 ( 3) p r ov i d e s t h a t i n s e t ti ng a n I n v e s tm e nt M a nd a t e , t he r e sp o ns i b l e Min i st er s m u s t h a ve r e g a r d to m a x i mi s i ng t he re t u r n on A ss e t R e c y c l i n g F u nd c ons i s t e nt w i t h i n t er n a t i o n a l b e st p rac t i c e f or inst i t u ti on a l i nv e st m e n t , a nd o f t he ob j ec ti v e s of t he i nv e s t m e nt of t he A ss e t R e c y cli n g F und, a nd a n y o t h e r m att er s t he M i n i s t er s c ons i d e r t o be r e l e v a n t .

 

Th i s re qu i re m e nt w il l g i v e t he F u t u r e F und B o ar d a nd t he P ar li a m e nt a ssu r a n c e t h a t t he re spons i b l e M i n i s t er s m ust c ons i d e r t he s c o p e o f t h e i r d i rec ti ons f r om a n i nv e st m e nt p er sp ec t i v e , w hile e nsu r i n g th a t th er e is f l e x i bi li t y to t a k e acc o unt of b r o a d e r po li c y i ssu e s a nd n a ti on a l i n t ere st c ons i d e r a ti ons.

 

Sub s ect i o n s 36 ( 5) a n d 3 6 ( 6) p r ov i de t h a t t h e I n v e st m e nt M a nd a t e m a y i n c l ud e , but i s not lim it e d t o, s t a t e m e n t s a bout po li c i e s t he F u t ur e F und B o ar d m ust pu r sue i n

re l a ti on t o r i sk a nd re t u r n a nd t he a ll o ca ti on o f t he A ss e t R e c y c li n g F und t o p ar ti c u l a r a ss e t c l a ss e s. Th i s m a y i n c l ude re s t r i c ti ons o r t h r e sho l ds f or i nv e st i ng t he A ss e t R e c y c l i n g F u n d i n cer t a i n j u r i sd i c ti ons or a ss e t c l a ss e s a nd s t a t e m e n t s of t he G ov er n m e n t s t o l e r a n c e f or l oss e s.

 

Sub s ect i on 36 ( 7) p r ov i d e s th a t a n y po l i c i e s a r e s u b j ec t to t he lim it a t i ons s e t out in

s ect i on 37 .

 

Sub s ect i on 36 ( 8) e nsu r e s t h a t t he F u t u r e F und B o ar d i s not g i v e n c on f li c t i n g d i rec ti ons r e g ar d i n g t h e G ov er n m e n t s t o l e r a n c e f or r i sk, it s e x p ec t a ti ons f or re t u r ns a nd a n y a sso c i a t e d a l l o c a ti on of t he A ss e t R e c y c l i ng F und acr oss a ss e t c l a ss e s.



To a vo i d doub t , s ub s ect i on 36 ( 9) m a k e s i t c l ea r t h a t t he s c ope of t h e re sp o n s i b l e M i n i s t er s’ po wer s t o i ss u e d i rec ti ons t o t he F u t u r e F und B o ar d i n r e l a ti on t o t he i nv e st m e nt of t he A ss e t R e c y c l i n g F u n d i s bound b y t he A c t . F o r e x a m p l e , t he re spons i b l e M i n i s t er s c ou l d not d i rec t t he F u t ur e F und B o ar d t o use d er i v a t i v e s i n a m a nn e r t h a t c on t r a d i c t s s ect i on 43 (w h i c h d ea l s w it h t he ac qu i si t i on of d er i v a ti v e s b y t he F u t u r e F und B o ar d ) .

 

Sub s ect i on 36 ( 10) p r ov i d e s t h a t t he I nv e st m e nt M a nd a t e w il l not f o r m a l l y c o mm e n ce un ti l a t l ea st 15 ca l e nd a r d a y s af t e r i t i s i ssu e d. T h i s i s t o a ll ow t he F u t u r e F und

B o ar d t i m e t o a d j ust t o a n y r e v i s e d d i r ec ti ons i ss u e d b y t h e re spons i b l e M i n i s t er s. I m po r t a n t l y , t h e F u t u r e F und B o ar d w il l be a b l e t o know w it h cer t a i n t y w h e n t he n ew d i rec tion w ill c o m e into f o rce .

 

Sub s ect i on 36 ( 11) p r ov i d e s t h a t d i rec ti ons und e r s ub s ect i on 36 ( 1 ) , w h i c h s e t out cer t a i n r u l e s t h a t t he F u t u r e F und B o ar d m ust c o m p l y w i t h, a r e l e g i s l a ti v e i n c h arac t e r a nd ar e t h eref o r e l e g i sl a t i ve i ns t r u m e n t s f or t he p u r pos e s of s ec ti on 5 of t he

L e g i s l a ti v e I ns t ru me n t s A c t 2003.  H o we v er , a n y d i rec ti ons i ssu e d b y t h e r e spons i b l e Min i st er s a s p ar t of t he I n v e st m e nt M a nd a te ar e e x e m pt fr om p ar li a m e n t a r y d i s a ll o wa n c e p r ov i d e d b y s ec ti on 44 of t h e L e g i s l a ti v e I ns t ru me n t s A c t 2 0 03 a nd e x e m pt fr om su n s e t ti ng p r ov i d e d b y s ec ti on 54 of t he L e g i s l a ti v e I ns t ru me n t s A c t

2003 .

 

A s l e g i s l a ti ve i ns t r u m e n t s, a n y d i r ec ti ons g i v e n t o t he F u t u r e F und B o ar d u nd e r t h i s s ec ti on ar e re qu i r e d t o be re g i s t ere d on t h e Fe d e r a l Re g i s t e r o f L e g i sl a tive I ns t r u m e n t s a nd t a b l e d i n t he P ar li a m e n t .

 

Th i s a pp r o ac h e n a b l e s t h e pub li c a nd P ar li a m e nt t o ho l d t he G ov er n m e nt a cc oun t a b l e f or t he d i r ec ti ons i t i ssu e s t o t he F u t u r e F und B o a r d w it hout im p e d i n g t h e G ov er n m e n t s a b ili t y to m a n a g e its f in a n ce s.

 

Sub s ect i o n s 36 ( 12) a n d 36 ( 13) p r ov i de t h a t , sub j ec t t o t he re s t r i c ti ons s e t out i n t he Ac t a nd t he e x p ec t a ti ons of t he G ov er n m e nt a s ar t i c u l a t e d i n t he I nv e st m e nt M a nd a t e , t he F u t u r e F und B o ar d h a s a s t a t u t o r y ob l i g a t i on t o s ee k t o m a x i mi se re t u r ns, c ons i s t e nt w i t h i n t er n a t i o n a l b e st p rac t i c e f or inst i t u ti on a l i nv e st m e nt a nd e n h a n c i n g t he C om m on wea lth s a b ili t y to m a k e p a y m e n t s i n r e l a tion to t he ob j ec ts of t he i nv e st m e nt of t he A ss e t R e c y c l i n g F u n d ( s e t out in s ect i on 32 ).

 

Th i s p r ov i s i on ( to g e t h e r w ith s ub s ect i on 3 6 ( 8 ) ) e s t a b li sh e s a c l e a r h i era r c h y of p r i o r i ti e s f or t he F u t u r e F und B o ar d - t h e re spons i b ili t y to m a x imise re tu r n s i s subo r d i n a t e t o t he i nv e s t m e nt p ara m e t er s s e t out by t h e P ar li a m e nt a nd t he G ov er n m e n t . Th i s f r a me w o r k p r ov i d e s a p p r op r i a t e f l e x i b i l i t y w hile still e n su r i ng su it a b l e a c c o u n t a b i li t y f o r a n y d i r e c ti ons t he G ov e r n m e nt g i v e s t h e F u t u r e F und B o ar d r e g ar d i n g t h e i n v e st m e nt of t he A ss e t R e c y c li ng F und.

 

I t a l so p r ov i d e s t h e F u t u r e F und B o ar d w it h c l ar i t y a s t o t he e x t e nt of it s a cc ou n t a b il i t y

- t he F u t u r e F und B o ar d m ust be a b l e t o d e m ons t r a t e t h a t i t i s pu r su i ng pol i c i e s a nd st r a t e g i e s t h a t a r e c l ear l y d i r ec t e d a t m a x im i s i ng i n v e st m e nt r e tu r ns in a m a nn e r th a t is c ons i s t e nt w ith b e st p rac t i ce .



I t i s e x p ec t e d t h a t t he F u t u r e F und B o ar d w il l a d o p t a b e st p rac t i c e a pp r o a c h t o a ra n g e of i ssu e s b y l ear n i n g f r om t h e e x p er i e n ce s of o t h e r i nv e s t o r s a nd f unds of n a tion a l si g n i f i ca n ce .

 

The pu r pose of s ub s ec t i o n 36 ( 13) is to c l ar i f y th a t s ub s ect i on 36 ( 12) is t he d efa ult pos iti on i n t he e v e nt t h a t a d i rec ti on un d e r s ub s ec t i on 36 ( 1) i s not i ssu e d or i s re vok e d. H o we v er , a d i r ec ti on i ssu e d b y t h e M i n i s t er s und e r s ub s ect i on 3 6 ( 1) w ill ov err i de s ub s ect i on 36 ( 1 2 ) .

 

S ect i on 37 - L i m i t a t i on on A ss e t Rec y c l in g F u n d I n v e s t m e n t M a nd a t e

 

Sub s ect i on 37 sp ec i f i e s t h a t t he re spons i b l e M i n i s t er s ca nnotd i rec t t h e F u t u r e F und B o ar d t o u s e t h e a ss e t s of t he A ss e t R e c y cli n g F u n d t o i nv e st in a p ar ti c u l a r f in a n c i a l a ss e t , f or e x a m p l e , sh a r e s i n a p ar ti c u l a r i n f ra s t r u c t u r e c o m p a n y . I t a l so p r e v e n t s t he re spons i b l e Min i st er s fr o m i ssu i ng a Min i st er i a l d i rec tion th a t h a s t he ef f ec t of re qu i r i n g t h e F u t ur e F u n d B o ar d t o u s e t h e a ss e t s o f t he A ss e t R e c y c li n g F u nd t o suppo r t a p ar ti c u l a r bus i n e ss e n ti t y , a p ar ti c u l a r ac t i v i t y o r a p ar ti c u l a r bus i n e ss.

 

Th i s s ec ti on do e s not l i m i t t he a b ili t y o f t he I nv e s t m e nt M a nd a te to s e t out t he po li c i e s a s i n t e nd e d und e r t he B i ll , su c h a s t hose t o be pu r su e d b y t h e F u t u r e F und B o ar d i n re l a ti on t o m a t t er s of r i sk a nd re t u r n.

 

S ect i on 38- F u t u r e F u n d B oa r d t o b e c o n s u l te d on A ss e t Rec y c l in g F u n d

I n v e s t m e n t M a nd a te

 

C ons i s t e nt w it h t he F u t u r e F und arra n g e m e n t s, t he re spons i b l e M i n i s t er s a r e re qu i r e d t o c onsu l t t he F u t ur e F u n d B o ar d on a n y c h a n g e s or a dd iti ons t o t he I n v e s t m e nt M a nd a t e . Sub s ect i o n s 3 8 ( 1) a n d 38 ( 3) ac h i e v e t h i s b y re qu i r i n g t he re sp o ns i b l e M i n i s t er s t o s e nd a d raf t of t he n e w d i r ec ti on t o t h e F u t u r e F und B o ar d a nd i nv iti n g t he B o ar d to m a ke a su b mission w i t h in a sp ec i f i e d time lim i t.

 

The sp ec i f i e d time limit w ill be d e t er m i n e d on a ca se b y ca s e b a sis w ith re g ar d t o re l e v a nt c i rc u m s t a n ce s a nd p r io r i t i e s a t t he t im e . I t m a y b e t h e ca se th a t u r g e nt c h a n g e s ar e r e qu i re d i n t he n a ti o n a l i n t ere s t . I n t h i s si t u a ti on, i t w ou l d be r ea son a b l e f or t he F u t u r e F und B o a r d t o be a sk e d t o c ons i d e r a d raf t d i r ec ti on qu i c k l y . H o w e v er , w h er e t h e r e i s l e ss u r g e n c y , o r t he c h a n g e i n t he I nv e st m e nt M a nd a t e i s q u it e subs t a n ti a l , i t w ou l d be rea son a b l e t o p r ov i d e t he F u t u r e F und B o ar d w it h m o r e t i m e

t o c ons i d e r a d r af t d i r e c t i on.

 

Sub s ect i on 38 ( 2) p r ov i d e s t h a t a n y sub mi ss i on rece i v e d b y t h e r e spons i b l e M i n i s t er s fr om t he F u t u r e F und B o ar d m ust be t a b l e d i n t he P ar li a m e nt w it h t he n e w d i rec ti on. I n t h i s w a y , t h e F u t u r e F und B o ar d w il l be a b l e t o e nsu r e t h a t t h e i r v i e ws o n t he e x p ec t e d imp a c t on t h e ir a b ili t y to m a x i m i se re tu r ns ar e pub li c l y kno w n.

 

S ect i on 39 - C o m p lia nc e w i t h A ss e t Rec y c l in g F un d I n v e s t m en t M a n d a t e

 

Sub s ect i on 39 ( 1) p r ov i d e s t h a t i t i s t he re spons i b ili t y o f t he F u t u r e F und B o ar d t o t a ke a l l rea son a b l e s t e ps t o e nsu r e t h a t a l l po li c i e s a nd d ec i s i ons re g ar d i n g t he op era ti on a nd i nv e st m e nt of A ss e t R e c y c li n g F und ar e i n acc o r d a n c e w it h a n y d i rec ti ons ( I nv e s tm e nt M a nd a t e ) i ssu e d b y t h e re s pons i b l e M i n i s t er s. S in c e t he



I nv e st m e nt M a nd a t e i s i n t e nd e d t o p r ov i de b r o a d g u i d a n c e t o t he F u t u r e F und B o ar d, it m a y c on t a in d i r ec t i ons t h a t re qu i r e t h e B o ar d t o a pp l y i t s j u d g em e nt on w h e t h e r or not A ss e t R e c y c l i n g F u n d i nv e st m e n t s c o m p l y w i t h t he M a nd a t e.

 

Sub s ect i on 39 ( 2) p r ov i d e s t h a t i f t h e F u t u r e F und B o ar d b ec o m e s awar e of a b reac h of t he I nv e st m e nt M a n d a t e , it m ust in f o r m t he re s pons i b l e Min i st er s in wr i t i ng a s soon a s i s p rac ti ca b l e , i n c l ud i ng a p r opos e d s t ra t e g y t o b r i n g t h e o p era ti o n s of t he A ss e t R e c y c li n g F und i n t o acc o r d a n c e w it h t he I n v e st m e nt M a nd a t e .

 

S im il ar l y , s ub s ect i o n s 3 9 ( 3) a n d 39 ( 4) p r ov i de t h a t i f t h e G ov er n m e nt i d e n t i f i e s area s w h e r e t he F u t u r e F und B o ar d i s not c o m p l y i ng w it h t h e I n v e st m e nt M a nd a t e , t he re spons i b l e M i n i s t er s ca n i ssue wr i t t e n d i r ec t i o ns t o t he B o ar d t o t a k e a cti on t o re m e d y t he s i t u a ti on. T h e F u t u r e F und B o ar d i s r e qu i re d t o c o m p l y w it h a n y su c h d i rec t i ons, not i n g th a t t he re spons i b l e Min i st er s ar e t he f in a l ar bi t er s on w h a t i s i n t e nd e d b y t h e I nv e s t m e nt M a nd a t e .

 

Sub s ect i on 39 ( 5) p r ov i d e s t h a t a n y t ra ns a c ti ons u nd er t a k e n b y t h e F u t ur e F und B o ar d t h a t ar e d ee m e d l a t e r not t o h a ve c o m p li e d w it h t h e I nv e st m e nt M a nd a t e , a r e st il l

v a li d a nd t he B o ar d i s re q u i re d t o honour a n y c o mmi tm e nt m a d e . T h i s p r o t ec t s t h i r d p ar ti e s w ho e n t e r i n t o t r a ns ac ti ons w it h t he F u t u r e F und B o ar d or it s a g e n t s i n g ood fa ith.

 

Sub s ect i on 39 ( 6) m a k e s i t c l ea r t h a t a d i r ec ti on u n d e r s ub s ect i on 39 ( 3) i s not a l e g i sl a tive i ns t r u m e n t . T h i s p r ov i s i on is m ere l y d e c l a r a to r y in n a tu re . D i r e c t i ons of t h i s t y p e a r e a d mi n i s t ra t i ve i n c h a r ac t e r b e ca u s e t h e y ar e m ere l y t he a pp l i ca t i on of a l e g a l po w e r i n a p ar t i c u l a r ca s e ; t h e y do not d e t e r m i ne or a lt e r t he c on t e nt of t he l a w its e l f .

 

S ect i on 40 - F u t u r e F un d B oa r d m u st n ot tr i g g e r t h e t a k e o v e r p r ov i s i o n s of t he

C orpora ti o n s A c t 2001

 

S ect i on 40 a ims to m i n i mise m ar k e t d i s t o r tion a n d e limin a te t he po t e nt i a l f or c on f li c t s of i n t ere st f or t he G ov er n m e nt a s a m ar k e t r e g u l a t o r . I t p r ov i d e s t h a t t he F u t u r e F und B o ar d i s p r oh i b it e d f r om t r i g g e r i n g t h e t a k e o v e r p r ov i s i ons und e r s ec t i on 6 0 6 of t he C o r po ra ti ons Ac t .

 

S ec ti on 606 of t he C o r p o ra ti ons Ac t e ss e n ti a l l y p r oh i b it s ac qu i s i ti ons i n re l e v a nt i n t ere s t s i n t he vo ti n g s h a re s of a li s t e d c o m p a n y , o r un li s t e d c o m p a n y w it h m o r e t h a n

50 sh ar e ho l d er s, i f a p e r s on s vo ti ng po w e r i n c r ea s e s fr om a f i g u r e a t or b e l ow 20% t o a f i g u r e a bo v e 20% ( o r fr om a f i g u r e a bo v e 2 0 % t o a h i g h e r f i g u r e a bo v e 20% but b e l ow 90 % ) - un l e ss t he sh are s ar e ac q u i re d i n o n e of t he c i r c u m s t a n ce s s e t out a t s ec ti on 611 of t h a t Ac t .

 

H o we v er , i t i s t he G ov e r n m e n t s i n t e n ti on t h a t t he t a k e ov e r t h re sho l d be a d h ere d t o qui t e st r i c t l y in re l a tion t o lis t e d c o m p a n i e s a nd un l i s t e d c o m p a n i e s w i t h m o r e th a n

50 sh are ho l d er s. Th e r ef o re , s ub s ect i on 40 ( 1) p r o v i d e s t h a t t he e x ce p ti ons p r ov i d e d und e r s ec ti on 611 of t he C o r po ra ti ons Ac t ( t h a t i s, e x ce p ti ons t o t he p r oh i b i ti on i n s ec ti on 606) do not a pp l y i n re l a ti on t o ac qu i si t i o n s b y t he F u t u r e F und B o a r d.



The p r oh i b iti on on t he F u t u r e F und B o ar d i s not e x p ec t e d t o h a ve a m a t er i a l i m p a c t on t he i nv e st m e nt eff i c i e n c y o f t he A ss e t R e c y cl i n g F und a ssu c h l i mits a r e qu i t e s i mi l ar t o t hose o f t e n us e d b y o t h e r f und m a n a g er s . H o w e v er , t he F u t u r e F und B o ar d w ill n ee d to h a ve r e g ar d t o t h e e nt i re t y of its i n t ere st ( th a t i s, t h r ou g h i nv e s t m e n t of t h e A ss e t R e c y c li n g F u n d) i n a p ar ti c u la r c o m p a n y w h e n t he B o ar d i s p r o p os i ng a p ar ti c u l a r ac qu i s i ti on i n t he c on t e x t of t he A ss e t R e c y c li n g F und.

 

Sub s ect i on 40 ( 2) p r ov i d e s t h a t i f f or so m e r ea son t he F u t u r e F und B o ar d h a s not c o m pl i e d w ith s ec tion6 0 6 of t he C o r po ra ti ons Ac t (a s i t i s a pp li e d t o t he F u t u r e F und B o ar d un d e r s ect i on 40 ) , t he re l e v a nt t r a ns ac t i ons w ill st ill be v a lid. The a i m of this p r ov i s i on i s t o e nsu r e t h i r d p ar ti e s a r e not a dv er s e l y a ff e c t e d b y a n y no n -c o m p li a n ce of t he F u t u r e F und B o ar d .

 

A no t e a t t he e nd of t h e s ec ti on a ss i s t s t he rea d e r b y r e f err i n g t o s ec ti on 39 of t he F u t u r e F und Ac t , w h i c h s e t s out t he a pp li ca ti on of t he C o r po ra ti ons Ac t t o t he F u t u r e F und B o ar d.

 

S ect i on 41 - B o rr o w in g

 

S ect i on 41 p r oh i b it s t he F u t u r e F und B o ar d f r om bo rr o w i n g m on e y , e x ce p t f or sho r t t er m bo rr o w i n g a ss o c i a t e d w ith t he s e t tl e m e nt of t r a ns ac t i ons, or in o t h e r c i rc u m s t a n ce s p re s c r i b e d i n t he r u l e s ( s ee s s ub s ec t i on 41 ( 3) b e l o w) .

 

The ov e r a ll a im of t h i s s e c ti on is to e nsu r e t h a t t he F u t u r e F und B o ar d i s a b l e t o op era t e ef f i c i e n t l y w it h o u t e x pos i ng t he bu d g e t t o undue r i sk.

 

Sub s ect i on 41 ( 3) p r ov i d e s t h a t t he r u l e s m a y be m a de t o sp ec i f y c i rc u m s t a n ce s i n w h i c h i t i s c ons i d ere d a p p r op r i a t e f o r t he F u t u r e F und B o ar d t o b e a b l e t o b o rr o w . The r u l e s m a y a l so b e u s e d t o c l ar i f y a n y un c er t a i n t y on w h e t h e r a p ar t i c u l a r ac ti v i t y c ons tit u t e s bo rr o w i n g .  W h il e i t i s n o t a n ti c i p a t e d t h a t t he F u t u r e F und B o ar d w il l h a ve a n ee d t o bo rr o w , t h i s p r ov i s i on a ll o w s f or un f o r s ee n e v e n t s or c h a n g e s i n t he i nv e st m e nt e nv i r on m e nt w it hout t he n ee d t o a m e n d t he p r i m a r y l e g i s l a t i on. The r u l es w ou l d be d i s a ll o wa b l e b y e it h e r H ou s e o f t he P a r l i a m e n t .

 

S ect i on 42 - A ss e t Rec y c l in g F un d in v e s t m e n t p o li c i es

 

S ect i on 42 p r ov i d e s t h a t t he F u t u r e F und B o ar d i s re qu i re d t o f o r m u l a t e , p ub li sh a nd c o m p l y w ith a nu m b e r of pol i c i e s on i t s i nv e s t m e n t ac tivi ti e s.

 

The a i m of t h i s p r ov i s i o n i s t o e nsu r e r i g o u r a nd t r a nsp are n c y ar ou n d how t he F u t u r e F und B o ar d p erf o r m s it s i nv e st m e nt f un c ti on i n re l a ti on t o t he A ss e t R e c y c ling F und, i n c l ud i n g r i sk m a n a g e m e n t , p erf o r m a n c e a s s e ss m e nt a nd b e n c h m ar ks.

 

Sub s ect i on 42 ( 1) a n d 4 2 ( 7) re qu i r e s t he F u t u r e F u nd B o ar d t o f o r m u l a t e a n d c o m p l y w ith pol i c i e s a nd a n y a d d ition a l m a tt er s sp e c i f i e d i n t he r u l e s.

 

A no t e a t t he e nd of s ub s ect i on 42 ( 1) r e mi nds t he rea d e r t h a t , un d e r su b s ec t i on 33 ( 3) of t he Ac t s I n t er p re t a t i on Ac t , t he F u t ur e F und B o ar d i s a b l e t o re p ea l , r e s c i nd, re vok e , a m e nd, or v a r y a n y su c h p o li c i e s.



Sub s ect i on 42 ( 2) p r ov i d e s t h a t t he po l i c i e s t h a t t h e F u t u r e F und B o ar d d e v e l ops m ust notbe i n c o m p a ti b l e w it h t he I n v e st m e nt M a nd a t e .

 

Sub s ect i on 42 ( 3) a n d 4 2 ( 4) p r ov i d e s t h a t t he F u t u r e F und B o ar d m ust pub l i sh t he f i r st s e t of po li c i e s on t he i n t er n e t .

 

Sub s ect i o n s 42 ( 5) a n d 4 2 ( 6) p r ov i de t h a t t h e F u t u r e F und B o ar d m ust c o nd u c t re v i e ws of t h e s e po li c i e s p er i od i ca l l y a nd w h er e t h e re spons i b l e M i n i s t er s c h a n g e t h e I nv e st m e nt M a nd a t e . I t i s not e x p ec t e d t h a t t h e se re v i e ws w ou l d be a f o r m a l p r o ce ss or t h a t t he re su lt s of t he r e v i e ws w ou l d be r e qu i r e d t o be pub li sh e d. H o we v er , i f t he re v i e w r e su lt e d i n a n y c h a n g e s t o t he po l i c i e s, i t i s i n t e nd e d t h a t t he upd a t e d po li c i e s w ou l d be pub li sh e d on t h e i n t er n e t .

 

Sub s ect i on 42 ( 8) p r ov i d e s t h a t i f t h e F u t u r e F und B o ar d e n t er s i n t o a t r a n s ac t i on w h i c h i s not c ons i s t e nt w it h a po l i c y t h a t i t h a s p u b li sh e d und e r t h i s s ec ti o n , t he t r a ns ac tion w i l l s t ill be v a lid. Th i s w ill e nsu r e th a t t h i r d p ar ti e s ar e not af f ec t e d b y a n y i n c ons i s t e n c y w it h t he F u t u r e F und B o ar d s p o l i c i e s. H o we v er , s ub s ect i on 42 ( 7) p r ov i d e s t h a t t he F u t u r e F und B o ar d i s re qu i re d t o t a ke a l l rea son a b l e s t e p s t o c o m p l y w it h t he po li c i e s i t d e v e l ops und e r s ub s ect i on 42 ( 1 ).

 

Sub s ect i on 42 ( 9) m a k e s it c l ea r th a t t he pol i c i e s of t he F u t u r e F und B o ar d ar e not l e g i sl a tive i ns t r u m e n t s, b eca use t h e y a r e a d m i n i s t r a t iv e in c h a r ac t er . Th e y do not d e t er mi ne or a lt e r t he c o n t e nt of t he l a w, but a r e r a t h e r a dm in i s t ra t iv e po l i c ie s th a t t he F u t u r e F und B o ar d ar e r e qu i r e t o f o r m u l a t e a nd c o m p l y w it h t o e nsu r e r i g o ur a nd t ra nsp are n c y ar ound how t he B o ar d p e r f o r m s it s i n v e st m e nt f un c ti on.

 

S ect i on 43 - Der i va t i v es

 

Der iv a tiv e s a r e w id e l y u s e d b y f<