Financial Agreement Act 1944 (NSW)

Financial Agreement Act 1944 No 29 An Act to approve an Agreement between the Commonwealth of Australia of the First Part, and the States of New South Wales, Victoria, Queensland, South Australia, Western Australia and Tasmania of the Second, Third, Fourth, Fifth, Sixth and Seventh Parts respectively; and for purposes connected therewith. 1 Name of Act and commencement (1) This Act may be cited as the Financial Agreement Act 1944. (2) This Act shall commence upon a day to be appointed by the Governor and notified by proclamation published in the Gazette. 2 Approval of Agreement The Agreement made on the fifteenth day of November, one thousand nine hundred and forty-four, a copy of which is set forth in the Schedule, is approved. 3 Appropriation (1) The Consolidated Revenue Fund is hereby appropriated to the extent necessary for the purpose of carrying out the Financial Agreement on the part of the State of New South Wales. (2) In this section, the Financial Agreement means the Agreement a copy of which is set forth in the Schedule to the Financial Agreement Ratification Act 1928, as varied prior to the date of commencement of this Act and as varied by the Agreement referred to in section 2 and the Agreement referred to in section 2 of the Financial Agreement (Decimal Currency) Act 1966 and the Agreement referred to in section 3 of the Financial Agreement (Amendment) Act 1976. The Schedule (Section 2) AGREEMENT made the fifteenth day of November, One thousand nine hundred and forty-four BETWEEN THE COMMONWEALTH OF AUSTRALIA (in this Agreement called "the Commonwealth") of the first part, THE STATE OF NEW SOUTH WALES of the second part, THE STATE OF VICTORIA of the third part, THE STATE OF QUEENSLAND of the fourth part, THE STATE OF SOUTH AUSTRALIA of the fifth part, THE STATE OF WESTERN AUSTRALIA of the sixth part, and THE STATE OF TASMANIA of the seventh part (each of the parties of the second, third, fourth, fifth, sixth and seventh parts being in this Agreement referred to as a "State" and the expression "the States" hereinafter used meaning where the context so permits or requires all of such parties): WHEREAS an Agreement (hereinafter referred to as "the Financial Agreement") was made on the twelfth day of December, One thousand nine hundred and twenty-seven between the parties hereto with respect to the public debts of the States: AND WHEREAS the Financial Agreement has been approved by the Parliaments of the Commonwealth and of the States: AND WHEREAS the Financial Agreement has been varied by the following agreements made pursuant to Section 105A of the Constitution of the Commonwealth between the parties hereto, namely, an Agreement made the twenty-first day of July One thousand nine hundred and thirty-one a copy of which Agreement is set forth in the Schedule to the Debt Conversion Agreement Act 1931 of the Commonwealth, an Agreement made the twenty-second day of October One thousand nine hundred and thirty-one a copy of which Agreement is set forth in the Schedule to the Debt Conversion Agreement Act (No. 2) 1931 of the Commonwealth, and an Agreement made the third day of July One thousand nine hundred and thirty-four a copy of which Agreement is set forth in the Schedule to the Soldier Settlement Loans (Financial Agreement) Act 1935 of the Commonwealth (each of such Agreements being hereinafter referred to as an "Amending Agreement" and the expression "the Amending Agreements" hereinafter used meaning all of such Agreements): AND WHEREAS the Amending Agreements have been severally approved by the Parliaments of the Commonwealth and of the States: AND WHEREAS the Commonwealth and the States have agreed pursuant to Section 105A of the Constitution of the Commonwealth that the Financial Agreement as varied by the Amending Agreements shall be further varied as hereinafter provided: NOW IT IS HEREBY AGREED as follows: 1. This Agreement shall come into force upon being authorized or approved by the Parliaments of the Commonwealth and of the States but not otherwise. 2. Clause 3 of Part I of the Financial Agreement is varied: (a) by inserting after sub-clause (b) the following sub-clause: (ba) The member representing the Commonwealth shall be the Chairman of the Loan Council; (b) by omitting from sub-clauses (g), (i), (j), (k) and (l) the phrases "for each financial year", "for the year", "for any year" and "for that year" (wherever occurring) and inserting in their stead the phrases "during each financial year", "during the year", "during any year" and "during that year" respectively; (c) by omitting from sub-clause (h) the words "for the year" (second occurring) and inserting in their stead the words "during the year"; (d) by inserting in paragraph (ii) of sub-clause (i) after the words "redemption of loans," the words "or for the funding of revenue deficits or to meet revenue deficits, or any specified amount or class of expenditure which the Loan Council by unanimous decision declares shall not be included,"; and (e) by omitting from sub-clause (m) the words "other than the matters referred to in sub-clauses (h) and (j) of clause 3" and inserting in their stead the words "other than the matters in respect of which unanimous decision is required by sub-clauses (h), (i) and (j) of this clause". 3. Clause 5 of Part I of the Financial Agreement is varied: (a) by omitting from the fifth paragraph the words "for the financial year" and inserting in their stead the words "during the financial year"; and (b) by adding at the end of the seventh paragraph the words "This paragraph shall not apply to or in respect of any of the loans referred to in sub-clause (ja) of clause 3 of Part III of this Agreement." 4. Clause 6 of Part I of the Financial Agreement is varied by omitting from the fifth paragraph the words "for the financial year" and inserting in their stead the words "during the financial year". 5. Clause 3 of Part III of the Financial Agreement is varied: (a) by omitting from sub-clause (e) the word and letter "and (j)" and inserting in their stead the letters and word "(j) and (ja)"; (b) by omitting from sub-clause (f) the word and letter "and (j)" and inserting in their stead the letters and word "(j) and (ja)"; (c) by inserting in sub-clause (j) after the words "In respect of any loan" the words "(except any of the loans referred to in sub-clause (ja) of this clause)"; (d) by inserting after sub-clause (j) the following sub-clause: (ja) (1) In respect of loans raised by a State or by the Commonwealth for and on behalf of a State on the security of Commonwealth Treasury Bills to meet a revenue deficit accruing after 30th June 1927, and before 1st July 1935 (such loans being referred to in this sub-clause as 'special deficit loans'), the Commonwealth and the State shall respectively in each year during the period commencing on 1st July next succeeding the date on which the loans are raised and ending on 30th June 1944, pay from revenue a sinking fund contribution at the rate of 5s. for each £100 of the total amount of the face values of the Commonwealth Treasury Bills which have been issued in respect of special deficit loans of that State and which are current on 30th June next preceding the commencement of the year in which the sinking fund contribution is payable. (2) (i) The amount set out hereunder opposite the name of a State shall be applied by the National Debt Commission to the repurchase or redemption of securities issued in respect of special deficit loans of that State: New South Wales £1,970,000 Victoria 260,000 Queensland 125,000 South Australia 300,000 Western Australia 335,000 Tasmania 10,000 £3,000,000 (ii) The amount set out in sub-paragraph (i) of this paragraph opposite the name of a State represents the approximate aggregate as on 1st July 1944, of the sinking fund contributions paid by the Commonwealth and that State under paragraph (1) of this sub-clause together with accumulations on those contributions at the rate of 4½ per centum per annum compounded. (iii) The provisions of sub-clause (q) of this clause, which require the State to make further sinking fund contributions at the rate of 4½ per centum per annum of the face value of a cancelled security, shall not apply to or in respect of any security repurchased or redeemed under this paragraph. (3) In each year during the period of 39 years commencing on 1st July 1944, the Commonwealth and the State concerned shall each pay from revenue a sinking fund contribution which, in the case of the Commonwealth, shall be at the rate of 5s. for each £100 of the amount of the special deficit loans of that State, and, in the case of the State, shall be at the rate of 15s. for each £100 of that amount. In this paragraph and paragraphs (4) and (5) of this sub-clause the amount of the special deficit loans of a State shall be taken to be the amount set out hereunder opposite the name of that State, viz.: New South Wales £26,120,000 Victoria 3,995,000 Queensland 2,148,000 South Australia 4,920,000 Western Australia 5,390,000 Tasmania 445,000 £43,018,000 The sum which is to be taken as the amount of the special deficit loans of a State as set out in this paragraph opposite the name of that State represents the gross total of the special deficit loans of that State as on 1st July 1944, less: (i) the amount which the National Debt Commission is required under paragraph (2) of this sub-clause to apply to the repurchase or redemption of securities issued in respect of special deficit loans of that State; and (ii) the amount which that State has undertaken to apply to the redemption or repurchase of such securities. (4) All sinking fund contributions payable under paragraph (3) of this sub-clause in respect of the amount of special deficit loans of a State and all further sinking fund contributions required to be made under sub-clause (q) of this clause upon the cancellation of a security issued in respect of that amount, shall be applied to the repurchase or redemption of securities issued in respect of that amount. (5) When a loan is raised for the conversion, renewal or redemption of the whole or any portion of the amount of the special deficit loans of a State, the only sinking fund contributions to be made by the Commonwealth and the State in respect of the amount or portion so converted, renewed or redeemed shall be sinking fund contributions at the same rate and for the same period and upon the same amount as if such amount or portion has not been converted, renewed or redeemed; and (e) by inserting after sub-clause (q) the following sub-clauses: (r) (1) Subject to paragraph (2) of this sub-clause, a State may, from time to time, pay to the National Debt Commission a sum in addition to sinking fund contributions for the purpose of being applied to the repurchase or redemption of securities issued in respect of a public debt of the State or a loan raised by the Commonwealth for and on behalf of the State. The provisions of sub-clause (q) of this clause shall apply with respect to any security so repurchased or redeemed (including any security repurchased or redeemed in accordance with paragraph (2) of this sub-clause) provided that the State shall not be required to make any further sinking fund contribution under sub-clause (q) of this clause upon the cancellation of the security. (2) If any such sum is tendered by the State to the National Debt Commission, and is accepted by the National Debt Commission, for the purpose mentioned in paragraph (1) of this sub-clause but subject to either or both of the following conditions, namely, (i) that the sum shall be applied to the repurchase or redemption of particular securities specified by the State; (ii) that sinking fund contributions of the Commonwealth and the State payable under sub-clause (b), (f), (h), (j) or (ja) of this clause in respect of the amount represented by the repurchased or redeemed securities shall cease as from the date of cancellation of those securities, that sum shall be applied, and the condition or conditions shall take effect, accordingly. (s) (1) Where, upon the conversion or partial conversion at a discount of a loan raised by or on behalf of a State, sinking fund moneys are applied to the redemption of any amount of the converted loan, the State shall repay to the National Debt Commission from State revenue so much of the sinking fund moneys so applied as does not exceed the aggregate amount of the discounts allowed to subscribers to the loan raised to effect the conversion or partial conversion. (2) Repayment by the State shall, unless otherwise approved by the National Debt Commission, be by equal annual instalments extending over the period of the loan raised to effect the conversion or partial conversion. For the purpose of calculating the amount of the annual instalments any broken portion of a year shall be disregarded. (3) Where, by the terms of the loan raised to effect the conversion or partial conversion, the borrower has an option as to the date upon which the borrower shall be entitled to redeem the loan, the period of the loan shall, for the purposes of this sub-clause, be deemed to be the period terminating upon the earliest date of redemption provided for by the terms of the loan. (4) All repayment instalments payable to the National Debt Commission in pursuance of this sub-clause shall be payable at such times as shall be fixed by the National Debt Commission, and shall be applied as if they were sinking fund contributions made by the State under this clause, provided that the State shall not be required to make any further sinking fund contribution under sub-clause (q) of this clause upon the cancellation of any security to the repurchase or redemption of which any repayment instalment has been applied. (t) All sinking fund contributions payable under this Agreement in respect of overseas debt, and all further sinking fund contributions so payable upon the cancellation of securities in respect of overseas debt, shall be calculated at the mint par of exchange prevailing on 1st July 1927. 6. (1) The variations made by paragraphs (a), (b) and (c) of clause 2, by paragraph (a) of clause 3, and by clause 4, of this Agreement shall come into force on the date on which this Agreement comes into force. (2) The variations made by paragraphs (d) and (e) of clause 2, by paragraph (b) of clause 3, and by paragraphs (a), (b) and (c) of clause 5, of this Agreement shall be deemed to have come into force on 1st July 1927. (3) Paragraph (1) of sub-clause (ja) of clause 3 of Part III of the Financial Agreement, inserted by clause 5 of this Agreement, shall be deemed to have come into force on 1st July 1927. (4) Paragraphs (2), (3), (4) and (5) of sub-clause (ja) of clause 3 of Part III of the Financial Agreement, inserted by clause 5 of this Agreement, shall be deemed to have come into force on 1st July 1944. (5) Sub-clause (r) of clause 3 of Part III of the Financial Agreement, inserted by clause 5 of this Agreement, shall come into force on the date on which this Agreement comes into force. (6) Sub-clause (s) of clause 3 of Part III of the Financial Agreement, inserted by clause 5 of this Agreement, shall be deemed to have come into force on 1st July 1937. (7) Sub-clause (t) of clause 3 of Part III of the Financial Agreement, inserted by clause 5 of this Agreement, shall be deemed to have come into force on 1st July 1927. 7. (1) The Financial Agreement as varied by clause 18 of the Amending Agreement made the third day of July, One thousand nine hundred and thirty-four and by clauses 2, 3, 4 and 5 of this Agreement is further varied: (a) by the deletion of clause 7 of Part I and the whole of Part II (other than the heading "Part II") therefrom; (b) by renumbering and relettering the provisions thereof in accordance with the numbering and lettering of the Agreement set out in the Schedule to this Agreement; and (c) by such variations of the provisions thereof as are consequential upon the variations effected by paragraphs (a) and (b) of this clause. (2) The Agreement set out in the Schedule to this Agreement shall be taken to be the Financial Agreement as varied by clause 18 of the Amending Agreement made the third day of July One thousand nine hundred and thirty-four and by clauses 2, 3, 4 and 5 of this Agreement and sub-clause (1) of this clause. IN WITNESS whereof the Prime Minister of the Commonwealth of Australia and the Premiers of each of the States of New South Wales, Victoria, Queensland, South Australia, Western Australia, and Tasmania have signed this Agreement respectively for and on behalf of the Commonwealth of Australia and of the said States. Signed by the Prime Minister of the Commonwealth of Australia for and on behalf of the said Commonwealth in the presence of— } JOHN CURTIN. F. A. McLAUGHLIN. Signed by the Premier of the State of New South Wales for and on behalf of the said State in the presence of— } W. J. McKELL. M. K. WEIR. Signed by the Premier of the State of Victoria for and on behalf of the said State in the presence of— } A. A. DUNSTAN. A. T. SMITHERS. Signed by the Premier of the State of Queensland for and on behalf of the said State in the presence of— } FRANK A. COOPER. E. A. CROSSER. Signed by the Premier of the State of South Australia for and on behalf of the said State in the presence of— } T. PLAYFORD. R. R. STUCKEY. Signed by the Premier of the State of Western Australia for and on behalf of the said State in the presence of— } J. WILLCOCK A. J. REID. Signed by the Premier of the State of Tasmania for and on behalf of the said State in the presence of— } ROBERT COSGROVE. E. PARKES THE SCHEDULE THE FINANCIAL AGREEMENT* AGREEMENT made the twelfth day of December One thousand nine hundred and twenty-seven BETWEEN THE COMMONWEALTH OF AUSTRALIA (in this Agreement called the Commonwealth) of the first part, THE STATE OF NEW SOUTH WALES of the second part, THE STATE OF VICTORIA of the third part, THE STATE OF QUEENSLAND of the fourth part, THE STATE OF SOUTH AUSTRALIA of the fifth part, THE STATE OF WESTERN AUSTRALIA of the sixth part, and THE STATE OF TASMANIA of the seventh part (each of the parties of the second, third, fourth, fifth, sixth, and seventh parts being in this Agreement referred to as a State and the expression "the States" hereinafter used meaning where the context so permits or requires all of such parties). WHEREAS with a view to making provision for the adjustment of Commonwealth and State financial relations the general principle of a draft scheme was affirmed by a Conference of Commonwealth and State Ministers in Melbourne which commenced on the sixteenth day of June One thousand nine hundred and twenty-seven; AND WHEREAS permanent effect cannot be given to the proposals contained in the said scheme unless the Constitution of the Commonwealth is altered so as to confer on the Parliament of the Commonwealth power to make laws for carrying out or giving permanent effect to such proposals; AND WHEREAS pending the submission to the electors of a proposed law for the alteration of the said Constitution as aforesaid and in order to obtain immediately some of the advantages which would result from united action by adoption of the said scheme the Commonwealth and the States have agreed that for the period commencing on the first day of July One thousand nine hundred and twenty-seven and ending on the thirtieth day of June One thousand nine hundred and twenty-nine certain of the proposed provisions of the said scheme shall be temporarily adopted: * This Agreement is a reprint of the Financial Agreement made the 12th December 1927, between the Commonwealth and the States, as varied by provisions of other Agreements made between the same parties, namely, by Clause 18 of an Agreement made the 3rd July 1934, and by Clauses 2, 3, 4 and 5, and sub-clause (1) of Clause 7, of an Agreement made the 15th November 1944. The Financial Agreement is also affected by the following Agreements made between the Commonwealth and the States, namely, an Agreement made the 21st July 1931, and an Agreement made the 22nd October 1931, and by provisions, other than Clause 18, of the aforesaid Agreement made the 3rd July 1934, and by an Agreement made the 11th September 1928, between the Commonwealth and the State of Tasmania. The variations made by the Agreement of the 15th November 1944 (other than those which are noted in the margin of this reprint as being effective from specified dates), came into force on the date on which that Agreement came into force. NOW THIS AGREEMENT WITNESSETH: PART I 1. This Agreement shall have no force or effect and shall not be binding on any party unless and until it is approved by the Parliaments of the Commonwealth and of the States. DEFINITIONS 2. In this Agreement: "Net Public Debt of a State existing on 30th June 1927," means in respect of each State the amount of debt set forth hereunder opposite to the name of that State, viz.: New South Wales £234,088,501* Victoria 136,949,942* Queensland 101,977,855* South Australia 84,834,364* Western Australia 61,060,675* Tasmania 22,434,060* £641,345,397* * The amounts of the "Net Public Debt" of the States and "Gross Public Debt" of the States as set out in clause 2, have been varied as from 1st July 1927, by the provisions of the Agreement made 3rd July 1934. The amounts as so varied are as follows: Net Public Debt Gross Public Debt £ £ New South Wales 233,153,779 238,506,641 Victoria 136,348,982 144,243,570 Queensland 101,840,622 105,122,683 South Australia 84,029,376 86,809,017 Western Australia 61,060,675 70,705,913 Tasmania 22,314,180 24,134,808 638,747,614 669,522,632 The said amount of the net public debt of each State includes debts of that State secured by: (i) Inscribed Stock, including Local Inscribed Stock and Government Inscribed Stock; (ii) Instalment Stock; (iii) Registered Stock; (iv) Funded Stock; (v) Stock payable to bearer; (vi) Bonds, including registered bonds; (vii) Debentures, including registered debentures and instalment debentures; (viii) Treasury Bills not repayable within twelve months from the date of issue; or (ix) Fixed deposit receipts or special deposit receipts for moneys borrowed for other than temporary purposes; issued or created by the State or by or on behalf of a Colony the predecessor of the State in respect of moneys borrowed by the Colony or State together with debts of the State to the Commonwealth of the amount set out respectively hereunder opposite to the name of the State so far as those last mentioned debts are not included by being secured in manner aforesaid: New South Wales £12,553,698 Victoria 23,688,269 Queensland 16,082,583 South Australia 18,446,197 Western Australia 16,739,872 Tasmania 3,948,613 £91,459,232 after deducting therefrom the amount for which the Commonwealth by this Agreement assumes liability under clause 13 of this Agreement and the amount of any moneys or securities standing to the credit of a sinking fund, redemption fund, or a fund of a like nature of the State as on 30th June 1927, and does not include any moneys raised by the State by way of overdraft, fixed deposit, or special deposit for temporary purposes only. The said sum of £234,088,501 (being the amount of the debt of New South Wales abovementioned) comprises the debts referred to in, and has been computed in the manner shown in, the statement signed by representatives of the Commonwealth and of New South Wales. "Gross public Debt of a State existing on 30th June 1927," means in respect of each State the amount of debt set forth hereunder opposite to the name of that State, viz.: New South Wales £239,441,363* Victoria 144,844,530* Queensland 105,259,916* South Australia 87,614,005* Western Australia 70,705,913 Tasmania 24,254,688* £672,120,415* * See footnote to definition of "Net public debt of a State existing on 30th June 1927" in this clause. The said amount of the gross public debt of each State includes the net public debt of that State together with the amount for which the Commonwealth by this Agreement assumes liability under clause 13 of this Agreement and the amount of any moneys or securities standing to the credit of any sinking fund, redemption fund or fund of a like nature of the State as on 30th June 1927. "Transferred Properties" means the properties mentioned or specified in the Schedule of Transferred Properties signed by representatives of the Commonwealth and the States as revised to the 30th June 1927, being properties which became vested in the Commonwealth pursuant to section 85 (i) of the Constitution of the Commonwealth. "The Loan Council" means the Australian Loan Council created in pursuance of this Agreement. "Bondholder" means an owner of any: (i) Inscribed Stock, including Local Inscribed Stock and Government Inscribed Stock; (ii) Instalment Stock; (iii) Registered Stock; (iv) Funded Stock; (v) Stock payable to bearer; (vi) Bonds, including registered bonds; (vii) Debentures, including registered debentures and instalment debentures; (viii) Treasury Bills not repayable within twelve months from the date of issue; or (ix) Fixed deposit receipts or special deposit receipts for moneys borrowed for other than temporary purposes; issued or created by a State or by or on behalf of a Colony the predecessor of the State in respect of borrowed moneys but does not include the Commonwealth. AUSTRALIAN LOAN COUNCIL 3. (1) (a) There shall be an Australian Loan Council which shall consist of one representative of the Commonwealth who shall be: (i) the Prime Minister of the Commonwealth; or (ii) in the absence of the Prime Minister at any time from a meeting of the Council—a Minister nominated in writing by the Prime Minister, and one representative of each State who shall be: (iii) the Premier of that State; or (iv) in the absence of the Premier at any time from a meeting of the Council—a Minister nominated in writing by the Premier of that State. Provided that if, in the opinion of the Prime Minister or of any Premier of a State, special circumstances exist at any time which make it desirable so to do, the Prime Minister or the Premier, as the case may be, may nominate some other person to represent the Commonwealth or the State (as the case may be) as a member of the Loan Council. (b) Any nomination of a representative of a State shall be notified in writing by the Premier of the State to the Prime Minister. (2) The member representing the Commonwealth on the Loan Council shall hold office during the pleasure of the Prime Minister of the Commonwealth and a member representing a State shall hold office during the pleasure of the Premier of the State which the member was appointed to represent. (3) The member representing the Commonwealth shall be the Chairman of the Loan Council. (4) A decision in which all the members for the time being of the Loan Council concur shall be a unanimous decision of the Loan Council notwithstanding any vacancy then existing in its membership. (5) A meeting of the Loan Council may at any time be convened by the member representing the Commonwealth, and shall be so convened upon the request of at least three members representing States. (6) A majority of the members of the Loan Council shall constitute a quorum of the Loan Council for the exercise of its powers at any meeting. Provided that: (a) a member may at any time appoint in writing a deputy to act in his absence; and any deputy so appointed may in the absence of the member exercise all the powers and functions of the member and his presence shall be deemed the presence of the member; and (b) an absent member who has not appointed a deputy may vote by letter or by telegram, and in such case that member shall be counted as being present in relation only to the questions on which he has voted. (7) The Loan Council may make rules of procedure including rules relating to places times, and notices of meetings, and conduct of business at meetings, and from time to time may alter such rules. (8) The Commonwealth and each State will from time to time, while Part III of this Agreement is in force, submit to the Loan Council a programme setting forth the amount it desires to raise by loans during each financial year for purposes other than the conversion, renewal or redemption of existing loans or temporary purposes. Each programme shall state the estimated total amount of such loan expenditure during the year, and the estimated amount of repayments which will be available towards meeting that expenditure. Any revenue deficit to be funded shall be included in such loan programme, and the amount of such deficit shall be set out. Loans for Defence purposes approved by the Parliament of the Commonwealth shall not be included in the Commonwealth's loan programme or be otherwise subject to this Agreement. (9) If the Loan Council decides that the total amount of the loan programme for the year cannot be borrowed at reasonable rates and conditions it shall decide the amount to be borrowed during the year, and may by unanimous decision allocate such amount between the Commonwealth and the States. (10) If the members of the Loan Council