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This is a Bill, not an Act. For current law, see the Acts databases.
NATION-BUILDING FUNDS BILL 2008
2008
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Nation-building Funds Bill 2008
No. , 2008
(Finance and Deregulation)
A Bill for an Act about the Building Australia
Fund, the Education Investment Fund and the
Health and Hospitals Fund, and for other purposes
i Nation-building Funds Bill 2008 No. , 2008
Contents
Chapter 1--Preliminary
1
1
Short title................................................................................ 1
2
Commencement ..................................................................... 2
3
Simplified outline................................................................... 2
4
Definitions.............................................................................. 4
5
Financial assets .................................................................... 11
6
Crown to be bound ............................................................... 12
7
Extension to external Territories .......................................... 12
8
Extra-territorial application.................................................. 12
Chapter 2--Building Australia Fund
13
Part 2.1--Introduction
13
9
Object ................................................................................... 13
10
Simplified outline................................................................. 13
Part 2.2--Building Australia Fund
15
Division 1--Introduction
15
11
Simplified outline................................................................. 15
Division 2--Establishment of the Building Australia Fund etc.
17
12
Establishment of the Building Australia Fund ..................... 17
13
Establishment of the Building Australia Fund Special
Account ................................................................................ 17
Division 3--Credits of amounts to the Building Australia Fund
18
14
Initial credits of amounts to the Building Australia
Fund Special Account .......................................................... 18
15
Subsequent credits of amounts to the Building
Australia Fund Special Account--determinations by
the responsible Ministers ..................................................... 18
16
Credit of amount to the Building Australia Fund
Special Account--balance of the Communications
Fund Special Account .......................................................... 19
17
Credit of amount to the Building Australia Fund
Special Account--balance of the Telstra Sale Special
Account ................................................................................ 19
Division 4--Debits of amounts from the Building Australia Fund
21
18
Purposes of the Building Australia Fund Special
Account--payments purposes and purposes related
exclusively to the Building Australia Fund.......................... 21
Nation-building Funds Bill 2008 No. , 2008 ii
19
Purposes of the Building Australia Fund Special
Account--transitional .......................................................... 22
20
Purposes of the Building Australia Fund Special
Account--purposes not related exclusively to the
Building Australia Fund....................................................... 23
21
Extended meaning of payment in relation to the
creation or development of transport infrastructure ........... 25
22
Extended meaning of payment in relation to the
creation or development of communications
infrastructure ....................................................................... 25
23
Eligible national broadband network matter ........................ 26
24
Extended meaning of payment in relation to the
creation or development of energy infrastructure ............... 26
25
Extended meaning of payment in relation to the
creation or development of water infrastructure ................. 27
26
Future Fund Board must ensure that there is
sufficient money in the Building Australia Fund
Special Account to cover authorised payments etc.............. 28
Division 5--Inter-fund transfers
29
27
Transfers from the Building Australia Fund to the
Future Fund .......................................................................... 29
28
Transfers from the Building Australia Fund to the
Education Investment Fund ................................................. 29
29
Transfers from the Building Australia Fund to the
Health and Hospitals Fund ................................................... 30
Part 2.3--Investment of the Building Australia Fund
31
30
Simplified outline................................................................. 31
31
Objects of investment of the Building Australia Fund ........ 31
32
Investment of the Building Australia Fund .......................... 32
33
Building Australia Fund to inherit investments of the
Communications Fund ......................................................... 32
34
Management of investments of the Building
Australia Fund...................................................................... 33
35
Building Australia Fund Investment Mandate ..................... 34
36
Limitation on Building Australia Fund Investment
Mandate................................................................................ 36
37
Future Fund Board to be consulted on Building
Australia Fund Investment Mandate .................................... 36
38
Compliance with Building Australia Fund
Investment Mandate ............................................................. 37
39
Future Fund Board must not trigger the takeover
provisions of the Corporations Act 2001 ............................. 38
40
Borrowing ............................................................................ 38
iii Nation-building Funds Bill 2008 No. , 2008
41
Building Australia Fund investment policies ....................... 39
42
Derivatives ........................................................................... 40
43
Additional financial assets ................................................... 40
44
Securities lending arrangements .......................................... 41
45
Investment managers............................................................ 41
46
Custody of securities ............................................................ 42
47
Refund of franking credits ................................................... 42
48
Realisation of non-financial assets....................................... 43
49
Additional function of the Future Fund Board..................... 43
Part 2.4--Payments
44
Division 1--Introduction
44
50
Simplified outline................................................................. 44
Division 2--Direct payments
46
51
Authorisation of payments ................................................... 46
52
Recommendations about payments...................................... 46
53
Grant to a State or Territory--transport infrastructure ........ 48
54
Grant to a State or Territory--communications
infrastructure etc. ................................................................. 49
55
Grant to a State or Territory--energy infrastructure ........... 49
56
Grant to a State or Territory--water infrastructure ............. 50
57
Grant to a person other than a State or Territory --
transport infrastructure ......................................................... 51
58
Grant to a person other than a State or Territory--
communications infrastructure etc. ...................................... 51
59
Grant to a person other than a State or Territory --
energy infrastructure ............................................................ 52
60
Grant to a person other than a State or Territory--
water infrastructure .............................................................. 52
Division 3--Channelling of payments through the BAF
Infrastructure Portfolio Special Account
54
61
Establishment of the BAF Infrastructure Portfolio
Special Account ................................................................... 54
62
Purpose of the BAF Infrastructure Portfolio Special
Account ................................................................................ 54
63
Channelling of payments through the BAF
Infrastructure Portfolio Special Account ............................. 54
64
Recommendations about payments...................................... 55
65
Payments--debit from the BAF Infrastructure
Portfolio Special Account .................................................... 55
66
Grant to a State or Territory--transport infrastructure ........ 56
Nation-building Funds Bill 2008 No. , 2008 iv
67
Grant to a person other than a State or Territory --
transport infrastructure ......................................................... 56
Division 4--Channelling of payments through the BAF
Communications Portfolio Special Account
58
68
Establishment of the BAF Communications Portfolio
Special Account ................................................................... 58
69
Purposes of the BAF Communications Portfolio
Special Account ................................................................... 58
70
Channelling of payments through the BAF
Communications Portfolio Special Account ........................ 58
71
Recommendations about payments...................................... 59
72
Payments--debit from the BAF Communications
Portfolio Special Account .................................................... 60
73
Grant to a State or Territory--communications
infrastructure etc. ................................................................. 61
74
Grant to a person other than a State or Territory --
communications infrastructure etc. ...................................... 61
Division 5--Channelling of payments through the BAF Energy
Portfolio Special Account
62
75
Establishment of the BAF Energy Portfolio Special
Account ................................................................................ 62
76
Purpose of the BAF Energy Portfolio Special
Account ................................................................................ 62
77
Channelling of payments through the BAF Energy
Portfolio Special Account .................................................... 62
78
Recommendations about payments...................................... 63
79
Payments--debit from the BAF Energy Portfolio
Special Account ................................................................... 63
80
Grant to a State or Territory--energy infrastructure ........... 64
81
Grant to a person other than a State or Territory --
energy infrastructure ............................................................ 64
Division 6--Channelling of payments through the BAF Water
Portfolio Special Account
66
82
Establishment of the BAF Water Portfolio Special
Account ................................................................................ 66
83
Purpose of the BAF Water Portfolio Special Account ........ 66
84
Channelling of payments through the BAF Water
Portfolio Special Account .................................................... 66
85
Recommendations about payments...................................... 67
86
Payments--debit from the BAF Water Portfolio
Special Account ................................................................... 67
87
Grant to a State or Territory--water infrastructure ............. 68
v Nation-building Funds Bill 2008 No. , 2008
88
Grant to a person other than a State or Territory --
water infrastructure .............................................................. 68
Division 7--Channelling of State/Territory grants payments
through the COAG Reform Fund
70
Subdivision A--Channelling of trans port infrastructure grants
70
89
Channelling of State/Territory grants payments
through the COAG Reform Fund......................................... 70
90
Recommendations about grants payments--transport
infrastructure ........................................................................ 71
91
Transfers from the BAF Infrastructure Portfolio
Special Account to the COAG Reform Fund....................... 71
92
Grants payments--debit from the COAG Reform
Fund ..................................................................................... 72
93
Grant to a State or Territory--transport infrastructure ........ 72
Subdivision B--Channelling of communications infrastructure
grants
73
94
Channelling of State/Territory grants payments
through the COAG Reform Fund......................................... 73
95
Recommendations about grants payments--
communications infrastructure............................................. 74
96
Transfers from the BAF Communications Portfolio
Special Account to the COAG Reform Fund....................... 74
97
Grants payments--debit from the COAG Reform
Fund ..................................................................................... 75
98
Grant to a State or Territory--communications
infrastructure ........................................................................ 76
Subdivision C--Channelling of energy infrastructure grants
76
99
Channelling of State/Territory grants payments
through the COAG Reform Fund......................................... 76
100
Recommendations about grants payments--energy
infrastructure ........................................................................ 77
101
Transfers from the BAF Energy Portfolio Special
Account to the COAG Reform Fund ................................... 77
102
Grants payments--debit from the COAG Reform
Fund ..................................................................................... 78
103
Grant to a State or Territory--energy infrastructure ........... 79
Subdivision D--Channelling of water infrastructure grants
79
104
Channelling of State/Territory grants payments
through the COAG Reform Fund......................................... 79
105
Recommendations about grants payments--water
infrastructure ........................................................................ 80
Nation-building Funds Bill 2008 No. , 2008 vi
106
Transfers from the BAF Water Portfolio Special
Account to the COAG Reform Fund ................................... 81
107
Grants payments--debit from the COAG Reform
Fund ..................................................................................... 81
108
Grant to a State or Territory--water infrastructure ............. 82
Division 8--Total payments for a financial year
83
109
General drawing rights limit in relation to a financial
year....................................................................................... 83
110
Drawing rights in relation to other financial years .............. 84
111
No drawing rights to be issued if there is no general
drawing rights limit in relation to a financial year ............... 84
112
Total payments to depend primarily on the
macroeconomic circumstances ............................................ 86
Part 2.5--Reporting obligations etc.
89
113
Finance Minister may require Future Fund Board to
prepare reports or give information ..................................... 89
114
Keeping the responsible Ministers informed etc.................. 90
115
Finance Minister may give reports to other Ministers
etc. ........................................................................................ 90
Part 2.6--Miscellaneous
91
116
Infrastructure Australia to advise Infrastructure
Minister about transport infrastructure ................................ 91
117
Infrastructure Australia to advise Communications
Minister about communications infrastructure .................... 91
118
Infrastructure Australia to advise Energy Minister
about energy infrastructure .................................................. 92
119
Infrastructure Australia to advise Water Minister
about water infrastructure .................................................... 92
120
BAF evaluation criteria ........................................................ 93
121
Investment provisions do not apply to certain assets ........... 94
122
Delegation by the Finance Minister ..................................... 94
123
Delegation by the Treasurer ................................................. 95
124
Delegation by the Infrastructure Minister ............................ 95
125
Delegation by the Communications Minister ...................... 96
126
Delegation by the Energy Minister ...................................... 96
127
Delegation by the Water Minister ........................................ 96
Chapter 3--Education Investment Fund
98
Part 3.1--Introduction
98
128
Object ................................................................................... 98
129
Simplified outline................................................................. 98
vii Nation-building Funds Bill 2008 No. , 2008
Part 3.2--Education Investment Fund
100
Division 1--Introduction
100
130
Simplified outline............................................................... 100
Division 2--Establishment of the Education Investment Fund
etc.
102
131
Establishment of the Education Investment Fund.............. 102
132
Establishment of the Education Investment Fund
Special Account ................................................................. 102
Division 3--Credits of amounts to the Education Investment
Fund
103
133
Initial credits of amounts to the Education
Investment Fund Special Account ..................................... 103
134
Subsequent credits of amounts to the Education
Investment Fund Special Account--determinations
by the responsible Ministers .............................................. 103
135
Credit of amount to the Education Investment Fund
Special Account--balance of the Higher Education
Endowment Fund Special Account .................................... 104
Division 4--Debits of amounts from the Education Investment
Fund
105
136
Purposes of the Education Investment Fund Special
Account--payments purposes and purposes related
exclusively to the Education Investment Fund .................. 105
137
Purposes of the Education Investment Fund Special
Account--transitional ........................................................ 106
138
Purposes of the Education Investment Fund Special
Account--purposes not related exclusively to the
Education Investment Fund ............................................... 108
139
Payments in relation to the creation or development
of higher education infrastructure ...................................... 109
140
Payments in relation to the creation or development
of research infrastructure ................................................... 110
141
Payments in relation to the creation or development
of vocational education and training infrastructure ........... 110
142
Payments in relation to the creation or development
of eligible education infrastructure .................................... 111
143
Designated education infrastructure-related matters.......... 112
144
Transitional HEEF payments ............................................. 112
145
Future Fund Board must ensure that there is
sufficient money in the Education Investment Fund
Special Account to cover authorised payments etc............ 113
Nation-building Funds Bill 2008 No. , 2008 viii
Division 5--Inter-fund transfers
114
146
Transfers from the Education Investment Fund to the
Future Fund ........................................................................ 114
147
Transfers from the Education Investment Fund to the
Building Australia Fund..................................................... 114
148
Transfers from the Education Investment Fund to the
Health and Hospitals Fund ................................................. 115
Part 3.3--Investment of the Education Investment Fund
116
149
Simplified outline............................................................... 116
150
Objects of investment of the Education Investment
Fund ................................................................................... 116
151
Investment of the Education Investment Fund .................. 117
152
Education Investment Fund to inherit investments of
the Higher Education Endowment Fund ............................ 117
153
Management of investments of the Education
Investment Fund................................................................. 118
154
Education Investment Fund Investment Mandate.............. 118
155
Limitation on Education Investment Fund
Investment Mandate ........................................................... 120
156
Future Fund Board to be consulted on Education
Investment Fund Investment Mandate ............................... 121
157
Compliance with Education Investment Fund
Investment Mandate ........................................................... 122
158
Future Fund Board must not trigger the takeover
provisions of the Corporations Act 2001 ........................... 123
159
Borrowing .......................................................................... 123
160
Education Investment Fund investment policies ............... 124
161
Derivatives ......................................................................... 125
162
Additional financial assets ................................................. 125
163
Securities lending arrangements ........................................ 126
164
Investment managers.......................................................... 127
165
Custody of securities .......................................................... 127
166
Refund of franking credits ................................................. 127
167
Realisation of non-financial assets..................................... 128
168
Additional function of the Future Fund Board................... 128
Part 3.4--Payments
129
Division 1--Introduction
129
169
Simplified outline............................................................... 129
Division 2--Education Investment Fund Advisory Board
131
170
Education Investment Fund Advisory Board..................... 131
171
Functions of the EIF Advisory Board ................................ 131
ix Nation-building Funds Bill 2008 No. , 2008
172
EIF evaluation criteria........................................................ 133
173
Remuneration and allowances ........................................... 133
174
Disclosure of interests ........................................................ 134
175
Resignation......................................................................... 134
Division 3--Direct payments
135
176
Authorisation of payments ................................................. 135
177
Recommendations about payments.................................... 135
178
Grant to a State or Territory--education
infrastructure etc. ............................................................... 137
179
Grant to a person other than a State or Territory --
education infrastructure etc. ............................................... 137
180
Grant to a person other than a State or Territory --
research infrastructure........................................................ 138
Division 4--Channelling of payments through the EIF
Education Portfolio Special Account
139
181
Establishment of the EIF Education Portfolio Special
Account .............................................................................. 139
182
Purposes of the EIF Education Portfolio Special
Account .............................................................................. 139
183
Channelling of payments through the EIF Education
Portfolio Special Account .................................................. 140
184
Recommendations about payments--education
infrastructure ...................................................................... 140
185
Payments--debit from the EIF Education Portfolio
Special Account ................................................................. 142
186
Grant to a State or Territory--education
infrastructure etc. ............................................................... 142
187
Grant to a person other than a State or Territory --
education infrastructure etc. ............................................... 143
Division 5--Channelling of payments through the EIF Research
Portfolio Special Account
144
188
Establishment of the EIF Research Portfolio Special
Account .............................................................................. 144
189
Purposes of the EIF Research Portfolio Special
Account .............................................................................. 144
190
Channelling of payments through the EIF Research
Portfolio Special Account .................................................. 144
191
Recommendations about payments--research
infrastructure and transitional HEEF payments ................. 145
192
Payments--debit from the EIF Research Portfolio
Special Account ................................................................. 146
Nation-building Funds Bill 2008 No. , 2008 x
193
Grant to a person other than a State or Territory --
research infrastructure........................................................ 147
Division 6--Channelling of State/Territory grants payme nts
through the COAG Reform Fund
148
194
Channelling of State/Territory grants payments
through the COAG Reform Fund....................................... 148
195
Recommendations about grants payments ......................... 149
196
Transfers from the EIF Education Portfolio Special
Account to the COAG Reform Fund ................................. 149
197
Grants payments--debit from the COAG Reform
Fund ................................................................................... 150
198
Grant to a State or Territory--education
infrastructure ...................................................................... 150
Division 7--Total payments for a financial year
152
199
General drawing rights limit in relation to a financial
year..................................................................................... 152
200
Drawing rights in relation to other financial years ............ 153
201
No drawing rights to be issued if there is no general
drawing rights limit in relation to a financial year ............. 153
202
Total payments to depend primarily on the
macroeconomic circumstances .......................................... 153
Part 3.5--Reporting obligations etc.
155
203
Finance Minister may require Future Fund Board to
prepare reports or give information ................................... 155
204
Keeping the responsible Ministers informed etc................ 156
205
Finance Minister may give reports to other Ministers
etc. ...................................................................................... 156
Part 3.6--Miscellaneous
157
206
Investment provisions do not apply to certain assets ......... 157
207
Delegation by the Finance Minister ................................... 157
208
Delegation by the Treasurer ............................................... 158
209
Delegation by the Education Minister ............................... 158
210
Delegation by the Research Minister ................................. 159
Chapter 4--Health and Hospitals Fund
160
Part 4.1--Introduction
160
211
Object ................................................................................. 160
212
Simplified outline............................................................... 160
xi Nation-building Funds Bill 2008 No. , 2008
Part 4.2--Health and Hospitals Fund
162
Division 1--Introduction
162
213
Simplified outline............................................................... 162
Division 2--Establishment of the Health and Hospitals Fund etc.
163
214
Establishment of the Health and Hospitals Fund ............... 163
215
Establishment of the Health and Hospitals Fund
Special Account ................................................................. 163
Division 3--Credits of amounts to the Health and Hospitals
Fund
164
216
Initial credits of amounts to the Health and Hospitals
Fund Special Account ........................................................ 164
217
Subsequent credits of amounts to the Health and
Hospitals Fund Special Account--determinations by
the responsible Ministers ................................................... 164
Division 4--Debits of amounts from the Health and Hospitals
Fund
166
218
Purposes of the Health and Hospitals Fund Special
Account--payments purposes and purposes related
exclusively to the Health and Hospitals Fund.................... 166
219
Purposes of the Health and Hospitals Fund Special
Account--purposes not related exclusively to the
Health and Hospitals Fund ................................................. 167
220
Extended meaning of payment in relation to the
creation or development of health infrastructure .............. 168
221
Future Fund Board must ensure that there is
sufficient money in the Health and Hospitals Fund
Special Account to cover authorised payments etc............ 169
Division 5--Inter-fund transfers
170
222
Transfers from the Health and Hospitals Fund to the
Future Fund ........................................................................ 170
223
Transfers from the Health and Hospitals Fund to the
Building Australia Fund..................................................... 170
224
Transfers from the Health and Hospitals Fund to the
Education Investment Fund ............................................... 171
Part 4.3--Investment of the Health and Hospitals Fund
172
225
Simplified outline............................................................... 172
226
Objects of investment of the Health and Hospitals
Fund ................................................................................... 172
227
Investment of the Health and Hospitals Fund .................... 173
228
Management of investments of the Health and
Hospitals Fund ................................................................... 173
Nation-building Funds Bill 2008 No. , 2008 xii
229
Health and Hospitals Fund Investment Mandate ............... 174
230
Limitation on Health and Hospitals Fund Investment
Mandate.............................................................................. 175
231
Future Fund Board to be consulted on Health and
Hospitals Fund Investment Mandate.................................. 176
232
Compliance with Health and Hospitals Fund
Investment Mandate ........................................................... 176
233
Future Fund Board must not trigger the takeover
provisions of the Corporations Act 2001 ........................... 177
234
Borrowing .......................................................................... 178
235
Health and Hospitals Fund investment policies ................. 178
236
Derivatives ......................................................................... 179
237
Additional financial assets ................................................. 180
238
Securities lending arrangements ........................................ 180
239
Investment managers.......................................................... 181
240
Custody of securities .......................................................... 182
241
Refund of franking credits ................................................. 182
242
Realisation of non-financial assets..................................... 182
243
Additional function of the Future Fund Board................... 183
Part 4.4--Payments
184
Division 1--Introduction
184
244
Simplified outline............................................................... 184
Division 2--Health and Hospitals Fund Advisory Board
185
245
Health and Hospitals Fund Advisory Board ...................... 185
246
Functions of the HHF Advisory Board .............................. 185
247
HHF evaluation criteria...................................................... 186
248
Remuneration and allowances ........................................... 186
249
Disclosure of interests ........................................................ 186
250
Resignation......................................................................... 187
Division 3--Direct payments
188
251
Authorisation of payments ................................................. 188
252
Recommendations about payments.................................... 188
253
Grant to a State or Territory ............................................... 188
254
Grant to a person other than a State or Territory ............... 189
Division 4--Channelling of payments through the HHF Health
Portfolio Special Account
190
255
Establishment of the HHF Health Portfolio Special
Account .............................................................................. 190
256
Purpose of the HHF Health Portfolio Special
Account .............................................................................. 190
xiii Nation-building Funds Bill 2008 No. , 2008
257
Channelling of payments through the HHF Health
Portfolio Special Account .................................................. 190
258
Recommendations about payments.................................... 191
259
Payments--debit from the HHF Health Portfolio
Special Account ................................................................. 191
260
Grant to a State or Territory ............................................... 192
261
Grant to a person other than a State or Territory ............... 192
Division 5--Channelling of State/Territory grants payments
through the COAG Reform Fund
194
262
Channelling of State/Territory grants payments
through the COAG Reform Fund....................................... 194
263
Recommendations about grants payments ......................... 194
264
Transfers from the HHF Health Portfolio Special
Account to the COAG Reform Fund ................................. 195
265
Grants payments--debit from the COAG Reform
Fund ................................................................................... 196
266
Grant to a State or Territory ............................................... 196
Division 6--Total payments for a financial year
197
267
General drawing rights limit in relation to a financial
year..................................................................................... 197
268
Drawing rights in relation to other financial years ............ 198
269
No drawing rights to be issued if there is no general
drawing rights limit in relation to a financial year ............. 198
270
Total payments to depend primarily on the
macroeconomic circumstances .......................................... 198
Part 4.5--Reporting obligations etc.
200
271
Finance Minister may require Future Fund Board to
prepare reports or give information ................................... 200
272
Keeping the responsible Ministers informed etc................ 201
273
Finance Minister may give reports to other Ministers
etc. ...................................................................................... 201
Part 4.6--Miscellaneous
202
274
Investment provisions do not apply to certain assets ......... 202
275
Delegation by the Finance Minister ................................... 202
276
Delegation by the Treasurer ............................................... 203
277
Delegation by the Health Minister ..................................... 203
Chapter 5--Regulations
204
278
Regulations......................................................................... 204
Nation-building Funds Bill 2008 No. , 2008 1
A Bill for an Act about the Building Australia
1
Fund, the Education Investment Fund and the
2
Health and Hospitals Fund, and for other purposes
3
The Parliament of Australia enacts:
4
Chapter 1--Preliminary
5
6
7
1 Short title
8
This Act may be cited as the Nation-building Funds Act 2008.
9
Chapter 1 Preliminary
Section 2
2 Nation-building Funds Bill 2008 No. , 2008
2 Commence ment
1
(1) Each provision of this Act specified in column 1 of the table
2
commences, or is taken to have commenced, in accordance with
3
column 2 of the table. Any other statement in column 2 has effect
4
according to its terms.
5
6
Commencement information
Column 1
Column 2
Column 3
Provision(s)
Commencement
Date/Details
1. Sections 1 and
2 and anything in
this Act not
elsewhere covered
by this table
The day on which this Act receives the
Royal Assent.
2. Sections 3 to
278
1 January 2009.
However, if the Nation-building Funds
(Consequential Amendments) Act 2008 does
not receive the Royal Assent before
1 January 2009, the provision(s) do not
commence at all.
Note:
This table relates only to the provisions of this Act as originally
7
passed by both Houses of the Parliament and assented to. It will not be
8
expanded to deal with provisions inserted in this Act after assent.
9
(2) Column 3 of the table contains additional information that is not
10
part of this Act. Information in this column may be added to or
11
edited in any published version of this Act.
12
3 Simplified outline
13
The following is a simplified outline of this Act:
14
·
Chapter 2 sets up the Building Australia Fund, which will
15
enhance the Commonwealth's ability:
16
(a) to make payments in relation to the creation or
17
development of transport infrastructure; and
18
Preliminary Chapter 1
Section 3
Nation-building Funds Bill 2008 No. , 2008 3
(b) to make payments in relation to the creation or
1
development of communications infrastructure;
2
and
3
(c) to make payments in relation to eligible national
4
broadband network matters; and
5
(d) to make payments in relation to the creation or
6
development of energy infrastructure; and
7
(e) to make payments in relation to the creation or
8
development of water infrastructure.
9
·
Chapter 3 sets up the Education Investment Fund, which will
10
enhance the Commonwealth's ability:
11
(a) to make payments in relation to the creation or
12
development of higher education infrastructure;
13
and
14
(b) to make payments in relation to the creation or
15
development of research infrastructure; and
16
(c) to make payments in relation to the creation or
17
development of vocational education and training
18
infrastructure; and
19
(d) to make payments in relation to the creation or
20
development of eligible education infrastructure;
21
and
22
(e) to make transitional HEEF payments.
23
·
Chapter 4 sets up the Health and Hospitals Fund, which will
24
enhance the Commonwealth's ability to make payments in
25
relation to the creation or development of health
26
infrastructure.
27
Chapter 1 Preliminary
Section 4
4 Nation-building Funds Bill 2008 No. , 2008
4 Definitions
1
In this Act:
2
acquire includes acquire by way of issue.
3
Agency means the Future Fund Management Agency.
4
Appropriation Act means an Act appropriating money for
5
expenditure out of the Consolidated Revenue Fund.
6
asset means:
7
(a) any kind of real or personal property; or
8
(b) any legal or equitable estate or interest in real or personal
9
property; or
10
(c) any legal or equitable right.
11
BAF Communications Portfolio Special Account means the BAF
12
Communications Portfolio Special Account established by
13
section 68.
14
BAF Energy Portfolio Special Account means the BAF Energy
15
Portfolio Special Account established by section 75.
16
BAF evaluation criteria means evaluation criteria under
17
section 120.
18
BAF Infrastructure Portfolio Special Account means the BAF
19
Infrastructure Portfolio Special Account established by section 61.
20
BAF Water Portfolio Special Account means the BAF Water
21
Portfolio Special Account established by section 82.
22
balance of the Building Australia Fund means the sum of:
23
(a) amounts standing to the credit of the Building Australia Fund
24
Special Account; and
25
(b) the value of investments of the Building Australia Fund.
26
balance of the Education Investment Fund means the sum of:
27
(a) amounts standing to the credit of the Education Investment
28
Fund Special Account; and
29
(b) the value of investments of the Education Investment Fund.
30
Preliminary Chapter 1
Section 4
Nation-building Funds Bill 2008 No. , 2008 5
balance of the Health and Hospitals Fund means the sum of:
1
(a) amounts standing to the credit of the Health and Hospitals
2
Fund Special Account; and
3
(b) the value of investments of the Health and Hospitals Fund.
4
bank has the same meaning as in the Financial Management and
5
Accountability Act 1997.
6
Building Australia Fund means the Building Australia Fund
7
established by section 12.
8
Building Australia Fund investment function of the Future Fund
9
Board means:
10
(a) a function or power conferred on the Future Fund Board by
11
section 32, 34, 40, 42, 44 or 45; or
12
(b) a right or power conferred on the Future Fund Board in its
13
capacity as the holder of an investment of the Building
14
Australia Fund.
15
Building Australia Fund Investment Mandate has the meaning
16
given by subsection 35(4).
17
Building Australia Fund Special Account means the Building
18
Australia Fund Special Account established by section 13.
19
business entity means:
20
(a) a company; or
21
(b) a partnership; or
22
(c) a trust; or
23
(d) a body politic.
24
carriage service has the same meaning as in the
25
Telecommunications Act 1997.
26
Chair means the Chair of the Future Fund Board.
27
COAG Reform Fund means the COAG Reform Fund established
28
by section 5 of the COAG Reform Fund Act 2008.
29
Communications Department means the Department administered
30
by the Communications Minister.
31
Chapter 1 Preliminary
Section 4
6 Nation-building Funds Bill 2008 No. , 2008
Communications Minister means the Minister who administers the
1
Telecommunications Act 1997.
2
debenture has the same meaning as in the Corporations Act 2001.
3
derivative means a derivative (within the meaning of Chapter 7 of
4
the Corporations Act 2001) that is a financial asset.
5
designated education infrastructure-related matter has the
6
meaning given by section 143.
7
drawing right means a drawing right issued under section 27 of the
8
Financial Management and Accountability Act 1997.
9
Education Department means the Department administered by the
10
Education Minister.
11
Education Investment Fund means the Education Investment
12
Fund established by section 131.
13
Education Investment Fund investment function of the Future
14
Fund Board means:
15
(a) a function or power conferred on the Future Fund Board by
16
section 151, 153, 159, 161, 163 or 164; or
17
(b) a right or power conferred on the Future Fund Board in its
18
capacity as the holder of an investment of the Education
19
Investment Fund.
20
Education Investment Fund Investment Mandate has the
21
meaning given by subsection 154(4).
22
Education Investment Fund Special Account means the
23
Education Investment Fund Special Account established by
24
section 132.
25
Education Minister means the Minister who administers Part 2-2
26
of the Higher Education Support Act 2003.
27
Note:
Part 2-2 of the Higher Education Support Act 2003 deals with the
28
Commonwealth Grant Scheme.
29
EIF Advisory Board means the Education Investment Fund
30
Advisory Board established under section 170.
31
Preliminary Chapter 1
Section 4
Nation-building Funds Bill 2008 No. , 2008 7
EIF designated Ministers means:
1
(a) the Education Minister; and
2
(b) the Research Minister.
3
EIF Education Portfolio Special Account means the EIF
4
Education Portfolio Special Account established by section 181.
5
EIF evaluation criteria means evaluation criteria under
6
section 172.
7
EIF Research Portfolio Special Account means the EIF Research
8
Portfolio Special Account established by section 188.
9
eligible national broadband network matter has the meaning
10
given by section 23.
11
Energy Department means the Department administered by the
12
Energy Minister.
13
Energy Minister means the Minister who administers the
14
Australian Energy Market Act 2004.
15
Finance Department means the Department administered by the
16
Finance Minister.
17
Finance Minister has the same meaning as in the Financial
18
Management and Accountability Act 1997.
19
financial asset has the meaning given by section 5.
20
Future Fund Board means the Future Fund Board of Guardians.
21
Future Fund Board member means a member of the Future Fund
22
Board, and includes the Chair.
23
Future Fund Special Account means the Future Fund Special
24
Account established by section 12 of the Future Fund Act 2006.
25
GFS Australia means the publication of the Australian Bureau of
26
Statistics known as Australian System of Government Finance
27
Statistics: Concepts, Sources and Methods, as updated from time to
28
time. This updating takes 2 forms, as follows:
29
Chapter 1 Preliminary
Section 4
8 Nation-building Funds Bill 2008 No. , 2008
(a) from time to time, a new version of the publication is
1
produced;
2
(b) from time to time, material in the current version of the
3
publication is updated by other publications of the Australian
4
Bureau of Statistics.
5
GFS system has the same meaning as in GFS Australia.
6
Health and Hospitals Fund means the Health and Hospitals Fund
7
established by section 214.
8
Health and Hospitals Fund investment function of the Future
9
Fund Board means:
10
(a) a function or power conferred on the Future Fund Board by
11
section 227, 228, 234, 236, 238 or 239; or
12
(b) a right or power conferred on the Future Fund Board in its
13
capacity as the holder of an investment of the Health and
14
Hospitals Fund.
15
Health and Hospitals Fund Investment Mandate has the meaning
16
given by subsection 229(4).
17
Health and Hospitals Fund Special Account means the Health
18
and Hospitals Fund Special Account established by section 215.
19
Health Department means the Department administered by the
20
Health Minister.
21
Health Minister means the Minister responsible for administering
22
the Health Insurance Act 1973.
23
HHF Advisory Board means the Health and Hospitals Fund
24
Advisory Board established under section 245.
25
HHF evaluation criteria means evaluation criteria under
26
section 247.
27
HHF Health Portfolio Special Account means the HHF Health
28
Portfolio Special Account established by section 255.
29
higher education institution means an institution specified in a
30
legislative instrument made by the EIF designated Ministers for the
31
purposes of this definition.
32
Preliminary Chapter 1
Section 4
Nation-building Funds Bill 2008 No. , 2008 9
Infrastructure Department means the Department administered by
1
the Infrastructure Minister.
2
Infrastructure Minister means the Minister who administers the
3
Infrastructure Australia Act 2008.
4
investment means any mode of application of money or financial
5
assets for the purpose of gaining a return (whether by way of
6
income, capital gain or any other form of return).
7
investment manager means a person or body (other than the
8
Agency) who undertakes to do any or all of the following:
9
(a) invest amounts on behalf of the Future Fund Board;
10
(b) manage the investment of funds on behalf of the Future Fund
11
Board;
12
(c) acquire derivatives on behalf of the Future Fund Board;
13
(d) manage derivatives on behalf of the Future Fund Board;
14
(e) enter into securities lending arrangements on behalf of the
15
Future Fund Board;
16
(f) realise financial assets on behalf of the Future Fund Board;
17
(g) perform custodial functions in relation to the financial assets
18
of the Future Fund Board.
19
investment of the Building Australia Fund means a financial asset
20
that, under a provision of this Act, is taken to be an investment of
21
the Building Australia Fund.
22
investment of the Education Investment Fund means a financial
23
asset that, under a provision of this Act, is taken to be an
24
investment of the Education Investment Fund.
25
investment of the Health and Hospitals Fund means a financial
26
asset that, under a provision of this Act, is taken to be an
27
investment of the Health and Hospitals Fund.
28
modifications includes additions, omissions and substitutions.
29
national broadband network means a national telecommunications
30
network for the high-speed carriage of communications. For this
31
purpose, carriage, communications and telecommunications
32
Chapter 1 Preliminary
Section 4
10 Nation-building Funds Bill 2008 No. , 2008
network have the same meanings as in the Telecommunications Act
1
1997.
2
Note:
See also subsection 7(2).
3
payment in relation to the creation or development of
4
communications infrastructure has a meaning affected by
5
section 22.
6
payment in relation to the creation or development of eligible
7
education infrastructure has the meaning given by section 142.
8
payment in relation to the creation or development of energy
9
infrastructure has a meaning affected by section 24.
10
payment in relation to the creation or development of health
11
infrastructure has a meaning affected by section 220.
12
payment in relation to the creation or development of higher
13
education infrastructure has the meaning given by section 139.
14
payment in relation to the creation or development of research
15
infrastructure has the meaning given by section 140.
16
payment in relation to the creation or development of transport
17
infrastructure has a meaning affected by section 21.
18
payment in relation to the creation or development of vocational
19
education and training infrastructure has the meaning given by
20
section 141.
21
payment in relation to the creation or development of water
22
infrastructure has a meaning affected by section 25.
23
person (except in Division 2 of Part 3.4 and Division 2 of Part 4.4)
24
includes a partnership.
25
Note:
See also paragraph 22(1)(a) of the Acts Interpretation Act 1901.
26
realise includes redeem or dispose of.
27
Research Department means the Department administered by the
28
Research Minister.
29
Preliminary Chapter 1
Section 5
Nation-building Funds Bill 2008 No. , 2008 11
research institution means an institution specified in a legislative
1
instrument made by the EIF designated Ministers for the purposes
2
of this definition.
3
Research Minister means the Minister who administers the
4
Australian Research Council Act 2001.
5
responsible Ministers means:
6
(a) the Treasurer; and
7
(b) the Finance Minister.
8
securities lending arrangement means an agreement of the kind
9
known as a securities lending arrangement.
10
transitional HEEF payment has the meaning given by
11
section 144.
12
Treasury Department means the Department administered by the
13
Treasurer.
14
value of an investment of:
15
(a) the Building Australia Fund; or
16
(b) the Education Investment Fund; or
17
(c) the Health and Hospitals Fund;
18
means the market value of the investment. For this purpose,
19
disregard anything that would prevent or restrict conversion of a
20
financial asset to money.
21
vocational education and training provider means a person or
22
body specified in a legislative instrument made by the EIF
23
designated Ministers for the purposes of this definition.
24
Water Department means the Department administered by the
25
Water Minister.
26
Water Minister means the Minister who administers the Water Act
27
2007.
28
5 Financial assets
29
A reference in this Act to a financial asset is a reference to:
30
Chapter 1 Preliminary
Section 6
12 Nation-building Funds Bill 2008 No. , 2008
(a) an asset that, in accordance with GFS Australia, is treated as
1
a financial asset for the purposes of the GFS system in
2
Australia; or
3
(b) an asset specified in regulations made for the purposes of this
4
paragraph;
5
but does not include a reference to an asset that, under the
6
regulations, is taken to be a non-financial asset for the purposes of
7
this Act.
8
Note:
For specification by class, see subsection 13(3) of the Legislative
9
Instruments Act 2003.
10
6 Crown to be bound
11
(1) This Act binds the Crown in each of its capacities.
12
(2) This Act does not make the Crown liable to be prosecuted for an
13
offence.
14
7 Extension to external Territories
15
(1) This Act extends to every external Territory.
16
(2) However, for the purposes of this Act, it is immaterial whether a
17
national broadband network extends to an external Territory.
18
8 Extra-territorial application
19
This Act extends to acts, omissions, matters and things outside
20
Australia (unless the contrary intention appears).
21
22
Building Australia Fund Chapter 2
Introduction Part 2.1
Section 9
Nation-building Funds Bill 2008 No. , 2008 13
1
Chapter 2--Building Australia Fund
2
Part 2.1--Introduction
3
4
9 Object
5
The object of this Chapter is to enhance the Commonwealth's
6
ability:
7
(a) to make payments in relation to the creation or development
8
of transport infrastructure; and
9
(b) to make payments in relation to the creation or development
10
of communications infrastructure; and
11
(c) to make payments in relation to eligible national broadband
12
network matters; and
13
(d) to make payments in relation to the creation or development
14
of energy infrastructure; and
15
(e) to make payments in relation to the creation or development
16
of water infrastructure.
17
10 Simplified outline
18
The following is a simplified outline of this Chapter:
19
·
This Chapter sets up the Building Australia Fund, which
20
consists of:
21
(a) the Building Australia Fund Special Account; and
22
(b) the investments of the Building Australia Fund.
23
·
The main purposes of the Building Australia Fund Special
24
Account are:
25
(a) to make payments in relation to the creation or
26
development of transport infrastructure; and
27
Chapter 2 Building Australia Fund
Part 2.1 Introduction
Section 10
14 Nation-building Funds Bill 2008 No. , 2008
(b) to make payments in relation to the creation or
1
development of communications infrastructure;
2
and
3
(c) to make payments in relation to eligible national
4
broadband network matters; and
5
(d) to make payments in relation to the creation or
6
development of energy infrastructure; and
7
(e) to make payments in relation to the creation or
8
development of water infrastructure.
9
·
The Finance Minister is responsible for authorising payments
10
on the recommendation of the Infrastructure Minister, the
11
Communications Minister, the Energy Minister or the Water
12
Minister.
13
·
If a payment is made by way of a grant of financial assistance,
14
the terms and conditions on which the financial assistance is
15
granted are to be set out in a written agreement between the
16
Commonwealth and the recipient.
17
·
The Future Fund Board is responsible for deciding how to
18
invest the Building Australia Fund.
19
·
Investments of the Building Australia Fund will consist of
20
financial assets.
21
·
The Future Fund Board is bound by a Building Australia Fund
22
Investment Mandate given to it by the responsible Ministers.
23
Note:
The Future Fund Act 2006 provides that the Future Fund Management
24
Agency is responsible for assisting and advising the Future Fund
25
Board.
26
27
Building Australia Fund Chapter 2
Building Australia Fund Part 2.2
Introduction Division 1
Section 11
Nation-building Funds Bill 2008 No. , 2008 15
1
Part 2.2--Building Australia Fund
2
Division 1--Introduction
3
11 Simplified outline
4
The following is a simplified outline of this Part:
5
·
This Part sets up the Building Australia Fund.
6
·
The Building Australia Fund consists of:
7
(a) the Building Australia Fund Special Account; and
8
(b) the investments of the Building Australia Fund.
9
·
The balance of the Communications Fund is to be transferred
10
to the Building Australia Fund.
11
·
The balance of the Telstra Sale Special Account is to be
12
transferred to the Building Australia Fund.
13
·
One or more initial amounts are to be credited to the Building
14
Australia Fund Special Account by 30 June 2009. The total of
15
the initial amounts must equal $7.5 billion.
16
·
The responsible Ministers may determine that additional
17
amounts are to be credited to the Building Australia Fund
18
Special Account.
19
·
Amounts may be debited from the Building Australia Fund
20
Special Account in accordance with the purposes of the
21
Building Australia Fund Special Account.
22
·
The main purposes of the Building Australia Fund Special
23
Account are:
24
Chapter 2 Building Australia Fund
Part 2.2 Building Australia Fund
Division 1 Introduction
Section 11
16 Nation-building Funds Bill 2008 No. , 2008
(a) to make payments in relation to the creation or
1
development of transport infrastructure; and
2
(b) to make payments in relation to the creation or
3
development of communications infrastructure;
4
and
5
(c) to make payments in relation to eligible national
6
broadband network matters; and
7
(d) to make payments in relation to the creation or
8
development of energy infrastructure; and
9
(e) to make payments in relation to the creation or
10
development of water infrastructure.
11
Note 1:
The Communications Fund was established by repealed
12
section 158ZG of the Telecommunications (Consumer Protection and
13
Service Standards) Act 1999.
14
Note 2:
The Telstra Sale Special Account was established under subsection
15
20(1) of the Financial Management and Accountability Act 1997.
16
17
Building Australia Fund Chapter 2
Building Australia Fund Part 2.2
Establishment of the Building Australia Fund etc. Division 2
Section 12
Nation-building Funds Bill 2008 No. , 2008 17
1
Division 2--Establishment of the Building Australia Fund
2
etc.
3
12 Establishme nt of the Building Australia Fund
4
(1) The Building Australia Fund is established by this section.
5
(2) The Building Australia Fund consists of:
6
(a) the Building Australia Fund Special Account; and
7
(b) the investments of the Building Australia Fund.
8
13 Establishme nt of the Building Australia Fund Special Account
9
(1) The Building Australia Fund Special Account is established by this
10
section.
11
(2) The Building Australia Fund Special Account is a Special Account
12
for the purposes of the Financial Management and Accountability
13
Act 1997.
14
Note:
An Appropriation Act may contain a provision to the effect that, if any
15
of the purposes of a Special Account is a purpose that is covered by an
16
item in the Appropriation Act (whether or not the item expressly refers
17
to the Special Account), then amounts may be debited against the
18
appropriation for that item and credited to that Special Account.
19
20
Chapter 2 Building Australia Fund
Part 2.2 Building Australia Fund
Division 3 Credits of amounts to the Building Australia Fund
Section 14
18 Nation-building Funds Bill 2008 No. , 2008
1
Division 3--Credits of amounts to the Building Australia
2
Fund
3
14 Initial credits of amounts to the Building Australia Fund Special
4
Account
5
(1) The responsible Ministers may, by writing, determine that:
6
(a) a specified amount is to be credited to the Building Australia
7
Fund Special Account on a specified day; or
8
(b) a specified amount is to be credited to the Building Australia
9
Fund Special Account in specified instalments on specified
10
days.
11
(2) The responsible Ministers must ensure that, by the end of 30 June
12
2009, the total of the amounts credited to the Building Australia
13
Fund Special Account under subsection (1) equals $7.5 billion.
14
Note 1:
See also section 16 (balance of the Communications Fund to be
15
credited to the Building Australia Fund Special Account).
16
Note 2:
See also section 33 (Building Australia Fund to inherit investments of
17
the Communications Fund).
18
Note 3:
See also section 17 (balance of the Telstra Sale Special Account to be
19
credited to the Building Australia Fund Special Account).
20
(3) The responsible Ministers must not make a determination under
21
subsection (1) after 30 June 2009.
22
(4) A determination under subsection (1) is irrevocable.
23
(5) A determination under subsection (1) is a legislative instrument,
24
but section 42 (disallowance) of the Legislative Instruments Act
25
2003 does not apply to the determination.
26
15 Subsequent credits of amounts to the Building Australia Fund
27
Special Account--determinations by the responsible
28
Ministers
29
(1) The responsible Ministers may, by writing, determine that:
30
Building Australia Fund Chapter 2
Building Australia Fund Part 2.2
Cred its of amounts to the Build ing Australia Fund Division 3
Section 16
Nation-building Funds Bill 2008 No. , 2008 19
(a) a specified amount is to be credited to the Building Australia
1
Fund Special Account on a specified day; or
2
(b) a specified amount is to be credited to the Building Australia
3
Fund Special Account in specified instalments on specified
4
days.
5
Note:
For variation and revocation, see subsection 33(3) of the Acts
6
Interpretation Act 1901.
7
(2) In making a determination under subsection (1), the responsible
8
Ministers must have regard to the object of this Chapter.
9
(3) A determination under subsection (1) is a legislative instrument,
10
but section 42 (disallowance) of the Legislative Instruments Act
11
2003 does not apply to the determination.
12
16 Credit of amount to the Building Australia Fund Special
13
Account--balance of the Communications Fund Special
14
Account
15
As soon as practicable after the commencement of this section,
16
there is to be credited to the Building Australia Fund Special
17
Account an amount equal to the balance of the Communications
18
Fund Special Account as at immediately before the commencement
19
of this section.
20
Note:
The Communications Fund Special Account was established by
21
repealed section 158ZH of the Telecommunications (Consumer
22
Protection and Service Standards) Act 1999.
23
17 Credit of amount to the Building Australia Fund Special
24
Account--balance of the Telstra Sale Special Account
25
(1) The responsible Ministers may, by writing, determine that an
26
amount equal to the balance of the Telstra Sale Special Account as
27
at a specified time is to be:
28
(a) debited from the Telstra Sale Special Account; and
29
(b) credited to the Building Australia Fund Special Account.
30
Note:
The Telstra Sale Special Account was established under subsection
31
20(1) of the Financial Management and Accountability Act 1997.
32
Chapter 2 Building Australia Fund
Part 2.2 Building Australia Fund
Division 3 Credits of amounts to the Building Australia Fund
Section 17
20 Nation-building Funds Bill 2008 No. , 2008
(2) The responsible Ministers must make a determination under
1
subsection (1) before the end of 30 June 2009.
2
(3) A determination under subsection (1) is a legislative instrument,
3
but section 42 (disallowance) of the Legislative Instruments Act
4
2003 does not apply to the determination.
5
6
Building Australia Fund Chapter 2
Building Australia Fund Part 2.2
Debits of amounts from the Building Australia Fund Division 4
Section 18
Nation-building Funds Bill 2008 No. , 2008 21
1
Division 4--Debits of amounts from the Building Australia
2
Fund
3
18 Purposes of the Building Australia Fund Special Account--
4
payments purposes and purposes related exclusively to
5
the Building Australia Fund
6
(1) Each of the following is a purpose of the Building Australia Fund
7
Special Account:
8
(a) making payments in relation to the creation or development
9
of transport infrastructure, so long as the payments are
10
authorised under subsection 51(1);
11
(b) making payments in relation to the creation or development
12
of communications infrastructure, so long as the payments
13
are authorised under subsection 51(2);
14
(c) making payments in relation to eligible national broadband
15
network matters, so long as the payments are authorised
16
under subsection 51(3);
17
(d) making payments in relation to the creation or development
18
of energy infrastructure, so long as the payments are
19
authorised under subsection 51(4);
20
(e) making payments in relation to the creation or development
21
of water infrastructure, so long as the payments are
22
authorised under subsection 51(5);
23
(f) paying the costs of, or incidental to, the acquisition of
24
financial assets under section 32;
25
(g) paying expenses of an investment of the Building Australia
26
Fund;
27
(h) paying the costs of, or incidental to, the acquisition of
28
derivatives under section 42;
29
(i) paying or discharging the costs, expenses and other
30
obligations incurred by the Future Fund Board under a
31
contract between the Future Fund Board and an investment
32
manager engaged under subsection 45(1);
33
(j) paying or discharging the costs, expenses and other
34
obligations incurred in connection with the establishment,
35
Chapter 2 Building Australia Fund
Part 2.2 Building Australia Fund
Division 4 Debits of amounts from the Bu ild ing Australia Fund
Section 19
22 Nation-building Funds Bill 2008 No. , 2008
maintenance or operation of a bank account of the Future
1
Fund Board, where the bank account relates exclusively to
2
the Building Australia Fund;
3
(k) paying a premium in respect of a contract of insurance
4
entered into by the Future Fund Board exclusively in
5
connection with the Building Australia Fund;
6
(l) paying or discharging any other costs, expenses, obligations
7
or liabilities incurred by the Future Fund Board exclusively
8
in connection with the Building Australia Fund.
9
Note:
See section 21 of the Financial Management and Accountability Act
10
1997 (debits from Special Accounts).
11
(2) Paragraphs (1)(b) and (c) do not limit each other.
12
(3) A payment under paragraph (1)(a), (b), (c), (d) or (e) may be made:
13
(a) by way of a grant of financial assistance; or
14
(b) otherwise than by way of a grant of financial assistance.
15
Note 1:
Section 63 deals with the channelling of payments through the BAF
16
Infrastructure Portfolio Special Account.
17
Note 2:
Section 70 deals with the channelling of payments through the BAF
18
Communications Portfolio Special Account.
19
Note 3:
Section 77 deals with the channelling of payments through the BAF
20
Energy Portfolio Special Account.
21
Note 4:
Section 84 deals with the channelling of payments through the BAF
22
Water Portfolio Special Account.
23
Note 5:
Sections 89, 94, 99 and 104 deal with the channelling of
24
State/Territory grants payments through the COAG Reform Fund.
25
19 Purposes of the Building Australia Fund Special Account--
26
transitional
27
Each of the following is a purpose of the Building Australia Fund
28
Special Account:
29
(a) paying the costs of, or incidental to, the acquisition of
30
financial assets under repealed Division 3 of Part 9C of the
31
Telecommunications (Consumer Protection and Service
32
Standards) Act 1999, where the costs were incurred before
33
the commencement of this section;
34
Building Australia Fund Chapter 2
Building Australia Fund Part 2.2
Debits of amounts from the Building Australia Fund Division 4
Section 20
Nation-building Funds Bill 2008 No. , 2008 23
(b) paying expenses of an investment of the Building Australia
1
Fund, where:
2
(i) immediately before the commencement of this section,
3
the investment was an investment of the
4
Communications Fund; and
5
(ii) the expense was incurred before the commencement of
6
this section;
7
(c) paying the costs of, or incidental to, the acquisition of
8
derivatives under repealed section 158ZQ of the
9
Telecommunications (Consumer Protection and Service
10
Standards) Act 1999, where the costs were incurred before
11
the commencement of this section;
12
(d) paying or discharging any other costs, expenses, obligations
13
or liabilities incurred by the Commonwealth in connection
14
with the Communications Fund, where the costs, expenses,
15
obligations or liabilities were incurred before the
16
commencement of this section.
17
Note 1:
See section 21 of the Financial Management and Accountability Act
18
1997 (debits from Special Accounts).
19
Note 2:
The Communications Fund was established by repealed
20
section 158ZG of the Telecommunications (Consumer Protection and
21
Service Standards) Act 1999.
22
20 Purposes of the Building Australia Fund Special Account--
23
purposes not related exclusively to the Building Australia
24
Fund
25
Each of the following is a purpose of the Building Australia Fund
26
Special Account:
27
(a) paying or discharging the costs, expenses and other
28
obligations incurred in connection with the establishment,
29
maintenance or operation of a bank account of the Future
30
Fund Board, where those costs, expenses or obligations are
31
not covered by:
32
(i) paragraph 18(1)(j); or
33
(ii) paragraph 136(1)(j); or
34
(iii) paragraph 137(e); or
35
(iv) paragraph 218(1)(f); or
36
Chapter 2 Building Australia Fund
Part 2.2 Building Australia Fund
Division 4 Debits of amounts from the Bu ild ing Australia Fund
Section 20
24 Nation-building Funds Bill 2008 No. , 2008
(v) paragraph 2(1)(g) of Schedule 2 to the Future Fund Act
1
2006;
2
(b) paying a premium in respect of a contract of insurance
3
entered into by the Future Fund Board, where the premium is
4
not covered by:
5
(i) paragraph 18(1)(k); or
6
(ii) paragraph 136(1)(k); or
7
(iii) paragraph 137(f); or
8
(iv) paragraph 218(1)(g); or
9
(v) paragraph 2(1)(h) of Schedule 2 to the Future Fund Act
10
2006;
11
(c) paying or discharging any other costs, expenses, obligations
12
or liabilities incurred by the Future Fund Board, where the
13
costs, expenses, obligations or liabilities are not covered by:
14
(i) a paragraph of subsection 18(1); or
15
(ii) a paragraph of subsection 136(1); or
16
(iii) a paragraph of section 137; or
17
(iv) a paragraph of subsection 218(1); or
18
(v) a paragraph of subclause 2(1) of Schedule 2 to the
19
Future Fund Act 2006;
20
(d) paying remuneration and allowances of Future Fund Board
21
members;
22
(e) paying remuneration, and other employment-related costs
23
and expenses, in respect of members of the staff of the
24
Agency;
25
(f) paying or discharging the costs, expenses and other
26
obligations incurred by the Commonwealth under a contract
27
entered into under section 78 or 82 of the Future Fund Act
28
2006;
29
(g) paying or discharging the costs, expenses and other
30
obligations incurred by the Commonwealth in connection
31
with the operation of the Agency.
32
Note:
See section 21 of the Financial Management and Accountability Act
33
1997 (debits from Special Accounts).
34
Building Australia Fund Chapter 2
Building Australia Fund Part 2.2
Debits of amounts from the Building Australia Fund Division 4
Section 21
Nation-building Funds Bill 2008 No. , 2008 25
21 Extended meaning of payment in relation to the creation or
1
development of transport infrastructure
2
For the purposes of this Act, each of the following payments is
3
taken to be a payment in relation to the creation or development
4
of transport infrastructure:
5
(a) a payment in relation to the acquisition of shares in a
6
company that is, or will be, involved in the creation or
7
development of transport infrastructure;
8
(b) a payment in relation to the acquisition of debentures of a
9
company that is, or will be, involved in the creation or
10
development of transport infrastructure;
11
(c) a payment in relation to the acquisition of units in a unit trust
12
that is, or will be, involved in the creation or development of
13
transport infrastructure;
14
(d) a payment in relation to the acquisition of a financial asset in
15
a business entity that is, or will be, involved in the creation or
16
development of transport infrastructure;
17
(e) a payment in relation to a matter incidental or ancillary to a
18
matter set out in paragraph (a), (b), (c) or (d).
19
Note:
See section 121.
20
22 Extended meaning of payment in relation to the creation or
21
development of communications infrastructure
22
For the purposes of this Act, each of the following payments is
23
taken to be a payment in relation to the creation or development
24
of communications infrastructure:
25
(a) a payment in relation to the acquisition of shares in a
26
company that is, or will be, involved in the creation or
27
development of communications infrastructure;
28
(b) a payment in relation to the acquisition of debentures of a
29
company that is, or will be, involved in the creation or
30
development of communications infrastructure;
31
(c) a payment in relation to the acquisition of units in a unit trust
32
that is, or will be, involved in the creation or development of
33
communications infrastructure;
34
Chapter 2 Building Australia Fund
Part 2.2 Building Australia Fund
Division 4 Debits of amounts from the Bu ild ing Australia Fund
Section 23
26 Nation-building Funds Bill 2008 No. , 2008
(d) a payment in relation to the acquisition of any other financial
1
asset in a business entity that is, or will be, involved in the
2
creation or development of communications infrastructure;
3
(e) a payment in relation to a matter incidental or ancillary to a
4
matter set out in paragraph (a), (b), (c) or (d).
5
Note:
See section 121.
6
23 Eligible national broadband network matter
7
For the purposes of this Act, an eligible national broadband
8
network matter is any of the following matters:
9
(a) the acquisition of shares in a company that is, or will be,
10
involved in the creation or development of a national
11
broadband network;
12
(b) the acquisition of debentures of a company that is, or will be,
13
involved in the creation or development of a national
14
broadband network;
15
(c) the acquisition of units in a unit trust that is, or will be,
16
involved in the creation or development of a national
17
broadband network;
18
(d) the acquisition of any other financial asset in a business
19
entity that is, or will be, involved in the creation or
20
development of a national broadband network;
21
(e) the creation or development of a national broadband network;
22
(f) the supply of a broadband carriage service over a national
23
broadband network;
24
(g) the acquisition of assets for use in connection with the
25
creation or development of a national broadband network;
26
(h) a matter incidental or ancillary to a matter set out in
27
paragraph (a), (b), (c), (d), (e), (f) or (g).
28
Note:
See section 121.
29
24 Extended meaning of payment in relation to the creation or
30
development of energy infrastructure
31
For the purposes of this Act, each of the following payments is
32
taken to be a payment in relation to the creation or development
33
of energy infrastructure:
34
Building Australia Fund Chapter 2
Building Australia Fund Part 2.2
Debits of amounts from the Building Australia Fund Division 4
Section 25
Nation-building Funds Bill 2008 No. , 2008 27
(a) a payment in relation to the acquisition of shares in a
1
company that is, or will be, involved in the creation or
2
development of energy infrastructure;
3
(b) a payment in relation to the acquisition of debentures of a
4
company that is, or will be, involved in the creation or
5
development of energy infrastructure;
6
(c) a payment in relation to the acquisition of units in a unit trust
7
that is, or will be, involved in the creation or development of
8
energy infrastructure;
9
(d) a payment in relation to the acquisition of a financial asset in
10
a business entity that is, or will be, involved in the creation or
11
development of energy infrastructure;
12
(e) a payment in relation to a matter incidental or ancillary to a
13
matter set out in paragraph (a), (b), (c) or (d).
14
Note:
See section 121.
15
25 Extended meaning of payment in relation to the creation or
16
development of water infrastructure
17
For the purposes of this Act, each of the following payments is
18
taken to be a payment in relation to the creation or development
19
of water infrastructure:
20
(a) a payment in relation to the acquisition of shares in a
21
company that is, or will be, involved in the creation or
22
development of water infrastructure;
23
(b) a payment in relation to the acquisition of debentures of a
24
company that is, or will be, involved in the creation or
25
development of water infrastructure;
26
(c) a payment in relation to the acquisition of units in a unit trust
27
that is, or will be, involved in the creation or development of
28
water infrastructure;
29
(d) a payment in relation to the acquisition of a financial asset in
30
a business entity that is, or will be, involved in the creation or
31
development of water infrastructure;
32
(e) a payment in relation to a matter incidental or ancillary to a
33
matter set out in paragraph (a), (b), (c) or (d).
34
Note:
See section 121.
35
Chapter 2 Building Australia Fund
Part 2.2 Building Australia Fund
Division 4 Debits of amounts from the Bu ild ing Australia Fund
Section 26
28 Nation-building Funds Bill 2008 No. , 2008
26 Future Fund Board must ensure that there is sufficient money in
1
the Building Australia Fund Special Account to cover
2
authorised payments etc.
3
The Future Fund Board must take all reasonable steps to ensure
4
that the amount of money standing to the credit of the Building
5
Australia Fund Special Account is sufficient to cover:
6
(a) the debit of amounts for payments authorised, or proposed to
7
be authorised, under subsection 51(1), (2), (3), (4) or (5); and
8
(b) amounts debited, or proposed to be debited, under subsection
9
63(1); and
10
(c) amounts debited, or proposed to be debited, under subsection
11
70(1); and
12
(d) amounts debited, or proposed to be debited, under subsection
13
77(1); and
14
(e) amounts debited, or proposed to be debited, under subsection
15
84(1); and
16
(f) amounts debited, or proposed to be debited, under subsection
17
89(1); and
18
(g) amounts debited, or proposed to be debited, under subsection
19
94(1); and
20
(h) amounts debited, or proposed to be debited, under subsection
21
99(1); and
22
(i) amounts debited, or proposed to be debited, under subsection
23
104(1).
24
Note:
This may require the Future Fund Board to realise an investment of
25
the Building Australia Fund in accordance with section 34.
26
27
Building Australia Fund Chapter 2
Building Australia Fund Part 2.2
Inter-fund transfers Division 5
Section 27
Nation-building Funds Bill 2008 No. , 2008 29
1
Division 5--Inter-fund transfers
2
27 Transfers from the Building Australia Fund to the Future Fund
3
(1) If an amount is debited from the Future Fund Special Account for a
4
purpose mentioned in subclause 2(2) of Schedule 2 to the Future
5
Fund Act 2006, the Finance Minister may, by writing, direct that a
6
specified amount is to be:
7
(a) debited from the Building Australia Fund Special Account;
8
and
9
(b) credited to the Future Fund Special Account;
10
on a specified day.
11
(2) The specified amount must not exceed the amount debited from the
12
Future Fund Special Account as mentioned in subsection (1).
13
(3) A direction under subsection (1) is not a legislative instrument.
14
28 Transfers from the Building Australia Fund to the Education
15
Investment Fund
16
(1) If an amount is debited from the Education Investment Fund
17
Special Account for a purpose mentioned in section 138, the
18
Finance Minister may, by writing, direct that a specified amount is
19
to be:
20
(a) debited from the Building Australia Fund Special Account;
21
and
22
(b) credited to the Education Investment Fund Special Account;
23
on a specified day.
24
(2) The specified amount must not exceed the amount debited from the
25
Education Investment Fund Special Account as mentioned in
26
subsection (1).
27
(3) A direction under subsection (1) is not a legislative instrument.
28
Chapter 2 Building Australia Fund
Part 2.2 Building Australia Fund
Division 5 Inter-fund transfers
Section 29
30 Nation-building Funds Bill 2008 No. , 2008
29 Transfers from the Building Australia Fund to the Health and
1
Hospitals Fund
2
(1) If an amount is debited from the Health and Hospitals Fund Special
3
Account for a purpose mentioned in section 219, the Finance
4
Minister may, by writing, direct that a specified amount is to be:
5
(a) debited from the Building Australia Fund Special Account;
6
and
7
(b) credited to the Health and Hospitals Fund Special Account;
8
on a specified day.
9
(2) The specified amount must not exceed the amount debited from the
10
Health and Hospitals Fund Special Account as mentioned in
11
subsection (1).
12
(3) A direction under subsection (1) is not a legislative instrument.
13
14
Building Australia Fund Chapter 2
Investment of the Building Australia Fund Part 2.3
Section 30
Nation-building Funds Bill 2008 No. , 2008 31
1
Part 2.3--Investment of the Building Australia
2
Fund
3
4
30 Simplified outline
5
The following is a simplified outline of this Part:
6
·
The Future Fund Board is responsible for deciding how to
7
invest the Building Australia Fund.
8
·
Investments of the Building Australia Fund will consist of
9
financial assets.
10
·
Investments of the Building Australia Fund will be held in the
11
name of the Future Fund Board.
12
·
The Future Fund Board is bound by a Building Australia Fund
13
Investment Mandate given to it by the responsible Ministers.
14
31 Objects of investment of the Building Australia Fund
15
(1) The main object of the acquisition by the Future Fund Board of a
16
financial asset as an investment of the Building Australia Fund is
17
to enhance the Commonwealth's ability:
18
(a) to make payments in relation to the creation or development
19
of transport infrastructure; and
20
(b) to make payments in relation to the creation or development
21
of communications infrastructure; and
22
(c) to make payments in relation to eligible national broadband
23
network matters; and
24
(d) to make payments in relation to the creation or development
25
of energy infrastructure; and
26
(e) to make payments in relation to the creation or development
27
of water infrastructure.
28
Chapter 2 Building Australia Fund
Part 2.3 Investment of the Bu ilding Australia Fund
Section 32
32 Nation-building Funds Bill 2008 No. , 2008
(2) The ancillary objects of the acquisition by the Future Fund Board
1
of a financial asset as an investment of the Building Australia Fund
2
are to enhance the ability of the Commonwealth and the Future
3
Fund Board to:
4
(a) discharge costs, expenses, obligations and liabilities; and
5
(b) make payments;
6
as mentioned in paragraphs 18(1)(f) to (l),19(a) to (d) and 20(a) to
7
(g).
8
32 Investment of the Building Australia Fund
9
(1) The Future Fund Board may invest amounts standing to the credit
10
of the Building Australia Fund Special Account in any financial
11
assets.
12
(2) Investments under subsection (1) are to be made in the name of the
13
Future Fund Board.
14
(3) Investments under subsection (1) are taken to be investments of the
15
Building Australia Fund.
16
(4) This section does not authorise the acquisition of a derivative.
17
Note:
For acquisition of derivatives, see section 42.
18
33 Building Australia Fund to inherit investments of the
19
Communications Fund
20
Scope
21
(1) This section applies to a financial asset if:
22
(a) immediately before the commencement of this section, the
23
financial asset was an investment of the Communications
24
Fund; and
25
(b) the financial asset is held by the Commonwealth; and
26
(c) the financial asset has been continuously held by the
27
Commonwealth since the commencement of this section.
28
Note:
The Communications Fund was established by repealed
29
section 158ZG of the Telecommunications (Consumer Protection and
30
Service Standards) Act 1999.
31
Building Australia Fund Chapter 2
Investment of the Building Australia Fund Part 2.3
Section 34
Nation-building Funds Bill 2008 No. , 2008 33
Investment of the Building Australia Fund
1
(2) The financial asset is taken to be an investment of the Building
2
Australia Fund.
3
Rights and powers
4
(3) The Future Fund Board may, on behalf of the Commonwealth,
5
exercise any rights or powers conferred on the Commonwealth in
6
the Commonwealth's capacity as the holder of the financial asset.
7
(4) Such a right or power is taken to be a Building Australia Fund
8
investment function of the Future Fund Board.
9
34 Management of investments of the Building Australia Fund
10
(1) Income derived from an investment of the Building Australia Fund
11
is to be credited to the Building Australia Fund Special Account.
12
(2) A return of capital, or any other financial distribution, relating to
13
an investment of the Building Australia Fund is to be credited to
14
the Building Australia Fund Special Account.
15
(3) The Future Fund Board may realise an investment of the Building
16
Australia Fund.
17
(4) Upon realisation of an investment of the Building Australia Fund,
18
the proceeds of the investment are to be credited to the Building
19
Australia Fund Special Account.
20
(5) At any time before an investment of the Building Australia Fund
21
matures, the Future Fund Board may authorise the re-investment of
22
the proceeds upon maturity in a financial asset investment with the
23
same entity. The new investment is taken to be an investment of
24
the Building Australia Fund.
25
(6) Section 39 of the Financial Management and Accountability Act
26
1997 does not apply to an investment of the Building Australia
27
Fund.
28
Chapter 2 Building Australia Fund
Part 2.3 Investment of the Bu ilding Australia Fund
Section 35
34 Nation-building Funds Bill 2008 No. , 2008
35 Building Australia Fund Investment Mandate
1
(1) The responsible Ministers may give the Future Fund Board written
2
directions about the performance of its Building Australia Fund
3
investment functions, and must give at least one such direction.
4
Note 1:
Building Australia Fund investment function is defined in section 4.
5
Note 2:
For variation and revocation, see subsection 33(3) of the Acts
6
Interpretation Act 1901.
7
(2) Subsection (1) has effect subject to section 36.
8
(3) In giving a direction under subsection (1), the responsible
9
Ministers must have regard to:
10
(a) maximising the return earned on the Building Australia Fund,
11
consistent with international best practice for institutional
12
investment; and
13
(b) enhancing the Commonwealth's ability:
14
(i) to make payments in relation to the creation or
15
development of transport infrastructure; and
16
(ii) to make payments in relation to the creation or
17
development of communications infrastructure; and
18
(iii) to make payments in relation to eligible national
19
broadband network matters; and
20
(iv) to make payments in relation to the creation or
21
development of energy infrastructure; and
22
(v) to make payments in relation to the creation or
23
development of water infrastructure; and
24
(c) such other matters as the responsible Ministers consider
25
relevant.
26
(4) Directions under subsection (1) are to be known collectively as the
27
Building Australia Fund Investment Mandate.
28
(5) A direction under subsection (1) may set out the policies to be
29
pursued by the Future Fund Board in relation to:
30
(a) matters of risk and return; and
31
(b) the allocation of financial assets.
32
A policy relating to the allocation of financial assets must not be
33
inconsistent with a policy relating to matters of risk and return.
34
Building Australia Fund Chapter 2
Investment of the Building Australia Fund Part 2.3
Section 35
Nation-building Funds Bill 2008 No. , 2008 35
(6) Subsection (5) does not limit subsection (1).
1
(7) Subsection (5) has effect subject to section 36.
2
(8) The Building Australia Fund Investment Mandate prevails over
3
subsection (12) to the extent of any inconsistency.
4
(9) The responsible Ministers must not give a direction under
5
subsection (1) that is inconsistent with this Act (other than
6
subsection (12)).
7
(10) A direction under subsection (1) must not take effect before the
8
15th day after the day on which it is given.
9
(11) A direction under subsection (1) is a legislative instrument.
10
Note 1:
Section 42 (disallowance) of the Legislative Instruments Act 2003
11
does not apply to the direction--see section 44 of that Act.
12
Note 2:
Part 6 (sunsetting) of the Legislative Instruments Act 2003 does not
13
apply to the direction--see section 54 of that Act.
14
(12) In the performance of its Building Australia Fund investment
15
functions, the Future Fund Board must seek to:
16
(a) maximise the return earned on the Building Australia Fund,
17
consistent with international best practice for institutional
18
investment; and
19
(b) enhance the Commonwealth's ability:
20
(i) to make payments in relation to the creation or
21
development of transport infrastructure; and
22
(ii) to make payments in relation to the creation or
23
development of communications infrastructure; and
24
(iii) to make payments in relation to eligible national
25
broadband network matters; and
26
(iv) to make payments in relation to the creation or
27
development of energy infrastructure; and
28
(v) to make payments in relation to the creation or
29
development of water infrastructure.
30
Note:
Building Australia Fund investment function is defined in section 4.
31
(13) Subsection (12) has effect subject to:
32
(a) this Act; and
33
Chapter 2 Building Australia Fund
Part 2.3 Investment of the Bu ilding Australia Fund
Section 36
36 Nation-building Funds Bill 2008 No. , 2008
(b) a direction under subsection (1).
1
36 Limitation on Building Australia Fund Investment Mandate
2
(1) The responsible Ministers must not give a direction under
3
subsection 35(1) that has the purpose, or has or is likely to have the
4
effect, of directly or indirectly requiring the Future Fund Board to:
5
(a) invest an amount standing to the credit of the Building
6
Australia Fund Special Account in a particular financial
7
asset; or
8
(b) acquire a particular derivative; or
9
(c) allocate financial assets to:
10
(i) a particular business entity; or
11
(ii) a particular activity; or
12
(iii) a particular business.
13
(2) Paragraphs (1)(a) and (b) do not limit paragraph (1)(c).
14
37 Future Fund Board to be consulted on Building Australia Fund
15
Investment Mandate
16
(1) Before giving the Future Fund Board a direction under subsection
17
35(1), the responsible Ministers must:
18
(a) send a draft of the direction to the Future Fund Board; and
19
(b) invite the Future Fund Board to make a submission to the
20
responsible Ministers on the draft direction within a time
21
limit specified by the responsible Ministers; and
22
(c) consider any submission that is received from the Future
23
Fund Board within that time limit.
24
(2) If:
25
(a) the responsible Ministers give the Future Fund Board a
26
direction under subsection 35(1); and
27
(b) the Future Fund Board made a submission to the responsible
28
Ministers on a draft of the direction within the time limit
29
specified by the responsible Ministers;
30
the submission is to be tabled in each House of the Parliament with
31
the direction.
32
Building Australia Fund Chapter 2
Investment of the Building Australia Fund Part 2.3
Section 38
Nation-building Funds Bill 2008 No. , 2008 37
Note:
For tabling of the direction, see section 38 of the Legislative
1
Instruments Act 2003.
2
(3) A time limit specified under this section must be reasonable.
3
38 Compliance with Building Australia Fund Investment Mandate
4
(1) The Future Fund Board must take all reasonable steps to comply
5
with the Building Australia Fund Investment Mandate.
6
(2) As soon as practicable after the Future Fund Board becomes aware
7
that it has failed to comply with the Building Australia Fund
8
Investment Mandate, the Future Fund Board must give the
9
responsible Ministers a written statement:
10
(a) informing the responsible Ministers of the failure to comply
11
with the Building Australia Fund Investment Mandate; and
12
(b) setting out the action that the Future Fund Board proposes to
13
take in order to comply with the Building Australia Fund
14
Investment Mandate.
15
(3) If the responsible Ministers are satisfied that the Future Fund
16
Board has failed to comply with the Building Australia Fund
17
Investment Mandate, the responsible Ministers may, by written
18
notice given to the Future Fund Board, direct the Future Fund
19
Board:
20
(a) to give the responsible Ministers, within a period specified in
21
the notice, a written explanation for the failure to comply
22
with the Building Australia Fund Investment Mandate; and
23
(b) to take action specified in the notice, within a period
24
specified in the notice, in order to comply with the Building
25
Australia Fund Investment Mandate.
26
(4) The Future Fund Board must comply with a direction under
27
subsection (3).
28
(5) A failure to comply with:
29
(a) the Building Australia Fund Investment Mandate; or
30
(b) a direction under subsection (3);
31
does not affect the validity of any transaction.
32
(6) A direction under subsection (3) is not a legislative instrument.
33
Chapter 2 Building Australia Fund
Part 2.3 Investment of the Bu ilding Australia Fund
Section 39
38 Nation-building Funds Bill 2008 No. , 2008
39 Future Fund Board must not trigger the takeover provisions of
1
the Corporations Act 2001
2
(1) Subsections 606(1A) and (2A) and section 611 of the Corporations
3
Act 2001 do not apply to an acquisition by the Future Fund Board
4
if the acquisition is the result of the performance by the Future
5
Fund Board of its Building Australia Fund investment functions.
6
(2) A failure by the Future Fund Board to comply with section 606 of
7
the Corporations Act 2001 (as modified by this section) does not
8
affect the validity of any transaction.
9
Note:
See also section 39 of the Future Fund Act 2006 (application of the
10
Corporations Act 2001).
11
40 Borrowing
12
(1) The Future Fund Board must not borrow money for a purpose in
13
connection with the Building Australia Fund unless the borrowing
14
is authorised by subsection (2) or (3).
15
(2) The Future Fund Board is authorised to borrow money for a
16
purpose in connection with the Building Australia Fund if:
17
(a) the purpose of the borrowing is to enable the Future Fund
18
Board to cover settlement of a transaction for the acquisition
19
of one or more financial assets; and
20
(b) at the time the relevant acquisition decision was made, it was
21
likely that the borrowing would not be needed; and
22
(c) the period of the borrowing does not exceed 7 days; and
23
(d) if the borrowing were to take place, the total amount
24
borrowed by the Future Fund Board would not exceed 10%
25
of the balance of the Building Australia Fund.
26
(3) The Future Fund Board is authorised to borrow money for a
27
purpose in connection with the Building Australia Fund if the
28
borrowing takes place in such circumstances (if any) as are
29
specified in the regulations.
30
Building Australia Fund Chapter 2
Investment of the Building Australia Fund Part 2.3
Section 41
Nation-building Funds Bill 2008 No. , 2008 39
41 Building Australia Fund investment policies
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(1) The Future Fund Board must formulate written policies to be
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complied with by it in relation to the following matters in
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connection with the Building Australia Fund:
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(a) the investment strategy for the Building Australia Fund;
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(b) benchmarks and standards for assessing the performance of
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the Building Australia Fund;
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(c) risk management for the Building Australia Fund;
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(d) a matter relating to international best practice for institutional
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investment;
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(e) a matter specified in the regulations.
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Note:
For variation and revocation, see subsection 33(3) of the Acts
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Interpretation Act 1901.
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(2) The Future Fund Board must ensure that policies formulated under
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subsection (1) are consistent with the Building Australia Fund
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Investment Mandate.
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Publication of policies
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(3) The Future Fund Board must cause copies of policies formulated
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under subsection (1) to be published on the internet.
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(4) The Future Fund Board must ensure that the first set of policies
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formulated under subsection (1) is published on the internet as
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soon as practicable after the commencement of this section.
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Review of policies
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(5) The Future Fund Board must conduct periodic reviews of policies
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formulated under subsection (1).
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(6) If there is a change in the Building Australia Fund Investment
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Mandate, the Future Fund Board must review any relevant policies
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formulated under subsection (1).
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Compliance with policies
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(7) The Future Fund Board must take all reasonable steps to comply
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with policies formulated under subsection (1).
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Part 2.3 Investment of the Bu ilding Australia Fund
Section 42
40 Nation-building Funds Bill 2008 No. , 2008
(8) A failure to comply with a policy formulated under subsection (1)
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does not affect the validity of any transaction.
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Policies
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(9) A policy formulated under subsection (1) is not a legislative
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instrument.
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42 Derivatives
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(1) The Future Fund Board may acquire a derivative for the purpose
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of:
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(a) protecting the value of an investment of the Building
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Australia Fund (other than a derivative); or
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(b) protecting the return on an investment of the Building
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Australia Fund (other than a derivative); or
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(c) achieving indirect exposure to financial assets (other than
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derivatives) for a purpose in connection with the Building
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Australia Fund; or
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(d) achieving transactional efficiency for a purpose in connection
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with the Building Australia Fund;
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but must not acquire a derivative for the purpose of:
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(e) speculation; or
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(f) leverage.
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(2) The acquisition of a derivative under subsection (1) must be
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consistent with the investment strategy embodied in a policy
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formulated by the Future Fund Board under subsection 41(1).
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(3) A derivative acquired under subsection (1) is to be held in the
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name of the Future Fund Board.
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(4) A derivative acquired under subsection (1) is taken to be an
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investment of the Building Australia Fund.
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43 Additional financial assets
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If, as a result of:
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(a) the Future Fund Board's holding of an investment of the
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Building Australia Fund; or
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Building Australia Fund Chapter 2
Investment of the Building Australia Fund Part 2.3
Section 44
Nation-building Funds Bill 2008 No. , 2008 41
(b) the exercise of any rights or powers conferred on the Future
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Fund Board in its capacity as the holder of an investment of
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the Building Australia Fund;
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the Future Fund Board becomes the holder of a financial asset, that
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financial asset is taken to be an investment of the Building
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Australia Fund.
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44 Securities lending arrangements
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(1) The Future Fund Board may enter into securities lending
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arrangements for a purpose in connection with the Building
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Australia Fund.
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(2) Any money received by the Future Fund Board under a securities
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lending arrangement entered into under subsection (1) is to be
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credited to the Building Australia Fund Special Account.
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(3) To avoid doubt, a securities lending arrangement entered into
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under subsection (1) may provide for the Future Fund Board to
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realise an investment of the Building Australia Fund.
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(4) If, as the result of the operation of a securities lending arrangement
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entered into under subsection (1), the Future Fund Board becomes
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the holder of a financial asset, that financial asset is taken to be an
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investment of the Building Australia Fund.
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45 Investment managers
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(1) The Future Fund Board may engage one or more investment
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managers for purposes in connection with the Building Australia
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Fund.
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(2) The Future Fund Board must not:
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(a) invest amounts under subsection 32(1); or
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(b) acquire derivatives under subsection 42(1); or
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(c) enter into a securities lending arrangement under subsection
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44(1); or
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(d) realise financial assets that are investments of the Building
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Australia Fund;
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unless the Future Fund Board does so:
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Part 2.3 Investment of the Bu ilding Australia Fund
Section 46