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2008-2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
INTERNATIONAL MONETARY AGREEMENTS AMENDMENT BILL 2009
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Treasurer, the Hon Wayne Swan MP)
Table of contents
General outline 1
Do not remove section break.
International Monetary Agreements Amendment Bill 2009
The purpose of this Bill is to amend the International Monetary
Agreements (IMA) Act 1947 to alter the definition of the
International Monetary Fund Articles of Agreement
('Fund Agreement') and the definition of World Bank Articles of
Agreement ('Bank Agreement') to include any amendments of the
relevant Articles of Agreement that enter into force for Australia
without the need for further legislative changes when these
amendments are made.
The proposed Bill will simplify the process for Australia to accept
amendments to the Fund and Bank Agreements that have recently been
agreed by members of the International Monetary Fund (IMF) and
World Bank, as well as any future amendments, while retaining
policy and parliamentary scrutiny.
Currently, an IMA Amendment Act is required to change the IMA Act
to reflect any amendments to the Fund and Bank Agreements.
However, this legislative process is largely an administrative
task.
The Treasurer, as Australia's Governor of the IMF and World Bank,
is required to vote on any proposed changes to the Articles of
Agreement of either institution.
The Agreements, which are schedules to the Act, constitute
international treaties for Australia and, as such, irrespective of
the requirement for legislation, any amendments to the treaties
will still require tabling in Parliament for consideration by the
Joint Standing Committee on Treaties.
Amendments to the Fund Agreement and the Bank Agreement have
recently been approved by the Boards of Governors of the IMF and
World Bank. These include amendments to increase the number of
basic votes allocated to each member of the IMF and World Bank,
provide for a second Alternate Executive Director for large
constituencies at the IMF and expand the investment authority of
the IMF.
The amendments in this Bill will enact any amendments to the Fund
Agreement and the Bank Agreement for Australia, including those
recently approved as identified above, upon their entry into force.
Date of effect: The amendments in this Bill will apply from the
date it receives Royal Assent.
Proposal announced: On 28 April 2008, the IMF Board of Governors
approved amendments to the Fund Agreement to increase the number of
basic votes allocated to each member and provide for a second
Alternate Executive Director for large constituencies at the IMF.
On 5 May 2008, the IMF Board of Governors approved amendments to
the Fund Agreement to expand the investment authority of the IMF.
This is part of broader reform of the IMF's income model, including
deriving income from investment of the proceeds of the sale of part
of the IMF's gold holdings.
On 30 January 2009, the Board of Governors of the World Bank
approved amendments to the Bank Agreement to increase the number of
basic votes allocated to each member - thereby increasing the
voting share of developing and transition countries in the World
Bank.
The Treasurer, as Governor for Australia of the IMF and World Bank,
voted in favour of each of these proposed amendments.
Amendments to the Fund and Bank Agreements enter into force for all
members, whether or not they have accepted the amendments,
following certification by the IMF or World Bank, by formal
communication, that three fifths of the members, having 85 per cent
of the total voting power, have accepted the amendments.
Financial impact: This Bill will have no financial impact.
Regulation: No compliance costs are expected to result from entry
into force of this Bill.
Notes on individual clauses
Clause 1 - Short title
1. This clause provides the short title by which the Act may be cited.
Clause 2 - Commencement
2. This clause provides that the proposed amendments will commence on
the day on which the Act receives the Royal Assent.
Clause 3 - Schedule(s)
3. This clause makes it clear that the International Monetary
Agreements Act 1947 is amended or repealed as set out in the
applicable items in the Schedule concerned, and any other item in a
Schedule to this Act has effect according to its terms.
Schedule 1 - Amendments
Item 1 - Subsection 3(1) (at the end of the definition of Bank
Agreement)
4. This item extends the definition of Bank Agreement (currently
defined as the Articles of Agreement of the International Bank for
Reconstruction and Development set out in Schedule 2 of the Act, as
amended in accordance with a Board of Governors resolution set out
in Schedule 3) to also include any other amendments of the Articles
of Agreement that have entered into force for Australia.
Item 2 - Subsection 3(1) (at the end of the definition of Fund
Agreement)
5. This item extends the definition of Fund Agreement (currently
defined as the Articles of Agreements of the International Monetary
Fund set out in Schedule 1 of the Act) to also include any other
amendments of the Articles of Agreement that have entered into
force for Australia.
Item 3 - Application
6. This item specifies that the amendments made by this Schedule apply
in relation to amendments that enter into force for Australia on or
after the commencement of this item (regardless of whether the
amendments were proposed before, on or after that commencement).