Victorian Consolidated Legislation

Financial Management Act 1994 - SECT 40K

Guarantee charge

40K. Guarantee charge



(1) The Treasurer may determine, before financial accommodation to which a
State guarantee is to apply is provided to a person, that an annual guarantee
charge is payable by that person in respect of the financial accommodation at
an annual percentage rate specified in the determination, being a rate that,
in the opinion of the Treasurer, does not exceed the difference between-

   (a)  the annual interest or discount rate and other costs of the financial
        accommodation; and





   (b)  the estimated annual interest or discount rate and other costs of the
        financial accommodation that would apply if the State guarantee did
        not apply.

(2) A person who is required to pay a guarantee charge in respect of financial
accommodation must pay to the Treasurer, for payment into the Consolidated
Fund-

   (a)  if the financial accommodation is provided for less than 12 months, an
        amount determined-

   (i)  if the guarantee is under an Act, by multiplying the amount of the
        financial accommodation by the rate referred to in subsection (1); or

   (ii) if the guarantee is executed by the Treasurer, by multiplying the
        amount of the limit of the guarantee by the rate referred to in
        subsection (1); or

   (b)  if the financial accommodation is provided for 12 months or more, an
        amount in respect of each financial year during which the guarantee is
        in force determined by multiplying the sum of the person's liabilities
        in respect of the financial accommodation as at the end of that
        financial year by the rate referred to in subsection (1).

(3) A guarantee charge is payable on or before 31 December next following the
financial year, or part of a financial year, to which it relates and may be
recovered as a debt due to the State.