Airline Equipment (Loan Guarantee)
No. 131 of 1968
An Act relating to the provision of certain Equipment for a Domestic Airline.
[Assented to 9 December 1968]
BE it enacted by the Queen’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—
Short title.
1. This Act may be cited as the Airline Equipment (Loan Guarantee) Act 1968.
Commencement.
2. This Act shall come into operation on the day on which it receives the Royal Assent.
Guarantee of certain loans.
3.—(1.) The Treasurer may, on behalf of the Commonwealth, at the request of Ansett Transport Industries Limited and subject to the conditions required by this Act, for the purpose of enabling the purchase by Ansett Transport Industries (Operations) Proprietary Limited of one Boeing 727 aircraft and related spare parts and equipment, guarantee the repayment of, and the payment of interest on—
(a) a loan or loans of an amount or amounts not exceeding in the whole Two million five hundred thousand dollars in the currency of the United States of America; and
(b) a loan or loans of an amount or amounts not exceeding in the whole Two million two hundred and fifty thousand dollars in Australian currency,
made or to be made to Ansett Transport Industries (Operations) Proprietary Limited, being in each case a loan on terms of repayment under which every amount of moneys received by the borrower by way of loan is to be repaid within a period of seven years from the date on which the amount is received.
(2.) The guarantee in respect of a loan or loans under this section does not affect the rights of Ansett Transport Industries Limited or Ansett Transport Industries (Operations) Proprietary Limited under clause 4 of the agreement set out in the Second Schedule to the Airlines Agreements Act 1952-1961.
Financial conditions of guarantees.
4. For the purposes of the protection of the financial interests of the Commonwealth, the Treasurer shall not give a guarantee under the last preceding section in respect of a loan unless—
(a) the moneys are borrowed upon reasonable terms and conditions;
(b) proper security is, or is to be, given to the Commonwealth over the aircraft and related spare parts and equipment to which the loan relates;
(c) undertakings to the satisfaction of the Treasurer are given that the aircraft and other assets over which security is to be taken in accordance with the last preceding paragraph—
(i) will be insured, and kept insured, against all risks against which it is customary to insure, and to their full insurable value;
(ii) will not be sold or made the subject of a mortgage or charge having priority over the security to the Commonwealth in respect of the guarantee; and
(iii) will not be taken out of Australia for a destination that is not in Australia or a Territory of the Commonwealth except after the furnishing of such security as the Treasurer requires;
(d) undertakings to the satisfaction of the Treasurer are given that, for so long as the loan or any interest on the loan remains unpaid, officers employed in the Commonwealth Service will have full access at all reasonable times to the financial accounts of Ansett
Overview
The Airline Equipment (Loan Guarantee) Act 1968 was enacted to address a specific financial need of Ansett Transport Industries Limited, enabling the company to purchase a Boeing 727 aircraft and related equipment. This Act was passed by the Queen’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, aiming to support the expansion of domestic air services through the provision of necessary aviation equipment. The primary objective of the Act is to facilitate the acquisition of the aircraft by guaranteeing the repayment of loans, subject to certain financial conditions designed to protect the Commonwealth’s interests. This legislative measure reflects a policy objective to foster the growth and competitiveness of the domestic airline industry by ensuring that airlines have access to essential capital and resources.
Scope and Application
The Airline Equipment (Loan Guarantee) Act 1968 applies specifically to the Commonwealth of Australia's provision of financial guarantees for certain loans taken by Ansett Transport Industries (Operations) Proprietary Limited for the acquisition of a Boeing 727 aircraft and related spare parts and equipment. This Act is limited in its scope to the transactions directly related to the purchase of this specific aircraft and its associated assets. The financial guarantees are provided by the Treasurer on behalf of the Commonwealth, subject to the conditions outlined in the Act, which include the terms of repayment, security over the aircraft, insurance, and access to financial accounts. The Act's geographic reach is confined to the Commonwealth level, and it does not extend to other entities or industries beyond the specified transaction. The Act does not explicitly mention exclusions, exemptions, or thresholds, but the financial guarantees are contingent upon the satisfaction of specific conditions outlined in the Act. The application of this Act may be further extended or restricted through subordinate instruments, although such details are not provided within the primary text of the Act.
Key Provisions
The Airline Equipment (Loan Guarantee) Act 1968, specifically in sections 1 to 4, establishes the framework for the Commonwealth to guarantee certain loans for Ansett Transport Industries (Operations) Proprietary Limited to purchase a Boeing 727 aircraft and related spare parts and equipment. Section 1 gives the Act its short title, while Section 2 states that the Act comes into operation on the day it receives Royal Assent. Section 3 details the conditions under which the Treasurer may guarantee loans up to USD 2,500,000 and AUD 2,250,000, provided they are repaid within seven years. Section 4 outlines the financial conditions that must be met before the Treasurer can provide a guarantee, including reasonable terms and conditions, proper security over the aircraft and related assets, and insurance and other undertakings to protect the Commonwealth's interests.
The Act imposes several obligations on the parties involved. Firstly, Ansett Transport Industries (Operations) Proprietary Limited must ensure that the loans are used strictly for the purchase of the specified aircraft and related equipment. Secondly, the company must adhere to the financial conditions stipulated in Section 4, including providing proper security and maintaining insurance on the assets. Thirdly, Ansett must also comply with the undertakings given to the Treasurer, such as allowing Commonwealth officers access to financial accounts and ensuring the assets are not removed from Australia without appropriate security. These obligations are designed to protect the financial interests of the Commonwealth and ensure that the loaned funds are used for their intended purpose.
Failure to comply with the conditions and obligations of the Act can result in serious consequences. Although specific offences and penalties are not detailed in the provided sections, the Act implies that non-compliance could lead to the withdrawal of the guarantee, financial repercussions for Ansett Transport Industries, and potential legal action by the Commonwealth. The Act does not specify maximum penalties, but breaches of such a nature could result in financial loss or legal disputes that might lead to significant civil or criminal penalties. The overarching intent of the Act is to safeguard the Commonwealth’s financial interests while facilitating the necessary purchase of critical equipment for Ansett Transport Industries.