EXPLANATORY STATEMENT
STATUTORY RULES 1985 NO. 210
ISSUED BY THE AUTHORITY OF THE MINISTER FOR DEFENCE
ARMY AND AIR FORCE CANTEEN SERVICE REGULATIONS (AMENDMENT)
The Army and Air Force Canteen Service Regulations (“the Regulations”) provide for the establishment and operation of canteens for the Army and Air Force and, in particular, for the distribution of profits and other surplus funds by the Army and Air Force Canteen Service Board of Management (“the Board”). It is an important part of the policy for the Canteen Service that its profits and surplus funds should be applied for the benefit of personnel at the units and bases where it trades.
This Statutory Rule amends the Regulations by revising the procedure for distributing Canteen Service profits and other surplus funds. The amendments:
a. change the period over which profits are calculated from a “financial year” to a “trading period”, in line with established accounting practice;
b. require the Board to distribute, in accordance with principles approved by the Minister for Defence, profits and other surplus funds at least once in each financial year; and
c. enable the Board to adopt different formulas for the distribution of profits and of surplus funds (taking account, in the latter case, of gross sales as well as trading profits), in order to ensure an equitable distribution.
The Statutory Rule:
a. omits from sub-regulation 24(1) “financial year” wherever occurring and substitutes “trading period”;
b. omits from paragraph 24(2)(d) “21(3)” and substitutes “21(2)””, a drafting amendment to rectify an incorrect reference;
c. substitutes in sub-regulation 24(2) “, at least once in each financial year,” for “from time to time”;
d. omits paragraph 24(3)(b) and substitutes new paragraphs 24(3)(b) and 24(3)(c). New paragraph 24(3)(b) provides that Canteen Service profits distributed to a unit or base will continue to be related to the trading profits of canteens at that unit or base. Paragraph 24(3)(c) provides that other surplus funds which the Canteen Service distributes to a unit or base are to be related to either the trading profit or the gross sales of canteens at that unit or base; and
e. inserts sub-regulation 24(4) which defines a “trading period” as being such period as is determined by the Board having regard to the principles approved by the Minister for Defence.
The amendments have effect from the date of the gazettal of the Statutory Rule.
Overview
The Army and Air Force Canteen Service Regulations (Amendment) 1996 was enacted to address gaps in the distribution of profits and other surplus funds by the Army and Air Force Canteen Service Board of Management. This Statutory Rule, issued by the authority of the Minister for Defence, was made under the Statutory Rules Act 1978 and aims to ensure that profits and surplus funds are applied equitably for the benefit of personnel at the units and bases where the Canteen Service operates. The principal objective of these amendments is to align the distribution process with established accounting practices and to provide the Board with the flexibility to adopt different formulas for the distribution of profits and surplus funds, taking into account trading profits and gross sales.
Scope and Application
The Army and Air Force Canteen Service Regulations (Amendment) Statutory Rules 1995 No. 210, issued under the authority of the Minister for Defence, modify the Army and Air Force Canteen Service Regulations which govern the establishment and operation of canteens for the Army and Air Force, including the distribution of profits and surplus funds. This Act applies to the Army and Air Force Canteen Service Board of Management and its activities, specifically the distribution of profits and surplus funds. The amendment is designed to align the calculation period of profits with established accounting practices, requiring a change from a “financial year” to a “trading period”. Additionally, the Board must distribute profits and surplus funds at least once in each financial year, and may use different formulas for distributing profits and surplus funds to ensure equity. The amendments have a national jurisdictional reach, as they pertain to the Commonwealth’s Army and Air Force Canteen Service. The changes have effect from the date of the gazettal of the Statutory Rule.
Key Provisions
The Army and Air Force Canteen Service Regulations (Amendment) Statutory Rule 1985 No. 210 introduces significant changes to the distribution of profits and surplus funds by the Army and Air Force Canteen Service Board of Management. Firstly, it modifies the calculation period for profits from a “financial year” to a “trading period” (Section 24(1)), aligning with established accounting practices. This change ensures that profits are assessed based on the actual trading activities rather than the conventional calendar year. Secondly, the Board is mandated to distribute profits and surplus funds at least once in each financial year (Section 24(2)), thereby formalising the distribution schedule and ensuring timely benefits to personnel. Additionally, the Board is empowered to adopt distinct formulas for distributing profits and surplus funds, with surplus funds being related to either trading profits or gross sales, as deemed appropriate (Section 24(3) and 24(4)).
The Regulations impose several obligations on the Board. Foremost, the Board must now base its profit calculations on the trading period, a period determined by the Board in accordance with principles approved by the Minister for Defence (Section 24(1) and 24(4)). The Board is also required to distribute profits and surplus funds at least annually, ensuring that the benefits derived from the Canteen Service's operations are periodically and fairly shared with personnel at the units and bases where it operates (Section 24(2)). Furthermore, the Board must consider both trading profits and gross sales when distributing surplus funds, aiming for an equitable distribution that reflects the actual financial performance of the canteens (Section 24(3)(b) and 24(3)(c)). These obligations underscore the importance of transparency and fairness in the distribution process.
Breaches of the amended Regulations may lead to various consequences. While the specific offences and penalties are not detailed in the Statutory Rule, it is likely that non-compliance could result in administrative or legal actions. The Minister for Defence, or other relevant authorities, may take measures to enforce the provisions, potentially including fines or other administrative penalties. Additionally, failure to adhere to the mandated distribution procedures could lead to civil consequences, such as lawsuits from affected personnel or entities. The exact nature and severity of these consequences would depend on the specific breach and the discretion of the enforcing authorities.