EXPLANATORY STATEMENT
STATUTORY RULES 1990 NO. 157
Issued by the Authority of the Minister for Transport and Communications
Subject - Australian Postal Corporation Act 1989
Australia Post (Capital) Regulations
Section 102 of the Australian Postal Corporation Act 1989 (the Corporation Act) provides that the Governor-General may make regulations, not inconsistent with the Corporation Act, prescribing matters required or permitted by the Corporation Act to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to the Corporation Act.
Section 69 of the Telecommunications and Postal Services (Transitional Provisions and Consequential Amendments) Act 1989 (the Transition Act) provides that, subject to any regulations made under the Corporation Act, section 74 of the Postal Services Act 1975 (the old Act), as in force immediately before the commencement of section 69, continues to have effect as if the old Act had not been repealed. The old Act was repealed by section 75 of the Transition Act on 1 July 1989.
Section 74 of the old Act provides for the determination of the value of the assets and liabilities of the former Australian Postal Commission, now the Australian Postal Corporation (Australia Post). The amount by which the assets, determined under paragraph 74(1)(a) of the old Act, exceeds the liabilities, determined under paragraph 74(1)(b) of the old Act, represents what are known as the vesting day loans payable by Australia Post to the Commonwealth at such times and by such instalments as the Minister for Finance from time to time determines.
Section 51 of the Corporation Act provides that the Minister shall, as soon as practicable after the commencement of the Corporation Act and after consultation with the Board of Directors of Australia Post, determine the amount of Australia Post’s initial capital under the Corporation Act. The Corporation Act commenced on 1 July 1989.
It is intended that the outstanding vesting day loans payable by Australia Post to the Commonwealth under section 74 of the old Act will be determined by the Minister to be Australia Post’s initial capital under subsection 51(1) of the Corporation Act. The Regulations enable the making of this determination by eliminating the outstanding loans,
which amount to $28.4 million. The Prime Minister approved the conversion of the loans to equity in a letter dated 8 May 1990.
Details of the Regulations are as follows:
Regulation 1 cites the Regulations as the Australia Post (Capital) Regulations.
Regulation 2 provides that the Regulations commence on 30 June 1990.
Regulation 3 provides that section 74 of the old Act continues to have effect in relation to Australia Post, as if the value of the assets determined under paragraph 74(1)(a) of the old Act, and the value of the liabilities determined under paragraph 74(1)(b) of that Act, less any repayments made by Australia Post, are equal. This balancing of Australia Post’s assets and liabilities eliminates the vesting day loans.
The Regulations commence on 30 June 1990.
Overview
The Australia Post (Capital) Regulations 1990 were enacted under the Australian Postal Corporation Act 1989 with the aim of addressing the outstanding vesting day loans that the Australian Postal Corporation (Australia Post) owed to the Commonwealth government. The primary objective of these regulations was to convert these loans into equity, thereby determining Australia Post's initial capital as stipulated by section 51 of the Corporation Act. This legislative measure was introduced to provide clarity and legal framework for the conversion process, which was approved by the Prime Minister in a letter dated 8 May 1990. By doing so, the regulations facilitated the elimination of the $28.4 million in outstanding vesting day loans and ensured the continuity of certain provisions from the repealed Postal Services Act 1975. These regulations were issued by the authority of the Minister for Transport and Communications and came into effect on 30 June 1990, providing a formal mechanism for the transition of Australia Post's financial obligations.
Scope and Application
The Australia Post (Capital) Regulations 1990 apply to Australia Post, the entity established under the Australian Postal Corporation Act 1989. These Regulations were made under the authority of the Minister for Transport and Communications to facilitate the conversion of outstanding vesting day loans, which were previously payable by Australia Post to the Commonwealth, into the corporation’s initial capital. This conversion aligns with the intent of the Australian Postal Corporation Act and the transitional provisions set out in the Telecommunications and Postal Services (Transitional Provisions and Consequential Amendments) Act 1989. The Regulations came into effect on 30 June 1990, ensuring that the assets and liabilities of Australia Post are balanced in such a way that the outstanding loans, amounting to $28.4 million, are effectively eliminated. The application of these Regulations is limited to the specific context of converting the vesting day loans into equity, and they do not extend to other matters beyond this specific financial restructuring.
Key Provisions
The Australia Post (Capital) Regulations, which fall under the Australian Postal Corporation Act 1989 (Corporation Act), primarily serve to address the financial restructuring of Australia Post. Section 3 of these Regulations (Regulation 3) ensures that the assets and liabilities of Australia Post, as determined under section 74 of the repealed Postal Services Act 1975 (the old Act), are balanced. This balancing of assets and liabilities eliminates the outstanding vesting day loans, which amounted to $28.4 million, thereby converting these loans into equity. This financial restructuring is intended to align with the provisions of the Corporation Act, which commenced on 1 July 1989.
Under the Corporation Act, the Minister for Finance is tasked with determining Australia Post's initial capital, as specified in section 51. The Australia Post (Capital) Regulations facilitate this determination by effectively nullifying the outstanding vesting day loans, thus making the conversion of these loans into equity possible. This regulatory approach ensures that Australia Post's financial standing aligns with the statutory requirements set out in the Corporation Act. The Regulations also take into account the approval of the Prime Minister, as evidenced by a letter dated 8 May 1990.
The Regulations impose specific obligations on Australia Post and the Minister for Finance. Australia Post is required to provide the necessary financial data to facilitate the determination of its assets and liabilities under the old Act. The Minister, on the other hand, must ensure that the outstanding vesting day loans are appropriately converted into equity, thereby setting the initial capital of Australia Post. These obligations are crucial for the effective implementation of the Corporation Act and the financial restructuring of Australia Post.
Failure to comply with the provisions of the Australia Post (Capital) Regulations could result in legal consequences. Although the Regulations themselves do not specify penalties, breaches of the Corporation Act or any related statutory requirements could lead to legal action under the Corporation Act. The specific consequences for non-compliance would depend on the nature and severity of the breach, with potential penalties including fines and other civil or criminal sanctions. The overarching aim of these provisions is to ensure that Australia Post operates within the legal framework established by the Corporation Act and its associated regulations.