Australian Industry Development Corporation Amendment Act 1987

Overview

The Australian Industry Development Corporation Amendment Act 1987 was enacted by the Commonwealth Parliament to amend the Australian Industry Development Corporation Act 1970. The objective of the Act is to modify the guarantee provisions for borrowings and the raising of funds by the Australian Industry Development Corporation (AIDC). Specifically, it addresses the need to provide the Chief Executive of AIDC with more flexibility in determining whether the Commonwealth guarantee applies to certain borrowings and raisings of funds, particularly those involving securities or foreign currencies. This amendment aims to ensure that the AIDC can effectively manage its financial activities while balancing the risk to the Commonwealth. The Act came into effect upon receiving Royal Assent.

Scope and Application

The Australian Industry Development Corporation Amendment Act 1987 amends the Australian Industry Development Corporation Act 1970, which established the Australian Industry Development Corporation (AIDC). The Act applies to the AIDC and its activities, particularly in relation to borrowings and raising of funds. The amendments pertain to the Commonwealth guarantee for the AIDC's financial obligations, modifying the conditions under which the Commonwealth may be liable for the Corporation's debts. Specifically, the Act alters the circumstances where the Commonwealth guarantee applies to borrowings and other means of raising funds by the Corporation, requiring a written determination by the Chief Executive for the guarantee to be applicable unless certain conditions are met. The amendments apply to borrowings and fund-raising activities undertaken by the AIDC on or after 8 October 1986, while maintaining the original provisions for activities occurring prior to this date. The Act's jurisdiction is federal, impacting the operations of the AIDC as a Commonwealth entity. The scope of the Act is limited to the financial transactions of the AIDC, without specifying exclusions or exemptions beyond the conditions outlined for the application of the Commonwealth guarantee.

Key Provisions

The Australian Industry Development Corporation Amendment Act 1987 amends the Australian Industry Development Corporation Act 1970. Key sections of the Amendment Act (sections 35) modify the guarantee provisions for borrowings and raising of funds by the Australian Industry Development Corporation (AIDC). The changes state that the guarantee for borrowings or raising of funds does not apply unless the Chief Executive determines in writing that the guarantee applies (s 35(2)). The Chief Executive can make such a determination for specific transactions or classes of transactions (s 35(3)). The amendments include borrowings or funds raised through securities or in foreign currencies (s 35(4) and (6)). Additionally, taking deposits is considered a borrowing for the purposes of this section (s 35(7)). These changes apply to borrowings and fund-raising activities occurring after 8 October 1986, with the possibility of retrospective application if a determination is made within a month of the Act receiving Royal Assent (s 35(8) and (9)). Under the amended Act, the AIDC and its Chief Executive are subject to specific obligations. The Chief Executive must make a written determination if the guarantee applies to a particular borrowing or fund-raising transaction (s 35(2)). This determination can be made for individual transactions or for classes of transactions (s 35(3)). The AIDC must also adhere to the expanded definition of borrowing and fund-raising, which includes activities involving securities and foreign currency (s 35(4) and (6)). The taking of deposits is considered a borrowing for the purposes of applying the guarantee (s 35(7)). The Act allows for retrospective application of these provisions if a determination is made within one month of the Act receiving Royal Assent (s 35(8) and (9)). The Australian Industry Development Corporation Amendment Act 1987 does not explicitly state specific offences, penalties, or consequences for breach. However, non-compliance with the amended provisions, such as failing to make the required written determination or improperly applying the guarantee, could potentially result in legal challenges or financial liabilities. The exact consequences would depend on the specific circumstances and the interpretation of the law by the courts. The maximum penalties, if any, are not specified in the text provided.