EXPLANATORY STATEMENT
STATUTORY RULES 1984 NO. 307
ISSUED BY AUTHORITY OF THE TREASURER
COMMONWEALTH BANKS ACT 1959
COMMONWEALTH BANKS REGULATIONS (AMENDMENT)
Section 129 of the Commonwealth Banks Act 1959 (the Act) empowers the Governor-General to make regulations, not inconsistent with the Act, prescribing all matters which by the Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act or for the conduct of business by the Commonwealth Banking Corporation, the Commonwealth Bank, the Commonwealth Savings Bank or the Commonwealth Development Bank.
Section 121 of the Act provides that the Board of the Commonwealth Banking Corporation (Corporation) shall, as soon as practicable after each thirtieth day of June, in respect of each of the abovementioned bodies prepare financial statements, in accordance with the prescribed forms, in respect of that year. The forms are prescribed by sub-regulation 36(1) of the Commonwealth Banks Regulations and are set out in the Schedule to those Regulations.
As a measure aimed at improving the reserves position of the Corporation and its three constituent banks, the Board of the Corporation decided that all four bodies would revalue their premises to reflect current market valuations and that, in future, the Group would follow a policy of regular revisions of property values. The Treasurer is aware of this decision and both he and the Auditor-General are in full agreement with it.
A consequence of the Board’s decision is the need for the Corporation to include a premises revaluation reserve in its accounts which is not currently provided for in its prescribed form, Form B in the Schedule to the Regulations. The three constituent banks have existing provisions for reserves in their accounts which can absorb the reserves created by the revaluation. There have also been a number of changes over time in the terminology used in the financial statements in the Corporation’s Annual Report which have not been reflected by appropriate amendments to the various forms prescribed for the Corporation and its constituent banks. To rectify that situation, the format of Form B of the Regulations (in respect of the Corporation) has been revised. The Regulations are also being amended to bring the form of financial statements of the three constituent banks of the Corporation into line with the form of financial statements for savings and trading banks prescribed in the Second Schedule to the Banking Act 1959.
The Regulations are also being amended to recognise the change of name of the Commonwealth Trading Bank of Australia to the Commonwealth Bank of Australia which was effected by the Commonwealth Banks Amendment Act 1984.
Sub-section 111(3) of the Commonwealth Banks Act provides that the Commonwealth Bank may, where the Managing Director is satisfied that special circumstances exist, lend to an officer upon such terms and conditions as the Managing Director thinks fit, money not exceeding at any one time $5,000 or such other amount as is prescribed. A further amendment to the Regulations is required to give effect to the Treasurer’s recent decision to increase, from $5,000 to $12,000, the limit on non-housing loans to staff that can be made under sub-section 111(3). Loans made in terms of sub-section 111(3) are largely used to assist officers, whose duties require them to make extensive use of their own cars on Corporation business, to purchase motor vehicles. The loans are made at concessional interest rates.
The amending Regulations repeal regulation 35 which prescribed an amount for the purpose of section 66 of the Act which has been repealed. Regulation 35 is substituted by a new regulation which prescribes $12,000 as the amount for the purposes of sub-section 111(3) of the Act.
As mentioned above, the opportunity is being taken to update the forms prescribed by sub-regulation 36(1) for the purposes of paragraph 121(1)(b) of the Act and to provide a premises revaluation reserve in the financial statements of the Corporation. Regulation 7 substitutes a revised Form B, which includes a premises revaluation reserve, in the Schedule to the Regulations. By virtue of regulation 6, which amends sub-regulation 36(1), Form B is the prescribed form for the Corporation.
Regulation 7 removes certain forms that have been provided in respect of the Commonwealth Bank, Commonwealth Savings Bank and Commonwealth Development Bank, and regulation 6 amends sub-regulation 36(1) to prescribe the relevant forms in the Second Schedule of the Banking Act 1959 for the purpose of paragraph 121(1)(b) of the Commonwealth Banks Act. This will ensure consistency in the format in which the Corporation is required to present financial information under both the Commonwealth Banks Act 1959 and the Banking Act 1959. The relevant forms in the Second Schedule to the Banking Act 1959 as prescribed by regulation 6 are Forms A and B in respect of the Commonwealth Bank and Commonwealth Development Bank and Forms B and G in respect of the Savings Bank.