STATUTORY RULES.
1952. No. 66.
REGULATIONS UNDER THE DEFENCE PREPARATIONS ACT 1951.*
I, THE GOVERNOR-GENERAL in and over the Commonwealth of Australia, acting with the advice of the Federal Executive Council, hereby make the following Regulations under the Defence Preparations Act 1951.
Dated this thirteenth day of August, 1952.
W. J. McKELL
Governor-General.
By His Excellency’s Command,
For and on behalf of Prime Minister.
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AMENDMENTS OF THE DEFENCE PREPARATIONS (CAPITAL ISSUES) REGULATIONS.†
Provisions with respect to deposits.
1. Regulations 8 and 9 of the Defence Preparations (Capital Issues) Regulations are repealed and the following regulation inserted in their stead:—
“8. A company (other than a bank, a declared pastoral company, a building society, or a co-operative society) shall not, without the consent of the Treasurer, accept or receive a deposit—
(a) if the amount borrowed and not repaid under deposits accepted or received by that company (including the deposit then accepted or received) during the preceding year exceeds Five thousand pounds; or
(b) if the sum of—
(i) the amount borrowed and not repaid under deposits accepted or received by that company (including the deposit then accepted or received) during the preceding two years;
(ii) the amount of authorized capital issued by the company during that period; and
(iii) the amount borrowed and not repaid under a security issued or given by the company during that period (not being a security referred to in sub-regulation (3.) of regulation 13 of these Regulations),
exceeds Ten thousand pounds.”.
* Notified in the Commonwealth Gazette on , 1952.
† Statutory Rules 1951, No. 84.
3189.—Price 3D. 10/28.7.1952.
Certain loans not affected.
2. Regulation 13 of the Defence Preparations (Capital Issues) Regulations is amended by omitting from paragraph (c) of sub-regulation (2.) the words “Four pounds ten shillings” and inserting in their stead the words “Five pounds”.
By Authority: L. F. JOHNSTON, Commonwealth Government Printer, Canberra.
Overview
Statutory Rules 1952, No. 66, made under the Defence Preparations Act 1951, was enacted to address the need for tighter control over capital issues during a period of national defence preparations. The Federal Executive Council, acting on behalf of the Commonwealth Parliament, established these regulations to regulate deposits accepted by companies to prevent excessive borrowing and safeguard economic stability. The primary policy objective of these regulations was to ensure that companies, particularly those not classified as banks, pastoral companies, building societies, or co-operative societies, do not exceed specified borrowing limits without the Treasurer's consent, thereby maintaining a balanced approach to capital flow and financial security during wartime preparations.
Scope and Application
The Statutory Rules of 1952, No. 66, made under the Defence Preparations Act 1951, serve to amend the Defence Preparations (Capital Issues) Regulations, specifically targeting the conditions under which companies can accept or receive deposits. These regulations apply to companies, excluding banks, declared pastoral companies, building societies, and co-operative societies, thereby regulating their borrowing capacities during the preceding year and two-year periods. The regulation stipulates that a company cannot accept or receive a deposit without the Treasurer's consent if the amount borrowed and not repaid from deposits in the preceding year exceeds Five thousand pounds, or if the sum of the aforementioned amounts plus the authorized capital issued and other specified borrowings exceeds Ten thousand pounds within two years. Additionally, the amendments modify the threshold for certain loans, raising the specified amount from Four pounds ten shillings to Five pounds. These regulations hold jurisdictional reach across the Commonwealth, providing a legislative framework aimed at managing and controlling capital issues during a period of heightened defence preparedness.
Key Provisions
The Regulations under the Defence Preparations Act 1951, specifically the Defence Preparations (Capital Issues) Regulations, contain several key provisions (reg 1, 8). Regulation 8 replaces previous regulations and establishes new conditions on companies accepting or receiving deposits. Companies, excluding banks, declared pastoral companies, building societies, and co-operative societies, are now prohibited from accepting or receiving deposits if certain criteria are met (reg 8(a) and (b)). These criteria pertain to the amount of borrowed funds not yet repaid over the preceding year and a combined total of borrowed funds, issued capital, and other securities over the preceding two years.
The obligations imposed by these Regulations require companies to seek consent from the Treasurer before accepting or receiving deposits if the specified thresholds are exceeded. Companies must carefully monitor and report their financial activities, including the amounts borrowed and not yet repaid, as well as any issued capital or securities (reg 8). Additionally, Regulation 13 is amended to adjust the threshold for certain loans that are exempt from these deposit restrictions, increasing the exempted amount from Four pounds ten shillings to Five pounds (reg 2).
Failure to comply with these Regulations can result in significant consequences. Although the document does not explicitly detail offences or penalties for breach, the Defence Preparations Act 1951 likely provides for both civil and criminal sanctions under its provisions. Typically, breaches of financial regulations may lead to fines, imprisonment, or both, depending on the severity and intent of the violation. Companies found to be in non-compliance could face substantial financial penalties and reputational damage, which could further impact their ability to secure future funding or maintain market stability.