Export Finance and Insurance Corporation Amendment (Finance) Act 2013
No. 30, 2013
An Act to amend the Export Finance and Insurance Corporation Act 1991, and for related purposes
Contents
1 Short title
2 Commencement
3 Schedule(s)
Schedule 1—Amendments
Export Finance and Insurance Corporation Act 1991
Export Finance and Insurance Corporation Amendment (Finance) Act 2013
No. 30, 2013
An Act to amend the Export Finance and Insurance Corporation Act 1991, and for related purposes
[Assented to 30 March 2013]
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Export Finance and Insurance Corporation Amendment (Finance) Act 2013.
2 Commencement
This Act commences on the day after this Act receives the Royal Assent.
3 Schedule(s)
Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
Schedule 1—Amendments
Export Finance and Insurance Corporation Act 1991
1 Subsection 36(3)
Omit “(3)”.
2 Subsection 49(2)
Omit “(2)” (first occurring).
3 At the end of subsection 49(2) (before the note)
Add:
; and (d) any direction by the Minister under subsection 55A(2) for the payment of a dividend by EFIC in the financial year to which the target relates.
4 Subsection 54(8)
Repeal the subsection, substitute:
(8) EFIC’s called capital at any time must not exceed:
(a) $200,000,000; or
(b) if a greater amount is specified in a legislative instrument made by the Minister—that greater amount.
5 Section 55 (heading)
Before “dividends”, insert “annual”.
6 After section 55
Insert:
55A Payment of additional dividends to the Commonwealth
One‑off dividend
(1) EFIC must pay the Commonwealth a dividend of $200,000,000 before 30 June 2013.
Minister may direct payment of a specified dividend
(2) The Minister may, in writing, direct EFIC to pay the Commonwealth a specified dividend within a specified period.
(3) In giving a direction under subsection (2), the Minister must:
(a) have regard to:
(i) the policies of the Commonwealth Government; and
(ii) the general policy of EFIC in relation to the performance of its functions; and
(iii) such commercial considerations as the Minister considers appropriate; and
(b) be satisfied that the specified dividend is reasonable having regard to:
(i) the likely capital and reserves of EFIC at the time the direction is given; and
(ii) the expected liabilities, losses and claims of and against EFIC at that time.
(4) Before the Minister gives a direction under subsection (2), the Minister must:
(a) consult the Board about the matters referred to in subparagraphs (3)(a)(ii) and (b)(i) and (ii); and
(b) obtain the agreement of the Prime Minister, Treasurer and Finance Minister to the direction.
(5) EFIC must comply with a direction given under subsection (2).
[Minister’s second reading speech made in—
House of Representatives on 13 February 2013
Senate on 14 March 2013]
Overview
The Export Finance and Insurance Corporation Amendment (Finance) Act 2013 was enacted by the Parliament of Australia to make amendments to the Export Finance and Insurance Corporation Act 1991, specifically addressing financial aspects of the Export Finance and Insurance Corporation (EFIC). This legislation aims to introduce certain financial controls and directives, including a mandated one-off dividend payment to the Commonwealth and provisions for future dividend payments based on ministerial directives, subject to specific conditions and consultations. The policy objective behind these amendments is to ensure the financial stability and alignment of EFIC's operations with the Commonwealth's financial policies and objectives. The Act provides a framework for the Minister to direct EFIC regarding dividend payments, taking into account various factors such as EFIC’s capital, reserves, liabilities, and commercial considerations.
Scope and Application
The Export Finance and Insurance Corporation Amendment (Finance) Act 2013 applies to the Export Finance and Insurance Corporation (EFIC), an entity established under the Export Finance and Insurance Corporation Act 1991. The Act specifically addresses amendments to the financial arrangements and governance of EFIC, primarily concerning the payment of dividends to the Commonwealth. The legislation imposes a mandatory requirement for EFIC to pay a one-off dividend of $200,000,000 before 30 June 2013, and allows the Minister to direct EFIC to pay additional dividends within specified periods, subject to consultation with the Board and approval by the Prime Minister, Treasurer, and Finance Minister. Additionally, the Act modifies the maximum limit of EFIC's called capital, setting it at $200,000,000 unless otherwise specified by a legislative instrument made by the Minister. The amendments are effective across the Commonwealth, impacting EFIC's financial obligations and capital structure within the Australian jurisdiction.
Key Provisions
The main provisions of the Export Finance and Insurance Corporation Amendment (Finance) Act 2013 (the Act) amend the Export Finance and Insurance Corporation Act 1991 (EFIC Act). The amendments pertain to the capital limits and dividend payments of the Export Finance and Insurance Corporation (EFIC). Specifically, section 1 of the Act modifies the EFIC Act to state that EFIC's called capital must not exceed $200,000,000 or a greater amount specified by the Minister in a legislative instrument (section 54(8)). Additionally, section 55A introduces a new provision whereby EFIC must pay a one-off dividend of $200,000,000 before 30 June 2013 and allows the Minister to direct EFIC to pay a specified dividend within a set period, subject to certain conditions and consultations (section 55A(2)–(5)).
The Act imposes several obligations on EFIC and the Minister. Firstly, EFIC must ensure that its called capital does not exceed the prescribed limit, either $200,000,000 or a higher amount specified by the Minister. Secondly, EFIC must comply with any dividend payment directions issued by the Minister under section 55A. Thirdly, the Minister must consult the Board and obtain the agreement of the Prime Minister, Treasurer, and Finance Minister before directing EFIC to pay a specified dividend. This requirement underscores the importance of coordination and approval from key government officials before any such directive is issued.
The Act also outlines consequences for non-compliance. Although specific offences and penalties are not detailed within the Act, the requirement for EFIC to adhere to the capital limit and comply with dividend payment directions implies that failure to do so could result in legal or administrative actions. Non-compliance with the Minister's direction to pay a dividend might also have broader implications for the governance and financial health of EFIC, potentially leading to scrutiny or intervention by the government. The Act ensures that EFIC operates within its financial limits and adheres to the directives set forth by the Minister, maintaining the integrity and stability of the corporation's financial management.