Export Guarantee Act 1924

Overview

The Export Guarantee Act 1924 was enacted by the Parliament of Australia to provide a framework for guaranteeing advances made on the export of produce, thereby supporting the export and marketing activities of Australian produce. This legislation aimed to address the financial risks faced by exporters by ensuring that banks could lend to boards controlling the export of specified produce with the security of a government guarantee. The Act establishes a Trust Account, known as the Primary Production Trust Account, which serves as a repository for funds appropriated for the purposes of the Act and from which payments can be made to cover guarantees and advances related to the export of produce. The Act also empowers the Minister to declare which produce is subject to the Act and to provide assistance in the export and marketing of primary produce, subject to certain financial limitations and reporting requirements. The policy objective is to facilitate the export of Australian produce by mitigating financial risks and providing necessary support to the export sector.

Scope and Application

The Export Guarantee Act 1924 applies to advances made by prescribed banks to associations of persons, referred to as Boards, which control the export and marketing of specified Australian produce. The Minister has the authority to declare, through a notice in the Gazette, which produce is subject to the Act, thereby deeming that produce to be covered. The Act provides for guarantees on these advances up to 80% of the market value of the produce, determined by the Minister, and may be subject to conditions set by the Treasurer. Additionally, the Minister can grant assistance for the export and marketing of primary produce, subject to a total expenditure limit of Five hundred thousand pounds. The Act is applicable to the Commonwealth of Australia, and its provisions may be extended or restricted through regulations made by the Governor-General in accordance with the Act. The Act also establishes a Primary Production Trust Account, which receives appropriations for its operations and is used to cover payments related to guarantees, advances, and assistance under the Act.

Key Provisions

The Export Guarantee Act 1924, section 4, provides that the Treasurer may guarantee up to 80% of the market value of any advance made by a prescribed bank to a Board in relation to the financing of a scheme for the export and marketing of produce controlled by the Board. The market value of the produce is determined by the Minister, as per section 4(3). Any guarantee can be subject to conditions specified by the Treasurer, and if these conditions are not observed, the Treasurer may revoke the guarantee, as outlined in section 4(5). Section 5 of the Act allows the Minister to grant assistance in relation to the export and marketing of primary produce upon the receipt of a report and recommendation from an advisory body. This assistance is subject to a maximum expenditure and liability limit of Five hundred thousand pounds, as per section 5(4). The Act imposes several obligations on the parties involved. For instance, the Treasurer is required to guarantee advances made by prescribed banks to Boards, subject to the conditions specified in section 4. The Minister, on the other hand, must determine the market value of the produce for the purposes of the guarantee, as per section 4(3). Additionally, the Minister is obligated to grant assistance to primary production, based on recommendations from an advisory body, in accordance with section 5. Furthermore, there is a requirement to lay returns showing the reports, recommendations, and assistance granted under section 5 before each House of the Parliament on specific dates, as per section 5(2) and (3). Breaches of the conditions specified in section 4(5) can lead to the revocation of the guarantee, with the Treasurer and the Commonwealth being relieved of all liability under the guarantee not incurred before the notice of revocation, as per section 4(5). However, the Act does not specify any maximum penalties for such breaches. Section 9 of the Act allows the Governor-General to make regulations necessary or convenient for carrying out or giving effect to the Act, which may include provisions related to the enforcement of the Act and the imposition of penalties for breaches.