Financial Management and Accountability Amendment (2014 Measures No. 4) Regulation 2014

Administered by Department of Finance

Legislation au F2014L00436 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Select Legislative Instrument No. 43, 2014

 

Issued by the Authority of the Minister for Finance

 

Financial Management and Accountability Act 1997

 

Financial Management and Accountability Amendment

(2014 Measures No. 4) Regulation 2014

 

The Financial Management and Accountability Act 1997 (the FMA Act) provides a framework of rules for the proper management of public money and public property by Chief Executives and officials of FMA Act agencies.  The FMA Act applies to Commonwealth Departments of State and their staff, parliamentary departments and their staff, and prescribed agencies.

 

Subsection 65(1) of the FMA Act provides that the Governor-General may make regulations prescribing matters required or permitted by that Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to that Act.

 

To respond to the High Court’s decision in Williams v Commonwealth (2012) 288 ALR 410, the Financial Framework Legislation Amendment Act (No. 3) 2012 inserted section 32B of the FMA Act, which authorised the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Management and Accountability Regulations 1997 (the Principal Regulations).  Section 32B also authorises the Commonwealth to make, vary and administer arrangements for the purposes of programmes specified in the Principal Regulations.  Schedule 1AA and Schedule 1AB to the Principal Regulations specify the arrangements, grants and programmes. 

 

The Regulation amends the Principal Regulations to establish legislative authority in Schedule 1AB for the Government to provide grants of financial assistance to the states and territories for the Drought Concessional Loans Scheme.  Concessional loans would be provided to eligible farm businesses that are experiencing financial pressures as a result of severe drought conditions.

 

Under the Scheme, drought concessional loans will be available to drought-affected farm businesses for debt restructuring, operating expenses and/or drought recovery and preparedness activities.  The Drought Concessional Loans Scheme will help farm businesses recover from, and prepare for, droughts and return to commercial viability in the long term. 

 

Details of the Regulation are set out at Attachment A.  A Statement of Compatibility with Human Rights is at Attachment B. 

 

The Regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.  

 

The Regulation commences on the day after registration on the Federal Register of Legislative Instruments. 

 

Consultation

 

In accordance with section 17 of the Legislative Instruments Act 2003, consultation has taken place with the Department of Agriculture.  A regulation impact statement is not required as the Regulation only applies to FMA Act Agencies and does not adversely affect the private sector.

 

 

 

Details of the Financial Management and Accountability Amendment (2014 Measures No. 4) Regulation 2014

 

Section 1 – Name of Regulation

 

This section provides that the title of the Regulation is the Financial Management and Accountability Amendment (2014 Measures No. 4) Regulation 2014.

 

Section 2 – Commencement

 

This section provides that the Regulation commences on the day after it is registered on the Federal Register of Legislative Instruments. 

 

Section 3 – Authority

 

This section provides that the Regulation is made under the Financial Management and Accountability Act 1997 (FMA Act).

 

Section 4 – Schedule(s)

 

This section provides that the Financial Management and Accountability Regulations 1997 is amended as set out in Schedule 1 to the Regulation.

 

Schedule 1 – Amendments

 

Item 1 – Part 2 of Schedule 1AB (note)

 

This item repeals the note to Part 2 of Schedule 1AB and adds two items to this Part to establish legislative authority for the Government to provide grants of financial assistance to the states or territories for matters administered by the Department of Agriculture, respectively.

 

New table item 1 establishes legislative authority for the Government to provide grants of financial assistance to the states and territories for the purposes of establishing and funding a scheme by which loans are provided to eligible farm businesses that are experiencing financial pressures as a result of severe drought conditions.

 

The Commonwealth has allocated $280 million to the Drought Concessional Loans Scheme from 2013–14 to 2014–15 for grants of financial assistance to the states and territories.  These grants will be made on conditions imposed under section 32C of the Financial Management and Accountability Act 1997 (terms and conditions for grants).  The conditions imposed on the grants will establish the framework under which the states and territories (or their delivery agencies) will be able to provide loans to eligible farm businesses.

 

The Drought Concessional Loans Scheme will help farm businesses recover from, and prepare for, future droughts and return to commercial viability in the long term. 

 

The key features of the scheme provide that:

  • drought concessional loans will be available to drought-affected farm businesses for debt restructuring, operating expenses and/or drought recovery and preparedness activities;
  • drought concessional loan will have a loan term of five years, with a concessional interest rate period of five years;
  • drought concessional loans will have a variable interest rate of 4 per cent set at the commencement of the scheme.  The interest rate will be revised in accordance with changes to the Farm Finance Concessional Loans Scheme, remaining 0.5 per cent below the Farm Finance rate;
  • interest only payments will be available for the loan term;
  • at the end of the loan term, the farm business must repay or refinance the remaining loan balance; and
  • farm businesses must be able to demonstrate that they have sound prospects for a return to commercial viability to be eligible for a loan.

 

Under this framework, scheme guidelines will be publicly available.  Prospective loan applicants will be able to use these guidelines to apply for a loan.  Individual loan details will not be publicly available; however actual expenditure for the purposes of the grants of financial assistance will be publicly available.

 

It will be the responsibility of the delivery agencies in each jurisdiction to assess and make decisions about individual loan applications in accordance with the scheme guidelines, on a case‑by‑case basis.  The scheme guidelines outline applicants’ rights of appeal, which include an internal review of the decision within the state or territory delivery agency and the option to engage the State or Territory Ombudsman.  

 

The Drought Concessional Loans Scheme was announced by the Prime Minister, the Hon Tony Abbott MP, and the Minister for Agriculture, the Hon Barnaby Joyce MP, on 26 February 2014.

 

 

 

 

Statement of Compatibility with Human Rights

Prepared in accordance with part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Financial Management and Accountability Amendment (2014 Measures No. 4) Regulation 2014

 

This Regulation is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Legislative Instrument

 

The Financial Management and Accountability Act 1997 (the FMA Act) provides a framework of rules for the proper management of public money and public property by Chief Executives and officials of FMA Act agencies.  The FMA Act applies to Commonwealth Departments of State and their staff, parliamentary departments and their staff, and prescribed agencies. 

 

Section 32B of the FMA Act establishes legislative authority for the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Management and Accountability Regulations 1997 (FMA Regulations) and to make, vary and administer arrangements and grants for the purposes of programmes specified in the FMA Regulations.  This is in response to the High Court’s decision in Williams v Commonwealth (2012) 288 ALR 410.  Schedule 1AA and Schedule 1AB to the FMA Regulations specify the arrangements, grants and programmes. 

 

The Regulation amends the FMA Regulations to establish legislative authority in Schedule 1AB for the Government to provide grants of financial assistance to the states and territories for the Drought Concessional Loans Scheme which was announced by the Prime Minister and the Minister for Agriculture on 26 February 2014.  Under the Scheme, concessional loans will be provided to eligible farm businesses that are experiencing financial pressures as a result of severe drought conditions.  The Scheme will help farm businesses recover from, and prepare for, droughts and return to commercial viability in the long term.  Drought concessional loans will be available to drought-affected farm businesses for debt restructuring, operating expenses and/or drought recovery and preparedness activities.  The Department of Agriculture will administer this scheme.

 

The item specified in Schedule 1AB is the responsibility of the relevant Minister who have portfolio responsibility for the matter.

 

Human rights implications

 

The Regulation does not engage any of the applicable rights or freedoms.

 

Conclusion

 

This regulation is compatible with human rights as it does not raise any human rights issues.

 

 

Senator the Hon Mathias Cormann

Minister for Finance

Overview

The Financial Management and Accountability Amendment (2014 Measures No. 4) Regulation 2014 was enacted to amend the Financial Management and Accountability Regulations 1997, in response to the High Court’s decision in Williams v Commonwealth (2012) 288 ALR 410. The Regulation, issued under the authority of the Minister for Finance, provides legislative authority for the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Management and Accountability Regulations 1997. In particular, it establishes authority for the Government to provide grants of financial assistance to the states and territories for the Drought Concessional Loans Scheme. This scheme, announced by the Prime Minister and the Minister for Agriculture on 26 February 2014, aims to support farm businesses affected by severe drought by providing concessional loans for debt restructuring, operating expenses, and drought recovery and preparedness activities. The scheme is designed to help these businesses recover and return to commercial viability in the long term. The Regulation is compatible with human rights as it does not engage any of the applicable rights or freedoms. The Financial Management and Accountability Act 1997 (FMA Act) forms the legislative foundation for this Regulation, providing rules for the proper management of public money and public property by Chief Executives and officials of FMA Act agencies. This Act applies to Commonwealth Departments of State, parliamentary departments, and prescribed agencies. Section 32B of the FMA Act authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Management and Accountability Regulations 1997 and to make, vary and administer arrangements for the purposes of programmes specified in the FMA Regulations. The Regulation amends the FMA Regulations to establish legislative authority for the Drought Concessional Loans Scheme, which will be administered by the Department of Agriculture. The scheme aims to provide financial assistance to drought-affected farm businesses to support their recovery and preparedness for future droughts.

Scope and Application

The Financial Management and Accountability Amendment (2014 Measures No. 4) Regulation 2014 amends the Financial Management and Accountability Regulations 1997 to establish legislative authority for the Commonwealth Government to provide grants of financial assistance to the states and territories for the Drought Concessional Loans Scheme. This scheme aims to support farm businesses affected by severe drought conditions through concessional loans for debt restructuring, operating expenses, and drought recovery and preparedness activities. The regulation applies to Commonwealth Departments of State, their staff, parliamentary departments, their staff, and prescribed agencies under the Financial Management and Accountability Act 1997. The regulation does not adversely affect the private sector and has been developed following consultation with the Department of Agriculture. It is compatible with human rights as it does not engage any of the applicable rights or freedoms. The regulation commences on the day after registration on the Federal Register of Legislative Instruments.

Key Provisions

The Financial Management and Accountability Amendment (2014 Measures No. 4) Regulation 2014 primarily focuses on amending the Financial Management and Accountability Regulations 1997 (FMA Regulations) to provide legislative authority for the Government to grant financial assistance to the states and territories for the Drought Concessional Loans Scheme (section 4). This amendment responds to the High Court's decision in Williams v Commonwealth (2012) 288 ALR 410, and it establishes the framework for the Commonwealth to administer grants specified in the FMA Regulations, as per section 32B of the Financial Management and Accountability Act 1997 (FMA Act). The Regulation also outlines the terms and conditions under which these grants will be provided, including the specific purposes and the overall framework for the Drought Concessional Loans Scheme. Under this Regulation, the obligations for entities governed by the FMA Act, particularly Commonwealth Departments of State, parliamentary departments, and prescribed agencies, include adhering to the terms and conditions set forth for the Drought Concessional Loans Scheme. This includes the allocation of $280 million from 2013–14 to 2014–15 for grants to states and territories, which are to be made on conditions outlined in section 32C of the FMA Act. These conditions ensure that the grants are used to establish and fund a scheme whereby concessional loans are provided to eligible farm businesses experiencing financial pressures due to severe drought conditions. The delivery agencies in each jurisdiction must assess individual loan applications according to the scheme guidelines, which outline the applicants' rights of appeal. The Regulation also imposes specific requirements on the Drought Concessional Loans Scheme. For instance, the loans will have a five-year term with a concessional interest rate for the first five years, and the interest rate will be set at 4 per cent at the scheme's commencement, with adjustments made in line with the Farm Finance Concessional Loans Scheme. Only interest payments will be required during the loan term, and at the end of the term, the farm business must repay or refinance the loan balance. To be eligible for a loan, farm businesses must demonstrate sound prospects for a return to commercial viability. Scheme guidelines will be made publicly available, although individual loan details will not be disclosed. In terms of penalties and consequences for breaches, the Regulation does not specify particular offences or penalties within the text provided. However, as it operates under the framework of the FMA Act, any non-compliance with the terms and conditions of the grants or mismanagement of public money and property could potentially lead to legal repercussions. Such actions might be subject to the provisions of the FMA Act, which could include financial penalties, disciplinary actions against officials, or other administrative consequences as deemed appropriate under the law. The exact penalties would depend on the specific nature of the breach and the applicable provisions of the FMA Act.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.