EXPLANATORY STATEMENT
Issued by the Authority of the Treasurer and the Minister for Finance and Administration
Future Fund Act 2006
Future Fund (Crediting of Additional Amounts) Determination 2007
Paragraph 3(1)(a) of Schedule 1 to the Future Fund Act 2006 (the Act) provides that, if a target asset level for the Future Fund (for the relevant financial year) has been set, the responsible Ministers may determine by writing that a specified amount is to be credited to the Future Fund Special Account on a specified day in the financial year.
The target asset level declaration for the 2006-07 financial year has been issued by the Designated Actuary in accordance with Schedule 3 to the Act.
The purpose of the Future Fund (Crediting of Additional Amounts) Determination 2007 is to specify that an amount of $3.638 billion, which is the remainder of the available 2005‑06 budget surplus, should be credited to the Future Fund Special Account (Fund Account) on 16 February 2007.
Section 3 of this Determination revokes the Future Fund (Crediting of Additional Amounts) Determination 2006, which provided that the amount of $3.638 billion would be credited on 28 February 2007. The 2006 Determination also provided for an amount of $18.639 billion to be credited to the Fund Account on 22 January 2007. Subclause 4(3) of Schedule 1 to the Act provides that the revocation of the 2006 Determination does not affect the $18.639 billion transaction as it has already been credited.
The Act provides that amounts may be transferred to the Fund, provided that the transfer does not increase the balance of the Fund above the target asset level for the Fund that is in place at the time of the transfer.
To correctly establish the balance of the Fund, a ‘balance day’ must be declared by the responsible Ministers. The balance day is administrative in nature and is used as a reference date for measurement of the starting position of the Fund. The Determination sets 6 February 2007 as the balance day for this purpose under subparagraph 3(2)(a)(i) of Schedule 1 to the Act.
Subclause 4(1) of Schedule 1 to the Act states that the Determination ceases to be in force at whichever is the earliest of the end of the specified day, the time when the target asset level declaration ceases to be in force and the time of revocation of the Determination (if this occurs).
The Determination is deemed to be a legislative instrument for the purpose of the Legislative Instruments Act 2003. However, the Determination, as a ministerial direction, is not disallowable.
The Determination commences the day it is registered on the Federal Register of Legislative Instruments.
Overview
The Future Fund (Crediting of Additional Amounts) Determination 2007 was enacted to address the need for the crediting of additional funds to the Future Fund Special Account as stipulated under the Future Fund Act 2006. This legislation, issued by the Authority of the Treasurer and the Minister for Finance and Administration, aims to specify the crediting of $3.638 billion, which is the remainder of the available 2005-06 budget surplus, to the Future Fund on 16 February 2007. This Determination revokes the previous Future Fund (Crediting of Additional Amounts) Determination 2006, which had set a different date for the crediting of the same amount. The Determination sets 6 February 2007 as the balance day for the Fund, in accordance with the Act, and ensures that the transfer does not exceed the target asset level for the Fund. This legislative instrument, while considered under the Legislative Instruments Act 2003, is not subject to disallowance.
Scope and Application
The Future Fund (Crediting of Additional Amounts) Determination 2007 applies to the Future Fund established under the Future Fund Act 2006, specifically addressing the crediting of additional amounts to the Future Fund Special Account. This Determination applies to the Minister for Finance and the Treasurer, who are responsible for the Future Fund, and it pertains to the financial transactions of crediting a specified amount to the Fund. Geographically, the Act applies at the Commonwealth level, as it is a federal statute. The Determination outlines the crediting of $3.638 billion to the Fund on 16 February 2007, replacing the earlier determination that had set a crediting date of 28 February 2007. Notably, the revocation of the 2006 Determination does not affect the previously credited amount of $18.639 billion. The Determination is subject to the conditions stipulated in the Act, such as ensuring that the crediting does not exceed the target asset level set for the Fund. The balance day for measuring the Fund's starting position is set as 6 February 2007, and the Determination will cease to be in force at the earliest of the specified crediting date, the cessation of the target asset level declaration, or the revocation of the Determination itself. The Determination is registered as a legislative instrument under the Legislative Instruments Act 2003 but is not subject to disallowance.
Key Provisions
The Future Fund (Crediting of Additional Amounts) Determination 2007, under Section 3 of the Future Fund Act 2006, specifies that $3.638 billion, the remainder of the 2005-06 budget surplus, must be credited to the Future Fund Special Account on 16 February 2007. This amount is to be credited as per the requirements of Paragraph 3(1)(a) of Schedule 1 to the Act, which allows the responsible Ministers to credit an amount if a target asset level has been set for the Future Fund for the relevant financial year. This Determination revokes the 2006 Determination, which had set the crediting date for 28 February 2007 and also provided for an earlier crediting of $18.639 billion on 22 January 2007. Importantly, the revocation does not affect the earlier transaction as it had already been completed, as outlined in Subclause 4(3) of Schedule 1 to the Act.
The Future Fund (Crediting of Additional Amounts) Determination 2007 imposes specific obligations on the responsible Ministers. They must ensure that the $3.638 billion is credited to the Future Fund Special Account on the specified date. Additionally, they must declare a balance day, which serves as a reference point for measuring the starting position of the Fund. Under this Determination, 6 February 2007 is set as the balance day, as per subparagraph 3(2)(a)(i) of Schedule 1 to the Act. These obligations are critical for maintaining accurate records and ensuring compliance with the legislative requirements governing the Future Fund.
Failure to comply with the provisions of the Future Fund (Crediting of Additional Amounts) Determination 2007 can result in various consequences. While the Determination itself is not subject to disallowance, it is still a legislative instrument governed by the Legislative Instruments Act 2003. The Determination will cease to be in force at the earliest of the specified day, the time when the target asset level declaration ceases to be in force, or the time of its revocation, as stated in Subclause 4(1) of Schedule 1 to the Act. It is essential for the responsible Ministers to adhere to these provisions to avoid any legal repercussions or administrative penalties.