EXPLANATORY STATEMENT
Issued by the Authority of the Treasurer and the Minister for Finance and Administration
Future Fund Act 2006
Future Fund (Crediting of Initial Amount) Determination 2006
Subclause 2 (1) of Schedule 1 to the Future Fund Act 2006 provides that, before 1 July 2006, the responsible Ministers must determine by writing that $18 billion is to be credited to the Future Fund Special Account - either on a specified day or in specified instalments.
The purpose of this Future Fund (Crediting of Initial Amount) Determination 2006 is to specify 5 May 2006 as the day on which the initial amount of $18 billion is to be credited to the Future Fund Special Account.
The $18 billion is sourced from previously realised surpluses held on deposit with the Reserve Bank of Australia.
The Determination is deemed to be a legislative instrument for the purposes of the Legislative Instruments Act 2003, however, the Determination, as a ministerial direction, is not disallowable.
The Determination commences on registration and cannot be revoked.
Overview
The Future Fund Act 2006 was enacted to establish the Future Fund, a sovereign wealth fund aimed at funding future superannuation liabilities of the Commonwealth. This legislation was introduced to address the need for a sustainable and robust financial framework to manage long-term fiscal obligations. The Act was passed by the Parliament of Australia and its primary policy objective is to ensure the financial security of future pension liabilities through prudent investment and management of the fund. The Future Fund (Crediting of Initial Amount) Determination 2006 was subsequently made to specify the initial crediting of $18 billion to the Future Fund Special Account, sourced from surpluses held with the Reserve Bank of Australia. This Determination ensures the timely establishment of the fund and sets the initial capital, reflecting the commitment to long-term fiscal responsibility.
Scope and Application
The Future Fund (Crediting of Initial Amount) Determination 2006 applies to the Future Fund established under the Future Fund Act 2006 and relates specifically to the crediting of an initial amount to the Future Fund Special Account. This Determination pertains to the responsible Ministers who are tasked with the duty to credit the specified amount by a certain date, as outlined in the Act. The geographic and jurisdictional reach of this Determination is national, as it pertains to Commonwealth legislation. This Determination does not specify exclusions, exemptions, or thresholds within its scope, as it directly addresses the crediting of the initial amount to the Future Fund. While the Act itself may extend or restrict application through subordinate instruments, this particular Determination is a straightforward ministerial direction that specifies the exact date for the crediting of the initial amount, with no provisions for revocation once registered.
Key Provisions
The Future Fund (Crediting of Initial Amount) Determination 2006, under subclause 2(1) of Schedule 1 to the Future Fund Act 2006, mandates that the responsible Ministers must determine, in writing, that an initial amount of $18 billion be credited to the Future Fund Special Account before 1 July 2006. This Determination specifies that this crediting must occur on 5 May 2006. This initial crediting is sourced from surpluses previously held on deposit with the Reserve Bank of Australia. As a legislative instrument under the Legislative Instruments Act 2003, this Determination, while not disallowable, becomes effective upon registration and cannot be revoked once in effect.
In terms of obligations, the responsible Ministers must ensure the crediting of the $18 billion to the Future Fund Special Account is executed by the specified date. This involves a clear and documented ministerial determination, ensuring transparency and accountability in the process. The funds, which are sourced from previously realised surpluses held with the Reserve Bank of Australia, must be transferred accurately and on time to meet the legislative requirements.
The Determination sets forth clear obligations for the responsible Ministers, requiring them to issue a written directive to credit the $18 billion to the Future Fund Special Account by 5 May 2006. This directive must be precise and include details of the amount and the date of the crediting, ensuring compliance with the Future Fund Act 2006. Failure to meet these obligations could lead to significant legal and financial repercussions.
In terms of enforcement and consequences, the Determination does not explicitly outline specific offences or penalties for non-compliance. However, as a legislative instrument, any failure to adhere to the requirements could potentially result in legal challenges or administrative actions. The seriousness of non-compliance is underscored by the fact that the Determination is not subject to disallowance and becomes effective immediately upon registration, highlighting the importance of strict adherence to the stipulated provisions.