LOAN.
No. 26 of 1940.
An Act to authorize the Raising and Expending of a certain Sum of Money.
[Assented to 1st June, 1940.]
BE it enacted by the King’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—
Short title.
1. This Act may be cited as the Loan Act 1940.
Commencement.
2. This Act shall come into operation on the day on which it receives the Royal Assent.
Authority to borrow £68,740,000.
3. The Treasurer may, from time to time borrow—
(a) under the provisions of the Commonwealth Inscribed Stock Act 1911-1940, or under the provisions of any Act authorizing the issue of Treasury Bills; and
(b) from the Government of the United Kingdom, in accordance with the provisions of section five of this Act,
moneys not exceeding in the whole the amount of Sixty-eight million seven hundred and forty thousand pounds.
Purposes for which money may be expended.
4. The amount borrowed may be issued and applied for the expenses of borrowing and for the purposes set forth in the Schedule to this Act.
Conditions of borrowing from United Kingdom Government.
5. The following provisions shall apply with respect to moneys borrowed under this Act from the Government of the United Kingdom:—
(a) the rate of interest, the date of repayment and the form of security may be such as are approved by the Governor General; and
(b) the principal moneys shall be repayable, and the interest thereon shall be payable, out of the Consolidated Revenue Fund, which is hereby appropriated for the purpose.
Section 4.
THE SCHEDULE.
—
DEFENCE AND WAR (1939-40) SERVICES.
Department of Defence Co-ordination. | Appropriated by this Act. |
| £ |
Buildings, works and sites, fittings and furniture, and miscellaneous war services... | 131,000 |
The Schedule—continued.
Department of the Navy. | Appropriated by this Act. |
Pay and allowances of mobilized and volunteer forces, special staffs and guards, ordnance and armament stores, ammunition, fuel, naval construction, fleet auxiliaries and charter of naval craft, machinery, plant and other equipment, naval communications, transport services, construction of graving dock, buildings, works and sites, fittings and furniture, expenditure related to manufactured munitions and other miscellaneous war services | £ |
6,016,000 |
Department of the Army. | |
Pay and allowances of universal military service personnel, mobilized and volunteer forces, special staffs and guards, camp expenses including internment camps, general stores and fuel, arms, armament and ammunition, mechanization, equipment and reserves, machinery and plant, buildings, works and sites, fittings and furniture, expenditure related to manufactured munitions and other miscellaneous war services | 33,406,000 |
Department of Air. | |
Pay and allowances of Air Force personnel and reserves and special staffs, general stores and fuel, landplane and seaplane equipment including spare parts, machinery, tools, ordnance and engineering supplies and ammunition, warlike stores and equipment, purchase and charter of aircraft, buildings, works and sites, fittings and furniture, expenditure related to manufactured munitions, expenditure in connexion with the Empire Air Training Scheme and other miscellaneous war services | 26,402,000 |
Department of Supply and Development. | |
Manufacture of munitions including pay, general expenses, working credits for factories and machinery and plant, reserves of raw materials, armament annexes, aircraft construction, buildings, works and sites, fittings and furniture, training of toolmakers and other miscellaneous war expenditure | 2,439,000 |
Total Defence and War (1939-40) Services................. | 68,394,000 |
Overview
The Loan Act 1940 was enacted by the Commonwealth Parliament to address the financial requirements of the Australian Government for defence and war services during the period of 1939 to 1940. Assented to on 1st June, 1940, this Act authorised the Treasurer to borrow up to £68,740,000, either under the Commonwealth Inscribed Stock Act 1911-1940, Treasury Bills, or from the Government of the United Kingdom, with the terms of borrowing from the latter approved by the Governor-General. The borrowed funds were intended to cover expenses for defence and war services as detailed in the Schedule, including the Department of Defence Coordination, the Navy, the Army, the Air Force, and the Supply and Development department, among others. The Act specified that these funds would be appropriated from the Consolidated Revenue Fund for repayment of principal and interest.
Scope and Application
The Loan Act 1940 pertains to the authority of the Commonwealth of Australia to borrow a specified sum of money for designated purposes. The Act applies to the Commonwealth government, specifically the Treasurer, who is empowered to borrow money under the provisions of the Commonwealth Inscribed Stock Act 1911-1940, Treasury Bills, or from the Government of the United Kingdom. The borrowing is strictly earmarked for expenses related to defence and war services for the period of 1939-40, as outlined in the Schedule to this Act, which includes allocations for various defence departments such as the Army, Navy, and Air. The Act has a national jurisdictional reach as it is a Commonwealth Act. There are no exclusions or exemptions explicitly stated within the Act, though the borrowing is limited to the specified amount of £68,740,000. The Act’s application may be extended or modified through subordinate instruments, such as regulations or orders, which might detail specific conditions of borrowing or the allocation of funds within the designated purposes.
Key Provisions
The Loan Act 1940 (sections 1-5) provides the legal framework for the Australian government to borrow up to £68,740,000 for specific war-related expenses. The Act authorises the Treasurer to borrow these funds either through the Commonwealth Inscribed Stock Act 1911-1940, the issuance of Treasury Bills, or directly from the Government of the United Kingdom. The borrowed money is to be used for the expenses related to borrowing and for the purposes detailed in the attached Schedule, specifically for Defence and War Services from 1939 to 1940. The Act also outlines conditions for borrowing from the UK Government, including the interest rate, repayment date, and form of security, all of which must be approved by the Governor General. The principal and interest on these loans are to be repaid from the Consolidated Revenue Fund.
Under the Loan Act 1940, the government has specific obligations to adhere to the conditions set forth for borrowing from the UK Government, as well as to ensure the funds are used strictly for the purposes outlined in the Schedule. This includes ensuring that the borrowed funds are applied to Defence and War Services, specifically for the Departments of Defence Coordination, the Navy, the Army, Air, and Supply and Development. The Act mandates the appropriation of funds for various war-related expenses, including personnel pay and allowances, equipment, ammunition, construction, and other miscellaneous services. The government is also required to repay the principal and interest on these loans from the Consolidated Revenue Fund, ensuring the financial obligations are met as stipulated.
Breaches of the Loan Act 1940 could result in various legal consequences, although the specific provisions for penalties or sanctions are not detailed within the text provided. Generally, failing to comply with the terms of borrowing, misappropriating funds, or not adhering to the approved conditions could lead to financial penalties or legal action. For instance, if the government fails to repay the loans as specified, it could face financial liabilities and reputational damage. Additionally, any misuse of funds could result in criminal charges if it is determined that public money has been misappropriated or improperly spent. The maximum penalties for such offences would depend on the specific breaches and relevant laws governing financial misconduct in Australia.