Loan Act 1987

Overview

The Loan Act 1987, enacted by the Commonwealth of Australia's Parliament, was designed to address the need for authorised borrowing and expenditure of funds for specific purposes during the financial year ending on 30 June 1988. This Act provides the Treasurer with the authority to borrow and expend money for defence services and to supplement the Consolidated Revenue Fund. The Act's primary objective is to ensure that the funds borrowed are used strictly for the purposes outlined, such as defence services and related borrowing expenses, while also preventing any unauthorised expenditures beyond the authorised limits. The Act stipulates that the borrowed funds can only be used for specified purposes and prohibits any expenditure beyond the authorised limits, except for the expenses of borrowing.

Scope and Application

The Loan Act 1987 applies specifically to the Commonwealth of Australia and authorises the borrowing and expending of money for defence services and to supplement the Consolidated Revenue Fund for the current financial year, which ends on 30 June 1988. The Act permits the Treasurer to borrow money up to certain limits to fund defence services and to cover the expenses of borrowing. The borrowed funds must be used strictly for defence services or supplementing the Consolidated Revenue Fund, as outlined in the Act. The Act does not extend beyond the current financial year, nor does it authorise expenditure after 30 June 1988, except for the expenses of borrowing. The borrowing is to be conducted in accordance with the Commonwealth Inscribed Stock Act 1911 or an Act authorising the issue of Treasury Bills. The Act provides for the appropriation of the Loan Fund to the extent necessary for its purposes and explicitly limits expenditure to prevent exceeding the authorised amounts for defence services within the current financial year.

Key Provisions

The Loan Act 1987 (the "Act") provides the authority for the borrowing and expending of money for defence purposes during the current financial year, which ends on 30 June 1988. Under section 4, the Treasurer is authorised to borrow money up to a specified limit, which includes the total amount authorised for defence services for the year, plus the expenses of borrowing. This money can only be used for defence services and related borrowing expenses, as outlined in section 5. Similarly, under section 6, the Treasurer can also borrow additional funds, up to a limit determined by the Treasurer based on the anticipated shortfall in the Consolidated Revenue Fund for the year and the borrowing expenses. This money can be used only for replenishing the Consolidated Revenue Fund and for borrowing expenses, as specified in section 7. The Loan Fund is appropriated to the extent necessary for the purposes of the Act, as stated in section 8. The Act also imposes a limit on expenditure such that it cannot exceed the total amount authorised for defence services for the year, as per section 9(1), except for the advance to the Minister for Finance as mentioned in section 9(2). Moreover, no expenditure (other than borrowing expenses) is permitted after 30 June 1988, as per section 9(3). The Act imposes several obligations on the Treasurer and other parties involved in the borrowing and expenditure process. The Treasurer must ensure that the borrowing and expenditure do not exceed the authorised limits and must use the borrowed funds solely for the purposes specified in the Act. The Treasurer must also ensure that the borrowing and expenditure comply with the relevant appropriation Acts, such as the Commonwealth Inscribed Stock Act 1911 and any Act authorising the issue of Treasury Bills. Furthermore, the Act requires that the borrowing and expenditure be for the benefit of defence services and the replenishment of the Consolidated Revenue Fund, as outlined in sections 5 and 7, respectively. The Act does not explicitly outline specific offences, penalties, or consequences for breaches. However, any breach of the borrowing and expenditure limits, or misuse of the borrowed funds, could potentially lead to legal consequences under other applicable laws, such as the Public Governance, Performance and Accountability Act 2013 or common law principles of misfeasance in public office. The Act's provisions are designed to ensure that the borrowing and expenditure are conducted within authorised limits and for specified purposes, thereby minimising the risk of unauthorised or improper use of public funds.