LOAN (No. 2).
No. 71 of 1938.
An Act to authorize the Raising and Expending of a certain Sum of Money.
[Assented to 12th December, 1938.]
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 (No. 2) 1938.
Commencement.
2. This Act shall come into operation on the day on which it receives the Royal Assent.
Authority to borrow £10,200,000.
3. The Treasurer may, from time to time, under the provisions of the Commonwealth Inscribed Stock Act 1911–1933, or under the provisions of any Act authorizing the issue of Treasury Bills, borrow moneys not exceeding in the whole the amount of Ten million two hundred thousand pounds.
Purpose 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.
THE SCHEDULE. Section 4.
| Appropriated by this Act. |
DEPARTMENT OF DEFENCE. | £ |
Navy. | |
Under Control of Department of Defence. | |
Naval construction and additions to fleet............................ | 238,000 |
Reserves of stores, including ammunition, ordnance, torpedo stores and fuel oil... | 522,000 |
Naval establishments—Machinery and plant and Wireless Telegraphy equipment. | 30,000 |
Targets for fleet, yard craft, boats and launches—construction.............. | 66,000 |
Under Control of Department of Works. | |
Buildings, works and sites...................................... | 703,000 |
Total Navy........................... | 1,559,000 |
Army. | |
Under Control of Department of Defence. | |
Coast defences—equipment and works............................. | 35,000 |
Arms, armament and ammunition, mechanization, equipment and reserves...... | 3,329,000 |
Under Control of Department of Works. | |
Buildings, works and sites...................................... | 592,000 |
Total Army | 3,956,000 |
Air Force. | |
Under Control of Department of Defence. | |
Landplane and seaplane equipment and plant, including spare parts, machinery, tools, ordnance and engineering supplies and ammunition | 2,819,000 |
Warlike stores and equipment................................... | 314,000 |
Under Control of Department of Works. | |
Buildings, works and sites...................................... | 294,000 |
Total Air Force | 3,427,000 |
Munitions Supply Branch. | |
Under Control of Department of Defence. | |
Machinery and plant for manufacture of munitions...................... | 510,000 |
Reserves of materials for manufacture of munitions..................... | 128,000 |
Under Control of Department of Works. | |
Buildings, works and sites...................................... | 334,000 |
Total Munitions Supply Branch | 972,000 |
Principal Supply Officers Committee. | |
Under Control of Department of Defence. | |
Armament annexes, plant, materials and experimental work................ | 86,000 |
Total Department of Defence............... | 10,000,000 |
Overview
The Loan Act (No. 2) 1938 was enacted to address a financial shortfall in the Commonwealth's budget, enabling the government to raise funds for critical defence-related expenditures. Enacted by the Commonwealth Parliament, the Act provides the Treasurer with the authority to borrow up to £10,200,000 for the defence sector, which was a pressing concern during a period of rising international tensions leading up to World War II. The primary policy objective of this legislation was to ensure that the Commonwealth could adequately finance the expansion and fortification of its defence capabilities, including the Navy, Army, and Air Force, as well as support the establishment of munitions supply infrastructure.
The funds raised under this Act were designated for specific defence-related projects and the maintenance of reserves, as detailed in the Schedule. This included substantial allocations for naval construction, the acquisition of armaments and ammunition, the establishment of air force equipment and facilities, and the development of munitions manufacturing infrastructure. By providing these financial resources, the Act aimed to bolster the nation's defence preparedness and respond to the escalating global security environment.
Scope and Application
The Loan Act (No. 2) 1938 applies to the Commonwealth of Australia and authorises the Treasurer to borrow a specific sum of money for designated purposes. The borrowing authority is limited to a total of £10,200,000, which may be raised under the provisions of the Commonwealth Inscribed Stock Act 1911–1933 or any Act allowing for the issuance of Treasury Bills. The borrowed funds are to be allocated strictly for the expenses associated with the borrowing process and for the purposes detailed in the attached Schedule. The Act does not explicitly mention any exclusions, exemptions, or thresholds, but it delineates specific allocations for the Navy, Army, Air Force, Munitions Supply Branch, and the Principal Supply Officers Committee under the Department of Defence and the Department of Works. The geographic reach of this Act is confined to the Commonwealth of Australia, and its application may be extended or restricted through subordinate instruments as deemed necessary by the relevant authorities.
Key Provisions
The Loan Act (No. 2) 1938 (sections 1-4) provides the framework for the Commonwealth government to borrow up to £10,200,000. The Act authorises the Treasurer to borrow this amount under the provisions of the Commonwealth Inscribed Stock Act 1911–1933 or any Act allowing for the issuance of Treasury Bills (section 3). The funds raised can be used for the expenses associated with borrowing and for the specific purposes outlined in the attached schedule (section 4).
Under the Act, the borrowing authority is strictly limited to the £10,200,000 amount and can only be spent on the expenses of borrowing and the designated purposes listed in the schedule. The schedule details allocations for the Navy, Army, Air Force, Munitions Supply Branch, and the Principal Supply Officers Committee, all under the control of the Department of Defence or the Department of Works, depending on the specific items or projects (section 4).
Failure to comply with the strictures set out in the Loan Act (No. 2) 1938 may lead to legal consequences. Although the Act does not explicitly outline penalties for non-compliance, breaches of financial legislation can generally result in civil or criminal penalties under other related laws, such as the Crimes Act 1914. For instance, misuse of public funds can lead to criminal charges, while administrative breaches might result in fines or other civil penalties, depending on the severity and intent behind the non-compliance.
The Loan Act (No. 2) 1938 sets a clear framework for the borrowing and spending of a specific sum, with particular emphasis on transparency and accountability in the allocation of funds. The Act requires that the funds be used solely for the purposes outlined in the schedule, which are detailed meticulously to ensure proper oversight and governance. This structured approach aims to prevent any misuse of the borrowed funds and ensures that the financial resources are directed towards their intended military and defence-related purposes.