Loan Act (No. 2) 1991

Overview

The Loan Act (No. 2) 1991 was enacted by the Parliament of Australia to address the need for additional funds for defence services and to supplement the Consolidated Revenue Fund during the financial year ending 30 June 1992. This legislation was introduced to provide the Treasurer with the authority to borrow and expend money specifically for defence purposes and to cover any shortfall in the Consolidated Revenue Fund. The Act ensures that borrowing is strictly governed, with specific limits and purposes outlined, and includes provisions to prevent over-expenditure on defence services beyond what has been authorised in appropriation Acts. The primary policy objective of the Act is to facilitate the financial management of defence expenditures and to ensure that the Consolidated Revenue Fund is adequately supplemented during the specified financial year.

Scope and Application

The Loan Act (No. 2) 1991 is a Commonwealth statute that authorises the borrowing and expenditure of funds for specific purposes within the current financial year ending on 30 June 1992. The Act applies to the Treasurer, who is authorised to borrow money to cover expenditures for defence services and to supplement the Consolidated Revenue Fund, subject to the limitations outlined in the Act and relevant appropriation Acts. The borrowing must comply with the Commonwealth Inscribed Stock Act 1911 or an Act authorising the issue of Treasury Bills, and no other means. The borrowed funds can only be used for defence services or the expenses of borrowing, or for payments to the credit of the Consolidated Revenue Fund and the expenses of borrowing, as specified. The Act does not permit any expenditure for defence services that would exceed the authorised amounts in the relevant appropriation Acts, except for advances to the Minister for Finance. Additionally, no expenditure (other than for the expenses of borrowing) is permitted after 30 June 1992. The Act’s scope and application may be further defined or extended through subordinate instruments, though the primary text does not specify any such provisions.

Key Provisions

The Loan Act (No. 2) 1991 primarily authorises the Treasurer to borrow and expend money for defence services and to supplement the Consolidated Revenue Fund within specific financial constraints. Under Section 4, the Treasurer is permitted to borrow money for defence services during the current financial year, ensuring that the total borrowed does not exceed the sum of the authorised expenditure for defence services and the expenses of borrowing. This borrowed money can be expended for defence services and the associated borrowing expenses (Section 5). Similarly, Section 6 allows borrowing for supplementing the Consolidated Revenue Fund, ensuring the total borrowed does not exceed the shortfall in revenue and the borrowing expenses. The borrowed funds for this purpose can be used to make payments to the Consolidated Revenue Fund and for borrowing expenses (Section 7). The Act imposes specific obligations on the Treasurer and other relevant authorities. The Treasurer must ensure that the borrowing and expenditure do not exceed the authorised limits and must comply with the specified borrowing methods, including the use of the Commonwealth Inscribed Stock Act 1911 or an Act authorising the issue of Treasury Bills (Sections 4(2) and 6(2)). Additionally, the Act imposes a limitation on the expenditure for defence services, ensuring that it does not exceed the authorised amounts in the relevant appropriation Acts (Section 9(1)). It also prohibits any expenditure beyond the current financial year unless it is for the payment of borrowing expenses (Section 9(3)). Failure to comply with the provisions of the Act may result in legal consequences. Specifically, the Act limits the expenditure for defence services to prevent exceeding authorised amounts, which is a key provision to avoid unauthorised spending. While the Act does not explicitly list offences or penalties, breaches of the borrowing limits or unauthorised expenditure could potentially lead to legal actions for misuse of public funds. The Act’s provisions are designed to ensure that all borrowing and expenditure are within the authorised limits and for the specified purposes, thereby maintaining financial discipline and accountability in the use of public funds.