Qantas Airways Limited (Loan Guarantee) Act 1979
No. 51 of 1979
An Act relating to the provision of certain equipment for Qantas Airways Limited
Contents
1 Short title
2 Commencement
3 Provision of credit deemed to be a borrowing
4 Guarantee of certain loans
5 Conditions of guarantees
6 Delegation
Qantas Airways Limited (Loan Guarantee) Act 1979
No. 51 of 1979
An Act relating to the provision of certain equipment for Qantas Airways Limited
[Assented to 14 June 1979]
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Qantas Airways Limited (Loan Guarantee) Act 1979.
2 Commencement
This Act shall come into operation on the day on which it receives the Royal Assent.
3 Provision of credit deemed to be a borrowing
For the purposes of this Act, the provision of credit shall be deemed to be a borrowing to the extent of the amount of that credit.
4 Guarantee of certain loans
(1) The Treasurer may, on behalf of the Commonwealth, and subject to the conditions required by this Act, guarantee:
(a) the repayment by Qantas Airways Limited of amounts borrowed by it not exceeding its expenditure in connection with the purchase by it of 2 Boeing 747 aircraft and related spare parts and equipment; and
(b) the payment of interest on amounts so borrowed.
(2) A guarantee or guarantees shall not be given under subsection (1) in respect of moneys borrowed in the currency of the United States of America, or in any other currency, exceeding in the aggregate $94,000,000 in the currency of the United States of America.
(3) For the purposes of subsection (2), the amount of a borrowing in a currency other than the currency of the United States of America shall be taken to be the amount in the currency of the United States of America that was equivalent to the first-mentioned amount at the date of the borrowing, as ascertained by the Reserve Bank of Australia.
5 Conditions of guarantees
For the purpose of the protection of the financial interests of the Commonwealth, the Treasurer shall not give a guarantee under section 4 unless:
(a) the moneys are borrowed on terms and conditions that the Treasurer is satisfied are reasonable;
(b) proper security to the satisfaction of the Treasurer is, or is to be, given to the Commonwealth over the aircraft, spare parts and equipment to which the borrowing relates;
(c) undertakings to the satisfaction of the Treasurer are given that the aircraft, spare parts and equipment over which security is to be taken in accordance with paragraph (b):
(i) will be insured, and kept insured, against all risks that it is customary to insure, and to their full insurable value; and
(ii) will not be sold or made the subject of a mortgage or charge having priority over the security to the Commonwealth in respect of the guarantee; and
(d) such other conditions as the Treasurer thinks necessary are fulfilled.
6 Delegation
(1) The Treasurer may, either generally or as otherwise provided by the instrument of delegation, by writing signed by him, delegate to an officer of the Department of the Treasury any of his powers or functions under this Act, other than this power of delegation.
(2) A power or function so delegated, when exercised or performed by the delegate, shall, for the purposes of this Act, be deemed to have been exercised or performed by the Treasurer.
(3) A delegate is, in the exercise or performance of a power or function so delegated, subject to the directions of the Treasurer.
(4) A delegation under this section does not prevent the exercise of a power or the performance of a function by the Treasurer.
Overview
The Qantas Airways Limited (Loan Guarantee) Act 1979, enacted by the Parliament of Australia, was established to address the financial needs of Qantas Airways Limited for the acquisition of specific equipment. The primary objective of this legislation was to facilitate the provision of financial support to Qantas for the purchase of two Boeing 747 aircraft and related spare parts and equipment, up to a specified monetary limit. The Act was designed to ensure that the Commonwealth's financial interests were protected through the guarantee of certain loans, subject to specific conditions and terms that the Treasurer deemed reasonable. The enactment of this Act aimed to assist Qantas in enhancing its fleet and operational capacity, thereby contributing to the overall growth and stability of the Australian aviation industry.
Scope and Application
The Qantas Airways Limited (Loan Guarantee) Act 1979 is an Act of the Commonwealth of Australia that provides for the Commonwealth to guarantee certain loans made to Qantas Airways Limited for the purchase of two Boeing 747 aircraft and related spare parts and equipment. The Act applies to the Commonwealth, as represented by the Treasurer, and to Qantas Airways Limited, as the entity receiving the loan guarantee. The guarantee is limited to loans not exceeding an aggregate amount of $94,000,000 in the currency of the United States of America. The Act also specifies conditions that must be met before a guarantee can be issued, including that the borrowing is done on reasonable terms and conditions, proper security is given to the Commonwealth, and the aircraft and equipment are insured against all customary risks. The Treasurer has the power to delegate certain functions to an officer of the Department of the Treasury, but retains the ultimate authority over the exercise of these powers and functions.
Key Provisions
The Qantas Airways Limited (Loan Guarantee) Act 1979 (sections 1-6) primarily concerns the provision of a loan guarantee by the Commonwealth for Qantas Airways Limited to finance the purchase of two Boeing 747 aircraft and related spare parts and equipment. Under section 4(1), the Treasurer, on behalf of the Commonwealth, may guarantee the repayment of certain loans made to Qantas, up to an aggregate amount of $94,000,000 USD, and the payment of interest on such loans. However, this guarantee is subject to specific conditions outlined in section 5, including the terms and conditions of the loans, the provision of adequate security over the aircraft and equipment, insurance of these assets, and any other conditions deemed necessary by the Treasurer to protect the Commonwealth's financial interests.
The Act imposes several obligations on the parties involved. Firstly, section 4(2) stipulates a financial limit on the guarantee, ensuring that the total borrowed amount does not exceed the specified threshold. Section 5(a) requires that the loans must be made on reasonable terms and conditions. Section 5(b) mandates that proper security must be provided to the Commonwealth over the aircraft and equipment, while section 5(c) requires undertakings that the assets will be insured against all customary risks and will not be sold or encumbered in a way that would compromise the Commonwealth’s security interests. Additionally, the Treasurer has the discretion to impose further conditions necessary to safeguard the Commonwealth's interests.
Breaches of the conditions set forth in this Act may lead to civil or criminal consequences. While the Act does not explicitly outline specific penalties for breaches, the failure to meet the conditions for providing a guarantee could potentially result in the Commonwealth declining to honour the guarantee, leading to financial ramifications for Qantas. Furthermore, if the security provided or the insurance arrangements are found to be inadequate, this could expose the Commonwealth to financial risk, potentially leading to legal actions to enforce the terms of the guarantee or to recover losses. The Act’s provisions, however, do not specify maximum penalties, leaving such determinations to the discretion of the courts or relevant authorities in the event of a breach.