STATES LOAN.
No. 6 of 1925.
An Act to authorize the raising of Moneys to be loaned to the States and for other purposes.
[Assented to 13th July, 1925.]
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 States Loan Act 1925.
Agreements with States.
2. The Treasurer of the Commonwealth may enter into an agreement with the Treasurer of any State, providing—
(a) for the borrowing by the Commonwealth, on behalf of any State, of such amounts as are declared by that agreement to be necessary for the general loan purposes of that State, and have been or may be authorized by the Parliament of the State up to the thirtieth day of June One thousand nine, hundred and twenty-six;
(b) the terms and conditions upon which loans may be made to the State under this Act;
(c) for the conversion into a Commonwealth loan, or for the redemption, of any State loan falling due on or before the first day of July One thousand nine hundred and twenty-six; and
(d) the terms and conditions upon which the conversion or redemption of any State loan may be effected.
Authority to borrow moneys.
3. The Treasurer may, from time to time, under the provisions of the Commonwealth Inscribed Stock Act 1911–1918, or under the provisions of any Act authorizing the issue of Treasury Bills, borrow-moneys to such amounts as are specified in any agreement made in pursuance of section two of this Act.
Application of moneys.
4. Moneys borrowed under this Act shall be issued and applied only for the expenses of borrowing, and for making loans to the States and redeeming State loans in accordance with section two of this Act.
Power to make advances to States pending raising of loans.
5.—(1.) Pending the borrowing of moneys in pursuance of this Act, the Treasurer may, from time to time, advance to the States out of any moneys in the Commonwealth Public Account, sums not exceeding the moneys which may be borrowed in pursuance of this Act.
(2.) Any moneys so advanced shall be repayable to the Commonwealth from the proceeds of any loan raised in pursuance of this Act after the moneys have been advanced.
Conversion of State securities into Commonwealth securities.
6. The Treasurer may, for the purposes of any agreement made in pursuance of this Act, convert into a Commonwealth security any State security falling due on or before the first day of July One thousand nine hundred and twenty-six.
Principal moneys and interest charged on Consolidated Revenue Fund.
7. The principal money of any security issued in accordance with this Act or the States Loan Act 1924 and the interest thereon shall be a charge on, and payable out of, the Consolidated Revenue Fund, which is hereby appropriated for the purpose.
Regulations.
8. The Governor-General may make regulations, not inconsistent with this Act, prescribing all matters which by this Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed, for carrying out or giving effect to this Act.
Overview
The States Loan Act 1925 was enacted by the Parliament of Australia to address the need for financial assistance to the states, particularly in light of the economic challenges faced during the early 20th century. The Act authorises the Commonwealth to borrow money to provide loans to the states, facilitating their ability to meet general financial obligations. This Act allows the Treasurer of the Commonwealth to enter into agreements with the Treasurers of the states for the borrowing, terms, and conditions of loans, including the conversion or redemption of existing state loans. The moneys borrowed under this Act are to be used specifically for the expenses of borrowing and for making loans to the states, as well as for redeeming state loans, ensuring that the financial support provided is directly applied to the intended purpose.
Scope and Application
The States Loan Act 1925 applies to the Commonwealth Treasurer who is empowered to enter into agreements with State Treasurers for the purpose of facilitating loans from the Commonwealth to the States. This Act applies to the geographic jurisdiction of the Commonwealth of Australia and allows the Commonwealth to borrow moneys to fund these loans, with the borrowed funds being used solely for the expenses of borrowing, and for making loans to the States and redeeming State loans as outlined in the agreement. The Act also provides for the conversion of State securities into Commonwealth securities, with the principal moneys and interest being charged on the Consolidated Revenue Fund. The application of this Act can be extended or restricted through regulations made by the Governor-General, which must not be inconsistent with the Act. The Act does not specify any exclusions or exemptions, and the authority to borrow moneys is limited to the amounts specified in any agreement made under this Act.
Key Provisions
The main operative sections of the States Loan Act 1925 outline the framework for the Commonwealth to loan money to the States. Section 2 allows the Treasurer of the Commonwealth to enter into agreements with the Treasurer of any State for borrowing specified amounts, setting terms and conditions for the loans, and facilitating the conversion or redemption of State loans. Section 3 authorises the Treasurer to borrow moneys as specified in these agreements under the Commonwealth Inscribed Stock Act 1911–1918 or any Act that allows for Treasury Bills. Section 4 specifies that the borrowed moneys must be used for the expenses of borrowing and for making loans to the States and redeeming State loans as per the agreement. Section 5 provides for the Treasurer to make advances to the States from the Commonwealth Public Account, pending the raising of loans under the Act, with these advances to be repaid from the proceeds of the loans. Section 6 allows for the conversion of State securities into Commonwealth securities for the purposes of any agreement made under the Act. Section 7 ensures that the principal moneys and interest of any security issued under this Act or the States Loan Act 1924 are a charge on the Consolidated Revenue Fund. Lastly, Section 8 empowers the Governor-General to make regulations necessary or convenient for carrying out the Act.
The Act imposes several obligations on the parties involved. The Treasurer of the Commonwealth must enter into agreements with State Treasurers to facilitate loans (Section 2). These agreements must detail the borrowing amounts, terms and conditions of the loans, and the process for converting or redeeming State loans. The Treasurer must also ensure that the borrowed moneys are used strictly for the expenses of borrowing and for the intended loans and redemptions (Section 4). The Treasurer can make temporary advances to States from the Commonwealth Public Account, which must be repaid once loans are raised (Section 5). Additionally, the Treasurer has the authority to convert State securities into Commonwealth securities as per the agreements (Section 6). The principal moneys and interest on any securities issued under the Act are charged on the Consolidated Revenue Fund (Section 7).
Failure to comply with the provisions of the States Loan Act 1925 may result in various consequences. Although the Act does not explicitly state offences, penalties, or civil/criminal consequences for breaches, breaches of the terms and conditions set in the agreements or misuse of funds could potentially lead to legal actions or disputes. The regulations made under Section 8 might further define specific compliance requirements and potential penalties for non-compliance. As such, any significant deviation from the Act's provisions could be subject to judicial review or enforcement actions by the relevant authorities.