EXPLANATORY STATEMENT
STATUTORY RULES 1984 NO. 403
ISSUED BY AUTHORITY OF THE MINISTER FOR FINANCE
SUPERANNUATION ACT 1976 - AMENDMENT OF THE SUPERANNUATION (INVESTMENT) REGULATIONS
LEGISLATIVE BASIS FOR THE REGULATIONS
Section 168 of the Superannuation Act 1976 (the Act) provides that the Governor-General may make regulations not inconsistent with the Act, prescribing matters which the Act requires or permits to be prescribed, for carrying out or giving effect to the Act.
The Act makes provision for, and in relation to, an occupational superannuation scheme for persons employed by the Commonwealth, and for certain other persons. Contributions by contributors to the Scheme are paid into the Superannuation Fund (the Fund) and invested by the Superannuation Fund Investment Trust (the Trust).
Section 42 of the Act sets out the manner in which the Fund may be invested by the Trust. The section lists a number of specific ways in which Fund moneys may be invested and also provides that they may be invested “in any manner that is prescribed”.
The Superannuation (Investment) Regulations specify certain other ways in which the Fund moneys may be invested.
In summary, the Regulations already provide that investments may be made in deposits in the short-term money market, in buy-back transactions, in bills of exchange accepted or endorsed by a bank or dealer in the short-term money market, in loans to bodies corporate who in turn grant housing loans, in negotiable certificates of deposit issued by a bank, in improving land owned by the Trust, in unit trusts, in leveraged leases and in an interest, other than shares or debentures, that entitles the Trust to an interest in the assets or profits or both of a financial or business undertaking or scheme.
BACKGROUND TO AND CONTENT OF THE REGULATIONS
It is preferable that the Trust have the power to participate directly in joint ventures rather than have to rely on its unit trust power or to participate via subsidiary companies.
The purpose of this Regulation, therefore, is to authorise the Trust to invest as a direct participant in joint ventures with one or more other participants.
This will overcome legal doubts about the Trust’s power to participate directly in joint ventures and will obviate any suggestion that the Trust would be circumventing its investment powers were it to enter into joint ventures via its unit trust power or through a subsidiary company.