EXPLANATORY STATEMENT
STATUTORY RULES 1988 NO 150
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
TERRITORY AUTHORITIES (FINANCIAL PROVISIONS) ACT 1978 –
TERRITORY AUTHORITIES (FINANCIAL PROVISIONS) REGULATIONS (AMENDMENT)
Section 10 of the Territory Authorities (Financial Provisions) Act 1978 (the Act) provides that the Governor-General may make regulations, not inconsistent with this Act, prescribing all matters required or permitted by this Act to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to this Act. The attached Statutory Rules prescribe the Australian Capital Territory Electricity and Water Authority as an authority to which subsection 7(2) of the Act applies.
Subsection 4(1) of the Act provides that in the Act, unless the contrary intention appears, “authority” means a body corporate established for a public purpose by or under a law of a Territory.
Subsection 7(2) of the Act provides that the Treasurer may, on behalf of the Commonwealth, guarantee the repayment by an authority to which the section applies of amounts lawfully borrowed by the authority, other than moneys lent under that section, and the payment of interest on amounts so borrowed.
The attached Statutory Rules prescribe the Australian Capital Territory Electricity and Water Authority (the Authority), established from 1 July 1988 by the Electricity and Water Ordinance 1988, as an authority to which subsection 7(2) of this Act applies.
The Authority replaced the Australian Capital Territory Electricity Authority established under section 5 of the Australian Capital Territory Electricity Supply Act 1962. Subsection 26A(1) of that Act provided that the Australian Capital Territory Electricity Authority may, with the approval of the Treasurer, borrow money otherwise than from the Commonwealth or raise money otherwise than by borrowing on terms and conditions that were specified in, or consistent with the approval. Subsection 26B(1) of that Act provided that the Treasurer may, on behalf of the Commonwealth, enter into a contract or issue a written determination guaranteeing borrowings raised by that Authority under subsection 26A(1) of that Act.
The Authority is a body corporate with perpetual succession, whose purpose is to provide reticulated services (electricity supply, water supply and sewerage services) in the Australian Capital Territory. Section 43 of the Electricity and Water Ordinance 1988 provides for
the Authority to raise borrowings, otherwise than from the Commonwealth and to raise money otherwise than by borrowing.
It is appropriate that the Australian Capital Territory Electricity and Water Authority also has provisions for Commonwealth guarantees on its borrowings available to it, and this is provided by the attached Statutory Rules.
Authority: Section 10 of the Territory Authorities (Financial Provisions) Act 1978
Overview
The Territory Authorities (Financial Provisions) Regulations (Amendment) 1988, issued under the authority of the Minister for Finance, was enacted to address the need for financial provisions governing the operations of public authorities in Australian territories. This legislation amends the Territory Authorities (Financial Provisions) Act 1978 to include the Australian Capital Territory Electricity and Water Authority as an entity eligible for Commonwealth guarantees on its borrowings. The Act was established to streamline and formalise the financial provisions applicable to authorities established for public purposes by or under a law of a Territory, aiming to provide a framework that ensures the stability and reliability of these entities. By amending the Act, the Parliament seeks to ensure that essential services, such as electricity and water supply in the Australian Capital Territory, can be reliably funded through authorised borrowings, supported by the Commonwealth where necessary.
Scope and Application
The Territory Authorities (Financial Provisions) Act 1978 applies to authorities, which are defined as bodies corporate established for a public purpose by or under a law of a Territory. Specifically, the Act allows the Treasurer to guarantee the repayment of amounts borrowed by an authority, excluding moneys lent under the Act, and the payment of interest on those borrowed amounts. The attached Statutory Rules amend the Act by prescribing the Australian Capital Territory Electricity and Water Authority as an authority to which these provisions apply. This amendment is made to ensure that the Authority, which was established to provide reticulated services such as electricity, water supply, and sewerage services in the Australian Capital Territory, can benefit from Commonwealth guarantees on its borrowings, in line with the provisions that applied to its predecessor, the Australian Capital Territory Electricity Authority. The jurisdictional reach of the Act is limited to the Australian Capital Territory, and the amendment through the Statutory Rules extends the application of the Act to the newly established Authority, ensuring continuity in the financial provisions for public service provision in the territory.
Key Provisions
The primary operative sections of the Territory Authorities (Financial Provisions) Act 1978, as amended by these regulations, are Sections 4(1) and 7(2). Section 4(1) defines "authority" as a body corporate established for a public purpose by or under a law of a Territory. Section 7(2) allows the Treasurer, on behalf of the Commonwealth, to guarantee the repayment of amounts lawfully borrowed by the prescribed authority, excluding moneys lent under the Act, and the payment of interest on such amounts. The Statutory Rules amend Section 7(2) to include the Australian Capital Territory Electricity and Water Authority (the Authority) as one of the authorities eligible for such guarantees.
The Act imposes specific obligations on the Treasurer to guarantee the repayment of lawful borrowings by the Authority, excluding those under the Act itself, as well as the payment of interest on these borrowings. The Authority, as a body corporate established for a public purpose, is required to adhere to the financial provisions set out in the Act and any related regulations. The Act also mandates that any borrowings by the Authority must be for purposes consistent with its public service objectives, specifically the provision of reticulated services such as electricity, water supply, and sewerage services in the Australian Capital Territory.
Failure to comply with the financial provisions and obligations stipulated in the Act may result in various civil and criminal consequences. Although specific penalties are not detailed within the statutory rules, breaches of financial provisions under the Act could potentially lead to legal actions for non-compliance. These actions may include fines, restitution, or other remedies as determined by the courts. Additionally, there could be broader administrative and governmental repercussions for non-compliance, impacting the Authority's operational funding and credibility.