THE SCHEDULE
AGREEMENT made the twelfth day of December One thousand nine hundred and
twenty-seven BETWEEN THE COMMONWEALTH OF AUSTRALIA (in this Agreement called
the
Commonwealth) of the first part, THE STATE OF NEW SOUTH WALES of the second
part, THE STATE OF VICTORIA of the third part, THE STATE OF QUEENSLAND of the
fourth part, THE STATE OF SOUTH AUSTRALIA of the fifth part, THE STATE OF
WESTERN AUSTRALIA of the sixth part, and THE STATE OF TASMANIA of the seventh
part (each of the parties of the second, third, fourth, fifth, sixth, and
seventh parts being in this Agreement referred to as a State and the
expression
"the States" hereinafter used meaning where the context so permits or
requires
all of such parties).
WHEREAS with a view to making provision for the adjustment of Commonwealth
and
State financial relations the general principle of a draft scheme was
affirmed
by a Conference of Commonwealth and State Ministers in Melbourne which
commenced
on the sixteenth day of June One thousand nine hundred and twenty-seven;
AND WHEREAS permanent effect cannot be given to the proposals contained in
the
said scheme unless the Constitution of the Commonwealth is altered so as to
confer on the Parliament of the Commonwealth power to make laws for carrying
out
or giving permanent effect to such proposals;
AND WHEREAS pending the submission to the electors of a proposed law for
the
alteration of the said Constitution as aforesaid and in order to obtain
immediately some of the advantages which would result from united action by
adoption of the said scheme the Commonwealth and the States have agreed that
for
the period commencing on the first day of July One thousand nine hundred and
twenty-seven and ending on the thirtieth day of June One thousand nine
hundred
and twenty-nine certain of the proposed provisions of the said scheme shall
be
temporarily adopted:
NOW THIS AGREEMENT WITNESSETH:
PART I
1. This Agreement shall have no force or effect and shall not be binding on
any party unless and until it is approved by the Parliaments of the
Commonwealth
and of the States.
2. DEFINITIONS
In this Agreement-
"Net Public debt of a State existing on 30th June, 1927,"
means in respect of each State the amount of debt set forth hereunder
opposite
to the name of that State, viz.:-
New South Wales . . . . . . . . . . . 234,088,501
pounds
Victoria . . . . . . . . . . . . . . . 136,949,942
Queensland . . . . . . . . . . . . . . 101,977,855
South Australia . . . . . . . . . . . 84,834,364
Western Australia . . . . . . . . . . 61,060,675
Tasmania . . . . . . . . . . . . . . . 22,434,060
-----------
641,345,397 pounds
-----------
The said amount of the net public debt of each State includes the debts of
that State secured by-
(i) Inscribed Stock, including Local Inscribed Stock and Government
Inscribed Stock;
(ii) Instalment Stock;
(iii) Registered Stock;
(iv) Funded Stock;
(v) Stock payable to bearer;
(vi) Bonds, including registered bonds;
(vii) Debentures, including registered debentures and instalment
debentures;
(viii) Treasury Bills not repayable within twelve months from the date
of
issue; or
(ix) Fixed deposit receipts or special deposit receipts for moneys
borrowed
for other than temporary purposes;
issued or created by the State or by or on behalf of a Colony the
predecessor
of the State in respect of moneys borrowed by the Colony or State together
with
debts of the State to the Commonwealth of the amount set out respectively
hereunder opposite to the name of the State so far as those last mentioned
debts
are not included by being secured in manner aforesaid:-
New South Wales . . . . . . . . . . . 12,553,698 pounds
Victoria . . . . . . . . . . . . . . . 23,688,269
Queensland . . . . . . . . . . . . . . 16,082,583
South Australia . . . . . . . . . . . 18,446,197
Western Australia . . . . . . . . . . 16,739,872
Tasmania . . . . . . . . . . . . . . . 3,948,613
----------
91,459,232 pounds
----------
after deducting therefrom the amount for which the Commonwealth by this
Agreement assumes liability under Part III, Clause 4, of this Agreement and
the
amount of any moneys or securities standing to the credit of a sinking fund,
redemption fund, or a fund of a like nature of the State as on 30th June,
1927,
and does not include any moneys raised by the State by way of overdraft,
fixed
deposit, or special deposit for temporary purposes only.
The said sum of 234,088,501 pounds (being the amount of the debt of New
South
Wales abovementioned) comprises the debts referred to in, and has been
computed
in the manner shown in, the statement signed by representatives of the
Commonwealth and of New South Wales.
"Gross Public Debt of a State existing on 30th June, 1927,"
means in respect of each State the amount of debt set forth hereunder
opposite
to the name of that State, viz.:-
New South Wales . . . . . . . . . . . 239,441,363 pounds
Victoria . . . . . . . . . . . . . . . 144,844,530
Queensland . . . . . . . . . . . . . . 105,259,916
South Australia . . . . . . . . . . . 87,614,005
Western Australia . . . . . . . . . . 70,705,913
Tasmania . . . . . . . . . . . . . . . 24,254,688
----------
672,120,415 pounds
----------
The said amount of the gross public debt of each State includes the net
public debt of that State together with the amount for which the
Commonwealth by
this Agreement assumes liability under Part III, Clause 4, of this
Agreement and
the amount of any moneys or securities standing to the credit of any
sinking
fund redemption fund or fund of a like nature of the State as on 30th
June,
1927.
"Transferred Properties" means the properties mentioned or specified
in the Schedule of Transferred Properties signed by representatives of
the
Commonwealth and the States as revised to the 30th June, 1927, being
properties
which became vested in the Commonwealth pursuant to Section 85 (i) of
the
Constitution of the Commonwealth.
"The Loan Council" means the Australian Loan Council created in
pursuance of this Agreement.
"Bondholder" means an owner of any-
(i) Inscribed Stock, including Local Inscribed Stock and
Government
Inscribed Stock;
(ii) Instalment Stock;
(iii) Registered Stock;
(iv) Funded Stock;
(v) Stock payable to bearer;
(vi) Bonds, including registered bonds;
(vii) Debentures including registered debentures and instalment
debentures;
(viii) Treasury Bills not repayable within twelve months from the date
of
issue or
(ix) Fixed deposit receipts or special deposit receipts for moneys
borrowed
for other than temporary purposes;
issued or created by a State or by or on behalf of a Colony the
predecessor
of the State in respect of borrowed moneys but does not include the
Commonwealth.
3. AUSTRALIAN LOAN COUNCIL
(a) There shall be an Australian Loan Council, which shall consist of one
Minister of State of the Commonwealth to be appointed in writing from time to
time by the Prime Minister of the Commonwealth to represent the Commonwealth,
and one Minister of State of each State to be appointed in writing from time
to
time by the Premier of that State to represent that State. Provided that, if
in
the opinion of the Prime Minister or of any Premier of a State, special
circumstances exist at any time which make it desirable so to do, a person
who
is not a Minister may instead of a Minister be appointed by the Prime
Minister
or the Premier as the case may be to represent the Commonwealth or a State as
a
member of the Loan Council. The name of each person appointed to represent a
State shall be notified in writing by the Premier of that State to the Prime
Minister.
(b) The member representing the Commonwealth on the Loan Council shall hold
office during the pleasure of the Prime Minister of the Commonwealth and a
member representing a State shall hold office during the pleasure of the
Premier
of the State which the member was appointed to represent.
(c) A decision in which all the members for the time being of the Loan
Council
concur shall be a unanimous decision of the Loan Council notwithstanding any
vacancy then existing in its membership.
(d) A meeting of the Loan Council may at any time be convened by the member
representing the Commonwealth, and shall be so convened upon the request of
at
least three members representing States.
(e) A majority of the members of the Loan Council shall constitute a quorum
of
the Loan Council for the exercise of its powers at any meeting. Provided
that-
(i) a member may at any time appoint in writing a deputy to act in his
absence; and any deputy so appointed may in the absence of the member
exercise
all the powers and functions of the member and his presence shall be deemed
the
presence of the member; and
(ii) an absent member who has not appointed a deputy may vote by letter
or
by telegram, and in such case that member shall be counted as being present
in
relation only to the questions on which he has voted.
(f) The Loan Council may make rules of procedure including rules relating
to
places, times, and notices of meetings, and conduct of business at meetings,
and
from time to time may alter such rules.
(g) The Commonwealth and each State will from time to time while Part II of
this Agreement is in force, and while Part III of this Agreement is in force,
submit to the Loan Council a programme setting forth the amount it desires to
raise by loans for each financial year for purposes other than the
conversion,
renewal or redemption of existing loans or temporary purposes. Each programme
shall state the estimated total amount of such loan expenditure for the year,
and the estimated amount of repayments which will be available towards
meeting
that expenditure. Any revenue deficit to be funded shall be included in such
loan programme, and the amount of such deficit shall be set out. Loans for
Defence purposes approved by the Parliament of the Commonwealth shall not be
included in the Commonwealth's loan programme or be otherwise subject to this
Agreement.
(h) If the Loan Council decides that the total amount of the loan programme
for the year cannot be borrowed at reasonable rates and conditions it shall
decide the amount to be borrowed for the year, and may by unanimous decision
allocate such amount between the Commonwealth and the States.
(i) If the members of the Loan Council fail to arrive at a unanimous
decision
under the last preceding sub-clause allocating the amount to be borrowed for
any
year, the amount to be borrowed for that year shall be allocated as follows:-
(i) The Commonwealth shall, if it so desires, be entitled to have
one-fifth or any less proportion of such amount allocated to the
Commonwealth;
and
(ii) Each State shall be entitled to have allocated to it a sum (being
a
portion of the balance of such amount) bearing to the balance of such amount
the
same proportion which the net loan expenditure of that State in the
preceding
five years bears to the net loan expenditure of all the States during the
same
period. Provided that any State may, if it so desires, have allocated to it
a
sum less than the sum to which it is entitled under this sub-clause or no
sum,
and that when a less sum or no sum has been allocated to any State or States
in
manner aforesaid the amount then remaining available for allocation shall be
allocated to the other States in the proportion which the net loan
expenditure
of each of such other States in the preceding five years bears to the net
loan
expenditure of all such other States during the same period. For the purposes
of
this sub-clause net loan expenditure does not include expenditure for the
conversion, renewal, or redemption of loans, but means the gross other loan
expenditure of a State less any amounts of such expenditure repaid to the
State
other than moneys repaid to the State in manner stated in Part II, clause 4
(e),
or Part III clause 3 (i), of this Agreement.
(j) If the total amount to be borrowed as aforesaid for any year is to be
borrowed by means of more than one loan the Loan Council may by unanimous
decision apportion between the Commonwealth and the States the amount to be
borrowed by each such loan other than the loan by means of which the balance
of
the total amount to be borrowed as aforesaid for the year is borrowed.
(k) If the members of the Loan Council fail to arrive at a unanimous
decision
under the last preceding sub-clause apportioning the amount to be borrowed as
aforesaid by any loan the amount to be borrowed by that loan shall be
apportioned between the Commonwealth and the States in proportion to the
amount
then to be borrowed as aforesaid for the Commonwealth and for each State for
the
year.
(l) The Commonwealth and each State will also from time to time, while Part
II
of this Agreement is in force and while Part III of this Agreement is in
force,
submit to the Loan Council a statement setting out the amount it requires for
each financial year for the conversion, renewal or redemption of existing
loans.
(m) If the members of the Loan Council fail to arrive at a unanimous
decision
on any matter other than the matters referred to in sub-clauses (h) and (j)
of
clause 3 and sub-clause (b) of clause 4 of this part of this Agreement, the
matter shall be determined by a majority of votes of the members.
On every question for decision by the Loan Council the member representing
the
Commonwealth shall have two votes and a casting vote, and each member
representing a State shall have one vote.
(n) A decision of the Loan Council in respect of a matter which the Loan
Council is by this Agreement empowered to decide shall be final and binding
on
all parties to this Agreement.
(o) In this clause the expressions "Prime Minister" and "Premier" include
the persons for the time being respectively acting as such.
4. FUTURE BORROWINGS OF COMMONWEALTH AND STATES
(a) Except in cases where the Loan Council has decided under sub-clause
(b)
of this clause that moneys shall be borrowed by a State, the Commonwealth,
while
Part II or Part III of this Agreement is in force, shall, subject to the
decisions of the Loan Council and subject also to Clauses 5 and 6 of this
Part
of this Agreement, arrange for all borrowings for or on behalf of the
Commonwealth or any State, and for all conversions, renewals, redemptions,
and
consolidations of the Public Debts of the Commonwealth and of the States.
(b) If at any time the Loan Council by unanimous decision so decides, a
State
may in accordance with the terms of the decision borrow moneys outside
Australia
in the name of the State, and issue securities for the moneys so borrowed.
The
Commonwealth shall guarantee that the State will perform all its obligations
to
bondholders in respect of the moneys so borrowed. For all the purposes of
this
Agreement, including the making of sinking fund contributions, the moneys so
borrowed shall be deemed to be moneys borrowed by the Commonwealth for and on
behalf of that State.
(c) If any State after the 30th June, 1927, and before this Agreement has
been approved by the Parliaments of the Commonwealth and of the States, has
borrowed moneys in the name of the State and issued securities for the moneys
so
borrowed, such moneys shall for all the purposes of this Agreement, including
the making of sinking fund contributions, be deemed to be moneys borrowed by
the
Commonwealth for and on behalf of that State.
(d) While Part II or Part III of this Agreement is in force, moneys shall
not
be borrowed by the Commonwealth or any State otherwise than in accordance
with
this Agreement.
5. BORROWING BY STATES
For any purpose (including the redemption of securities given or issued at
any
time for moneys previously borrowed or used in manner stated in this clause)
a
State may, while Part II or Part III of this Agreement is in force:-
(a) Subject to any maximum limits decided upon by the Loan Council from
time
to time for interest, brokerage, discount and other charges, borrow
moneys
within the State from authorities, bodies, funds or institutions
(including
Savings Banks) constituted or established under Commonwealth or State
law or
practice and from the public by counter sales of securities, and
(b) use any public moneys of the State which are available under the
laws of
the State.
Any securities that are issued for moneys so borrowed or used shall
be
Commonwealth securities, to be provided by the Commonwealth upon terms
approved
by the Loan Council.
Where any such borrowing or use is solely for temporary purposes, the
provisions of this Agreement, other than this clause, shall not apply.
Where any such borrowing or use is not solely for temporary purposes, and
Commonwealth securities are issued in respect thereof, the moneys borrowed or
used shall be deemed to be moneys borrowed by the Commonwealth for and on
behalf
of the State, and may be retained by the State. A State may convert
securities
given or issued at any time by that State for moneys previously borrowed or
used
in manner stated in this clause. New securities issued on any such conversion
shall be Commonwealth securities to be provided by the Commonwealth upon
terms
approved by the Loan Council. The amount for which such new securities are
issued shall be deemed to be moneys borrowed by the Commonwealth for and on
behalf of the State.
If the moneys deemed under this clause to be moneys borrowed by the
Commonwealth on behalf of a State, together with the amounts raised by the
Commonwealth for and on behalf of the State exceed the total amount of loan
moneys decided upon by the Loan Council as the moneys to be raised for and on
behalf of the State for the financial year in which the money is deemed to be
borrowed, the excess shall, unless the Loan Council otherwise decides, be
deemed
to be moneys received by the State in the following year on account of its
loan
programme for that year.
For the purposes of this clause counter sales of securities shall be deemed
to
mean sales of securities made at the offices of the State Treasury, and at
such
other places as may be decided upon by the Loan Council.
The Commonwealth shall not be under any obligation to make sinking fund
contributions in respect of moneys borrowed or used pursuant to this clause
to
meet a revenue deficit of a State, but the provisions of clause 4 (d) of Part
II
and of clause 3 (j) of Part III of this Agreement shall apply respectively to
all moneys borrowed or used for that purpose.
Except in cases where the Loan Council has otherwise decided under
sub-clause
(b) of clause 4 of Part I of this Agreement a State shall not have the right
to
invite loan subscriptions by the issue of a public prospectus.
Notwithstanding anything contained in this Agreement, any State may use for
temporary purposes any public moneys of the State which are available under
the
laws of the State, or may, subject to maximum limits (if any) decided upon by
the Loan Council from time to time for interest, brokerage, discount, and
other
charges, borrow money for temporary purposes by way of overdraft, or fixed,
special, or other deposit, and the provisions of this Agreement other than
this
paragraph shall not apply to such moneys.
6. BORROWING BY COMMONWEALTH
For any purpose (including the redemption of securities given or issued at
any
time for moneys previously borrowed or used in manner stated in this clause)
the
Commonwealth may-while Part II or Part III of this Agreement is in force-
(a) Subject to any maximum limits decided upon by the Loan Council from
time
to time for interest, brokerage, discount and other charges, borrow
moneys
within the Commonwealth from authorities, bodies, funds or
institutions
(including Savings Banks) constituted or established under Commonwealth
or State
law or practice and from the public by counter sales of securities,
and
(b) use any public moneys of the Commonwealth which are available
under the
laws of the Commonwealth.
Any securities that are issued for moneys so borrowed or used shall
be
Commonwealth securities, to be provided by the Commonwealth upon terms
approved
by the Loan Council.
Where any such borrowing or use is solely for temporary purposes, the
provisions of this Agreement, other than this clause, shall not apply.
Where any such borrowing or use is not solely for temporary purposes, and
Commonwealth securities are issued in respect thereof, the moneys borrowed or
used may be retained by the Commonwealth. The Commonwealth may convert
securities given or issued at any time by the Commonwealth for moneys
previously
borrowed or used in manner stated in this clause. New securities issued on
any
such conversion shall be Commonwealth securities to be provided by the
Commonwealth upon terms approved by the Loan Council.
If the moneys so borrowed or used are not borrowed or used solely for
temporary purposes and Commonwealth securities are issued in respect thereof,
and such moneys, together with other moneys borrowed by the Commonwealth for
and
on behalf of the Commonwealth as part of the total amount of loan moneys
decided
upon by the Loan Council as the moneys to be raised for and on behalf of the
Commonwealth for the financial year in which the securities are issued,
exceed
such total amount the excess shall unless the Loan Council otherwise decides
be
deemed to be moneys received by the Commonwealth in the following year on
account of its loan programme for that year.
For the purposes of this clause counter sales of securities shall be deemed
to
mean sales of securities made at the offices of the Commonwealth Treasury,
and
at such other places as may be decided upon by the Loan Council.
Notwithstanding anything contained in this Agreement, the Commonwealth may
use
for temporary purposes any public moneys of the Commonwealth which are
available
under the laws of the Commonwealth or may, subject to maximum limits (if any)
decided upon by the Loan Council from time to time for interest, brokerage,
discount, and other charges, borrow money for temporary purposes by way of
overdraft, or fixed, special or other deposit, and the provisions of this
Agreement other than this paragraph shall not apply to such moneys.
7. PAYMENT OF INTEREST AND SINKING FUNDS
In the event of Part III of this Agreement not coming into force each State
shall in respect of all moneys borrowed by the Commonwealth for and on behalf
of
that State during the period commencing on the 1st July, 1927, and ending on
the
30th June, 1929-
(a) pay to the Commonwealth interest at the full rate of interest payable
by
the Commonwealth in respect of the loan by which such moneys were
borrowed or
such other rate of interest as may be payable by that State to the
Commonwealth
under any agreement made or to be made between the Commonwealth and
that State
in respect of such moneys. Such interest shall be payable for the full
term of
that loan and be paid to the Commonwealth on the respective days upon
which
interest is payable by the Commonwealth in respect of that loan; and
(b) make sinking fund contributions to the National Debt Commission
in
respect of the loan by which such moneys were borrowed at the full
rate, and for
the portion unexpired on the 30th June, 1929 of the full period,
provided for in
the conditions under which the public were invited to subscribe to that
loan;
and
(c) pay to the Commonwealth when the loan matures an amount which
(together
with the sinking fund contributions made by the Commonwealth and the
State in
respect of that loan and the accumulations of such contributions) will
be
sufficient to provide for the redemption of that loan. For the purposes
of this
sub-clause such contributions shall be deemed to accumulate at the rate
of 41/2
per centum per annum compounded.
PART II
1. This part of this Agreement shall be in force only during and in respect
of
the period of two years, commencing on 1st July, 1927, and ending on 30th
June,
1929.
2. CONTRIBUTION BY COMMONWEALTH TO INTEREST
The Commonwealth will in each of the said two years pay to each State by
equal
monthly instalments the amount set out opposite to the name of that State as
shown hereunder:-
New South Wales . . . . . . . . . . . 2,917,411 pounds
Victoria . . . . . . . . . . . . . . . 2,127,159
Queensland . . . . . . . . . . . . . . 1,096,235
South Australia . . . . . . . . . . . 703,816
Western Australia . . . . . . . . . . 473,432
Tasmania . . . . . . . . . . . . . . . 266,859
----------
7,584,912 pounds
----------
Each State shall apply the amount so paid to it towards payment of interest
due by that State on the Public Debt of that State. All amounts paid by the
Commonwealth to a State in pursuance of Section 6 of the States Grants Act
1927, of the Commonwealth shall be deemed to be payments to that State under
this clause.
3. TRANSFERRED PROPERTIES
The Commonwealth will in each of the said two years pay to each State
interest
at the rate of 5 per centum per annum on the agreed value of transferred
properties in the State, such value being in the case of each State as
follows:-
New South Wales . . . . . . . . . . . 4,788,005 pounds
Victoria . . . . . . . . . . . . . . . 2,302,862
Queensland . . . . . . . . . . . . . . 1,560,639
South Australia . . . . . . . . . . . 1,035,631
Western Australia . . . . . . . . . . 736,432
Tasmania . . . . . . . . . . . . . . . 500,754
----------
Total . . . . . . . . . . . . . . . 10,924,323 pounds
----------
4. SINKING FUNDS
(a) In each of the said two years the Commonwealth will pay from revenue a
sinking fund contribution at the rate of 2s. 6d. per annum for each 100 pounds
of
the net Public Debts of the States existing on 30th June, 1927, and each
State
(other than the State of New South Wales) will pay from revenue a sinking
fund
contribution at the rate of 5s. per annum for each pounds 100 of the net
public
debt of that State existing on 30th June, 1927. The State of New South Wales
will in the financial year commencing 1st July, 1928, pay from revenue a
sinking
fund contribution at the rate of 5s. for each 100 pounds of the net public
debt of
that State existing on 30th June, 1927.
(b) Where in respect of any debt included in the gross public debt of a
State
existing on 30th June, 1927, there is under laws or contracts existing at
that
date an obligation to provide a sinking fund at a rate in excess of 7s. 6d.
per
annum for each 100 pounds, any amount to be so provided in excess of the rate
of
7s. 6d. per annum for each 100 pounds shall be provided out of the National
Debt
Sinking Fund established under the laws of the Commonwealth. Provided that if
any law imposing such an obligation is repealed or is amended so as to reduce
the rate of sinking fund to be provided, the only amount (if any) to be
provided
out of the National Debt Sinking Fund pursuant to this sub-clause in respect
of
that debt shall, as from the date of such repeal or amendment, be the amount
(if
any) by which the reduced rate of sinking fund for the time being exceeds 7s.
6d. per annum for each pounds 100.
(c) In respect of each loan raised after the 30th June, 1927, either by a
State or by the Commonwealth for and on behalf of a State (other than a loan
raised for the conversion, renewal, or redemption of a loan or for temporary
purposes) the Commonwealth and that State shall, subject to the next
succeeding
sub-clause as from the date of the raising of that loan, each pay from revenue
a
sinking fund contribution at the rate of five shillings (5s.) per annum for
each
100 pounds of the amount of such loan. Provided, however, that the liability
of the
State of New South Wales to make sinking fund contributions under this
sub-clause shall commence on the 1st July, 1928. The provisions of this
sub-clause apply to a loan raised after the 30th June, 1927, to meet a
revenue
deficit which accrued on or before that date.
(d) In respect of any loan raised after 30th June, 1927, by a State or by
the
Commonwealth for and on behalf of a State to meet a revenue deficit accruing
after that date no sinking fund contribution shall be payable by the
Commonwealth, but that State shall pay from revenue a sinking fund
contribution
at a rate of not less than 4 per centum per annum on the amount of that loan.
(e) Where loan moneys have been advanced by a State under terms providing
for
the repayment of such moneys, the State shall as and when such moneys are
repaid
pay such moneys either to the State Loan Fund or to the account or fund from
which such moneys were advanced, or to the sinking fund hereinafter
mentioned,
and shall, in addition, make from revenue its sinking fund contributions in
respect of the loan or loans from which the moneys so advanced were provided.
Provided that when loan moneys have been advanced by a State to a Public or
Local Authority or body constituted by the State or under the laws of the
State
and the Authority or body repays such moneys out of its revenue the State may
out of moneys so repaid make its sinking fund contributions in respect of the
loan moneys so advanced.
(f) All sinking fund contributions to be made in pursuance of this Part of
this Agreement shall be paid to the National Debt Commission constituted
under
the National Debt Sinking Fund Act 1923-25*2*, of the
Commonwealth (herein called the National Debt Commission) as follows:-
(i) as regards the net public debt of a State existing on 30th June,
1927-by half-yearly instalments on 30th September and 31st March in each
financial year, or on such other dates as may be agreed between the
Commonwealth
and the State;
(ii) as regards loans raised after 30th June, 1927-by equal instalments
on
the dates on which interest on such loans is payable or on such other dates
as
may be agreed upon between the Commonwealth and the State concerned.
(g) Where the conditions relating to sinking funds, redemption funds, and
funds of a like nature require payments to be made to trustees, the National
Debt Commission will either directly or through any State concerned, make the
necessary payments to those trustees.
(h) The sinking fund contributions made under this Part of this Agreement
in
respect of the Public Debt of a State (other than contributions paid or to be
paid to trustees under the last preceding sub-clause hereof) shall so far as
the
same will suffice be applied in the repurchase or redemption of the Public
Debt
of that State and in the event of the proposed law for the alteration of the
Constitution referred to in Part IV of this Agreement not becoming law and of
this Agreement not being validated thereunder, on or before the 30th June,
1929,
all State securities repurchased or redeemed as aforesaid shall be cancelled
with the exception of securities the market value of which represents the
amount
of money provided in excess of the rate of 7s. 6d. per annum for each 100
pounds
under paragraph (b) of this clause, which latter securities shall be retained
by
and belong to the National Debt Commission.
PART III
This Part of this Agreement shall not come into force or be binding upon
any
party hereto unless before the 1st July, 1929, the Constitution of the
Commonwealth has been altered in accordance with the proposals referred to in
Part IV of this Agreement and a law of the Parliament of the Commonwealth has
been made thereunder validating this Agreement, but shall come into full
force
and effect if and when before the said date the Constitution is so altered
and
this Agreement is so validated.
When this Part of this Agreement comes into force every matter or thing
done
and payment made under or in pursuance of Part II of this Agreement shall be
deemed, so far as is practicable, to have been done or made under this Part
of
this Agreement to the same extent as if this Part had then in fact been in
force, and all necessary adjustments shall be made in respect of moneys so
paid
in order to ensure that no party hereto shall be liable for or make double
payments in respect of the same matter.
PERMANENT PROVISIONS
1. TAKING OVER STATES' PUBLIC DEBTS
Subject to the provisions of this Part of this Agreement the Commonwealth
will
take over on the 1st July, 1929:-
(i) the balance then unpaid of the gross public debt of each State
existing
on 30th June, 1927; and
(ii) all other debts of each State existing on the 1st July, 1929,
for moneys
borrowed by that State which by this Agreement are deemed to be moneys
borrowed
by the Commonwealth for and on behalf of that State-
and will in respect of the debts so taken over assume as between the
Commonwealth and the States the liabilities of the States to bondholders.
2. PAYMENT OF INTEREST
(a) Subject to this clause the Commonwealth will pay to bondholders from
time
to time interest payable on the Public Debts of the States taken over by the
Commonwealth as aforesaid other than debts due by the States to the
Commonwealth.
(b) The Commonwealth will in each year during the period of 58 years,
commencing on 1st July, 1927, provide by equal monthly instalments the
following
amounts in respect of each State as shown hereunder towards the interest
payable
by that State:-
New South Wales . . . . . . . . . . . 2,917,411 pounds
Victoria . . . . . . . . . . . . . . . 2,127,159
Queensland . . . . . . . . . . . . . . 1,096,235
South Australia . . . . . . . . . . . 703,816
Western Australia . . . . . . . . . . 473,432
Tasmania . . . . . . . . . . . . . . . 266,859
----------
7,584,912 pounds
----------
(c) Each State shall in each year during the same period of 58 years pay to
the Commonwealth the excess over the amounts to be provided by the
Commonwealth
under the last preceding sub-clause necessary to make up as they fall due the
interest charges falling due in that year on the public debt of that State
taken
over by the Commonwealth as aforesaid and then unpaid, and on any moneys
borrowed by the Commonwealth on behalf of that State and then unpaid, and
after
the expiration of the said period each State shall in each year pay to the
Commonwealth, as they fall due, the whole of the interest charges on any debt
then unpaid and included in the public debt of that State taken over by the
Commonwealth as aforesaid, and on any moneys borrowed by the Commonwealth on
behalf of that State and then unpaid.
(d) The method by which payments shall be made by a State under sub-clause
(c)
of this clause shall be arranged from time to time between the Commonwealth
and
that State.
(e) The rate of interest payable under sub-clause (c) of this clause in
respect of moneys borrowed by the Commonwealth on behalf of a State shall be
the
full rate of interest payable by the Commonwealth in respect of the loan by
which such moneys were borrowed or such other rate of interest as may be
payable
by the State to the Commonwealth under any Agreement made or to be made
between
the Commonwealth and that State in respect of such moneys and such interest
shall be payable by the State for the full term of that loan.
3. SINKING FUNDS
(a) A sinking fund at the rate of 7s. 6d. per annum for each 100 pounds of
the
net public debts of the States existing on 30th June, 1927, shall be
established
in the manner hereinafter set forth.
(b) During the period of fifty-eight years commencing on the 1st July,
1927,
the Commonwealth shall pay from revenue annually a sinking fund contribution
at
the rate of 2s. 6d. for each pounds 100 of the net public debts of the
States
existing on 30th June, 1927, and each State (other than the State of New
South
Wales) shall in each year during the said period pay from revenue a sinking
fund
contribution at the rate of 5s. for each 100 pounds of the net public debt of
such
State existing on 30th June, 1927. The State of New South Wales during the
period of fifty-eight years commencing on the 1st July, 1928, shall in each
year
pay from revenue a sinking fund contribution at the rate of 5s. for each 100
pounds
of the net public debt of that State existing on 30th June, 1927.
(c) Where in respect of any debt included in the gross Public Debt of a
State
existing at the 30th June, 1927, there is under laws or contracts existing at
that date an obligation to provide a sinking fund at a rate in excess of 7s.
6d.
per annum for each 100 pounds, any amount to be so provided in excess of 7s.
6d.
per annum for each 100 pounds shall be provided out of the National Debt
Sinking
Fund, established under the laws of the Commonwealth. Provided that if any
law
imposing such an obligation is repealed or is amended so as to reduce the
rate
of sinking fund to be provided the only amount (if any) to be provided out of
the National Debt Sinking Fund pursuant to this sub-clause in respect of that
debt shall as from the date of such repeal or amendment be the amount (if
any)
by which the reduced rate of sinking fund for the time being exceeds 7s. 6d.
per
annum for each pounds 100.
(d) When a loan is issued for the conversion, renewal, or redemption of any
debt of a State included in the gross Public Debt of that State existing on
30th
June, 1927, the only sinking fund contributions to be made by the
Commonwealth
and that State in respect of the debt so converted, renewed, or redeemed
shall
be sinking fund contributions at the same rate and for the same period and
upon
the same amount as if such debt had not been converted, renewed, or redeemed.
(e) Subject to sub-clauses (h) and (j) of this clause a sinking fund at the
rate of 10s. per annum for each 100 pounds of the amount of each new loan
raised by
a State or by the Commonwealth for and on behalf of a State after 30th June,
1927, shall be established.
(f) Subject to sub-clauses (h) and (j) of this clause, in each year during
the
period of fifty-three years from the date of the raising after 30th June,
1927,
of any new loan by a State or by the Commonwealth for and on behalf of a
State
the Commonwealth and that State shall each pay from revenue a sinking fund
contribution of a sum equal to 5s. for each pounds 100 of the amount of the
new
loan.
Provided that the period of fifty-three years during which the State of New
South Wales shall make sinking fund contributions in respect of new loans
raised
in the financial year beginning on the 1st July, 1927, shall commence on the
1st
July, 1928.
(g) For the purpose of the last two preceding sub-clauses a loan issued
after
the 30th June, 1927, to meet a revenue deficit which accrued on or before
that
date shall be deemed to be a new loan, but a loan issued for the conversion,
renewal or redemption of a debt shall not be deemed to be a new loan, and
where
a loan is issued partly for the conversion, renewal, or redemption of a debt
and
partly for other purposes so much only of the loan as has been issued for
other
purposes, shall be deemed to be a new loan.
(h) Where it is agreed between the Commonwealth and a State that a loan or
any
portion of a loan raised after 30th June, 1927, and expended or to be
expended
upon wasting assets should be redeemed within a shorter period than
fifty-three
years, the annual sinking fund contributions of the State in respect of that
loan or the portion thereof, shall be increased to an amount which with the
sinking fund contributions of the Commonwealth in respect of that loan or the
portion thereof will provide for the redemption of that loan or the portion
thereof within such shorter period. All sinking fund contributions of the
State
in respect of that loan or the portion thereof shall cease on the expiration
of
the shorter period, but the Commonwealth contributions in respect of that
loan
shall continue for the remainder of the period of fifty-three years from the
date of the raising of that loan, and during such remainder of the period the
State contributions to the sinking fund in respect of other loans of that
State
shall be reduced by the amount of the Commonwealth contributions during that
remainder of the period in respect of such redeemed loan or the portion
thereof.
For the purposes of this sub-clause the sinking fund contributions of the
Commonwealth and the State shall be deemed to accumulate at the rate of 41/2
per centum per annum compounded.
(i) Where loan moneys have been advanced by a State under terms providing
for
the repayment of such moneys the State shall as and when such moneys are
repaid
pay such moneys either to the State Loan Fund or to the account or fund from
which such moneys were advanced, or to the sinking fund and shall in addition
make from revenue its sinking fund contributions in respect of the loan or
loans
from which the moneys so advanced were provided.
Provided that when loan moneys have been advanced by a State to a Public or
Local Authority or body constituted by the State or under the laws of the
State
and the Authority or body repays such moneys out of its revenue the State may
out of moneys so repaid make its sinking fund contributions in respect of the
loan moneys so advanced.
(j) In respect of any loan raised after the 30th June, 1927, by a State or
by
the Commonwealth for and on behalf of a State to meet a revenue deficit
accruing
after that date no sinking fund contribution shall be payable by the
Commonwealth, but that State shall for a period sufficient to provide for the
redemption of that loan pay from revenue in each year during such period a
sinking fund contribution at a rate of not less than 4 per centum per annum
of
the amount of that loan. For the purposes of this sub-clause the sinking fund
contributions of the State shall be deemed to accumulate at the rate of 41/2
per centum per annum compounded.
(k) All sinking fund contributions to be made in pursuance of this part of
this Agreement shall be debts payable to the National Debt Commission as
follows:-
(i) As regards the net public debt of a State existing on 30th June,
1927-by half-yearly instalments on 30th September and 31st March in each
financial year or on such other dates as may be agreed between the
Commonwealth
and that State.
(ii) As regards loans raised after 30th June, 1927-by equal instalments
on
the dates on which interest on such loans is payable or on such other dates
as
may be agreed upon between the Commonwealth and the State concerned.
(l) Subject to the next succeeding sub-clause all moneys and securities
standing to the credit of sinking funds, redemption funds and funds of a like
nature of a State existing on 30th June, 1929, shall forthwith be transferred
by
the States to the National Debt Commission. Nothing in this sub-clause
contained
shall be deemed to limit the power of a State to cancel before 30th June,
1929,
any such securities.
(m) Where the conditions relating to sinking funds, redemption funds, and
funds of a like nature as aforesaid held by a State on trust or by trustees
under statutory or contractual obligations preclude the transfer of those
funds
to the National Debt Commission, such funds shall remain under the control of
the State or those trustees, and the National Debt Commission will either
directly or through the State concerned make all future payments to the State
or
to those trustees from the sinking fund.
(n) The sinking funds to be established under this Agreement shall be
controlled by the National Debt Commission. The National Debt Commission may
arrange with any State to act as its agent in connexion with payments due to
bondholders.
(o) Sinking Fund contributions made under this Agreement in respect of the
debts of a State and funds of that State transferred to the National Debt
Commission under sub-clause (l) of this clause will not be accumulated, but
(subject to sub-clauses (m) and (p) of this clause) will be applied to the
redemption of the public debts of that State and of loans raised by the
Commonwealth for and on behalf of that State, or to the purchase of
securities
issued in respect thereof.
(p) If at any time it is deemed inexpedient by the National Debt Commission
to
apply sinking funds in the manner set forth in sub-clause (o) of this clause,
such funds may be temporarily invested in any securities in which the
National
Debt Commission is from time to time by law authorized to invest moneys.
(q) When a security issued in respect of a public debt of a State or of a
loan
raised by the Commonwealth for and on behalf of a State is repurchased or
redeemed by the National Debt Commission such security shall be cancelled-
(i) if a repurchased security-on the last day of September, December,
March, or June next ensuing after the date of repurchase, or on the date of
maturity of the security whichever shall first occur; and
(ii) if a redeemed security-on the date of redemption.
In addition to the sinking fund contributions otherwise payable in respect
of
that debt or loan the State concerned shall-
(i) as from the date of cancellation of each security and for the full
period during which the said sinking fund contributions are payable make
from
revenue a further sinking fund contribution at the rate of 41/2 per centum
per
annum of the face value of the cancelled security; and
(ii) also pay to the National Debt Commission interest on the face value
of
each repurchased security at the rate provided by the security from the last
date preceding the repurchase upon which interest was payable under the terms
of
the security up to the date of cancellation of the security.
4. TRANSFERRED PROPERTIES
It is agreed that all questions between the Commonwealth and the States
relating to State properties transferred to the Commonwealth or acquired by
the
Commonwealth under section 85 of the Constitution shall be settled as
follows:-
The States will as from 1st July, 1929, and as between the Commonwealth and
the States be completely free and discharged from all liability whether in
respect of principal, interest or sinking fund, or otherwise, which liability
shall be assumed by the Commonwealth in respect of so much of the public
debts
of the States bearing interest at the rate of 5 per centum per annum, taken
over
by the Commonwealth as aforesaid as amounts to the agreed value of
transferred
properties, namely, pounds 10,924,323, apportioned to the several States as
follows:-
New South Wales . . . . . . . . . . . 4,788,005 pounds
Victoria . . . . . . . . . . . . . . . 2,302,862
Queensland . . . . . . . . . . . . . . 1,560,639
South Australia . . . . . . . . . . . 1,035,631
Western Australia . . . . . . . . . . 736,432
Tasmania . . . . . . . . . . . . . . . 500,754
----------
Total . . . . . . . . . . . . . . . 10,924,323 pounds
----------
The particular portion of the public debt of each State in respect of which
the States shall become free and discharged from liability shall be
determined
by the Commonwealth.
Each State will issue to the Commonwealth freehold titles (or, if the laws
of
any State do not permit of the issue of freehold titles, then titles as near
to
freehold as the laws of that State will permit) for transferred properties
consisting of land or interests in land in that State, and all liability of
the
Commonwealth to the State in respect of transferred properties shall as from
the
1st July, 1929, be extinguished.
The provisions of clauses 2 and 3 of this Part of this Agreement shall not
apply to the said amount of pounds 10,924,323.
PART IV-MISCELLANEOUS
1. EXPENSES OF LOAN FLOTATION
Each State shall repay to the Commonwealth all expenses incurred or
payments
made by the Commonwealth in the performance of this Agreement in relation to
the
State including the following expenses and payments:-
(i) Loan flotation charges;
(ii) Management charges;
(iii) Stamp duties on transfer of securities;
(iv) Commission on payment of interest;
(v) Expenses incurred in the conversion renewal redemption or
consolidation
of loans;
(vi) Exchange on transference of moneys.
Unless it is otherwise agreed between the Commonwealth and a State the
Commonwealth will not do anything in connexion with a loan of that State
existing on the 30th June, 1927, or raised thereafter pursuant to this
Agreement
which if done by that State would be a breach of any now existing agreement
by
that State with any Bank.
A certificate by the Auditor-General of the Commonwealth stating the amount
to
be repaid by a State to the Commonwealth and the matter in respect of which
the
repayment is to be made shall in the event of a dispute be conclusive as to
the
amount and matter stated.
2. ALTERATION OF THE CONSTITUTION
The Commonwealth will take the necessary action to submit to the Parliament
of
the Commonwealth and to the electors proposals for the alteration of the
Constitution of the Commonwealth in the following form:-
"105A. (1) The Commonwealth may make agreements with the States with
respect
to the public debts of the States, including-
(a) the taking over of such debts by the Commonwealth;
(b) the management of such debts;
(c) the payment of interest and the provision and management of
sinking funds
in respect of such debts;
(d) the consolidation, renewal, conversion, and redemption of such
debts;
(e) the indemnification of the Commonwealth by the States in respect
of debts
taken over by the Commonwealth; and
(f) the borrowing of money by the States or by the Commonwealth or
by the
Commonwealth for the States.
(2) The Parliament may make laws for validating any such agreement
made
before the commencement of this section.
(3) The Parliament may make laws for the carrying out by the parties
thereto
of any such agreement.
(4) Any such agreement may be varied or rescinded by the parties thereto.
(5) Every such agreement and any such variation thereof shall be binding
upon
the Commonwealth and the States parties thereto, notwithstanding anything
contained in this Constitution or the constitution of the several States or
in
any law of the Parliament of the Commonwealth or of any State.
(6) The powers conferred by this section shall not be construed as being
limited in any way by the provisions of section 105 of this Constitution."
3. INDEMNITY
Each State agrees with the Commonwealth that it will by the faithful
performance of its obligations under this Agreement indemnify the
Commonwealth
against all liabilities whatsoever in respect of the public debt of that
State
taken over by the Commonwealth as aforesaid (other than the liabilities of
the
Commonwealth under this Agreement to pay interest and to make sinking fund
contributions and under clause 4 of Part III of this Agreement), and in
respect
of all loans of that State in respect of which this Agreement provides that
sinking fund contributions shall be made.
4. ACCOUNTS
Separate accounts shall be kept by the Commonwealth for each State in
respect
of Debt, Interest, and Sinking Funds.
IN WITNESS whereof the Prime Minister of the Commonwealth of Australia and
the
Premiers of each of the States of New South Wales, Victoria, Queensland,
South
Australia, Western Australia, and Tasmania have signed this Agreement
respectively for and on behalf of the Commonwealth of Australia and of the
said
States.
Signed by the Prime Minister of the Commonwealth of
Australia for and on behalf of the said
Commonwealth in the presence of-
S. M. BRUCE
EARLE PAGE
Signed by the Premier of the State of New South
Wales for and on behalf of the said State in the
presence of-
T. R. BAVIN
B. S. STEVENS
Signed by the Premier of the State of Victoria for
and on behalf of the said State in the presence of-
E. J. HOGAN
H. A. PITT
Signed by the Premier of the State of Queensland
for and on behalf of the said State in the presence
of-
W. McCORMACK
J. MULLAN
Signed by the Premier of the State of South
Australia for and on behalf of the said State in
the presence of-
R. L. BUTLER
H. TASSIE
Signed by the Premier of the State of Western
Australia for and on behalf of the said State in
the presence of-
P. COLLIER
GEO. W. SIMPSON
Signed by the Premier of the State of Tasmania for
and on behalf of the said State in the presence of-
J. A. LYONS
J. ALLAN GUY
*2* The Schedule-Clause 4 of Part II-The National Debt Sinking Fund Act 1923
was repealed by the National Debt Sinking Fund Act 1966 (No. 65, 1966).