Federal Register of Legislation - Australian Government

Primary content

A Bill for an Act to deal with consequential matters arising from the enactment of the Future Drought Fund Act 2018, and for other purposes
Administered by: Finance
For authoritative information on the progress of bills and on amendments proposed to them, please see the House of Representatives Votes and Proceedings, and the Journals of the Senate as available on the Parliament House website.
Registered 28 Nov 2018
Introduced HR 28 Nov 2018

 

 

2016-2017-2018

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

FUTURE DROUGHT FUND (CONSEQUENTIAL AMENDMENTS) BILL 2018

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Finance and the Public Service,
Senator the Hon Mathias Cormann)

 

 

Table of abbreviations and common terms

 

Abbreviation or

common term

Description

Agency

means the Future Fund Management Agency established by section 74 of the Future Fund Act 2006

Agriculture Minister

means the Minister administering the Primary Industries Research and Development Act 1989

ATSILSFF

means the Aboriginal and Torres Strait Islander Land and Sea Future Fund established by section 9 of the ATSILSFF Act

ATSILSFF Act

means Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018

ATSILSFF Special Account

means the Aboriginal and Torres Strait Islander Land and Sea Future Fund Special Account established by section 12 of the ATSILSFF Act

BAF

means the Building Australia Fund established by section 12 of the NBF Act

BAF Special Account

means the Building Australia Fund Special Account established by section 13 of the NBF Act

COAG Reform Fund

means the COAG Reform Fund established by section 5 of the COAG Reform Fund Act 2008

COAG Reform Fund Act

means the COAG Reform Fund Act 2008

DCAF

means the DisabilityCare Australia Fund established by section 10 of the DCAF Act

  DCAF Act

means the DisabilityCare Australia Fund Act 2013

 DCAF Special Account

means the DisabilityCare Australia Fund Special Account established by section 11 of the DCAF Act

EIF

means the Education Investment Fund established by section 131 of the NBF Act

EIF Special Account

means the Education Investment Fund Special Account established by section 132 of the NBF Act

Finance Minister

has the same meaning as defined in section 8 of the PGPA Act

Future Drought Fund

means the Future Drought Fund established by section 10 of the Future Drought Fund Act

Future Drought Fund Act

means the Future Drought Fund Act 2018

Future Drought Fund Special Account

means the Future Drought Fund Special Account established by section 13 of the Future Drought Fund Act

Future Fund

means the Future Fund established by section 11 of the Future Fund Act

Future Fund Act

means the Future Fund Act 2006

Future Fund Board

means the Future Fund Board of Guardians established by section 34 of the Future Fund Act

Future Fund Special Account

means the Future Fund Special Account established by section 12 of the Future Fund Act

Legislation Act

means the Legislation Act 2003

MRFF

means the Medical Research Future Fund established by section 11 of the MRFF Act

MRFF Act

means the Medical Research Future Fund Act 2015

MRFF Special Account

means the Medical Research Future Fund Special Account established by section 14 of the MRFF Act

NBF Act

means the Nation-building Funds Act 2008

PGPA Act

means the Public Governance, Performance and Accountability Act 2013

RIC Act

means the Regional Investment Corporation Act 2018

Responsible Ministers

means the following:

(a)       the Treasurer; and

(b)       the Finance Minister


FUTURE DROUGHT FUND (CONSEQUENTIAL AMENDMENTS) BILL 2018

 

OUTLINE

 

The Bill makes a number of consequential amendments to other pieces of legislation required to enable the effective operation of the Future Drought Fund at commencement. It accompanies the Future Drought Fund Bill 2018 (the substantive Bill) that has prompted the need for this Bill.

 

The Future Drought Fund Bill establishes the Future Drought Fund as a dedicated financial asset to provide a secure revenue stream to be used for drought resilience, preparedness and response.

 

The Future Drought Fund will be established as the Future Drought Fund Special Account and the investments of the Future Drought Fund (made and managed by the Future Fund Board).

 

The consequential amendments made in this Bill support the establishment of the Future Drought Fund in that they:

 

·         extend the Future Fund Board’s duties to manage the Future Drought Fund; and

 

·         allow for amounts to be transferred between the Future Drought Fund and the Future Fund to allow for proper apportioning of common expenses incurred by the Future Fund Board in managing the Future Drought Fund, the ATSILSFF, the Future Fund, MRFF, the EIF, the BAF, and the DCAF.

 

The Bill amends the ATSILSFF Act, the Future Fund Act, the NBF Act, the DCAF Act, the MRFF Act, the RIC Act and the COAG Reform Fund Act.

 

The Bill closes the Building Australia Fund by repealing relevant sections of the NBF Act. The closure of the Building Australia Fund and repurposing the uncommitted funds is possible because the Government has secured the future of the National Disability Insurance Scheme and ensured it is fully funded through better economic and fiscal management, which has delivered a strong and improving budget position. This means the Government is able to fully fund the National Disability Insurance Scheme without persisting with the Medicare levy increase and the uncommitted funds currently in the Building Australia Fund can be used to fund initiatives that enhance future drought resilience, preparedness and response across Australia. The Future Drought Fund will be established with an initial balance (money and investments) equal to the balance of the Building Australia Fund immediately before the time of establishment of the Future Drought Fund.

 

The Bill also provides for transitional arrangements including relating to reporting arrangements for the BAF.

 

Providing for a separate Bill for consequential amendments conforms to the Commonwealth practice to reduce the complexity of principal Acts.

 

 

 

Financial Impact Statement

 

The Bill has no financial impact.

 

Statement of Compatibility with Human Rights

 

The Future Drought Fund (Consequential Amendments) Bill 2018 (the Bill) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth).

 

Overview of the Bill

 

The Bill deals with consequential matters arising from the enactment of the Future Drought Fund Act. This includes the following amendments:

 

·         amendments to the Future Fund Act to give the Future Fund Board functions in relation to the Future Drought Fund;

 

·         amendments to the ATSILSFF Act, DCAF Act, the Future Fund Act, the MRFF Act and the NBF Act to allow amounts to be transferred between the Future Drought Fund and the Future Fund to allow for proper apportioning of common expenses incurred by the Future Fund Board in managing the ATSILSFF, the DCAF, the Future Drought Fund, the Future Fund, the MRFF, and the EIF; and

 

·         amendments to the NBF Act to close the BAF, as a consequence of the decision to establish the Future Drought Fund with an initial balance (money and investments) equal to the balance of the BAF immediately before the time of the establishment of the Future Drought Fund.

 

Human rights implications

 

The consequential amendments in the Bill are administrative or machinery in nature. None of these amendments directly advances or limits a relevant human right or freedom.

 

To the extent these amendments facilitate the establishment of the Future Drought Fund, these amendments may indirectly engage the human rights or freedoms engaged by the Future Drought Fund Act. The Future Drought Fund Act is compatible with human rights because it promotes the right to an adequate standard of living, enshrined in Article 11(1) of the International Covenant on Economic Social and Cultural Rights.

 

Conclusion

 

This Bill is compatible with human rights.

 


 

FUTURE DROUGHT FUND (CONSEQUENTIAL AMENDMENTS) BILL 2018

 

 

NOTES ON CLAUSES

 

Clause 1 – Short Title

1.                  This clause would provide for the Act to be cited as the Future Drought Fund (Consequential Amendments) Act 2018.

Clause 2 – Commencement

2.                  Clause 2 would deal with commencement of the provisions in the Bill. This clause would have the effect of providing that:

·         clauses 1 to 3 and anything in the Bill not elsewhere covered by the table would commence on the day the Bill receives the Royal Assent.

·         Schedules 1 and 2 would commence at the same time as the Future Drought Fund Act, and that these provisions would not commence at all if that Bill does not commence.

·         Schedule 3 would commence either immediately after the commencement of either the Future Drought Fund Act or the ASTILSFF Act, whichever is later. However, Schedule 3 would not commence at all if either the Future Drought Fund Act or the ASTILSFF Act do not commence. This is because the items in this Schedule make amendments to the ASTILSFF Act that are consequential to the Future Drought Fund Act, so will not be required if either of these Acts do no commence.

Clause 3 – Schedules

3.                  This clause would provide that each Act specified in a Schedule to this Act is amended or repealed as set out in the Schedule concerned.

Schedule 1 – General Amendments

4.                  This schedule makes amendments to several Acts as a result of the establishment of the Future Drought Fund.

DisabilityCare Australia Fund Act 2013

5.                  Item 1 inserts new paragraph 16(a)(iia) in the DCAF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the DCAF can be met from the DCAF Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board, including the Future Drought Fund.

6.                  Item 2 inserts new paragraph 16(b)(iia) in the DCAF Act. The effect of this amendment is to provide that the cost of insurance incurred by the Future Fund Board in relation to the DCAF can be met from the DCAF Special Account to the extent that such insurance premiums do not relate to any other Fund invested by the Future Fund Board, including the Future Drought Fund.

7.                  Item 6 inserts new paragraph 16(c)(iia) in the DCAF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in relation to managing the DCAF can be met from the DCAF Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board, including the Future Drought Fund.

Future Fund Act 2006

8.                  Item 4 replaces the note to section 4 of the Future Fund Act. The substituted note confirms that the Future Fund Board has additional functions under the Future Drought Fund Act.

9.                  Item 5 inserts definitions of Future Drought Fund and Future Drought Fund Special Account. These expressions are defined by reference to the Future Drought Fund Act.

10.              This item also inserts a definition of Agriculture Minister in the Future Fund Act. This expression is defined as the Minister who administers the Primary Industries Research and Development Act 1989.

11.              Item 6 amends Note 2A to section 13 of the Future Fund Act. The amended note explains that Schedule 2A to the Future Fund Act is about transfers of amounts from the Future Fund to the other Funds invested by the Future Fund Board, including the Future Drought Fund.

12.              Item 7 inserts new paragraph 28(5)(aa) and Item 8 inserts new paragraphs 28(5)(ca) in the Future Fund Act. The effect of these amendments is to allow the same person to be engaged as an investment manager for more than one Fund invested by the Future Fund Board, including the Future Drought Fund.

13.              Item 9 amends the note to section 33 of the Future Fund Act. The amended note explains that the Future Fund Board has additional functions under other legislation, including the Future Drought Fund Act.

14.              Item 10 inserts new subparagraph 35(b)(ia) in the Future Fund Act. This amendment provides that the Future Fund Board has the functions conferred on the Future Fund Board by the Future Drought Fund Act.

15.              Item 11 inserts new paragraph 55(3)(aa) in the Future Fund Act. This amendment provides that the Future Fund Boards reporting obligations in relation to the Future Fund do not include its separate reporting obligation to the responsible Ministers under the Future Drought Fund Act.

16.              Item 12 inserts new paragraph 63(1)(aa) in the Future Fund Act, and Item 13 inserts new paragraph 63(2)(aaa) in the Future Fund Act. These amendments ensure that neither a Future Fund Board member nor the Chair of the Future Fund Board breaches civil or criminal obligations under the Future Fund Act by performing an act that the Future Fund Board member or Chair is required to perform under the Future Drought Fund Act.

17.              Item 14 inserts new subsection 81(1AA) and Item 15 inserts new subsection 81(2AA) in the Future Fund Act. These amendments require that the annual report prepared by the Chair of the Future Fund Board include a report on the performance of investments of the Future Drought Fund and the amounts debited from the Future Drought Fund for purposes allowed under the Future Drought Fund Act. In addition, the annual report will also need to include benchmarks in relation to the performance of the debits from the Future Drought Fund. This is consistent with arrangements for the other Funds invested by the Future Fund Board.

18.              Item 16 inserts new paragraph 81(4)(aa) in the Future Fund Act. The effect of this amendment is to include the Agriculture Minister in the list of Ministers to whom the nominated Minister must give a copy of the annual report given to the nominated Minister under section 46 of the PGPA Act.

19.              Item 17 inserts new paragraph 83B(1)(aa) in the Future Fund Act. The effect of these amendments is to allow the Future Fund Board to delegate its power to engage investment managers for purposes in connection with the Future Drought Fund to the Chair of the Future Board or a SES Employee in the Agency.

20.              Item 18 inserts new subparagraph 84(1)(b)(ia) and Item 19 inserts new subparagraph 84(1)(b)(iiia) in the Future Fund Act. The effect of these amendments is to provide that any amount of money received by the Future Fund Board must be credited to the Future Fund Special Account if none of the legislation for the other Funds invested by the Future Fund Board requires the amount to be credited to these other Funds.

21.              Item 20 inserts new subsection 84(1A) in the Future Fund Act. The effect of this amendment is to allow the nominated Minister to provide a written direction to the Future Fund Board requiring an amount credited to the Future Fund Special Account under subsection 84(1) of the Future Fund Act to be debited from the Future Fund Special Account and credited to the Future Drought Fund Special Account.

22.              Item 21 inserts new reference to ‘(1A)’ in paragraph 84(5)(b) of the Future Fund Act. The effect of this amendment is to provide that if an amount is credited to the Future Fund Special Account under subsection 84(1) of the Future Fund Act, the sum of one or more amounts specified under new subsection 84(1A) must not exceed the amount of the credit.

23.              Item 22 inserts new reference to ‘(1A)’ in subsection 84(6) of the Future Fund Act. The effect of this amendment is to declare that a written direction made under new subsection 84(1A) is not a legislative instrument. This is consistent with the status of other written directions that can be made by the nominated Minister under subsections 84(3), 84(4A), and 84(4B) for the transfer of amounts to other special accounts as provided for under those subsections.

24.              Items 23, 24 and 25 amend paragraphs 2(2)(a), 2(2)(b) and 2(2)(c) of Schedule 2 of the Future Fund Act to make reference to certain provisions of the Future Drought Fund Act. The effect of these amendments is to provide that the purposes of the Future Fund Special Account include debits by the Future Fund Board to pay bank account expenses, insurance premiums and costs relating to the management of the Future Drought Fund.

25.              Item 26 adds reference to the Future Drought Fund in Clause 1 of Schedule 2A of the Future Fund Act. Clause 1 of Schedule 2A provides a simplified outline of the Schedule.

26.              Item 27 adds new clause 1A to Schedule 2A to the Future Fund Act. New clause 1A will allow the nominated Minister under the Future Fund Act to require, by writing, the reversal of a debit from the Future Drought Fund to meet bank account, insurance premium or other costs relating to the Future Drought Fund. This reversal is to be effected by debiting the Future Fund Special Account and crediting the Future Drought Fund Special Account. The reversal amount cannot exceed the amount originally debited from the Future Drought Fund Special Account. The nominated Minister’s written direction is declared not to be a legislative instrument.

Medical Research Future Fund Act 2015

27.              Item 28 inserts new subparagraph 19(a)(v) in the MRFF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the MRFF can be met from the MRFF Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board, including the Future Drought Fund.

28.              Item 29 inserts new subparagraph 19(b)(v) in the MRFF Act. The effect of this amendment is to provide that the cost of insurance incurred by the Future Fund Board in relation to the MRFF can be met from the MRFF Special Account to the extent that such insurance premiums do not relate to any other Fund invested by the Future Fund Board, including the Future Drought Fund.

29.              Item 30 inserts new subparagraph 19(c)(v) in the MRFF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in relation to managing the MRFF can be met from the MRFF Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board, including the Future Drought Fund.

Nation‑building Funds Act 2008

30.              Item 31 inserts new subparagraph 138(a)(va) in the NBF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the EIF can be met from the EIF Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board, including the Future Drought Fund.

31.              Item 32 inserts new paragraph 138(b)(va) in the NBF Act. The effect of this amendment is to provide that the cost of insurance incurred by the Future Fund Board in relation to the EIF can be met from the EIF Special Account to the extent that such insurance does not relate to any other Fund invested by the Future Fund Board, including the Future Drought Fund.

32.              Item 33 inserts new subparagraph 138(c)(va) in the NBF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in relation to managing the EIF can be met from the EIF Special Account, to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board, including the Future Drought Fund.

Regional Investment Corporation Act 2018

33.              Item 34 inserts a definition of drought resilience in section 4 of the RIC Act. This definition has the same meaning as the definition of drought resilience in the Future Drought Fund Act.

34.              Item 35 amends paragraph 15(1)(e) in the RIC Act. The effect of this amendment is to expand the functions of the RIC Board to include functions conferred on it by the Future Drought Fund Act. The additional function is to provide advice to the Agriculture Minister regarding grants or payments for services from the Future Drought Fund.

35.              Items 36 and 37 amend subparagraph 17(2)(a)(viii) and paragraph 17(2)(a) in the RIC Act. The effect of this amendment is to include ‘drought resilience’ as a relevant qualification, skill or experience that a member of the RIC Board may possess.

36.              Items 38 and 39 amend the notes at subsection 26(2) of the RIC Act. The effect of this amendment is to include an additional note (Note 2), which clarifies that the appointment of a Board Member of the Regional Investment Corporation may be terminated under section 30 of the Future Drought Fund Act as well as under the provisions of the RIC Act. Termination under the Future Drought Fund Act relates to a Board member failing to comply with obligations regarding disclosure of interests.     


 

Schedule 2 – Abolition of the Building Australia Fund

37.              This Schedule makes amendments to several Acts as a result of the closure of the BAF.

Part 1 – Amendments

COAG Reform Fund Act 2008

38.              Item 1 repeals note 2 after subclause 5(2) of the COAG Reform Fund Act, which refers to transfer of amounts from the BAF to the COAG Reform Fund. This note is no longer required due to the closure of the BAF.

39.              Item 2 amends subsection 7(1)(b) of the COAG Reform Fund Act to remove reference to subsections 92(2), 97(2), 102(2) and 107(2) of the NBF Act. These references deal with the channelling of State and Territory grants payments through the COAG Reform Fund. Those grants are made out of money originating in the BAF. These references are no longer required due to the closure of the BAF.

40.              Items 3 and 4 amend the relevant note at the end of section 7 of the COAG Reform Fund Act to account for the amendments to that section in item 2.

DisabilityCare Australia Fund Act 2013

41.              Item 5 amends subparagraph 16(a)(iii) of the DCAF Act to remove reference to paragraph 18(1)(j) of the NBF Act. Paragraph 16(a) of the DCAF Act provides that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the DCAF can be met from the DCAF Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board. The effect of this amendment is to remove reference the BAF from the list of other Funds invested by the Future Fund Board.

42.              Item 6 amends subparagraph 16(b)(iii) of the DCAF Act to remove reference to paragraph 18(1)(k) of the NBF Act. Paragraph 16(b) of the DCAF Act provides the cost of insurance incurred by the Future Fund Board in relation to the DCAF can be met from the DCAF Special Account to the extent that such insurance premiums do not relate to any other Fund invested by the Future Fund Board. The effect of this amendment is to remove reference the BAF from the list of other Funds invested by the Future Fund Board.

43.              Item 7 amends subparagrah16(c)(iii) of the DCAF Act to remove reference to subsection 18(1) of the NBF Act. Paragraph 16(c) of the DCAF Act provides that expenses incurred by the Future Fund Board in relation to managing the DCAF can be met from the DCAF Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board. The effect of this amendment is to remove reference the BAF from the list of other Funds invested by the Future Fund Board.

Future Fund Act 2006

44.              Item 8 repeals a number of definitions from the Future Fund Act related to the BAF, which are no longer required due to its closure.

45.              Item 9 removes reference to the BAF from note 2A after section 13 of the Future Fund Act, which refers to transfer of amounts from the Future Fund to other Funds managed by the Future Fund. This reference is no longer required due to the closure of the BAF.

46.              Item 10 repeals paragraph 28(5)(d) of the Future Fund Act, which refers to a section of the NBF Act which relates to the BAF that will be repealed by item 33 of this Schedule. Subsection 28(5) of the Future Fund Act provides that an investment manager may be engaged in relation to more than one fund managed by the Future Fund Board. The effect of this repeal is to remove the BAF from the list of funds managed by the Future Fund Board.

47.              Items 11, 12, 13 and 14 make amendments to repeal provisions from the Future Fund Act which set out the Future Fund’s reporting requirements in relation to the BAF.

48.              Item 15 repeals paragraph 83B(1)(b) of the Future Fund Act, which refers to a section of the NBF Act that will be repealed by item 33 of this Schedule. The effect of this repeal to is remove the power for the Future Fund Board to delegate its powers to engage investment managers for purposes in relation to the BAF.

49.              Items 16 and 17 repeal provisions in the Future Fund Act dealing with the BAF Special Account, which will be abolished by item 33 of this Schedule. Items 18 and 19 repeal cross-references to the paragraph repealed by item 17.

50.              Item 20 repeals references in provisions of Schedule 2 to the Future Fund Act, which refer to paragraphs paragraph 18(1)(j) and (k) and subsection 18(1) of the NBF Act. The provisions amended by this item provide that the following expenses incurred by the Future Fund Board in relation to the Future Fund can be met from the Future Fund Special Account, to the extent that they do not relate to any of the other funds managed by the Future Fund:

·            establishing and operating bank accounts;

·           the cost of insurance; and

·           costs of managing the Future Fund.

51.              The effect of these amendments is to remove reference to the BAF from the other Funds invested by the Future Fund Board.

52.              Item 21 removes reference to the BAF from the simplified outline of Schedule 2A to the Future Fund Act, which deals with transfers between funds managed by the Future Fund Board.

53.              Item 22 repeals clause 2 of Schedule 2A to the Future Fund Act, which provides a mechanism for amounts to be transferred from the Future Fund to the BAF.

Medical Research Future Fund Act 2015

54.              Item 23 amends subparagraph 19(a)(iii) of the MRFF Act to remove reference to paragraph 18(1)(j) of the NBF Act. Paragraph 19(a) of the MRFF Act provides that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the MRFF can be met from the MRFF Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board. The effect of this amendment is to remove the BAF from the list of other Funds invested by the Future Fund Board.

55.              Item 24 amends subparagraph 19(b)(iii) of the MRFF Act to remove reference to paragraph 18(1)(k) of the NBF Act. Paragraph 19(b) of the MRFF Act provides the cost of insurance incurred by the Future Fund Board in relation to the MRFF can be met from the MRFF Special Account to the extent that such insurance premiums do not relate to any other Fund invested by the Future Fund Board. The effect of this amendment is to remove the BAF from the list of other Funds invested by the Future Fund Board.

56.              Item 25 amends subparagrah19(c)(iii) of the MRFF Act to remove reference to subsection 18(1) of the NBF Act. Paragraph 19(c) of the MRFF Act provides that expenses incurred by the Future Fund Board in relation to managing the MRFF can be met from the MRFF Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board. The effect of this amendment is to remove reference the BAF from the list of other Funds invested by the Future Fund Board.

Nation-building Funds Act 2008

57.              Item 26 amends the title of the NBF Act to remove reference to the BAF, due to its closure.

58.              Item 27 removes the simplified outline of Chapter 2, which sets up the BAF, from the NBF Act.

59.              Item 28 repeals a number of definitions from the NBF Act related to the BAF, which are no longer required due to its closure.

60.              Item 29 amends the definition of ‘value’ of an investment to remove reference to investments of the BAF, but retains reference to investments of the EIF.

61.              Item 30 repeals the definitions of ‘Water Department’ and ‘Water Minister’ from the NBF Act, as they are no longer required due to the closure of the BAF.

62.              Items 31 and 32 amend section 7 of the NBF Act to remove reference to the extent of the national broadband network from the application provisions of that Act. This reference is no longer required as it related to the operation of the BAF.

63.              Item 33 repeals Chapter 2 of the NBF Act, which establishes the BAF and sets out how it operates. The effect of this repeal will be to close the BAF. The Future Drought
Fund Act provides for the transfer of the balance of the BAF to the Future Drought Fund.

64.              Item 34 repeals references in section 138 of the NBF Act, which refer to paragraphs paragraph 18(1)(j) and (k) and subsection 18(1) of that Act. Section 138 of the NBF Act provides that the following expenses incurred by the Future Fund Board in relation to the EIF can be met from the EIF Special Account, to the extent that they do not relate to any of the other funds managed by the Future Fund Board:

·           establishing and operating bank accounts;

·           the cost of insurance; and

·           costs of managing the EIF.

65.              The effect of this item is to remove reference to the BAF from the other Funds invested by the Future Fund Board.

66.              Item 35 repeals section 147 of the NBF Act, which deals with transfers of funds between the EIF and the BAF. Items 36 and 37 remove cross-references to section 147 in relation to the delegation of the functions or powers of the Finance Minister.

Part 2 – Transitional provisions

Item 38 – Transitional – reporting obligations of the Future Fund Board of Guardians

67.              This item is a transitional provision that maintains the Finance Minister’s ability to request information and reports, and the Future Fund Board’s obligations to keep the responsible Ministers informed, in relation to the performance of the Future Fund Board’s functions and the operation of the Board in respect of the BAF, despite the repeal of the relevant sections on the NBF Act by this Bill. This provision ensures that there is no gap in oversight and reporting about the BAF after its closure.

Item 39 – Transitional – reports

68.              This item is a transitional provision that maintains the existing arrangements for the preparation and tabling of the Future Fund’s annual report in relation to the BAF for the financial year in which this Bill commences, despite the repeal of provisions of the Future Fund Act dealing with the BAF by this Bill. This provision ensures that there is no gap in oversight and reporting about the BAF after its closure.

Item 40 – Transitional rules

69.              This item enables the Finance Minister to make rules, by legislative instrument, covering matters of a transitional nature (including savings or application provisions) relating to the amendments made by this Schedule.

70.              Enabling the making of rules rather than regulations would accord with the Office of Parliamentary Counsel's Drafting Direction No. 3.8 – Subordinate Legislation. Paragraph 2 of that Drafting Direction states that "OPC's starting point is that subordinate instruments should be made in the form of legislative instruments (as distinct from regulations) unless there is good reason not to do so".

71.              Paragraph 3 of the Drafting Direction states that matters such as compliance and enforcement, the imposition of taxes, setting amounts to be appropriated, and amendments to the text of an Act, should be included in regulations unless there is a strong justification otherwise. The Bill does not intend to enable the rules to provide for any of the types of matters listed.

72.              In addition, this item would clarify that the rules made under this item would be a legislative instrument for the purposes of the Legislation Act. Pursuant to sections 38 and 39 of that Act, all legislative instruments and their explanatory statements must be tabled in both Houses of the Parliament within 6 sitting days of the date of registration of the instrument on the Federal Register of Legislation. Once tabled, the rules would be subject to the same level of Parliamentary scrutiny as regulations (including consideration by the Senate Standing Committee on Regulations and Ordinances), and a motion to disallow the rules may be moved in either House of the Parliament within 15 sitting days of the date the rules are tabled (see section 42 of the Legislation Act).

73.              Subitem 40(2) would be a declaratory clause, included for the avoidance of doubt.


 

Schedule 3 – Amendments contingent on the commencement of the Aboriginal and Torres Strait Islanders Land and Sea Future Fund Act 2018\

74.         This Schedule makes amendments that are contingent on the commencement of the ASTILSFF Act. If that Act does not commence, these amendments will not commence (refer clause 2 of this Bill).

Part 1 – General Amendments

Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018

75.         Item 1 inserts new paragraph 16(a)(vi) in the ASTILSFF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the ATSILSFF can be met from the ATSILSFF Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board, including the Future Drought Fund.

76.         Item 2 inserts new paragraph 16(b)(vi) in the ASTILSFF Act. The effect of this amendment is to provide that the cost of insurance incurred by the Future Fund Board in relation to the ASTILSFF can be met from the ASTILSFF Special Account to the extent that such insurance premiums do not relate to any other Fund invested by the Future Fund Board, including the Future Drought Fund.

77.         Item 3 inserts new paragraph 16(c)(vi) in the ASTILSFF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in relation to managing the ASTILSFF can be met from the ASTILSFF Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board, including the Future Drought Fund.

Future Drought Fund Act

78.         Item 4 inserts new paragraph 17(a)(vi) in the Future Drought Fund Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the Future Drought Fund can be met from the Future Drought Fund Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board, including the ASTILSFF.

79.         Item 5 inserts new paragraph 17(b)(vi) in the Future Drought Fund Act. The effect of this amendment is to provide that the cost of insurance incurred by the Future Fund Board in relation to the Future Drought Fund can be met from the Future Drought Fund Special Account to the extent that such insurance premiums do not relate to any other Fund invested by the Future Fund Board, including the ASTILSFF.

80.         Item 6 inserts new paragraph 17(c)(vi) in the Future Drought Fund Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in relation to managing the Future Drought Fund can be met from the Future Drought Fund Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board, including the ASTILSFF.

Part 2 – Abolition of the Building Australia Fund

Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018

81.         Item 7 amends subparagraph 16(a)(iv) of the ATSILSFF Act to remove reference to paragraph 18(1)(j) of the NBF Act. Paragraph 16(a) of the ATSILSFF Act provides that that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the ATSILSFF can be met from the ATSILSFF Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board. The effect of this amendment is to remove reference the BAF from the list of other Funds invested by the Future Fund Board.

82.         Item 8 amends subparagraph 16(b)(iv) of the ATSILSFF Act to remove reference to paragraph 18(1)(k) of the NBF Act. Paragraph 16(b) of the ATSILSFF Act provides the cost of insurance incurred by the Future Fund Board in relation to the ASTILSFF can be met from the ASTILSFF Special Account to the extent that such insurance premiums do not relate to any other Fund invested by the Future Fund Board. The effect of this amendment is to remove reference the BAF from the list of other Funds invested by the Future Fund Board.

83.         Item 9 amends subparagraph 16(c)(iv) of the ATSILSFF Act to remove reference to paragraph 18(1) of the NBF Act. Paragraph 16(c) of the ATSILSFF Act provides that expenses incurred by the Future Fund Board in relation to managing the ASTILSFF can be met from the ASTILSFF Special Account to the extent that such expenses do not relate to any other Fund invested by the Future Fund Board. The effect of this amendment is to remove reference the BAF from the list of other Funds invested by the Future Fund Board.