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ASSET RECYCLING FUND BILL 2014

 

 

 

2013-2014 

 

The Parliament of the 

Commonwealth of Australia 

 

HOUSE OF REPRESENTATIVES 

 

 

 

 

Presented and read a first time 

 

 

 

 

Asset Recycling Fund Bill 2014 

 

No.      , 2014 

 

(Finance) 

 

 

 

A Bill for an Act to establish the Asset Recycling 

Fund, and for related purposes 

   

   

   

 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

i 

 

Contents 

Part 1--Preliminary

 

1

 

Short title ........................................................................................... 1

 

Commencement ................................................................................. 1

 

Simplified outline of this Act ............................................................. 2

 

Definitions ......................................................................................... 2

 

Crown to be bound ............................................................................. 6

 

Extension to external Territories ........................................................ 7

 

Extra-territorial application ................................................................ 7

 

Alternative constitutional basis .......................................................... 7

 

Object ................................................................................................. 9

 

Part 2--Asset Recycling Fund

 

10

 

Division 1--Introduction

 

10

 

10 

Simplified outline of this Part .......................................................... 10

 

Division 2--Establishment of the Asset Recycling Fund etc.

 

11

 

11 

Establishment of the Asset Recycling Fund .................................... 11

 

12 

Establishment of the Asset Recycling Fund Special Account ......... 11

 

Division 3--Credits of amounts to the Asset Recycling Fund

 

12

 

13 

Initial credits to Special Account ..................................................... 12

 

14 

Subsequent credits of amounts ......................................................... 12

 

Division 4--Debits of amounts from the Asset Recycling Fund, 

etc.

 

14

 

Subdivision A--Purposes

 

14

 

15 

Purposes of the Asset Recycling Fund Special Account--

main purposes .................................................................................. 14

 

16 

Purposes of the Asset Recycling Fund Special Account--

purposes related exclusively to the investments etc. of the 

Asset Recycling Fund ...................................................................... 14

 

17 

Purposes of the Asset Recycling Fund Special Account--

purposes not related exclusively to the Asset Recycling Fund ........ 15

 

Subdivision B--Grants channelling through COAG Reform Fund

 

17

 

18 

Channelling of State/Territory grants payments through the 

COAG Reform Fund ........................................................................ 17

 

19 

Recommendations about grants payments ....................................... 18

 

20 

Debit from the COAG Reform Fund ............................................... 18

 

21 

Grant to a State or Territory ............................................................. 19

 

 

 

ii 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

Subdivision C--Payments channelling through the Asset 

Recycling Fund Infrastructure Special Account

 

19

 

22 

Establishment of the Asset Recycling Fund Infrastructure 

Special Account ............................................................................... 19

 

23 

Purpose of the Asset Recycling Fund Infrastructure Special 

Account ............................................................................................ 20

 

24 

Channelling of payments through the Asset Recycling Fund 

Infrastructure Special Account ........................................................ 20

 

25 

Recommendations about payments .................................................. 21

 

26 

Payments--debit from the Asset Recycling Fund 

Infrastructure Special Account ........................................................ 21

 

27 

Grant to a person other than a State ................................................. 22

 

28 

Payment to a person other than a State ............................................ 22

 

Subdivision D--Obligation to ensure sufficient money

 

23

 

29 

Future Fund Board must ensure that there is sufficient 

money in the Asset Recycling Fund Special Account to 

cover authorised debits etc. .............................................................. 23

 

Division 5--Inter-fund transfers

 

24

 

30 

Transfers from the Asset Recycling Fund to the Future Fund ......... 24

 

Part 3--Investment of the Asset Recycling Fund

 

25

 

31 

Simplified outline of this Part .......................................................... 25

 

32 

Objects of investment of the Asset Recycling Fund ........................ 25

 

33 

Investment of the Asset Recycling Fund ......................................... 26

 

34 

Allocation of investments to the Asset Recycling Fund .................. 26

 

35 

Management of investments of the Asset Recycling Fund .............. 28

 

36 

Asset Recycling Fund Investment Mandate ..................................... 28

 

37 

Limitation on Asset Recycling Fund Investment Mandate .............. 30

 

38 

Future Fund Board to be consulted on Asset Recycling Fund 

Investment Mandate ......................................................................... 30

 

39 

Compliance with Asset Recycling Fund Investment Mandate ........ 31

 

40 

Future Fund Board must not trigger the takeover provisions 

of the Corporations Act 2001 .......................................................... 32

 

41 

Borrowing ........................................................................................ 32

 

42 

Asset Recycling Fund investment policies ...................................... 33

 

43 

Derivatives ....................................................................................... 34

 

44 

Additional financial assets ............................................................... 35

 

45 

Securities lending arrangements ...................................................... 35

 

46 

Investment managers ....................................................................... 36

 

47 

Custody of securities ........................................................................ 36

 

48 

Refund of franking credits ............................................................... 36

 

49 

Realisation of non-financial assets ................................................... 37

 

 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

iii 

 

50 

Additional function of the Future Fund Board ................................. 37

 

Part 4--Reporting obligations etc.

 

38

 

51 

Simplified outline of this Part .......................................................... 38

 

52 

Finance Minister may require Future Fund Board to prepare 

reports or give information .............................................................. 38

 

53 

Keeping the responsible Ministers informed etc. ............................. 39

 

54 

Finance Minister may give reports to other Ministers etc. ............... 39

 

Part 5--Miscellaneous

 

40

 

55 

Simplified outline of this Part .......................................................... 40

 

56 

Delegation by the Finance Minister ................................................. 40

 

57 

Delegation by the Treasurer ............................................................. 41

 

58 

Delegation by the Infrastructure Minister ........................................ 41

 

59 

Rules ................................................................................................ 41

 

 

 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

1 

 

A Bill for an Act to establish the Asset Recycling 

Fund, and for related purposes 

The Parliament of Australia enacts: 

Part 1--Preliminary 

   

1  Short title 

 

  This Act may be cited as the Asset Recycling Fund Act 2014

2  Commencement 

 

  This Act commences on 1 July 2014. 

   

Part 1  Preliminary 

   

 

Section 3 

 

2 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

3  Simplified outline of this Act 

This Act sets up the Asset Recycling Fund, which consists of: 

 

(a) 

the Asset Recycling Fund Special Account; and 

 

(b) 

the investments of the Asset Recycling Fund. 

The main purposes of the Asset Recycling Fund Special Account 

are: 

 

(a) 

to transfer amounts to the COAG Reform Fund in order 

to make grants of financial assistance to the States and 

Territories for expenditure incurred under the National 

Partnership Agreement on Asset Recycling; and 

10 

 

(b) 

to transfer amounts to the COAG Reform Fund in order 

11 

to make grants of financial assistance to the States and 

12 

Territories for expenditure incurred under the National 

13 

Partnership Agreement on Land Transport Infrastructure 

14 

Projects; and 

15 

 

(c) 

to transfer amounts to the COAG Reform Fund in order 

16 

to make infrastructure national partnership grants; and 

17 

 

(d) 

to transfer amounts to the Asset Recycling Fund 

18 

Infrastructure Special Account to enable the making of 

19 

infrastructure payments. 

20 

The Future Fund Board is responsible for deciding how to invest 

21 

the Asset Recycling Fund. 

22 

Investments of the Asset Recycling Fund will consist of financial 

23 

assets. 

24 

The Future Fund Board is bound by an Asset Recycling Fund 

25 

Investment Mandate given to it by the responsible Ministers. 

26 

Note: 

The Future Fund Act 2006 provides that the Future Fund Management 

27 

Agency is responsible for assisting and advising the Future Fund 

28 

Board. 

29 

4  Definitions 

30 

 

  In this Act: 

31 

   

Preliminary  Part 1 

   

 

Section 4 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

3 

 

acquire includes acquire by way of issue. 

Agency means the Future Fund Management Agency. 

Appropriation Act means an Act appropriating money for 

expenditure out of the Consolidated Revenue Fund. 

asset means: 

 

(a)  any kind of real or personal property; or 

 

(b)  any legal or equitable estate or interest in real or personal 

property; or 

 

(c)  any legal or equitable right. 

Asset Recycling Fund means the Asset Recycling Fund established 

10 

by section 11. 

11 

Asset Recycling Fund Infrastructure Special Account means the 

12 

Asset Recycling Fund Infrastructure Special Account established 

13 

by section 22. 

14 

Asset Recycling Fund investment function of the Future Fund 

15 

Board means: 

16 

 

(a)  a function or power conferred on the Future Fund Board by 

17 

section 33, 35, 41, 43, 45 or 46; or 

18 

 

(b)  a right or power conferred on the Future Fund Board in its 

19 

capacity as the holder of an investment of the Asset 

20 

Recycling Fund. 

21 

Asset Recycling Fund Investment Mandate has the meaning given 

22 

by subsection 36(4). 

23 

Asset Recycling Fund Special Account means the Asset Recycling 

24 

Fund Special Account established by section 12. 

25 

balance of the Asset Recycling Fund means the sum of: 

26 

 

(a)  amounts standing to the credit of the Asset Recycling Fund 

27 

Special Account; and 

28 

 

(b)  the value of investments of the Asset Recycling Fund. 

29 

bank has the same meaning as in the Financial Management and 

30 

Accountability Act 1997

31 

   

Part 1  Preliminary 

   

 

Section 4 

 

4 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

Building Australia Fund means the Building Australia Fund 

established by section 12 of the Nation-building Funds Act 2008. 

Building Australia Fund Special Account means the Building 

Australia Fund Special Account established by section 13 of the 

Nation-building Funds Act 2008. 

business entity means: 

 

(a)  a company; or 

 

(b)  a partnership; or 

 

(c)  a trust; or 

 

(d)  a body politic. 

10 

Chair means the Chair of the Future Fund Board. 

11 

COAG Reform Fund means the COAG Reform Fund established 

12 

by section 5 of the COAG Reform Fund Act 2008

13 

derivative means a derivative (within the meaning of Chapter 7 of 

14 

the Corporations Act 2001) that is a financial asset. 

15 

Education Investment Fund means the Education Investment 

16 

Fund established by section 131 of the Nation-building Funds Act 

17 

2008. 

18 

Education Investment Fund Special Account means the 

19 

Education Investment Fund Special Account established by 

20 

section 132 of the Nation-building Funds Act 2008. 

21 

Finance Department means the Department administered by the 

22 

Finance Minister. 

23 

Finance Minister has the same meaning as in the Financial 

24 

Management and Accountability Act 1997. 

25 

financial asset has the same meaning as in the Nation-building 

26 

Funds Act 2008

27 

Future Fund Board means the Future Fund Board of Guardians. 

28 

Future Fund Special Account means the Future Fund Special 

29 

Account established by section 12 of the Future Fund Act 2006

30 

   

Preliminary  Part 1 

   

 

Section 4 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

5 

 

Infrastructure Department means the Department administered by 

the Infrastructure Minister. 

Infrastructure Minister means the Minister who administers the 

Infrastructure Australia Act 2008. 

infrastructure national partnership grant means a grant of 

financial assistance to a State or Territory to: 

 

(a)  support the delivery by the State or Territory of specified 

infrastructure outputs or infrastructure projects; or 

 

(b)  facilitate reforms relating to infrastructure by the State or 

Territory; or 

10 

 

(c)  reward the State or Territory for nationally significant 

11 

reforms relating to infrastructure. 

12 

infrastructure payment means a payment of an amount to a person 

13 

(other than a State), under an agreement between the person and 

14 

the Commonwealth, to: 

15 

 

(a)  support the delivery by the person of specified infrastructure 

16 

outputs or infrastructure projects; or 

17 

 

(b)  facilitate reforms relating to infrastructure by the person; or 

18 

 

(c)  reward the person for reforms relating to infrastructure. 

19 

investment means any mode of application of money or financial 

20 

assets for the purpose of gaining a return (whether by way of 

21 

income, capital gain or any other form of return). 

22 

investment manager means a person or body (other than the 

23 

Agency) who undertakes to do any or all of the following: 

24 

 

(a)  invest amounts on behalf of the Future Fund Board; 

25 

 

(b)  manage the investment of funds on behalf of the Future Fund 

26 

Board; 

27 

 

(c)  acquire derivatives on behalf of the Future Fund Board; 

28 

 

(d)  manage derivatives on behalf of the Future Fund Board; 

29 

 

(e)  enter into securities lending arrangements on behalf of the 

30 

Future Fund Board; 

31 

 

(f)  realise financial assets on behalf of the Future Fund Board; 

32 

 

(g)  perform custodial functions in relation to the financial assets 

33 

of the Future Fund Board. 

34 

   

Part 1  Preliminary 

   

 

Section 5 

 

6 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

investment of the Asset Recycling Fund means a financial asset 

that, under a provision of this Act, is taken to be an investment of 

the Asset Recycling Fund. 

National Partnership Agreement on Asset Recycling means the 

National Partnership Agreement on Asset Recycling agreed to by 

the Council of Australian Governments on 2 May 2014, as 

amended from time to time. 

National Partnership Agreement on Land Transport 

Infrastructure Projects means the National Partnership Agreement 

on Land Transport Infrastructure Projects between the 

10 

Commonwealth, the States and the Territories that took effect on 

11 

1 July 2014, as amended from time to time. 

12 

person includes a partnership. 

13 

Note: 

See also subsection 2C(1) of the Acts Interpretation Act 1901

14 

realise includes redeem or dispose of. 

15 

responsible Ministers means: 

16 

 

(a)  the Treasurer; and 

17 

 

(b)  the Finance Minister. 

18 

rules means rules made under section 59. 

19 

securities lending arrangement means an agreement of the kind 

20 

known as a securities lending arrangement. 

21 

Treasury Department means the Department administered by the 

22 

Treasurer. 

23 

value, of an investment of the Asset Recycling Fund, means the 

24 

market value of the investment. For this purpose, disregard 

25 

anything that would prevent or restrict conversion of a financial 

26 

asset to money. 

27 

5  Crown to be bound 

28 

 

(1)  This Act binds the Crown in each of its capacities. 

29 

   

Preliminary  Part 1 

   

 

Section 6 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

7 

 

 

(2)  This Act does not make the Crown liable to be prosecuted for an 

offence. 

6  Extension to external Territories 

 

  This Act extends to every external Territory. 

7  Extra-territorial application 

 

  This Act extends to acts, omissions, matters and things outside 

Australia. 

8  Alternative constitutional basis 

 

(1)  Without limiting its effect apart from this section, this Act also has 

effect in relation to the making of infrastructure payments as 

10 

provided by this section. 

11 

 

(2)  This Act also has the effect it would have if its operation in relation 

12 

to the making of infrastructure payments were expressly confined 

13 

to an operation limited to the making of infrastructure payments 

14 

that relate to infrastructure outputs, projects or reforms in 

15 

connection with trade or commerce: 

16 

 

(a)  between Australia and other countries; or 

17 

 

(b)  among the States; or 

18 

 

(c)  between Territories or between a Territory and a State. 

19 

 

(3)  This Act also has the effect it would have if its operation in relation 

20 

to the making of infrastructure payments were expressly confined 

21 

to an operation limited to infrastructure payments: 

22 

 

(a)  to be made to a corporation to which paragraph 51(xx) of the 

23 

Constitution applies; or 

24 

 

(b)  that relate to infrastructure outputs, projects or reforms in 

25 

connection with infrastructure that is, or is to be, owned or 

26 

operated by a corporation to which paragraph 51(xx) of the 

27 

Constitution applies. 

28 

 

(4)  This Act also has the effect it would have if its operation in relation 

29 

to the making of infrastructure payments were expressly confined 

30 

to an operation limited to infrastructure payments that relate to 

31 

   

Part 1  Preliminary 

   

 

Section 8 

 

8 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

infrastructure outputs, projects or reforms in connection with 

infrastructure that would enable or assist a corporation to which 

paragraph 51(xx) of the Constitution applies to carry on its 

business. 

 

(5)  This Act also has the effect it would have if its operation in relation 

to the making of infrastructure payments were expressly confined 

to an operation limited to the making of infrastructure payments: 

 

(a)  in relation to a Territory government; or 

 

(b)  in relation to infrastructure outputs, projects or reforms in a 

Territory. 

10 

 

(6)  This Act also has the effect it would have if its operation in relation 

11 

to the making of infrastructure payments were expressly confined 

12 

to an operation limited to the making of infrastructure payments 

13 

that relate to infrastructure outputs, projects or reforms that are, or 

14 

are to be, in places acquired by the Commonwealth for public 

15 

purposes. 

16 

 

(7)  This Act also has the effect it would have if its operation in relation 

17 

to the making of infrastructure payments were expressly confined 

18 

to an operation limited to the making of infrastructure payments 

19 

that relate to infrastructure outputs, projects or reforms in 

20 

connection with purposes related to railway acquisition, 

21 

construction or extension in a State with the consent of the State. 

22 

 

(8)  This Act also has the effect it would have if its operation in relation 

23 

to the making of infrastructure payments were expressly confined 

24 

to an operation limited to the making of infrastructure payments 

25 

that relate to infrastructure outputs, projects or reforms in 

26 

connection with external affairs. 

27 

 

(9)  This Act also has the effect it would have if its operation in relation 

28 

to the making of infrastructure payments were expressly confined 

29 

to an operation limited to the making of infrastructure payments 

30 

that relate to infrastructure outputs, projects or reforms that relate 

31 

to the defence of Australia. 

32 

 

(10)  This Act also has the effect it would have if its operation in relation 

33 

to the making of infrastructure payments were expressly confined 

34 

to an operation limited to the making of infrastructure payments in 

35 

   

Preliminary  Part 1 

   

 

Section 9 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

9 

 

so far as it is appropriate for the payments to be provided by the 

Commonwealth as the national Government of Australia under the 

executive powers of the Commonwealth. 

9  Object 

 

  The object of this Act is to enhance the Commonwealth's ability: 

 

(a)  to transfer amounts to the COAG Reform Fund in order to 

make grants of financial assistance to the States and 

Territories for expenditure incurred under the National 

Partnership Agreement on Asset Recycling; and 

 

(b)  to transfer amounts to the COAG Reform Fund in order to 

10 

make grants of financial assistance to the States and 

11 

Territories for expenditure incurred under the National 

12 

Partnership Agreement on Land Transport Infrastructure 

13 

Projects; and 

14 

 

(c)  to transfer amounts to the COAG Reform Fund in order to 

15 

make infrastructure national partnership grants; and 

16 

 

(d)  to transfer amounts to the Asset Recycling Fund 

17 

Infrastructure Special Account to enable the making of 

18 

infrastructure payments. 

19 

   

Part 2  Asset Recycling Fund 

Division 1  Introduction 

 

Section 10 

 

10 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

Part 2--Asset Recycling Fund 

Division 1--Introduction 

10  Simplified outline of this Part 

This Part sets up the Asset Recycling Fund, consisting of: 

 

(a) 

the Asset Recycling Fund Special Account; and 

 

(b) 

the investments of the Asset Recycling Fund. 

The responsible Ministers may determine that amounts are to be 

credited to the Asset Recycling Fund Special Account. 

Amounts may be debited from the Asset Recycling Fund Special 

Account in accordance with its purposes. 

10 

The main purposes of the Asset Recycling Fund Special Account 

11 

are the same as the object of this Act. 

12 

Other purposes relate to paying or discharging particular costs, 

13 

expenses and obligations. 

14 

The Finance Minister is responsible for authorising debits (the 

15 

amounts of which will be credited to the COAG Reform Fund or 

16 

the Asset Recycling Fund Infrastructure Special Account) on the 

17 

recommendation of another Minister (usually the Treasurer or the 

18 

Infrastructure Minister). 

19 

   

Asset Recycling Fund  Part 2 

Establishment of the Asset Recycling Fund etc.  Division 2 

 

Section 11 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

11 

 

Division 2--Establishment of the Asset Recycling Fund etc. 

11  Establishment of the Asset Recycling Fund 

 

(1)  The Asset Recycling Fund is established by this section. 

 

(2)  The Fund consists of: 

 

(a)  the Asset Recycling Fund Special Account; and 

 

(b)  the investments of the Asset Recycling Fund. 

12  Establishment of the Asset Recycling Fund Special Account 

 

(1)  The Asset Recycling Fund Special Account is established by this 

section. 

 

(2)  The Asset Recycling Fund Special Account is a Special Account 

10 

for the purposes of the Financial Management and Accountability 

11 

Act 1997

12 

Note: 

An Appropriation Act may contain a provision to the effect that, if any 

13 

of the purposes of a Special Account is a purpose that is covered by an 

14 

item in the Appropriation Act (whether or not the item expressly refers 

15 

to the Special Account), then amounts may be debited against the 

16 

appropriation for that item and credited to that Special Account. 

17 

   

Part 2  Asset Recycling Fund 

Division 3  Credits of amounts to the Asset Recycling Fund 

 

Section 13 

 

12 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

Division 3--Credits of amounts to the Asset Recycling 

Fund 

13  Initial credits to Special Account 

Building Australia Fund amount 

 

(1)  On the commencement of this section: 

 

(a)  there is to be credited to the Asset Recycling Fund Special 

Account an amount equal to the lesser of: 

 

(i)  $2.4 billion; or 

 

(ii)  the balance of the Building Australia Fund Special 

Account as at immediately before the commencement of 

10 

this section; and 

11 

 

(b)  the Building Australia Fund Special Account is to be debited 

12 

an amount equal to the amount credited under paragraph (a). 

13 

Note: 

See also subsection 34(1), which is about allocation of investments to 

14 

the Asset Recycling Fund from the Building Australia Fund. 

15 

Education Investment Fund amount 

16 

 

(2)  On the commencement of this section: 

17 

 

(a)  there is to be credited to the Asset Recycling Fund Special 

18 

Account an amount equal to the lesser of: 

19 

 

(i)  $3.5 billion; or 

20 

 

(ii)  the balance of the Education Investment Fund Special 

21 

Account as at immediately before the commencement of 

22 

this section; and 

23 

 

(b)  the Education Investment Fund Special Account is to be 

24 

debited an amount equal to the amount credited under 

25 

paragraph (a). 

26 

Note: 

See also subsection 34(4), which is about allocation of investments to 

27 

the Asset Recycling Fund from the Education Investment Fund. 

28 

14  Subsequent credits of amounts 

29 

 

(1)  The responsible Ministers may, by writing, determine that: 

30 

   

Asset Recycling Fund  Part 2 

Credits of amounts to the Asset Recycling Fund  Division 3 

 

Section 14 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

13 

 

 

(a)  a specified amount is to be credited to the Asset Recycling 

Fund Special Account on a specified day; or 

 

(b)  a specified amount is to be credited to the Asset Recycling 

Fund Special Account in specified instalments on specified 

days. 

Note: 

For variation and revocation, see subsection 33(3) of the Acts 

Interpretation Act 1901

 

(2)  In making a determination under subsection (1), the responsible 

Ministers must have regard to the object of this Act. 

 

(3)  A determination under subsection (1) is a legislative instrument, 

10 

but section 42 (disallowance) of the Legislative Instruments Act 

11 

2003 does not apply to the determination. 

12 

   

Part 2  Asset Recycling Fund 

Division 4  Debits of amounts from the Asset Recycling Fund, etc. 

 

Section 15 

 

14 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

Division 4--Debits of amounts from the Asset Recycling 

Fund, etc. 

Subdivision A--Purposes 

15  Purposes of the Asset Recycling Fund Special Account--main 

purposes 

 

  Each of the following is a purpose of the Asset Recycling Fund 

Special Account: 

 

(a)  to transfer amounts to the COAG Reform Fund in order to 

make grants of financial assistance to the States and 

Territories for expenditure incurred under the National 

10 

Partnership Agreement on Asset Recycling; 

11 

 

(b)  to transfer amounts to the COAG Reform Fund in order to 

12 

make grants of financial assistance to the States and 

13 

Territories for expenditure incurred under the National 

14 

Partnership Agreement on Land Transport Infrastructure 

15 

Projects; 

16 

 

(c)  to transfer amounts to the COAG Reform Fund in order to 

17 

make infrastructure national partnership grants; 

18 

 

(d)  to transfer amounts to the Asset Recycling Fund 

19 

Infrastructure Special Account to enable the making of 

20 

infrastructure payments. 

21 

16  Purposes of the Asset Recycling Fund Special Account--purposes 

22 

related exclusively to the investments etc. of the Asset 

23 

Recycling Fund 

24 

 

  Each of the following is a purpose of the Asset Recycling Fund 

25 

Special Account: 

26 

 

(a)  paying the costs of, or incidental to, the acquisition of 

27 

financial assets under section 33; 

28 

 

(b)  paying expenses of an investment of the Asset Recycling 

29 

Fund; 

30 

 

(c)  paying the costs of, or incidental to, the acquisition of 

31 

derivatives under section 43; 

32 

   

Asset Recycling Fund  Part 2 

Debits of amounts from the Asset Recycling Fund, etc.  Division 4 

 

Section 17 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

15 

 

 

(d)  paying or discharging the costs, expenses and other 

obligations incurred by the Future Fund Board under a 

contract between the Future Fund Board and an investment 

manager engaged under subsection 46(1); 

 

(e)  paying or discharging the costs, expenses and other 

obligations incurred in connection with the establishment, 

maintenance or operation of a bank account of the Future 

Fund Board, if the bank account relates exclusively to the 

Asset Recycling Fund; 

 

(f)  paying a premium in respect of a contract of insurance 

10 

entered into by the Future Fund Board exclusively in 

11 

connection with the Asset Recycling Fund; 

12 

 

(g)  paying or discharging any other costs, expenses, obligations 

13 

or liabilities incurred by the Future Fund Board exclusively 

14 

in connection with the Asset Recycling Fund. 

15 

Note: 

See section 21 of the Financial Management and Accountability Act 

16 

1997 (debits from Special Accounts). 

17 

17  Purposes of the Asset Recycling Fund Special Account--purposes 

18 

not related exclusively to the Asset Recycling Fund 

19 

 

  Each of the following is a purpose of the Asset Recycling Fund 

20 

Special Account: 

21 

 

(a)  paying or discharging the costs, expenses and other 

22 

obligations incurred in connection with the establishment, 

23 

maintenance or operation of a bank account of the Future 

24 

Fund Board, if those costs, expenses or obligations are not 

25 

covered by: 

26 

 

(i)  paragraph 16(e); or 

27 

 

(ii)  paragraph 2(1)(g) of Schedule 2 to the Future Fund Act 

28 

2006; or 

29 

 

(iii)  paragraph 18(1)(j) of the Nation-building Funds Act 

30 

2008; or 

31 

 

(iv)  paragraph 136(1)(j) of the Nation-building Funds Act 

32 

2008; or 

33 

 

(v)  paragraph 137(e) of the Nation-building Funds Act 

34 

2008; or 

35 

   

Part 2  Asset Recycling Fund 

Division 4  Debits of amounts from the Asset Recycling Fund, etc. 

 

Section 17 

 

16 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

 

(vi)  paragraph 218(1)(f) of the Nation-building Funds Act 

2008; or 

 

(vii)  paragraph 16(1)(a) of the DisabilityCare Australia Fund 

Act 2013

 

(b)  paying a premium in respect of a contract of insurance 

entered into by the Future Fund Board, if the premium is not 

covered by: 

 

(i)  paragraph 16(f); or 

 

(ii)  paragraph 2(1)(h) of Schedule 2 to the Future Fund Act 

2006; or 

10 

 

(iii)  paragraph 18(1)(k) of the Nation-building Funds Act 

11 

2008; or 

12 

 

(iv)  paragraph 136(1)(k) of the Nation-building Funds Act 

13 

2008; or 

14 

 

(v)  paragraph 137(f) of the Nation-building Funds Act 

15 

2008; or 

16 

 

(vi)  paragraph 218(1)(g) of the Nation-building Funds Act 

17 

2008; or 

18 

 

(vii)  paragraph 16(1)(b) of the DisabilityCare Australia Fund 

19 

Act 2013

20 

 

(c)  paying or discharging any other costs, expenses, obligations 

21 

or liabilities incurred by the Future Fund Board, if the costs, 

22 

expenses, obligations or liabilities are not covered by: 

23 

 

(i)  a paragraph of section 16; or 

24 

 

(ii)  a paragraph of subclause 2(1) of Schedule 2 to the 

25 

Future Fund Act 2006; or 

26 

 

(iii)  a paragraph of subsection 18(1) of the Nation-building 

27 

Funds Act 2008; or 

28 

 

(iv)  a paragraph of subsection 136(1) of the Nation-building 

29 

Funds Act 2008; or 

30 

 

(v)  a paragraph of section 137 of the Nation-building Funds 

31 

Act 2008; or 

32 

 

(vi)  a paragraph of subsection 218(1) of the Nation-building 

33 

Funds Act 2008; or 

34 

 

(vii)  paragraph 16(1)(c) of the DisabilityCare Australia Fund 

35 

Act 2013

36 

   

Asset Recycling Fund  Part 2 

Debits of amounts from the Asset Recycling Fund, etc.  Division 4 

 

Section 18 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

17 

 

 

(d)  paying remuneration and allowances of Future Fund Board 

members; 

 

(e)  paying remuneration, and other employment-related costs 

and expenses, in respect of members of the staff of the 

Agency; 

 

(f)  paying or discharging the costs, expenses and other 

obligations incurred by the Commonwealth under a contract 

entered into under section 78 or 82 of the Future Fund Act 

2006

 

(g)  paying or discharging the costs, expenses and other 

10 

obligations incurred by the Commonwealth in connection 

11 

with the operation of the Agency. 

12 

Note: 

See section 21 of the Financial Management and Accountability Act 

13 

1997 (debits from Special Accounts). 

14 

Subdivision B--Grants channelling through COAG Reform 

15 

Fund 

16 

18  Channelling of State/Territory grants payments through the 

17 

COAG Reform Fund 

18 

 

(1)  The Finance Minister may, by writing, direct that a specified 

19 

amount is to be: 

20 

 

(a)  debited from the Asset Recycling Fund Special Account; and 

21 

 

(b)  credited to the COAG Reform Fund; 

22 

on a specified day. 

23 

 

(2)  The direction must be expressed to be given in order to enable the 

24 

amount to be debited from the COAG Reform Fund for the 

25 

purpose of making: 

26 

 

(a)  a specified grant of financial assistance to the States and 

27 

Territories for: 

28 

 

(i)  expenditure incurred under the National Partnership 

29 

Agreement on Asset Recycling; or 

30 

 

(ii)  expenditure incurred under the National Partnership 

31 

Agreement on Land Transport Infrastructure Projects; or 

32 

 

(b)  a specified infrastructure national partnership grant. 

33 

   

Part 2  Asset Recycling Fund 

Division 4  Debits of amounts from the Asset Recycling Fund, etc. 

 

Section 19 

 

18 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

 

(3)  Two or more directions under subsection (1) may be set out in the 

same document. 

 

(4)  A direction under subsection (1) is not a legislative instrument. 

 

(5)  The Finance Minister must give a copy of a direction under 

subsection (1) to the Minister who recommended the specification 

of the grant (see section 19). 

19  Recommendations about grants payments 

 

(1)  A grant must not be specified under subparagraph 18(2)(a)(i) 

unless the Treasurer has recommended the specification of the 

grant. 

10 

 

(2)  A grant must not be specified under subparagraph 18(2)(a)(ii) 

11 

unless the Infrastructure Minister has recommended the 

12 

specification of the grant. 

13 

 

(3)  A grant must not be specified under paragraph 18(2)(b) unless a 

14 

Minister (other than the Finance Minister) has recommended the 

15 

specification of the grant. 

16 

20  Debit from the COAG Reform Fund 

17 

Scope 

18 

 

(1)  This section applies if: 

19 

 

(a)  the Finance Minister gives a direction under subsection 18(1) 

20 

for a purpose in relation to a grant of financial assistance to a 

21 

State or Territory; and 

22 

 

(b)  the amount specified in the direction is credited to the COAG 

23 

Reform Fund. 

24 

Debit from the COAG Reform Fund 

25 

 

(2)  The Treasurer must ensure that, as soon as practicable after the 

26 

amount is credited, the COAG Reform Fund is debited for the 

27 

purposes of making the grant. 

28 

   

Asset Recycling Fund  Part 2 

Debits of amounts from the Asset Recycling Fund, etc.  Division 4 

 

Section 21 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

19 

 

 

(3)  However, if the debit from the COAG Reform Fund cannot be 

made, an amount equal to the credited amount is to be: 

 

(a)  debited from the COAG Reform Fund; and 

 

(b)  credited to the Asset Recycling Fund Special Account. 

21  Grant to a State or Territory 

Scope 

 

(1)  This section applies if: 

 

(a)  an amount is to be debited from the COAG Reform Fund for 

the purpose of: 

 

(i)  making a grant of financial assistance to a State or 

10 

Territory for expenditure incurred under the National 

11 

Partnership Agreement on Asset Recycling or under the 

12 

National Partnership Agreement on Land Transport 

13 

Infrastructure Projects; or 

14 

 

(ii)  making an infrastructure national partnership grant; and 

15 

 

(b)  the grant is covered by subsection 20(2). 

16 

Note: 

Subsection 20(2) deals with grants channelled through the COAG 

17 

Reform Fund. 

18 

Terms and conditions 

19 

 

(2)  The terms and conditions on which that financial assistance is 

20 

granted are to be set out in a written agreement between the 

21 

Commonwealth and the State or Territory. 

22 

 

(3)  An agreement under subsection (2) may be entered into by a 

23 

Minister on behalf of the Commonwealth. 

24 

Subdivision C--Payments channelling through the Asset 

25 

Recycling Fund Infrastructure Special Account 

26 

22  Establishment of the Asset Recycling Fund Infrastructure Special 

27 

Account 

28 

 

(1)  The Asset Recycling Fund Infrastructure Special Account is 

29 

established by this section. 

30 

   

Part 2  Asset Recycling Fund 

Division 4  Debits of amounts from the Asset Recycling Fund, etc. 

 

Section 23 

 

20 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

 

(2)  The Asset Recycling Fund Infrastructure Special Account is a 

Special Account for the purposes of the Financial Management 

and Accountability Act 1997

Note: 

An Appropriation Act may contain a provision to the effect that, if any 

of the purposes of a Special Account is a purpose that is covered by an 

item in the Appropriation Act (whether or not the item expressly refers 

to the Special Account), then amounts may be debited against the 

appropriation for that item and credited to that Special Account. 

23  Purpose of the Asset Recycling Fund Infrastructure Special 

Account 

10 

 

(1)  The purpose of the Asset Recycling Fund Infrastructure Special 

11 

Account is to enable the making of infrastructure payments, if the 

12 

payments are specified under subsection 24(1). 

13 

Note: 

See section 21 of the Financial Management and Accountability Act 

14 

1997 (debits from Special Accounts). 

15 

 

(2)  A payment under subsection (1) may be made: 

16 

 

(a)  by way of a grant of financial assistance; or 

17 

 

(b)  otherwise. 

18 

24  Channelling of payments through the Asset Recycling Fund 

19 

Infrastructure Special Account 

20 

 

(1)  The Finance Minister may, by writing, direct that a specified 

21 

amount is to be: 

22 

 

(a)  debited from the Asset Recycling Fund Special Account; and 

23 

 

(b)  credited to the Asset Recycling Fund Infrastructure Special 

24 

Account; 

25 

on a specified day. 

26 

 

(2)  The direction must be expressed to be given in order to enable the 

27 

specified amount to be debited from the Asset Recycling Fund 

28 

Infrastructure Special Account for the purpose of enabling the 

29 

making of infrastructure payments. 

30 

 

(3)  Two or more directions under subsection (1) may be set out in the 

31 

same document. 

32 

   

Asset Recycling Fund  Part 2 

Debits of amounts from the Asset Recycling Fund, etc.  Division 4 

 

Section 25 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

21 

 

 

(4)  A direction under subsection (1) is not a legislative instrument. 

 

(5)  The Finance Minister must give a copy of a direction under 

subsection (1) to the Infrastructure Minister. 

25  Recommendations about payments 

 

  A payment must not be specified under subsection 24(1) unless the 

Infrastructure Minister has recommended the specification of the 

payment. 

26  Payments--debit from the Asset Recycling Fund Infrastructure 

Special Account 

Scope 

10 

 

(1)  This section applies if: 

11 

 

(a)  the Finance Minister gives a direction under subsection 24(1) 

12 

for a purpose in relation to a payment; and 

13 

 

(b)  the amount specified in the direction is credited to the Asset 

14 

Recycling Fund Infrastructure Special Account. 

15 

Debit from the Asset Recycling Fund Infrastructure Special 

16 

Account 

17 

 

(2)  The Infrastructure Minister must ensure that, as soon as practicable 

18 

after the amount is credited, the Asset Recycling Fund 

19 

Infrastructure Special Account is debited for the purposes of 

20 

making the payment. 

21 

 

(3)  However, if the payment cannot be made, an amount equal to the 

22 

credited amount is to be: 

23 

 

(a)  debited from the Asset Recycling Fund Infrastructure Special 

24 

Account; and 

25 

 

(b)  credited to the Asset Recycling Fund Special Account. 

26 

   

Part 2  Asset Recycling Fund 

Division 4  Debits of amounts from the Asset Recycling Fund, etc. 

 

Section 27 

 

22 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

27  Grant to a person other than a State 

Scope 

 

(1)  This section applies if: 

 

(a)  an amount is to be debited from the Asset Recycling Fund 

Infrastructure Special Account for the purpose of enabling 

the making of infrastructure payments; and 

 

(b)  the payment is by way of a grant of financial assistance. 

Terms and conditions 

 

(2)  The terms and conditions on which that financial assistance is 

granted are to be set out in a written agreement between the 

10 

Commonwealth and the person who is to receive the payment by 

11 

way of the grant under the agreement. 

12 

 

(3)  An agreement under subsection (2) may be entered into by the 

13 

Infrastructure Minister on behalf of the Commonwealth. 

14 

28  Payment to a person other than a State 

15 

Scope 

16 

 

(1)  This section applies if: 

17 

 

(a)  an amount is to be debited from the Asset Recycling Fund 

18 

Infrastructure Special Account for the purpose of enabling 

19 

the making of infrastructure payments; and 

20 

 

(b)  the payment is otherwise than by way of a grant of financial 

21 

assistance. 

22 

Terms and conditions 

23 

 

(2)  The terms and conditions on which that payment is paid are to be 

24 

set out in a written agreement between the Commonwealth and the 

25 

person who is to receive the payment under the agreement. 

26 

 

(3)  An agreement under subsection (2) may be entered into by the 

27 

Infrastructure Minister on behalf of the Commonwealth. 

28 

   

Asset Recycling Fund  Part 2 

Debits of amounts from the Asset Recycling Fund, etc.  Division 4 

 

Section 29 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

23 

 

Subdivision D--Obligation to ensure sufficient money 

29  Future Fund Board must ensure that there is sufficient money in 

the Asset Recycling Fund Special Account to cover 

authorised debits etc. 

 

  The Future Fund Board must take all reasonable steps to ensure 

that the amount of money standing to the credit of the Asset 

Recycling Fund Special Account is sufficient to cover the debit of 

amounts authorised, or proposed to be authorised, under this Part. 

Note: 

This may require the Future Fund Board to realise an investment of 

the Asset Recycling Fund in accordance with section 35. 

10 

   

Part 2  Asset Recycling Fund 

Division 5  Inter-fund transfers 

 

Section 30 

 

24 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

Division 5--Inter-fund transfers 

30  Transfers from the Asset Recycling Fund to the Future Fund 

 

(1)  If an amount is debited from the Future Fund Special Account for a 

purpose mentioned in subclause 2(2) of Schedule 2 to the Future 

Fund Act 2006, the Finance Minister may, by writing, direct that a 

specified amount is to be: 

 

(a)  debited from the Asset Recycling Fund Special Account; and 

 

(b)  credited to the Future Fund Special Account; 

on a specified day. 

 

(2)  The specified amount must not exceed the amount debited from the 

10 

Future Fund Special Account as mentioned in subsection (1). 

11 

 

(3)  A direction under subsection (1) is not a legislative instrument. 

12 

   

Investment of the Asset Recycling Fund  Part 3 

   

 

Section 31 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

25 

 

Part 3--Investment of the Asset Recycling Fund 

   

31  Simplified outline of this Part 

The Future Fund Board is responsible for deciding how to invest 

the Asset Recycling Fund. 

Investments of the Asset Recycling Fund will consist of financial 

assets. 

Investments of the Asset Recycling Fund will be held in the name 

of the Future Fund Board. 

The Future Fund Board is bound by an Asset Recycling Fund 

10 

Investment Mandate given to it by the responsible Ministers. 

11 

32  Objects of investment of the Asset Recycling Fund 

12 

 

(1)  The main objects of the acquisition by the Future Fund Board of a 

13 

financial asset as an investment of the Asset Recycling Fund are to 

14 

enhance the Commonwealth's ability: 

15 

 

(a)  to transfer amounts to the COAG Reform Fund in order to 

16 

make grants of financial assistance to the States and 

17 

Territories for expenditure incurred under the National 

18 

Partnership Agreement on Asset Recycling; and 

19 

 

(b)  to transfer amounts to the COAG Reform Fund in order to 

20 

make grants of financial assistance to the States and 

21 

Territories for expenditure incurred under the National 

22 

Partnership Agreement on Land Transport Infrastructure 

23 

Projects; and 

24 

 

(c)  to transfer amounts to the COAG Reform Fund in order to 

25 

make infrastructure national partnership grants; and 

26 

 

(d)  to transfer amounts to the Asset Recycling Fund 

27 

Infrastructure Special Account to enable the making of 

28 

infrastructure payments. 

29 

   

Part 3  Investment of the Asset Recycling Fund 

   

 

Section 33 

 

26 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

 

(2)  The ancillary objects of the acquisition by the Future Fund Board 

of a financial asset as an investment of the Asset Recycling Fund 

are to enhance the ability of the Commonwealth and the Future 

Fund Board to: 

 

(a)  discharge costs, expenses, obligations and liabilities; and 

 

(b)  make payments; 

as mentioned in paragraphs 16(a) to (g) and 17(a) to (g). 

33  Investment of the Asset Recycling Fund 

 

(1)  The Future Fund Board may invest amounts standing to the credit 

of the Asset Recycling Fund Special Account in any financial 

10 

assets. 

11 

 

(2)  Investments under subsection (1) are to be made in the name of the 

12 

Future Fund Board. 

13 

 

(3)  Investments under subsection (1) are taken to be investments of the 

14 

Asset Recycling Fund. 

15 

 

(4)  This section does not authorise the acquisition of a derivative. 

16 

Note: 

For acquisition of derivatives, see section 43. 

17 

34  Allocation of investments to the Asset Recycling Fund 

18 

From the Building Australia Fund 

19 

 

(1)  Subsection (2) applies if the amount transferred to the Asset 

20 

Recycling Fund Special Account under subsection 13(1) is less 

21 

than $2.4 billion. 

22 

 

(2)  On the day that this section commences: 

23 

 

(a)  the Future Fund Board must: 

24 

 

(i)  determine the balance of the Asset Recycling Fund 

25 

following the transfer under subsection 13(1); and 

26 

 

(ii)  determine, by writing, sufficient financial assets that 

27 

were, immediately before commencement, investments 

28 

of the Building Australia Fund that are to be allocated 

29 

from that Fund to the Asset Recycling Fund, to ensure 

30 

that the portion of the balance of the Asset Recycling 

31 

   

Investment of the Asset Recycling Fund  Part 3 

   

 

Section 34 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

27 

 

Fund allocated from the Building Australia Fund will 

equal $2.4 billion; and 

 

(b)  immediately after the determination under 

subparagraph (a)(ii) is made, the relevant financial assets are 

taken to cease to be investments of the Building Australia 

Fund and to become investments of the Asset Recycling 

Fund. 

 

(3)  A determination made under subparagraph (2)(a)(ii) is not a 

legislative instrument. 

From the Education Investment Fund 

10 

 

(4)  Subsection (5) applies if the amount transferred to the Asset 

11 

Recycling Fund Special Account under subsection 13(2) is less 

12 

than $3.5 billion. 

13 

 

(5)  On the day that this section commences: 

14 

 

(a)  the Future Fund Board must: 

15 

 

(i)  determine the balance of the Asset Recycling Fund 

16 

following the transfer under subsection 13(2); and 

17 

 

(ii)  determine, by writing, sufficient financial assets that 

18 

were, immediately before commencement, investments 

19 

of the Education Investment Fund that are to be 

20 

allocated from that Fund to the Asset Recycling Fund, 

21 

to ensure that the portion of the balance of the Asset 

22 

Recycling Fund allocated from the Education 

23 

Investment Fund will equal $3.5 billion; and 

24 

 

(b)  immediately after the determination under 

25 

subparagraph (a)(ii) is made, the relevant financial assets are 

26 

taken to cease to be investments of the Education Investment 

27 

Fund and to become investments of the Asset Recycling 

28 

Fund. 

29 

 

(6)  A determination made under subparagraph (5)(a)(ii) is not a 

30 

legislative instrument. 

31 

   

Part 3  Investment of the Asset Recycling Fund 

   

 

Section 35 

 

28 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

35  Management of investments of the Asset Recycling Fund 

 

(1)  Income derived from an investment of the Asset Recycling Fund is 

to be credited to the Asset Recycling Fund Special Account. 

 

(2)  A return of capital, or any other financial distribution, relating to 

an investment of the Asset Recycling Fund is to be credited to the 

Asset Recycling Fund Special Account. 

 

(3)  The Future Fund Board may realise an investment of the Asset 

Recycling Fund. 

 

(4)  Upon realisation of an investment of the Asset Recycling Fund, the 

proceeds of the investment are to be credited to the Asset 

10 

Recycling Fund Special Account. 

11 

 

(5)  At any time before an investment of the Asset Recycling Fund 

12 

matures, the Future Fund Board may authorise the re-investment of 

13 

the proceeds upon maturity in a financial asset investment with the 

14 

same entity. The new investment is taken to be an investment of 

15 

the Asset Recycling Fund. 

16 

 

(6)  Section 39 of the Financial Management and Accountability Act 

17 

1997 does not apply to an investment of the Asset Recycling Fund. 

18 

36  Asset Recycling Fund Investment Mandate 

19 

 

(1)  The responsible Ministers may give the Future Fund Board written 

20 

directions about the performance of its Asset Recycling Fund 

21 

investment functions, and must give at least one such direction. 

22 

Note 1: 

Asset Recycling Fund investment function is defined in section 4. 

23 

Note 2: 

For variation and revocation, see subsection 33(3) of the Acts 

24 

Interpretation Act 1901

25 

 

(2)  Subsection (1) has effect subject to section 37. 

26 

 

(3)  In giving a direction under subsection (1), the responsible 

27 

Ministers must have regard to: 

28 

 

(a)  maximising the return earned on the Asset Recycling Fund, 

29 

consistent with international best practice for institutional 

30 

investment; and 

31 

   

Investment of the Asset Recycling Fund  Part 3 

   

 

Section 36 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

29 

 

 

(b)  enhancing the Commonwealth's ability to fulfil the object of 

this Act; and 

 

(c)  such other matters as the responsible Ministers consider 

relevant. 

 

(4)  Directions under subsection (1) are to be known collectively as the 

Asset Recycling Fund Investment Mandate

 

(5)  A direction under subsection (1) may set out the policies to be 

pursued by the Future Fund Board in relation to: 

 

(a)  matters of risk and return; and 

 

(b)  the allocation of financial assets. 

10 

A policy relating to the allocation of financial assets must not be 

11 

inconsistent with a policy relating to matters of risk and return. 

12 

 

(6)  Subsection (5) does not limit subsection (1). 

13 

 

(7)  Subsection (5) has effect subject to section 37. 

14 

 

(8)  The Asset Recycling Fund Investment Mandate prevails over 

15 

subsection (12) to the extent of any inconsistency. 

16 

 

(9)  The responsible Ministers must not give a direction under 

17 

subsection (1) that is inconsistent with this Act (other than 

18 

subsection (12)). 

19 

 

(10)  A direction under subsection (1) must not take effect before the 

20 

15th day after the day on which it is given. 

21 

 

(11)  A direction under subsection (1) is a legislative instrument. 

22 

Note 1: 

Section 42 (disallowance) of the Legislative Instruments Act 2003 

23 

does not apply to the direction--see section 44 of that Act. 

24 

Note 2: 

Part 6 (sunsetting) of the Legislative Instruments Act 2003 does not 

25 

apply to the direction--see section 54 of that Act. 

26 

 

(12)  In the performance of its Asset Recycling Fund investment 

27 

functions, the Future Fund Board must seek to: 

28 

 

(a)  maximise the return earned on the Asset Recycling Fund, 

29 

consistent with international best practice for institutional 

30 

investment; and 

31 

   

Part 3  Investment of the Asset Recycling Fund 

   

 

Section 37 

 

30 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

 

(b)  enhance the Commonwealth's ability to fulfil the object of 

this Act. 

Note: 

Asset Recycling Fund investment function is defined in section 4. 

 

(13)  Subsection (12) has effect subject to: 

 

(a)  this Act; and 

 

(b)  a direction under subsection (1). 

37  Limitation on Asset Recycling Fund Investment Mandate 

 

(1)  The responsible Ministers must not give a direction under 

subsection 36(1) that has the purpose, or has or is likely to have the 

effect, of directly or indirectly requiring the Future Fund Board to: 

10 

 

(a)  invest an amount standing to the credit of the Asset 

11 

Recycling Fund Special Account in a particular financial 

12 

asset; or 

13 

 

(b)  acquire a particular derivative; or 

14 

 

(c)  allocate financial assets to: 

15 

 

(i)  a particular business entity; or 

16 

 

(ii)  a particular activity; or 

17 

 

(iii)  a particular business. 

18 

 

(2)  Paragraphs (1)(a) and (b) do not limit paragraph (1)(c). 

19 

38  Future Fund Board to be consulted on Asset Recycling Fund 

20 

Investment Mandate 

21 

 

(1)  Before giving the Future Fund Board a direction under 

22 

subsection 36(1), the responsible Ministers must: 

23 

 

(a)  send a draft of the direction to the Future Fund Board; and 

24 

 

(b)  invite the Future Fund Board to make a submission to the 

25 

responsible Ministers on the draft direction within a time 

26 

limit specified by the responsible Ministers; and 

27 

 

(c)  consider any submission that is received from the Future 

28 

Fund Board within that time limit. 

29 

 

(2)  If: 

30 

   

Investment of the Asset Recycling Fund  Part 3 

   

 

Section 39 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

31 

 

 

(a)  the responsible Ministers give the Future Fund Board a 

direction under subsection 36(1); and 

 

(b)  the Future Fund Board made a submission to the responsible 

Ministers on a draft of the direction within the time limit 

specified by the responsible Ministers; 

the submission is to be tabled in each House of the Parliament with 

the direction. 

Note: 

For tabling of the direction, see section 38 of the Legislative 

Instruments Act 2003

 

(3)  A time limit specified under this section must be reasonable. 

10 

39  Compliance with Asset Recycling Fund Investment Mandate 

11 

 

(1)  The Future Fund Board must take all reasonable steps to comply 

12 

with the Asset Recycling Fund Investment Mandate. 

13 

 

(2)  As soon as practicable after the Future Fund Board becomes aware 

14 

that it has failed to comply with the Asset Recycling Fund 

15 

Investment Mandate, the Future Fund Board must give the 

16 

responsible Ministers a written statement: 

17 

 

(a)  informing the responsible Ministers of the failure to comply 

18 

with the Asset Recycling Fund Investment Mandate; and 

19 

 

(b)  setting out the action that the Future Fund Board proposes to 

20 

take in order to comply with the Asset Recycling Fund 

21 

Investment Mandate. 

22 

 

(3)  If the responsible Ministers are satisfied that the Future Fund 

23 

Board has failed to comply with the Asset Recycling Fund 

24 

Investment Mandate, the responsible Ministers may, by written 

25 

notice given to the Future Fund Board, direct the Future Fund 

26 

Board: 

27 

 

(a)  to give the responsible Ministers, within a period specified in 

28 

the notice, a written explanation for the failure to comply 

29 

with the Asset Recycling Fund Investment Mandate; and 

30 

 

(b)  to take action specified in the notice, within a period 

31 

specified in the notice, in order to comply with the Asset 

32 

Recycling Fund Investment Mandate. 

33 

   

Part 3  Investment of the Asset Recycling Fund 

   

 

Section 40 

 

32 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

 

(4)  The Future Fund Board must comply with a direction under 

subsection (3). 

 

(5)  A failure to comply with: 

 

(a)  the Asset Recycling Fund Investment Mandate; or 

 

(b)  a direction under subsection (3); 

does not affect the validity of any transaction. 

 

(6)  A direction under subsection (3) is not a legislative instrument. 

40  Future Fund Board must not trigger the takeover provisions of 

the Corporations Act 2001 

 

(1)  Subsections 606(1A) and (2A) and section 611 of the Corporations 

10 

Act 2001 do not apply to an acquisition by the Future Fund Board 

11 

if the acquisition is the result of the performance by the Future 

12 

Fund Board of its Asset Recycling Fund investment functions. 

13 

 

(2)  A failure by the Future Fund Board to comply with section 606 of 

14 

the Corporations Act 2001 (as modified by this section) does not 

15 

affect the validity of any transaction. 

16 

Note: 

See also section 39 of the Future Fund Act 2006 (application of the 

17 

Corporations Act 2001). 

18 

41  Borrowing 

19 

 

(1)  The Future Fund Board must not borrow money for a purpose in 

20 

connection with the Asset Recycling Fund unless the borrowing is 

21 

authorised by subsection (2) or (3). 

22 

 

(2)  The Future Fund Board is authorised to borrow money for a 

23 

purpose in connection with the Asset Recycling Fund if: 

24 

 

(a)  the purpose of the borrowing is to enable the Future Fund 

25 

Board to cover settlement of a transaction for the acquisition 

26 

of one or more financial assets; and 

27 

 

(b)  at the time the relevant acquisition decision was made, it was 

28 

likely that the borrowing would not be needed; and 

29 

 

(c)  the period of the borrowing does not exceed 7 days; and 

30 

   

Investment of the Asset Recycling Fund  Part 3 

   

 

Section 42 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

33 

 

 

(d)  if the borrowing were to take place, the total amount 

borrowed by the Future Fund Board would not exceed 10% 

of the balance of the Asset Recycling Fund. 

 

(3)  The Future Fund Board is authorised to borrow money for a 

purpose in connection with the Asset Recycling Fund if the 

borrowing takes place in such circumstances (if any) as are 

specified in the rules. 

42  Asset Recycling Fund investment policies 

 

(1)  The Future Fund Board must formulate written policies to be 

complied with by it in relation to the following matters in 

10 

connection with the Asset Recycling Fund: 

11 

 

(a)  the investment strategy for the Asset Recycling Fund; 

12 

 

(b)  benchmarks and standards for assessing the performance of 

13 

the Asset Recycling Fund; 

14 

 

(c)  risk management for the Asset Recycling Fund; 

15 

 

(d)  a matter relating to international best practice for institutional 

16 

investment; 

17 

 

(e)  a matter specified in the rules. 

18 

Note: 

For variation and revocation, see subsection 33(3) of the Acts 

19 

Interpretation Act 1901

20 

 

(2)  The Future Fund Board must ensure that policies formulated under 

21 

subsection (1) are consistent with the Asset Recycling Fund 

22 

Investment Mandate. 

23 

Publication of policies 

24 

 

(3)  The Future Fund Board must cause copies of policies formulated 

25 

under subsection (1) to be published on the internet. 

26 

 

(4)  The Future Fund Board must ensure that a copy of the first set of 

27 

policies formulated under subsection (1) is published on the 

28 

internet as soon as practicable after the commencement of this 

29 

section. 

30 

   

Part 3  Investment of the Asset Recycling Fund 

   

 

Section 43 

 

34 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

Review of policies 

 

(5)  The Future Fund Board must conduct periodic reviews of policies 

formulated under subsection (1). 

 

(6)  If there is a change in the Asset Recycling Fund Investment 

Mandate, the Future Fund Board must review any relevant policies 

formulated under subsection (1). 

Compliance with policies 

 

(7)  The Future Fund Board must take all reasonable steps to comply 

with policies formulated under subsection (1). 

 

(8)  A failure to comply with a policy formulated under subsection (1) 

10 

does not affect the validity of any transaction. 

11 

Policies 

12 

 

(9)  A policy formulated under subsection (1) is not a legislative 

13 

instrument. 

14 

43  Derivatives 

15 

 

(1)  The Future Fund Board may acquire a derivative for the purpose 

16 

of: 

17 

 

(a)  protecting the value of an investment of the Asset Recycling 

18 

Fund (other than a derivative); or 

19 

 

(b)  protecting the return on an investment of the Asset Recycling 

20 

Fund (other than a derivative); or 

21 

 

(c)  achieving indirect exposure to financial assets (other than 

22 

derivatives) for a purpose in connection with the Asset 

23 

Recycling Fund; or 

24 

 

(d)  achieving transactional efficiency for a purpose in connection 

25 

with the Asset Recycling Fund; 

26 

but must not acquire a derivative for the purpose of: 

27 

 

(e)  speculation; or 

28 

 

(f)  leverage. 

29 

   

Investment of the Asset Recycling Fund  Part 3 

   

 

Section 44 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

35 

 

 

(2)  The acquisition of a derivative under subsection (1) of this section 

must be consistent with the investment strategy embodied in a 

policy formulated by the Future Fund Board under 

subsection 42(1). 

 

(3)  A derivative acquired under subsection (1) of this section is to be 

held in the name of the Future Fund Board. 

 

(4)  A derivative acquired under subsection (1) of this section is taken 

to be an investment of the Asset Recycling Fund. 

44  Additional financial assets 

 

  If, as a result of: 

10 

 

(a)  the Future Fund Board's holding of an investment of the 

11 

Asset Recycling Fund; or 

12 

 

(b)  the exercise of any rights or powers conferred on the Future 

13 

Fund Board in its capacity as the holder of an investment of 

14 

the Asset Recycling Fund; 

15 

the Future Fund Board becomes the holder of a financial asset, that 

16 

financial asset is taken to be an investment of the Asset Recycling 

17 

Fund. 

18 

45  Securities lending arrangements 

19 

 

(1)  The Future Fund Board may enter into securities lending 

20 

arrangements for a purpose in connection with the Asset Recycling 

21 

Fund. 

22 

 

(2)  Any money received by the Future Fund Board under a securities 

23 

lending arrangement entered into under subsection (1) is to be 

24 

credited to the Asset Recycling Fund Special Account. 

25 

 

(3)  To avoid doubt, a securities lending arrangement entered into 

26 

under subsection (1) may provide for the Future Fund Board to 

27 

realise an investment of the Asset Recycling Fund. 

28 

 

(4)  If, as the result of the operation of a securities lending arrangement 

29 

entered into under subsection (1), the Future Fund Board becomes 

30 

the holder of a financial asset, that financial asset is taken to be an 

31 

investment of the Asset Recycling Fund. 

32 

   

Part 3  Investment of the Asset Recycling Fund 

   

 

Section 46 

 

36 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

46  Investment managers 

 

(1)  The Future Fund Board may engage one or more investment 

managers for purposes in connection with the Asset Recycling 

Fund. 

 

(2)  The Future Fund Board must not: 

 

(a)  invest amounts under subsection 33(1); or 

 

(b)  acquire derivatives under subsection 43(1); or 

 

(c)  enter into a securities lending arrangement under 

subsection 45(1); or 

 

(d)  realise financial assets that are investments of the Asset 

10 

Recycling Fund; 

11 

unless the Future Fund Board does so: 

12 

 

(e)  through an investment manager engaged by the Future Fund 

13 

Board under subsection (1) of this section; or 

14 

 

(f)  in a manner approved, in writing, by the responsible 

15 

Ministers. 

16 

 

(3)  The Future Fund Board must ensure that any investment manager 

17 

engaged by the Future Fund Board under subsection (1) operates 

18 

within this Act. 

19 

 

(4)  The Future Fund Board must ensure that any investment manager 

20 

engaged by the Future Fund Board under subsection (1) reports to: 

21 

 

(a)  the Future Fund Board; and 

22 

 

(b)  the Agency; 

23 

on the state of the investments of the Asset Recycling Fund at such 

24 

times and in such manner as the Future Fund Board determines. 

25 

47  Custody of securities 

26 

 

  Section 40 of the Financial Management and Accountability Act 

27 

1997 does not apply to an investment of the Asset Recycling Fund. 

28 

48  Refund of franking credits 

29 

 

  If: 

30 

   

Investment of the Asset Recycling Fund  Part 3 

   

 

Section 49 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

37 

 

 

(a)  the Future Fund Board receives a refund of a tax offset under 

the Income Tax Assessment Act 1997; and 

 

(b)  the tax offset is attributable to an investment of the Asset 

Recycling Fund; 

the refund is to be credited to the Asset Recycling Fund Special 

Account. 

Note 1: 

See also section 84B of the Future Fund Act 2006

Note 2: 

For refunds of tax offsets, see Division 63 of the Income Tax 

Assessment Act 1997

49  Realisation of non-financial assets 

10 

 

(1)  If an asset held by the Future Fund Board as an investment of the 

11 

Asset Recycling Fund ceases to be a financial asset: 

12 

 

(a)  the Future Fund Board must realise the asset as soon as 

13 

practicable after the Future Fund Board becomes aware of the 

14 

cessation; and 

15 

 

(b)  this Act (other than this section) applies in relation to the 

16 

asset (including in relation to the realisation of the asset) as if 

17 

the asset had remained a financial asset, and an investment of 

18 

the Asset Recycling Fund, until the realisation. 

19 

 

(2)  If an asset acquired by the Future Fund Board, purportedly as an 

20 

investment of the Asset Recycling Fund, is not a financial asset: 

21 

 

(a)  the Future Fund Board must realise the asset as soon as 

22 

practicable after the Future Fund Board becomes aware that 

23 

the asset is not a financial asset; and 

24 

 

(b)  this Act (other than this section) applies in relation to the 

25 

asset (including in relation to the realisation of the asset) as if 

26 

the asset had been a financial asset, and an investment of the 

27 

Asset Recycling Fund, from the time of its acquisition by the 

28 

Future Fund Board until the realisation. 

29 

50  Additional function of the Future Fund Board 

30 

 

  The functions of the Future Fund Board include the function of 

31 

investing amounts in accordance with this Act. 

32 

   

Part 4  Reporting obligations etc. 

   

 

Section 51 

 

38 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

Part 4--Reporting obligations etc. 

   

51  Simplified outline of this Part 

The Finance Minister may provide reports, documents and other 

information to Ministers. 

The Future Fund Board must keep the responsible Ministers 

informed of its operations under this Act. It may also be required 

by the Finance Minister to provide reports and provide 

information. 

52  Finance Minister may require Future Fund Board to prepare 

10 

reports or give information 

11 

Reports 

12 

 

(1)  The Finance Minister may, by written notice given to the Future 

13 

Fund Board, require the Future Fund Board to: 

14 

 

(a)  prepare a report about one or more specified matters relating 

15 

to the performance of the Future Fund Board's functions 

16 

under this Act; and 

17 

 

(b)  give copies of the report to the Finance Minister within the 

18 

period specified in the notice. 

19 

Information 

20 

 

(2)  The Finance Minister may, by written notice given to the Future 

21 

Fund Board, require the Future Fund Board to: 

22 

 

(a)  prepare a document setting out specified information relating 

23 

to the performance of the Future Fund Board's functions 

24 

under this Act; and 

25 

 

(b)  give copies of the document to the Finance Minister within 

26 

the period specified in the notice. 

27 

   

Reporting obligations etc.  Part 4 

   

 

Section 53 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

39 

 

Compliance 

 

(3)  The Future Fund Board must comply with a requirement under 

subsection (1) or (2). 

Publication of reports and documents 

 

(4)  The Finance Minister may cause to be published (whether on the 

internet or otherwise): 

 

(a)  a report under subsection (1); or 

 

(b)  a document under subsection (2). 

Reports and documents 

 

(5)  A report under subsection (1) is not a legislative instrument. 

10 

 

(6)  A document under subsection (2) is not a legislative instrument. 

11 

53  Keeping the responsible Ministers informed etc. 

12 

 

(1)  The Future Fund Board must keep the responsible Ministers 

13 

informed of the operations of the Future Fund Board under this 

14 

Act. 

15 

 

(2)  The Future Fund Board must give the Finance Minister such 

16 

reports, documents and information in relation to those operations 

17 

as are appropriate. 

18 

54  Finance Minister may give reports to other Ministers etc. 

19 

 

  The Finance Minister may give a Minister any of the following: 

20 

 

(a)  a report under subsection 52(1) or 53(2); 

21 

 

(b)  a document under subsection 52(2) or 53(2); 

22 

 

(c)  any other information or document obtained by the Finance 

23 

Minister under this Act. 

24 

   

Part 5  Miscellaneous 

   

 

Section 55 

 

40 

Asset Recycling Fund Bill 2014 

No.      , 2014 

 

Part 5--Miscellaneous 

   

55  Simplified outline of this Part 

This Part deals with miscellaneous matters, such as delegations and 

rules. 

56  Delegation by the Finance Minister 

Department 

 

(1)  The Finance Minister may, by writing, delegate any or all of his or 

her powers under section 14, 18, 24 or 30 to: 

 

(a)  the Secretary of the Finance Department; or 

10 

 

(b)  an SES employee, or acting SES employee, in the Finance 

11 

Department. 

12 

Note: 

The expressions SES employee and acting SES employee are defined 

13 

in section 2B of the Acts Interpretation Act 1901

14 

 

(2)  In exercising powers under a delegation under subsection (1), the 

15 

delegate must comply with any directions of the Finance Minister. 

16 

Agency 

17 

 

(3)  The Finance Minister may, by writing, delegate any or all of his or 

18 

her powers under section 30 to: 

19 

 

(a)  the Chair; or 

20 

 

(b)  an SES employee, or acting SES employee, in the Agency. 

21 

Note: 

The expressions SES employee and acting SES employee are defined 

22 

in section 2B of the Acts Interpretation Act 1901

23 

 

(4)  In exercising powers under a delegation under subsection (3), the 

24 

delegate must comply with any directions of the Finance Minister. 

25 

   

Miscellaneous  Part 5 

   

 

Section 57 

 

No.      , 2014 

Asset Recycling Fund Bill 2014 

41 

 

57  Delegation by the Treasurer 

 

  The Treasurer may, by writing, delegate any or all of his or her 

functions under section 14 or subsection 20(2) to: 

 

(a)  the Secretary of the Treasury Department; or 

 

(b)  an SES employee, or acting SES employee, in the Treasury 

Department. 

Note: 

The expressions SES employee and acting SES employee are defined 

in section 2B of the Acts Interpretation Act 1901

58  Delegation by the Infrastructure Minister 

 

  The Infrastructure Minister may, by writing, delegate any or all of 

10 

his or her functions under subsection 26(2) to: 

11 

 

(a)  the Secretary of the Infrastructure Department; or 

12 

 

(b)  an SES employee, or acting SES employee, in the 

13 

Infrastructure Department. 

14 

Note: 

The expressions SES employee and acting SES employee are defined 

15 

in section 2B of the Acts Interpretation Act 1901

16 

59  Rules 

17 

 

  The Finance Minister may, by legislative instrument, make rules 

18 

prescribing matters: 

19 

 

(a)  required or permitted by this Act to be prescribed by the 

20 

rules; or 

21 

 

(b)  necessary or convenient to be prescribed for carrying out or 

22 

giving effect to this Act. 

23 

 


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