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This is a Bill, not an Act. For current law, see the Acts databases.
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
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Simplified outline of this Act ............................................................. 2
4
Definitions ......................................................................................... 2
5
Crown to be bound ............................................................................. 6
6
Extension to external Territories ........................................................ 7
7
Extra-territorial application ................................................................ 7
8
Alternative constitutional basis .......................................................... 7
9
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
1
Fund, and for related purposes
2
The Parliament of Australia enacts:
3
Part 1--Preliminary
4
5
1 Short title
6
This Act may be cited as the Asset Recycling Fund Act 2014.
7
2 Commencement
8
This Act commences on 1 July 2014.
9
Part 1 Preliminary
Section 3
2
Asset Recycling Fund Bill 2014
No. , 2014
3 Simplified outline of this Act
1
This Act sets up the Asset Recycling Fund, which consists of:
2
(a)
the Asset Recycling Fund Special Account; and
3
(b)
the investments of the Asset Recycling Fund.
4
The main purposes of the Asset Recycling Fund Special Account
5
are:
6
(a)
to transfer amounts to the COAG Reform Fund in order
7
to make grants of financial assistance to the States and
8
Territories for expenditure incurred under the National
9
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.
1
Agency means the Future Fund Management Agency.
2
Appropriation Act means an Act appropriating money for
3
expenditure out of the Consolidated Revenue Fund.
4
asset means:
5
(a) any kind of real or personal property; or
6
(b) any legal or equitable estate or interest in real or personal
7
property; or
8
(c) any legal or equitable right.
9
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
1
established by section 12 of the Nation-building Funds Act 2008.
2
Building Australia Fund Special Account means the Building
3
Australia Fund Special Account established by section 13 of the
4
Nation-building Funds Act 2008.
5
business entity means:
6
(a) a company; or
7
(b) a partnership; or
8
(c) a trust; or
9
(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
1
the Infrastructure Minister.
2
Infrastructure Minister means the Minister who administers the
3
Infrastructure Australia Act 2008.
4
infrastructure national partnership grant means a grant of
5
financial assistance to a State or Territory to:
6
(a) support the delivery by the State or Territory of specified
7
infrastructure outputs or infrastructure projects; or
8
(b) facilitate reforms relating to infrastructure by the State or
9
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
1
that, under a provision of this Act, is taken to be an investment of
2
the Asset Recycling Fund.
3
National Partnership Agreement on Asset Recycling means the
4
National Partnership Agreement on Asset Recycling agreed to by
5
the Council of Australian Governments on 2 May 2014, as
6
amended from time to time.
7
National Partnership Agreement on Land Transport
8
Infrastructure Projects means the National Partnership Agreement
9
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
1
offence.
2
6 Extension to external Territories
3
This Act extends to every external Territory.
4
7 Extra-territorial application
5
This Act extends to acts, omissions, matters and things outside
6
Australia.
7
8 Alternative constitutional basis
8
(1) Without limiting its effect apart from this section, this Act also has
9
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
1
infrastructure that would enable or assist a corporation to which
2
paragraph 51(xx) of the Constitution applies to carry on its
3
business.
4
(5) This Act also has the effect it would have if its operation in relation
5
to the making of infrastructure payments were expressly confined
6
to an operation limited to the making of infrastructure payments:
7
(a) in relation to a Territory government; or
8
(b) in relation to infrastructure outputs, projects or reforms in a
9
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
1
Commonwealth as the national Government of Australia under the
2
executive powers of the Commonwealth.
3
9 Object
4
The object of this Act is to enhance the Commonwealth's ability:
5
(a) to transfer amounts to the COAG Reform Fund in order to
6
make grants of financial assistance to the States and
7
Territories for expenditure incurred under the National
8
Partnership Agreement on Asset Recycling; and
9
(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
1
Division 1--Introduction
2
10 Simplified outline of this Part
3
This Part sets up the Asset Recycling Fund, consisting of:
4
(a)
the Asset Recycling Fund Special Account; and
5
(b)
the investments of the Asset Recycling Fund.
6
The responsible Ministers may determine that amounts are to be
7
credited to the Asset Recycling Fund Special Account.
8
Amounts may be debited from the Asset Recycling Fund Special
9
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.
1
11 Establishment of the Asset Recycling Fund
2
(1) The Asset Recycling Fund is established by this section.
3
(2) The Fund consists of:
4
(a) the Asset Recycling Fund Special Account; and
5
(b) the investments of the Asset Recycling Fund.
6
12 Establishment of the Asset Recycling Fund Special Account
7
(1) The Asset Recycling Fund Special Account is established by this
8
section.
9
(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
1
Fund
2
13 Initial credits to Special Account
3
Building Australia Fund amount
4
(1) On the commencement of this section:
5
(a) there is to be credited to the Asset Recycling Fund Special
6
Account an amount equal to the lesser of:
7
(i) $2.4 billion; or
8
(ii) the balance of the Building Australia Fund Special
9
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
1
Fund Special Account on a specified day; or
2
(b) a specified amount is to be credited to the Asset Recycling
3
Fund Special Account in specified instalments on specified
4
days.
5
Note:
For variation and revocation, see subsection 33(3) of the Acts
6
Interpretation Act 1901.
7
(2) In making a determination under subsection (1), the responsible
8
Ministers must have regard to the object of this Act.
9
(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
1
Fund, etc.
2
Subdivision A--Purposes
3
15 Purposes of the Asset Recycling Fund Special Account--main
4
purposes
5
Each of the following is a purpose of the Asset Recycling Fund
6
Special Account:
7
(a) to transfer amounts to the COAG Reform Fund in order to
8
make grants of financial assistance to the States and
9
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
1
obligations incurred by the Future Fund Board under a
2
contract between the Future Fund Board and an investment
3
manager engaged under subsection 46(1);
4
(e) paying or discharging the costs, expenses and other
5
obligations incurred in connection with the establishment,
6
maintenance or operation of a bank account of the Future
7
Fund Board, if the bank account relates exclusively to the
8
Asset Recycling Fund;
9
(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
1
2008; or
2
(vii) paragraph 16(1)(a) of the DisabilityCare Australia Fund
3
Act 2013;
4
(b) paying a premium in respect of a contract of insurance
5
entered into by the Future Fund Board, if the premium is not
6
covered by:
7
(i) paragraph 16(f); or
8
(ii) paragraph 2(1)(h) of Schedule 2 to the Future Fund Act
9
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
1
members;
2
(e) paying remuneration, and other employment-related costs
3
and expenses, in respect of members of the staff of the
4
Agency;
5
(f) paying or discharging the costs, expenses and other
6
obligations incurred by the Commonwealth under a contract
7
entered into under section 78 or 82 of the Future Fund Act
8
2006;
9
(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
1
same document.
2
(4) A direction under subsection (1) is not a legislative instrument.
3
(5) The Finance Minister must give a copy of a direction under
4
subsection (1) to the Minister who recommended the specification
5
of the grant (see section 19).
6
19 Recommendations about grants payments
7
(1) A grant must not be specified under subparagraph 18(2)(a)(i)
8
unless the Treasurer has recommended the specification of the
9
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
1
made, an amount equal to the credited amount is to be:
2
(a) debited from the COAG Reform Fund; and
3
(b) credited to the Asset Recycling Fund Special Account.
4
21 Grant to a State or Territory
5
Scope
6
(1) This section applies if:
7
(a) an amount is to be debited from the COAG Reform Fund for
8
the purpose of:
9
(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
1
Special Account for the purposes of the Financial Management
2
and Accountability Act 1997.
3
Note:
An Appropriation Act may contain a provision to the effect that, if any
4
of the purposes of a Special Account is a purpose that is covered by an
5
item in the Appropriation Act (whether or not the item expressly refers
6
to the Special Account), then amounts may be debited against the
7
appropriation for that item and credited to that Special Account.
8
23 Purpose of the Asset Recycling Fund Infrastructure Special
9
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.
1
(5) The Finance Minister must give a copy of a direction under
2
subsection (1) to the Infrastructure Minister.
3
25 Recommendations about payments
4
A payment must not be specified under subsection 24(1) unless the
5
Infrastructure Minister has recommended the specification of the
6
payment.
7
26 Payments--debit from the Asset Recycling Fund Infrastructure
8
Special Account
9
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
1
Scope
2
(1) This section applies if:
3
(a) an amount is to be debited from the Asset Recycling Fund
4
Infrastructure Special Account for the purpose of enabling
5
the making of infrastructure payments; and
6
(b) the payment is by way of a grant of financial assistance.
7
Terms and conditions
8
(2) The terms and conditions on which that financial assistance is
9
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
1
29 Future Fund Board must ensure that there is sufficient money in
2
the Asset Recycling Fund Special Account to cover
3
authorised debits etc.
4
The Future Fund Board must take all reasonable steps to ensure
5
that the amount of money standing to the credit of the Asset
6
Recycling Fund Special Account is sufficient to cover the debit of
7
amounts authorised, or proposed to be authorised, under this Part.
8
Note:
This may require the Future Fund Board to realise an investment of
9
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
1
30 Transfers from the Asset Recycling Fund to the Future Fund
2
(1) If an amount is debited from the Future Fund Special Account for a
3
purpose mentioned in subclause 2(2) of Schedule 2 to the Future
4
Fund Act 2006, the Finance Minister may, by writing, direct that a
5
specified amount is to be:
6
(a) debited from the Asset Recycling Fund Special Account; and
7
(b) credited to the Future Fund Special Account;
8
on a specified day.
9
(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
1
2
31 Simplified outline of this Part
3
The Future Fund Board is responsible for deciding how to invest
4
the Asset Recycling Fund.
5
Investments of the Asset Recycling Fund will consist of financial
6
assets.
7
Investments of the Asset Recycling Fund will be held in the name
8
of the Future Fund Board.
9
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
1
of a financial asset as an investment of the Asset Recycling Fund
2
are to enhance the ability of the Commonwealth and the Future
3
Fund Board to:
4
(a) discharge costs, expenses, obligations and liabilities; and
5
(b) make payments;
6
as mentioned in paragraphs 16(a) to (g) and 17(a) to (g).
7
33 Investment of the Asset Recycling Fund
8
(1) The Future Fund Board may invest amounts standing to the credit
9
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
1
equal $2.4 billion; and
2
(b) immediately after the determination under
3
subparagraph (a)(ii) is made, the relevant financial assets are
4
taken to cease to be investments of the Building Australia
5
Fund and to become investments of the Asset Recycling
6
Fund.
7
(3) A determination made under subparagraph (2)(a)(ii) is not a
8
legislative instrument.
9
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
(1) Income derived from an investment of the Asset Recycling Fund is
2
to be credited to the Asset Recycling Fund Special Account.
3
(2) A return of capital, or any other financial distribution, relating to
4
an investment of the Asset Recycling Fund is to be credited to the
5
Asset Recycling Fund Special Account.
6
(3) The Future Fund Board may realise an investment of the Asset
7
Recycling Fund.
8
(4) Upon realisation of an investment of the Asset Recycling Fund, the
9
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
1
this Act; and
2
(c) such other matters as the responsible Ministers consider
3
relevant.
4
(4) Directions under subsection (1) are to be known collectively as the
5
Asset Recycling Fund Investment Mandate.
6
(5) A direction under subsection (1) may set out the policies to be
7
pursued by the Future Fund Board in relation to:
8
(a) matters of risk and return; and
9
(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
1
this Act.
2
Note:
Asset Recycling Fund investment function is defined in section 4.
3
(13) Subsection (12) has effect subject to:
4
(a) this Act; and
5
(b) a direction under subsection (1).
6
37 Limitation on Asset Recycling Fund Investment Mandate
7
(1) The responsible Ministers must not give a direction under
8
subsection 36(1) that has the purpose, or has or is likely to have the
9
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
1
direction under subsection 36(1); and
2
(b) the Future Fund Board made a submission to the responsible
3
Ministers on a draft of the direction within the time limit
4
specified by the responsible Ministers;
5
the submission is to be tabled in each House of the Parliament with
6
the direction.
7
Note:
For tabling of the direction, see section 38 of the Legislative
8
Instruments Act 2003.
9
(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
1
subsection (3).
2
(5) A failure to comply with:
3
(a) the Asset Recycling Fund Investment Mandate; or
4
(b) a direction under subsection (3);
5
does not affect the validity of any transaction.
6
(6) A direction under subsection (3) is not a legislative instrument.
7
40 Future Fund Board must not trigger the takeover provisions of
8
the Corporations Act 2001
9
(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
1
borrowed by the Future Fund Board would not exceed 10%
2
of the balance of the Asset Recycling Fund.
3
(3) The Future Fund Board is authorised to borrow money for a
4
purpose in connection with the Asset Recycling Fund if the
5
borrowing takes place in such circumstances (if any) as are
6
specified in the rules.
7
42 Asset Recycling Fund investment policies
8
(1) The Future Fund Board must formulate written policies to be
9
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
1
(5) The Future Fund Board must conduct periodic reviews of policies
2
formulated under subsection (1).
3
(6) If there is a change in the Asset Recycling Fund Investment
4
Mandate, the Future Fund Board must review any relevant policies
5
formulated under subsection (1).
6
Compliance with policies
7
(7) The Future Fund Board must take all reasonable steps to comply
8
with policies formulated under subsection (1).
9
(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
1
must be consistent with the investment strategy embodied in a
2
policy formulated by the Future Fund Board under
3
subsection 42(1).
4
(3) A derivative acquired under subsection (1) of this section is to be
5
held in the name of the Future Fund Board.
6
(4) A derivative acquired under subsection (1) of this section is taken
7
to be an investment of the Asset Recycling Fund.
8
44 Additional financial assets
9
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
(1) The Future Fund Board may engage one or more investment
2
managers for purposes in connection with the Asset Recycling
3
Fund.
4
(2) The Future Fund Board must not:
5
(a) invest amounts under subsection 33(1); or
6
(b) acquire derivatives under subsection 43(1); or
7
(c) enter into a securities lending arrangement under
8
subsection 45(1); or
9
(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
1
the Income Tax Assessment Act 1997; and
2
(b) the tax offset is attributable to an investment of the Asset
3
Recycling Fund;
4
the refund is to be credited to the Asset Recycling Fund Special
5
Account.
6
Note 1:
See also section 84B of the Future Fund Act 2006.
7
Note 2:
For refunds of tax offsets, see Division 63 of the Income Tax
8
Assessment Act 1997.
9
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.
1
2
51 Simplified outline of this Part
3
The Finance Minister may provide reports, documents and other
4
information to Ministers.
5
The Future Fund Board must keep the responsible Ministers
6
informed of its operations under this Act. It may also be required
7
by the Finance Minister to provide reports and provide
8
information.
9
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
1
(3) The Future Fund Board must comply with a requirement under
2
subsection (1) or (2).
3
Publication of reports and documents
4
(4) The Finance Minister may cause to be published (whether on the
5
internet or otherwise):
6
(a) a report under subsection (1); or
7
(b) a document under subsection (2).
8
Reports and documents
9
(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
1
2
55 Simplified outline of this Part
3
This Part deals with miscellaneous matters, such as delegations and
4
rules.
5
56 Delegation by the Finance Minister
6
Department
7
(1) The Finance Minister may, by writing, delegate any or all of his or
8
her powers under section 14, 18, 24 or 30 to:
9
(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
1
The Treasurer may, by writing, delegate any or all of his or her
2
functions under section 14 or subsection 20(2) to:
3
(a) the Secretary of the Treasury Department; or
4
(b) an SES employee, or acting SES employee, in the Treasury
5
Department.
6
Note:
The expressions SES employee and acting SES employee are defined
7
in section 2B of the Acts Interpretation Act 1901.
8
58 Delegation by the Infrastructure Minister
9
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