Commonwealth Inscribed Stock Amendment Act 2013

No. 135, 2013

An Act to remove the limit on stock and securities on issue, and for other purposes

[Assented to 10 December 2013]

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Commonwealth Inscribed Stock Amendment Act 2013.

2 Commencement

This Act commences on the day this Act receives the Royal Assent.

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Amendment of the Commonwealth Inscribed Stock Act 1911

1 Section 5

Repeal the section.

2 Subsection 51JA(2)

Omit “, disregarding stock and securities of the kind mentioned in subsection 5(2),”.

3 After subsection 51JA(2)

Insert:

(2A) In working out the total face value of stock and securities for the purposes of subsection (2), disregard:

(a) stock and securities issued in relation to money borrowed under the Loan (Temporary Revenue Deficits) Act 1953; and

(b) stock and securities loaned by the Treasurer under a securities lending arrangement under section 5BA of the Loans Securities Act 1919, or held by or on behalf of the Treasurer for the purpose of such an arrangement; and

(d) stock and securities on issue as at the start of 13 July 2008, other than Treasury Fixed Coupon Bonds.

Note: The time referred to in paragraph (d) is when item 4 of Schedule 1 to the Commonwealth Securities and Investment Legislation Amendment Act 2008 commenced.

4 At the end of section 51JA

Add:

(5) For the purposes of this section:

(a) the face value of a Treasury Indexed Bond is taken to be its face value at the time it was issued; and

(b) the loan of stock or a security is taken to include an arrangement under which it is sold and repurchased.

Schedule 2—Amendment of the Charter of Budget Honesty Act 1998

1 At the end of clause 2 of Schedule 1

Add:

Additional statements about Commonwealth stock and securities

(7) In certain cases where the face value of Commonwealth stock and securities on issue has increased by $50 billion or more since a previous report or statement under the Charter of Budget Honesty, the Treasurer is to table a statement setting out reasons for the increase (see Part 9).

2 Subclause 3(1) of Schedule 1

Insert:

Commonwealth stock and securities means stock and securities on issue under the Commonwealth Inscribed Stock Act 1911 (the CIS Act) or the Loans Securities Act 1919 (disregarding stock and securities of the kind mentioned in subsection 51JA(2A) of the CIS Act).

debt statement, for a report under Part 5 or 7, means a statement that includes:

(a) the following information about Commonwealth stock and securities on issue, at the time of the report and for the financial year to which the report relates and the following 3 financial years:

(i) the value of the stock and securities (including their market and face value, and their value as a proportion of gross domestic product);

(ii) the total expected interest expenses relating to the stock and securities; and

(b) a breakdown, by maturity and timing of interest payments, of Commonwealth stock and securities on issue at the time of the report.

3 At the end of subclause 12(1) of Schedule 1

Add:

; (f) a debt statement.

4 At the end of subclause 16(1) of Schedule 1

Add:

; and (c) contain a debt statement.

5 At the end of subclause 24(1) of Schedule 1

Add:

; (e) a debt statement.

6 At the end of paragraph 26(a) of Schedule 1

Add:

(v) the information required by paragraph 24(1)(e); and

7 At the end of Schedule 1

Add:

Part 9—Additional statements about Commonwealth stock and securities

33 Additional statements about Commonwealth stock and securities

(1) This clause applies when the actual face value of Commonwealth stock and securities on issue has increased by $50 billion or more since whichever of the following last occurred:

(a) a budget economic and fiscal outlook report, a mid‑year economic and fiscal outlook report or a pre‑election economic and fiscal outlook report was publicly released;

(b) a statement under this clause was tabled.

(2) The Treasurer is to table in each House of the Parliament, within 3 sittings days of that House after the increase referred to in subclause (1), a statement setting out the reasons for the increase, including the extent to which any of the following contributed to the increase:

(a) lower than expected revenue;

(b) higher than expected spending;

(d) grants to State and Territory governments for infrastructure.

8 Application—statements under clause 33 of the Charter of Budget Honesty

Clause 33 of Schedule 1 to the Charter of Budget Honesty Act 1998 applies in relation to a report referred to in paragraph (1)(a) of that clause that is publicly released on or after the commencement of this item.

[Minister’s second reading speech made in—

House of Representatives on 13 November 2013

Senate on 14 November 2013]

(202/13)