Commonwealth Coat of Arms of Australia

Guarantee of Lending to Small and Medium Enterprises (Coronavirus Economic Response Package) Act 2020

No. 29, 2020

An Act about loan guarantees, and for related purposes

[Assented to 24 March 2020]

The Parliament of Australia enacts:

This Act is the Guarantee of Lending to Small and Medium Enterprises (Coronavirus Economic Response Package) Act 2020.

(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Commencement information
Column 1	Column 2	Column 3
Provisions	Commencement	Date/Details
1. The whole of this Act	The day after this Act receives the Royal Assent.	25 March 2020

Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

(2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3 Simplified outline of this Act

• The Minister may, on behalf of the Commonwealth, grant a guarantee to a financial institution in connection with loans made, or to be made, by the financial institution to SME entities if granting the guarantee is likely to assist in dealing with the economic impacts of the Coronavirus known as COVID‑19.

• The Consolidated Revenue Fund is appropriated for the purposes of meeting any liabilities that the Commonwealth incurs under those guarantees.

4 Definitions

In this Act:

constitutional corporation means a corporation to which paragraph 51(xx) of the Constitution applies.

financial institution means:

(a) a body corporate that is an ADI for the purposes of the Banking Act 1959; or

(b) a non‑ADI lender (within the meaning of the Banking Act 1959).

legislative rules means rules made under section 8.

SME entity has the meaning given by the legislative rules.

5 Loan guarantees by the Commonwealth

(1) The Minister may, on behalf of the Commonwealth, grant a guarantee to a financial institution in connection with loans made, or to be made, by the financial institution to SME entities.

(2) The Minister must not grant a guarantee unless:

(a) the Minister is satisfied that granting the guarantee is likely to assist in dealing with the economic impacts of the Coronavirus known as COVID‑19; and

(b) the guarantee is in connection with loans made, or to be made, by a financial institution that is a constitutional corporation.

(3) The grant of a guarantee must be in accordance with any requirements prescribed by the legislative rules.

(4) For the purposes of the application of this section to a loan made by a financial institution, it is immaterial whether the loan was made before, at or after the commencement of this section.

6 Appropriation for the purposes of loan guarantee liabilities

(1) The Consolidated Revenue Fund is appropriated for the purposes of meeting any liabilities that the Commonwealth incurs under guarantees granted under section 5.

(2) The total amount appropriated under subsection (1) must not exceed $20 billion.

7 Delegation by the Minister

(1) The Minister may, by writing, delegate any or all of the Minister’s powers under section 5 to:

(a) the Secretary of the Department; or

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

Note: The expressions SES employee and acting SES employee are defined in section 2B of the Acts Interpretation Act 1901.

(2) In exercising powers under a delegation under subsection (1), the delegate must comply with any directions of the Minister.

8 Legislative rules

The Minister may, by legislative instrument, make rules (legislative rules) prescribing matters required or permitted by this Act to be prescribed by the legislative rules.

[Minister’s second reading speech made in—

House of Representatives on 23 March 2020

Senate on 23 March 2020]

(43/20)