Purpose and provisions of the bill
The purpose of the bill is to enable Australia to join the AfDB Group.
To become a member, Australia must make payments as required under the Agreement
Establishing the African Development Bank and the Agreement Establishing
the African Development Fund. The bill would authorise the Australian Government
to purchase membership shares in the AfDB and to make payments to meet
membership and continuing subscriptions to the ADF.
The bill comprises eight clauses. Clause 1 specifies the Act's short
title—African Development Bank Act 2013; clause 2 specifies that
the Act would commence on the day after the Act receives the Royal Assent; and
clause 3 defines key terms in the legislation.
make payments to the African Development Bank
Clause 4 of the bill authorises the minister to purchase a fixed number
of membership-related shares in the Bank. Specifically, it provides for the
minister, on behalf of Australia, to make an arrangement for Australia to
become a member of the AfDB and to subscribe to:
paid-up shares of the authorised capital stock of the Bank at a price not more
than 10,000 special drawing rights per share; and
callable shares of the authorised capital stock of the Bank at a price not more
than 10,000 special drawing rights a share.
The International Monetary Fund (IMF) created special drawing rights (SDRs)
as an international reserve asset, which can be exchanged for freely useable
The value of SDRs is based on 'a basket of four key international currencies'—euro,
Japanese yen, pound sterling and US dollar. SDRs also serve as the unit of
account of the IMF and some other international organisations.
While the bill, if enacted, would establish the legislative authority for
the purchase of the 98,528 shares to become a member of the Bank, the
Explanatory Memorandum makes clear that the minister 'may subscribe to, and pay
for, only the specified number of shares'. It notes further that 'if, in the
future, Australia wanted to subscribe to more shares, then the Act would be
amended to authorise this'.
In respect of the callable shares, the Explanatory Memorandum notes
...callable shares would only occur if the Bank could not
otherwise meet its financial obligations and so explicitly requested payment
for some or all of these shares from all Bank members.
Payment for the Bank shares, including payments connected with
securities issued for the payments of these funds, is to be drawn from
Consolidated Revenue Funds.
Authority to make payments to the
African Development Fund
To become a member of the AfDB, Australia, as a non-regional state, must
first accede to membership of the ADF.
Under clause 5, the minister, on behalf of Australia, may make an arrangement
for Australia to subscribe to the Fund in connection with the initial subscription
to become a member of, and any subsequent subscription to, the Fund.
The Explanatory Memorandum notes that payments for subscriptions to the Fund would
come from money appropriated under other legislation, such as an annual
Authority to issue securities
Clause 6 of the bill authorises the minister to issue securities by
Australia to make payments for Australia's initial subscription to shares in
the Bank and to subscriptions to the Fund.
The bill stipulates in clause 7 that the legislation would not limit the
executive power of the Commonwealth.
The legislation under clause 8 provides for the minister to make rules
by legislative instrument prescribing matters:
or permitted by the Act to be prescribed by the rules; or
or convenient to be prescribed for carrying out or giving effect to the Act.
In this regard, the Explanatory Memorandum indicates that it was not
envisaged that any such rules would 'be required to give effect to the Act'. It
At the time of writing, however, it was Office of
Parliamentary Counsel policy to ensure that all new legislation contains a
clause to cover the scenario where the Government wants to make rules to
further define certain parts of a new Act, including any amendments
subsequently made to the Act.
Statement of compatibility with
The Explanatory Memorandum states that the bill 'does not raise any
human rights issues'.
Consistent with this view, the Parliamentary Joint Committee on Human Rights
found that the bill was 'unlikely to raise human rights concerns'.
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