Bills Digest no. 30 2006–07
Housing Loans Insurance Corporation (Transfer of Assets
and Abolition) Repeal Bill 2006
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Passage History
Housing Loans Insurance Corporation
(Transfer of Assets and Abolition) Repeal Bill
2006
Date introduced: 13 September 2006
House: House of
Representatives
Portfolio: Treasury
Commencement: This Bill only comes into effect if the transfer
of the pre-transfer contracts occurs. In that event, this Bill will
commence on the latter of two dates either the day after Royal
Assent or the transfer vesting day when declared.
To repeal the Housing Loans Insurance Corporation (Transfer
of Assets and Abolition) Act 1996 as much of the Act is now
redundant. Operative provisions in the repealed Act are included in
the accompanying Housing Loans Insurance Corporation (Transfer of
Pre-transfer Contracts) Bill 2006.
Background to this legislation is included in the Bills Digest
for the Housing Loans Insurance Corporation (Transfer of
Pre-transfer Contracts) Bill 2006 (the Transfer Bill).
The Housing Loans Insurance Corporation (Transfer of Assets and
Abolition) Repeal Bill 2006 (the Repeal Bill) repeals the
Commonwealth s rights and obligations as owner of the pre-transfer
contracts. It also repeals the Commonwealth s guarantee to meet
payments arising under the contracts. The repeal of the current law
in its entirety occurs on the same day as the Commonwealth vests
its ownership of the remaining mortgage insurance contracts (the
pre-transfer contracts) in a person in accordance with the Transfer
Bill. The Bill further provides that a person can seek compensation
from the Commonwealth if the repeal of the Commonwealth guarantee
under the current law has the effect of involving an acquisition of
property other than on just terms.
Item 1 of Schedule 1 repeals
the Housing Loans Insurance Corporation (Transfer of Assets and
Abolition) Act 1996. According to the Explanatory Memorandum,
the repeal has no adverse effect on lenders holding an insurance
contract that is still in force to which the HLIC was a party prior
to its restructure and abolition in 1997.(1) In the
event that these pre-transfer contracts are able to be vested in an
acquirer, all obligations under the pre-transfer contracts will be
met by the acquirer in whom the contracts are vested. In the event
that vesting does not occur, the Repeal Bill does not commence.
Ownership of the pre-transfer contracts will continue to be vested
in the Commonwealth. All obligations arising under the contracts
will continue to be paid by the Commonwealth.
Schedule 2 provides that compensation may be
sought from the Commonwealth. Under the current law, the
Commonwealth guarantees the payment of all money arising under the
pre-transfer contracts. Item 1 of Schedule
2 provides that, if the repeal of the Commonwealth
guarantee results in an acquisition of property from a person other
than on just terms, then the Commonwealth will pay compensation to
the person. If the person and the Commonwealth do not agree on the
amount of the compensation, item 2 of
Schedule 2 provides that the person may take the
Commonwealth to court. Any amount that is payable in compensation
is to be paid out of the Consolidated Revenue Fund (item
3 of Schedule 2). Accountability to
Parliament for making such a payment would be met through the
Treasury Portfolio Budget Statements and the Treasury Annual
Report.
Endnotes
- Explanatory Memorandum, Housing Loans Insurance
Corporation (Transfer of Assets and Abolition) Repeal Bill 2006, p.
14.
Rosemary Bell
10 October 2006
Bills Digest Service
Parliamentary Library
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ISSN 1328-8091
© Commonwealth of Australia 2006
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Published by the Parliamentary Library, 2006.
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