Bills Digest no. 68 2008–09
Nation-building Funds (Consequential Amendments) Bill 2008
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
Financial implications
Main provisions
Contact officer & copyright details
Passage history
Date introduced:
13 November 2008
House: House of Representatives
Portfolio: Finance and Deregulation
Commencement:
Sections 1 to 3, and
anything not covered elsewhere in the table in clause 2: on Royal
Assent. Schedules 1 to 3 commence at the same time as section 3 of
the proposed Nation-building Funds Act 2008.[1]
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
To support the
establishment of three nation-building Funds the Building Australia
Fund, the Education Investment Fund and the Health and Hospitals
Fund through the Nation-building Funds Bill 2008.
In the 2008-09 Budget, the Rudd Government
announced that it would establish three funds the Building
Australia Fund, the Education Investment Fund and the Health and
Hospitals Fund. The purpose of the Funds is to finance investment
in infrastructure. The Future Fund Board of Guardians will be
responsible for investing in all three Funds (as well as the Future
Fund).
The government wants to accelerate infrastructure investment to
counter the current slowdown in the economy. The Minister for
Finance and Deregulation, the Hon. Lindsay Tanner, in his second
reading speech stated:
This consequential amendments Bill will allow
for interim arrangements to begin as soon as possible to implement
the Government s Nation-building Funds. This will fast track the
nation-building agenda in response to the global financial
crisis.[2]
The Nation-building Funds (Consequential Amendments) Bill 2008
the Bill seeks to establish provisions which would allow the
government to fast track expenditure from the three Funds.
The Building Australia Fund will be partly funded from the
Communications Fund. The Education Investment Fund will be partly
funded from the Higher
Education Endowment Fund (HEEF). The
Higher Education Endowment Fund Act 2007 established
the HEEF. The Health and Hospitals Fund will receive an initial
allocation of $10 billion from the 2007-08 and 2008-09 Budget
surpluses.[3]
For additional background, see the Bills Digest for the related
Nation-building Funds Bill 2008.
On 23 October 2008, the Senate referred the COAG Reform Fund
Bill 2008 to the Standing Committee on Economics for inquiry and
report by 10 November 2008. The reporting date was subsequently
extended to 1 December 2008 to allow for concurrent reporting with
the Nation-Building Funds Bill 2008 and the Nation-Building Funds
(Consequential Amendments) Bill 2008, which were introduced in the
House of Representatives on 13 November 2008. Details of the
inquiry are at
http://www.aph.gov.au/Senate/committee/economics_ctte/coag_08/index.htm
The financial implications are discussed in the Bills Digest for
the Nation-building Funds Bill 2008.
The Bill has three Schedules.
Item 1 repeals the Higher Education
Endowment Fund Act 2007.
Schedule 2 amends the
Future Fund Act 2006. The provisions in Schedule 2 are
mainly technical amendments consequent to the proposed
establishment of the three Funds and the transfer of the amounts in
the Communications Fund and the Higher Education Endowment Fund to
the Building Australia Fund and the Education Investment Fund
respectively.
Item 31 amends
section 65, which deals with circumstances under which it is
reasonable for a Future Fund Board member to rely on information.
According to the Explanatory Memorandum:
The words proposed to be substituted would
include circumstances when a Future Fund Board member makes an
independent assessment in good faith and will make the wording
consistent with the corresponding provisions of the Corporations
Act. This amendment also reflects amendments recently made to the
Commonwealth Authorities and Companies
Act 1997.[4]
Item 44 inserts new Schedule 2A
Inter-fund transfers.
The four Funds the Building Australia Fund, the Education
Investment Fund, the Health and Hospitals Fund and the Future Fund
will incur common costs. The scheme allows for the apportioning of
common costs across the Funds. Where one Fund has incurred common
costs, the scheme allows for the other Funds to reimburse that Fund
by inter-fund transfers. The Bill envisages the Future Fund
reimbursing the three other Funds. Schedule 2A contains the
provisions to allow this to happen. Items 2, 3 and
4 allow transfers from the Future Fund to the
Building Australia Fund, the Education Investment Fund, and the
Health and Hospitals Fund respectively.
As noted, the balance in the HEEF is to be transferred to the
Education Investment Fund. Items 1 to
8 contain transitional provisions related to the
HEEF, which the Explanatory Memorandum explains adequately.
Items 9 to 16 contain
transitional provisions intended to support the government s fast
tracking of infrastructure spending. These provisions anticipate
the passing of the Nation building Funds Bill 2008. The provisions
propose recognising interim evaluation criteria. The advisory
bodies Infrastructure Australia, the Interim Education Investment
Advisory Board, and the Interim Health and Hospitals Advisory Board
will use these criteria to advise the relevant minister whether a
proposed project satisfies the criteria. Because the education and
health advisory bodies will not be established until the Nation
building Funds Bill 2008 has passed, the Bill establishes the
interim education and health advisory bodies (Interim Education
Investment Advisory Board and the Interim Health and Hospitals
Advisory Board). The Interim Boards are to be established by the
executive power of the Commonwealth. Once the Nation building Funds
Bill 2008 has passed, any advice that Infrastructure Australia and
the interim education and health advisory bodies have given to
ministers will be deemed to meet the requirements of the Nation
building Funds Act 2008.
Item 9 Transitional advice given by
Infrastructure Australia to the Infrastructure Minister
relates to the Building Australia Fund.
Item 9(1) deals with the scope of item
9 and provides that item 9 applies if,
before the item 9 commences, criteria known as the
interim BAF evaluation criteria were published on a Commonwealth
website paragraph 9(1)(a) and after the
publication, but before item 9 commences, Infrastructure Australia
advised the Infrastructure Minister that a payment satisfies the
relevant interim BAF evaluation criteria paragraph
9(1)(b).
Item 9(2) deals with advice from Infrastructure
Australia. It provides that the Nation‑building Funds Act
2008 has effect as if: immediately after the commencement of
item 9, Infrastructure Australia had advised the
Infrastructure Minister, under section 116 of that Act, that
the payment satisfies the relevant BAF evaluation criteria
paragraph 9(2)(a) and any requirements imposed by
that Act in relation to that advice had been complied with
paragraph 9(2)(b).
Provisions for communications, energy etc identical to those in
item 9 are contained in items 10
to 12.
Item 13 Transitional advice given by
the Interim EIF Advisory Board to the Education Minister
contains provisions identical to those in item 9
but also establishes the Interim Education Investment Fund Advisory
Board subparagraph 13(1)(a)(i).
Richard Webb
28 November 2008
Bills Digest Service
Parliamentary Library
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