{"id":"C2004A03502","name":"Loan Act 1987","slug":"loan-act-1987","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"93 of 1987","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":7244,"registerId":"commonwealth-C2004A03502-current","compilationNumber":null,"startDate":"2026-03-30","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Loan Act 1987","content":"![C2004A02388.jpg](image.001.jpeg)\n\nLoan Act 1987\n\nNo. 93 of 1987\n\nAn Act to authorise the borrowing and expending of money for certain purposes\n\n\\[Assented to 28 October 1987\\]\n\nBE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:\n\nPART I—PRELIMINARY\n\nShort title\n\n1\\. This Act may be cited as the Loan Act 1987.\n\nCommencement\n\n2. This Act shall come into operation on the day on which it receives the Royal Assent.\n\nInterpretation\n\n3\\. In this Act, unless the contrary intention appears:\n\n“current financial year” means the year ending on 30 June 1988;\n\n“defence service”, in relation to a financial year, means a service specified under the heading “DEPARTMENT OF DEFENCE” in a relevant appropriation Act for the financial year;\n\n  \n\n“relevant appropriation Act”, in relation to the current financial year, means:\n\n(a) the Supply Act (No. 1) 1987-88; or\n\n(b) an Act, whether passed before or after the commencement of this Act, appropriating the Consolidated Revenue Fund for the service of that financial year, being an Act that is expressed to have effect subject to this Act.\n\nPART II—BORROWING AND EXPENDING OF MONEY FOR DEFENCE PURPOSES\n\nAuthority to borrow\n\n4. (1) The Treasurer may, from time to time during the current financial year, borrow money that, together with any money previously borrowed under this subsection during that financial year, does not exceed the sum of:\n\n(a) the total of the amounts authorised to be expended after the commencement of this Act and before the end of that financial year for defence services for that financial year; and\n\n(b) the expenses of borrowing.\n\n(2) Money may be borrowed under subsection (1) in accordance with:\n\n(a) the Commonwealth Inscribed Stock Act 1911; or\n\n(b) an Act authorising the issue of Treasury Bills\n\nand not otherwise.\n\nApplication of money borrowed under section 4\n\n5. Money borrowed under subsection 4 (1) in the current financial year may be issued and expended for:\n\n(a) defence services for that financial year; and\n\n(b) the expenses of borrowing;\n\nand not otherwise.\n\nPART III—SUPPLEMENTATION OF THE CONSOLIDATED REVENUE FUND\n\nAuthority to borrow\n\n6. (1) The Treasurer may, from time to time during the current financial year, borrow money that, together with any money previously borrowed under this subsection during that financial year, does not exceed the sum of:\n\n(a) the amount that, at the time of the borrowing, the Treasurer considers to be the greatest amount by which the money lawfully available, apart from this Part, for expenditure from the Consolidated Revenue Fund in that financial year is likely to be less than the amount of the expenditure made, and to be made, from the Consolidated Revenue Fund in that financial year; and\n\n  \n\n(b) the amount that, at that time, the Treasurer considers will be the expenses of the borrowing.\n\n(2) Money may be borrowed under subsection (1) in accordance with:\n\n(a) the Commonwealth Inscribed Stock Act 1911; or\n\n(b) an Act authorising the issue of Treasury Bills;\n\nand not otherwise.\n\nApplication of money borrowed under subsection 6 (1)\n\n7. Money borrowed under subsection 6 (1) may be issued and expended:\n\n(a) in making payments to the credit of the Consolidated Revenue Fund; and\n\n(b) for the expenses of borrowing;\n\nand not otherwise.\n\nPART IV—MISCELLANEOUS\n\nAppropriation\n\n8. The Loan Fund is appropriated to the extent necessary for the purposes of this Act.\n\nLimitation of expenditure\n\n9. (1) Nothing in this Act, or in a relevant appropriation Act for the current financial year, shall be taken to authorise the expenditure for a defence service for that financial year of an amount the expenditure of which would result in the total expenditure for that service under this Act and the relevant appropriation Acts for that financial year exceeding the total of the amounts authorised by the relevant appropriation Acts for that financial year to be expended in respect of that service.\n\n(2) Subsection (1) does not affect the expenditure of money appropriated under the heading “ADVANCE TO THE MINISTER FOR FINANCE” in a relevant appropriation Act for the current financial year.\n\n(3) Nothing in this Act shall be taken to authorise expenditure (otherwise than for the expenses of borrowing) after 30 June 1988.\n\n\\[Minister’s second reading speech made in—\n\nHouse of Representatives on 15 September 1987\n\nSenate on 24 September 1987\\]","sortOrder":0}],"analysis":{"issue_detection":{"absurdities":[],"contradictions":[]},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"Based on the Act text supplied, the scope is confined to authorising borrowing during the 1987–88 financial year for defence services and for supplementing the Consolidated Revenue Fund, with explicit temporal and purpose limits (see ss 3,4,5,6,7,9). The text contains no provision or indication that its scope departs from that stated purpose."},"complexity_factors":["Time-limited operation tied to the current financial year (defined as year ending 30 June 1988) (s 3; ss 4,6,9(3)): creates urgency and one-off accounting rules.","Treasurer discretion in forecasting the \"greatest amount\" of shortfall for Consolidated Revenue Fund supplementation (s 6(1)(a)): requires judgment and creates implementation risk.","Caps expressed as aggregates of authorised expenditure plus borrowing expenses (ss 4(1)(a), 6(1)(b)): necessitates aggregation and tracking against appropriations.","Strict-purpose constraints on use of borrowed funds (ss 5,7): funds may be applied only for defence services, CRF credits, and borrowing expenses, limiting substitution.","Procedural/technical borrowing methods limited to Commonwealth Inscribed Stock Act 1911 or authorised Treasury Bills (ss 4(2), 6(2)): narrows instruments and interacts with other statutes.","Interaction with relevant appropriation Acts and Supply Act (definition of \"relevant appropriation Act\" in s 3): cross-referencing increases legal and administrative coordination.","Appropriation of Loan Fund (s 8) and explicit expenditure ceiling preventing overspend beyond appropriations (s 9(1)): administrative compliance and recordkeeping obligations."],"plain_english_summary":"The Loan Act 1987 lets the Treasurer borrow, during the 1987–88 financial year, limited sums to meet defence appropriations and to temporarily top up the Consolidated Revenue Fund. Borrowing is allowed only under the Commonwealth Inscribed Stock Act 1911 or by authorised Treasury Bills, capped to amounts set or estimated by the Treasurer (plus borrowing costs), and borrowed money may be spent only for specified purposes and within that financial year’s appropriation limits."},"summary":{"complexity_score":3,"scope_assessment":{"changed":false,"description":"The Act appears to have operated exactly as intended — a narrow, time-limited authority to borrow money for defence services and Consolidated Revenue Fund supplementation during the 1987–88 financial year only. No amendments or scope expansions are evident in the text, and the hard expiry of 30 June 1988 was built into the original design."},"complexity_factors":["Dual borrowing mechanisms with different permitted uses require careful distinction","Cross-references to multiple other Acts (Supply Act, Commonwealth Inscribed Stock Act, Treasury Bills legislation, relevant appropriation Acts) require those documents to be read alongside this one","The limitation in section 9 requires calculating aggregate spending across multiple Acts to determine whether a spending ceiling has been breached","The definition of 'relevant appropriation Act' includes future Acts not yet passed at commencement, creating a forward-looking definitional dependency","Legislation is now expired and purely historical, which adds interpretive context needed to understand its current irrelevance"],"plain_english_summary":"This Act gave the Australian Treasurer one-year authority (1987–88) to borrow from authorised government markets to cover Defence spending and temporary shortfalls in the Consolidated Revenue Fund. Borrowing was limited to specified instruments and could only fund defence if earmarked for that purpose.\n\nIt primarily affected the federal government and Defence, with indirect implications for taxpayers; the authority expired on 30 June 1988 and is now historical."},"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"This legislation remains tightly scoped to its original purpose. It is a time-limited appropriation and borrowing authority for a single financial year (1987-88), specifically authorising deficit financing for defence services and general revenue supplementation. There is no evidence of scope creep; the Act contains no regulatory powers, no ongoing administrative mechanisms, and no provisions that extend beyond its stated purpose of authorising borrowing for the specified financial year."},"complexity_factors":["Short, focused statute with only 9 sections across 4 Parts","Limited defined terms (only 3: 'current financial year', 'defence service', 'relevant appropriation Act')","Straightforward conditional logic—borrowing limits are clearly capped by reference to other appropriation Acts","No nested exceptions or complex cross-referencing beyond references to the Commonwealth Inscribed Stock Act 1911 and Supply Act","Temporal limitation creates clear boundaries (only applies to 1987-88 financial year)","Single purpose legislation without regulatory schemes or enforcement mechanisms"],"plain_english_summary":"This law gives the Australian Government permission to borrow money for two specific purposes during the 1987-88 financial year (which ended on 30 June 1988).\n\n**What it does:**\n\n*   **Defence borrowing (Part II):** Allows the Treasurer to borrow money to pay for defence services (military spending) that had been approved in other budget laws, plus any costs associated with arranging those loans.\n*   **General budget shortfall borrowing (Part III):** Allows the Treasurer to borrow money to cover any gap between what the government expected to spend from its main bank account (the Consolidated Revenue Fund) and what was actually available, plus borrowing costs.\n\n**Who it affects:**\n\nPrimarily the Australian Government itself, specifically the Treasurer and the Department of Defence. It also affects anyone lending money to the government (since it authorises the government to issue bonds or Treasury Bills).\n\n**How borrowing works:**\n\nThe money can only be borrowed using two specific methods:\n*   Issuing Commonwealth Inscribed Stock (government bonds)\n*   Issuing Treasury Bills (short-term government debt)\n\n**Key limits:**\n\n*   The borrowing authority expires at the end of the 1987-88 financial year (30 June 1988).\n*   Defence spending under this Act cannot exceed the amounts already approved in the main budget (appropriation) laws.\n*   Borrowed money can only be used for the specified purposes—defence services, covering revenue shortfalls, or paying the costs of borrowing itself.\n\n**Why it matters:**\n\nThis is a \"supply\" law that ensures the government can access cash when tax revenue and other funds aren't sufficient to cover approved spending. It provides flexibility to manage cash flow, particularly for defence expenditure, without waiting for tax receipts to arrive."}},"importantCases":[],"_links":{"self":"/api/acts/loan-act-1987","history":"/api/acts/loan-act-1987/history","analysis":"/api/acts/loan-act-1987/analysis","conflicts":"/api/acts/loan-act-1987/conflicts","importantCases":"/api/acts/loan-act-1987/important-cases","documents":"/api/acts/loan-act-1987/documents"}}