{"id":"C1925A00002","name":"Loan Act (No. 1) 1925","slug":"loan-act-no-1-1925","collection":"act","jurisdiction":"commonwealth","status":"repealed","isInForce":false,"actNumber":"2 of 1925","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":3121,"registerId":"commonwealth-C1925A00002-current","compilationNumber":null,"startDate":"2026-03-30","status":"Repealed","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Loan Act (No. 1) 1925","content":"LOAN (No. 1).\n\nNo. 2 of 1925.\n\nAn Act to authorize the Raising and Expending of certain Sums of Money.\n\n\\[Assented to 29th June, 1925.\\]\n\nBE it enacted by the King’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—\n\nShort title.\n\n1. This Act may be cited as the Loan Act (No. 1) 1925.\n\nAuthority to borrow £2,150,000.\n\n2. The Treasurer may from time to time under the provisions of the Commonwealth Inscribed Stock Act 1911–1918, or under the provisions of any Act authorizing the issue of Treasury Bills, borrow moneys not exceeding in the whole the amount of Two million one hundred and fifty thousand pounds.\n\nPurpose for which money may be borrowed.\n\n3. The amount borrowed shall be issued and applied only for the expenses of borrowing and for the purposes of appropriations made or to be made by law.\n\nIssue and application of £2,086,000.\n\n4. There may be issued and applied out of the proceeds of any Loan raised under the authority of any Loan Act, including the present Act, the sum of Two million and eighty-six thousand pounds for the purposes set forth in the Schedule to this Act.\n\nSCHEDULE.\n\n—\n\n| UNDER THE CONTROL OF THE HOME AND TERRITORIES DEPARTMENT, THE DEPARTMENT OF WORKS AND RAILWAYS, AND THE HEALTH DEPARTMENT.                           | £      |\n| ---------------------------------------------------------------------------------------------------------------------------------------------------- | ------ |\n| Works, Services, and Acquisition of Land in Federal Capital Territory (All receipts from the Federal Capital Territory to be credited to this vote.) | 86,000 |\n\nUNDER THE CONTROL OF THE POSTMASTER-GENERAL’S DEPARTMENT.\n\n| Construction and extension of telegraphs and telephones, also construction of conduits and laying wires underground | 2,000,000  |\n| ------------------------------------------------------------------------------------------------------------------- | ---------- |\n| Total.........                                                                                                      | £2,086,000 |","sortOrder":0}],"analysis":{"summary":{"complexity_score":2,"scope_assessment":{"changed":false,"description":"This Act is entirely consistent with its original intent. It is a single-purpose, time-limited borrowing authorisation — a common legislative instrument of the era. It does exactly what its title says: authorises the raising and spending of a specific sum of money on two pre-identified infrastructure projects. There is no evidence of scope creep, amendment, or expansion beyond the original borrowing purpose."},"complexity_factors":["Very short Act — only 4 operative sections plus a Schedule","Minimal defined terms — no interpretation section at all","Simple cross-references to only two other Acts (Commonwealth Inscribed Stock Act 1911–1918 and any Treasury Bills Act), with no complex interaction between them","Straightforward conditional logic: borrowed money must be applied to lawful appropriations only","Schedule is a simple two-line table with no conditional allocations or sub-categories","No exceptions, penalties, or enforcement mechanisms"],"plain_english_summary":"## Loan Act (No. 1) 1925 — Plain English Summary\n\nThis is a **Commonwealth borrowing authorisation law** from 1925. In plain terms, it gives the Federal Treasurer the legal green light to borrow money on behalf of Australia and spend it on two specific government projects.\n\n### What does it actually do?\n\n- **Authorises borrowing** of up to **£2,150,000** (roughly two million one hundred and fifty thousand pounds) — a very large sum for 1925.\n- The money must be raised either through **Commonwealth Inscribed Stock** (a type of government bond — essentially IOUs sold to investors that pay interest and are repaid later) or through **Treasury Bills** (short-term government borrowing instruments).\n- The money can only be spent on the **costs of borrowing itself** (fees, administration, etc.) and on purposes **approved by law** — so the Treasurer can't just spend it however they like.\n\n### Who gets the money?\n\nThe Act sets aside **£2,086,000** for two specific purposes listed in a Schedule:\n\n- 🏗️ **£86,000** — Works, services, and land acquisition in the **Federal Capital Territory** (what is now the ACT — Canberra was still being built at this time), overseen by the Home and Territories Department, the Department of Works and Railways, and the Health Department. Any money collected (receipts) from the Federal Capital Territory had to be credited back against this amount.\n- 📞 **£2,000,000** — Construction and extension of **telegraphs and telephones**, including laying wires underground and building conduits (protective tunnels/pipes for cables), overseen by the **Postmaster-General's Department** (which ran Australia's communications network at the time).\n\n### Why does it matter?\n\nThis Act is a snapshot of **how Australia funded its infrastructure in the 1920s** — through sovereign borrowing (government debt). It reflects two major national priorities of the era: **building the new national capital** and **expanding the country's telecommunications network**. The strict rules about how borrowed money can be used reflect an early commitment to fiscal accountability (making sure public debt is spent only where Parliament has approved)."},"issue_detection":{"absurdities":[{"type":"other","section":"Section 4 and Schedule","severity":"medium","reasoning":"The asymmetry between the borrowing authority (Section 2, capped at £2,150,000 under this Act) and the spending authority (Section 4, drawing from proceeds of 'any Loan Act') severs the logical link between the two core provisions of the Act. A Loan Act would ordinarily authorise borrowing and then direct those proceeds to specific purposes. Here, the spending authority floats free of the borrowing authority, creating an internal structural incoherence. The Act could theoretically authorise £2,086,000 in spending while the current Act's borrowing is used for entirely different purposes under Section 3.","confidence":0.75,"description":"Section 4 authorises £2,086,000 to be issued from 'any Loan Act, including the present Act', but Section 2 only authorises borrowing up to £2,150,000 under the present Act. Section 4 draws on a pool of funds from any Loan Act — meaning the £2,086,000 authorised for spending in the Schedule need not come from the £2,150,000 authorised to be borrowed under this very Act. The present Act is therefore simultaneously a borrowing instrument and a spending instrument drawing on a broader, undefined pool of loan proceeds, making it impossible to trace with precision whether the spending authorised by Section 4 is funded by the borrowing authorised by Section 2 of this Act or some other Act entirely."},{"type":"impossible_compliance","section":"Section 3","severity":"medium","reasoning":"Requiring that funds be applied only for appropriations 'to be made by law' presupposes a future legislative act that may or may not occur, and may occur in a form different from what was anticipated. An officer spending the money cannot confirm at the time of expenditure that the required future appropriation will be made. Spending in anticipation of a future appropriation is a well-known source of accountability risk, and conditioning compliance on a future contingent event makes the obligation practically unverifiable at the moment it must be satisfied.","confidence":0.72,"description":"Section 3 provides that borrowed money 'shall be issued and applied only for the expenses of borrowing and for the purposes of appropriations made or to be made by law.' The phrase 'appropriations to be made by law' means the money can be applied to appropriations that do not yet exist at the time of borrowing. This creates an impossible compliance situation: the borrower cannot know at the time of drawing down funds whether the future appropriation will materialise, meaning there is no practical way to verify compliance with the condition at the point the money is spent."},{"type":"other","section":"Section 4 and Schedule","severity":"low","reasoning":"While it is common for Loan Acts to build in a buffer for borrowing expenses, the complete absence of any limit or reporting requirement on the £64,000 residual — in an Act that is otherwise very specific about amounts — is a minor structural gap. It is an amusing quirk rather than a fatal flaw, but it does mean the Act provides less accountability for the residual than for the scheduled items.","confidence":0.65,"description":"The Schedule total of £2,086,000 is presented as the sum of £86,000 and £2,000,000, which does arithmetically equal £2,086,000. However, Section 4 authorises 'the sum of Two million and eighty-six thousand pounds' to be issued from 'the proceeds of any Loan raised under the authority of any Loan Act, including the present Act.' Section 2 authorises borrowing of £2,150,000. The gap of £64,000 between the borrowing ceiling (£2,150,000) and the scheduled expenditure (£2,086,000) is unaccounted for. Section 3 says the remainder must go to 'expenses of borrowing', but no cap or estimate is placed on those expenses, meaning up to £64,000 could be consumed in borrowing costs with no further accountability mechanism."}],"contradictions":[{"severity":"medium","section_a":"Section 2","section_b":"Section 4","confidence":0.78,"description":"Section 2 authorises the Treasurer to borrow up to £2,150,000 under this Act. Section 4 authorises expenditure of £2,086,000 from the proceeds of 'any Loan Act, including the present Act.' These two provisions pull in different directions: Section 2 establishes a borrowing ceiling specific to this Act, while Section 4 draws on a pooled, cross-Act source of funds. This means the spending authorised by Section 4 is not necessarily funded by — or limited to — the borrowing authorised by Section 2, undermining the internal coherence of the Act as a matched borrowing-and-spending instrument."},{"severity":"medium","section_a":"Section 3","section_b":"Section 4","confidence":0.7,"description":"Section 3 confines the application of borrowed money to 'the expenses of borrowing and for the purposes of appropriations made or to be made by law', implying borrowed funds should be channelled through the appropriations framework. Section 4, however, directly authorises expenditure of £2,086,000 for the specific purposes listed in the Schedule without expressly tying that expenditure to an appropriation. This creates tension as to whether Section 4 is itself the appropriation (making Section 3's reference to future appropriations redundant for these purposes) or whether a separate appropriation is still required on top of Section 4's authority."}]}},"importantCases":[],"_links":{"self":"/api/acts/loan-act-no-1-1925","history":"/api/acts/loan-act-no-1-1925/history","analysis":"/api/acts/loan-act-no-1-1925/analysis","conflicts":"/api/acts/loan-act-no-1-1925/conflicts","importantCases":"/api/acts/loan-act-no-1-1925/important-cases","documents":"/api/acts/loan-act-no-1-1925/documents"}}