{"id":"C2004A04217","name":"Loan Act (No. 2) 1991","slug":"loan-act-no-2-1991","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"142 of 1991","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":7440,"registerId":"commonwealth-C2004A04217-current","compilationNumber":null,"startDate":"2026-03-30","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Loan Act (No. 2) 1991","content":"![Commonwealth Government crest](image.001.png)\n\nLoan Act (No. 2) 1991\n\nNo. 142 of 1991\n\nAn Act to authorise the borrowing and expending of money for certain purposes\n\n\\[Assented to 21 October 1991\\]\n\nThe Parliament of Australia enacts:\n\nPART 1—PRELIMINARY\n\nShort title\n\n1. This Act may be cited as the Loan Act (No. 2) 1991.\n\nCommencement\n\n2. This Act commences 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 1992;\n\n“defence service”, in relation to the current financial year, means a service specified under the heading “DEPARTMENT OF DEFENCE” in a relevant appropriation Act for the financial year;\n\n“relevant appropriation Act” means:\n\n(a) the Supply Act (No. 1) 1991-92; or\n\n(b) the Appropriation Act (No. 1) 1991-92; or\n\n(c) an Act, whether passed before or after the commencement of this Act, appropriating the Consolidated Revenue Fund for the service of the current financial year, being an Act that is expressed to have effect subject to this Act.\n\nPART 2—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 3—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 amount by which, apart from this Part, money received, and to be received, in the Consolidated\n\nRevenue 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(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 4—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, authorises 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 authorises expenditure (otherwise than for payment of the expenses of borrowing) after 30 June 1992.\n\n\\[Minister’s second reading speech made in—\n\nHouse of Representatives on 20 August 1991\n\nSenate on 4 September 1991\\]","sortOrder":0}],"analysis":{"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"},"issue_detection":{"absurdities":[{"type":"circular_definition","section":"3 - Definition of 'relevant appropriation Act'","severity":"medium","reasoning":"The definition purports to capture future appropriation Acts only if those Acts explicitly subject themselves to this Act. However, this Act cannot compel future Parliaments to include that language, and future Acts that do not include the expression fall outside the definition even if they appropriate funds for the same financial year. This creates an incomplete and potentially arbitrary boundary for the definition.","confidence":0.72,"description":"The definition of 'relevant appropriation Act' includes Acts 'whether passed before or after the commencement of this Act' that appropriate the Consolidated Revenue Fund for the current financial year, provided they are 'expressed to have effect subject to this Act.' This creates a bootstrapping problem: future Acts cannot know at the time of their drafting whether they need to be expressed as subject to this Act unless the drafter anticipates this requirement, and this Act cannot bind future Parliaments to include such an expression."},{"type":"impossible_compliance","section":"4(1) - Authority to borrow (Part 2)","severity":"medium","reasoning":"The ceiling for borrowing is dynamically defined by reference to expenditure authorised under appropriation Acts, some of which may not yet be passed. This creates a moving and potentially unknowable target at any given moment, making it practically impossible for the Treasurer to confirm compliance at the time of borrowing.","confidence":0.65,"description":"The borrowing limit under s4(1)(a) is calculated by reference to 'amounts authorised to be expended after the commencement of this Act and before the end of that financial year for defence services.' At the moment of commencement, this figure may be zero or unknown, making the initial borrowing ceiling indeterminate until appropriation Acts are in force. The Treasurer cannot meaningfully calculate the ceiling without first knowing what amounts are authorised under relevant appropriation Acts, which may not yet exist."},{"type":"self_contradicting","section":"9(3) - Limitation of expenditure","severity":"low","reasoning":"Section 5 limits expenditure of borrowed money (including borrowing expenses) to the current financial year ending 30 June 1992. Section 9(3) then explicitly carves out borrowing expenses from the post-30 June prohibition, implying such expenses can be paid after that date. These two provisions are in tension because s5 does not make a similar carve-out.","confidence":0.7,"description":"Section 9(3) prohibits expenditure (other than borrowing expenses) after 30 June 1992, but the Act commenced on 21 October 1991. The borrowing powers in ss4 and 6 are exercisable 'during the current financial year' (ending 30 June 1992). This is internally consistent, but s9(3) adds a redundant absolute prohibition that merely restates the temporal limitation already implicit in the definition of 'current financial year.' The parenthetical exception for 'expenses of borrowing' creates a minor anomaly: borrowing expenses could theoretically be incurred after 30 June 1992 on loans drawn before that date, yet s5 requires borrowing expenses to be expended 'in the current financial year.' This creates a narrow but real conflict."},{"type":"impossible_compliance","section":"6(1) - Authority to borrow (Part 3)","severity":"medium","reasoning":"Because the ceiling is determined solely by the Treasurer's own assessment at the time of borrowing, the provision provides no meaningful legal constraint. Any borrowing could be justified post-hoc by reference to the Treasurer's contemporaneous opinion, rendering the limit legally unenforceable and logically circular as a control mechanism.","confidence":0.78,"description":"The borrowing ceiling under s6(1) is based entirely on the Treasurer's subjective forward estimate of a likely revenue shortfall. There is no objective benchmark, audit mechanism, or cap on this estimate. A Treasurer could theoretically borrow unlimited amounts by forming an (unchallenged) view that a very large shortfall is 'likely.' The provision contains no safeguard against speculative or inflated estimates."}],"contradictions":[{"severity":"medium","section_a":"5 - Application of money borrowed under section 4","section_b":"9(3) - Limitation of expenditure","confidence":0.75,"description":"Section 5 restricts expenditure of money borrowed under s4(1) — including expenses of borrowing — to the current financial year (ending 30 June 1992). Section 9(3) explicitly permits expenditure for 'expenses of borrowing' after 30 June 1992. These two provisions are in direct conflict regarding whether borrowing expenses may be paid after 30 June 1992."},{"severity":"medium","section_a":"9(1) - Limitation of expenditure","section_b":"4(1) - Authority to borrow","confidence":0.68,"description":"Section 4(1) authorises borrowing up to the total of amounts authorised to be expended for defence services plus borrowing expenses. Section 9(1) then provides that nothing in this Act authorises expenditure for a defence service where total expenditure would exceed what is authorised under relevant appropriation Acts. Together, these sections mean that the borrowing ceiling in s4(1) can never actually be reached in practice: the Treasurer may borrow up to the authorised expenditure amount, but s9(1) then caps actual expenditure at that same amount, meaning borrowing expenses effectively have no room within the ceiling without exceeding appropriation limits — unless borrowing expenses are treated as falling entirely outside the s9(1) cap, which is not made explicit."},{"severity":"low","section_a":"3 - Definition of 'current financial year'","section_b":"2 - Commencement","confidence":0.62,"description":"The Act commenced on 21 October 1991, well into the financial year ending 30 June 1992. The 'current financial year' is defined as the full year ending 30 June 1992. Several provisions (e.g. s4(1)(a)) refer to amounts authorised to be expended 'after the commencement of this Act and before the end of that financial year,' implicitly acknowledging that the first ~4 months of the financial year (July–October 1991) predate the Act. This means appropriation authority for that earlier period of the same 'current financial year' is excluded from the borrowing ceiling calculation, creating an asymmetry where the financial year is treated as both the current year (in full) and a partial year (for borrowing purposes)."}]},"summary":{"complexity_score":3,"scope_assessment":{"changed":false,"description":"The Act closely matches its stated purpose — authorising borrowing and expenditure for defence services and revenue supplementation during the 1991–92 financial year. There is no evidence of scope creep; the provisions are tightly constrained by purpose, amount, mechanism, and time, consistent with the Act's title and long title."},"complexity_factors":["Cross-references to multiple external Acts (Supply Act, Appropriation Acts, Commonwealth Inscribed Stock Act 1911) requiring reading alongside this legislation to fully understand scope","Two distinct borrowing mechanisms with separate purposes, limits, and conditions, which could cause confusion if conflated","Defined terms (e.g., 'current financial year', 'defence service', 'relevant appropriation Act') that modify plain meaning of words","Interaction between the limitation clause (s.9) and the Advance to the Minister for Finance carve-out adds a layer of nuance","Strict temporal limits and conditions on expenditure authority require careful reading to identify what is and isn't permitted"],"plain_english_summary":"The Loan Act (No. 2) 1991 authorised the Federal Treasurer to borrow for the 1991–92 year to fund approved defence services and to top up the Consolidated Revenue Fund when receipts were insufficient.  \n\nBorrowing had to use established instruments, stay within appropriation limits, and the authority expired on 30 June 1992 — a short-term measure to ensure defence pay and uninterrupted government services."},"flash_summary":{"complexity_score":3,"scope_assessment":{"changed":false,"description":"The Act does not expand long-term borrowing powers. It grants temporary, purpose-limited borrowing authority for the 1991–92 year only, constrained by appropriation limits and by how borrowed funds may be used (ss 4–7, 9). The principal change is timing and method of meeting cash needs for defence and the Consolidated Revenue Fund; authority is bounded and conditional rather than broadened."},"complexity_factors":["Temporal limitation to a single financial year creates short-lived authority but requires precise timing and accounting (definition of \"current financial year\", s 3; ss 4(1), 6(1), 9(3)).","Treasurer discretion to estimate required borrowing introduces forecasting risk and administrative judgment (s 6(1)(a); s 4(1) for defence borrowing).","Caps tied to amounts authorised by relevant appropriation Acts require coordination with appropriations and tracking of previously borrowed sums to avoid exceeding limits (s 4(1)(a); s 9(1)).","Permitted borrowing mechanisms are narrowly prescribed, limiting operational options to Inscribed Stock or Treasury Bills (ss 4(2), 6(2)).","Ring-fenced application of proceeds constrains use to specified purposes (defence services, Consolidated Revenue Fund credit, and borrowing expenses) and prevents fungibility (ss 5, 7).","Appropriation of the Loan Fund and exceptions (Advance to Minister for Finance) create technical interactions with existing appropriation structures (s 8; s 9(2)).","Short statutory text makes legal interpretation straightforward, but practical implementation depends on Treasury forecasting, cash management and inter-Act coordination."],"plain_english_summary":"This Act temporarily authorises the Treasurer to borrow, during the 1991–92 financial year, amounts needed to cover authorised defence spending and to make up shortfalls in the Consolidated Revenue Fund. Borrowings are limited to Inscribed Stock or Treasury Bills and may be spent only on defence services, crediting the Consolidated Revenue Fund, and borrowing costs. The Treasurer sets amounts by estimate; repayment rests with public finances (see ss 4–7, 9)."},"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"The Act remains tightly focused on its original purpose of providing temporary borrowing authority for the 1991-92 financial year. The scope is explicitly limited to defence services and Consolidated Revenue Fund supplementation, with strict temporal and monetary caps that prevent scope creep."},"complexity_factors":["Only 4 defined terms in the interpretation section","Straightforward two-part structure (defence borrowing + revenue fund supplementation)","Minimal cross-referencing – only refers to the Commonwealth Inscribed Stock Act 1911 and generic \"relevant appropriation Acts\"","Simple conditional logic with clear caps on borrowing amounts","Single temporal limitation (expires 30 June 1992) with no nested exceptions","Total length is approximately 2 pages with 9 sections"],"plain_english_summary":"**What this law does:**\n\nThis Act gives the Australian Government temporary authority to borrow money during the 1991-92 financial year (1 July 1991 to 30 June 1992) for two specific purposes:\n\n1. **Defence spending** – The Treasurer can borrow money to pay for defence services that Parliament has already approved funding for through other budget laws (called \"appropriation Acts\"). The borrowed money can only be used for defence expenses and the costs of arranging the loans.\n\n2. **Topping up the government's main bank account** – If the government expects to receive less money than it needs to spend from its main operating fund (the Consolidated Revenue Fund), the Treasurer can borrow to cover that shortfall. This borrowed money goes straight into the government's main account to pay for general expenses, not specifically for defence.\n\n**Who it affects:**\n\n- **The Treasurer** – gets temporary borrowing powers\n- **The Department of Defence** – can receive borrowed funds for approved programs\n- **Australian taxpayers** – ultimately responsible for repaying these loans through future taxes\n\n**Why it matters:**\n\nThis is a short-term \"supply\" law. It ensures the government can keep paying bills and funding defence programs even if tax revenue hasn't come in yet, or if there's a gap between when expenses are due and when money is available. It's essentially a legal IOU system that expires on 30 June 1992.\n\n**Key limits:**\n- Borrowing can't exceed what Parliament has already approved for defence spending\n- No borrowing allowed after 30 June 1992\n- Money can only be borrowed through government bonds (Commonwealth Inscribed Stock) or Treasury Bills"}},"importantCases":[],"_links":{"self":"/api/acts/loan-act-no-2-1991","history":"/api/acts/loan-act-no-2-1991/history","analysis":"/api/acts/loan-act-no-2-1991/analysis","conflicts":"/api/acts/loan-act-no-2-1991/conflicts","importantCases":"/api/acts/loan-act-no-2-1991/important-cases","documents":"/api/acts/loan-act-no-2-1991/documents"}}