{"id":"C2004A00031","name":"Papua New Guinea Loan Guarantee Act 1973","slug":"papua-new-guinea-loan-guarantee-act-1973","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"32 of 1973","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":2683,"registerId":"commonwealth-C2004A00031-current","compilationNumber":null,"startDate":"2026-03-29","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Papua New Guinea Loan Guarantee Act 1973","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n![](image.001.png)\n\n \n\n \n\n \n\n \n\n \n\nPapua New Guinea Loan Guarantee Act 1973\n\n \n\nNo. 32 of 1973\n\n \n\n \n\n \n\n \n\n \n\nAn Act to provide for the Giving of a Guarantee by the Commonwealth with respect to a Loan to be raised Overseas by the Administration of Papua New Guinea, and for purposes connected therewith\n\n \n\n \n\n \n\nContents\n\n[1 Short title](#_Toc425167309)\n\n[2 Commencement](#_Toc425167310)\n\n[3 Application of Act](#_Toc425167311)\n\n[4 Interpretation](#_Toc425167312)\n\n[5 Approval of guarantee](#_Toc425167313)\n\n[6 Appropriation](#_Toc425167314)\n\n[7 Moneys to be paid free of taxes etc.](#_Toc425167315)\n\n \n\n![](image.001.png)\n\n \n\n \n\nPapua New Guinea Loan Guarantee Act 1973\n\nNo. 32 of 1973\n\n \n\n \n\n \n\nAn Act to provide for the Giving of a Guarantee by the Commonwealth with respect to a Loan to be raised Overseas by the Administration of Papua New Guinea, and for purposes connected therewith\n\n[Assented to 24 May 1973]\n\nThe Parliament of Australia enacts:\n\n##### 1  Short title\n\n  This Act may be cited as the Papua New Guinea Loan Guarantee Act 1973.\n\n##### 2  Commencement\n\n  This Act shall come into operation on the day on which it receives the Royal Assent.\n\n##### 3  Application of Act\n\n  This Act extends to Papua New Guinea.\n\n##### 4  Interpretation\n\n (1) In this Act, unless the contrary intention appears:\n\nAdministration means the Administration or Government of Papua New Guinea.\n\nguarantee means the guarantee by the Commonwealth under subsection 5(1), and includes any agreement entered into for the purposes of that guarantee.\n\nloan agreement means the agreement to which the guarantee relates.\n\n (2) For the purposes of this Act, an amount of foreign currency, other than the currency of the United States of America, is, at a specified time, equivalent to Twenty million dollars in the currency of the United States of America if, at that time, that first‑mentioned amount is equivalent to an amount of Australian currency that, at that time, is equivalent to Twenty million dollars in the currency of the United States of America.\n\n (3) For the purposes of subsection (2), the amount in one currency that, at a specified time, is equivalent to an amount in another currency is the amount determined by the Reserve Bank of Australia, having regard to the exchange rates of that bank for Australian Government transactions, to be so equivalent.\n\n##### 5  Approval of guarantee\n\n (1) Subject to this section, if the Administration enters into an agreement under which the Administration is to, or may, borrow, by way of the sale of bonds or otherwise, an amount in a foreign currency that does not exceed:\n\n (a) where the foreign currency is the currency of the United States of America—Twenty million dollars in that currency; or\n\n (b) where the foreign currency is not the currency of the United States of America—an amount in that foreign currency that is, when the agreement is entered into, equivalent to Twenty million dollars in the currency of the United States of America,\n\nthe Treasurer, or a person authorized by him, may, on behalf of the Commonwealth, give a guarantee in respect of the payment of all moneys, including interest, payable by the Administration under the agreement and may, for the purposes of the guarantee, enter into an agreement containing such terms as are approved by the Treasurer and the Minister for External Territories.\n\n (2) For the purposes of subsection (1), any form of undertaking of liability to pay any moneys shall be deemed to be a guarantee in respect of the payment of those moneys.\n\n (3) The guarantee, when given, constitutes a valid and binding obligation of the Commonwealth in accordance with its terms.\n\n (4) The power conferred by subsection (1):\n\n (a) is limited to the giving of a guarantee in respect of one agreement only; and\n\n (b) shall not be exercised after the expiration of the period of four months commencing on the date of commencement of this Act.\n\n##### 6  Appropriation\n\n  Any payments by the Commonwealth under the guarantee are payable out of the Consolidated Revenue Fund, which is appropriated accordingly.\n\n##### 7  Moneys to be paid free of taxes etc.\n\n  A provision of the guarantee or of the loan agreement providing for:\n\n (a) payments to be made without deduction for, or to be free from, taxes, imposts or duties;\n\n (b) documents to be free from taxes or duties; or\n\n (c) payments to be free from restrictions, regulations, controls or moratoria,\n\nhas effect as if enacted by this Act and operates notwithstanding anything in any law of the Commonwealth or of a State or Territory, whether passed or made before or after the commencement of this Act.\n\n \n\n \n","sortOrder":0}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":2,"scope_assessment":{"changed":false,"description":"The legislation remains tightly scoped to its original purpose. It was always intended as a specific, one-off guarantee for a single PNG loan of up to US$20 million, with explicit temporal (4-month) and quantitative limits. The scope has not expanded beyond this narrow, transitional purpose."},"complexity_factors":["Very short statute — only 7 sections spanning approximately 2 pages","Minimal defined terms — only 2 key definitions ('Administration' and 'guarantee') plus technical currency conversion rules","Simple conditional structure — single trigger (loan agreement up to US$20m) with straightforward time and scope limits","No cross-references to other Acts or complex regulatory schemes","One technical complexity: the nested currency conversion formula in section 4(2)-(3) requiring Reserve Bank determinations for non-USD loans","No exceptions, exemptions, or regulatory powers — purely facilitative"],"plain_english_summary":"**What this law does:**\n\nThis Act allows the Australian Government (the Commonwealth) to act as a guarantor for a single overseas loan taken out by Papua New Guinea (PNG) in 1973. Think of it like a parent co-signing a loan for their child — if PNG couldn't repay the money, Australia promised to step in and pay instead.\n\n**Key details:**\n\n*   **The loan:** PNG could borrow up to **US$20 million** (or the equivalent in another foreign currency) from international lenders by selling bonds or other arrangements.\n*   **The guarantee:** The Australian Treasurer (or someone they authorised) could promise that Australia would repay the loan if PNG defaulted (failed to pay).\n*   **Time limit:** This power expired **four months after the Act started**, so it was a one-off, time-sensitive deal.\n*   **Tax protection:** Any agreement made under this Act could specify that payments would be free from Australian taxes, duties, or government restrictions — and those terms would override any other Australian law.\n*   **Funding:** If Australia had to pay out on the guarantee, the money would come from the **Consolidated Revenue Fund** (the government's main bank account).\n\n**Who it affects:**\n\n*   **Papua New Guinea:** Got access to cheaper international borrowing because Australia's guarantee made lenders more confident.\n*   **International lenders:** Got a safety net — if PNG couldn't pay, Australia (a wealthy, stable country) would cover the debt.\n*   **Australian taxpayers:** Ultimately bore the risk if PNG defaulted and Australia had to pay.\n\n**Why it matters:**\n\nThis was a **historical transitional measure**. In 1973, PNG was still an Australian territory preparing for independence (which came in 1975). This Act helped PNG establish its international creditworthiness by leveraging Australia's financial reputation. It was a limited, specific promise — not an open-ended lending facility — designed to support PNG's economic development as it moved toward self-governance."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":3,"scope_assessment":{"changed":false,"description":"The Act explicitly limits its scope to a single overseas borrowing by the Papua New Guinea Administration up to US$20 million (or equivalent), subject to a four‑month window and specified approval process (s5(1),(4)). Those express limits indicate the instrument implements a narrowly confined guarantee power rather than expanding ongoing guarantee authority."},"complexity_factors":["Single-loan, time-limited power: guarantee power confined to one agreement and exercisable only within four months of commencement (s5(4)).","Currency-equivalence rule requires Reserve Bank determination for non‑USD amounts, adding an external conversion step (s4(2)–(3)).","Executive discretion in approving guarantee terms: Treasurer (or authorised delegate) and Minister for External Territories must approve terms (s5(1)).","Broad deeming of liability as a guarantee: any undertaking to pay is treated as a guarantee, expanding what instruments may trigger liability (s5(2)).","Commonwealth payment obligation and appropriation: payments under the guarantee are obligations of the Commonwealth and paid from the Consolidated Revenue Fund (s5(3), s6).","Overrides to other laws: guarantee or loan clauses providing tax- or control-free treatment operate despite any Commonwealth, State or Territory law, before or after commencement (s7), which raises legal interaction considerations."],"plain_english_summary":"Allows the Commonwealth to guarantee a single overseas loan raised by the Administration of Papua New Guinea of up to US$20 million (or an equivalent amount in another currency) and to enter guarantee terms approved by the Treasurer and the Minister for External Territories. If the Commonwealth must pay under that guarantee, payments are drawn from the Consolidated Revenue Fund; guarantee clauses may also exempt payments and documents from taxes or controls and operate despite other laws."}},"importantCases":[],"_links":{"self":"/api/acts/papua-new-guinea-loan-guarantee-act-1973","history":"/api/acts/papua-new-guinea-loan-guarantee-act-1973/history","analysis":"/api/acts/papua-new-guinea-loan-guarantee-act-1973/analysis","conflicts":"/api/acts/papua-new-guinea-loan-guarantee-act-1973/conflicts","importantCases":"/api/acts/papua-new-guinea-loan-guarantee-act-1973/important-cases","documents":"/api/acts/papua-new-guinea-loan-guarantee-act-1973/documents"}}