{"id":"C2004A03767","name":"Qantas Airways Limited (Loan Guarantee) Act 1989","slug":"qantas-airways-limited-loan-guarantee-act-1989","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"19 of 1989","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":436168,"registerId":"C2004A03767-fast-fetch-1775953428434","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Qantas Airways Limited (Loan Guarantee) Act 1989","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\n \n\nQantas Airways Limited (Loan Guarantee) Act 1989\n\n \n\nNo. 19 of 1989\n\n \n\n \n\n \n\n \n\n \n\nAn Act relating to the provision of certain equipment for Qantas Airways Limited\n\n \n\n \n\n \n\nContents\n\n[1 Short title](#_Toc425776216)\n\n[2 Commencement](#_Toc425776217)\n\n[3 Interpretation](#_Toc425776218)\n\n[4 Guarantee of certain loans](#_Toc425776219)\n\n[5 Conditions of guarantees](#_Toc425776220)\n\n[6 Delegation](#_Toc425776221)\n\n \n\n![](image.001.png)\n\n \n\n \n\nQantas Airways Limited (Loan Guarantee) Act 1989\n\nNo. 19 of 1989\n\n \n\n \n\n \n\nAn Act relating to the provision of certain equipment for Qantas Airways Limited\n\n[Assented to 20 April 1989]\n\nThe Parliament of Australia enacts:\n\n##### 1  Short title\n\n  This Act may be cited as the Qantas Airways Limited (Loan Guarantee) Act 1989.\n\n##### 2  Commencement\n\n  This Act commences on the day on which it receives the Royal Assent.\n\n##### 3  Interpretation\n\n (1) In this Act:\n\nborrow includes borrow, or otherwise raise money, by dealing in securities.\n\n (2) For the purposes of this Act, the obtaining of credit shall be taken to be a borrowing of an amount equal to the value of the credit obtained.\n\n##### 4  Guarantee of certain loans\n\n (1) The Treasurer may, on behalf of the Commonwealth, and subject to the conditions required by this Act, guarantee:\n\n (a) the payment by Qantas Airways Limited of amounts that Qantas Airways Limited is liable to pay with respect to so much of the money borrowed by it as does not exceed the total expenditure that, to the satisfaction of the Treasurer:\n\n (i) will be, or has been, incurred by Qantas Airways Limited in connection with the purchase by it of 3 Boeing 747-400 aircraft and related spare parts and equipment; and\n\n (ii) will be, or has been, met out of money owned or borrowed by it; and\n\n (b) the payment of interest (including any interest on that interest) on money so borrowed.\n\n (2) A guarantee or guarantees shall not be given under subsection (1) in respect of money borrowed in the currency of the United States of America, or in any other currency, exceeding in the aggregate $385,000,000 in the currency of the United States of America.\n\n (3) The power of the Treasurer to give a guarantee under this section includes:\n\n (a) a power to agree, on behalf of the Commonwealth, that proceedings under the guarantee may be taken in a court of a  country other than Australia; and\n\n (b) a power to waive, on behalf of the Commonwealth, the immunity of the Commonwealth from suit in a court of a country other than Australia in relation to any proceedings that may be taken under the guarantee in such a court.\n\n (4) For the purposes of subsection (2), the amount of a borrowing in a currency other than the currency of the United States of America shall be taken to be the amount in the currency of the United States of America that was equivalent to the first-mentioned amount at the date of the borrowing, as ascertained by the Reserve Bank of Australia.\n\n##### 5  Conditions of guarantees\n\n  For the purpose of the protection of the financial interests of the Commonwealth, the Treasurer shall not give a guarantee under section 4 unless:\n\n (a) the money is borrowed on terms and conditions that the Treasurer is satisfied are reasonable;\n\n (b) appropriate security to the satisfaction of the Treasurer is, or is to be, given to the Commonwealth over property of Qantas Airways Limited, being property 85% of the value of the interest of Qantas Airways Limited in which, immediately before the giving of security to the Commonwealth, equals or exceeds the amounts borrowed;\n\n (c) undertakings to the satisfaction of the Treasurer are given that the property of Qantas Airways Limited over which security is, or is to be, taken in accordance with paragraph (b):\n\n (i) will be insured and kept insured against all risks against which it is customary to insure and to the full insurable value of that property; and\n\n (ii) will not be dealt with so as to prejudice the security given to the Commonwealth in respect of the guarantee; and\n\n (d) such other conditions as the Treasurer thinks necessary are fulfilled.\n\n##### 6  Delegation\n\n (1) The Treasurer may, by signed instrument, delegate to an officer of the Department of the Treasury all or any of the powers or functions of the Treasurer under this Act.\n\n (2) A delegate is, in the exercise or performance of a power or function so delegated, subject to the directions of the Treasurer.\n\n \n\n \n\n \n\n \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 focused on its original purpose: facilitating the purchase of three specific Boeing 747-400 aircraft by providing a government loan guarantee. The scope has not expanded beyond this narrow, time-bound transaction."},"complexity_factors":["Only 6 sections total, with minimal cross-referencing","Just 2 defined terms in the interpretation section ('borrow' and treatment of credit as borrowing)","Straightforward conditional structure with clear monetary cap ($385 million USD)","Single purpose legislation with narrow scope (specific aircraft purchase)","No nested exceptions or complex procedural requirements"],"plain_english_summary":"This law allows the Australian Government to act as a guarantor for loans taken out by Qantas Airways Limited in 1989. Specifically, the Treasurer can promise to pay back Qantas's debts if the airline defaults, but only for money borrowed to buy three specific Boeing 747-400 aircraft and related spare parts. There's a cap of $385 million US dollars on these guarantees. The law also sets conditions to protect taxpayers' money: the loan terms must be reasonable, Qantas must put up property as security worth at least 85% of the loan value, the aircraft must be fully insured, and Qantas can't sell or mess with the secured property without consequences. The Treasurer can also delegate these powers to senior Treasury officials and can agree to let foreign courts handle any disputes over the guarantees."},"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":3,"scope_assessment":{"changed":false,"description":"This Act remains narrowly focused on enabling the Commonwealth to guarantee loans taken by Qantas for the purchase of three Boeing 747-400 aircraft and related spare parts and equipment, up to a specified US dollar cap. It does not broaden the classes of beneficiaries, the types of projects, or the government’s guarantee powers beyond that narrowly specified purpose."},"complexity_factors":["Short text: 6 sections, limited scope (single transaction type).","1 defined or specially-treated term in the Interpretation section ('borrow' and treatment of 'obtaining of credit').","Aggregate guarantee cap in foreign-currency equivalent (US$385,000,000) requiring conversion by the RBA (section 4(2)–(4)).","Treasurer satisfaction tests on reasonableness and security (section 5) — discretionary standards that require administrative judgment.","Specific quantitative condition: security must cover property representing at least 85% of the value of Qantas' interest immediately before security is given (section 5(b)).","Power to agree to foreign-jurisdiction proceedings and to waive Commonwealth immunity (section 4(3)) — cross-border enforcement complexity.","Delegation power to Treasury officers subject to Treasurer directions (section 6) — introduces administrative layering."],"plain_english_summary":"**What this law does (mechanically)\n\n- Authorises the Commonwealth, through the Treasurer, to guarantee certain loans that Qantas Airways Limited takes out to buy three Boeing 747-400 aircraft and related spare parts and equipment (section 4).\n- Limits the total amount guaranteed to the equivalent of US$385,000,000 (section 4(2)). For loans in other currencies, the Reserve Bank of Australia (RBA) converts the amount into US dollars at the date of borrowing (section 4(4)).\n- Allows the Treasurer to agree that any legal action under the guarantee can be taken in a foreign court and to waive the Commonwealth's immunity from suit in that foreign court (section 4(3)).\n- Requires that, before giving a guarantee, the Treasurer must be satisfied that the borrowing terms are reasonable, that adequate security is (or will be) given over Qantas property equal to at least 85% of the value of Qantas' interest immediately before the security is given, and that the secured property will be insured and not disposed of in a way that weakens the Commonwealth's security. The Treasurer may impose other conditions as needed (section 5).\n- Permits the Treasurer to delegate these powers and functions to an officer of the Treasury; delegates remain subject to the Treasurer's directions (section 6).\n\nWho it affects\n\n- Direct beneficiary: Qantas Airways Limited, which may obtain a Commonwealth-backed guarantee for loans used to buy three specified aircraft and related equipment (section 4).\n- Lenders or bondholders to Qantas: they receive a Commonwealth guarantee for payment of principal and interest on qualifying borrowings (section 4(1)(a)–(b)).\n- The Commonwealth (taxpayers): the government becomes contingently liable for guaranteed payments if Qantas defaults, subject to the conditions set by the Treasurer (sections 4–5).\n- The Treasurer and Treasury officers: they have decision-making and administrative responsibilities, including assessing reasonableness of terms, accepting security, and setting conditions (sections 4–6).\n\nWhy it matters (stated purpose and practical implications)\n\n- The Act is framed to enable Qantas to secure financing for specific aircraft purchases by reducing lender risk through a Commonwealth guarantee. The stated aim (in the Act's long title) is to assist the provision of certain equipment for Qantas.\n\nAnalysis of incentives, costs, trade-offs and risks (testing the stated purpose)\n\n- Who pays and who decides: The Treasurer decides whether to give a guarantee and on what conditions (sections 4, 5). If a guarantee is called, the Commonwealth (i.e. taxpayers) bears the cost of payments to lenders. This is a contingent fiscal exposure until and unless a default occurs.\n- Effect on private contracting and competition: A Commonwealth guarantee reduces the credit risk faced by lenders, which typically lowers Qantas' borrowing costs or improves access to credit. That changes the commercial balance between Qantas and its competitors (for example, by lowering Qantas’ financing cost for fleet investment), but does not directly restrict competitors’ actions.\n- Concentrated benefit vs diffuse cost: The direct, concentrated beneficiary is Qantas (a single company). The cost is a contingent liability spread across the Commonwealth's finances and ultimately taxpayers, which is diffuse until crystallised.\n- Conditions and protection for the Commonwealth: The Act builds protective mechanisms—Treasurer satisfaction as to reasonableness of terms (s5(a)), high-value security requirements (s5(b)), insurance and non-disposal undertakings (s5(c)), and a cap on total guaranteed amount (s4(2)). Those mechanisms reduce, but do not eliminate, fiscal risk and require active administration.\n- Discretion and implementation risk: Key concepts (for example, whether expenditures “to the satisfaction of the Treasurer” qualify, or what security is “to the satisfaction of the Treasurer”) give wide administrative discretion (s4(1), s5). That discretion creates implementation risk tied to how the Treasurer exercises judgment and monitors compliance. Practical enforcement of security over aircraft and spare parts involves cross-border legal, insolvency and regulatory considerations, especially where guarantees allow foreign-court proceedings or waiver of immunity (s4(3)).\n- Currency and valuation mechanics: The RBA conversion rule (s4(4)) fixes how non‑USD borrowings are measured for the cap, which avoids later dispute about cap calculations but exposes the Commonwealth to exchange-rate timing effects at borrowing dates.\n- Compliance burden on the company: Qantas must provide security, insurance and formal undertakings acceptable to the Treasurer; those conditions impose administrative and contractual costs on the company (s5(b)–(c)).\n\nNet mechanical effect\n\n- The Act authorises a narrowly tailored Commonwealth-backed loan guarantee for a specific capital purchase program by Qantas, subject to a USD cap, Treasurer oversight, security and insurance conditions, and the possibility of foreign-jurisdiction enforcement. It shifts credit risk from private lenders to the Commonwealth on defined terms, creating a contingent fiscal exposure while lowering Qantas' effective borrowing cost if and when a guarantee is provided."}},"importantCases":[],"_links":{"self":"/api/acts/qantas-airways-limited-loan-guarantee-act-1989","history":"/api/acts/qantas-airways-limited-loan-guarantee-act-1989/history","analysis":"/api/acts/qantas-airways-limited-loan-guarantee-act-1989/analysis","conflicts":"/api/acts/qantas-airways-limited-loan-guarantee-act-1989/conflicts","importantCases":"/api/acts/qantas-airways-limited-loan-guarantee-act-1989/important-cases","documents":"/api/acts/qantas-airways-limited-loan-guarantee-act-1989/documents"}}