Commonwealth legislation

Factor to index Financial Supplement debts and accumulated Financial Supplement debts (May 2005)

RepealedCTH

This Act has been repealed and is no longer in force. It is retained for historical reference.

Jurisdiction

Commonwealth

Collection

legislative instrument

Plain English Summary

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This instrument sets the annual inflation adjustment for old student loans called Financial Supplement debts (loans taken out under the former Student Financial Supplement Scheme, which closed to new borrowers in 2003).

What it does:

Sets the indexation factor at 1.024 (equivalent to a 2.4% increase) to apply on 1 June 2005
Uses the Consumer Price Index (CPI) formula required by the Student Assistance Act 1973, comparing average prices across 2004 and 2005 to maintain the real value of the debt

Who it affects:

Former students who still owe money under the old Financial Supplement Scheme (SFSS), where the government provided loans for living expenses

Why it matters:

Prevents the real value of these debts from being eroded by inflation (a process called "indexation")
The 2.4% increase reflects moderate inflation at the time, ensuring borrowers don't repay less in real terms than they originally borrowed

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Current sections

Direct links to the current provisions in Factor to index Financial Supplement debts and accumulated Financial Supplement debts (May 2005).

Factor to index Financial Supplement debts and accumulated Financial Supplement debts (May 2005)

Legislative Instrument

Student Assistance Act 1973:
Factor to index Financial Supplement debts and accumulated Financial Supplement debts.

I, Erin Kathleen Holland, as delegate of the Commissioner of Taxation, notify pursuant to subsection 12ZF(7A) of the Student Assistance Act 1973, that 1.024 is the indexation factor to be used for working out Financial Supplement debts and accumulated Financial Supplement debts on 1 June 2005.

Citation

This instrument may be cited as a factor to index Financial Supplement debts and accumulated Financial Supplement debts.

Commencement

This Instrument commences on 1 June 2005.

Application

In accordance with subsection 12ZF(6) of the Student Assistance Act 1973, the indexation factor is the number worked out to three decimal places using the formula:

the sum of the index number for the March 2005 quarter and the index numbers for the 3 immediately preceding quarters

divided by

the sum of the index number for the March 2004 quarter and the index numbers for the 3 immediately preceding quarters,

where index number, in relation to a quarter, means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Australian Statistician in respect of that quarter.

Indexation factor for 1 June 2005:

= Mar05+Dec04+Sep04+Jun04.

Mar04+Dec03+Sep03+Jun03

= 147.5 + 146.5 + 145.4 + 144.8

144.1 + 142.8 + 142.1 + 141.3

= 584.2

570.3

= 1.024 (to 3 decimal places)

The indexation factor is 1.024 and the effective percentage increase is 2.4%.

(Erin Kathleen Holland)

Deputy Commissioner of Taxation

Dated this 11th day of May 2005

Source text

Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.

1 Factor to index Financial Supplement debts and accumulated Financial Supplement debts (May 2005)