Financial Agreement Act 1928 (Western Australia)

The Financial Agreement Act 1928 (WA) formally approves and gives effect in Western Australia to the intergovernmental Financial Agreement signed 12 December 1927 (the said agreement), and implements a package of borrowing, sinking fund, transfer and administration measures agreed between the Commonwealth and the States. Section 2 of the Act expressly approves the agreement set out in the Schedule and makes that agreement operative in Western Australia. The Act imposes rules about existing sinking‑fund investments (s 3), suspends or modifies State laws to accommodate the agreement (ss 4-6), appropriates the Consolidated Account (s 7), empowers the Governor to make regulations (s 8), and allows investment of statutory moneys in Commonwealth as well as Western Australian Government securities (s 9).

Mechanically, the Schedule (the Agreement) establishes an Australian Loan Council (Part I, cl 3) with specific membership and voting arrangements (Commonwealth member two votes and a casting vote), prescribes that while Part II or Part III is in force the Commonwealth will arrange borrowings for the Commonwealth and the States subject to Loan Council decisions (Part I, cl 4), and sets out temporary transitional measures (Part II, two‑year program from 1 July 1927 to 30 June 1929) and conditional permanent measures (Part III, which only comes into force if the Constitution is altered and the Agreement is validated before 1 July 1929).

If Part III were to come into force, the Agreement provides that the Commonwealth will take over specified elements of the States’ public debts on 1 July 1929 and assume liabilities to bondholders in respect of those debts (Part III, cl 1). It prescribes detailed payment and sinking‑fund arrangements: the Commonwealth undertakes to make annual interest contributions for 58 years at set amounts per State (Part III, cl 2(b)), while States are required to meet the shortfall and eventually bear all interest charges after the 58‑year period (Part III, cl 2(c)-(d)). A central National Debt Commission is to control sinking funds and manage repurchases or cancellations of securities (Part II cl 4(f)-(h); Part III cl 3).

CrestWestern Australia

Financial Agreement Act 1928

Western Australia

Financial Agreement Act 1928

Contents

Short title 1
Approval of agreement 1
Sinking funds 1
Suspension of Sale of Government Property Act 1907 3
Construction of Acts of W.A. 3
Modification of conflicting provisions 3
Appropriation 4
Regulations 4
Investment of moneys in Commonwealth Government securities 4

The Schedule

Notes

Compilation table 30

Defined terms

Western Australia

Financial Agreement Act 1928

An Act to approve an agreement between the Commonwealth of Australia and the States of New South Wales, Victoria, Queensland, South Australia, Western Australia, and Tasmania concerning the adjustment of the financial relations between the Commonwealth and the States, and for purposes incidental thereto.

1. Short title

This Act may be cited as the Financial Agreement Act 1928 1.

2. Approval of agreement

The agreement, a copy of which is set forth in the Schedule (hereinafter referred to as the said agreement) is hereby approved.

3. Sinking funds

(1) All inscribed stock and debentures of this State held on 30 June 1927, as sinking fund investments under the General Loan and Inscribed Stock Act 1910 2, or any Act thereby repealed, shall by force of this Act, if and when Part III of the said agreement shall come into force and effect, be cancelled as from the said 30 June, and the public debt shall to that extent be redeemed, and payment of interest and sinking fund contributions on and in respect of such cancelled securities shall, as from the said 30 June, cease.

For the purposes of this subsection, inscribed stock or debentures of this State in which the proceeds of the sale of any other inscribed stock or debentures held on the said date as sinking fund investments may thereafter be or have been invested, shall be deemed to be inscribed stock or debentures of this State held as aforesaid on the said date.

(2) All sinking fund contributions payable after 30 June 1927, under and at the rate prescribed by the General Loan and Inscribed Stock Act 1910 2, or any other Act, for investment by the trustees appointed in London under the said Act in respect of any public debt of the State shall, subject as hereinafter provided, be suspended, and if and when Part III of the said agreement shall come into force and effect shall be superseded by the sinking fund contributions payable under the said agreement; but if Part III of the said agreement shall not come into force and effect, all suspended interest and sinking fund contributions shall be paid by the State to the trustees forthwith.

(3) This section shall not apply to loans domiciled with the Crown agents for the Colonies, or to the 5% inscribed stock for £140 000 maturing on 19 February 1936.

(4) As from the date of the commencement of the operation of Part II of the said agreement, paragraphs (a) and (d) of the proviso to section 6, and the words “so long as the currency of 30 years is not exceeded” in paragraph (c) of such proviso, and the second paragraph of section 9 of the Treasury Bonds Deficiency Act 1916 2, as thereby enacted and as incorporated with the Treasury Bonds Deficiency Acts of 1918 2, 1918(2) 2, 1919 2, 1920 2, and 1924 2, and also section 14 of the Land Act Amendment Act 1909 3, and section 9 of the Land Act Amendment Act 1915 3, shall be suspended during the period fixed for the operation of Part II of the said agreement, and as from the time that Part III of the said agreement shall come into force the same shall cease to have effect.

(5) The State shall indemnify the trustees of the sinking funds established under the General Loan and Inscribed Stock Act 1910 2, and any Act thereby repealed, from all responsibility in respect thereof, arising from the provisions of the said agreement or of this Act.

4. Suspension of Sale of Government Property Act 1907

(1) As from the date of the commencement of the operation of Part II of the said agreement, the provisions of the Sale of Government Property Act 1907 4, shall be suspended during the period fixed for the operation of Part II of the said agreement, and as from the time that Part III of the said agreement shall come into force the same shall cease to have effect, subject to subsections (2) and (3).

[(2), (3) deleted]

[Section 4 amended: No. 98 of 1985 s. 3; No. 92 of 1990 s. 39(1).]

5. Construction of Acts of W.A.

All Acts of the Parliament of Western Australia, whether passed before or after the commencement of this Act, so far as they relate to matters or things provided for or contained in this Act or the said agreement, shall be read and construed as subject to this Act and the said agreement, and shall, with such alterations, modifications, substitutions, additions, and omissions as are necessary, have effect accordingly.

6. Modification of conflicting provisions

(1) The Governor may, by Order in Council published in the Gazette, suspend, repeal or amend, or modify in any manner whatever any Order in Council or Regulation, whether promulgated or made before or after the commencement of this Act, which it may be considered necessary or convenient to suspend, repeal, amend, or modify, in order to provide for the administration of this Act and the said agreement, and the carrying into effect of the objects and purposes of this Act and the said agreement.

(2) Any Order in Council under this section may be repealed, amended, or modified by a like Order in Council, and any such Order in Council as amended or modified shall take effect accordingly.

7. Appropriation

The Consolidated Account is hereby appropriated for the purposes of this Act, and to the extent necessary for carrying into effect the said agreement on the part of this State.

[Section 7 amended: No. 6 of 1993 s. 11; No. 77 of 2006 s. 4.]

8. Regulations

The Governor may from time to time make regulations providing for all or any purposes (either generally or to meet particular cases) necessary or convenient for the administration of this Act and the said agreement, or for carrying into effect the objects and purposes of this Act and the said agreement; and where there is in this Act no provision or no sufficient provision in respect of any matter or thing necessary or expedient for the administration of this Act or the said agreement, or for carrying into effect the objects and purposes of this Act and the said agreement, providing for and supplying such omission or insufficiency.

9. Investment of moneys in Commonwealth Government securities

Any reference in any Act enabling or requiring any moneys to be invested in Western Australian Government securities, shall be read and construed and have effect as if it enabled or required such moneys to be invested either in Western Australian Government securities or in Commonwealth Government securities, or in both kinds of securities.

The Schedule

AGREEMENT MADE THE TWELFTH DAY OF DECEMBER One thousand nine hundred and twenty‑seven BETWEEN THE COMMONWEALTH OF AUSTRALIA (in this Agreement called the Commonwealth) of the first part, THE STATE OF NEW SOUTH WALES of the second part, THE STATE OF VICTORIA of the third part, THE STATE OF QUEENSLAND of the fourth part, THE STATE OF SOUTH AUSTRALIA of the fifth part, THE STATE OF WESTERN AUSTRALIA of the sixth part, and THE STATE OF TASMANIA of the seventh part (each of the parties of the second, third, fourth, fifth, sixth, and seventh parts being in this Agreement referred to as a State and the expression “the States” hereinafter used meaning where the context so permits or requires all of such parties).

WHEREAS with a view to making provision for the adjustment of Commonwealth and State financial relations the general principle of a draft scheme was affirmed by a Conference of Commonwealth and State Ministers in Melbourne which commenced on the sixteenth day of June One thousand nine hundred and twenty‑seven:

AND WHEREAS permanent effect cannot be given to the proposals contained in the said scheme unless the Constitution of the Commonwealth is altered so as to confer on the Parliament of the Commonwealth power to make laws for carrying out or giving permanent effect to such proposals:

AND WHEREAS pending the submission to the electors of a proposed law for the alteration of the said Constitution as aforesaid and in order to obtain immediately some of the advantages which would result from united action by adoption of the said scheme the Commonwealth and the States have agreed that for the period commencing on the first day of July One thousand nine hundred and twenty‑seven and ending on the thirtieth day of June One thousand nine hundred and twenty‑nine certain of the proposed provisions of the said scheme shall be temporarily adopted:

NOW THIS AGREEMENT WITNESSETH:

PART I.

This Agreement shall have no force or effect and shall not be binding on any party unless and until it is approved by the Parliaments of the Commonwealth and of the States.
— DEFINITIONS.

In this Agreement —

“Net Public debt of a State existing on 30th June, 1927,” means in respect of each State the amount of debt set forth hereunder opposite to the name of that State, viz.: —

	£
New South Wales . . . . . . . . . . . . .	234,088,501
Victoria . . . . . . . . . . . . . . . . . . . . .	136,949,942
Queensland . . . . . . . . . . . . . . . . . .	101,977,855
South Australia . . . . . . . . . . . . . . .	84,834,364
Western Australia . . . . . . . . . . . . .	61,060,675
Tasmania . . . . . . . . . . . . . . . . . . . .	22,434,060<br>–—————
	£641,345,397
	–—————

The said amount of the net public debt of each State includes the debts of that State secured by —

(i) Inscribed Stock, including Local Inscribed Stock and Government Inscribed Stock;

(ii) Instalment Stock;

(iii) Registered Stock;

(iv) Funded Stock;

(v) Stock payable to bearer;

(vi) Bonds, including registered bonds;

(vii) Debentures, including registered debentures and instalment debentures;

(viii) Treasury Bills not repayable within twelve months from the date of issue; or

(ix) Fixed deposit receipts or special deposit receipts for moneys borrowed for other than temporary purposes;

issued or created by the State or by or on behalf of a Colony the predecessor of the State in respect of moneys borrowed by the Colony or State together with debts of the State to the Commonwealth of the amount set out respectively hereunder opposite to the name of the State so far as those last mentioned debts are not included by being secured in manner aforesaid: —

	£
New South Wales . . . . . . . . . . . . .	12,553,698
Victoria . . . . . . . . . . . . . . . . . . . . .	23,688,269
Queensland . . . . . . . . . . . . . . . . . .	16,082,583
South Australia . . . . . . . . . . . . . . .	18,446,197
Western Australia . . . . . . . . . . . . .	16,739,872
Tasmania . . . . . . . . . . . . . . . . . . . .	3,948,613
	–—————
	£91,459,232
	–—————

after deducting therefrom the amount for which the Commonwealth by this Agreement assumes liability under Part III., Clause 4, of this Agreement and the amount of any moneys or securities standing to the credit of a sinking fund, redemption fund, or a fund of a like nature of the State as on 30th June, 1927, and does not include any moneys raised by the State by way of overdraft, fixed deposit, or special deposit for temporary purposes only.

The said sum of £234,088,501 (being the amount of debt of New South Wales above‑mentioned) comprises the debts referred to in, and has been computed in the manner shown in the Statement signed by representatives of the Commonwealth and of New South Wales.

“Gross Public Debt of a State existing on 30th June, 1927,” means in respect of each State the amount of debt set forth hereunder opposite the name of that State, viz.: —

	£
New South Wales . . . . . . . . . . . . .	239,441,363
Victoria . . . . . . . . . . . . . . . . . . . . .	144,844,530
Queensland . . . . . . . . . . . . . . . . . .	105,259,916
South Australia . . . . . . . . . . . . . . .	87,614,005
Western Australia . . . . . . . . . . . . .	70,705,913
Tasmania . . . . . . . . . . . . . . . . . . . .	24,254,688
	–—————
	£672,120,415
	–—————

The said amount of the gross public debt of each State includes the net public debt of that State together with the amount for which the Commonwealth by this Agreement assumes liability under Part III., Clause (4), of this Agreement and the amount of any moneys or securities standing to the credit of any sinking fund redemption fund or fund of a like nature of the State as on 30th June, 1927.

“Transferred Properties” means the properties mentioned or specified in the Schedule of Transferred Properties signed by representatives of the Commonwealth and the States as revised to the 30th June, 1927, being properties which became vested in the Commonwealth pursuant to Section 85(i) of the Constitution of the Commonwealth.

“The Loan Council” means the Australian Loan Council created in pursuance of this Agreement.

“Bondholder” means an owner of any —

(i) Inscribed Stock, including Local Inscribed Stock and Government Inscribed Stock;

(ii) Instalment Stock;

(iii) Registered Stock;

(iv) Funded Stock;

(v) Stock payable to bearer;

(vi) Bonds, including registered bonds;

(vii) Debentures, including registered debentures and instalment debentures;

(viii) Treasury Bills not repayable within twelve months from the date of issue; or

(ix) Fixed deposit receipts or special deposit receipts for moneys borrowed for other than temporary purposes:

issued or created by a State or by or on behalf of a Colony the predecessor of the State in respect of borrowed moneys but does not include the Commonwealth.

— AUSTRALIAN LOAN COUNCIL.

(a) There shall be an Australian Loan Council, which shall consist of one Minister of State of the Commonwealth to be appointed in writing from time to time by the Prime Minister of the Commonwealth to represent the Commonwealth, and one Minister of State of each State to be appointed in writing from time to time by the Premier of that State to represent that State. Provided that, if in the opinion of the Prime Minister or of any Premier of a State, special circumstances exist at any time which make it desirable so to do, a person who is not a Minister may instead of a Minister be appointed by the Prime Minister or the Premier as the case may be to represent the Commonwealth or a State as a member of the Loan Council. The name of each person appointed to represent a State shall be notified in writing by the Premier of that State to the Prime Minister.

(b) The member representing the Commonwealth on the Loan Council shall hold office during the pleasure of the Prime Minister of the Commonwealth and a member representing a State shall hold office during the pleasure of the Premier of the State which the member was appointed to represent.

(c) A decision in which all the members for the time being of the Loan Council concur shall be a unanimous decision of the Loan Council notwithstanding any vacancy then existing in its membership.

(d) A meeting of the Loan Council may at any time be convened by the member representing the Commonwealth, and shall be so convened upon the request of at least three members representing States.

(e) A majority of the members of the Loan Council shall constitute a quorum of the Loan Council for the exercise of its powers at any meeting. Provided that —

(i) a member may at any time appoint in writing a deputy to act in his absence; and any deputy so appointed may in the absence of the member exercise all the powers and functions of the member and his presence shall be deemed the presence of the member; and

(ii) an absent member who has not appointed a deputy may vote by letter or by telegram, and in such case that member shall be counted as being present in relation only to the questions on which he has voted.

(f) The Loan Council may make rules of procedure including rules relating to places, times, and notices of meetings, and conduct of business at meetings, and from time to time may alter such rules.

(g) The Commonwealth and each State will from time to time while Part II. of this Agreement is in force, and while Part III. of this Agreement is in force, submit to the Loan Council a programme setting forth the amount it desires to raise by loans for each financial year for purposes other than the conversion, renewal or redemption of existing loans, or temporary purposes. Each programme shall state the estimated total amount of such loan expenditure for the year, and the estimated amount of repayments which will be available towards meeting that expenditure. Any revenue deficit to be funded shall be included in such loan programme, and the amount of such deficit shall be set out. Loans for Defence purpose approved by the Parliament of the Commonwealth shall not be included in the Commonwealth’s loan programme or be otherwise subject to this Agreement.

(h) If the Loan Council decides that the total amount of the loan programme for the year cannot be borrowed at reasonable rates and conditions it shall decide the amount to be borrowed for the year, and may by unanimous decision allocate such amount between the Commonwealth and the States.

(i) If the members of the Loan Council fail to arrive at a unanimous decision under the last preceding subclause allocating the amount to be borrowed for any year, the amount to be borrowed for that year shall be allocated as follows: —

(i) The Commonwealth shall, if it so desires, be entitled to have one‑fifth or any less proportion of such amount allocated to the Commonwealth; and

(ii) Each State shall be entitled to have allocated to it a sum (being a portion of the balance of such amount) bearing to the balance of such amount the same proportion which the net loan expenditure of that State in the preceding five years bears to the net loan expenditure of all the States during the same period. Provided that any State may, if it so desires, have allocated to it a sum less than the sum to which it is entitled under this subclause or no sum, and that when a less sum or no sum has been allocated to any State or States in manner aforesaid the amount then remaining available for allocation shall be allocated to the other States in the proportion which the net loan expenditure of each of such other States in the preceding five years bears to the net loan expenditure of all such other States during the same period. For the purposes of this subclause net loan expenditure does not include expenditure for the conversion, renewal, or redemption of loans, but means the gross other loan expenditure of a State less any amounts of such expenditure repaid to the State other than moneys repaid to the State in manner stated in Part II., Clause 4(e), or Part III., Clause 3(i) of this Agreement.

(j) If the total amount to be borrowed as aforesaid for any year is to be borrowed by means of more than one loan the Loan Council may by unanimous decision apportion between the Commonwealth and the States the amount to be borrowed by each such loan other than the loan by means of which the balance of the total amount to be borrowed as aforesaid for the year is borrowed.

(k) If the members of the Loan Council fail to arrive at a unanimous decision under the last preceding subclause apportioning the amount to be borrowed as aforesaid by any loan the amount to be borrowed by that loan shall be apportioned between the Commonwealth and the States in proportion to the amount then to be borrowed as aforesaid for the Commonwealth and for each State for the year.

(l) The Commonwealth and each State will also from time to time, while Part II. of this Agreement is in force and while Part III. of this Agreement is in force, submit to the Loan Council a statement setting out the amount it requires for each financial year for the conversion, renewal or redemption of existing loans.

(m) If the members of the Loan Council fail to arrive at a unanimous decision on any matter other than the matters referred to in Subclauses (h) and (j) of Clause 3 and Subclause (b) of Clause 4 of this part of this Agreement, the matter shall be determined by a majority of votes of the members.

On every question for decision by the Loan Council the member representing the Commonwealth shall have two votes and a casting vote, and each member representing a State shall have one vote.

(n) A decision of the Loan Council in respect of a matter which the Loan Council is by this Agreement empowered to decide shall be final and binding on all parties to this Agreement.

(o) In this clause the expressions “Prime Minister” and “Premier” include the persons for the time being respectively acting as such.

— FUTURE BORROWINGS OF COMMONWEALTH
AND STATES.

(a) Except in cases where the Loan Council has decided under Subclause (b) of this clause that moneys shall be borrowed by a State, the Commonwealth, while Part II. or Part III. of this Agreement is in force, shall, subject to the decisions of the Loan Council and subject also to Clauses 5 and 6 of this Part of this Agreement, arrange for all borrowings for or on behalf of the Commonwealth or any State, and for all conversions, renewals, redemptions, and consolidations of the Public Debts of the Commonwealth and of the States.

(b) If at any time the Loan Council by unanimous decision so decides a State may in accordance with the terms of the decision borrow moneys outside Australia in the name of the State, and issue securities for the moneys so borrowed. The Commonwealth shall guarantee that the State will perform all its obligations to bond holders in respect of the moneys so borrowed. For all the purposes of this Agreement, including the making of sinking fund contributions, the moneys so borrowed shall be deemed to be moneys borrowed by the Commonwealth for and on behalf of that State.

(c) If any State after the 30th June, 1927, and before this Agreement has been approved by the Parliaments of the Commonwealth and of the States, has borrowed moneys in the name of the State and issued securities for the moneys so borrowed, such moneys shall for all the purposes of this Agreement, including the making of sinking fund contributions, be deemed to be moneys borrowed by the Commonwealth for and on behalf of that State.

(d) While Part II. and Part III. of this Agreement is in force moneys shall not be borrowed by the Commonwealth or any State otherwise than in accordance with this Agreement.

— BORROWING BY STATES.

For any purpose (including the redemption of securities given or issued at any time for moneys previously borrowed or used in manner stated in this clause) a State may, while Part II. or Part III. of this Agreement is in force —

(a) Subject to any maximum limits decided upon by the Loan Council from time to time for interest, brokerage, discount and other charges, borrow moneys within the State from authorities, bodies, funds or institutions (including Savings Banks) constituted or established under Commonwealth or State law or practice and from the public by counter sales of securities, and

(b) use any public moneys of the State which are available under the laws of the State.

Any securities that are issued for moneys so borrowed or used shall be Commonwealth securities, to be provided by the Commonwealth upon terms approved by the Loan Council.

Where any such borrowing or use is solely for temporary purposes, the provisions of this Agreement, other than this clause, shall not apply.

Where any such borrowing or use is not solely for temporary purposes, and Commonwealth securities are issued in respect thereof, the moneys borrowed or used shall be deemed to be moneys borrowed by the Commonwealth for and on behalf of the State, and may be retained by the State. A State may convert securities given or issued at any time by that State for moneys previously borrowed or used in manner stated in this clause. New securities issued on any such conversion shall be Commonwealth securities to be provided by the Commonwealth upon terms approved by the Loan Council. The amount for which such new securities are issued shall be deemed to be moneys borrowed by the Commonwealth for and on behalf of the State.

If the moneys deemed under this clause to be moneys borrowed by the Commonwealth on behalf of the State, together with the amounts raised by the Commonwealth for and on behalf of the State exceed the total amount of loan moneys decided upon by the Loan Council as the moneys to be raised for and on behalf of the State for the financial year in which the money is deemed to be borrowed, the excess shall, unless the Loan Council otherwise decides, be deemed to be moneys received by the State in the following year on account of its loan programme for that year.

For the purposes of this clause counter sales of securities shall be deemed to mean sales of securities made at the offices of the State Treasury, and at such other places as may be decided upon by the Loan Council.

The Commonwealth shall not be under any obligation to make sinking fund contributions in respect of moneys borrowed or used pursuant to this clause to meet a revenue deficit of a State, but the provisions of Clause 4(d) of Part II. and of Clause 3(j) of Part III. of this Agreement shall apply respectively to all moneys borrowed or used for that purpose.

Except in cases where the Loan Council has otherwise decided under sub‑clause (b) of clause 4 of Part I. of this Agreement a State shall not have the right to invite loan subscriptions by the issue of a public prospectus.

Notwithstanding anything contained in this Agreement, any State may use for temporary purposes any public moneys of the State which are available under the laws of the State, or may, subject to maximum limits (if any) decided upon by the Loan Council from time to time for interest, brokerage, discount, and other charges, borrow money for temporary purposes by way of overdraft, or fixed, special, or other deposit, and the provisions of this Agreement other than this paragraph shall not apply to such moneys.

— BORROWING BY COMMONWEALTH.

For any purpose (including the redemption of securities given or issued at any time for moneys previously borrowed or used in manner stated in this clause) the Commonwealth may, while Part II. or Part III. of this Agreement is in force —

(a) subject to any maximum limits decided upon by the Loan Council from time to time for interest, brokerage, discount and other charges, borrow moneys within the Commonwealth from authorities, bodies, funds or institutions (including Savings Banks) constituted or established under Commonwealth or State law or practice, and from the public by counter sales of securities; and

(b) use any public moneys of the Commonwealth which are available under the laws of the Commonwealth.

Any securities that are issued for moneys so borrowed or used shall be Commonwealth securities, to be provided by the Commonwealth upon terms approved by the Loan Council.

Where any such borrowing or use is solely for temporary purposes, the provisions of this Agreement, other than this clause, shall not apply.

Where any such borrowing or use is not solely for temporary purposes, and Commonwealth securities are issued in respect thereof, the moneys borrowed or used may be retained by the Commonwealth. The Commonwealth may convert securities given or issued at any time by the Commonwealth for moneys previously borrowed or used in manner stated in this clause. New securities issued on any such conversion shall be Commonwealth securities to be provided by the Commonwealth upon terms approved by the Loan Council.

If the moneys so borrowed or used are not borrowed or used solely for temporary purposes and Commonwealth securities are issued in respect thereof, and such moneys, together with other moneys borrowed by the Commonwealth for and on behalf of the Commonwealth as part of the total amount of loan moneys decided upon by the Loan Council as the moneys to be raised for and on behalf of the Commonwealth for the financial year in which the securities are issued, exceeds such total amount the excess shall, unless the Loan Council otherwise decides, be deemed to be moneys received by the Commonwealth in the following year on account of its loan programme for that year.

For the purposes of this clause, counter sales of securities shall be deemed to mean sales of securities made at the offices of the Commonwealth Treasury, and at such other places as may be decided upon by the Loan Council.

Notwithstanding anything contained in this Agreement, the Commonwealth may use for temporary purposes any public moneys of the Commonwealth which are available under the laws of the Commonwealth or may, subject to maximum limits (if any) decided upon by the Loan Council from time to time for interest, brokerage, discount, and other charges, borrow money for temporary purposes by way of overdraft, or fixed, special or other deposit, and the provisions of this Agreement other than this paragraph shall not apply to such moneys.

— PAYMENT OF INTEREST AND SINKING FUND.

In the event of Part III. of this Agreement not coming into force each State shall in respect of all moneys borrowed by the Commonwealth for and on behalf of that State during the period commencing on the 1st July, 1927, and ending on the 30th June, 1929 —

(a) pay to the Commonwealth interest at the full rate of interest payable by the Commonwealth in respect of the loan by which such moneys were borrowed or such other rate of interest as may be payable by that State to the Commonwealth under any agreement made or to be made between the Commonwealth and that State in respect of such moneys. Such interest shall be payable for the full term of that loan and be paid to the Commonwealth on the respective days upon which interest is payable by the Commonwealth in respect of that loan; and

(b) make sinking fund contributions to the National Debt Commission in respect of the loan by which such moneys were borrowed at the full rate and for the proportion unexpired on the 30th June, 1929, of the full period provided for in the conditions under which the public were invited to subscribe to that loan; and

(c) pay to the Commonwealth when the loan matures an amount which (together with the sinking fund contributions made by the Commonwealth and the State in respect of that loan and the accumulations of such contributions) will be sufficient to provide for the redemption of that loan. For the purposes of this sub‑clause such contributions shall be deemed to accumulate at the rate of 4½ per centum per annum compounded.

PART II.

This part of this Agreement shall be in force only during and in respect of the period of two years, commencing on 1st July, 1927, and ending on 30th June, 1929.
— CONTRIBUTION BY COMMONWEALTH TO INTEREST.

The Commonwealth will in each of the said two years pay to each State by equal monthly instalments the amount set out opposite to the name of that State as shown hereunder: —

	£
New South Wales . . . . . . . . . . . . . . . .	2,917,411
Victoria . . . . . . . . . . . . . . . . . . . . . . . .	2,127,159
Queensland . . . . . . . . . . . . . . . . . . . . .	1,096,235
South Australia . . . . . . . . . . . . . . . . . .	703,816
Western Australia . . . . . . . . . . . . . . . .	473,432
Tasmania . . . . . . . . . . . . . . . . . . . . . . .	266,859
	—————
	£7,584,912
	—————

Each State shall apply the amount so paid to it towards payment of interest due by that State on the Public Debt of that State. All amounts paid by the Commonwealth to a State in pursuance of Section 6 of the State Grants Act 1927, of the Commonwealth shall be deemed to be payments to that State under this clause.

— TRANSFERRED PROPERTIES.

The Commonwealth will in each of the said two years pay to each State interest at the rate of 5 per centum per annum on the agreed value of transferred properties in the State, such value being in the case of each State as follows: —

	£
New South Wales . . . . . . . . . . . . . . . .	4,788,005
Victoria . . . . . . . . . . . . . . . . . . . . . . . .	2,302,862
Queensland . . . . . . . . . . . . . . . . . . . . .	1,560,639
South Australia . . . . . . . . . . . . . . . . . .	1,035,631
Western Australia . . . . . . . . . . . . . . . .	736,432
Tasmania . . . . . . . . . . . . . . . . . . . . . . .	500,754
	—————
Total . . . . . . . . . . . . .	£10,924,323
	—————

— SINKING FUNDS.

(a) In each of the said two years the Commonwealth will pay from revenue a sinking fund contribution at the rate of 2s. 6d. per annum for each £100 of the Net public debts of the States existing on 30th June, 1927, and each State (other than the State of New South Wales) will pay from revenue a sinking fund contribution at the rate of 5s. per annum for each £100 of the net public debt of that State existing on 30th June, 1927. The State of New South Wales will in the financial year commencing 1st July, 1928, pay from revenue a sinking fund contribution at the rate of 5s. for each £100 of the net public debt of that State existing on 30th June, 1927.

(b) Where in respect of any debt included in the gross public debt of a State existing on 30th June, 1927, there is under laws or contracts existing at that date an obligation to provide a sinking fund at a rate in excess of 7s. 6d. per annum for each £100, any amount to be so provided in excess of the rate of 7s. 6d. per annum for each £100 shall be provided out of the National Debt Sinking Fund established under the laws of the Commonwealth. Provided that if any law imposing such an obligation is repealed or is amended so as to reduce the rate of sinking fund to be provided, the only amount (if any) to be provided out of the National Debt Sinking Fund pursuant to this subclause in respect of that debt shall, as from the date of such repeal or amendment, be the amount (if any) by which the reduced rate of sinking fund for the time being exceeds 7s. 6d. per annum for each £100.

(c) In respect of each loan raised after the 30th June, 1927, either by a State or by the Commonwealth for and on behalf of a State (other than a loan raised for the conversion, renewal, or redemption of a loan, or for temporary purposes) the Commonwealth and that State shall, subject to the next succeeding subclause as from the date of the raising of that loan, each pay from revenue a sinking fund contribution at the rate of five shillings (5s.) per annum for each £100 of the amount of such loan. Provided, however, that the liability of the State of New South Wales to make sinking fund contributions under this sub‑clause shall commence on the 1st July, 1928. The provisions of this sub‑clause apply to a loan raised after the 30th June, 1927, to meet a revenue deficit which accrued on or before that date.

(d) In respect of any loan raised after 30th June, 1927, by a State or by the Commonwealth for and on behalf of a State to meet a revenue deficit accruing after that date no sinking fund contribution shall be payable by the Commonwealth, but that State shall pay from revenue a sinking fund contribution at a rate of not less than 4 per centum per annum on the amount of that loan.

(e) Where loan moneys have been advanced by a State under terms providing for the repayment of such moneys, the State shall as and when such moneys are repaid pay such moneys either to the State Loan Fund or to the account or fund from which such moneys were advanced, and shall in addition, make from revenue its sinking fund contributions in respect of the loan or loans from which the moneys so advanced were provided. Provided that when loan moneys have been advanced by a State to a public or local authority or body constituted by the State, or under the laws of the State, and the authority or body repays such moneys out of its revenue, the State may out of moneys so repaid make its sinking fund contributions in respect of the loan moneys so advanced.

(f) All sinking fund contributions to be made in pursuance of this Part of this Agreement shall be paid to the National Debt Commission constituted under the National Debt Sinking Fund Act 1923‑25, of the Commonwealth (herein called the National Debt Commission) as follows: —

(i) as regards the net public debt of a State existing on 30th June, 1927 — by half‑yearly instalments on 30th September and 31st March in each financial year, or on such other dates as may be agreed between the Commonwealth and the State;

(ii) as regards loans raised after 30th June, 1927 — by equal instalments on the dates on which interest on such loans is payable or on such other dates as may be agreed upon between the Commonwealth and the State concerned.

(g) Where the conditions relating to sinking funds, redemption funds, and funds of a like nature require payments to be made to trustees, the National Debt Commission will either directly or through any State concerned, make the necessary payments to those trustees.

(h) The sinking fund contributions made under this Part of this Agreement in respect of the Public Debt of a State (other than constributions paid or to be paid to trustees under the last preceding sub‑clause hereof) shall so far as the same will suffice be applied in the repurchase or redemption of the Public Debt of that State and in the event of the proposed law for the alteration of the Constitution referred to in Part IV. of this Agreement not becoming law, and of this Agreement not being validated thereunder on or before the 30th June, 1929, all State securities repurchased or redeemed as aforesaid shall be cancelled with the exception of securities the market value of which represents the amount of money provided in excess of the rate of 7s. 6d. per annum for each £100 under paragraph (b) of this clause, which latter securities shall be retained by and belong to the National Debt Commission.

PART III.

This Part of this Agreement shall not come into force or be binding upon any party hereto unless before the 1st July, 1929, the Constitution of the Commonwealth has been altered in accordance with the proposals referred to in Part IV. of this Agreement, and a law of the Parliament of the Commonwealth has been made thereunder validating this Agreement, but shall come into full force and effect if, and when, before the said date the Constitution is so altered and this Agreement is so validated.

When this Part of this Agreement comes into force every matter or thing done and payment made under or in pursuance of Part II. of this Agreement shall be deemed, so far as is practicable, to have been done or made under this Part of this Agreement to the same extent as if this Part had then in fact been in force, and all necessary adjustments shall be made in respect of moneys so paid in order to ensure that no party hereto shall be liable for or make double payments in respect of the same matter.

PERMANENT PROVISIONS.

— TAKING OVER STATES’ PUBLIC DEBTS.

Subject to the provisions of this part of this Agreement the Commonwealth will take over on the 1st July, 1929: —

(i) the balance then unpaid of the gross public debt of each State existing on 30th June, 1927; and

(ii) all other debts of each State existing on the 1st July, 1929, for moneys borrowed by that State which by this Agreement are deemed to be moneys borrowed by the Commonwealth for and on behalf of that State —

and will in respect of the debts so taken over assume as between the Commonwealth and the States the liabilities of the States to bondholders.

— PAYMENT OF INTEREST.

(a) Subject to this clause the Commonwealth will pay to bondholders from time to time interest payable on the Public Debts of the States taken over by the Commonwealth as aforesaid other than debts due by the States to the Commonwealth.

(b) The Commonwealth will in each year during the period of 58 years, commencing on 1st July, 1927, provide by equal monthly instalments the following amounts in respect of each State as shown hereunder towards the interest payable by that State: —

	£
New South Wales . . . . . . . . . . . . . . . .	2,917,411
Victoria . . . . . . . . . . . . . . . . . . . . . . . .	2,127,159
Queensland . . . . . . . . . . . . . . . . . . . . .	1,096,235
South Australia . . . . . . . . . . . . . . . . . .	703,816
Western Australia . . . . . . . . . . . . . . . .	473,432
Tasmania . . . . . . . . . . . . . . . . . . . . . . .	266,859
	–————
	£7,584,912
	–————

(c) Each State shall in each year during the same period of 58 years pay to the Commonwealth the excess over the amounts to be provided by the Commonwealth under the last preceding subclause necessary to make up as they fall due the interest charges falling due in that year on the public debt of that State taken over by the Commonwealth as aforesaid and then unpaid, and on any moneys borrowed by the Commonwealth on behalf of that State and then unpaid, and after the expiration of the said period each State shall in each year pay to the Commonwealth, as they fall due, the whole of the interest charges on any debt then unpaid and included in the public debt of that State taken over by the Commonwealth as aforesaid, and on any moneys borrowed by the Commonwealth on behalf of that State and then unpaid.

(d) The method by which payments shall be made by a State under Subclause (c) of this clause shall be arranged from time to time between the Commonwealth and that State.

(e) The rate of interest payable under Subclause (c) of this clause in respect of moneys borrowed by the Commonwealth on behalf of a State shall be the full rate of interest payable by the Commonwealth in respect of the loan by which such moneys were borrowed or such other rate of interest as may be payable by the State to the Commonwealth under any Agreement made or to be made between the Commonwealth and that State in respect of such moneys and such interest shall be payable by the State for the full term of that loan.

— SINKING FUND.

(a) A sinking fund at the rate of 7s. 6d. per annum for each £100 of the net public debts of the States existing on 30th June, 1927, shall be established in the manner hereinafter set forth.

(b) During the period of fifty‑eight years commencing on the 1st July, 1927, the Commonwealth shall pay from revenue annually a sinking fund contribution at the rate of 2s. 6d. for each £100 of the net public debts of the States existing on 30th June, 1927, and each State (other than the State of New South Wales) shall in each year during the said period pay from revenue a sinking fund contribution at the rate of 5s. for each £100 of the net public debt of such State existing on 30th June, 1927. The State of New South Wales during the period of fifty‑eight years commencing on the 1st July, 1928, shall in each year pay from revenue a sinking fund contribution at the rate of 5s. for each £100 of the net public debt of that State existing on 30th June, 1927.

(c) Where in respect of any debt included in the gross public debt of a State existing at the 30th June, 1927, there is under laws or contracts existing at that date an obligation to provide a sinking fund at a rate in excess of 7s. 6d. per annum for each £100, any amount to be so provided in excess of 7s. 6d. per annum for each £100 shall be provided out of the National Debt Sinking Fund, established under the laws of the Commonwealth. Provided that if any law imposing such an obligation is repealed or is amended so as to reduce the rate of sinking fund to be provided the only amount (if any) to be provided out of the National Debt Sinking Fund pursuant to this subclause in respect of that debt shall as from the date of such repeal or amendment be the amount (if any) by which the reduced rate of sinking fund for the time being exceeds 7s. 6d. per annum for each £100.

(d) When a loan is issued for the conversion, renewal, or redemption of any debt of a State included in the gross Public Debt of that State existing on 30th June, 1927, the only sinking fund contribution to be made by the Commonwealth and that State in respect of the debt so converted, renewed, or redeemed shall be sinking fund contributions at the same rate and for the same period and upon the same amount as if such debt had not been converted, renewed, or redeemed.

(e) Subject to Subclauses (h) and (j) of this clause a sinking fund at the rate of 10s. per annum for each £100 of the amount of each new loan raised by a State or by the Commonwealth for and on behalf of a State after 30th June, 1927, shall be established.

(f) Subject to Subclauses (h) and (j) of this clause, in each year during the period of fifty‑three years from the date of the raising after 30th June, 1927, of any new loan by a State or by the Commonwealth for and on behalf of a State the Commonwealth and that State shall each pay from revenue a sinking fund contribution of a sum equal to 5s. for each £100 of the amount of the new loan.

Provided that the period of fifty‑three years during which the State of New South Wales shall make sinking fund contributions in respect of new loans raised in the financial year beginning on the 1st July, 1927, shall commence on the 1st July, 1928.

(g) For the purpose of the last two preceding subclauses a loan issued after the 30th June, 1927, to meet a revenue deficit which accrued on or before that date shall be deemed to be a new loan, but a loan issued for the conversion, renewal or redemption of a debt shall not be deemed to be a new loan, and where a loan is issued partly for the conversion, renewal, or redemption of a debt and partly for other purposes so much only of the loan as has been issued for other purposes shall be deemed to be a new loan.

(h) Where it is agreed between the Commonwealth and a State that a loan or any portion of a loan raised after 30th June, 1927, and expended or to be expended upon wasting assets should be redeemed within a shorter period than fifty‑three years, the annual sinking fund contributions of the State in respect of that loan or the portion thereof, shall be increased to an amount which with the sinking fund contributions of the Commonwealth in respect of that loan or the portion thereof will provide for the redemption of that loan or the portion thereof within such shorter period. All sinking fund contributions of the State in respect of that loan or the portion thereof shall cease on the expiration of the shorter period, but the Commonwealth contributions in respect of that loan shall continue for the remainder of the period of fifty‑three years from the date of the raising of that loan, and during such remainder of the period the State contributions to the sinking fund in respect of other loans of that State shall be reduced by the amount of the Commonwealth contributions during that remainder of the period in respect of such redeemed loan or the portion thereof. For the purposes of this subclause the sinking fund contributions of the Commonwealth and the State shall be deemed to accumulate at the rate of 4½ per centum per annum compounded.

(i) Where loan moneys have been advanced by a State under terms providing for the repayment of such moneys the State shall as and when such moneys are repaid pay such moneys either to the State Loan Fund or to the account or fund from which such moneys were advanced, or to the sinking fund and shall in addition make from revenue its sinking fund contributions in respect of the loan or loans from which the moneys so advanced were provided. Provided that when loan moneys have been advanced by a State to a public or local authority or body constituted by the State, or under the laws of the State, and the authority or body repays such moneys out of its revenue, the State may out of moneys so repaid make its sinking fund contributions in respect of the loan moneys so advanced.

(j) In respect of any loan raised after the 30th June, 1927, by a State or by the Commonwealth for and on behalf of a State to meet a revenue deficit accruing after that date no sinking fund contribution shall be payable by the Commonwealth, but that State shall for a period sufficient to provide for the redemption of that loan pay from revenue in each year during such period a sinking fund contribution at a rate of not less than 4 per centum per annum of the amount of that loan. For the purposes of this subclause the sinking fund contributions of the State shall be deemed to accumulate at the rate of 4½ per centum per annum compounded.

(k) All sinking fund contributions to be made in pursuance of this part of this Agreement shall be debts payable to the National Debt Commission as follows: —

(i) As regards the net public debt of a State existing on 30th June, 1927 — by half‑yearly instalments on 30th September and 31st March in each financial year or on such other dates as may be agreed between the Commonwealth and that State.

(ii) As regards loans raised after 30th June, 1927 — by equal instalments on the dates on which interest on such loans is payable or on such other dates as may be agreed upon between the Commonwealth and the State concerned.

(l) Subject to the next succeeding sub‑clause all moneys and securities standing to the credit of sinking funds, redemption funds and funds of a like nature of a State existing on 30th June, 1929, shall forthwith be transferred by the States to the National Debt Commission. Nothing in this sub‑clause contained shall be deemed to limit the power of a State to cancel before 30th June, 1929, any such securities.

(m) Where the conditions relating to sinking funds, redemption funds, and funds of a like nature as aforesaid held by a State on trust or by trustees under statutory or contractual obligations preclude the transfer of those funds to the National Debt Commission, such funds shall remain under the control of the State or those trustees, and the National Debt Commission will either directly or through the State concerned make all future payments to the State or to those trustees from the sinking fund.

(n) The sinking funds to be established under this Agreement shall be controlled by the National Debt Commission. The National Debt Commission may arrange with any State to act as its agent in connection with payments due to bondholders.

(o) Sinking fund contributions made under this Agreement in respect of the debts of a State, and funds of that State transferred to the National Debt Commission under sub-clause (l) of the clause will not be accumulated, but (subject to sub‑clauses (m) and (p) of this clause) will be applied to the redemption of the public debts of that State and of loans raised by the Commonwealth for and on behalf of that State, or to the purchase of securities issued in respect thereof.

(p) If at any time it is deemed inexpedient by the National Debt Commission to apply sinking funds in the manner set forth in sub‑clause (o) of this clause, such funds may be temporarily invested in any securities in which the National Debt Commission is from time to time by law authorised to invest moneys.

(q) When a security issued in respect of a public debt of a State or of a loan raised by the Commonwealth for and on behalf of a State is repurchased or redeemed by the National Debt Commission such security shall be cancelled —

(i) if a repurchased security — on the last day of September, December, March or June next ensuing after the date of repurchase, or on the date of maturity of the security whichever shall first occur; and

(ii) if a redeemed security — on the date of redemption.

In addition to the sinking fund contributions otherwise payable in respect of that debt or loan the State concerned shall —

(i) as from the date of cancellation of each security and for the full period during which the said sinking fund contributions are payable make from revenue a further sinking fund contribution at the rate of 4½ per centum per annum of the face value of the cancelled security; and

(ii) also pay to the National Debt Commission interest on the face value of each repurchased security at the rate provided by the security from the last date preceding the repurchase upon which interest was payable under the terms of the security up to the date of cancellation of the security.

— TRANSFERRED PROPERTIES.

It is agreed that all questions between the Commonwealth and the States relating to State properties transferred to the Commonwealth or acquired by the Commonwealth under section 85 of the Constitution shall be settled as follows: —

The State will as from 1st July, 1929, and as between the Commonwealth and the States be completely free and discharged from all liability whether in respect of principal, interest or sinking fund, or otherwise, which liability shall be assumed by the Commonwealth in respect of so much of the public debts of the States bearing interest at the rate of 5 per centum per annum, taken over by the Commonwealth as aforesaid as amounts to the agreed value of transferred properties, namely, £10,924,323, apportioned to the several States as follows: —

	£
New South Wales . . . . . . . . . . . . . . . .	4,788,005
Victoria . . . . . . . . . . . . . . . . . . . . . . . .	2,302,862
Queensland . . . . . . . . . . . . . . . . . . . . .	1,560,639
South Australia . . . . . . . . . . . . . . . . . .	1,035,631
Western Australia . . . . . . . . . . . . . . . .	736,432
Tasmania . . . . . . . . . . . . . . . . . . . . . . .	500,754
	—————
Total . . . . . . . . . . . . .	£10,924,323
	—————

The particular portion of the public debt of each State in respect of which the States shall become free and discharged from liability shall be determined by the Commonwealth.

Each State will issue to the Commonwealth freehold titles (or, if the laws of any State do not permit of the issue of freehold titles, then titles as near to freehold as the laws of that State will permit) for transferred properties consisting of land or interest in land in that State, and all liability of the Commonwealth to the State in respect of transferred properties shall as from the 1st July, 1929, be extinguished.

The provisions of clauses 2 and 3 of this Part of this Agreement shall not apply to the said amount of £10,924,323.

PART IV. — MISCELLANEOUS.

— EXPENSES OF LOAN FLOTATION.

Each State shall repay to the Commonwealth all expenses incurred or payments made by the Commonwealth in the performance of this Agreement in relation to the State including the following expenses and payments: —

(i) Loan flotation charges;

(ii) Management charges;

(iii) Stamp duties on transfer of securities;

(iv) Commission on payment of interest;

(v) Expenses incurred in the conversion, renewal, redemption or consolidation of loans;

(vi) Exchange on transference of moneys.

Unless it is otherwise agreed between the Commonwealth and a State the Commonwealth will not do anything in connexion with a loan of that State existing on the 30th June, 1927, or raised thereafter pursuant to this Agreement, which if done by that State would be a breach of any now existing agreement by that State with any Bank.

A certificate by the Auditor‑General of the Commonwealth stating the amount to be repaid by a State to the Commonwealth and the matter in respect of which the repayment is to be made shall, in the event of a dispute, be conclusive as to the amount and matter stated.

— ALTERATION OF THE CONSTITUTION.

The Commonwealth will take the necessary action to submit to the Parliament of the Commonwealth and to the electors proposals for the alteration of the Constitution of the Commonwealth in the following form: —

“105A. (1) The Commonwealth may make agreements with the States with respect to the public debts of the States, including —

(a) the taking over of such debts by the Commonwealth;

(b) the management of such debts;

(d) the consolidation, renewal, conversion, and redemption of such debts;

(e) the indemnification of the Commonwealth by the States in respect of debts taken over by the Commonwealth; and

(f) the borrowing of money by the States or by the Commonwealth or by the Commonwealth for the States.

(2) The Parliament may make laws for validating any such agreement made before the commencement of this section.

(3) The Parliament may make laws for the carrying out by the parties thereto of any such agreement.

(4) Any such agreement may be varied or rescinded by the parties thereto.

(5) Every such agreement and any such variation thereof shall be binding upon the Commonwealth and the States parties thereto, notwithstanding anything contained in this Constitution or the constitution of the several States or in any law of the Parliament of the Commonwealth or of any State.

(6) The powers conferred by this section shall not be construed as being limited in any way by the provisions of section 105 of this Constitution.”

— INDEMNITY.

Each State agrees with the Commonwealth that it will by the faithful performance of its obligations under this Agreement indemnify the Commonwealth against all liabilities whatsoever in respect of the public debt of that State taken over by the Commonwealth as aforesaid (other than the liabilities of the Commonwealth under this Agreement to pay interest and to make sinking fund contributions and under Clause 4 of Part III. of this Agreement), and in respect of all loans of that State in respect of which this Agreement provides that sinking fund contributions shall be made.

— ACCOUNTS.

Separate accounts shall be kept by the Commonwealth for each State in respect of Debt, Interest, and Sinking Funds.

In witness whereof the Prime Minister of the Commonwealth of Australia and the Premiers of each of the States of New South Wales, Victoria, Queensland, South Australia, Western Australia, and Tasmania, have signed this Agreement respectively for and on behalf of the Commonwealth of Australia, and of the said States.

Signed by the Prime Minister of the Commonwealth of Australia for and on behalf of the said Commonwealth in the presence of —<br>EARLE PAGE.	View image in the official source	S. M. BRUCE.
Signed by the Premier of the State of New South Wales for an on behalf of the said State in the presence of —<br>B. S. STEVENS.	View image in the official source	T. R. BAVIN.
Signed by the Premier of the State of Victoria for and on behalf of the said State in the presence of —<br>H. A. PITT.	View image in the official source	E. J. HOGAN.
Signed by the Premier of the State of Queensland for and on behalf of the said State in the presence of —<br>J. MULLEN.	View image in the official source	W. McCORMACK.
Signed by the Premier of the State of South Australia for and on behalf of the said State in the presence of —<br>H. TASSIE.	View image in the official source	R. L. BUTLER.
Signed by the Premier of the State of Western Australia for and on behalf of the said State in the presence of —<br>GEO. W. SIMPSON.	View image in the official source	P. COLLIER.
Signed by the Premier of the State of Tasmania for and on behalf of the said State in the presence of —<br>J. ALLAN GUY.	View image in the official source	J. A. LYONS.

dline

Notes

1 This is a compilation of the Financial Agreement Act 1928 and includes the amendments made by the other written laws referred to in the following table 5. The table also contains information about any reprint.

Compilation table

Short title	Number and year		Assent	Commencement
Financial Agreement Act 1928	1 of 1928 (19 Geo. V No. 1)		30 Aug 1928	30 Aug 1928
Acts Amendment (Financial Administration and Audit) Act 1985 s. 3	98 of 1985		4 Dec 1985	1 Jul 1986 (see s. 2 and Gazette 30 Jun 1986 p. 2255)
Financial Administration and Audit Amendment Act 1990 s. 39(1)	92 of 1990		20 Dec 1990	8 Mar 1991 (see s. 2 and Gazette 8 Mar 1991 p. 1029)
Financial Administration Legislation Amendment Act 1993 s. 11	6 of 1993		27 Aug 1993	1 Jul 1993 (see s. 2(1))
*Reprint of the Financial Agreement Act 1928* as at 1 Feb 2002** (includes amendments listed above)
Financial Legislation Amendment and Repeal Act 2006 s. 4	77 of 2006	21 Dec 2006	1 Feb 2007 (see s. 2(1) and Gazette 19 Jan 2007 p. 137)
*Reprint 2: The Financial Agreement Act 1928* as at 18 Mar 2016** (includes amendments listed above)

2 Repealed by the Statute Law Revision Act 1965.

3 Repealed by the Land Act 1933 which was repealed by the Land Administration Act 1997.

4 Repealed by the Acts Amendment (Financial Administration and Audit) Act 1985.

5 The Financial Agreement Act 1928 is affected by and should be read with the following:

Financial Agreement (Amendment) Act 1944 (No. 18 of 1944)

Financial Agreement (Amendment) Act 1966 (No. 48 of 1966)

*Financial Agreement (Amendment) Act 1976* (No. 15 of 1976)

Defined terms

[This is a list of terms defined and the provisions where they are defined. The list is not part of the law.]

Defined term Provision(s)

said agreement 2

Western Australia

Financial Agreement Act 1928

Western Australia

Financial Agreement Act 1928

Contents

Short title 1
Approval of agreement 1
Sinking funds 1
Suspension of Sale of Government Property Act 1907 3
Construction of Acts of W.A. 3
Modification of conflicting provisions 3
Appropriation 4
Regulations 4
Investment of moneys in Commonwealth Government securities 4

The Schedule

Notes

Compilation table 30

Defined terms

Western Australia

Financial Agreement Act 1928

1. Short title

This Act may be cited as the Financial Agreement Act 1928 1.

2. Approval of agreement

The agreement, a copy of which is set forth in the Schedule (hereinafter referred to as the said agreement) is hereby approved.

3. Sinking funds

(2) All sinking fund contributions payable after 30 June 1927, under and at the rate prescribed by the 2, or any other Act, for investment by the trustees appointed in London under the said Act in respect of any public debt of the State shall, subject as hereinafter provided, be suspended, and if and when Part III of the said agreement shall come into force and effect shall be superseded by the sinking fund contributions payable under the said agreement; but if Part III of the said agreement shall not come into force and effect, all suspended interest and sinking fund contributions shall be paid by the State to the trustees forthwith.

The legislation embeds several core concepts and mechanisms drawn from the Schedule and given statutory effect in Western Australia by ss 2-9. Key concepts are these.

Loan Council: The Agreement (Part I, cl 3) creates an Australian Loan Council comprising one Commonwealth representative and one representative for each State (normally a minister). The Loan Council sets loan programmes, decides total amounts that can be borrowed, may allocate borrowing between Commonwealth and States, and resolves apportionments of multi‑loan flotations. Voting rules are prescribed: the Commonwealth member has two votes and a casting vote; each State has one vote (Part I, cl 3(m)). Decisions made within the Loan Council are final and binding on the parties (Part I, cl 3(n)).
Centralised borrowing: While Part II or Part III is in force, the Agreement requires that the Commonwealth will, subject to Loan Council decisions and subject to certain exceptions, arrange borrowings for the Commonwealth and for the States (Part I, cl 4(a)). Where the Loan Council unanimously decides, a State may borrow overseas in its own name, with the Commonwealth guaranteeing obligation performance (Part I, cl 4(b)). Clause 5 and 6 of Part I set out detailed rules allowing States and the Commonwealth to borrow from internal authorities and the public, but where securities are issued for non‑temporary borrowings, they are to be Commonwealth securities provided on terms approved by the Loan Council (Part I, cls 5-6).
Sinking funds and National Debt Commission: The Agreement establishes prescribed sinking‑fund rates, contributions, and the National Debt Commission’s role in collecting and applying those contributions (Part II, cl 4; Part III, cl 3). For example, under Part III the sinking fund rate is 7s. 6d. per annum per £100 of the net public debts existing on 30 June 1927; the Commonwealth contributes 2s. 6d. and most States contribute 5s. (Part III, cl 3(b)). For new loans raised after 30 June 1927, a 10s. per annum per £100 rate and shared contributions of 5s./5s. over a 53‑year schedule are prescribed, subject to exceptions for loans raised to meet revenue deficits and other adjustments (Part III, cl 3(e)-(j)).
Transfer and valuation of properties: The Agreement fixes an agreed value for transferred properties vested in the Commonwealth under s 85(i) of the Constitution, £10,924,323 total apportioned to the States; that sum is used as a notional offset against the debts assumed by the Commonwealth (Part II, cl 3; Part III, cl 4). The States are to issue freehold titles (or near‑equivalents) for transferred land, and liability to States in respect of transferred properties is extinguished from 1 July 1929 to the agreed extent (Part III, cl 4).
Conditional permanence: Part II is temporary and operates only for two specified years (1 July 1927-30 June 1929) unless Part III comes into force. Part III contains the permanent takeover arrangements but only comes into force if the Constitution is altered and the Agreement validated before 1 July 1929 (Part III; Part IV cl 2 proposes the draft constitutional provision).
Administrative supremacy over State legislation: Sections 5 and 6 of the Act (and the Agreement’s finality clause) require Western Australian Acts to be read subject to this Act and authorise the Governor (s 6) to suspend, repeal, amend, or modify Orders in Council and Regulations to enable the administration of the Act and the Agreement. That mechanism creates a statutory hierarchy for matters covered by the Agreement.
Investment flexibility: Section 9 permits statutory investment directions that previously required investment in WA Government securities to be read as permitting investment in Commonwealth Government securities as well. That recharacterises permissible investment options for government funds, trustees and statutory bodies.

These concepts are technical and interconnected: Loan Council decisions shape borrowing capacity and instrument types; the Commonwealth’s central role in arranging and providing Commonwealth securities ties state borrowing to Commonwealth debt management; the National Debt Commission centralises sinking‑fund control; and the Act creates legal authority to suspend or modify domestic rules to give effect to those intergovernmental arrangements.

The Act affects an identifiable set of public and private actors by changing who decides on borrowing, where statutory funds may be invested, and how sinking funds and certain securities are treated.

State governments and Treasuries: The Agreement alters states’ borrowing mechanics while Part II or Part III is in force (Part I, cl 4; Part I, cls 5-6). States must submit loan programmes to the Loan Council (Part I, cl 3(g)), may be allocated borrowing quotas, and in many circumstances will have Commonwealth securities issued for loans they raise (Part I, cl 5). States bear ongoing obligations to pay sinking‑fund contributions and to pay their share of interest or the excess over Commonwealth contributions under Part III (Part III, cl 2(c); Part III, cl 3(b)). Section 5 requires State Acts to be read subject to the Act and Agreement, constraining State legislative autonomy in affected areas.
Commonwealth Treasury and Commonwealth Minister(s): The Commonwealth member to the Loan Council, appointed by the Prime Minister, participates in allocation and borrowing decisions and, under the Agreement, the Commonwealth is required in many circumstances to arrange borrowings and to provide certain regular payments to the States (Part II, cl 2 and cl 3; Part III, cl 2). The Commonwealth may issue Commonwealth securities for State borrowings and guarantees in some circumstances (Part I, cl 4(b); Part I, cl 5).
Loan Council members and deputies: Membership rules (Part I, cl 3(a)-(f)) implicate ministers or appointed non‑ministers and permit deputies, postal or telegram voting, and majority decision‑making for certain matters. The voting weighting gives the Commonwealth two votes and a casting vote (Part I, cl 3(m)), which affects bargaining dynamics.
National Debt Commission and trustees: The National Debt Commission (named in Part II, cl 4 and Part III, cl 3) is given control of sinking funds and responsibility for applying contributions to repurchasing or redeeming public debt (Part II, cl 4(f), (g), (h); Part III, cl 3(k)-(q)). Trustees holding sinking funds or securities (including London trustees, s 3(5)) are directly affected: the Act cancels certain inscribed stock or debentures if Part III comes into force (s 3(1)), suspends certain sinking fund contributions (s 3(2)), and indemnifies trustees against liability arising from the Agreement or Act (s 3(5)).
Bondholders and private investors: Owners of State inscribed stock, debentures, bonds, and similar securities are defined as “bondholders” in the Agreement (Part I, cl 2). The Agreement contemplates cancellation, repurchase, redemption and replacement of securities, and commits the Commonwealth to pay interest on debts it takes over (Part III, cls 1-3). The terms include how repurchased securities are cancelled and the consequential additional sinking fund payments required from States (Part III, cl 3(q) and (q)(i)-(ii)).
Statutory bodies, savings banks and public institutions: Clause 5 and 6 of Part I permit borrowing within jurisdictions from authorities, bodies, funds or institutions including Savings Banks; where such borrowing is not “temporary” and securities are issued, the securities shall be Commonwealth securities under terms approved by the Loan Council (Part I, cl 5). Section 9 of the Act changes investment options for statutory moneys to include Commonwealth securities.
Western Australian Crown and consolidated fund administrators: Section 7 appropriates the Consolidated Account for purposes of the Act and to the extent necessary for carrying the Agreement into effect on the State’s part. Section 6 authorises the Governor to make Orders in Council to modify inconsistent Orders or Regulations, affecting administrative processes.
Trustees and beneficiaries under State‑held sinking funds and redemption funds: Part III, cl 3(l) requires transfer of funds and securities to the National Debt Commission, subject to statutory or contractual trustee limits (Part III, cl 3(m)). Where trustee duties prevent transfer, funds remain under control of trustees and the National Debt Commission will make payments directly or through the State (Part III, cl 3(m)). Section 3(3) excludes loans domiciled with Crown agents and specific stock from the operation of s 3.

Collectively, the Act shifts central control over public borrowing and debt management away from uncoordinated State action towards coordinated Loan Council and Commonwealth control, changes the legal position of many classes of securities and their holders, and alters statutory investment regimes for public monies. The affected parties therefore include public treasuries, central Commonwealth bodies, trustees, bondholders, statutory funds, and public financial institutions.

The Act and the Schedule encode specific duties and contingent rights that allocate fiscal responsibilities between Commonwealth and State actors. The following outlines the principal duties and rights, with source references.

Approval duty and statutory primacy (s 2; s 5): Section 2 approves the said agreement. Section 5 requires Western Australian Acts to be read and construed as subject to this Act and the said agreement, and to be altered or modified so as to have effect accordingly. That creates a duty on State legislative and administrative actors to follow the Agreement in areas it governs.
Loan programme submissions and participation (Part I, cl 3(g), (l)): The Commonwealth and each State must submit to the Loan Council a programme setting out amounts desired to be raised by loans for each financial year (excluding conversions, renewals, redemptions, or temporary purposes). Each party must also submit statements of amounts required for conversion, renewal or redemption (Part I, cl 3(l)). This fixes an administrative duty of periodic reporting and programme formulation to the Loan Council.
Borrowing administration by the Commonwealth (Part I, cl 4(a)): While Part II or Part III is in force, the Commonwealth shall arrange for all borrowings for the Commonwealth or any State, subject to Loan Council decisions and to the exceptions set out in the Agreement (Part I, cl 4(a)). That creates a centralised duty for the Commonwealth to arrange borrowings, and a corresponding restriction on States borrowing outside the agreed channels unless authorised.
State borrowing rights with Commonwealth securities (Part I, cls 5-6): States may, subject to Loan Council limits and conditions, borrow moneys within the State from authorised institutions and the public (Part I, cl 5(a)), and may use public moneys available under State law (Part I, cl 5(b)). Any securities issued for non‑temporary borrowings shall be Commonwealth securities provided by the Commonwealth on terms approved by the Loan Council (Part I, cl 5). Thus a State has the right to borrow but, for non‑temporary borrowings, the right is expressed through the medium of Commonwealth securities.
Loan Council decision bindingness and voting rights (Part I, cl 3(m)-(n)): The Loan Council’s decisions about matters within its power are final and binding on all parties (Part I, cl 3(n)). Voting allocation gives the Commonwealth two votes and a casting vote (Part I, cl 3(m)). These rules create an institutional right for the Commonwealth to influence and ultimately control certain outcomes.
Payment obligations (Part II, cl 2; Part II, cl 3; Part III, cl 2 & 3): Part II prescribes temporary Commonwealth interest contributions to the States for the two years and interest on transferred properties (Part II, cls 2-3). Part III imposes an obligation on the Commonwealth to pay interest to bondholders for debts taken over (Part III, cl 2(a)), and to provide fixed annual instalments for 58 years towards States’ interest (Part III, cl 2(b)), while States must pay the excess interest charges not covered by the Commonwealth and, after 58 years, the whole interest (Part III, cl 2(c)-(d)). These are fundamental fiscal duties.
Sinking‑fund contributions and timings (Part II, cl 4; Part III, cl 3): Detailed duties specify rates, timing, and allocation of sinking‑fund contributions. For example, Part III requires a sinking fund at 7s. 6d. per £100 of net public debt (Part III, cl 3(a)), and prescribes the Commonwealth and State shares and application mechanics (Part III, cl 3(b), (e)-(k)). Payments are debts due to the National Debt Commission and are to be made on specified dates (Part II, cl 4(f); Part III, cl 3(k)).
Trustee indemnity and obligation (s 3(5); Part II cl 4(g); Part III cl 3(m)): Section 3(5) obliges the State to indemnify trustees of sinking funds from responsibility arising from the Agreement or the Act. Part II and Part III provide powers for the National Debt Commission to make necessary payments to trustees or through States where funds are held by trustees. Trustees therefore have a statutory avenue of payment and indemnity but may also face transfer of funds.
Transfer of titles and extinguishment of liability (Part III, cl 4): Each State must issue freehold titles or the nearest equivalent for transferred properties, and liability of the States to the Commonwealth in respect of transferred properties is extinguished from 1 July 1929 as to the agreed value apportioned (Part III, cl 4). That is a duty to effect property transfers and a concomitant right for the Commonwealth to take such titles.
Governor’s powers and regulatory duties (ss 6 and 8): The Governor may by Order in Council suspend, repeal, amend or modify Orders in Council or Regulations necessary for administration of the Act and the Agreement (s 6). The Governor may also make regulations for administration where the Act lacks provision (s 8). That confers executive rule‑making responsibility and discretion for implementation.
Appropriation and investment rights (s 7; s 9): Section 7 appropriates the Consolidated Account for purposes necessary to carry the Agreement into effect on the State’s part. Section 9 changes statutory investments so moneys that could previously be invested only in Western Australian Government securities may also be invested in Commonwealth Government securities. These are rights and obligations that alter how funds may be used and invested.
Finality and variation (Part I, cl 3(n); Part IV, cl 2 and cl 4): The Agreement contemplates that it may be validated by Commonwealth law (Part III requires constitutional alteration and validation), and Part IV includes a proposed constitutional provision (draft s 105A) to permit the Commonwealth to make and give permanent effect to such agreements. Parties have rights to vary or rescind agreements by mutual agreement (Part IV cl 2(4)). The Loan Council’s determinations are final within the scope of the Agreement (Part I, cl 3(n)).

These provisions together create a framework of positive duties to pay and report, obligations to transfer and cancel specified securities, institutional powers for centralised borrowing and control, and corresponding rights to receive contributions and have funds administered under National Debt Commission mechanics. Legal effects in WA are given statutory force by s 2 and implemented through executive powers (ss 6-8) and appropriation (s 7).

The Act is primarily a fiscal and administrative instrument. It creates enforceable financial obligations and administrative powers rather than criminal penalties. The following captures the enforcement architecture as set out in the Act and the Agreement (Schedule), and highlights where the statute gives legal force to financial claims.

Financial obligations treated as debts: The Agreement explicitly states that sinking‑fund contributions to be made are “debts payable to the National Debt Commission” and prescribes specific instalment dates (Part II, cl 4(f); Part III, cl 3(k)). Treating contributions as debts creates civil enforcement avenues: non‑payment would give rise to claims for debt against the State, enforceable under ordinary legal process. The Act appropriates the Consolidated Account (s 7) to enable such payments.
Certificate conclusive in disputes over expenses (Part IV, cl 1): Where the Commonwealth incurs expenses on behalf of a State in implementing the Agreement (loan flotation charges, management, stamp duties, commission etc), the Auditor‑General of the Commonwealth may issue a certificate stating the amount repayable by the State and the matter in respect of which repayment is to be made; such a certificate is “conclusive” as to amount and matter in the event of dispute (Part IV, cl 1). This procedural mechanism creates an administrative presumption: it streamlines Commonwealth recovery and limits contested factual disputes about amounts, by rendering the Auditor‑General’s certificate conclusive.
Contractual obligations and indemnities: Section 3(5) requires the State to indemnify trustees of sinking funds from liabilities arising from the Agreement or the Act. Part IV, cl 3 contains wider indemnity language where each State “agrees with the Commonwealth that it will by the faithful performance of its obligations under this Agreement indemnify the Commonwealth against all liabilities whatsoever in respect of the public debt of that State taken over by the Commonwealth” (with listed exceptions). These provisions allocate legal responsibility and create contractual claims enforceable in law.
Administrative powers to modify domestic rules (s 6): The Governor may suspend, repeal, amend or modify Orders in Council or Regulations to enable administration of the Act and the Agreement (s 6). While not a penalty, this power allows the executive to remove legislative or regulatory obstacles to implementation. That increases the State’s capacity to enforce obligations by changing administrative requirements or removing conflicting rules.
Sinking fund management and cancellation mechanics (Part III, cl 3(q)): The Agreement requires securities repurchased or redeemed by the National Debt Commission to be cancelled, and prescribes additional State sinking‑fund contributions upon cancellation (an extra 4½% per annum on the face value from date of cancellation, plus interest payments on repurchased securities, Part III, cl 3(q)(i)-(ii)). These rules create automatic financial consequences that operate as enforcement mechanisms affecting the State’s cash flow: when securities are repurchased or cancelled, further statutory obligations arise.
Absence of criminal sanctions: The Act and the Agreement do not introduce criminal offences or specify fines or imprisonment for breach. Enforcement is oriented to financial recovery, administrative control, and the leveraging of Commonwealth mechanisms rather than criminal sanction.
Finality of Loan Council decisions (Part I, cl 3(n)): The Loan Council’s decisions in respect of matters it is empowered to decide are “final and binding on all parties to this Agreement.” That provision governs intra‑governmental dispute resolution and limits the legal avenues for re‑litigation of Loan Council determinations by interlocutory disagreement among parties. However, the text does not expressly oust judicial review; the Agreement’s language is one of bindingness between parties rather than a statutory immunity from legal challenge in courts for public law reasonableness or jurisdictional error. The Act does not specify enforcement proceedings for breaches of Loan Council decisions, relying on institutional compliance and the contract/financial consequences established.
Trustee protections and payment routes: Where funds standing to a credit of sinking funds are held by trustees under statutory or contractual obligations and preclude transfer to the National Debt Commission, the Agreement requires such funds to remain under control of the State or trustees while providing that the National Debt Commission will make future payments to the State or trustees (Part III, cl 3(m)). That preserves trustee protection and provides a route for satisfied beneficiary payments.

In short, enforcement is civil and administrative. The architecture is built around debts payable to the National Debt Commission, conclusive certification of Commonwealth expenses, indemnities recoverable by the Commonwealth, and administrative rule‑making to clear statutory obstacles. The Agreement’s binding language and the Act’s appropriation and executive powers provide institutional levers for compliance, rather than criminal enforcement.

The Act and the Schedule explicitly interlock with, amend, suspend or supersede various State and Commonwealth measures; it also anticipates a constitutional amendment. The principal interaction points are these, as reflected in the statutory text and the Schedule.

Supersession of State Acts and regulatory modification (s 5; s 6): Section 5 directs that all Acts of the Parliament of Western Australia “so far as they relate to matters or things provided for or contained in this Act or the said agreement, shall be read and construed as subject to this Act and the said agreement.” Section 6 further empowers the Governor to suspend, repeal, amend or otherwise modify Orders in Council and Regulations (before or after commencement) by Order in Council to provide for the administration of this Act and the Agreement. Those provisions create an express statutory hierarchy: where State Acts touch covered matters they must be read subject to the Agreement. That has the effect of modifying the operation of State legislation in areas such as borrowing, sinking funds, and investment of public moneys.
Specific suspensions and historical cross‑references (s 3(4); s 4): Section 3(4) suspends certain provisions of earlier Western Australian Acts (proviso to s 6 and words in s 9 of the Treasury Bonds Deficiency Act 1916 and parts of the Land Act Amendment Acts) during the operation of Part II and ceases their effect when Part III comes into force. Section 4 suspended the Sale of Government Property Act 1907 during Part II; the Act’s notes record that s 4 has since been amended and that Sale of Government Property Act 1907 was subsequently repealed. These are direct interactions with earlier WA Acts.
References to Commonwealth Acts and institutions (Schedule): The Agreement prescribes the National Debt Commission (established under the National Debt Sinking Fund Act 1923‑25), envisages Commonwealth payments under the State Grants Act 1927 (Part II, cl 2), and sets out that the Commonwealth will make arrangements for borrowings. The Schedule therefore relies on and interacts with Commonwealth statutes and institutions for implementation.
Proposed constitutional amendment (Part IV, cl 2; draft s 105A): The Agreement expressly contemplates and sets out draft constitutional amendment text intended to confer on the Commonwealth Parliament power to make laws to validate and carry into effect agreements with the States concerning public debts (draft s 105A). The Agreement’s long‑term implementation (Part III) is conditional upon that constitutional amendment and subsequent validating Commonwealth law. The draft text would, if enacted, make agreements of this class binding notwithstanding other constitutional or State constitutional provisions and empower the Commonwealth Parliament to carry them into effect by legislation.
Investment rules and statutory trust funds (s 9; Part III cl 3(l)-(m)): Section 9 reinterprets any statutory reference to investment in Western Australian Government securities so that such references permit investment in Commonwealth Government securities as well. Part III, cl 3(l) requires transfer of moneys and securities standing to the credit of sinking funds, redemption funds and like funds existing on 30 June 1929, to the National Debt Commission, subject to the caveat in cl 3(m) that trustee or statutory obligations that preclude transfer must be respected, and in those cases the Commission will make payments through the State or trustees. These provisions interact with statutory trust rules and trustee duties and potentially override or adjust prior legislative directions about where particular funds should be held or invested.
Repeals or subsequent legislative changes (notes and compilation table): The Act’s Notes list amendments by later WA Acts (Acts Amendment (Financial Administration and Audit) Act 1985 s 3; Financial Administration and Audit Amendment Act 1990 s 39(1); Financial Administration Legislation Amendment Act 1993 s 11; Financial Legislation Amendment and Repeal Act 2006 s 4). The compilation table also records that some earlier Acts referenced in the Agreement (General Loan and Inscribed Stock Act 1910; Treasury Bonds Deficiency Acts; Land Acts) have been repealed historically. Those amendments and repeals affect how particular cross‑references operate now and require practitioners to check current statutory versions (see Notes and Compilation table).
Relationship with State contractual commitments to lenders and banks (Part IV, cl 1): The Agreement stipulates that the Commonwealth will not do anything in connection with a State loan that would, if done by that State, breach any existing agreement by that State with any bank, unless otherwise agreed between the Commonwealth and that State (Part IV, cl 1). This creates an interaction between the Agreement’s mechanics and pre‑existing contractual commitments that the State owes to private creditors.
Savings and exclusions (s 3(3)): The Act explicitly excludes certain loans domiciled with the Crown Agents for the Colonies and a specified 5% inscribed stock from the operation of some s 3 provisions (s 3(3)). That is a targeted interaction preserving particular prior arrangements.

In practical terms these interactions create a legal regime where State law, trustee obligations, and prior contractual commitments must be reconciled with the Agreement. The Act gives the State executive power to adjust domestic regulations and Orders in Council to manage those intersections, but where statutory trustee duties or contractual restrictions exist they are given protection by the Agreement (Part III, cl 3(m)). Practitioners should therefore read the Act in conjunction with current versions of the National Debt Sinking Fund Act, any applicable State statutory trust instruments, and the orders and regulations that the Governor has made under s 6 and s 8.

The Act as compiled includes a small number of subsequent amendments and reprints; the Act’s own Notes and Compilation table provide the authoritative list of those changes. Key legislative amendments and reprints recorded in the compilation table are these.

Original enactment: Financial Agreement Act 1928 (1 of 1928), assent 30 August 1928, commenced 30 August 1928. The Act approved the Agreement signed 12 December 1927 and brought it into Western Australian statute.
Acts Amendment (Financial Administration and Audit) Act 1985, s 3 (No. 98 of 1985): Amended s 4 (the provision suspending the Sale of Government Property Act 1907 during Part II) and is noted in the text as an amendment. The compilation table records assent 4 December 1985 and commencement 1 July 1986 (see s 2 and Gazette notice).
Financial Administration and Audit Amendment Act 1990, s 39(1) (No. 92 of 1990): Also amends s 4. The compilation table records assent 20 December 1990 and commencement 8 March 1991 (s 2 and Gazette).
Financial Administration Legislation Amendment Act 1993, s 11 (No. 6 of 1993): Amended s 7 (appropriation). Assent 27 August 1993; commenced 1 July 1993 per s 2(1).
Financial Legislation Amendment and Repeal Act 2006, s 4 (No. 77 of 2006): Further amended s 7. Assent 21 December 2006; commenced 1 February 2007 (s 2(1) and Gazette).
Reprints: The Act was reprinted as at 1 February 2002 (including amendments up to that date) and a Reprint 2 as at 18 March 2016 (including listed amendments).
Repeals of referenced Acts: The Act itself references earlier Western Australian statutes (for example, the General Loan and Inscribed Stock Act 1910, parts of the Treasury Bonds Deficiency Acts, and Land Act Amendment Acts). The Notes state certain of those Acts have been repealed: General Loan and Inscribed Stock Act 1910 and parts of the Treasury Bonds Deficiency Acts were repealed by the Statute Law Revision Act 1965. The Land Act Amendment Acts were repealed by the Land Act 1933 (which itself is repealed later by the Land Administration Act 1997). The Sale of Government Property Act 1907 was repealed by the Acts Amendment (Financial Administration and Audit) Act 1985.
Additional amendments listed in Notes: The Notes list Financial Agreement (Amendment) Acts of 1944 (No. 18 of 1944), 1966 (No. 48 of 1966), and 1976 (No. 15 of 1976) as affecting the Financial Agreement Act 1928. The compilation table also includes the relevant WA amendment Acts noted above.
Textual amendments within the Act: Section 4 lists subsections (2) and (3) as deleted and notes the legislative provenance of those deletions (No. 98 of 1985 s 3; No. 92 of 1990 s 39(1)). Section 7 includes amendment citations (No. 6 of 1993 s 11; No. 77 of 2006 s 4).
Defined terms: The Act’s defined term list contains only the defined term “said agreement” in s 2. Practitioners must note that the Schedule (the Agreement) contains many defined terms (for example, “Net Public debt of a State existing on 30th June, 1927,” “Bondholder,” “Loan Council”) that are critical to interpreting obligations.

The compilation table and Notes in the Act itself are the source for the amendment history. For present‑day application it is necessary to consult the current reprint and the Gazette notices and to check whether any Orders in Council, regulations, or further amendments have altered the Act’s operation since the latest reprint (Reprint 2 as at 18 March 2016). The Act indicates some cross‑references point to statutes since repealed; practitioners must therefore reconcile the Act’s historical references with current statutory law.

The Act and its Schedule contain no judicial decisions, litigation citations, or explicit references to case law within the text provided. The Schedule is an intergovernmental agreement that creates binding financial commitments and administrative structures; the Act itself does not record litigation or name any case authorities. The Notes and Compilation table list subsequent amending statutes but not litigation.

Because the text supplied does not identify any judicial determinations, there is no litigation history within the statute or the Schedule to summarise. That absence in the primary text means any adjudicated disputes about interpretation or enforcement of the Agreement, the Loan Council’s decisions, the transfer and cancellation of securities, or indemnities described in the Agreement would need to be located in external case law and archival records, none of which are contained in the source provided.

Practitioners seeking litigation history will therefore need to search court databases and public law reports for disputes touching on:

enforcement of Loan Council decisions or the legality of Loan Council procedures (Part I, cl 3);
disputes over the transfer, repurchase, cancellation of securities, and the interaction with trustees’ statutory obligations (Part II, cl 4; Part III, cl 3);
claims under indemnities (s 3(5); Part IV, cl 3) and certificates by the Auditor‑General made conclusive by the Agreement (Part IV, cl 1);
challenges to executive Orders in Council or regulations made under ss 6-8 in implementing the Agreement, including jurisdictional or administrative law challenges.

The Act’s language, making Loan Council decisions “final and binding” (Part I, cl 3(n)), does not in itself prevent judicial review of jurisdictional error or public law illegality, but the text does not address that question directly. No judicial doctrines, cases or precedents are cited in the Act or Schedule. Users should therefore treat the Act as a statutory implement of an intergovernmental agreement and consult contemporary legal reports and databases for any judicial treatment of disputes arising from these provisions.

This legislation contains several technical features and transitional traps that create legal and practical risks if overlooked. The following are concrete "gotchas" drawn from the text, with cross‑references to specific provisions.

Conditional operation of Part III: Many of the Act’s most consequential provisions (Commonwealth takeover of State debts, cancellation of certain securities, transfer of funds to National Debt Commission) only operate if Part III of the Agreement “comes into force and effect,” which requires a constitutional alteration and validating Commonwealth law prior to 1 July 1929 (Part III; Part IV, cl 2). Practitioners must check whether Part III has been validated or whether the Act continues to operate only under Part II mechanics. The Act itself does not unilaterally bring Part III into effect without constitutional validation; mis‑reading this could lead to erroneous implementation actions.
Cancellation of sinking‑fund securities tied to Part III timing (s 3(1)): Section 3(1) provides that inscribed stock and debentures held on 30 June 1927 as sinking‑fund investments “shall by force of this Act, if and when Part III of the said agreement shall come into force and effect, be cancelled as from the said 30 June.” The cancellation is backdated to 30 June if Part III comes into force, which has accounting, trustee and market implications. Trustees are indemnified (s 3(5)), but the retroactive date and conditionality mean timing matters crucially for legal and accounting treatment.
Trustees’ obligations and transfers of trusts (Part III, cl 3(l)-(m)): Part III requires transfer of moneys and securities standing to the credit of sinking funds to the National Debt Commission “forthwith” on 30 June 1929, subject to trustee and statutory limitations (cl 3(m)). If trustees are bound by statutory or contractual obligations that preclude transfer, the National Debt Commission will make payments directly or through the State. This creates potential friction with trustee duties and may require legal steps to clarify or vary trust instruments; failure to respect trustee constraints can provoke litigation.
Loan Council finality and Commonwealth voting weight (Part I, cl 3(m)-(n)): The Loan Council’s decisions are final and binding (cl 3(n)) and the Commonwealth member has two votes and a casting vote (cl 3(m)). This institutional architecture can produce 'locked in' outcomes for borrowing allocations and loan terms where State objections are overruled and may limit effective bargaining leverage for smaller States. It also places a premium on procedural compliance within the Loan Council to avoid disputes about the validity of its decisions.
"Temporary purposes" carve‑outs: Multiple provisions exclude borrowing “solely for temporary purposes” from the Agreement’s other requirements (Part I, cl 5, cl 6; Part III cl 3 etc). Determining whether a particular borrowing is “solely for temporary purposes” may be contested and affect whether Commonwealth securities must be issued, whether sinking‑fund contributions apply, and reporting obligations to the Loan Council.
Interaction with pre‑existing contractual obligations and bank agreements (Part IV, cl 1): The Agreement states the Commonwealth will not do anything in connection with a State loan which, if done by that State, would breach any existing agreement with any bank unless otherwise agreed. This preserves private contractual rights but imposes practical limits on some conversion or consolidation strategies; practitioners must identify and reconcile bank covenants and private financing agreements before carrying out Agreement mechanics.
Investment recharacterisation (s 9): Section 9 requires statutory references to investment in Western Australian Government securities to be read as permitting investment in Commonwealth Government securities as well. That is a legislative change of investor options for statutory bodies and trustees; however, it does not, on its face, address trust terms that are contractually specific. Practitioners must check the language of trust instruments and statutory mandates before switching investments.
Executive modification power (s 6): Section 6 empowers the Governor to suspend, repeal, amend or modify Orders in Council or Regulations “in any manner whatever” to provide for administration. That is broad discretion. Practitioners should check whether Orders in Council have been made under this power and whether those Orders alter the operation of pre‑existing administrative rules or statutory processes.
Prescriptive dates and historic valuations in the Schedule: The Agreement uses precise historic reference dates (30 June 1927; 1 July 1927; 1 July 1929) and fixed valuations (e.g. agreed value of transferred properties £10,924,323 apportioned in a schedule). Those fixed numeric figures became the basis for long‑term payment schedules (Part III, cl 2(b)). While historically necessary, the fixedness of these numbers may complicate contemporary accounting or archival interpretation; practitioners must map historical figures to current monetary contexts with caution.
Lack of express criminal sanctions and reliance on administrative mechanisms: The Act relies on debt obligations, indemnities, appropriations and institutional arrangements rather than penal sanctions. Enforcement is therefore administrative and commercial. Parties should not expect a criminal enforcement regime, but must prepare for civil recovery and administrative remedies.
Repealed or superseded cross‑references: The Schedule references Acts that have been repealed historically. The Notes indicate the General Loan and Inscribed Stock Act 1910 and parts of the Treasury Bonds Deficiency Acts have been repealed. Practitioners must reconcile the Agreement’s historical cross‑references with current law and verify whether earlier statutory mechanisms still meaningfully operate.

These features mean that careful attention to timing (whether Part III is in force), to trustee duties and private contracts, to Loan Council procedures and to Orders in Council and regulations made under ss 6-8 is essential. Failure to map the Agreement’s conditional provisions against current legal and institutional arrangements can cause implementation errors and contested outcomes.

Compliance under this Act requires coordinated administrative and legal steps by Western Australian agencies, trustees and financial officers. The following practical checklist is grounded in the Act and the Agreement and sets out concrete actions and procedural requirements.

Confirm the operative parts of the Agreement for current legal status
- Verify whether Part II or Part III of the Agreement is in force in law for Western Australia. Part II is time‑limited (1 July 1927 to 30 June 1929) (Part II, cl 1); Part III only comes into force if the Constitution is altered and the Agreement validated prior to 1 July 1929 (Part III; Part IV, cl 2). The text itself does not effect the constitutional alteration. Administrative compliance and accounting obligations hinge on whether Part III has taken effect.
Account for and report loan programmes to the Loan Council where applicable
- While Part II or Part III is in force, the Commonwealth and each State must submit to the Loan Council a programme setting forth loan amounts desired for each financial year, excluding conversions, renewals, redemptions and temporary purposes (Part I, cl 3(g)). Treasury officers must prepare and submit these programmes, including estimates of repayments and any revenue deficits to be funded. States must also submit statements of amounts required for conversions, renewals or redemptions (Part I, cl 3(l)).
Treat borrowings and securities according to the Agreement’s conditions
- Where borrowings are not solely for temporary purposes and Commonwealth securities are issued for State borrowings, ensure that securities conform to the terms approved by the Loan Council (Part I, cl 5). Maintain documentation showing Loan Council approval for any State borrowings permitted under Part I, cl 4(b) or cl 5(b).
Sinking‑fund obligations and instalment schedules
- For the applicable period, calculate and pay sinking‑fund contributions to the National Debt Commission according to the prescribed rates and instalment dates: Part II, cl 4(f) prescribes half‑yearly instalments for net public debt existing on 30 June 1927 and equal instalments for loans raised after that date; Part III, cl 3(k) prescribes debts payable to the National Debt Commission with specific timing. Prepare cashflow forecasts and schedule transfers to meet those instalments.
Coordinate with trustees and manage transfers of sinking funds
- If Part III is operative and moneys and securities standing to the credit of sinking funds must be transferred to the National Debt Commission (Part III, cl 3(l)), review trusteeships for statutory or contractual limits. Where trustee obligations preclude transfer, document that position and coordinate with the National Debt Commission so payments are made to or through trustees as required (Part III, cl 3(m)). Ensure indemnities under s 3(5) are documented to protect trustees from liability arising from the Agreement or the Act.
Maintain separate accounts and reporting per Agreement
- Part IV, cl 4 requires separate accounts kept by the Commonwealth for each State in respect of debt, interest and sinking funds. WA administrators should coordinate with Commonwealth accounting to reconcile State ledger entries, transfers, repurchases and cancellations. Ensure that recordkeeping supports Auditor‑General certification where required (Part IV, cl 1).
Follow Governor’s Orders in Council and regulations
- Monitor Orders in Council and regulations made under s 6 and s 8 to identify any modifications affecting administrative processes, timing or documentation. If changes are made by Order in Council to suspend, repeal or amend regulations or Orders in Council, ensure your processes are updated in accordance with those instruments.
Property transfers relating to transferred properties
- If required by Part III, facilitate issuance to the Commonwealth of freehold titles (or nearest equivalent) for transferred properties as specified (Part III, cl 4). Coordinate property title work and the extinguishment of liability by the State in respect of agreed values. Maintain contemporaneous documentation evidencing the issuance of titles and the agreed value apportionment.
Compliance with pre‑existing contractual obligations
- Review loans existing on 30 June 1927 and any subsequent loan documentation to ensure operations under the Agreement do not breach pre‑existing agreements with banks or lenders (Part IV, cl 1). Where necessary, obtain bank consents or make arrangements to preserve compliance.
Investment of statutory moneys
- Where statutory provisions enable or require investment in WA Government securities, treat those provisions as enabling investment in Commonwealth securities as well (s 9). However, verify the terms of trusts or statutory funds to ensure that the recharacterisation does not conflict with trust instruments or explicit statutory limits that cannot be altered by the Act’s re‑reading.
Prepare for repurchase, cancellation and additional sinking‑fund consequences
- When the National Debt Commission repurchases or redeems securities (Part III, cl 3(q)), note the timing of cancellation and the additional State sinking‑fund contribution obligation at 4½% per annum on the face value of cancelled securities, and payment of interest on the repurchased security up to cancellation. Ensure accounting systems capture these contingent liabilities.
Keep contemporaneous evidence for Auditor‑General certificates
- If the Commonwealth incurs expenses on a State’s behalf, the Auditor‑General’s certificate is conclusive in disputes about amount and matter (Part IV, cl 1). Maintain clear documentation of expenses, loan flotation charges, management charges, stamp duties, commissions and exchange to support or contest such certificates if required.
Legal review of trust instruments and statutory mandates
- Before transferring or changing the holding of funds, obtain legal advice about trustee duties and whether statutory trust provisions permit transfers or changes in investment. If trusts preclude transfers, document the nature of the limitation and ensure the National Debt Commission’s planned payment route is adhered to (Part III, cl 3(m)).
Monitor amendments and reprints
- Because the Act has been amended (see the compilation table and Notes), ensure compliance operations reference the current reprint and any Orders in Council or regulations made under ss 6-8. Keep a register of statutory changes that affect s 4, s 7, and other sections amended by later Acts (1985, 1990, 1993, 2006).
Audit and public reporting
- Facilitate audits and reporting to the Auditor‑General and the National Debt Commission as required. Ensure that financial statements disclose obligations under the Agreement and show transfers to or from sinking funds and the National Debt Commission.

These steps translate statutory duties into administrative tasks for State Treasuries, trustees and financial officers. They emphasise verification of which parts of the Agreement are operative, adherence to sinking‑fund schedules, trustee protection, coordination with Commonwealth institutions, and compliance with Orders in Council and regulations enacted under the Act.

Financial Agreement Act 1928

Plain English Summary

Deep Dive

What it does

Current sections