New South Wales act

Government Guarantees Act 1934

In ForceNSW

Jurisdiction

New South Wales

Act Number

57 of 1934

Collection

act

Plain English Summary

6/10 complexity

Validates past executive authorisations and authorises the Treasurer, usually on a Minister’s recommendation and with the Governor’s approval, to guarantee overdrafts or loan repayments to banks and approved lenders for a range of public, cooperative and industry-related bodies (s 2; s 3; ss 3A–3B). Guarantees can be renewed and amounts called are payable from the Consolidated Revenue Fund (s 3(4); s 5). Creditors must normally exhaust available securities before calling a guarantee; the Treasurer prescribes form and terms (s 4(e); s 4(a)).

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What it does

The Government Guarantees Act 1934 (NSW) is a statutory framework that validates past financial guarantees executed by the New South Wales executive government and establishes the legal authority, conditions, and procedures under which the Treasurer may execute sovereign guarantees to back the borrowings of specified public, community, agricultural, and private organisations.

The primary mechanical function of the Act is to deploy the credit of the State of New South Wales to facilitate access to capital for entities that might otherwise face higher borrowing costs or credit rationing in the private market. Section 2 of the Act performs a validating function. It retrospectively legalises any guarantee previously authorised by the Governor, the Executive Council, or the Treasurer before the enactment of the statute, as listed in the Schedule. Mechanically, s 2(1) deems these historical authorisations to be valid and binding guarantees by the Government even if no formal instrument of guarantee was executed at the time. To prevent sovereign defaults based on administrative technicalities, s 2(2) provides that no validated guarantee shall be held void on the ground that the authorising or executing party lacked the constitutional or statutory power to create a liability enforceable against the Government and payable out of public funds.

Beyond validation, the Act provides a prospective legal mechanism for the Treasurer, acting with the approval of the Governor, to guarantee overdraft accounts and advances made by financial institutions to designated categories of debtors. These categories include statutory health corporations, agricultural marketing boards, milk processing companies, co-operative housing and building societies, historical movie production entities, conservation trusts, sporting ground trustees, religious organisations, and arts organisations. Under s 5, any sum that becomes payable by the Treasurer under these guarantees is automatically appropriated from the Consolidated Revenue Fund without the need for further annual parliamentary appropriation bills. This statutory mechanism gives lenders an absolute, credit-wrapped assurance of payment backed by the state's tax base, lowering the risk premium of the underlying debt.

Current sections

Direct links to the current provisions in Government Guarantees Act 1934.

Name of Act

1 Name of Act

This Act may be cited as the Government Guarantees Act 1934.

Validation

2 Validation

(1) The action of the Governor and Executive Council or the Treasurer in authorising the giving of the guarantees set out in the Schedule is hereby validated and any such authorisation shall be deemed a guarantee by the Government notwithstanding that no formal instrument of guarantee has been executed.

(2) No guarantee so authorised shall be held to be void merely on the ground that the person by whom such guarantee was so authorised or given had no power to create a liability enforceable against the Government and to be discharged out of the Consolidated Revenue Fund.

s 2: Am 1972 No 49, sec 2 (b).

Authority for Treasurer to guarantee overdraft accounts etc

3 Authority for Treasurer to guarantee overdraft accounts etc

(1) It shall be lawful for the Treasurer, upon the recommendation of the Minister for Health, with the approval of the Governor, to execute a guarantee in favour of any bank, building society or credit union in respect of the overdraft account with the bank, building society or credit union or of any indebtedness to the bank, building society or credit union of any statutory health corporation or affiliated health organisation within the meaning of the Health Services Act 1997.

(2) It shall be lawful for the Treasurer with the approval of the Governor to execute a guarantee in favour of any bank, building society or credit union, or of any other body of persons, corporate or unincorporate, approved by the Minister (in this Act referred to as approved body) for the repayment of any advance made or to be made by the bank, building society, credit union or approved body, as the case may be:

(a) to any marketing board within the meaning of the Marketing of Primary Products Act 1927, or

(a1) (Repealed)

(b) to any society (other than a co-operative housing society) within the meaning of the Co-operation Act 1923, or

(c) to any society within the meaning of the Permanent Building Societies Act 1967:

Provided further that where any such guarantee is for the repayment of any advance to a community settlement society within the meaning of the Co-operation Act 1923, it shall not be executed except upon the recommendation of the Co-operative Farms Purchase Promotion Committee constituted under that Act.

(2A) (Repealed)

(3) It shall be lawful for the Treasurer, upon the recommendation of the Farmers’ Relief Board and with the approval of the Governor, to execute a guarantee in favour of any bank in respect of the account with the bank of a supervisor within the meaning of the Farmers’ Relief Act 1932.

(4) It shall be lawful for the Treasurer, with the approval of the Governor, but subject to this Act, to renew any guarantee validated by this Act or by the Housing (Further Provisions) Act 1937 for such further period or periods as the Treasurer may think fit, and either upon the same terms and conditions or upon such other terms and conditions and for the same amount or such other amount as may be agreed upon by the Treasurer, the bank and the debtor.

(5) Nothing in this section shall require the renewal of a continuing guarantee validated by this Act or by the Housing (Further Provisions) Act 1937 or prejudice its operation as a continuing guarantee.

(5A)

(a) It shall be lawful for the Treasurer with the approval of the Governor to execute a guarantee in favour of any bank in respect of the overdraft account with the bank of any person or body of persons corporate or unincorporate with whom the Treasurer has entered into an agreement pursuant to section 13A of the Cinematograph Films (Australian Quota) Act 1935.

(b) The Treasurer shall not execute a guarantee under this subsection after the thirty-first day of December, one thousand nine hundred and thirty-nine.

(5B) It shall be lawful for the Treasurer with the approval of the Governor to execute a guarantee in favour of any bank in respect of the overdraft account with the bank of The Metropolitan Meat Industry Commissioner.

(5C)

(a) It shall be lawful for the Treasurer, upon the recommendation of the Minister for Agriculture and with the approval of the Governor, to execute a guarantee in favour of any bank, building society or credit union, or of any other body of persons, corporate or unincorporate, approved by the Treasurer (in this Act referred to as approved body) for repayment of any advance to a society or company, being the owner or engaged in the operation of a factory for the processing of milk or other dairy products, or any such society and company acting together, for the purpose of providing facilities for bulk handling and transportation of milk.

(b) In this subsection:

society means a society within the meaning of the Co-operation Act 1923.

company means a company within the meaning of the Corporations Act 2001 of the Commonwealth.

(c) The provisions of this subsection in relation to a society shall be additional to and not in derogation of the provisions of paragraph (b) of subsection (2).

(5D) It shall be lawful for the Treasurer with the approval of the Governor to execute a guarantee in favour of any bank, building society or credit union, or other body of persons, corporate or unincorporate, approved by the Treasurer (in this Act referred to as approved body) for the repayment of any advance to the Trustees of The Labor Council of New South Wales, a trade union registered under the Trade Union Act 1881, as subsequently amended, for purposes connected with a new Trades Hall or other like purposes.

(5E) It shall be lawful for the Treasurer with the approval of the Governor to execute a guarantee in favour of any bank, building society or credit union in respect of the overdraft account with the bank, building society or credit union of the Hunter Valley Conservation Trust.

(5F) It shall be lawful for the Treasurer, with the approval of the Governor, to execute a guarantee in favour of any bank, building society or credit union in respect of the overdraft account with the bank, building society or credit union of the New South Wales Meat Industry Authority.

(5G) It shall be lawful for the Treasurer, upon the recommendation of the Minister for Sport and Recreation, and with the approval of the Governor, to execute a guarantee in favour of a bank, building society or credit union or other body of persons, corporate or unincorporate, approved by the Treasurer (in this Act referred to as the approved body) for the repayment of any money borrowed pursuant to section 24 of the Sydney Cricket and Sports Ground Act 1978.

(5H) It shall be lawful for the Treasurer, upon the recommendation of the Minister for Health and with the approval of the Governor, to execute a guarantee in favour of any bank, building society or credit union, or other body of persons, corporate or unincorporate, approved by the Treasurer (in this Act referred to as approved body) for the repayment of any advance to the Australasian Conference Association Limited, a company within the meaning of the Companies Act 1961, for the purpose of providing extensions to the body formerly known as the Sydney Sanitarium and Hospital, Wahroonga, and now known as the Sydney Adventist Hospital, Wahroonga, and for other purposes connected therewith.

(5I) It shall be lawful for the Treasurer, on the recommendation of the Minister for Health and with the approval of the Governor, to execute a guarantee in favour of the Bank of New South Wales for the repayment of any advance to the Trustees of the Sisters of Charity of Australia, a body corporate constituted under the Roman Catholic Church Communities’ Lands Act 1942, for the purpose of rebuilding St. Vincent’s Private Hospital, Darlinghurst, and for other purposes connected therewith.

(5J) It shall be lawful for the Treasurer, upon the recommendation of the Minister for the Arts and with the approval of the Governor, to execute a guarantee in favour of any bank or other body of persons, corporate or unincorporate, approved by the Treasurer (in this Act referred to as approved body) for the repayment of any advance to the Nimrod Theatre Company Limited.

(5K) (Repealed)

(6) Any guarantee executed by the Treasurer under this Act may be made by way of increase of the amount of the Treasurer’s liability as stated in a previous guarantee given under this Act, and may be made upon such terms and conditions as are prescribed or as the Treasurer may determine.

The enactment of this subsection shall not affect subsections (1), (2) and (3).

(7) The approval of the Governor to the execution of any guarantee under this section shall be conclusive evidence that the guarantee has not been entered into in contravention of this section.

s 3: Am 1937 No 27, secs 6 (1) (a) (3), 7 (3) (a); 1938 No 35, sec 7 (2); 1940 No 15, sec 2 (1) (a); 1941 No 20, sec 3 (1) (a); 1943 No 26, sec 2; 1948 No 17, sec 2 (1) (a); 1964 No 61, sec 2 (a) (b); 1967 No 18, sec 123 (1) (a); 1968 No 23, sec 2; 1968 No 52, sec 4; 1970 No 2, sec 53; 1972 No 49, sec 2 (c); 1972 No 63, Sch; 1972 No 80, sec 3; 1973 No 64, sec 2; 1975 No 84, sec 6; 1978 No 33, sec 2; 1978 No 62, sec 3; 1981 No 6, sec 3 (a); 1982 No 138, Sch 1; 1985 No 22, sec 2; 1986 No 16, Sch 23; 1987 No 247, sec 4 (a)–(c); 1990 No 76, Sch 2; 1991 No 15, Sch 4; 1992 No 34, Sch 1; 1996 No 24, Sch 1; 1997 No 11, Sch 1.9 [1] [2]; 1997 No 154, Sch 6.14 [1]; 2001 No 34, Sch 2.24; 2008 No 114, Sch 3.2; 2016 No 27, Sch 5.4.

3AA

Execution of certain guarantees on behalf of Treasurer

3AA Execution of certain guarantees on behalf of Treasurer

(1) Any guarantee authorised by this Act to be given for the repayment of any advance made to a co-operative housing society within the meaning of the Co-operation Act 1923 may, upon the recommendation of the Co-operative Housing Societies Advisory Committee constituted under that Act and with the approval of the Governor, be executed for and on behalf of the Treasurer by any other Minister of the Crown whom the Treasurer may authorise in writing either generally or in any particular case so to do.

(2) A guarantee executed by a Minister of the Crown for and on behalf of the Treasurer pursuant to subsection (1) shall be deemed to have been executed by the Treasurer.

(3) The approval of the Governor to the execution of any guarantee pursuant to this section shall be conclusive evidence that the guarantee has not been entered into in contravention of this section.

s 3AA: Ins 1972 No 49, sec 2 (d). Am 1981 No 6, sec 3 (b).

Guarantees for industrial purposes

3A Guarantees for industrial purposes

(1) Subject to subsection (2), it shall be lawful for the Treasurer, upon the recommendation of the Minister for Decentralisation and Development and with the approval of the Governor, to execute a guarantee, either alone or jointly with some other person, in favour of any bank, building society or credit union or other person (not being a co-operative society within the meaning of the Co-operation Act 1923) for the repayment of moneys expended or to be expended on:

(a) the acquisition of land, or land and buildings thereon,

(b) the construction, improvement or alteration of buildings, or

(c) the acquisition of plant, machinery or equipment,

used or to be used for the conduct of a country industry, as defined in the State Development and Industries Assistance Act 1966 immediately before its repeal by the Trade and Investment Cluster Governance (Amendment and Repeal) Act 2014.

(2) The Treasurer shall not execute a guarantee referred to in subsection (1) if the amount of the guarantee exceeds ninety per centum of the estimated value of the land or land and buildings thereon, of the estimated cost of the works of construction, improvement or alteration, or of the estimated value of the plant, machinery or equipment, as the case may be, such estimated value or cost to be ascertained in such manner as the Treasurer may direct.

(3) The Treasurer may enter into an agreement with a council within the meaning of the Local Government Act 1993 for the payment by that council to the Treasurer of part of any moneys paid under any guarantee given by the Treasurer under subsection (1).

(4) The execution by the Treasurer, either alone or jointly with some other person, of a guarantee under this section shall, in favour of the creditor, be conclusive evidence that the requirements of this section with respect to the guarantee have been complied with.

s 3A: Ins 1966 No 10, sec 37. Am 1972 No 49, sec 2 (e); 1972 No 65, sec 3; 1995 No 11, Sch 1; 1996 No 24, Sch 1; 1999 No 31, Sch 3.8; 2014 No 26, Sch 3.4.

Guarantees for development of the tourist industry

3B Guarantees for development of the tourist industry

(1) Subject to subsection (2), the Treasurer may, upon the recommendation of the Minister administering the Tourism Commission Act 1984, and with the approval of the Governor, execute a guarantee, either alone or jointly with some other person, in favour of any bank, building society or credit union or other person (not being a co-operative society within the meaning of the Co-operation Act 1923) for the repayment of moneys expended or to be expended on:

(a) the acquisition of land, or land and buildings thereon,

(b) the construction, improvement or alteration of buildings, or

(c) the acquisition of plant, machinery or equipment,

used or to be used for the development of the tourist industry in the State.

(2) Subsections (2), (3) and (4) of section 3A apply in respect of guarantees under this section in the same way as they apply in respect of guarantees under that section.

s 3B: Ins 1976 No 58, sec 31. Am 1984 No 48, sec 3; 1996 No 24, Sch 1.

Provisions relating to guarantees given under this Act

4 Provisions relating to guarantees given under this Act

The following provisions shall apply to and in respect of any guarantee authorised by this Act to be given or to and in respect of the renewal of any guarantee validated by this Act or by the Housing (Further Provisions) Act 1937:

(a) The guarantee shall be in such form and subject to such terms and conditions as are prescribed or as the Treasurer may determine.

(b) The guarantee may include the interest charges and expenses chargeable by the bank, building society, credit union or approved body as the case may be against the principal debtor in the usual course of its business and the expenses of enforcing or obtaining or endeavouring to enforce or obtain payment of the debt guaranteed and such interest charges and expenses.

(c) The guarantee may be expressed to include compound interest.

(d) The bank, building society, credit union or approved body as the case may be shall obtain, take and hold or retain and hold such securities (if any) for the payment of the principal debt as the Treasurer may require.

(e) The guarantee shall not be enforceable against the Treasurer or the Consolidated Revenue Fund unless and until the bank, building society, credit union or approved body as the case may be has exercised its rights and remedies under all securities held by or for it in respect of the debt guaranteed, other than the guarantee or where the principal debtor is a marketing board or a society (other than a building society community settlement society or community advancement society) within the meaning of the Co-operation Act 1923, unless a judge of the Supreme Court by order made on summons in Chambers declares that he or she is satisfied that the bank, building society, credit union or approved body as the case may be is unable to exercise such rights and remedies without undue interference with the operations of the board or society concerned or where the principal debtor is a building society community settlement society or community advancement society within the meaning of the said Act or a society (other than an association) within the meaning of the Permanent Building Societies Act 1967, unless the bank, building society, credit union or approved body, as the case may be, shall, under the provisions of the securities executed by the building society community settlement society or community advancement society in favour of the bank, building society, credit union or approved body as the case may be, or of any such securities, have become entitled to appoint a receiver of such of the property of the building society community settlement society or community advancement society or society (other than an association) within the meaning of the Permanent Building Societies Act 1967 as is charged by those securities or any of them with the repayment of the debt guaranteed.

This paragraph shall not apply to or in respect of any guarantee or any renewal of a guarantee, as the case may be, given under the authority of this Act, guaranteeing the repayment of any loans or advances made or to be made to any statutory health corporation or affiliated health organisation within the meaning of the Health Services Act 1997.

(f) The bank, building society, credit union or approved body as the case may be shall not without the consent in writing of the Treasurer assign or encumber the benefit of the guarantee.

s 4: Am 1937 No 27, secs 6 (1) (b), 7 (3) (b); 1940 No 15, sec 2 (1) (b); 1941 No 20, sec 3 (1) (b); 1948 No 17, sec 2 (1) (b); 1964 No 61, sec 2 (c); 1967 No 18, sec 123 (1) (b); 1972 No 49, sec 2 (f); 1972 No 63, Sch; 1992 No 34, Sch 1; 1996 No 24, Sch 1; 1997 No 11, Sch 1.9 [3]; 1997 No 154, Sch 6.14 [2].

4A

4A (Repealed)

Contingent appropriation

5 Contingent appropriation

Such sums as may from time to time become due and payable by the Treasurer under any guarantee validated or authorised by this Act or validated by the Housing (Further Provisions) Act 1937 may be paid out of the Consolidated Revenue Fund without further appropriation than this Act.

s 5: Am 1937 No 27, sec 7 (3) (c); 1972 No 49, sec 2 (g).

Regulations

6 Regulations

(1) The Governor may make regulations not inconsistent with this Act prescribing all matters which by this Act are required or permitted to be prescribed or which are necessary or convenient to be prescribed for giving effect to this Act.

(2) (Repealed)

s 6: Am 1987 No 48, Sch 32.

7

7 (Repealed)

sch

Schedule

(Section 2 (1))

| Date | Debtor | Creditor | Amount Guaranteed | | | | | £ s d | | 10 May, 1926 | Royal Prince Alfred Hospital. | Commercial Banking Co. of Sydney Ltd., Sydney. | 35,000 0 0 | | 31 Aug, 1926 | """ | """ | 10,000 0 0 | | 4 Jan, 1927 | """ | """ | 7,000 0 0 | | 15 Nov, 1927 | """ | """ | 10,000 0 0 | | 18 Sept, 1928 | """ | """ | 23,000 0 0 | | 5 Mar, 1929 | """ | """ | 10,000 0 0 | | 19 June, 1929 | """ | """ | 10,000 0 0 | | | | £ | 105,000 0 0 | | 11 Dec, 1928 | Sydney Hospital | Bank of NSW, Sydney | 69,000 0 0 | | 8 May, 1929 | Royal North Shore Hospital | Bank of NSW, North Sydney Branch. | 54,000 0 0 | | 8 Oct, 1929 | """ | """ | 32,392 0 0 | | 28 " 1930 | St. George District Hospital | Bank of Australasia, Kogarah Branch. | 5,000 0 0 | | 6 Dec, 1932 | Royal Alexandra Hospital for Children—General Fund Account. | Bank of NSW, Camperdown Branch. | 15,000 0 0 | | 6 " 1932 | Royal Alexandra Hospital for Children—Building Fund Account. | """ | 10,000 0 0 | | 3 July, 1933 | Auburn District Hospital | Bank of NSW, Auburn Branch. | 500 0 0 | | 9 Jan, 1934 | Broken Hill and District Hospital. | E.S.& A. Bank Limited, Broken Hill Branch. | 5,500 0 0 | | 31 " 1934 | Cessnock District Hospital | Bank of NSW, Cessnock Branch. | 6,000 0 0 | | 31 " 1934 | Kurri Kurri District Hospital | Bank of NSW, Kurri Kurri Branch. | 7,000 0 0 | | 31 " 1934 | Maitland Hospital | Bank of NSW, West Maitland Branch. | 8,000 0 0 | | 31 " 1934 | Orange District Hospital | Bank of NSW, Orange Branch. | 1,000 0 0and interest. | | 6 Dec, 1921 | Murrumbidgee Irrigation Areas Co-operative Company, Limited. | Bank of NSW, Leeton Branch. | 35,000 0 0 | | 12 Oct, 1932and5 Sept, 1933 | Yenda Producers’ Co-operative Society, Limited. | Bank of NSW, Yenda Branch. | 3,000 0 0and interest. | | 16 May, 1933 | Rice Marketing Board for the State of New South Wales. | Bank of NSW, Leeton Branch. | 205,000 0 0and interest. | | 5 April, 1934 | """ | """ | 205,000 0 0and interest. | | 9 Jan, 1934 | Young District Producers’ Co-operative Association Limited. | Commonwealth Bank of Australia, Young Branch. | 31,166 0 0and interest. | | 1 May, 1934 | New South Wales Dairy Products Board. | Commercial Banking Co. of Sydney, Ltd., Royal Exchange Branch. | 300 0 0and interest. | | 8 May, 1934 | Irrigation Co-operative Societies, Limited. | Bank of NSW, Yenda Branch. | 10,000 0 0and interest. | | 15 May, 1934 | Egg Marketing Board for the Counties of Cumberland and Northumberland and Shires of Nattai and Wollondilly. | Commonwealth Bank of Australia, Sydney. | 55,000 0 0and interest. | | 16 Oct, 1928 | White Memorial Swimming Baths Committee. | Commercial Banking Co. of Sydney, Ltd, Muswellbrook Branch. | 3,500 0 0 | | 26 Mar, 1926 | The Sydney Harbour Trust Clerical and General Officers’ Association, Ticket Organisation. | Bank of NSW, Sydney. | 1,250 0 0 | | 1 June, 1933 | NSW Public Service Professional Officers’ Association Season Ticket Organisation. | Bank of NSW, Royal Exchange Branch. | 1,500 0 0and interest. | | 20 Mar, 1934 | Public Service Association of NSW Season Ticket Organisation. | Commercial Banking Co. of Sydney, Ltd, Sydney. | 2,500 0 0 | | 4 Sept, 1929 | J C Lennon | Bank of NSW, Inverell Branch. | 5,040 0 0 | | 29 Oct, 1929 | J D Smith | Bank of NSW, Trundle Branch. | 300 0 0 | | 17 " 1933 | C W Beer, Supervisor, Farmers’ Relief Board. | Bank of NSW, Murwillumbah Branch. | 100 0 0 | | 17 " 1933 | R E Cumming, Supervisor, Farmers’ Relief Board. | Bank of NSW, Moree Branch. | 100 0 0 | | 17 " 1933 | W E Frost, Supervisor, Farmers’ Relief Board. | Bank of NSW, Canowindra Branch. | 200 0 0 | | 17 " 1933 | W J Johnson, Supervisor, Farmers’ Relief Board. | Bank of NSW, Grafton Branch. | 100 0 0 | | 17 " 1933 | J S Longhurst, Supervisor, Farmers’ Relief Board. | Bank of NSW, Bega Branch. | 100 0 0 | | 17 " 1933 | H A Marks, Supervisor, Farmers’ Relief Board. | Bank of NSW, Bellingen Branch. | 100 0 0 | | 17 " 1933 | E T Matthews, Supervisor, Farmers’ Relief Board. | Bank of NSW, Deniliquin Branch. | 200 0 0 | | 17 " 1933 | H G Norton, Supervisor, Farmers’ Relief Board. | Bank of NSW, Corowa Branch. | 150 0 0 | | 17 " 1933 | D R Parker, Supervisor, Farmers’ Relief Board. | Bank of NSW, Kempsey Branch. | 100 0 0 | | 17 " 1933 | F A Paterson, Supervisor, Farmers’ Relief Board. | Bank of NSW, Lismore Branch. | 100 0 0 | | 17 " 1933 | J D Purcell, Supervisor, Farmers’ Relief Board. | Bank of NSW, Junee Branch. | 150 0 0 | | 17 " 1933 | J R Souter, Supervisor, Farmers’ Relief Board. | Bank of NSW Glen Innes Branch. | 100 0 0 | | 17 " 1933 | H H Stevenson, Supervisor, Farmers’ Relief Board. | Bank of NSW, Tamworth Branch. | 200 0 0 | | 17 " 1933 | W D Sykes, Supervisor, Farmers’ Relief Board. | Bank of NSW, Wentworth Branch. | 100 0 0 | | 17 " 1933 | T A Tester, Supervisor, Farmers’ Relief Board. | Bank of NSW, Young Branch. | 100 0 0 | | 17 " 1933 | M C Tweedie, Supervisor, Farmers’ Relief Board. | Bank of NSW, Gunnedah Branch. | 200 0 0 | | 17 " 1933 | A F Witcombe, Supervisor, Farmers’ Relief Board. | Bank of NSW, Grenfell Branch. | 150 0 0 | | 17 Oct, 1933 | D L Young, Supervisor, Farmers’ Relief Board. | Bank of NSW, Albury Branch. | 250 0 0 | | 17 " 1933 | L C Abbott, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Berrigan Branch. | 200 0 0 | | 17 " 1933 | C D Cook, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney Ltd., Barraba Branch. | 250 0 0 | | 17 " 1933 | H L Dawson, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Cootamundra Branch. | 100 0 0 | | 17 " 1933 | O F Ebert, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney Ltd., Warren Branch. | 150 0 0 | | 17 " 1933 | A D Hickey, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Gosford Branch. | 150 0 0 | | 17 " 1933 | J P Le Lievre, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Cobar Branch. | 100 0 0 | | 17 " 1933 | B W Loder, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney Ltd., Sydney. | 200 0 0 | | 17 " 1933 | G E Metcalfe, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Cooma Branch. | 100 0 0 | | 17 " 1933 | G E Mitchell, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Goulburn Branch. | 100 0 0 | | 17 " 1933 | H G Moffitt, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Grenfell Branch. | 100 0 0 | | 17 " 1933 | R S Moore, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Young Branch. | 200 0 0 | | 17 " 1933 | D P McGee, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., West Wyalong Branch. | 500 0 0 | | 17 " 1933 | E R Patston, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Armidale Branch. | 100 0 0 | | 17 " 1933 | R S Phillips, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Yass Branch. | 100 0 0 | | 17 " 1933 | E J Pollock, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Casino Branch. | 200 0 0 | | 17 " 1933 | S H Short, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., West Maitland Branch. | 100 0 0 | | 17 " 1933 | H H Stitt, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Moree Branch. | 1,000 0 0 | | 17 " 1933 | G P Turner, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Wagga Wagga Branch. | 500 0 0 | | 17 " 1933 | J S Wild, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Henty Branch. | 500 0 0 | | 17 " 1933 | W Wilson, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Inverell Branch. | 100 0 0 | | 14 Mar, 1934 | J F Auswild, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Lake Cargelligo Branch. | 1,000 0 0 | | 14 " 1934 | """ | Commercial Banking Co. of Sydney, Ltd., Temora Branch. | 1,000 0 0 | | 5 April, 1934 | J Boyd, Supervisor, Farmers’ Relief Board. | Bank of NSW, Peak Hill Branch. | 200 0 0 | | 5 April, 1934 | E H Graham, Supervisor, Farmers’ Relief Board. | Bank of NSW, Hillston Branch. | 2,000 0 0 | | 5 " 1934 | G F Grill, Supervisor, Farmers’ Relief Board. | Bank of NSW, Manilla Branch. | 100 0 0 | | 5 " 1934 | E Steel, Supervisor, Farmers’ Relief Board. | Bank of NSW, Cowra Branch. | 200 0 0 | | 5 " 1934 | C C Brownhill, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Parkes Branch. | 400 0 0 | | 5 " 1934 | J G Muir, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Wellington Branch. | 700 0 0 | | 5 " 1934 | E H Sadgrove, Supervisor, Farmers’ Relief Board. | Commercial Banking Co., of Sydney, Ltd., Narromine Branch. | 200 0 0 | | 17 " 1934 | W T Easdown, Supervisor, Farmers’ Relief Board. | Bank of NSW, Coonabarabran Branch. | 500 0 0 | | 17 " 1934 | N J Hanlin, Supervisor, Farmers’ Relief Board. | Bank of NSW, Condobolin Branch. | 500 0 0 | | 17 " 1934 | W J Kinross, Supervisor, Farmers’ Relief Board. | Bank of NSW, Inverell Branch. | 1,000 0 0 | | 1 May, 1934 | W J Green, Supervisor, Farmers’ Relief Board. | Bank of NSW, Forbes Branch. | 400 0 0 | | 15 " 1934 | W H Bentley, Supervisor, Farmers’ Relief Board. | Bank of NSW, Orange Branch. | 600 0 0 | | 15 " 1934 | J Campbell, Supervisor, Farmers’ Relief Board. | Bank of NSW, Wagga Wagga Branch. | 750 0 0 | | 15 " 1934 | H B Duff, Supervisor, Farmers’ Relief Board. | Bank of NSW, Mudgee Branch. | 200 0 0 | | 15 " 1934 | F L Keyworth, Supervisor, Farmers’ Relief Board. | Bank of NSW, Dubbo Branch. | 750 0 0 | | 15 " 1934 | J M McInnes, Supervisor, Farmers’ Relief Board. | Bank of NSW, Temora Branch. | 1,000 0 0 | | 15 " 1934 | A Savage, Supervisor, Farmers’ Relief Board. | Bank of NSW, Griffith Branch. | 1,000 0 0 | | 12 June, 1934 | J A Lorimer, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Narrandera Branch. | 400 0 0 | | 3 July, 1934 | C T Pile, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Gosford Branch. | 150 0 0 | | 17 " 1934 | F S McCarthy, Supervisor, Farmers’ Relief Board. | Commercial Banking Co. of Sydney, Ltd., Yass Branch. | 250 0 0 |

Source text: opening excerpt

Sourced from legislation.nsw.gov.au, CC BY 4.0.

1 Name of Act

This Act may be cited as the Government Guarantees Act 1934.

2 Validation

(1) The action of the Governor and Executive Council or the Treasurer in authorising the giving of the guarantees set out in the Schedule is hereby validated and any such authorisation shall be deemed a guarantee by the Government notwithstanding that no formal instrument of guarantee has been executed.

(2) No guarantee so authorised shall be held to be void merely on the ground that the person by whom such guarantee was so authorised or given had no power to create a liability enforceable against the Government and to be discharged out of the Consolidated Revenue Fund.

s 2: Am 1972 No 49, sec 2 (b).

3 Authority for Treasurer to guarantee overdraft accounts etc

(1) It shall be lawful for the Treasurer, upon the recommendation of the Minister for Health, with the approval of the Governor, to execute a guarantee in favour of any bank, building society or credit union in respect of the overdraft account with the bank, building society or credit union or of any indebtedness to the bank, building society or credit union of any statutory health corporation or affiliated health organisation within the meaning of the Health Services Act 1997.

(2) It shall be lawful for the Treasurer with the approval of the Governor to execute a guarantee in favour of any bank, building society or credit union, or of any other body of persons, corporate or unincorporate, approved by the Minister (in this Act referred to as approved body) for the repayment of any advance made or to be made by the bank, building society, credit union or approved body, as the case may be:

(a) to any marketing board within the meaning of the Marketing of Primary Products Act 1927, or

(a1) (Repealed)

(b) to any society (other than a co-operative housing society) within the meaning of the Co-operation Act 1923, or

Several distinct legal and financial concepts underpin the operation of the Government Guarantees Act 1934.

Validation of Ultra Vires Actions

The concept of validation under s 2 is designed to cure potential ultra vires actions by executive officers. Under general administrative and constitutional law, executive officers cannot bind the Crown to make payments out of public funds without clear statutory authority. Section 2 cures this by retrospectively validating agreements that may have lacked formal statutory backing, creating an enforceable debt against the Consolidated Revenue Fund.

Conclusive Evidence Clauses

The Act employs "conclusive evidence" clauses to insulate transactions from subsequent administrative law challenges. Under s 3(7), s 3AA(3), s 3A(4), and s 3B(2), the approval of the Governor or the execution of a guarantee by the Treasurer is deemed conclusive evidence that all statutory requirements, preliminary recommendations, and procedures have been complied with. This shields lenders from the risk that a guarantee might be declared void due to an internal administrative failure, such as a failure of a Minister to obtain a proper departmental recommendation.

Sovereign Credit Enhancement and the "Approved Body"

The Act distinguishes between regulated financial institutions (banks, building societies, and credit unions) and other lenders, referred to under s 3 as "approved bodies." An approved body is any corporate or unincorporate entity approved by the relevant Minister or the Treasurer. This concept allows the state to back loans sourced from non-traditional or private institutional lenders, extending the state's credit wrap beyond the standard commercial banking sector.

Exhaustion of Securities (Guarantor of Last Resort)

A central concept of the Act is that the state acts as a guarantor of last resort rather than a primary obligor. Section 4(e) establishes that a guarantee is not enforceable against the Treasurer or the Consolidated Revenue Fund until the lender has first exercised and exhausted all its rights and remedies under all other securities held for the debt. This concept protects public funds by requiring lenders to foreclose on mortgages, liquidate physical assets, or enforce charges against the primary debtor before claiming against the state.

However, the Act modifies this concept for specific entities. For marketing boards or co-operatives, the lender can bypass full exhaustion if a Supreme Court judge declares that enforcing other securities would cause "undue interference" with the debtor's operations. For building societies, the threshold is met once the lender becomes entitled to appoint a receiver. For health service organisations under the Health Services Act 1997, the exhaustion requirement is completely waived, allowing immediate recourse to the state upon default.

Partial State Exposure (The 90% Valuation Cap)

For country industries and tourism development, the Act introduces a risk-sharing concept under s 3A(2) and s 3B(2). The Treasurer is prohibited from guaranteeing more than ninety percent of the estimated value of the land, buildings, works, plant, or machinery being funded. This concept ensures that either the lender or the borrower retains a minimum ten percent economic exposure, mitigating moral hazard.

Deep Dive

What it does

Current sections

Name of Act

1 Name of Act

Validation

2 Validation

Authority for Treasurer to guarantee overdraft accounts etc

3 Authority for Treasurer to guarantee overdraft accounts etc

Execution of certain guarantees on behalf of Treasurer

3AA Execution of certain guarantees on behalf of Treasurer

Guarantees for industrial purposes

3A Guarantees for industrial purposes

Guarantees for development of the tourist industry

3B Guarantees for development of the tourist industry

Provisions relating to guarantees given under this Act

4 Provisions relating to guarantees given under this Act

4A

Contingent appropriation

5 Contingent appropriation

Regulations

6 Regulations

7

sch

Source text: opening excerpt

1 Name of Act

1 Name of Act

2 Validation

2 Validation

3 Authority for Treasurer to guarantee overdraft accounts etc

3 Authority for Treasurer to guarantee overdraft accounts etc

Main concepts

Validation of Ultra Vires Actions

Conclusive Evidence Clauses

Sovereign Credit Enhancement and the "Approved Body"

Exhaustion of Securities (Guarantor of Last Resort)

Partial State Exposure (The 90% Valuation Cap)

Who it affects

Financial Institutions and Creditors

Borrowing Debtors

Executive Government and Ministers

Key duties and rights

Rights of the Lender

Duties of the Lender

Powers and Discretions of the Treasurer

Penalties and enforcement

The Exhaustion Bar to Enforcement

Judicial and Administrative Gateways to Enforcement

How it interacts with other laws

NSW Health and Community Legislation

Cooperative, Building Society, and Corporate Law

Agricultural and Economic Development Laws

Amendment history

Early and Mid-20th Century Amendments (1937-1968)

Late 20th Century and Modern Reform (1972-2016)

Litigation history

The Impact of Conclusive Evidence Clauses on Litigation

Non-Hostile Chamber Applications

Gotchas

The Exhaustion Trap

The Healthcare/Non-Healthcare Dichotomy

The 90% Valuation Ceiling Risk

The Prohibition on Unapproved Assignments

Local Government Indemnity Exposure

How to comply

For Lenders Securing a New Guarantee

For Lenders Enforcing a Guarantee

For Lenders Transferring Debt Portfolios

3AA Execution of certain guarantees on behalf of Treasurer

3AA Execution of certain guarantees on behalf of Treasurer

3A Guarantees for industrial purposes

3A Guarantees for industrial purposes

3B Guarantees for development of the tourist industry

3B Guarantees for development of the tourist industry

4 Provisions relating to guarantees given under this Act

4 Provisions relating to guarantees given under this Act