1Structural Adjustment (Loan Guarantees) Act 1974

STRUCTURAL ADJUSTMENT (LOAN GUARANTEES) ACT 1974 No. 155 of 1974 An Act to authorize the giving of Guarantees on behalf of Australia in respect of Loans made for the purposes of Structural Adjustment in Industry. BE IT ENACTED by the Queen, the Senate and the House of Representatives of Australia, as follows:— Short title. 1. This Act may be cited as the Structural Adjustment (Loan Guarantees) Act 1974. Commencement. 2. This Act shall come into operation on the day on which it receives the Royal Assent. Interpretation. 3. (1) In this Act, unless the contrary intention appears— “firm” means a company, partnership or individual; “guarantee ” means a guarantee under this Act; “national interest” means the interests of the Australian community in relation to matters that are, under the Constitution, the concern of the Australian Government, including matters incidental to the exercise of the powers of the Australian Government; “prescribed adjustment situation” means circumstances prescribed in accordance with section 5. (2) References in this Act to the Australian Government shall, where the context so admits, be read as including references to the Parliament. Object of Act. 4. (1) The object of this Act is, by assisting firms engaged in industrial operations to change the nature of their operations, to facilitate structural adjustments in industry that are necessary in the national interest as a result of action taken by the Australian Government or that, by reason of exceptional circumstances, it is desirable, in the national interest, should be assisted by the Australian Government because the existing structure of a particular industry is not conducive to the efficient use of resources, where those adjustments are beyond the normal adaptive capacity of the economy and where assistance under this Act would, at a cost that is reasonable in relation to the benefits of the community resulting from the assistance, prevent serious hardship or inequity in, or serious economic cost to, the Australian community. (2) Powers conferred by this Act, including the power of the Governor-General to make regulations, shall be exercised for the achievement of the object of this Act. Declaration of adjustment situations. 5. (1) The regulations may declare particular circumstances to be an adjustment situation for the purposes of this Act, being circumstances defined by reference to particular actions of the Australian Government or by reference to particular matters giving rise to the need for structural adjustments of a kind referred to in section 4. (2) Regulations declaring an adjustment situation shall specify the period during which applications for guarantees in relation to that adjustment situation may be made. Guarantees. 6. Subject to this Act, the Minister may, on behalf of Australia, guarantee the repayment of, and the payment of interest in respect of, loans made to, or to be employed by, firms that are affected by a prescribed adjustment situation. Restrictions on giving of guarantees. 7. (1) The Minister shall not give a guarantee in respect of a loan in relation to a prescribed adjustment situation unless he is satisfied that— (a) the firm by which the loan moneys will be employed has been or is being adversely affected by the prescribed adjustment situation to such extent as to render a significant and distinct part of its assets incapable of economic use; (b) the firm by which the loan moneys will be employed has taken all reasonable steps to adjust itself to that situation, including efforts to obtain finance on reasonable terms and conditions from normal commercial sources without a guarantee under this Act; and (c) the manner in which the loan moneys are to be employed is consistent with the national interest in relation to the use of resources and, where the prescribed adjustment situation relates to any action of the Australian Government, is consistent with the objective of the Australian Government in taking that action. (2) The Minister may give a guarantee in respect of a firm notwithstanding that paragraph (1)(a) is not applicable if, in relation to the prescribed adjustment situation concerned, structural adjustment by the industry in which the firm is engaged is an objective of the Government but the Minister is satisfied that the structural adjustment would not, without assistance by guarantees under this Act, be likely to occur at a reasonable speed and at a reasonable economic cost to the community. (3) A guarantee shall not be given in respect of a loan where compensation has been or will be paid by the Australian Government in respect of the assets rendered incapable of economic use by reason of the prescribed adjustment situation concerned. Further conditions relating to guarantees. 8. (1) The Minister shall not give more than 1 guarantee in respect of any 1 firm in relation to any 1 prescribed adjustment situation and for that purpose shall, unless he is satisfied that there are special circumstances that make it unreasonable to do so, treat firms that are associated with one another as 1 firm. (2) Subject to sub-section (3), a guarantee shall be in respect of such amount and period, and may be given subject to such conditions applicable to the lender or borrower, as the Minister determines, but the Minister may, with the agreement of the lender and the borrower, reduce the amount or vary the period or other conditions of the guarantee. (3) A guarantee shall not extend to more than nine-tenths of the loan to which it relates. (4) The Minister shall not give a guarantee in respect of a loan unless— (a) the loan moneys are, in his opinion, to be lent on reasonable terms and conditions; (b) the lender has taken or is to take security to the satisfaction of the Minister and the terms of the guarantee— (i) authorize the Minister to require the lender, in the event of default by the borrower, to exercise his rights in respect of the security to the best advantage before seeking payment under the guarantee; and (ii) make provision for Australia to have the benefit of the security in the event of payment being made by Australia under the guarantee; (c) the Minister is satisfied that assets over which the lender is to take security will be insured and kept insured to their full insurable value against all risks against which it is customary to insure and that rates, taxes, duties and charges in respect of those assets will be punctually paid, and such undertakings as the Minister thinks necessary for safeguarding the interests of Australia in respect of those assets are given; and (d) the firm concerned agrees to give to any officer authorized by the Minister full access to its accounts, books and documents and such information as the officer requires from time to time concerning the assets of the firm. (5) For the purposes of this section, 2 firms shall be deemed to be associated if— (a) they are companies that would be deemed to be related to each other for the purposes of the Companies Ordinance 1962-1974 of the Australian Capital Territory, or of that Ordinance amended at any time, if that Ordinance were applicable to them; or (b) the ownership or control of their respective industrial enterprises is otherwise so related that, in the opinion of the Minister, it is reasonable that they should be treated, for the purposes of this Act, as being associated, and a firm that is deemed to be associated with another firm shall be deemed to be associated with any firm with which that other firm is deemed to be associated. Moneys to be appropriated. 9. Any moneys required to be paid by Australia under a guarantee shall be paid out of moneys appropriated by the Parliament and lawfully available for the purpose. Offences. 10. (1) A person shall not, in or in connexion with an application for a guarantee, knowingly make to a person having duties or functions for the purposes of this Act, a statement, whether oral or in writing, or present to such a person a book, record or document, that is false or misleading. Penalty: $10,000 or imprisonment for 6 months. (2) For the purpose of the application of this section in relation to a company, but without prejudice to the liability of any person other than the company— (a) a statement made, or a book, record or document presented, by a person acting on behalf of the company shall be deemed to have been made or presented by the company; and (b) the knowledge of any person employed by, or concerned in the management of, the company shall be deemed to be knowledge of the company. Secrecy. 11. (1) Subject to this section, an officer performing duties for the purposes of this Act shall not, either directly or indirectly, except for purposes in connexion with this Act— (a) make a record of, or divulge or communicate to any person, any information concerning the affairs of a firm acquired by him in the course of those duties; or (b) produce to any person an application or document furnished for the purposes of obtaining a guarantee. Penalty: $500 or imprisonment for 6 months. (2) An officer to whom this section applies shall not be required to divulge or communicate to a court any information referred to in sub\-section (1) or to produce in a court any document referred to in that sub\-section, except where it is necessary to do so for the purposes of, or of a prosecution under or arising out of, this Act. (3) In this section— “court” includes a tribunal, authority or person having power to require the production of documents or the answering of questions; “produce” includes permit access to, and “production” has a corresponding meaning. Publication of certain particulars. 12. The Minister shall cause to be published in the Gazette from time to time and at least once in each financial year particulars of the names of firms in respect of which guarantees have been given, the amounts of the loans concerned and such other particulars, if any, in respect of guarantees as he thinks fit, not being particulars relating to the affairs of particular firms the disclosure of which would be likely to prejudice the business interests of those firms. Validity of guarantees. 13. The validity of a guarantee is not affected by the operation of any provision of this Act referring to the satisfaction or opinion of the Minister. Regulations. 14. The Governor-General may make regulations, not inconsistent with this Act, prescribing all matters required or permitted by this Act to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to this Act, including regulations— (a) prescribing classes of firms that are to be eligible for assistance by way of guarantees; and (b) requiring the verification by statutory declaration of matters contained in applications for guarantees or other documents or records supplied for the purposes of this Act.