This is one of Australia's oldest pieces of financial legislation, and it does a fairly simple job: it creates a framework for the Commonwealth Government to borrow money by issuing short-term debt instruments called "Treasury Bills".
What is a Treasury Bill?
A Treasury Bill is essentially an IOU issued by the government. The government sells these bills to investors (including individuals, institutions, and trustees), promises to pay interest on them, and then repays the full face value on a set date. Think of it like a government-issued term deposit.
Who does it affect?
The Commonwealth Government, which uses Treasury Bills to raise money for purposes authorised by other laws (such as funding government expenditure)
Investors and the public, who can purchase Treasury Bills as a relatively safe investment
Trustees, executors, and administrators (people who manage money on behalf of others, e.g. in deceased estates) — the Act explicitly allows them to invest trust money in Treasury Bills, signalling these were considered a safe, trustworthy investment
What does the Act actually set up?
Authorisation to issue: The Governor-General (acting on the government's advice) can authorise the Treasurer to issue Treasury Bills to raise money, but only where another law has already approved the borrowing
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Rules for each bill: Every Treasury Bill must be numbered, signed, registered with the Auditor-General, carry a date, pay interest at no more than 5% per year, and have a clear repayment date
How they work: Bills are transferable simply by handing them over (like cash — known in law as "transferable by delivery"), and both the principal (the original amount borrowed) and interest are payable to whoever holds the bill at the time ("payable to bearer")
Payment source: Money to repay bills comes from the Consolidated Revenue Fund (the government's main bank account), which this Act specifically sets aside (or "appropriates") for that purpose
Damaged or lost bills: There are procedures for replacing accidentally defaced, lost, or destroyed bills, including applying to the Federal Court for a certificate before a replacement can be issued
Destruction of old bills: Once paid off or cancelled, bills must be physically destroyed in the presence of senior officials, who then sign a certificate confirming this
Why does it matter?
Even though it dates from 1914, this Act remains in force. It established the legal plumbing for short-term Commonwealth government borrowing — a core tool of public finance. The interest rate cap of 5% and the bearer instrument structure reflect the financial norms of the early 20th century, and much of the heavy lifting in modern government borrowing is now done through more contemporary legislation.