EIGHTH REPORT OF THE PARLIAMENTARY JOINT COMMITTEE ON NATIVE TITLE AND THE ABORIGINAL AND TORRES STRAIT ISLANDER LAND FUND
Table of Contents

Chapter 2

Land Fund Report

Statutory Reporting Requirements

2.1 The statutory requirements in relation to the Land Fund's annual report are set out in section 193I of the ATSIC Act. They include the requirement for the Minister to cause to be prepared as soon as practicable after the end of 30 June each year a report about the administration and operation of the Land Fund and its supporting legislation (s.193I(1)). These requirements were set out in Chapter 3 of this Committee's fifth report.

2.2 The following specific matters are required by s.193I(2) of the ATSIC Act to be included in each Land Fund report:

(a) particulars of amounts credited to the Land Fund during the financial year;

(b) particulars of amounts paid out of the Land Fund during the financial year;

(c) particulars of investments of the Land Fund;

(d) the realised real return on investments of the Land Fund in respect of the financial year;

(e) such other information (if any) as is specified in the regulations.

2.3 Further, copies of annual reports are to be laid before each House of Parliament within fifteen sitting days after the completion of the report (s.193I(3)).

Compliance

Tabling

2.4 The 1995-1996 annual report of ATSIC, with the Land Fund report appended, was presented to the Minister on 22 October 1996 and was tabled in both Houses of Parliament on 31 October 1996. The Land Fund report therefore satisfied the tabling requirements.

Specific Matters

• Amounts credited to the Land Fund

2.5 $200 million was committed to the Land Fund in the 1994-95 Budget. For 1995-96, both the Land Fund report and the ILC report (pp.11 and 49) state that on 4 July 1995 $123,178,000 was appropriated to the Land Fund. This amount represents the first of nine indexed annual allocations of $121 million from 1995-96 through to 2003-2004. Each year the amount is to be indexed to maintain value in 1994-95 dollar terms. (It should be noted that the ILC report table on p.11 is incorrect in listing the single years for the notional allocations from '1999-2001' through '1999-2004'. Further, in the ILC report the paragraph Land Fund Appropriations 1995/96 on page 11 has been unnecessarily repeated on page 12.)

2.6 At page 50 of the ILC report, the Land Fund report records that:

The real return on investments was sufficient to meet the required margin of over 4.5 percent needed to ensure the capital base of the Land Fund reaches its target in 2004 of $1106 million indexed. However, this return is due mainly to the relatively low inflation rate and is down significantly from the 1994/95 real return of 6.47 percent.

The figure of $1106 million (indexed) for the 2004 Land Fund target is specified at s.193AA(2) of the ATSIC Act. It is noted that the useful table Notional Allocations to and from the Land Fund provided at page 11 of the ILC annual report for 1995-96 is not reconciled with the statutory target amount. It would be desirable, however, for the table to refer to the statutory target in future reports and for the ILC to confirm whether the target figure is being met. The Committee observes that reference in the ILC's annual report for 1994-95 (p. 3) to a total amount of $1.46 billion for the Land Fund has not been repeated in the ILC's 1995-96 annual report; the 'notional' target given is $1.289 billion.

• Amounts paid out of the Land Fund

2.7 An amount of $24,432,000 was provided to the ILC and $21,378,000 was provided to ATSIC for its Land Acquisition and Maintenance program. This was the second last such payment to ATSIC. At the public hearing on 24 March 1997, the ILC General Manager confirmed (Evidence, p. NT3) that from 1 July 1997 both the land acquisition and land management functions, previously shared with ATSIC, will be assumed completely by the ILC. The amount to be paid to ATSIC in 1996-97 will be the last payment; from 1997-98 the ILC will receive the entire $45 million (indexed).

• Investments and realised real returns

2.8 Both the Land Fund report and the ILC report (pp.10 and 49) state that, of the $123,178,000 appropriation for 1995-96, $77,368,000 was invested in securities in accordance with s. 62B of the Audit Act 1901. The ILC report (pp. 50,51) confirms that:

Investments during the year were made in securities prescribed by the Audit Act. These included term deposits, commercial bills and negotiable certificates of deposit. The balance of these investments at 30 June 1996 was $281,507,786. With outstanding interest on investments totalling $6,539,244, the value of the fund at 30 June 1996 was $288,047,030.

 

Response to the Committee's Fifth Report

2.9 In its fifth report, this Committee set out a number of shortcomings in reporting about the Land Fund for 1994-95. These matters included:

• lack of reference to s.193H of the ATSIC Act concerning approval of the form of the Financial Statements by the Minister's Delegate (p.12);
• coordination between the ILC and ATSIC in reporting Land Fund matters (p.14);
• the first draw down did not take place on the date proposed and information about the first draw down was incorrect (pp.15,16); and
• the ILC and ATSIC should coordinate their reporting on Land Fund matters (p.17).

2.10 The Committee notes that these matters received attention in the subsequent reporting about the Land Fund. The incorporation of the same appendix about the Land Fund in the annual reports from both the ILC and ATSIC was useful, and probably helped to reduce inconsistencies. This represents a very considerable improvement in Land Fund reporting. Nevertheless, ATSIC and the ILC need to continue to review the presentation of their reporting on this matter to make it as accessible as possible while eliminating the possibility of any inconsistencies in future reports.

 

Summary

2.11 Reporting about the Land Fund for 1995-96 complies with the legislative requirements. Importantly, the reporting appears to have accepted and adopted the suggestions contained in this Committee's fifth report.