Gazette . . Page.. 431 ..
TRUSTEE (AMENDMENT) BILL 1995
MR HUMPHRIES (Attorney-General) (10.49): Mr Speaker, I present the Trustee (Amendment) Bill 1995, together with its explanatory memorandum.
Title read by Clerk.
MR HUMPHRIES: I move:
That this Bill be agreed to in principle.
The Bill presented today honours a commitment made during the ACT election campaign concerning the position of credit unions in the ACT. It is a commitment that, I think, was made by both the Opposition and the Government at the time. I hope, therefore, that the Bill will receive support across the chamber.
The Bill has two purposes. Its main purpose is to add ACT credit unions to the list of investments in which a trustee may invest trust moneys. The opportunity has also been taken to rationalise and update the law dealing with investment of trust moneys by way of deposit with building societies. A trustee with trust moneys to invest may invest only in one of the investments authorised under or listed in section 14 of the Trustee Act, unless the trust instrument gives the trustee wider powers of investment. The list in the Act is known as the statutory list. At present, banks are included in the list, but not credit unions. I am informed by the Credit Union Services Corporation (Australia) Ltd, which is the peak organisation of credit unions in Australia, that there are five credit unions in the ACT, with about 68,000 members and total assets of about $250m. In New South Wales, on 3 March 1995 a regulation was published in the Gazette of that State which has the effect of prescribing as authorised trustee investments deposits with credit unions that are registered and authorised to operate under the Financial Institutions (NSW) Code. This Bill will bring the ACT law into line with New South Wales law.
While section 14 of the Trustee Act is being amended, it is also a good time to rationalise the provisions dealing with investment of trust moneys with building societies. The existing law in the ACT is that a local building society must have $50m in withdrawable funds, a record of compliance with building societies law for five years, and 10 years’ presence in the ACT. A “foreign” - meaning interstate - building society is subject to similar requirements. A building society that meets these criteria can be considered for approval. These provisions were made to meet circumstances which no longer exist. At present there are no “local” building societies, and no interstate building society has applied for inclusion in the statutory list. In view of the changes in the supervision of building societies and credit unions that have taken place since July 1992, there is no good reason why they should not be treated in the same way as banks for the purpose of investment of trust moneys. The Bill provides that trustee investment status in the ACT will be granted to ACT credit unions and building societies only. A trustee will not be able to select a credit union or building society in another State or Territory which might result in an outflow of money from the Territory - unless, of course, the trust instrument actually permits that to occur.