Introduction
All non-corporate Commonwealth entities (NCEs) and corporate Commonwealth entities (CCEs) undertake transactional banking using a range of banking services and payment methods to transact their ordinary business.
CCEs are able, in their own name, to hold money and enter into an agreement with a bank.
NCEs are able to:
- manage cash for and on behalf of the Australian Government, in accordance with government policies and related requirements
- maintain transactional bank accounts in Australia and, with specific approval from the Minister for Finance (Finance Minister), can maintain transactional bank accounts overseas.
Such accounts must not be operated for primarily earning interest or investment returns.
Under certain situations, NCEs’ may enter into an arrangement with a person, who is not an NCE official or a minister, to use or manage Commonwealth money (by receiving, having custody of or spending money) as an agent of the Commonwealth. Money held by an agent, for and on behalf of the Commonwealth:
- forms part of the CRF for the purposes of section 81 of the Constitution
- is referred to, at section 105 of the PGPA Act, as ‘other CRF money’.
Legislative Framework
The Finance Minister, under section 53 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), on behalf of the Commonwealth:
may enter into an agreement with a bank to conduct Australian Government banking business, including to open and maintain bank accounts
must open and maintain a central bank account with the Reserve Bank of Australia (RBA).
The primary central bank account of the Australian Government is the Official Public Account – part of a set of bank accounts called the Official Public Account Group.
The PGPA Act requires NCE bank accounts in Australia to be opened and maintained with the RBA or an authorised deposit-taking institution (ADI) under section 53. The Public Governance, Performance and Accountability (Finance Minister to Accountable Authorities of non-Corporate Commonwealth Entities) Delegation delegates authority, under section 53 of the PGPA Act, to the accountable authority of each NCE.
The delegation can be found on the PGPA legislation, associated instruments and policies page available under Policies, legislation and guidelines in the right-hand menu.
The PGPA Act, under section 54, states that the rules may prescribe matters relating to banking by CCEs. Requirements for the Commonwealth Superannuation Corporation with regards to banking in Australia are set out under section 18A of the Public Governance, Performance and Accountability Rule 2014(PGPA Rule). The rules do not currently prescribe banking requirements for any other CCE.
Ministers or entity officials are obligated to bank relevant money promptly and in accordance with any rules made under section 55 of the PGPA Act. ‘Relevant money’ is money that is standing to the credit of any bank account of the Commonwealth or a CCE, or money that is held by the Commonwealth or a CCE, under section 8 of the PGPA Act.
The PGPA Rule, under sections 19-21, supports section 55 of the PGPA Act by specifying when relevant money must be banked, and when it is not required to be banked.
