Commonwealth Numbered Regulations - Explanatory Statements

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EXPLANATORY STATEMENT Select Legislative Instrument 2006 No. 125


Issued by authority of the Parliamentary Secretary to the Treasurer

Cheques Act 1986

Cheques Amendment Regulations 2006 (No. 1)

Section 119 of the Cheques Act 1986 (the Act) provides that the Governor-General may make regulations regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

Section 76 of the Act permits that if a cheque is dishonoured, the indorser who has been compelled to pay the cheque may recover as damages, the sum ordered to be paid by the cheque, and the amount of any interest as determined by regulations. 

The Cheques Regulations 1987 (the Principal Regulations) set out the appropriate rate of interest calculated for damages on a dishonoured cheque as the 'average yield of the 13 week Treasury Notes' (Treasury Note). ).  Treasury Notes are no longer issued by the Government. The last Treasury Notes were issued on 8 October 2003.

The purpose of the Regulations is to replace the rate of interest calculated for damages on a dishonoured cheque from the Treasury Note rate to a more appropriate rate of interest.

Other references to the Treasury Note in the Taxation Administration Act 1953 and other tax laws have been amended to refer to the '90-day Bank Accepted Bills published by the Reserve Bank of Australia' (Bank Accepted Bill), by the Taxation Laws Amendment Act (No. 3) 2001. However, similar amendments to the Principal Regulations were not made.

For reasons of consistency with other Acts and in light of prior policy decisions, the Bank Accepted Bill rate replaces the Treasury Note rate in the Principal Regulations.

The Regulation regulation[sfl1]  was deemed a technical amendment by the Office of Regulatory Review; therefore no Regulatory Impact Statement was required to be prepared.

The Regulations commenced on the day after registration.


 [sfl1]Upper case for a set of Regulations, lower case for each regulation within that set.

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