Aboriginal and Torres Strait Islander Land Account Annual Report 2013–14
Role and functions
The Aboriginal and Torres Strait Islander Land Account (ATSILA) was established by subsection 5(3) of the Financial Management Legislation Amendment Act 1999, and is continued in existence by s 192W(1) of the Aboriginal and Torres Strait Islander Act 2005 (ATSI Act). The ATSILA was a Special Account for the purposes of the Financial Management and Accountability Act 1997 (FMA Act). From 1 July 2014, the ATSILA is a Special Account for the purposes of the Public Governance, Performance and Accountability Act 2013.
ATSILA was established to recognise that many Indigenous people will be unable to assert native title rights because they were dispossessed of their lands and therefore cannot demonstrate the continuous connection with land necessary to prove native title.
The ATSILA was credited over a ten year period from 1994 with direct appropriations and became a self-sustaining capital fund from 30 June 2004. ATSILA had a balance of almost $2 billion as at 30 June 2014, full details of the ATSILA 2013–14 Financial Statements is included in Part 4.
The purpose of ATSILA is to make payments to the Indigenous Land Corporation (ILC), an independent statutory authority established under the ATSI Act to assist Aboriginal and Torres Strait Islander people to acquire and manage land.
Since 2010, the ATSI Act requires that a minimum annual payment of $45 million be made to the ILC, indexed in each subsequent year according to the Consumer Price Index. The minimum payment will be made in all years, even if the amount paid would reduce the real capital value of ATSILA. This is to ensure a certain and regular funding stream for the ILC to allow it to carry out its legislated functions.
In addition to the minimum amount, the ATSI Act allows for the payment of additional amounts to the ILC from ATSILA in years where the actual balance of ATSILA is greater than that required to maintain its real capital value.
As a result of the Administrative Arrangements Order of 18 September 2013, the Department now manages the almost $2 billion investments in the Land Account.
Figure 5.17 details the payments made to the ILC since the amendments were made to the ATSI Act in 2010.
Investments of the Land Account
For the financial year 2013–14, investment activities were undertaken by Department officials in accordance with section 39 of the FMA Act as required by s 192W(3) of the ATSI Act and in compliance with an Investment Policy agreed between ATSILA’s Consultative Forum and the Department’s Chief Finance Officer, who is the Finance Minister’s Delegate for the purposes of the FMA Act.
The investment objectives are to achieve a return on the investments which will preserve the capital value of the fund in real terms and cover the annual payment to the ILC. This equates to a return of at least the CPI +2.6 per cent per annum.
Allowable investments under section 39 of the FMA Act include conservative low-risk investments such as Government Bonds, Semi Government Bonds (State or Territory) and term deposits with a bank. The ATSILA’s investments comprised of 12 per cent in Semi Government Bonds and 88 per cent in term deposits with Australian banks as at 30 June 2014.
Figure 5.18 provides the return on investments for the 2013–14 and 2012–13 year.
|Return on Investments
The ATSI Act requires the establishment of a consultative forum on investment policy of the ATSILA to meet at least twice each financial year (section 193G). The ATSILA’s Consultative Forum comprises the Department’s Chief Finance Officer and two ILC Directors elected by the ILC Board. The purpose of the Consultative Forum is to discuss the investment policy of the Land Account. Two meetings of the Consultative Forum were held in 2013–14, one on 4 March 2014 and the second one on 4 June 2014.