Page 1937 - Week 07 - Thursday, 20 August 1992
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TRUSTEE (AMENDMENT) BILL 1992
Debate resumed from 25 June 1992, on motion by Mr Connolly:
That this Bill be agreed to in principle.
MR HUMPHRIES (4.24): This Bill is quite straightforward. It complements the Bill we passed yesterday, the Trustee Companies (Amendment) Bill, in providing for the mechanisms whereby trustee companies might invest in common trust funds. As I mentioned yesterday, the idea is to allow trustee companies to pool funds from a number of sources, a number of estates they administer, put them together with other trustee companies perhaps, and make sure that they can compete in the market for the best investments. In those circumstances, it provides for better returns on investments and it is therefore a welcome reform.
I have only one small comment to make. I see that the amendment to section 14 of the principal Act expands the number of areas in which investments may be made by trustee companies and talks of government securities of the Commonwealth, the Territory, a State, another Territory - meaning the Northern Territory, I assume; I cannot think of any other Territory it could mean - the United Kingdom or New Zealand. I do not quite know why just the United Kingdom and New Zealand; perhaps it is a colonial relic of some kind. I am sure that governments in Canada, the United States, continental Europe and elsewhere also properly secure their investments in government securities, but for some reason that is not the case here and we do not envisage those sorts of investments. Perhaps it is not an area where there would be considerable interest. On the other hand, it may be that from time to time very attractive investment opportunities might come along and it might be appropriate to consider those sorts of investments when they do come along. Perhaps over time we will be a little less Anglocentric about these sorts of things.
MS ELLIS (4.27): This Bill complements the Trustee Companies (Amendment) Bill in making a number of reforms to the law relating to trustees and the administration of deceased estates. In order to protect beneficiaries, trustees are allowed to invest in only a limited range of investments. These are known as authorised trustee investments and are considered to be of a secure nature. The Bill expands the list of authorised trustee investments to give trustees a greater choice of approved investment products. The list will include deposits with a body corporate established by an Act of the Commonwealth or a State or Territory, where the deposit is guaranteed by the relevant government, as well as bills of exchange which mature 200 days or less after purchase and which give the holder a right to get back from a bank the face value of the bill. The addition of certain trustee company common funds to the list will, in conjunction with the amendments contained in the Trustee Companies (Amendment) Bill, allow trustee companies to offer the advantages of common funds to Canberra investors, whether or not they are trustees.
The Bill also removes an outdated provision which restricts trustees in some cases from applying the capital of a trust for the maintenance and education of an infant beneficiary. This provision, which had never been reviewed, was operating in some instances to frustrate the intentions of testators and settlers of trusts who particularly wanted to provide for the maintenance and education of children. This Bill clarifies a number of areas of trustee law and brings other areas into line with other jurisdictions. I commend the Bill for passage by the Assembly.
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