The Auditor-General desires that my opinion should be obtained as to whether the estimated issues of gold coin for redemption of Australian Notes are or are not included in section 31 of the Audit Act.

In connection with this matter, the Secretary to the Treasury points out that:

In section one [sic] of the Act 'Commonwealth Public Account' is defined. It includes the Consolidated Revenue Fund and all public moneys whatever. Section 21 requires that the Commonwealth Public Account shall be kept in a bank. Now the Australian Notes Act provides that the Treasurer shall 'hold' gold coin-clearly he cannot pay it into a bank. It seems to follow that the gold coin held by the Treasurer is not part of the Commonwealth Public Account and that therefore the warrant referred to in section 32 of the Audit Act is not required in relation to the issues of gold coin.

The definition of 'Commonwealth Public Account' in section 2 of the Audit Act 1901-1917 is as follows:

'Commonwealth Public Account' shall include the Consolidated Revenue Fund and all public moneys whatever.

'Public moneys' is defined to include 'all revenue loan trust and other moneys whatsoever received for or on account of the Commonwealth or referred to in this Act'.

Section 21 of the Act requires the Commonwealth Public Account to be kept in a bank.

By section 31 of the Act it is provided that:

No money shall be drawn from the Commonwealth Public Account except in the manner provided by this Act.

The manner is denned in the succeeding sections, namely, a statement by the Treasurer of the moneys required, an examination and countersignature of the statement by the Auditor-General; and thereupon return to the Treasurer and submission to the Governor-General for approval and signature. The Treasurer is thereupon (section 33) empowered to issue drafts or cheques upon the 'Commonwealth Public Account' in such form as shall be directed by the Treasurer, and such drafts or cheques shall be sufficient authority to the bank in which the said account is kept to debit the said account with the amounts mentioned therein.

Section 62 of the Audit Act provides, inter alia, that:

All the provisions of this Act relating to the issue and expenditure of public moneys and the authority for such issue and expenditure shall apply to the issue and expenditure of moneys standing to the credit of the Trust Fund, and the Governor-General shall have the same authority with respect to such moneys and the expenditure thereof as he has with respect to moneys standing to the credit of the Consolidated Revenue Fund.

The Australian Notes Act 1910-1911, section 8, however, provides, inter alia, that:

1. The moneys derived from the issue of Australian Notes and any interest thereon shall be placed to the credit of an account called the Australian Notes Account which shall be a Trust Account within the meaning of the Audit Acts 1901-1906.
2. Part of the moneys standing to the credit of the Australian Notes Account shall be held by the Treasurer in gold coin for the purposes of the reserve provided for in section nine of this Act . . .

Section 9 requires the Treasurer to hold in gold coin a reserve representing a certain portion of the amount of Notes issued, while section 6 of the same Act requires the Notes to be payable in gold coin on demand at the Commonwealth Treasury at the Seat of Government.

I am of opinion that the provisions of the Australian Notes Act requiring the Treasurer to hold a reserve in gold coin are inconsistent with the provisions of section 21 of the Audit Act requiring the Public Account to be kept in a bank. It follows, therefore, that in so far as the reserve is concerned it is not required to be kept in a bank, but on the contrary is required to be held by the Treasurer.

The provisions of sections 31 to 33 and 62 of the Audit Act which have already been referred to are framed for the purpose of enabling moneys to be drawn from the bank in which the Commonwealth Public Account is kept, and, although the definitions of 'Commonwealth Public Account' and 'Public moneys' are wide enough to include the gold reserve held for the purpose of the redemption of Australian Notes, I do not think that, in view of the inconsistency between the provisions of section 21 of the Audit Act and the provisions of the Australian Notes Act set out above, sections 31 to 33 and 62 of the former Act apply to the issue of moneys from the gold reserve.

I am, therefore, of opinion that the warrant of the Governor-General provided for in the Audit Act 1901-1917, section 32, is not required in the case of moneys issued for the purpose of the redemption of Notes.

It might be advisable, when the Audit Act is being amended, to include a provision removing the inconsistency which now exists between that Act and the Australian Notes Act in relation to the gold reserve.

[Vol. 16, p. 270]