Investment by Commonwealth entities (RMG 301)


This guide is relevant to officials of:

  • non-corporate Commonwealth entities (NCEs) who are delegated investment power from the Finance Minister or Treasurer under section 58 of PGPA Act and section 22 PGPA Rule and
  • corporate Commonwealth entities (CCEs) who are authorised to invest relevant money under section 59 of the PGPA Act.


1. Investment by NCEs

Key points

  • An investment is an arrangement that involves the purchase of an asset by a Commonwealth entity for the primary purpose of earning income or a profitable return.

  • As a general principle, NCEs do not invest relevant money, as cash and debt management is generally conducted at the whole-of-government level by the Australian Office of Financial Management. NCEs’ primary purposes are to carry out Commonwealth objectives, which are not profit-oriented.

  • Consequently, the PGPA Act limits the ability of the Commonwealth (as represented by NCEs) to invest relevant money (section 58).

  • Some NCEs have enabling legislation permitting investment activities. The PGPA Act does not limit the investment provisions in an entity’s enabling legislation.

  • The Finance Minister and the Treasurer can invest relevant money on behalf of the Commonwealth in certain authorised investments (section 58)

  • The Finance Minister has delegated the power in section 58 to invest relevant money where a clear business need to do so has been demonstrated. For example, in certain special accounts.

  • Accountable authorities who have been delegated the power to invest relevant money on behalf of the Commonwealth, can sub-delegate this power to officials.

  • A delegate or sub-delegate must invest relevant money in accordance with section 58 of the PGPA Act and the directions in the Finance Minister or Treasurer’s delegation.

  • NCEs need to keep sufficient records to monitor and manage any investments.

Authorised investments

  1. The Finance Minister or the Treasurer may invest in the following authorised investments (section 58(8) of the PGPA Act):

    • securities of, or securities guaranteed by, the Commonwealth, a State or a Territory

    • a deposit with a bank, including a deposit evidenced by a certificate of deposit (noting that ‘a deposit with a bank’ does not include: medium-term notes and fixed or floating rate notes, money market trusts or cash management trusts, and bills of exchange that do not comply with the rules) or

    • the forms of investment prescribed by section 22 the PGPA Rule, including:

      • a bill of exchange accepted or endorsed only by a bank

      • a professionally managed money market trust (if the Finance Minister or Treasurer is satisfied of certain conditions)

      • a debt obligation registered on the Austraclear system available through the Australian Securities Exchange’s website (a dematerialised security).

  2. In addition, the Treasurer is also authorised to invest in debt instruments with an investment grade credit rating that:

    • are issued or guaranteed by the government of a foreign country or

    • are issued or guaranteed by a financial institution whose members consist of foreign countries (which may also include Australia) or

    • are denominated in Australian currency.

Delegation of the power to invest

  1. The Finance Minister has delegated the power in section 58(1) to the accountable authorities of the following entities to invest relevant money standing to the credit of the listed special accounts:


Special accounts

Attorney-General’s Department

AGS Client Funds Special Account 2015

Australian Securities and Investments Commission

ASIC Deregistered Companies Trust Moneys Special Account

ASIC Security Deposits Special Account

ASIC Investigations, Legal Proceedings, Settlements and Court Orders Special Account

Department of Agriculture and Water Resources

National Residue Survey Account

Department of Prime Minister and Cabinet

Aboriginal and Torres Strait Islander Land Account

Aboriginals Benefit Account

Department of Industry, Innovation, and Science

Innovation, Science and Technology - Donations, Bequests and Sponsorship Special Account 2016

Ranger Rehabilitation Special Account

Department of Veterans’ Affairs

Defence Service Homes Insurance Account

Military Death Claim Compensation Special Account 2015

Federal Court of Australia

Federal Court of Australia Litigants’ Fund Special Account

Litigants’ Fund Special Account

National Blood Authority

National Managed Fund (Blood and Blood Products) Special Account

  1. In addition, the Treasurer has delegated investment powers to the Australian Office of Financial Management for its role in managing the Commonwealth’s public debt.

Managing investments

  1. An accountable authority who has been delegated the power to invest relevant money by the Finance Minister or the Treasurer, needs to ensure that their entity keeps sufficient documentation to adequately monitor and manage its investments (e.g. through an investment management plan (IMP)). An accountable authority could consider the following as a foundation for its IMP:

    • access to an adequately skilled internal treasury expert or investment adviser

    • risk analysis and management

    • return analysis

    • a documented investment strategy.

  2. Monitoring of investment performance is a useful tool to support decision-making about the treatment of current investments and the focus of future investment. Performance information may include a combination of qualitative and quantitative data. For more on performance management and reporting.

Reporting on investments

  1. The PGPA Financial Reporting Rule 2014 includes the financial reporting requirements and guidance for investments made under the PGPA Act. For further information, see RMG 125: Commonwealth Entities Financial Statements Guide.

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