Penalty Interest Rates Act
The Penalty Interest Rates Act was enacted in Australia in 1983. The act provides for the establishment of the penalty interest rate applied to debts arising from court orders or judgments, or amounts designated under specific legislation.
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Attorney-General
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The Penalty Interest Rates Act permits the Attorney-General of Australia to set the interest rate applied to court orders, judgments or other monetary fees or fines when specified by the government. According to the Department of Justice, the rate is "based on [the] appropriate institutional rate together with an added penalty element." The rate may be altered if there is a significant change in banking interest rates. The rate is printed in The Age newspaper every Monday under the Law List.
Setting Rate
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The rate is recommended to the Attorney-General by the Treasurer. The Treasurer bases his recommendation on the rate of interest charged for loans by public banks and the prevailing commercial rates of interest.
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Applicable Debts
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The Penalty Interest Rates Act lists the types of debts and bills that can be charged the penalty interest rate. These include loans in which no rate was contracted, solicitor costs, purchase money in arrears, judgments and court actions for debt collection.
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References
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