1. Legal and Constitutional Foundation

Establishment: Government-Owned Corporation under existing Commonwealth law (PGPA Act, Corporations Act 2001).

Constitutional Powers:

• S51(ii) - Taxation and public revenue
• S51(iv) - Borrowing on public credit
• S51(xiii) - Banking (excluding state banking)
• S81 - Consolidated Revenue Fund
• S96 - Financial assistance to States

Regulatory Oversight:

• APRA: Full prudential regulation as Authorised Deposit-taking Institution
• ASIC: Corporate conduct and disclosure
• ANAO: Mandatory performance and financial audits

2. Capitalisation Mechanism

Principles: Conservative, transparent, non-inflationary capital structure using sovereign and domestic sources.

Capital Sources:

• National Resource Royalties: Capped proportion of Commonwealth royalties (gas, minerals, gold) redirected to CPB Capital Reserve Fund
• Sovereign Domestic Bonds: Long-term bonds targeted exclusively at Australian residents, super funds, and domestic institutions
• Public Sector Deposits: Voluntary surplus funds from Commonwealth agencies under strict liquidity safeguards
• RBA Liquidity Support: Limited, transparent facilities during establishment phase only

Profit Distribution: All net profits retained for capital strengthening and expanded public lending capacity. No distribution to private shareholders or political entities.

3. Statutory Public-Benefit Mandate

Core Objectives:

• Finance strategic national infrastructure (water, energy, transport, housing, digital)
• Provide counter-cyclical credit to SMEs, farmers, regional enterprises
• Support agricultural resilience, food security, supply chains
• Expand finance access for Indigenous enterprises and cooperatives
• De-risk nationally significant projects to catalyse private co-investment

Prohibited Activities:

• Profit maximisation as primary objective
• Investment banking or speculative trading
• Consumer credit markets unrelated to mandate
• Proprietary trading or derivative speculation

4. Governance and Anti-Capture Safeguards

Independent Board: Appointed by bipartisan parliamentary committee with expertise in banking, economics, law, agriculture, or infrastructure finance. Fixed staggered terms for continuity.

Anti-Capture Mechanisms:

• No political donations or campaign support
• No lobbying or third-party advocacy
• No revolving-door appointments with regulated entities
• Mandatory conflict-of-interest declarations
• Ministers cannot direct individual lending decisions

Transparency Requirements:

• ANAO annual audits
• Quarterly public reporting of major lending and sector exposure
• Parliamentary committee oversight with public hearings
• All policies and performance metrics published online

Anti-Privatisation Lock: Requires supermajority parliamentary approval AND 75% referendum threshold to privatize.

5. Risk Management and Prudential Compliance

Full APRA Regulation: Subject to same standards as private banks including Basel III capital adequacy, liquidity ratios, stress testing, and recovery planning.

Conservative Capital Buffers:

• Higher-than-minimum capital ratios during initial operations
• Statutory leverage ceilings
• Counter-cyclical capital buffers

Credit Risk Framework:

• Independent credit committees separate from political influence
• Risk-based pricing reflecting project fundamentals
• Portfolio diversification limits
• Transparent disclosure of concessional lending

RBA Relationship: CPB operates within existing monetary system. No currency issuance authority. Access to standard liquidity facilities only.

6. Differentiation from Existing Institutions

Unlike CEFC/NAIF (sector-specific): CPB operates economy-wide across agriculture, housing, energy, regional infrastructure, and SMEs.

Unlike private banks (profit-driven): CPB prioritizes public benefit, serving underserved sectors like small farmers, regional SMEs, Indigenous enterprises.

Unlike sovereign wealth funds (foreign investment): CPB focuses exclusively on domestic development, recycling national capital within Australia.

Risk management complementarity: CPB de-risks private co-finance, encouraging investment where private actors are reluctant.

7. Expected Outcomes

Economic Resilience: 25-35% lower interest costs for public infrastructure compared to private debt.

Sovereign Capability: Reduced reliance on foreign lenders, lower exposure to global financial shocks.

Regional Strength: Targeted lending strengthens local economies, enhances food/water security.

Fiscal Multiplier: Every dollar lent projected to generate $4-5 in GDP growth through productive investment.

Counter-Cyclical Support: Cushions sectors during downturns without permanent market distortion.

8. Implementation Pathway

Phased, Risk-Managed Approach: