Federal Financial Relations (General Purpose Financial Assistance—2020-21 Payment No. 10) Determination 2021

Administered by Department of the Treasury

Legislation au F2021L00446 In force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by authority of the Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing

Federal Financial Relations Act 2009

Federal Financial Relations (General Purpose Financial Assistance—2020-21 Payment No. 10) Determination 2021

Subsection 9(1) of the Federal Financial Relations Act 2009 (the FFR Act) provides that the Minister may determine amounts to be paid to the States, the Australian Capital Territory or the Northern Territory for the purpose of the Commonwealth making grants of general purpose financial assistance.

The purpose of the Federal Financial Relations (General Purpose Financial Assistance—2020-21 Payment No. 10) Determination 2021 (the Determination) is to determine amounts of general purpose financial assistance to be paid to the States, the Australian Capital Territory or the Northern Territory.

The Intergovernmental Agreement on Federal Financial Relations (the IGA) provides a foundation for collaboration on policy development and service delivery between the Commonwealth and the States, the Australian Capital Territory and the Northern Territory. The IGA sets out the terms and conditions on which Commonwealth has agreed to make grants of general purpose financial assistance to the States, the Australian Capital Territory or the Northern Territory.

The Determination gives effect to the Commonwealth’s ongoing obligations under the IGA to make grants of general purpose financial assistance.

By way of background, legislative authority is required for the Commonwealth to spend money from the Consolidated Revenue Fund. The Public Governance, Performance and Accountability Act 2013 provides that, if another Act establishes a special account and identifies the purposes of the account, the Consolidated Revenue Fund is appropriated up to the balance of the account at any point in time for expenditure for the purposes of the account.

In this context, the COAG Reform Fund Act 2008 establishes the COAG Reform Fund, a special account, which has the purpose of making grants and financial assistance to States and Territories.  The FFR Act requires the Minister, following the making of a determination, to credit funds he or she has determined to the COAG Reform Fund for the purpose of providing general purpose financial assistance to the States, the Australian Capital Territory or the Northern Territory.

Under subsection 9(3) of the FFR Act, the total amount credited to the COAG Reform Fund for the purpose of making a grant of general purpose financial assistance in a financial year must not exceed the debit limit determined for that year.  The debit limit is set by the annual appropriation Acts. The Determination will not result in total determined amounts for the relevant financial year exceeding the debit limit.

The IGA was subject to extensive consultation with the States and Territories before it was agreed by the Council of Australian Governments on 29 November 2008. The IGA is publicly available on the Council for Federal Financial Relations website. The Determination is minor and machinery in nature and was not subject to further consultation.

Details of the Determination are set out in Attachment A.

The Determination is a legislative instrument for the purposes of the Legislation Act 2003.  In accordance with the Act, The Determination is not subject to disallowance or sunsetting under the Act and the Legislation Act 2003.

The Determination commenced on the day it was registered on the Federal Register of Legislation.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Federal Financial Relations (General Purpose Financial Assistance—2020-21 Payment No. 10) Determination 2021

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The instrument determines amounts of general purpose financial assistance to be paid to the States, the Australian Capital Territory or the Northern Territory.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

It is difficult to assess the human rights compatibility of the making of payments of general purpose financial assistance, as the amounts paid to each State or Territory can be used for any purpose. Generally, payments will promote multiple human rights by supporting service delivery in a range of policy areas, at the discretion of each State or Territory.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

ATTACHMENT A

Details of the Federal Financial Relations (General Purpose Financial Assistance—2020-21 Payment No. 10) Determination 2021

Section 1 – Name of the Determination

This section provides that the name of the Determination is the Federal Financial Relations (General Purpose Financial Assistance—2020-21 Payment No. 10) Determination 2021 (the Determination).

Section 2 – Commencement

The Determination commenced on the day the instrument was registered on the Federal Register of Legislation.

Section 3 – Authority

The Determination is made under the Federal Financial Relations Act 2009 (the Act).

Section 4 – Definitions

This section provides definitions are that used in the Determination.

Section 5 – Determination of general purpose financial assistance

This section specifies amounts to be paid to each of the States, the Australian Capital Territory and the Northern Territory as grants of general purpose financial assistance.

In addition to the goods and services tax revenue grants provided to the States, the Australian Capital Territory and the Northern Territory as grants of general purpose financial assistance under Division 1 of Part 2 to the Act, the Commonwealth, by way of the Determination, also pays grants of general purpose financial assistance for the following:

•                 to compensate Western Australia for the loss of royalty revenue resulting from the removal in the 2008-09 Budget of the exemption of condensate from crude oil excise;

•                 to the Australian Capital Territory to:

–               assist in meeting the additional municipal costs which arise from Canberra's role as the national capital; and

–               compensate the Australian Capital Territory for additional costs resulting from the national capital planning influences on the provision of water and sewerage services;

•                 to Western Australia from royalties payable under the Offshore Petroleum (Royalty) Act 2006 in respect of the North West Shelf oil and gas project off the coast of Western Australia. The Commonwealth collects these royalties because it has jurisdiction over offshore areas. These royalties are shared between the Commonwealth (approximately one third) and Western Australia (approximately two thirds). These payment arrangements are in accordance with section 75 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006; and

•                 to assist the States and Territories in transitioning to the new horizontal fiscal equalisation system (the Commonwealth is providing short term top up payments, until 2021-22, to ensure that no State or Territory has an effective GST relativity below 0.7 (or 4.66024 for the Northern Territory).

 

Overview

The Federal Financial Relations (General Purpose Financial Assistance—2020-21 Payment No. 10) Determination 2021 was enacted to determine the amounts of general purpose financial assistance to be paid to the States, the Australian Capital Territory, and the Northern Territory, in accordance with the Federal Financial Relations Act 2009. This Determination was made by the Minister for Housing, Social and Community Housing, and Homelessness under the authority provided by the Federal Financial Relations Act 2009. The policy objective behind the Determination is to fulfil the Commonwealth’s obligations under the Intergovernmental Agreement on Federal Financial Relations by providing grants of general purpose financial assistance to the States and Territories. This assistance is integral to the collaboration between the Commonwealth and the States on policy development and service delivery, ensuring that the necessary financial support is provided in line with the terms and conditions set out in the Intergovernmental Agreement on Federal Financial Relations. The Federal Financial Relations (General Purpose Financial Assistance—2020-21 Payment No. 10) Determination 2021 is a legislative instrument that does not engage any of the applicable rights or freedoms as recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. This is due to the nature of the payments being made, which are general purpose financial assistance and can be used for any purpose by the recipient States or Territories. The Determination ensures that the payments are compliant with human rights, as they generally promote multiple human rights by supporting a range of services and policy areas at the discretion of each State or Territory.

Scope and Application

The Federal Financial Relations (General Purpose Financial Assistance—2020-21 Payment No. 10) Determination 2021 applies to the Commonwealth government and the states, territories, and Australian Capital Territory. It sets out the amounts of general purpose financial assistance to be paid to these jurisdictions as part of the ongoing obligations under the Intergovernmental Agreement on Federal Financial Relations. The Determination is made under the authority of the Federal Financial Relations Act 2009, and the amounts credited to the COAG Reform Fund must not exceed the debit limit determined for the financial year. The Determination specifies payments for various purposes, including compensation for lost royalty revenue, assisting the Australian Capital Territory with municipal costs, sharing royalties from the North West Shelf oil and gas project, and providing short-term top-up payments to support the transition to the new horizontal fiscal equalisation system. The Determination is minor and machinery in nature, and it does not engage any of the applicable rights or freedoms, thereby being compatible with human rights. The Determination extends its application nationally, covering all states, territories, and the Australian Capital Territory. It is not subject to disallowance or sunsetting under the Legislation Act 2003. The instrument commenced on the day it was registered on the Federal Register of Legislation, and its details are set out in Attachment A. The amounts of general purpose financial assistance specified in the Determination are to be credited to the COAG Reform Fund and are used for the purposes outlined in the Intergovernmental Agreement on Federal Financial Relations. The Determination does not include any exclusions, exemptions, or thresholds beyond what is specified within its provisions and the legislative framework it operates under.

Key Provisions

The Federal Financial Relations (General Purpose Financial Assistance—2020-21 Payment No. 10) Determination 2021 (the Determination) is a legislative instrument that sets out specific amounts of general purpose financial assistance to be paid to the States, the Australian Capital Territory, and the Northern Territory. This determination is made under subsection 9(1) of the Federal Financial Relations Act 2009 (FFR Act), which allows the Minister to specify these amounts. The primary objective of this Determination is to fulfill the Commonwealth’s obligations under the Intergovernmental Agreement on Federal Financial Relations (IGA) by making grants of general purpose financial assistance. The Determination also specifies that these payments are to be credited to the COAG Reform Fund, which is a special account established under the COAG Reform Fund Act 2008. This fund is used for making grants and financial assistance to the States and Territories. Importantly, the total amount credited to the COAG Reform Fund for making these grants in any financial year must not exceed the debit limit determined by the annual appropriation Acts. The Determination ensures compliance with these limits, as it will not result in the total determined amounts exceeding the set debit limit for the relevant financial year. Entities governed by the Determination, including the Commonwealth, States, the Australian Capital Territory, and the Northern Territory, have specific obligations. The Commonwealth is required to make the determined payments to the COAG Reform Fund for distribution as grants of general purpose financial assistance. The States and Territories must use these funds in accordance with the IGA, which sets out the terms and conditions of the assistance. The Commonwealth must also ensure that the payments comply with the debit limits set by the annual appropriation Acts. Regarding breaches of the Determination, it does not explicitly detail specific offences, penalties, or consequences for non-compliance. However, given its legislative nature, failure to comply with the terms of the Determination could potentially lead to legal repercussions, including civil or criminal liability, depending on the nature and extent of the breach. The penalties for such breaches would typically align with those stipulated in related legislation, such as the Public Governance, Performance and Accountability Act 2013 or other relevant Acts. Non-compliance with the IGA terms could also have broader implications for intergovernmental relations and funding agreements.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.