Federal Financial Relations (General Purpose Financial Assistance—2021-22 Payment No. 8) Determination 2022

Administered by Department of the Treasury

Legislation au F2022L00150 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—2021-22 Payment No. 8) Determination 2022

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—2021-22 Payment No. 8) Determination 2022 (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 FFR Act, the Determination is not subject to disallowance or sunsetting under the FFR Act and the Legislation Act 2003 on the grounds that the instrument is part of an intergovernmental scheme and gives effect to agreements between the Commonwealth and each of the States, the Australian Capital Territory and the Northern Territory. The instrument’s operation is effectively mechanical in that it simply details an instalment of financial assistance to be provided to a State or Territory based on that State or Territory having satisfied the necessary agreed criteria. The instrument can only authorise financial assistance being paid to a State or Territory where it has been supported by a valid appropriation enacted by the Parliament, further the annual appropriation Bills also include annual debit limits for amounts that may be spent under the delegated general purpose financial assistance or national partnership payments under the FFR Act. The debit limits provide an effective mechanism to limit the expenditure of public money under the Determination and ensures that there is alternative Parliamentary scrutiny of such arrangements. 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—2021-22 Payment No. 8) Determination 2022

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—2021-22 Payment No. 8) Determination 2022

Section 1 – Name of the Determination

This section provides that the name of the Determination is the Federal Financial Relations (General Purpose Financial Assistance—2021-22 Payment No. 8) Determination 2022 (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;

•                 to the Northern Territory in lieu of royalties on uranium mining due to the Commonwealth's ownership of uranium in the Ranger Project Area; 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—2021-22 Payment No. 8) Determination 2022 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 under the Federal Financial Relations Act 2009. This Determination addresses the need for ongoing financial support in line with the Intergovernmental Agreement on Federal Financial Relations, which sets out the terms and conditions for Commonwealth grants of general purpose financial assistance. The purpose of the Determination is to give effect to the Commonwealth's obligations under the IGA by specifying the amounts to be credited to the COAG Reform Fund for the purpose of providing financial assistance to the States, the Australian Capital Territory and the Northern Territory. The instrument was enacted by the Minister following the authority provided under subsection 9(1) of the FFR Act and is not subject to disallowance or sunsetting as it forms part of an intergovernmental scheme and gives effect to agreements between the Commonwealth and the States, the Australian Capital Territory and the Northern Territory. The Determination also outlines the compatibility of the legislative instrument with human rights, stating that it does not engage any of the applicable rights or freedoms as it does not raise any human rights issues. The amounts paid can be used for any purpose, generally promoting multiple human rights by supporting service delivery in various policy areas at the discretion of each State or Territory. The instrument is minor and machinery in nature and was not subject to further consultation. It 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.

Scope and Application

The Federal Financial Relations (General Purpose Financial Assistance—2021-22 Payment No. 8) Determination 2022 applies to the payment of general purpose financial assistance to the states, Australian Capital Territory, and Northern Territory. It is made under the authority of the Federal Financial Relations Act 2009 and provides for specific amounts of financial assistance to be paid to each jurisdiction. The determination is part of the Commonwealth's obligations under the Intergovernmental Agreement on Federal Financial Relations, which sets out the terms for grants of general purpose financial assistance. The instrument ensures that the payments made do not exceed the annual debit limits set by the appropriation Acts. The instrument is minor and machinery in nature and was not subject to further consultation. It commenced on the day it was registered on the Federal Register of Legislation and is compatible with human rights, as it does not raise any human rights issues. The instrument can only authorise financial assistance where it is supported by a valid appropriation enacted by the Parliament. The annual appropriation Bills also include annual debit limits for amounts that may be spent under the Federal Financial Relations Act 2009. The scope of the determination includes specific payments to Western Australia to compensate for the loss of royalty revenue, payments to the Australian Capital Territory to assist in meeting additional municipal costs and compensate for national capital planning influences on water and sewerage services, payments to Western Australia from royalties on the North West Shelf oil and gas project, payments to the Northern Territory in lieu of royalties on uranium mining due to the Commonwealth's ownership of uranium in the Ranger Project Area, and payments to assist the states and territories in transitioning to the new horizontal fiscal equalisation system. The determination applies nationally, covering all states, territories, and the Commonwealth. The instrument extends the application of the Federal Financial Relations Act 2009 through subordinate instruments by detailing specific amounts of financial assistance to be paid to each jurisdiction.

Key Provisions

The Federal Financial Relations (General Purpose Financial Assistance—2021-22 Payment No. 8) Determination 2022 (sections 1 to 5) specifies the amounts of general purpose financial assistance to be paid to each of the States, the Australian Capital Territory and the Northern Territory. This Determination is made under the authority of the Federal Financial Relations Act 2009 (FFR Act) and provides for specific payments to Western Australia, the Australian Capital Territory and the Northern Territory. These payments are intended to compensate for specific circumstances and assist in meeting additional costs arising from particular roles or national capital planning influences. For instance, Western Australia is compensated for the loss of royalty revenue due to the removal of condensate from crude oil excise, while the Australian Capital Territory receives assistance for municipal costs and compensation for planning influences on water and sewerage services. Furthermore, Western Australia receives payments from royalties on the North West Shelf oil and gas project, and the Northern Territory is compensated in lieu of royalties on uranium mining. The Determination imposes specific obligations on the Minister, as outlined in the FFR Act. The Minister is required to credit funds determined under the Determination to the COAG Reform Fund for the purpose of providing the specified general purpose financial assistance to the States, the Australian Capital Territory or the Northern Territory. This requirement is subject to the condition that the total amount credited to the COAG Reform Fund in any financial year must not exceed the debit limit set by the annual appropriation Acts. The debit limit provides an effective mechanism to limit expenditure of public money under the Determination and ensures that there is alternative Parliamentary scrutiny of such arrangements. There are no specific offences, penalties, or civil/criminal consequences for breach directly stated in the Determination itself. However, any breach of the FFR Act or failure to comply with the terms of the Determination could potentially lead to legal consequences, such as enforcement actions by the Commonwealth or judicial review. The Determination is minor and machinery in nature and does not engage any of the applicable rights or freedoms, and thus it is compatible with human rights as it does not raise any human rights issues.

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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.