Federal Financial Relations (General Purpose Financial Assistance—2022-23 Payment No. 6) Determination 2022

Administered by Department of the Treasury

Legislation au F2022L01707 In force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by authority of the Assistant Minister for Competition, Charities and Treasury

Federal Financial Relations Act 2009

Federal Financial Relations (General Purpose Financial Assistance—2022-23 Payment No. 6) 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—2022-23 Payment No. 6) 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 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—2022-23 Payment No. 6) 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—2022-23 Payment No. 6) 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—2022-23 Payment No. 6) 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; and

•                 to the Northern Territory in lieu of royalties on uranium mining due to the Commonwealth's ownership of uranium in the Ranger Project Area.

Overview

The Federal Financial Relations (General Purpose Financial Assistance—2022-23 Payment No. 6) Determination 2022 was enacted to address the need for the Commonwealth to provide general purpose financial assistance to the States, the Australian Capital Territory, and the Northern Territory. This Determination was introduced under the Federal Financial Relations Act 2009, which empowers the Minister to determine the amounts to be paid to these jurisdictions. The objective of this legislative instrument is to give effect to the Commonwealth's obligations under the Intergovernmental Agreement on Federal Financial Relations, which outlines the terms for the grants of general purpose financial assistance. The Determination was issued by the Assistant Minister for Competition, Charities and Treasury and is a minor, machinery-in-nature instrument that does not undergo disallowance or sunsetting, as it implements intergovernmental agreements. The payments made under this Determination are subject to the debit limits set by the annual appropriation Acts, ensuring that the expenditure is within the budgetary constraints approved by the Parliament.

Scope and Application

The Federal Financial Relations (General Purpose Financial Assistance—2022-23 Payment No. 6) Determination 2022 specifies the amounts of general purpose financial assistance to be disbursed to the states, the Australian Capital Territory, and the Northern Territory, as mandated by the Federal Financial Relations Act 2009. This determination reflects the Commonwealth's commitment to providing financial support under the Intergovernmental Agreement on Federal Financial Relations, facilitating collaboration on policy development and service delivery between the Commonwealth and the states and territories. The Determination applies to the states, the Australian Capital Territory, and the Northern Territory, ensuring that these entities receive specified grants in accordance with the terms agreed upon in the IGA. These grants are intended to support various public services and compensate for certain financial losses, such as those experienced by Western Australia due to the removal of condensate from crude oil excise. The instrument operates within the jurisdictional scope of the Commonwealth and is subject to the appropriation processes of the Parliament, ensuring that the total expenditure does not exceed the annual debit limits set forth in the appropriation Acts. The instrument does not include any specific exclusions but is contingent on the states and territories meeting the criteria outlined in the IGA. The Determination is a legislative instrument that is not subject to disallowance or sunsetting, reflecting its role in implementing intergovernmental agreements.

Key Provisions

The Federal Financial Relations (General Purpose Financial Assistance—2022-23 Payment No. 6) Determination 2022 (the Determination) outlines the amounts of general purpose financial assistance (GPFA) to be paid by the Commonwealth to the States, the Australian Capital Territory (ACT), and the Northern Territory (NT). This is established under the Federal Financial Relations Act 2009 (FFR Act) (s 1). The Determination became effective on the date it was registered on the Federal Register of Legislation (s 2). It is created under the authority of the FFR Act (s 3) and includes definitions relevant to its operation (s 4). The core provision of the Determination is the specification of amounts to be paid to each of the States, the ACT, and the NT as GPFA (s 5). The Determination imposes obligations on the Commonwealth to make payments to the States, the ACT, and the NT as per the amounts specified in the Determination. These payments are intended to fulfil the Commonwealth’s obligations under the Intergovernmental Agreement on Federal Financial Relations (IGA) to provide GPFA. The payments are credited to the COAG Reform Fund, established under the COAG Reform Fund Act 2008, for the specific purpose of providing GPFA to the States, the ACT, and the NT. The total amount credited to the COAG Reform Fund for the purpose of making a GPFA grant in a financial year must not exceed the debit limit determined for that year by the annual appropriation Acts (FFR Act s 9(3)). The Determination itself does not create specific offences or penalties, as it primarily serves to detail financial assistance payments. However, the FFR Act and other related legislation may include provisions for breaches of the IGA or misuse of funds. Any misuse or misappropriation of funds credited to the COAG Reform Fund could result in criminal or civil penalties under other relevant Acts, such as the Public Governance, Performance and Accountability Act 2013. The IGA, which underpins the Determination, includes mechanisms for addressing breaches, including potential financial recoveries or adjustments to future payments. The Determination’s compatibility with human rights has been assessed, and it has been determined that it does not engage any applicable rights or freedoms, as the payments can be used for any purpose by the recipient jurisdictions (Statement of Compatibility with Human Rights). The Determination is a legislative instrument that is not subject to disallowance or sunsetting under the FFR Act and the Legislation Act 2003, given its role in giving effect to intergovernmental agreements. The operation of the Determination is mechanical, detailing an instalment of financial assistance contingent on the recipient jurisdiction meeting the agreed criteria. The instrument can only authorise payments where there is a valid appropriation enacted by Parliament, and the annual appropriation Bills include annual debit limits for amounts that may be spent under the FFR Act. This ensures that there is alternative parliamentary scrutiny of such arrangements, providing an additional check on the expenditure of public money under the Determination.

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Area of Law
Federal Financial Relations
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Commencement Provisions
Regulatory Standards
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General Purpose Financial Assistance
Debit Limit

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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.