Federal Financial Relations (General Purpose Financial Assistance—2024-25 Payment No. 8) Determination 2025

Administered by Department of the Treasury

Legislation au F2025L00133 In force Legislative Instrument

Legislation content

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—2024-25 Payment No. 8) Determination 2025

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—2024-25 Payment No. 8) Determination 2025 (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 Federation Reform Fund Act 2008 establishes the Federation Reform Fund, a special account, which has the purpose of making grants of 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 Federation 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 Federation 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 former 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 subsection 9(5) of the FFR Act and subsection 44(1) of the Legislation Act 2001, the Determination is not subject to disallowance. The Determination is also not subject to sunsetting under subsection 54(1) of the Legislation Act 2003. The exemptions for disallowance and sunsetting are provided 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.

A Policy Impact Analysis is not required as the instrument is machinery in nature (OIA24-07548).

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

A statement of Compatibility with Human Rights is at Attachment B.

ATTACHMENT A

Details of the Federal Financial Relations (General Purpose Financial Assistance—2024-25 Payment No. 8) Determination 2025

Section 1 – Name of the Determination

This section provides that the name of the Determination is the Federal Financial Relations (General Purpose Financial Assistance—2024-25 Payment No. 8) Determination 2025 (the Determination).

Section 2 – Commencement

The Determination commenced immediately after it 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; and

•                 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.

General purpose financial assistance is provided based on that State or Territory having satisfied the necessary agreed criteria, and having notified the Commonwealth prior to the relevant due date for monthly payments to the states and territories.


ATTACHMENT B

 

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—2024-25 Payment No. 8) Determination 2025

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.

Overview

The Federal Financial Relations (General Purpose Financial Assistance—2024-25 Payment No. 8) Determination 2025 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. This legislation is an implementation of the Federal Financial Relations Act 2009, which allows the Minister to make such payments under the Intergovernmental Agreement on Federal Financial Relations. The Determination provides a structured approach to the Commonwealth's financial support to the states and territories, ensuring that payments are made in accordance with agreed criteria and criteria previously notified to the Commonwealth. It is important to note that this Determination is not subject to disallowance or sunsetting as it operates within the framework of intergovernmental agreements and is supported by valid appropriations enacted by the Parliament. The policy objective is to uphold the terms of the Intergovernmental Agreement on Federal Financial Relations, ensuring that financial assistance is provided effectively and efficiently to support the agreed policy areas.

Scope and Application

The Federal Financial Relations (General Purpose Financial Assistance—2024-25 Payment No. 8) Determination 2025 applies to the Commonwealth, the States, the Australian Capital Territory, and the Northern Territory, focusing on the determination of general purpose financial assistance payments to be made by the Commonwealth to these entities. The Determination is made under subsection 9(1) of the Federal Financial Relations Act 2009 (FFR Act) and is governed by the terms of the Intergovernmental Agreement on Federal Financial Relations (IGA). This instrument aims to fulfil the Commonwealth's obligations under the IGA to provide grants of general purpose financial assistance to the States, the Australian Capital Territory, and the Northern Territory, ensuring compliance with the criteria and conditions set forth in the IGA. The Determination specifies particular amounts for each jurisdiction based on their respective needs and the criteria agreed upon under the IGA, and is subject to annual appropriation limits set out in the annual appropriation Acts. This instrument is not subject to disallowance or sunsetting, as it is considered minor and mechanical in nature, merely detailing an instalment of financial assistance. The Determination is compatible with human rights, as it does not raise any specific human rights issues, given that the payments can be used for any purpose by the recipient jurisdictions.

Key Provisions

The Federal Financial Relations (General Purpose Financial Assistance—2024-25 Payment No. 8) Determination 2025 (the Determination) provides the amounts of general purpose financial assistance to be paid to the States, the Australian Capital Territory, and the Northern Territory. This is done under the authority of subsection 9(1) of the Federal Financial Relations Act 2009 (FFR Act) and specifies the financial assistance amounts to be paid to each jurisdiction (section 5). These payments are part of the broader scheme of financial relations between the Commonwealth and the states and territories, as outlined in the Intergovernmental Agreement on Federal Financial Relations (IGA). The payments are intended to compensate Western Australia for the loss of royalty revenue due to the removal of the condensate excise exemption and to assist the Australian Capital Territory in managing its unique municipal costs and additional planning influences. The Determination imposes obligations on the Commonwealth to credit funds to the Federation Reform Fund for the purpose of providing general purpose financial assistance, as required by subsection 9(3) of the FFR Act. The total amount credited to the fund must not exceed the debit limit set for the financial year by the annual appropriation Acts. The Determination ensures that the Commonwealth's payments comply with the IGA and that these payments are made in accordance with the agreed criteria and timelines. The Determination also specifies that the Commonwealth will make payments to Western Australia from royalties collected under the Offshore Petroleum (Royalty) Act 2006, in line with section 75 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. There are no explicit offences, penalties, or civil or criminal consequences for breach detailed in the Determination itself. However, the Determination is underpinned by the legislative framework established by the FFR Act and the Federation Reform Fund Act 2008, which provide for the appropriation and expenditure of funds from the Consolidated Revenue Fund. The annual appropriation Acts set the debit limits, providing a mechanism for Parliamentary scrutiny of expenditure under the Determination. The Determination is not subject to disallowance or sunsetting, as it is considered minor and machinery in nature, giving effect to intergovernmental agreements. The compatibility with human rights is affirmed in the Statement of Compatibility with Human Rights, which concludes that the Determination does not engage any of the applicable rights or freedoms and is thus compatible with human rights.

Legal classification tags

Area of Law
Finance & Banking Law
Federalism & Intergovernmental Relations
Instrument
Determination
Concepts
Definitions & Interpretation
Commencement Provisions
Enforcement Powers
Reporting & Disclosure Obligations

Interactions

Authorises

All Versions

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.