Federal Financial Relations (GST Revenue Sharing Relativities for 2020 21) Determination 2020

Administered by Department of the Treasury

Legislation au F2020L00411 In force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by authority of the Treasurer

Federal Financial Relations Act 2009

Federal Financial Relations (GST Revenue Sharing Relativities for 2020-21) Determination 2020

Subsection 8(1) of the Federal Financial Relations Act 2009 (the Act) provides that the Treasurer may determine that a factor specified in the determination is the goods and services tax (GST) revenue sharing relativity for a State, the Australian Capital Territory or Northern Territory for a payment year.

The purpose of the Federal Financial Relations (GST Revenue Sharing Relativities for 2020-21) Determination 2020 (the Determination) is to specify the factors that will be the GST revenue sharing relativities for each State, the Australian Capital Territory and Northern Territory (the States and Territories) for the 2020-21 payment year.

Consistent with the Intergovernmental Agreement on Federal Financial Relations, the Commonwealth makes payments to the States and Territories of revenue received from the GST.  The GST payments are distributed among the States and Territories in accordance with the principle of horizontal fiscal equalisation and having regard to the recommendations of the Commonwealth Grants Commission.

The Commonwealth Grants Commission recommends the GST relativities to be used in calculating each State’s and Territory’s share of GST payments.  The relativities determine how much GST revenue each State and Territory receives compared with an equal per capita share.  The relativities are determined so that each State and Territory has the same fiscal capacity, under average policies, to provide services and the associated infrastructure to their communities.

This does not necessarily result in the same standard of government services—just the equalisation of each State’s or Territory’s fiscal capacity to provide the same standard of services.  In calculating the GST relativities, the Commonwealth Grants Commission takes into account the States’ and Territories’ different capacities to raise revenues and different costs that would be incurred, under average policies, to provide services and the associated infrastructure to their communities.

The Determination commenced the day after it was registered on the Federal Register of Legislation and applies to the 2020-21 payment year.

Before making a determination, the Treasurer must consult each of the States and Territories.  The Treasurer consulted the States and Territories at the meeting of the Council for Federal Financial Relations held on 1 April 2020 outlining the proposed GST revenue sharing relativities for each State and Territory for the 2020-21 payment year. An embargoed copy of the Commonwealth Grants Commission’s Report on GST Revenue Sharing Relativities—2020 Review was circulated to the States and Territories on 28 February 2020, consistent with the Commission’s terms of reference.  The Treasurer considered the matters raised by the States and Territories at the meeting and has accepted the recommendations of the Commonwealth Grants Commission.

Details of the Determination are set out in Attachment B.

The Determination is a legislative instrument for the purposes of the Legislation Act 2003.  However, the Determination is not subject to disallowance.

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

ATTACHMENT A

Statement of Compatibility with Human Rights

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

Federal Financial Relations (GST Revenue Sharing Relativities for 2020-21) Determination 2020

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 purpose of the Federal Financial Relations (GST Revenue Sharing Relativities for 2020-21) Determination 2019 (the Determination) is to specify the factors that will be the GST revenue sharing relativities for each State, the Australian Capital Territory and Northern Territory for the 2020-21 payment year.

Human rights implications

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

Conclusion

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


ATTACHMENT B

Details of the Federal Financial Relations (GST Revenue Sharing Relativities for 2020-21) Determination 2020

This Attachment sets out further details of the Federal Financial Relations (GST Revenue Sharing Relativities for 2020-21) Determination 2020 (the Determination).

Section 1 – Name

This section specifies the name of the Determination is the Federal Financial Relations (GST Revenue Sharing Relativities for 2020-21) Determination 2020.

Section 2 – Commencement

This section prescribes that the Determination commences the day after the Determination is registered.

Section 3 – Authority

This section provides that the Determination is made under the Federal Financial Relations Act 2009.

Section 4 – Definitions

This section provides definitions for the purposes of the Determination.

Sections 5 – GST revenue sharing relativities for the 2020-21 payment year

This section sets out the GST revenue sharing relativity for each State, the Australian Capital Territory and the Northern Territory, for the 2020‑21 payment year. The Treasurer accept the recommendation of the Commonwealth Grants Commission in its Report on GST Revenue Sharing Relativities—2020 Review.

Overview

The Federal Financial Relations (GST Revenue Sharing Relativities for 2020-21) Determination 2020 was enacted to address the need for specifying the factors that will be the GST revenue sharing relativities for each State, the Australian Capital Territory and Northern Territory for the 2020-21 payment year. This Determination is made under section 8(1) of the Federal Financial Relations Act 2009 and is an instrumental step in ensuring that the Commonwealth Grants Commission's recommendations on GST revenue sharing are implemented. The policy objective of this legislation is to ensure that the distribution of GST payments among the States and Territories is consistent with the principle of horizontal fiscal equalisation and the recommendations of the Commonwealth Grants Commission. This is aimed at equalising the fiscal capacity of each State and Territory to provide services and associated infrastructure to their communities, irrespective of their varying capacities to raise revenues and costs. Before making the determination, the Treasurer consulted with the States and Territories, considering their feedback and ultimately accepting the recommendations of the Commonwealth Grants Commission.

Scope and Application

The Federal Financial Relations (GST Revenue Sharing Relativities for 2020-21) Determination 2020 applies to the 2020-21 payment year and specifies the goods and services tax (GST) revenue sharing relativities for each State, the Australian Capital Territory, and the Northern Territory. This Determination is made under subsection 8(1) of the Federal Financial Relations Act 2009 and is consistent with the Intergovernmental Agreement on Federal Financial Relations, whereby the Commonwealth distributes GST revenue among the States and Territories based on the principle of horizontal fiscal equalisation. Before making this Determination, the Treasurer consulted each State and Territory and accepted the recommendations of the Commonwealth Grants Commission, which were based on their differing capacities to raise revenue and varying costs to provide services and infrastructure. This Determination is a legislative instrument but is not subject to disallowance. It ensures that each State and Territory has an equal fiscal capacity to provide services to their communities, although this does not necessarily result in the same standard of government services.

Key Provisions

The Federal Financial Relations (GST Revenue Sharing Relativities for 2020-21) Determination 2020 (the Determination) specifies the GST revenue sharing relativities for each State, the Australian Capital Territory, and the Northern Territory for the 2020-21 payment year (sections 2 and 4). These relativities, as recommended by the Commonwealth Grants Commission, are designed to ensure that each State and Territory has an equal fiscal capacity to provide services and infrastructure to their communities, even though the standard of services might differ (subsection 8(1)). This approach takes into account the different capacities of the States and Territories to raise revenue and the varying costs incurred under average policies to deliver services and infrastructure. The Determination imposes a requirement on the Treasurer to consult each of the States and Territories before making a determination (Attachment B, section 3). In this instance, the consultation took place at the meeting of the Council for Federal Financial Relations held on 1 April 2020, where the proposed GST revenue sharing relativities for each State and Territory for the 2020-21 payment year were outlined. Additionally, an embargoed copy of the Commonwealth Grants Commission’s Report on GST Revenue Sharing Relativities—2020 Review was circulated to the States and Territories on 28 February 2020, consistent with the Commission’s terms of reference (Attachment B, section 3). Under the Determination, there are no specific offences, penalties, or civil/criminal consequences outlined for breaches. However, as a legislative instrument made under the Federal Financial Relations Act 2009, any failure to comply with the provisions of the Determination could potentially lead to legal challenges or disputes over the distribution of GST payments. The Determination, however, is not subject to disallowance (Attachment B, section 3). Additionally, the Determination has been assessed for compatibility with human rights, and it has been concluded that it does not engage any of the applicable rights or freedoms, thereby ensuring that it is compatible with human rights (Attachment A).

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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.