Federal Financial Relations (GST Revenue Sharing Relativities for 2023-24) Determination 2023

Administered by Department of the Treasury

Legislation au F2023L00698 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 2023-24) Determination 2023

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 2023-24) Determination 2023 (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 2023-24 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 Treasury Laws Amendment (Making Sure Every State and Territory Gets Their Fair Share of GST) Act 2018 made changes to the equalisation arrangements. Under these changes, 2023-24 will be the third year in a 6-year transition away from distributing the GST pool based solely on the Commission’s assessment of States’ and Territories’ relative fiscal capacities (that is, providing States and Territories with the same ability to provide services). Over these 6 years, the Commission’s assessment will be adjusted to new arrangements where no State or Territory will have a per capita GST share lower than the fiscally stronger of New South Wales or Victoria. The transition will be completed in 2026-27.

This provides each State and Territory with the capacity to deliver services at a similar level. It takes account of each State’s and Territory’s different abilities to raise revenue and their different costs of service provision and ensures each has the capacity to provide services at the standard of New South Wales or Victoria, whichever is higher.

The Determination commenced the day after it was registered on the Federal Register of Legislation and applies to the 2023-24 payment year.

Before making a determination, the Treasurer must consult each of the States and Territories.  The Treasurer wrote to each of the States and Territories on 26 April 2023 outlining the proposed GST revenue sharing relativities for each State and Territory for the 2023-24 payment year. An embargoed copy of the Commonwealth Grants Commission’s Report on GST Revenue Sharing Relativities—2023 Update was circulated to the States and Territories on 28 February 2023, consistent with the Commission’s terms of reference.  The Treasurer considered the matters raised by the States and Territories in their responses and has accepted the recommendations of the Commonwealth Grants Commission.

Details of the Determination are set out in Attachment A.

The Determination is a legislative instrument for the purposes of the Legislation Act 2003.  However, the Determination is not subject to disallowance or sunsetting due to the operation of subsections 44(1) and 54(1) of the Legislation Act 2003. The enabling legislation facilitates the operation of an intergovernmental scheme involving the Commonwealth providing financial support to the States and Territories for the delivery of services. The enabling legislation authorises the Determination to be made for the purposes of this arrangement. Accordingly, the exemption from disallowance and sunsetting is appropriate as the Determination is integral to the operation of the intergovernmental scheme in calculating each State’s and Territory’s share of GST payments.

A Regulation Impact Statement is not required as the instrument is machinery in nature.

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

ATTACHMENT A

Details of the Federal Financial Relations (GST Revenue Sharing Relativities for 2023-24) Determination 2023

This Attachment sets out further details of the Federal Financial Relations (GST Revenue Sharing Relativities for 2023-24) Determination 2023 (the Determination).

Section 1 – Name

This section specifies the name of the Determination is the Federal Financial Relations (GST Revenue Sharing Relativities for 2023-24) Determination 2023.

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 2023-24 payment year

This section sets out the GST revenue sharing relativity for each State, the Australian Capital Territory and the Northern Territory, for the 2023‑24 payment year. The Treasurer accept the recommendation of the Commonwealth Grants Commission in its Report on GST Revenue Sharing Relativities—2023 Update.


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 (GST Revenue Sharing Relativities for 2023-24) Determination 2023

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 2023-24) Determination 2023 (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 2023-24 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.

Overview

The Federal Financial Relations (GST Revenue Sharing Relativities for 2023-24) Determination 2023 was enacted by the Commonwealth of Australia to specify the factors that will determine the GST revenue sharing relativities for each state, the Australian Capital Territory, and the Northern Territory for the 2023-24 payment year. This determination is made under the authority of the Federal Financial Relations Act 2009. The objective of the determination is to ensure that GST payments are distributed among the states and territories in accordance with the principle of horizontal fiscal equalisation and the recommendations of the Commonwealth Grants Commission, thereby providing each state and territory with the capacity to deliver services at a similar level. The determination is integral to the operation of the intergovernmental scheme involving the Commonwealth's financial support to the states and territories for service delivery. The Treasurer, in making the determination, has accepted the recommendations of the Commonwealth Grants Commission, which were based on the transition to a new equalisation arrangement over a six-year period.

Scope and Application

The Federal Financial Relations (GST Revenue Sharing Relativities for 2023-24) Determination 2023 applies to the calculation of the goods and services tax (GST) revenue sharing relativities for each State, the Australian Capital Territory, and the Northern Territory for the 2023-24 payment year. This determination is integral to the intergovernmental scheme whereby the Commonwealth provides financial support to the States and Territories for service delivery, ensuring equitable distribution of GST revenue in accordance with the principles of horizontal fiscal equalisation and the recommendations of the Commonwealth Grants Commission. The Determination was made under subsection 8(1) of the Federal Financial Relations Act 2009, and it specifies the relativities based on the Commission's Report on GST Revenue Sharing Relativities—2023 Update. The Commonwealth Treasurer is mandated to consult with each State and Territory before making such a determination, which in this case involved circulating an embargoed copy of the Commission’s report and considering responses from the States and Territories. The Determination is effective from the day after its registration and is not subject to disallowance or sunsetting due to its integral role in the intergovernmental financial arrangement.

Key Provisions

The Federal Financial Relations (GST Revenue Sharing Relativities for 2023-24) Determination 2023 (the Determination) sets out the factors that will be the GST revenue sharing relativities for each State, the Australian Capital Territory and Northern Territory for the 2023-24 payment year (Sections 5). These relativities determine how much GST revenue each State and Territory receives compared to an equal per capita share, taking into account the principle of horizontal fiscal equalisation and the recommendations of the Commonwealth Grants Commission (Section 8). The Determination is made under subsection 8(1) of the Federal Financial Relations Act 2009 (the Act) and commenced the day after it was registered on the Federal Register of Legislation (Sections 2 and 3). The Treasurer must consult with each of the States and Territories before making the determination (Section 12). The Determination imposes obligations on the Commonwealth to consult with the States and Territories before setting the GST revenue sharing relativities for the payment year. The Commonwealth must consider the recommendations of the Commonwealth Grants Commission in determining these relativities. The Commonwealth Grants Commission provides recommendations based on the principle of horizontal fiscal equalisation and the different abilities of each State and Territory to raise revenue and provide services. The Commonwealth must accept these recommendations in setting the GST revenue sharing relativities (Sections 8 and 12). There are no offences or penalties specified in the Determination for non-compliance. However, failure to comply with the requirements of the Determination may result in legal action being taken by the affected State or Territory. The Determination is integral to the operation of the intergovernmental scheme in calculating each State's and Territory's share of GST payments. The Determination is not subject to disallowance or sunsetting due to the operation of subsections 44(1) and 54(1) of the Legislation Act 2003. The Determination 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.