Federal Financial Relations (GST Revenue Sharing Relativities for 2024-25) Determination 2024

Administered by Department of the Treasury

Legislation au F2024L00523 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 2024-25) Determination 2024

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 2024-25) Determination 2024 (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 2024-25 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, 2024-25 will be the fourth 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 2024-25 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 3 April 2024 outlining the proposed GST revenue sharing relativities for each State and Territory for the 2024-25 payment year. An embargoed copy of the Commonwealth Grants Commission’s Report on GST Revenue Sharing Relativities—2024 Update was circulated to the States and Territories on 27 February 2024, 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 2024-25) Determination 2024

This Attachment sets out further details of the Federal Financial Relations (GST Revenue Sharing Relativities for 2024-25) Determination 2024 (the Determination).

Section 1 – Name

This section specifies the name of the Determination is the Federal Financial Relations (GST Revenue Sharing Relativities for 2024-25) Determination 2024.

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.

Section 5 – GST revenue sharing relativities for the 2024-25 payment year

This section sets out the GST revenue sharing relativity for each State, the Australian Capital Territory and the Northern Territory, for the 2024‑25 payment year. The Treasurer accepts the recommendation of the Commonwealth Grants Commission in its Report on GST Revenue Sharing Relativities—2024 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 2024-25) Determination 2024

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 2024-25) Determination 2024 (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 2024-25 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 2024-25) Determination 2024, made under the Federal Financial Relations Act 2009, addresses the need to specify the goods and services tax (GST) revenue sharing relativities for each state, the Australian Capital Territory, and the Northern Territory for the 2024-25 payment year. Enacted by the Parliament of Australia, the purpose of this Determination is to outline the factors that will be used to calculate the GST revenue shares for the states and territories, ensuring that the distribution aligns with the principle of horizontal fiscal equalisation and considers the recommendations of the Commonwealth Grants Commission. This Determination is integral to the operation of the intergovernmental scheme for distributing GST revenue and is not subject to disallowance or sunsetting due to its critical role in the financial support arrangement. The Treasury Laws Amendment (Making Sure Every State and Territory Gets Their Fair Share of GST) Act 2018 has introduced a six-year transition to adjust the GST revenue distribution, ensuring no state or territory will have a per capita GST share lower than that of the fiscally stronger of New South Wales or Victoria. The Federal Financial Relations (GST Revenue Sharing Relativities for 2024-25) Determination 2024 marks the fourth year of this transition, reflecting ongoing adjustments to support equitable service delivery capabilities across all states and territories. This legislative instrument ensures that the Commonwealth's GST payments are distributed fairly, taking into account each jurisdiction's fiscal capacity and service provision costs.

Scope and Application

The Federal Financial Relations (GST Revenue Sharing Relativities for 2024-25) Determination 2024 applies to the allocation of goods and services tax (GST) revenue among the States, the Australian Capital Territory, and the Northern Territory for the 2024-25 payment year. It is made under the authority of the Federal Financial Relations Act 2009 and aims to specify the GST revenue sharing relativities for each jurisdiction in accordance with the principle of horizontal fiscal equalisation and the recommendations of the Commonwealth Grants Commission. The determination is integral to the Commonwealth's intergovernmental financial support scheme, ensuring that the distribution of GST revenue reflects each jurisdiction's fiscal capacity and service delivery needs. The Treasurer, after consulting with the States and Territories and considering the Commonwealth Grants Commission's recommendations, has accepted the proposed relativities. The determination is not subject to disallowance or sunsetting, as it is essential to the operation of the intergovernmental financial arrangement. The Determination is applicable to the Commonwealth of Australia, the States (New South Wales, Victoria, Queensland, South Australia, Western Australia, and Tasmania), the Australian Capital Territory, and the Northern Territory. It does not extend beyond the geographic boundaries of Australia and does not apply to any entities or individuals outside these jurisdictions. The Determination is effective from the day after it is registered and applies solely to the 2024-25 payment year. The Determination does not impose any new obligations or restrictions on the States and Territories beyond the acceptance of the specified GST revenue sharing relativities. Additionally, no exclusions, exemptions, or thresholds are specified within the Determination, although the relativities themselves may vary by jurisdiction. The Determination is a legislative instrument made under the Legislation Act 2003 and, as such, is not subject to disallowance or sunsetting.

Key Provisions

The Federal Financial Relations (GST Revenue Sharing Relativities for 2024-25) Determination 2024 (sections 1-5) specifies the factors that will be the goods and services tax (GST) revenue sharing relativities for each State, the Australian Capital Territory and the Northern Territory for the 2024-25 payment year. This Determination is made under the Federal Financial Relations Act 2009 (section 3). The purpose of this Determination is to ensure that the Commonwealth’s GST payments to the States and Territories are distributed equitably, taking into account their respective fiscal capacities and service delivery requirements (section 4). The Determination commenced the day after it was registered on the Federal Register of Legislation (section 2). The Treasurer must consult with each of the States and Territories before making this Determination (section 1). The Determination imposes obligations on the Commonwealth and the States and Territories. The Commonwealth is required to make payments to the States and Territories from revenue received from the GST, ensuring that these payments are distributed in accordance with the principle of horizontal fiscal equalisation and the recommendations of the Commonwealth Grants Commission (section 4). The States and Territories must engage with the Commonwealth in the consultation process outlined in the Determination (section 1). The Commonwealth Grants Commission is tasked with recommending the GST relativities used in calculating each State’s and Territory’s share of GST payments (section 4). The Treasurer is required to consider the recommendations of the Commonwealth Grants Commission and consult with the States and Territories before finalising the GST revenue sharing relativities for the 2024-25 payment year (section 1). Breaching the obligations set out in the Determination may have civil or criminal consequences. While the Determination itself does not specify explicit penalties for non-compliance, the Federal Financial Relations Act 2009 and other relevant legislation may impose penalties for failure to comply with the requirements of the Determination. For instance, under the Legislation Act 2003, the Determination is exempt from disallowance and sunsetting, indicating the integral role it plays in the intergovernmental financial arrangement (section 1). Additionally, any failure to adhere to the recommended GST revenue sharing relativities could lead to disputes or legal actions under the Federal Financial Relations Act 2009 or other applicable laws, potentially resulting in significant financial implications for the Commonwealth and the States and Territories.

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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.