Federal Financial Relations (GST Revenue Sharing Relativities for 2026-27) Determination 2026

Administered by Department of the Treasury

Legislation au F2026L00550 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 2026-27) Determination 2026

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 2026-27) Determination 2026 (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 2026-27 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, 2026-27 will be the final year in a 6-year transition away from distributing the GST pool based solely on the Commission’s assessment of the States’ and Territories’ relative fiscal capacities (that is, providing the States and Territories with the same ability to provide services). Over these 6 years, the Commission’s assessment has been 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 the 2026-27 year.

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 2026-27 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 7 April 2026 outlining the proposed GST revenue sharing relativities for each State and Territory for the 2026-27 payment year. An embargoed copy of the Commonwealth Grants Commission’s 2026 Update – GST Relativities 2026-27 was circulated to the States and Territories on 27 February 2026, 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 statement of Compatibility with Human Rights is at Attachment B.

An Impact Analysis Statement is not required as the instrument is machinery in nature.

ATTACHMENT A

Details of the Federal Financial Relations (GST Revenue Sharing Relativities for 2026‑27) Determination 2026

Section 1 – Name

This section provides that the name of the Determination is the Federal Financial Relations (GST Revenue Sharing Relativities for 2026-27) Determination 2026.

Section 2 – Commencement

This section provides 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 2026-27 payment year

This section sets out the GST revenue sharing relativity for each State, the Australian Capital Territory and the Northern Territory, for the 2026-27 payment year. The Treasurer accepts the recommendation of the Commonwealth Grants Commission in its 2026 Update – GST Relativities 2026-27.

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 2026-27) Determination 2026

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 2026-27) Determination 2026 is to specify the factors that will be the GST revenue sharing relativities for each State, the Australian Capital Territory and the Northen Territory for the 2026-27 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 2026-27) Determination 2026 was enacted to specify the goods and services tax (GST) revenue sharing relativities for each state, the Australian Capital Territory, and the Northern Territory for the 2026-27 payment year. This Determination is made under subsection 8(1) of the Federal Financial Relations Act 2009, empowering the Treasurer to set these relativities. The policy objective of this Determination is to ensure fair distribution of GST revenue among the states and territories, reflecting their different fiscal capacities and service delivery costs, and aligning with the principles of horizontal fiscal equalisation and the recommendations of the Commonwealth Grants Commission. The Determination was developed in consultation with the states and territories, and it marks the final year of a six-year transition to a new equalisation arrangement, ensuring that no state or territory has a per capita GST share lower than the fiscally stronger of New South Wales or Victoria. The Determination came into effect the day after it was registered on the Federal Register of Legislation and is not subject to disallowance or sunsetting due to its integral role in the intergovernmental financial support scheme.

Scope and Application

The Federal Financial Relations (GST Revenue Sharing Relativities for 2026-27) Determination 2026 applies to the Commonwealth, States, and Territories of Australia, and it is concerned with the distribution of GST revenue for the specified financial year. This determination is made under the authority of the Federal Financial Relations Act 2009 and is integral to the intergovernmental scheme whereby the Commonwealth provides financial support to the States and Territories. The Determination specifies the GST revenue sharing relativities for each State, the Australian Capital Territory, and the Northern Territory for the 2026-27 payment year, which ensures equitable distribution based on fiscal capacity and service provision needs. The Determination is not subject to disallowance or sunsetting, as it is fundamental to the operation of the intergovernmental financial support arrangement. The instrument does not engage any of the applicable rights or freedoms as recognised or declared in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011, thus being compatible with human rights.

Key Provisions

The Federal Financial Relations (GST Revenue Sharing Relativities for 2026-27) Determination 2026 (the Determination) sets out the specific goods and services tax (GST) revenue sharing relativities for each State, the Australian Capital Territory and the Northern Territory for the 2026-27 payment year. This is made under subsection 8(1) of the Federal Financial Relations Act 2009 (the Act) (section 3). The determination was made following consultation with each of the States and Territories and based on the recommendations of the Commonwealth Grants Commission. The relativities are designed to ensure that each State and Territory has the capacity to deliver services at a similar level, taking into account their different abilities to raise revenue and their different costs of service provision (section 5). The Determination imposes specific obligations on the Commonwealth, the States and the Territories in relation to the distribution of GST payments. The Commonwealth is responsible for making the GST payments to the States and Territories in accordance with the GST revenue sharing relativities specified in the Determination. The States and Territories, in turn, have the obligation to use the GST payments for the delivery of services to their residents. The Commonwealth Grants Commission also plays a role in recommending the GST relativities based on its assessment of the relative fiscal capacities of the States and Territories. The determination of these relativities ensures that the GST payments are distributed in a manner that is equitable and takes into account the different needs and circumstances of each State and Territory (section 8). Failure to comply with the provisions of the Determination may result in legal consequences. However, the Determination itself does not specify any offences, penalties, or civil/criminal consequences for breach. The Act under which the Determination is made does not provide for any specific penalties for non-compliance with the Determination. Instead, the Act provides for general penalties for non-compliance with the Act, which may include fines and imprisonment. The specific penalties for non-compliance with the Determination would depend on the nature and extent of the breach and would be determined by the courts in accordance with the relevant laws (section 44(1) and 54(1) of the Legislation Act 2003). The Determination is a legislative instrument for the purposes of the Legislation Act 2003. However, it is not subject to disallowance or sunsetting due to the operation of subsections 44(1) and 54(1) of the Legislation Act 2003. This is because the Determination is integral to the operation of the intergovernmental scheme involving the Commonwealth providing financial support to the States and Territories for the delivery of services. The exemption from disallowance and sunsetting ensures that the Determination can continue to operate effectively and without interruption, which is essential for the smooth functioning of the GST revenue sharing arrangements. The Determination is also compatible with human rights as it does not engage any of the applicable rights or freedoms. This is confirmed in the Statement of Compatibility with Human Rights prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. The Statement explains that the Determination does not raise any human rights issues and is therefore compatible with human rights. This is an important consideration, as it ensures that the Determination does not infringe upon the rights and freedoms of individuals or groups, and that it operates in a manner that is consistent with Australia’s international human rights obligations.

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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.