EXPLANATORY STATEMENT
Issued by authority of the Assistant Minister for Productivity, Competition, Charities and Treasury and Parliamentary Secretary to the Treasurer
Federal Financial Relations Act 2009
Federal Financial Relations (Temporary Energy Bill Relief Payments) Determination 2025
Section 15E of the Federal Financial Relations Act 2009 (the Act) provides that the Minister must determine that an amount specified in the determination is to be paid to a State, the Australian Capital Territory or the Northern Territory (States and Territories) for the purpose of making a grant of financial assistances for the purpose of expenditure in accordance with the temporary energy bill relief agreement.
The purpose of the Federal Financial Relations (Temporary Energy Bill Relief Payments) Determination 2025 (the Determination) is to specify amounts to be paid to each of the States and Territories for the 2022-23 and 2023-24 financial years.
Under the Intergovernmental Agreement on Federal Financial Relations (the IGA) and the Act, the Commonwealth provides payments to the States and Territories to support state service delivery of economic and social reforms. The details of the funding arrangements as they relate to support for the delivery of temporary and targeted relief from high energy bills for households and small businesses are set out in a temporary energy bill relief agreement entered into between the Commonwealth and one or more of the States and Territories.
Advance payments in respect of temporary energy bill relief were made throughout the financial year based on estimates of each jurisdiction’s anticipated entitlement for that year. Any adjustment between the advances paid to a jurisdiction and the jurisdiction’s determined entitlement will be reconciled in the first practicable subsequent financial year.
The IGA and the temporary energy bill relief agreements were subject to extensive consultation with the States and Territories and were signed by all jurisdictions. The agreements are available on the website of the Council on Federal Financial Relations. Ongoing consultation with the States and Territories on federal financial relations occurs regularly.
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 15E(3) of the Act and subsection 44(1) of the Legislation Act 2003, the instrument is not subject to disallowance. In accordance with subsection 54(1) of the Legislation Act 2003, the Determination is not subject to sunsetting. The Determination is exempt from disallowance and sunsetting on the grounds that the Determination is part of an intergovernmental scheme and gives effect to agreements between the Commonwealth and each of the States and Territories. The Determination’s operation is effectively mechanical in that it simply details financial assistance to be provided to a State or Territory based on that State or Territory having satisfied the necessary agreed criteria.
The Determination commenced the day 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 (Temporary Energy Bill Relief Payments) Determination 2025
Section 1 – Name
This section provides that the name of the instrument is the Federal Financial Relations (Temporary Energy Bill Relief Payments) Determination 2025 (the Determination).
Section 2 – Commencement
This section provides that the Determination commences the day after it is registered on the Federal Register of Legislation.
Section 3 – Authority
This section provides that the Determination is made under the Federal Financial Relations Act 2009 (the Act).
Section 4 – Definitions
This section provides definitions for the purposes of the Determination.
Section 5 – Temporary energy bill relief payments for 2022-23
This section sets out that the amount required to be paid by the Commonwealth to each State and Territory in respect of the 2022-23 financial year is nil. Funding was not provided in relation to the 2022-23 financial year as there were no energy bill relief agreements in relation to that financial year. The Minister has still determined an amount, being nil, for the 2022-23 financial year as a determination is required under section 15E of Act.
Section 6 – Temporary energy bill relief payments for 2023-24
This section sets out the amounts required to be paid by the Commonwealth in respect of the 2023-24 financial year to each State and Territory in accordance with the energy bill relief agreements.
The amount of financial assistance payable to New South Wales, for the 2023-24 payment year, will be determined at a later date. The Determination will be amended to specify the amount payable to New South Wales once that amount has been finalised.
Section 15F of the Act provides that, subject to the temporary energy bill relief agreements, the total amount of financial assistance payable to the States and Territories for the 2022‑23 and 2023‑24 financial years is $1.5 billion. Noting this amount is subject to the temporary energy bill relief agreements, the total amount determined is less than $1.5 billion due to the opt-in and demand-driven nature of the program supported by the agreements. Further, the total amount in the Determination does not include the amount payable to New South Wales for the 2023-24 payment year, as New South Wales has not yet finalised payments under this program. The total amount will be amended to include this, once determined.
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 (Temporary Energy Bill Relief Payments) 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 purpose of the Federal Financial Relations (Temporary Energy Bill Relief Payments) Determination 2025 (the Determination) is to specify amounts to be paid to each State, the Australian Capital Territory and Northern Territory for the 2022-23 and 2023-24 financial years in accordance the temporary energy bill relief agreement. The payments are made for the purpose of supporting the delivery of temporary and targeted relief from high energy bills for households and small businesses.
Human rights implications
This Legislative Instrument promotes the right to an adequate standard of living, including food, water and housing under Article 11 of the International Covenant on Economic, Social and Cultural Rights.
The right to an adequate standard of living provides that Australia must take appropriate steps towards the realisation of this right in its jurisdiction, and that the relevant standard must be continuously improving. This legislative instrument improves the standard of living in Australia by supporting temporary and targeted relief on energy bills for eligible households and small businesses. This will assist in enhancing the welfare of Australians, including by reducing or mitigating the impact of rising energy prices.
Conclusion
The Legislative Instrument is compatible with human rights because it promotes the right to an adequate standard of living.