Local Government (Financial Assistance) Amendment Act 1989

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No. 62 of 1989

An Act to amend the Local Government (Financial Assistance) Act 1986

[Assented to 19 June 1989]

BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:

Short title etc.

1. (1) This Act may be cited as the Local Government (Financial Assistance) Amendment Act 1989.

(2) In this Act, “Principal Act” means the Local Government (Financial Assistance) Act 19861.

Commencement

2. This Act commences on the day on which it receives the Royal Assent.

Interpretation

3. Section 3 of the Principal Act is amended:

(a) by omitting paragraph (bb) of the definition of “base figure” and substituting the following paragraphs:

“(bb) in relation to the year beginning on 1 July 1989—the amount of $671 millions;

(bc) in relation to the year beginning on 1 July 1990—the amount worked out using the formula:

A × B

where:

A is the adjusted base figure determined under subsection 7a (4);

B is the estimated factor for that year; or”;

(b) by omitting “1990” from paragraph (c) of the definition of “base figure” and substituting “1991”;

“ ‘calculation quarter’ means the June 1989 quarter, the September 1989 quarter, the December 1989 quarter, or the March 1990 quarter;

‘index estimate’ means:

(a) except where paragraph (b) applies—the sum of the index numbers, in respect of the calculation quarters, estimated by the Department of the Treasury in May 1989, being 786.5; or

(b) if the Statistician changes the reference base for the Consumer Price Index in relation to a calculation quarter, the number that the Treasurer determines would have been the sum of the index numbers, in respect of the calculation quarters, estimated by the Department of the Treasury in May 1989 if it had known the terms of the new reference base;

‘index number’, in relation to a quarter, means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Statistician in respect of that quarter;”.

Determination of estimated factor

4. Section 5 of the Principal Act is amended by omitting from subsection (2) “1989” and substituting “1990”.

Determination of final factor

5. Section 6 of the Principal Act is amended:

(a) by omitting from subsection (2) “1989” and substituting “1990”;

(b) by inserting in subsection (5) “or 1 July 1989” after “1 July 1988”;

State entitlements for local government purposes

6. Section 7 of the Principal Act is amended:

(a) by omitting from subsection (4) “subsection (10)” and substituting “subsections (10) and (10b)”;

(b) by inserting in subsection (10) “(other than the year beginning on 1 July 1989)” after “a year”;

“(10b) A State is not entitled to a payment under subsection (4) in respect of the year beginning on 1 July 1989 until 15 August 1989.”;

(d) by omitting from subsection (11) “section 8” and substituting “sections 7a and 8”.

7. After section 7 of the Principal Act the following section is inserted:

Adjustment of amounts to which States entitled for 1989 financial year

“7a. (1) As soon as practicable after the Statistician publishes the index number in respect of the March quarter in the year beginning on 1 July 1989, the Treasurer is to determine the adjustment factor in respect of that year.

“(2) The adjustment factor is the number worked out using the formula:

where:

N1 is the index number in respect of the March quarter in the year beginning on 1 July 1989;

N3 is the sum of the index numbers in respect of the 3 quarters immediately preceding that quarter;

IE is the index estimate.

“(3) Where the Treasurer determines the adjustment factor in relation to the year beginning on 1 July 1989, the Treasurer is to determine the adjusted base figure in relation to that year.

“(4) The adjusted base figure is the number worked out by multiplying $671 millions by the adjustment factor.

“(5) Where the Treasurer determines the adjusted base figure, the Treasurer is to determine the amount to which each State would have been entitled under subsection 7 (4) in respect of the year beginning on 1 July 1989 if the adjusted base figure had been used instead of the base figure of $671 millions.

“(6) If the amount determined under subsection (5) in relation to a State is more than the amount to which the State was entitled under subsection 7 (4), the State is entitled to an additional amount equal to the difference.

“(7) In addition to any other conditions to which a payment under this Act is subject, payment of an amount to a State under subsection 7 (4) in respect of the year beginning on 1 July 1989 is subject to the condition that if the amount determined under subsection (5) of this section in relation to the State is less than the amount paid to the State under subsection 7 (4), the State will pay to the Commonwealth an amount equal to the difference.

“(8) Where an amount is payable to a State under subsection (6), that amount may be paid to the State together with the payment to which the State is entitled under section 7 in respect of the year beginning on 1 July 1990.

“(9) Where a State is liable to pay an amount to the Commonwealth under subsection (7), that amount may be deducted from any other amount payable to the State under this Act, and where an amount is so deducted, an amount equal to the amount so deducted is, in spite of the deduction, to be taken, for the purposes of this Act, to have been paid in full to the State.

“(10) An amount payable by a State to the Commonwealth under subsection (7) must be paid on or before a date determined by the Minister, by notice in writing given to the Treasurer of the State.”.

Allocation amongst local governing bodies

8. Section 10 of the Principal Act is amended:

(a) by inserting “, 7a” after “section 7”;

(b) by adding at the end the following subsection:

“(2) For the purposes of subsection (1), the principles applicable to a State under section 9 are to be taken to have effect in relation to the allocation amongst local governing bodies in the State of amounts payable to the State under section 7a in the same way as they have effect in relation to the allocation amongst those bodies of amounts payable to the State under sections 7 and 8.”.

NOTE

1. No. 79, 1986, as amended. For previous amendments, see Nos. 45 and 141, 1987; and No. 50, 1988.

[Minister’s second reading speech made in—

House of Representatives on 23 May 1989

Senate on 26 May 1989]

Overview

The Local Government (Financial Assistance) Amendment Act 1989 was enacted to address the need for adjustments in financial assistance to local governments in Australia for the financial year starting on 1 July 1989. The Act was introduced to amend the Local Government (Financial Assistance) Act 1986, responding to specific financial and administrative requirements that had emerged or needed clarification. The Act was assented to on 19 June 1989 and was passed by the Queen, in accordance with the Senate and the House of Representatives of the Commonwealth of Australia. The primary policy objective of this Act is to ensure that the financial assistance provided to local governments is accurately calculated and appropriately adjusted to reflect economic changes, particularly inflation, affecting the financial year in question.

Scope and Application

The Local Government (Financial Assistance) Amendment Act 1989 amends the Local Government (Financial Assistance) Act 1986 to adjust financial assistance provisions for the 1989 financial year. The Act applies to the Commonwealth, States, and local governments in Australia, specifically focusing on the financial assistance mechanisms provided under the Principal Act. It modifies the formula for calculating base figures, the determination of the estimated factor, and the state entitlements for local government purposes, as well as introducing a new section for adjusting amounts to which States are entitled for the 1989 financial year. The amendments ensure that the financial assistance provided to local governments is adjusted based on the Consumer Price Index, reflecting changes in economic conditions. The Act extends its application through subordinate instruments, which may further detail the implementation and operational aspects of the financial assistance adjustments.

Key Provisions

The Local Government (Financial Assistance) Amendment Act 1989 makes several amendments to the Local Government (Financial Assistance) Act 1986. Firstly, it amends the definition of "base figure" to update specific amounts for the years 1989, 1990, and 1991, and introduces new definitions for "calculation quarter," "index estimate," and "index number" (s. 3). It also modifies the year references in the determination of the estimated and final factors to 1990 (s. 5, s. 6). Additionally, it alters the state entitlements for local government purposes, particularly for the year 1989, and introduces a new section, 7a, detailing the adjustment of amounts to which states are entitled for the 1989 financial year based on the Consumer Price Index (s. 6, s. 7a). The Act imposes obligations on the Treasurer to determine the adjustment factor and the adjusted base figure for the year 1989 once the relevant index numbers are published. The Treasurer must also calculate the amount to which each state would have been entitled if the adjusted base figure had been used instead of the original base figure of $671 million. States are required to either receive additional payments if the calculated amount exceeds their original entitlement or repay any overpayments to the Commonwealth if the calculated amount is less than their original entitlement (s. 7a(4)-(7)). Furthermore, the Act requires states to make payments to the Commonwealth within a specified timeframe if they are liable for any overpayments (s. 7a(10)). Breach of the obligations outlined in the Act may lead to financial discrepancies or non-compliance with the stipulated payment schedules. Specifically, if a state fails to repay any overpayments to the Commonwealth by the date determined by the Minister, it may face penalties or enforcement actions as provided under the Local Government (Financial Assistance) Act 1986. However, the specific penalties or consequences for non-compliance are not detailed within this amendment act but are to be found in the principal Act.

Area of Law: Administrative Law; Finance & Banking Law
Instrument: Amending Act
Concepts: Definitions & Interpretation; Commencement Provisions; Repeal & Amendment; Licensing & Registration; Reporting & Disclosure Obligations

Interactions

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.

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