EXPLANATORY STATEMENT
Issued by authority of the Assistant Minister for Productivity, Competition, Charities and Treasury
Local Government (Financial Assistance) Act 1995
Local Government (Financial Assistance) (Final Factor for 2025-26 and Estimated Factor for 2026-27) Determination 2026
Subsection 8(1) of the Local Government (Financial Assistance) Act 1995 (the Act) provides that the Treasurer must, not later than 30 June in each financial year, determine the final factor for that financial year.
Further, paragraph 7(3)(b) of the Act provides that the Treasurer must, before the start of each financial year, make an estimate of the final factor for that year.
The Act established the current process for the provision of Commonwealth financial assistance to local government through the states and territories. Each year, the level of financial assistance available to the states and territories for local government purposes is indexed by a factor which is to be estimated, and then finally determined, by the Treasurer. The Local Government (Financial Assistance) (Final Factor for 2025-26 and Estimated Factor for 2026-27) Determination 2026 (the Determination) determines the final factor for the 2025-26 financial year and the estimated factor for the 2026-27 financial year.
In accordance with section 19 of the Acts Interpretation Act 1901, any Minister in the Treasury portfolio may determine the factors under the Act.
No consultation has been undertaken on this Determination as the Determination is machinery in nature. In accordance with the Act, copies of the Determination will be made available to the Treasurer of each of the states and territories.
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, this Determination is not subject to disallowance and 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 assistance to local government through the states and territories. The enabling legislation authorises the Determination to be made for the purposes of this arrangement. The factors determined by the Determination are largely mechanical in nature and have been derived from statistics published by the Australian Statistician.
A Policy Impact Analysis is not required as the Determination is machinery in nature.
The Determination commenced immediately 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 Local Government (Financial Assistance) (Final Factor 2025-26 and Estimated Factor for 2026-27) Determination 2026
Section 1 – Name
This section provides that the name of the instrument is the Local Government (Financial Assistance) (Final Factor 2025-26 and Estimated Factor for 2026-27) Determination 2026 (the Determination).
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 Local Government (Financial Assistance) Act 1995.
Section 4 – Definitions
This section provides definitions for the purposes of the Determination.
Sections 5 and 6 – Final factor for the year 2025-26
Section 5 provides the determined final factor in relation to the 2025-26 financial year.
Section 6 provides the details for how the final factor for the 2025-26 financial year was worked out.
Sections 7 and 8 – Estimated factor for the year 2026-27
Section 7 provides the estimated factor for the 2026-27 financial year.
Section 8 provides the details for how the estimated factor for the 2026-27 financial year was worked out.
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Local Government (Financial Assistance) (Final Factor for 2025-26 and Estimated Factor 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 Local Government (Financial Assistance) (Final Factor for 2025-26 and Estimated Factor for 2026-27) Determination 2026 (the Legislative Instrument) determines the final factor for the 2025-26 financial year and the estimated factor for the 2026-27 financial year. The factors are used to determine the amount of Commonwealth financial assistance which is made available to local government for a financial 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.