Local Government (Financial Assistance) (Final Factor for 2025-26 and Estimated Factor for 2026-27) Determination 2026

Administered by Department of the Treasury

Legislation au F2026L00850 In force Legislative Instrument

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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.

Overview

The Local Government (Financial Assistance) Act 1995 was enacted to establish a structured process for the provision of Commonwealth financial assistance to local governments through the states and territories. This Act addresses the gap in ensuring that local governments receive consistent and indexed financial support from the Commonwealth, thereby facilitating their ability to deliver essential services and undertake infrastructure projects. Enacted by the Australian Parliament, the Act's policy objective is to support the financial viability and operational capacity of local governments, ensuring they can meet community needs effectively. Each year, the Treasurer is required to estimate and subsequently determine a factor which indexes the level of financial assistance provided to the states and territories, as outlined in the Act. The Local Government (Financial Assistance) (Final Factor for 2025-26 and Estimated Factor for 2026-27) Determination 2026, made under this Act, specifies the final factor for the 2025-26 financial year and the estimated factor for the 2026-27 financial year, derived from statistics published by the Australian Statistician. This determination is a legislative instrument facilitating the intergovernmental scheme of financial assistance to local governments.

Scope and Application

The Local Government (Financial Assistance) (Final Factor for 2025-26 and Estimated Factor for 2026-27) Determination 2026 is a legislative instrument under the Local Government (Financial Assistance) Act 1995, which governs the provision of Commonwealth financial assistance to local government entities through the states and territories. The Determination is made by a Minister in the Treasury portfolio and specifies the final factor for the 2025-26 financial year and the estimated factor for the 2026-27 financial year, which are used to index the level of financial assistance available to the states and territories for local government purposes. The instrument applies to all local government entities in Australia, as it facilitates the intergovernmental scheme of financial assistance. The Determination is not subject to disallowance or sunsetting and is not considered to engage any human rights issues, as it does not raise any applicable rights or freedoms. It is largely mechanical in nature, derived from statistics published by the Australian Statistician, and commences immediately after its registration on the Federal Register of Legislation.

Key Provisions

The Local Government (Financial Assistance) (Final Factor for 2025-26 and Estimated Factor for 2026-27) Determination 2026 is an instrument that sets out the final financial assistance factor for the 2025-26 financial year and the estimated factor for the 2026-27 financial year. Section 5 of the Determination provides the final factor for 2025-26, while Section 7 provides the estimated factor for 2026-27. These factors are crucial as they determine the level of Commonwealth financial assistance available to local government through the states and territories. The methodology for calculating these factors is detailed in Sections 6 and 8, respectively. The obligations imposed by the Determination on the parties involved are primarily administrative. The Treasurer, under the authority granted by the Local Government (Financial Assistance) Act 1995, is required to determine these factors annually. This ensures a consistent and transparent process for calculating the financial assistance provided to local governments. Additionally, the states and territories must use these determined factors to allocate financial assistance to local councils within their jurisdictions. The Determination ensures that the process remains consistent and is based on reliable statistical data. Failure to comply with the provisions of the Determination could lead to administrative penalties, although no specific penalties are outlined in the Determination itself. The broader legislation, the Local Government (Financial Assistance) Act 1995, does not detail specific penalties for non-compliance with the Determination. However, any breach of the Act or its subsidiary instruments could potentially lead to civil or administrative actions under the relevant laws. The consequences would depend on the nature and severity of the breach, as well as the specific provisions of the primary legislation and any related regulations.

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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.