An Act to provide financial assistance to the States, the
Australian Capital Territory and the Northern Territory, and for related
purposes
Part 1—Preliminary
1
Short title [see Note 1]
This Act may be cited as the Federal
Financial Relations Act 2009.
2
Commencement
This Act commences on 1 April 2009.
3
Object
The object of this Act is to provide
ongoing financial support for the delivery of services by the States, through:
(a) general revenue assistance,
including the provision of GST revenue grants, to be used by the States for any
purpose; and
(b) national specific purpose
payments, to be spent by the States on certain service delivery sectors; and
(c) national partnership payments, to:
(i) support the delivery
by the States of specified outputs or projects; or
(ii) facilitate reforms by
the States; or
(iii) reward the States for
nationally significant reforms.
4
Definitions
In this Act:
Appropriation Act means an Act appropriating
money for expenditure out of the Consolidated Revenue Fund.
COAG Reform Fund means the COAG Reform Fund
established by section 5 of the COAG Reform Fund Act 2008.
drawing right means a drawing right issued
under section 27 of the Financial Management and Accountability Act
1997.
estimated population of a State has the
meaning given by section 7.
general interest charge means the charge
worked out under Part IIA of the Taxation Administration Act 1953.
GST has the same meaning as in the GST Act.
GST Act means the A New Tax System (Goods
and Services Tax) Act 1999.
GST Imposition Acts means the following Acts:
(a) the A New Tax System (Goods and
Services Tax Imposition—Customs) Act 1999;
(b) the A New Tax System (Goods and
Services Tax Imposition—Excise) Act 1999;
(c) the A New Tax System (Goods and
Services Tax Imposition—General) Act 1999;
(d) the A New Tax System (Goods and
Services Tax Imposition (Recipients)—Customs) Act 2005;
(e) the A New Tax System (Goods and
Services Tax Imposition (Recipients)—Excise) Act 2005;
(f) the A New Tax System (Goods
and Services Tax Imposition (Recipients)—General) Act 2005.
GST law has the same meaning as in the GST
Act.
GST refund provision means a provision of a
Commonwealth law the effect of which is to require the Commonwealth to refund
some or all of an amount of GST that has been paid, whether or not the
provision also applies in relation to other kinds of tax.
GST revenue has the meaning given by
section 6.
GST revenue sharing relativity for a State
for a payment year has the meaning given by section 8.
Intergovernmental Agreement means the Intergovernmental
Agreement on Federal Financial Relations that took effect on 1 January
2009.
Note: The Intergovernmental Agreement on Federal
Financial Relations provides an overarching framework for financial
transfers between the Commonwealth and the States and related collaboration on
policy development and service delivery.
luxury car tax law has the meaning given by section 27‑1
of the A New Tax System (Luxury Car Tax) Act 1999.
payment year means:
(a) the financial year starting on
1 July 2009; and
(b) each succeeding financial year.
These are described by a figure referring to 2 years (for
example, the 2009‑10 payment year is the payment year starting on 1 July
2009).
State includes the Australian Capital
Territory and the Northern Territory.
wine equalisation tax law has
the meaning given by section 33‑1 of the A New Tax System (Wine
Equalisation Tax) Act 1999.
Part 2—General revenue assistance
Division 1—GST revenue grants
5 GST
revenue grants
Subject to this Act, each State is
entitled to the payment, by way of financial assistance, for a payment year, of
a grant worked out using the formula:
where:
adjusted State population means the estimated
population of the State on 31 December in the payment year (see
section 7) multiplied by the GST revenue sharing relativity (see
section 8) for the State for that year.
adjusted total population means the sum of
the adjusted State populations of all of the States for the payment year.
GST revenue means the GST revenue for the
payment year (see section 6).
6 GST
revenue
(1) The Minister must make a determination
for each of the matters covered by subsections (3) and (4) stating the
amount for the payment year.
(2) The GST revenue for a
payment year is the difference between:
(a) the sum of all of the amounts
determined for matters covered by subsection (3) for the payment year; and
(b) the sum of all of the amounts
determined for matters covered by subsection (4) for the payment year.
(3) The matters are:
(a) the amount of GST that was
collected; and
(b) the amount of general interest
charge that was collected to the extent that it is attributable to:
(i) unpaid GST; or
(ii) unpaid general
interest charge, being general interest charge payable in respect of unpaid
GST; and
(c) the amount of payments made to the
Commissioner of Taxation where the payment represents an amount of GST that
would have been payable if the Constitution did not prevent tax from being
imposed on property of any kind belonging to a State and if section 5 of
the GST Imposition Acts had not been enacted; and
(d) the amount of additional amounts
of GST that would have been collected if the Commonwealth and Commonwealth
entities could be made subject to taxation by a Commonwealth law and if
section 177‑1 of the GST Act made those entities actually liable rather
than notionally liable; and
(e) the amount, determined in a manner
agreed by the Commonwealth and all of the States, that represents amounts of
voluntary GST payments that should have, but have not, been paid by local
government bodies.
(4) The matters are:
(a) the amount that was paid under the
GST refund provisions; and
(b) the amount that was payable under
the GST refund provisions and that (rather than being paid directly under those
provisions) was allocated, applied or refunded in accordance with Part IIB
of the Taxation Administration Act 1953;
to the extent that the amounts are attributable to GST.
(5) In making determinations for the purposes
of this section, the Minister must make such adjustments as are necessary to
ensure that any effect that the luxury car tax law or wine equalisation tax law
would otherwise have on the amounts of GST, and the amounts attributable to
GST, is removed.
(6) A determination made under
subsection (1) is not a legislative instrument.
7
Determination of population of a State
The estimated population
of a State on 31 December in a payment year is the population of the State
on that date as determined by the Australian Statistician after that date and
before 31 August in the following payment year.
8 GST
revenue sharing relativity
(1) The Minister may determine that a factor
specified in the determination is the GST revenue sharing relativity
for a State for a payment year.
(2) Before making a determination under
subsection (1), the Minister must consult each of the States.
(3) A determination under subsection (1)
is a legislative instrument, but section 42 (disallowance) of the Legislative
Instruments Act 2003 does not apply to the determination.
Division 2—Other general revenue assistance
9
General purpose financial assistance
(1) The Minister may determine that an amount
specified in the determination is to be paid to a State specified in the
determination for the purpose of making a grant of general purpose financial
assistance to the State.
(2) If the Minister determines an amount
under subsection (1):
(a) that amount must be credited to
the COAG Reform Fund; and
(b) the Minister must ensure that, as
soon as practicable after the amount is credited, the COAG Reform Fund is
debited for the purposes of making the grant.
(3) Despite subsection (2), the total
amount credited to the COAG Reform Fund under paragraph (2)(a) must not
exceed, and the total amount covered by drawing rights authorising debits from
the COAG Reform Fund for the purposes of making such grants must not exceed:
(a) in the financial year starting on
1 July 2008—$1,250,000,000; or
(b) in a later financial year in
relation to which an Appropriation Act relating to that financial year declares
that a specified amount is the general drawing rights limit for
the purposes of this section—that specified amount.
(4) Despite subsections (2) and (3), if
no Appropriation Act relating to a financial year starting after 30 June
2009 declares, in relation to that financial year, that a specified amount is
the general drawing rights limit for the purposes of this section:
(a) amounts must not be credited to
the COAG Reform Fund under paragraph (2)(a) during that financial year;
and
(b) drawing rights must not be issued
authorising debits from the COAG Reform Fund for the purposes of making such
grants in that financial year.
(5) A determination under subsection (1)
is a legislative instrument, but section 42 (disallowance) of the Legislative
Instruments Act 2003 does not apply to the determination.
Part 3—National specific purpose payments
10
National specific purpose payments for healthcare
(1) Financial assistance is payable in
accordance with this section to a State, for the financial year starting on
1 July 2009 and for each later financial year, for the purpose of
expenditure on healthcare.
(2) The total amount of all financial
assistance payable under subsection (1) to the States for a financial year
is:
(a) for the financial year starting on
1 July 2009—$11,224,185,000; or
(b) for a later financial year—the
total amount under this subsection for the preceding financial year, indexed in
accordance with subsection (3).
(3) The Minister may, by legislative
instrument, determine the manner in which the total amount under
paragraph (2)(b) is to be indexed for a particular financial year. The
determination must include a statement of the total amount for that financial
year.
(4) The Minister may, by legislative
instrument, determine, for each financial year, the manner in which the total
amount under subsection (2) is to be divided between the States.
(5) Financial assistance is payable to a
State under this section on condition that the financial assistance is spent on
healthcare.
11
National specific purpose payments for schools
(1) Financial assistance is payable in
accordance with this section to a State, for the financial year starting on
1 July 2008 and for each later financial year, for the purpose of
expenditure on schools.
Note: Financial assistance for non‑government
schools is provided for under the Schools Assistance Act 2008.
(2) The total amount of all financial
assistance payable under subsection (1) to the States for a financial year
is:
(a) for the financial year starting on
1 July 2008—the amount determined by the Minister; or
(b) for the financial year starting on
1 July 2009—$3,286,594,000; or
(c) for a later financial year—the
total amount under this subsection for the preceding financial year, indexed in
accordance with subsection (4).
(3) A determination under
paragraph (2)(a) is a legislative instrument, but section 42
(disallowance) of the Legislative Instruments Act 2003 does not apply to
the determination.
Note: The total amount of all financial assistance
payable to the States under subsection (1) of this section and subsections
12(1), 13(1) and 14(1), for the financial year starting on 1 July 2008, is
limited by section 15.
(4) The Minister may, by legislative
instrument, determine the manner in which the total amount under
paragraph (2)(c) is to be indexed for a particular financial year. The
determination must include a statement of the total amount for that financial
year.
(5) The Minister may, by legislative
instrument, determine, for each financial year, the manner in which the total
amount under subsection (2) is to be divided between the States.
(6) Financial assistance is payable to a
State under this section on condition that the financial assistance is spent on
schools.
12
National specific purpose payments for skills and workforce development
(1) Financial assistance is payable in
accordance with this section to a State, for the financial year starting on
1 July 2008 and for each later financial year, for the purpose of
expenditure on skills and workforce development.
(2) The total amount of all financial
assistance payable under subsection (1) to the States for a financial year
is:
(a) for the financial year starting on
1 July 2008—the amount determined by the Minister; or
(b) for the financial year starting on
1 July 2009—$1,317,877,000; or
(c) for a later financial year—the
total amount under this subsection for the preceding financial year, indexed in
accordance with subsection (4).
(3) A determination under
paragraph (2)(a) is a legislative instrument, but section 42
(disallowance) of the Legislative Instruments Act 2003 does not apply to
the determination.
Note: The total amount of all financial assistance
payable to the States under subsection (1) of this section and subsections
11(1), 13(1) and 14(1), for the financial year starting on 1 July 2008, is
limited by section 15.
(4) The Minister may, by legislative instrument,
determine the manner in which the total amount under paragraph (2)(c) is
to be indexed for a particular financial year. The determination must include a
statement of the total amount for that financial year.
(5) The Minister may, by legislative instrument,
determine, for each financial year, the manner in which the total amount under
subsection (2) is to be divided between the States.
(6) Financial assistance is payable to a
State under this section on condition that the financial assistance is spent on
skills and workforce development.
13
National specific purpose payments for disability services
(1) Financial assistance is payable in
accordance with this section to a State, for the financial year starting on
1 July 2008 and for each later financial year, for the purpose of
expenditure on disability services.
(2) The total amount of all financial
assistance payable under subsection (1) to the States for a financial year
is:
(a) for the financial year starting on
1 July 2008—the amount determined by the Minister; or
(b) for the financial year starting on
1 July 2009—$903,686,000; or
(c) for a later financial year—the
total amount under this subsection for the preceding financial year, indexed in
accordance with subsection (4).
(3) A determination under
paragraph (2)(a) is a legislative instrument, but section 42
(disallowance) of the Legislative Instruments Act 2003 does not apply to
the determination.
Note: The amount of all financial assistance payable
to the States under subsection (1) of this section and subsections 11(1),
12(1) and 14(1), for the financial year starting on 1 July 2008, is
limited by section 15.
(4) The Minister may, by legislative
instrument, determine the manner in which the total amount under
paragraph (2)(c) is to be indexed for a particular financial year. The
determination must include a statement of the total amount for that financial
year.
(5) The Minister may, by legislative
instrument, determine, for each financial year, the manner in which the total
amount under subsection (2) is to be divided between the States.
(6) Financial assistance is payable to a
State under this section on condition that the financial assistance is spent on
disability services.
14
National specific purpose payments for housing services
(1) Financial assistance is payable in
accordance with this section to a State, for the financial year starting on
1 July 2008 and for each later financial year, for the purpose of
expenditure on housing services.
(2) The total amount of all financial assistance
payable under subsection (1) to the States for a financial year is:
(a) for the financial year starting on
1 July 2008—the amount determined by the Minister; or
(b) for the financial year starting on
1 July 2009—$1,202,590,000; or
(c) for a later financial year—the
total amount under this subsection for the preceding financial year, indexed in
accordance with subsection (4).
(3) A determination under
paragraph (2)(a) is a legislative instrument, but section 42
(disallowance) of the Legislative Instruments Act 2003 does not apply to
the determination.
Note: The total amount of all financial assistance
payable to the States under subsection (1) of this section and subsections
11(1), 12(1) and 13(1), for the financial year starting on 1 July 2008, is
limited by section 15.
(4) The Minister may, by legislative
instrument, determine the manner in which the total amount under
paragraph (2)(c) is to be indexed for a particular financial year. The
determination must include a statement of the total amount for that financial
year.
(5) The Minister may, by legislative
instrument, determine, for each financial year, the manner in which the total
amount under subsection (2) is to be divided between the States.
(6) Financial assistance is payable to a
State under this section on condition that the financial assistance is spent on
housing services.
15
Total amount of financial assistance for the 2008‑2009 financial year
The total amount of all financial
assistance payable under subsections 11(1), 12(1), 13(1) and 14(1), for the
financial year starting on 1 July 2008, must not exceed $4,000,000,000.
Part 4—National partnership payments
16
National partnership payments
(1) The Minister may determine that an amount
specified in the determination is to be paid to a State specified in the
determination for the purpose of making a grant of financial assistance to:
(a) support the delivery by the State
of specified outputs or projects; or
(b) facilitate reforms by the State;
or
(c) reward the State for nationally
significant reforms.
(2) If the Minister determines an amount
under subsection (1):
(a) that amount must be credited to
the COAG Reform Fund; and
(b) the Minister must ensure that, as
soon as practicable after the amount is credited, the COAG Reform Fund is
debited for the purposes of making the grant.
(3) Despite subsection (2), the total
amount credited to the COAG Reform Fund under paragraph (2)(a) must not
exceed, and the total amount covered by drawing rights authorising debits from
the COAG Reform Fund for the purposes of making such grants must not exceed:
(a) in the financial year starting on
1 July 2008—$8,000,000,000; or
(b) in a later financial year in
relation to which an Appropriation Act relating to that financial year declares
that a specified amount is the general drawing rights limit for
the purposes of this section—that specified amount.
(4) Despite subsections (2) and (3), if
no Appropriation Act relating to a financial year starting after 30 June
2009 declares, in relation to that financial year, that a specified amount is
the general drawing rights limit for the purposes of this section:
(a) amounts must not be credited to
the COAG Reform Fund under paragraph (2)(a) during that financial year;
and
(b) drawing rights must not be issued
authorising debits from the COAG Reform Fund for the purposes of making such
grants in that financial year.
(5) A determination under subsection (1)
is a legislative instrument, but section 42 (disallowance) of the Legislative
Instruments Act 2003 does not apply to the determination.
Part 5—Payment of grants
17
Advance payments for financial year
The Minister may make advances to a
State of portions of the amount or amounts to which, it appears to the
Minister, the State will be entitled under:
(a) section 5; or
(b) a provision of Part 3;
for a financial year.
18
Overpayment or underpayment of grant
(1) If a State has been paid an amount in
excess of the amount that, under:
(a) section 5; or
(b) a provision of Part 3;
it was entitled to receive by way of financial assistance
for a financial year, the Minister must deduct an amount equal to the excess
from any amount that the State is entitled to receive by way of financial
assistance under that provision for the first practicable subsequent financial
year.
(2) If a State has been paid less than the
amount that, under:
(a) section 5; or
(b) a provision of Part 3;
it was entitled to receive by way of financial assistance
for a financial year, the Minister must add an amount equal to the shortfall to
any amount that the State is entitled to receive by way of financial assistance
under that provision for the first practicable subsequent financial year.
19
Minister may fix amounts, and times of payments, of financial assistance
(1) Financial assistance payable to a State
under this Act is to be paid in such amounts, and at such times, as the
Minister determines in writing.
(2) A determination made under
subsection (1) is not a legislative instrument.
20
Repayment if condition not fulfilled
(1) It is a condition of a payment of
financial assistance under this Act to a State that, if the State does not
fulfil a condition in respect of the payment, the State will, if the Minister
so determines, repay to the Commonwealth the amount stated in the
determination.
(2) The amount stated in the determination
under subsection (1) must not be more than the amount of the payment.
(3) A determination made under
subsection (1) is not a legislative instrument.
(4) If:
(a) a payment of financial assistance
has, during a financial year, been made to a State under this Act; and
(b) the Minister has determined under
subsection (1) that the State must repay an amount in respect of the
payment; and
(c) the State has not repaid the
amount;
the Minister may deduct an amount equal to the amount
unpaid from any amount that the State is entitled to receive by way of
financial assistance under this Act for a subsequent financial year.
(5) An amount payable by a State to the
Commonwealth under this Act is a debt due by the State to the Commonwealth.
Part 6—Miscellaneous
21
Minister to have regard to Intergovernmental Agreement and other agreements
In making a determination under this
Act, the Minister must have regard to:
(a) the Intergovernmental Agreement;
and
(b) if the determination relates to
financial assistance to a particular State—any other written agreement between
the Commonwealth and the State that relates to the financial assistance.
22
Appropriation
Payments under Division 1 of Part 2,
Part 3 or Part 5 are to be made out of the Consolidated Revenue Fund,
which is appropriated accordingly.
23
Delegation
(1) The Minister may, by writing, delegate
any or all of his or her powers under section 17 or 19 to an SES employee,
or acting SES employee, in the Department.
Note: The expressions SES employee and
acting SES employee are defined in section 2B of the Acts
Interpretation Act 1901.
(2) In exercising powers under a delegation,
the delegate must comply with any directions of the Minister.
24
Regulations
The Governor‑General may make
regulations prescribing matters:
(a) required or permitted by this Act
to be prescribed; or
(b) necessary or convenient to be
prescribed for carrying out or giving effect to this Act.