{"id":"a-1994-19","name":"Financial Agreement Act 1994","slug":"financial-agreement-act-1994","collection":"act","jurisdiction":"act","status":"in_force","isInForce":true,"actNumber":"19 of 1994","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":23553,"registerId":"act-a-1994-19-current","compilationNumber":null,"startDate":"2026-04-01","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Financial Agreement Act 1994","content":"Australian Capital Territory\nFinancial Agreement Act 1994\nNo 19\nRepublication No 1\nRepublication date: 13 June 2002\nLast amendment made by Act 2001 No 44\nAmendments incorporated to 12 September 2001\nAuthorised by the ACT Parliamentary Counsel\n\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\nAbout this republication\nThe republished law\nThis is a republication of the Financial Agreement Act 1994 as in force on 13 June 2002.\nIt includes any amendment, repeal or expiry affecting the republished law to\n12 September 2001 and any amendment made under the Legislation Act 2001, part 11.3\n(Editorial changes).\nThe legislation history and amendment history of the republished law are set out in\nendnotes 3 and 4.\nKinds of republications\nThe Parliamentary Counsel’s Office prepares 2 kinds of republications of ACT laws (see\nthe ACT legislation register at www.legislation.act.gov.au):\n authorised republications to which the Legislation Act 2001 applies\n unauthorised republications.\nThe status of this republication appears on the bottom of each page.\nEditorial changes\nThe Legislation Act 2001, part 11.3 authorises the Parliamentary Counsel to make editorial\namendments and other changes of a formal nature when preparing a law for republication.\nEditorial changes do not change the effect of the law, but have effect as if they had been\nmade by an Act commencing on the republication date (see Legislation Act 2001, s 115\nand s 117). The changes are made if the Parliamentary Counsel considers they are\ndesirable to bring the law into line, or more closely into line, with current legislative\ndrafting practice.\nThis republication includes amendments made under part 11.3 (see endnote 1).\nUncommenced provisions and amendments\nIf a provision of the republished law has not commenced or is affected by an\nuncommenced amendment, the symbol U appears immediately before the provision\nheading. The text of the uncommenced provision or amendment appears only in the last\nendnote.\nModifications\nIf a provision of the republished law is affected by a current modification, the symbol M\nappears immediately before the provision heading. The text of the modifying provision\nappears in the endnotes. For the legal status of modifications, see Legislation Act 2001,\nsection 95.\nPenalties\nThe value of a penalty unit for an offence against this republished law at the republication\ndate is—\n(a) if the person charged is an individual—$100; or\n(b) if the person charged is a corporation—$500.\n\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\nAmendments incorporated to\n12 September 2001\nAustralian Capital Territory\nFinancial Agreement Act 1994\nContents\nPage\n1 Name of Act 2\n2 Application of Legislation Act 2\n3 Meaning of the agreement 2\n4 Approval of agreement 2\nSchedule 1 Copy of the agreement 3\nEndnotes\n1 About the endnotes 25\n2 Abbreviation key 25\n3 Legislation history 26\n4 Amendment history 26\n\n\n\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\nAmendments incorporated to\n12 September 2001\nAustralian Capital Territory\nFinancial Agreement Act 1994\nAn Act to approve an agreement between the Commonwealth, States and\nTerritories, and for related purposes\n\nSection 1\npage 2 Financial Agreement Act 1994 R1\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n1 Name of Act\nThis Act is the Financial Agreement Act 1994.\n2 Application of Legislation Act\nThe Legislation Act 2001 does not apply to instruments made\nunder the agreement.\n3 Meaning of the agreement\nIn this Act:\nNote A definition applies except so far as the contrary intention appears\n(see Legislation Act 2001, s 155).\nthe Agreement means the Agreement, a copy of which is set out\nin schedule 1.\n4 Approval of agreement\nThe agreement made on 25 February 1994 is approved.\n\nCopy of the agreement Schedule 1\nR1 Financial Agreement Act 1994 page 3\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\nSchedule 1 Copy of the agreement\n(see s 3)\nFINANCIAL AGREEMENT\npursuant to\nsection 105A of the Commonwealth Constitution\nbetween\nTHE COMMONWEALTH OF AUSTRALIA\nTHE STATES\nTHE AUSTRALIAN CAPITAL TERRITORY\nand\nTHE NORTHERN TERRITORY OF AUSTRALIA\nAGREEMENT made the 25th day of February One thousand nine hundred\nand ninety four between-\nTHE COMMONWEALTH OF AUSTRALIA of the first part;\nTHE STATE OF NEW SOUTH WALES of the second part;\nTHE STATE OF VICTORIA of the third part;\nTHE STATE OF QUEENSLAND of the fourth part;\nTHE STATE OF WESTERN AUSTRALIA of the fifth part;\nTHE STATE OF SOUTH AUSTRALIA of the sixth part;\nTHE STATE OF TASMANIA of the seventh part;\nTHE AUSTRALIAN CAPITAL TERRITORY of the eighth part; and\nTHE NORTHERN TERRITORY OF AUSTRALIA of the ninth part\n\nSchedule 1 Copy of the agreement\npage 4 Financial Agreement Act 1994 R1\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n(each of the parties of the second, third, fourth, fifth, sixth and seventh parts\nand, in relation to clause 4, the Australian Capital Territory and the\nNorthern Territory of Australia in respect of which for the time being the\nAgreement is in force being in this Agreement referred to as a State and all\nof those parties as the context so permits or requires being in this\nAgreement referred to as the States).\nWHEREAS:\n(A) an Agreement (in this Agreement called the Original\nAgreement) was made the 12th December 1927 between\nthe parties to this Agreement with respect to the public\ndebts of the States;\n(B) the provisions of the Original Agreement (which, as varied\nby the Supplemental Agreements, is in this Agreement\ncalled the Principal Agreement) have been varied by the\nfollowing agreements made in pursuance of section 105A\nof the Constitution of the Commonwealth of Australia-\n(i) Agreement made the 1st July 1928, a copy of which\nis set out in the schedule to the Tasmanian Sinking\nFund Agreement Act 1928;\n(ii) Agreement made the 21st July 1931, a copy of which\nis set out in the schedule to the Debt Conversion\nAgreement Act 1931;\n(iii) Agreement made the 22nd October 1931, a copy of\nwhich is set out in the schedule to the Debt\nConversion Agreement Act (No. 2) 1931;\n(iv) Agreement made the 3rd July 1934, a copy of which\nis set out in the schedule to the Soldier Settlement\nLoans (Financial Agreement) Act 1935;\n(v) Agreement made the 15th November 1944, a copy of\nwhich is set out in the schedule to the Financial\nAgreement Act 1966;\n\nCopy of the agreement Schedule 1\nR1 Financial Agreement Act 1994 page 5\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n(vi) Agreement made the 11th February 1966, a copy of\nwhich is set out in the schedule to the Financial\nAgreement Act 1966;\n(vii) Agreement made the 5th February 1976, a copy of\nwhich is set out in the schedule to the Financial\nAgreement Act 1976,\n(which Agreements are in this Agreement referred to\nas the Supplemental Agreements);\n(C) the parties, other than those of the eighth and ninth parts,\nhave agreed that in pursuance of section 105A of the\nConstitution provision as specified in this Agreement\ndifferent from that in the Principal Agreement should be\nmade as to;\n(i) the powers of the Loan Council;\n(ii) the restriction on a State from borrowing by the issue\nof securities in its own name in domestic and\noverseas markets;\n(iii) the requirement on the Commonwealth and on a State\nfor approval of borrowings; and\n(iv) the power of the Commonwealth to borrow on behalf\nof the States; and\n(D) all the parties, agree that\n(i) the Australian Capital Territory and the Northern\nTerritory be represented on the Loan Council;\n(ii) the Loan Council have a power to make resolutions\nonly; and\n(iii) the Northern Territory and the Commonwealth make\ninto the Debt Retirement Reserve Trust Account the\npayments that they would otherwise have made under\nthe 1986 Arrangements;\nNOW IT IS HEREBY AGREED as follows:\n\nSchedule 1 Copy of the agreement\npage 6 Financial Agreement Act 1994 R1\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n1(1) This Agreement, other than this clause, shall have no force or\neffect and shall not be binding upon any party until, in respect\nof each party, either-\n(a) it is signed with the prior authority of the Parliament or, in\nthe case of each Territory, the Legislative Assembly, of\nthat party; or\n(b) after having been signed, it is approved by the Parliament\nor, in the case of each Territory, the Legislative Assembly,\nof that party.\n(2) The Commonwealth will take, as soon as possible, all\npracticable steps to seek the enactment of legislation relating to:\n(a) the cessation of the National Debt Sinking Fund created\nby the National Debt Sinking Fund Act 1966;\n(b) the establishment of the Debt Retirement Reserve Trust\nAccount; and\n(c) thereupon, the payment from the National Debt Sinking\nFund or, in the case of the Northern Territory, the Northern\nTerritory Debt Sinking Fund, into the Debt Retirement\nReserve Trust Account, but so that the payment is made to\nthe credit of the accounts established in respect of the\nrelevant States or the Northern Territory, as the case may\nbe, of the moneys then standing to the credit of the\naccounts in the National Debt Sinking Fund or the\nNorthern Territory Debt Sinking Fund, respectively,\nincluding any later amounts which, but for the abolition of\nthe National Debt Sinking Fund or the Northern Territory\nDebt Sinking Fund, would, when received, have been paid\ninto the National Debt Sinking Fund or the Northern\nTerritory Debt Sinking Fund.\n2(1) This Agreement, as varied from time to time, shall be known as\nthe 1994 Financial Agreement.\n(2) Upon its coming into force, clauses 7, 8, 10, 11 and 13 of this\nAgreement shall be deemed to have commenced to operate on\nand from 1 July 1990.\n\nCopy of the agreement Schedule 1\nR1 Financial Agreement Act 1994 page 7\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n3(1) In this Agreement, unless the contrary intention appears-\nbondholder means holder of any securities but does not include\nthe Commonwealth;\nface value means-\n(a) in relation to securities repayable in Australian currency,\nthe principal amount, excluding any amount payable by\nway of premium, remaining to be repaid in respect of the\nsecurities;\n(b) in relation to securities repayable in an overseas currency,\nthe equivalent in Australian currency of the principal\namount, excluding any amount payable by way of\npremium, remaining to be paid in respect of the securities,\nconverted at the Reserve Bank of Australia selling rate to\nthe Commonwealth Government at the time of conversion\nor at such rate as is agreed between the Commonwealth\nand the States;\ngross cost, in relation to the purchase of securities, means the\namount actually paid for the securities, including interest,\nbrokerage and commission;\nholder, in relation to securities, means owner of the securities\naccording to the manner in which ownership of the securities is\ndetermined;\nnet public debt, means:\n(a) in relation to a State, the public debt of the State less an\namount equal to the sum of the balance standing to the\ncredit of the State-\n(A) in relation to the period until the establishment of the\nDebt Retirement Reserve Trust Account, in the\nSinking Fund; and\n(B) thereafter, in the Debt Retirement Reserve Trust\nAccount; and\n\nSchedule 1 Copy of the agreement\npage 8 Financial Agreement Act 1994 R1\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n(b) in relation to the Northern Territory, the public debt of that\nTerritory less an amount equal to the sum of the balance\nstanding to the credit of the Territory-\n(C) in relation to the period until the establishment of the\nDebt Retirement Reserve Trust Account, in the\nNorthern Territory Debt Sinking Fund; and\n(D) thereafter, in the Debt Retirement Reserve Trust\nAccount;\nPremier includes, in relation to clause 4, the Chief Minister of-\n(a) the Australian Capital Territory; and\n(b) the Northern Territory of Australia,\nas the case may be;\npublic debt means\n(a) in relation to a State, the aggregate of the face value of the\nsecurities issued or created by the State or issued or created\nin respect of the State in accordance with the Principal\nAgreement that have not been purchased, redeemed or\notherwise repaid or in respect of which the State has not\notherwise been freed and discharged from liability; and\n(b) in relation to the Northern Territory, the aggregate of the\nface value of the securities issued or created in respect of\nthe Northern Territory in accordance with the 1986\nArrangements that have not been purchased, redeemed or\notherwise repaid or in respect of which the Northern\nTerritory has not otherwise been freed and discharged from\nliability;\nsecurities means-\n(a) where the context involves a State;\nInscribed Stock and Bonds\nInstalment Stock\n\nCopy of the agreement Schedule 1\nR1 Financial Agreement Act 1994 page 9\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\nRegistered Stock\nFunded Stock\nStock payable to bearer\nSpecial Bonds\nAustralian Savings Bonds\nwhich were issued or created by a State and taken over by\nthe Commonwealth under the Principal Agreement or\nissued or created in respect of a State; and\n(b) where the context involves the Northern Territory;\nInscribed Stock and Bonds\nRegistered Stock\nStock payable to bearer\nAustralian Savings Bonds\nwhich were issued or created in respect of the Northern\nTerritory under the 1986 Arrangements;\nthe Commission means the National Debt Commission\ncontinued in existence by the National Debt Sinking Fund Act\n1966;\nthe Loan Council means the Australian Loan Council continued\nin existence pursuant to this Agreement;\nthe Sinking Fund means the National Debt Sinking Fund\ncreated by the National Debt Sinking Fund Act 1966; and\nthe 1986 Arrangements means the Arrangements entered into\nbetween the Commonwealth of Australia and the Northern\nTerritory dated the 26th May 1986 under which, among other\nthings, there was created the Northern Territory Debt Sinking\nFund within the Commonwealth Trust Fund.\n(2) In this Agreement-\n\nSchedule 1 Copy of the agreement\npage 10 Financial Agreement Act 1994 R1\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n(a) a reference to a year is, unless the contrary intention\nappears, a reference to a financial year commencing on a\n1st July;\n(b) the expression “in writing” includes any mode of\nrepresenting or reproducing words and figures in a written\nform; and\n(c) except where inconsistent with the context, words in the\nsingular include the plural and words in the plural include\nthe singular.\n4(1) The Australian Loan Council created under the Principal\nAgreement is continued in existence hereunder but so that it\nshall consist of one representative of the Commonwealth who\nshall be-\n(a) the Prime Minister of the Commonwealth; or\n(b) a Minister or other person nominated in writing by the\nPrime Minister,\nand one representative of each State who shall be-\n(c) the Premier of that State; or\n(d) a Minister or other person nominated in writing by the\nPremier of that State,\nprovided that the nomination of the Minister shall be deemed to\ninclude another Minister of the Commonwealth or of the State,\nas the case may be, who is for the time being acting for the\nMinister nominated and references in this clause to a\nrepresentative shall be read so as to include a Minister who is so\nacting.\n(2) Any nomination of a substitute representative of the\nCommonwealth or of a State shall be tabled at the meeting of\nthe Loan Council next succeeding the nomination.\n(3) The representative of the Commonwealth on the Loan Council\nshall hold office during the pleasure of the Prime Minister of the\n\nCopy of the agreement Schedule 1\nR1 Financial Agreement Act 1994 page 11\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\nCommonwealth and a representative of a State shall hold office\nduring the pleasure of his or her Premier.\n(4) The representative of the Commonwealth shall be the Chairman\nof the Loan Council.\n(5) A decision in which all the representatives for the time being of\nthe Loan Council concur shall be not affected by any vacancy\nthen existing among the representatives.\n(6) A meeting of the Loan Council may at any time be convened by\nthe representative of the Commonwealth, and shall be so\nconvened upon the request of at least four State representatives.\n(7) A majority of the representatives of the Loan Council shall\nconstitute a quorum of the Loan Council for the exercise of its\npowers at any meeting, provided that-\n(a) a representative may at any time appoint in writing a\ndeputy to act in his absence, and any deputy so appointed\nmay in the absence of the representative exercise all the\npowers and functions of the representative and his or her\npresence shall be deemed the presence of the\nrepresentative; and\n(b) an absent representative who has not appointed a deputy\nmay vote by letter, telegram, or by facsimile and in such\ncase that representative shall be counted as being present\nin relation only to the questions on which he or she has\nvoted.\n(8) The Loan Council may make rules of procedure including rules\nrelating to places, times, and notices of meetings, and conduct\nof business at meetings, including voting on a resolution and\nfrom time to time may alter such rules.\n(9) The Loan Council may make resolutions, which are not to\noperate as they would have operated had clause 3 (15) of the\noriginal Agreement not been rescinded, in relation to-\n(a) borrowings;\n\nSchedule 1 Copy of the agreement\npage 12 Financial Agreement Act 1994 R1\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n(b) raisings; and\n(c) other financial arrangements\nby the Commonwealth, a State, a local governing body or any\nentity owned or controlled wholly or as to a major part by any\nof them, save for any of the foregoing excepted from time to\ntime by the Loan Council.\n(10) In this clause the expressions “Prime Minister” and “Premier”\ninclude the persons for the time being respectively acting as\nsuch.\n5(1) Subject to this clause the Commonwealth will continue to pay to\nbondholders from time to time interest payable on the Public\nDebts of the States taken over by the Commonwealth under the\nPrincipal Agreement other than debts due by the States to the\nCommonwealth.\n(2) Each State shall continue to pay in each year to the\nCommonwealth, as it falls due, the whole of the interest on any\ndebt included in the public debt of that State taken over by the\nCommonwealth under the Principal Agreement, and on any\nmoneys borrowed by the Commonwealth under the Principal\nAgreement on behalf of that State, then unpaid.\n(3) The Northern Territory shall continue to pay in each year to the\nCommonwealth, as it falls due, the whole of the interest on any\nmoneys borrowed by the Commonwealth on behalf of the\nNorthern Territory under the 1986 Arrangements then unpaid.\n(4) The method by which payments shall be made by a State under\nsub-clause (2) or the Northern Territory under sub-clause (3) of\nthis clause shall be arranged from time to time between the\nCommonwealth and, respectively, that State or the Northern\nTerritory.\n(5) The rate of interest payable under sub-clause (2) of this clause\nin respect of moneys borrowed by the Commonwealth on behalf\nof a State shall be the full rate of interest payable by the\nCommonwealth in respect of the loan by which such moneys\nwere borrowed or such other rate of interest as may be payable\n\nCopy of the agreement Schedule 1\nR1 Financial Agreement Act 1994 page 13\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\nby the State to the Commonwealth under any agreement made\nor to be made between the Commonwealth and that State in\nrespect of such moneys and such interest shall be payable by\nthat State for the full term of that loan.\n(6) The rate of interest payable under sub-clause (3) of this clause\nin respect of moneys borrowed by the Commonwealth on behalf\nof the Northern Territory shall be the full rate of interest payable\nby the Commonwealth in respect of the loan by which such\nmoneys were borrowed or such other rate of interest as may be\npayable by the Northern Territory to the Commonwealth under\nany agreement made or to be made between the Commonwealth\nand the Northern Territory in respect of such moneys and such\ninterest shall be payable by the Northern Territory for the full\nterm of that loan.\n6(1) There shall be a trust account to be called the “Debt Retirement\nReserve Trust Account”.\n(2) The Commonwealth shall establish and maintain a separate\naccount in the Debt Retirement Reserve Trust Account in\nrespect of each State.\n(3) The Commonwealth shall establish and maintain a separate\naccount in the Debt Retirement Reserve Trust Account in\nrespect of the Northern Territory.\n(4) There shall be paid by the Commonwealth into each of those\naccounts in the Debt Retirement Reserve Trust Account\nestablished under sub-clause 6(2):\n(a) amounts equal to the amounts received from the State\nunder sub-clause 7(2); and\n(b) amounts being the contributions by the Commonwealth\nunder clause 8.\n(5) There shall be paid by the Commonwealth into the accounts in\nthe Debt Retirement Reserve Trust Account established under\nsub-clause 6(3):\n\nSchedule 1 Copy of the agreement\npage 14 Financial Agreement Act 1994 R1\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n(a) amounts equal to the amounts received from the Northern\nTerritory under sub-clause 7(3); and\n(b) amounts being the contributions by the Commonwealth\nunder clause 8.\n(6) Moneys standing to the credit of an account established in\nrespect of a State in the Debt Retirement Reserve Trust Account\nshall be applied by the Commonwealth in connection with the\npurchase, redemption, including redemption on conversion, and\nrepayment of securities of that State. The gross cost, in the case\nof purchase, or the cost at face value, in the case of redemption\nor repayment, shall be charged to the account established in\nrespect of that State in the Debt Retirement Reserve Trust\nAccount.\n(7) Moneys standing to the credit of the account established in\nrespect of the Northern Territory in the Debt Retirement\nReserve Trust Account shall be applied by the Commonwealth\nin connection with the purchase, redemption, including\nredemption on conversion, and repayment of securities of the\nNorthern Territory. The gross cost, in the case of purchase, or\nthe cost at face value, in the case of redemption or repayment,\nshall be charged to the account established in respect of that\nTerritory in the Debt Retirement Reserve Trust Account.\n(8) Moneys standing to the credit of an account established in\nrespect of a State in the Debt Retirement Reserve Trust Account\nwill be held within the Commonwealth Public Account\nestablished pursuant to paragraph 21(1)(a) of the Audit Act\n1901 or that provision as amended, modified or re-enacted from\ntime to time. An amount equal to interest earned on that part of\nthe balances in the Commonwealth Public Account attributable\nto the credit balance in the account established in respect of a\nState within the Debt Retirement Reserve Trust Account shall\nbe added to the moneys standing to the credit of that account.\n(9) Moneys standing to the credit of the account established in\nrespect of the Northern Territory in the Debt Retirement\nReserve Trust Account will be held within the Commonwealth\n\nCopy of the agreement Schedule 1\nR1 Financial Agreement Act 1994 page 15\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\nPublic Account established pursuant to paragraph 21(1)(a) of\nthe Audit Act 1901 or that provision as amended, modified or\nre-enacted from time to time. An amount equal to interest\nearned on that part of the balances in the Commonwealth Public\nAccount attributable to the credit balance in the account\nestablished in respect of the Northern Territory within the Debt\nRetirement Reserve Trust Account shall be added to the moneys\nstanding to the credit of that account.\n(10) When securities of a State or of the Northern Territory are\npurchased, redeemed or repaid, the securities shall be deemed to\nhave been cancelled on the date of the purchase, redemption or\nrepayment.\n7(1) Each State shall, in respect of the public debt of the State, pay\nby equal monthly instalments during each year commencing on\n1 July 1990 or in such other amounts as are determined by\nagreement between the Commonwealth and the relevant State a\ncontribution calculated in respect of that year as provided in this\nclause.\n(2) Each State shall pay the contribution in respect of each year-\n(a) in respect of the period from 1 July 1990 until the\nestablishment of the Debt Retirement Reserve Trust\nAccount, to the Commission for credit to the account of\nthe State in the Sinking Fund, and\n(b) thereafter, to the Commonwealth for credit to the account\nestablished in respect of the State in the Debt Retirement\nReserve Trust Account\nsuch that the contribution, together with-\n(c) in the case of the period referred to in paragraph (a),\n(i) amounts of interest referred to in sub-clause 12A(7)\nof the Principal Agreement, preserved by sub-clause\n16(2), in respect of the relevant year or, where the\nDebt Retirement Reserve Trust Account has operated\nfor only part of the year, the other part of that year;\n\nSchedule 1 Copy of the agreement\npage 16 Financial Agreement Act 1994 R1\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n(ii) contributions by the Commonwealth pursuant to\nclause 8 as it relates to the State in respect of the\nrelevant year or, where the Debt Retirement Reserve\nTrust Account has operated for only part of the year,\nthe other part of that year; and\n(iii) the moneys standing to the credit of an account in\nrespect of the State in the Sinking Fund as at the\ncommencement of that year including where the Debt\nRetirement Reserve Trust Account has operated for\nonly part of the year; and\n(d) in the case of the period referred to in paragraph (b),\n(i) amounts equal to interest referred to in sub-clause\n6(8) in respect of the relevant year, or where the Debt\nRetirement Reserve Trust Account has operated for\nonly part of the year, the interest referred to in sub-\nclause 6(8) for that part of that year;\n(ii) contributions by the Commonwealth pursuant to\nclause 8 in respect of the relevant year or where the\nDebt Retirement Reserve Trust Account has operated\nfor only part of the year, the contribution made into\nthe Debt Retirement Reserve Trust Account for that\npart of the year; and\n(iii) the moneys standing at the commencement of the\nrelevant year to the credit of an account in respect of\nthe State in the Debt Retirement Reserve Trust\nAccount,\nis equal to the total of those parts of its public debt which\nfalls to be redeemed or is repaid or purchased in that year,\nor any greater amount which the State elects to have\nredeemed, repaid or purchased in that year, but so that in\nany event that contribution shall not be less than an amount\nequal to 0.85 per centum of the net public debt of the State\nas at the 30th June immediately preceding the year in\nwhich the contribution is payable.\n\nCopy of the agreement Schedule 1\nR1 Financial Agreement Act 1994 page 17\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n(3) The Northern Territory shall pay a contribution in respect of\neach year-\n(a) in respect of the period from 1 July 1990 until the\nestablishment of the Debt Retirement Reserve Trust\nAccount, to the Commonwealth for credit to the Northern\nTerritory Debt Sinking Fund; and\n(b) thereafter, to the Commonwealth for credit to the account\nestablished in respect of the Northern Territory in the Debt\nRetirement Reserve Trust Account\nsuch that the contribution, together with-\n(c) in the case of the period referred to in paragraph (a),\n(i) amounts of interest which would have been payable\nunder the 1986 Arrangements in respect of the\nrelevant year or, where the Debt Retirement Reserve\nTrust Account has operated for only part of the year,\nthe other part of that year;\n(ii) contributions by the Commonwealth pursuant to\nclause 8 as it relates to the Territory in respect of the\nrelevant year or, where the Debt Retirement Reserve\nTrust Account has operated for only part of the year,\nthe other part of that year; and\n(iii) the moneys standing to the credit of the Northern\nTerritory Debt Sinking Fund as at the commencement\nof that year including where the Debt Retirement\nReserve Trust Account has operated for only part of\nthe year; and\n(d) in the case of the period referred to in paragraph (b),\n(i) amounts equal to interest referred to in sub-clause\n6(9) in respect of the relevant year or, where the Debt\nRetirement Reserve Trust Account has operated for\nonly part of the year, the interest referred to in sub-\nclause 6(9) for that part of that year;\n\nSchedule 1 Copy of the agreement\npage 18 Financial Agreement Act 1994 R1\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n(ii) contributions by the Commonwealth pursuant to\nclause 8 in respect of the relevant year or, where the\nDebt Retirement Reserve Trust Account has operated\nfor only part of the year, the contribution made into\nthe Debt Retirement Reserve Trust Account for that\npart of the year; and\n(iii) the moneys standing at the commencement of the\nrelevant year to the credit of the account in respect of\nthe Northern Territory in the Debt Retirement\nReserve Trust Account,\nis equal to the total of those parts of its public debt which\nfalls to be redeemed or is repaid or purchased in that year\nor any greater amount which the Northern Territory elects\nto have redeemed, repaid or purchased in that year, but so\nthat in any event that contribution shall not be less than an\namount equal to 0.85 per centum of the net public debt of\nthe Northern Territory as at the 30th June immediately\npreceding the year in which the contribution is payable.\n8(1) The Commonwealth shall, in respect of the public debt of each\nState and of the Northern Territory, pay for credit to the account\nof the State in the National Debt Sinking Fund and that\nTerritory in the Northern Territory Debt Sinking Fund by equal\nmonthly instalments during each year commencing 1 July 1990\nor in such other amounts as are determined by agreement\nbetween the Commonwealth and the relevant State or the\nCommonwealth and the Northern Territory, as the case may be,\na contribution calculated in respect of that year as provided in\nthis clause.\n(2) The Commonwealth shall pay a contribution in respect of each\nof those years in relation to the public debt of a State and in\nrelation to the public debt of the Northern Territory that is\nequivalent to 0.28 per centum of the net public debt of the State\nor the Northern Territory, as the case may be, at the 30th June\nimmediately preceding the year in which the contribution is\npayable.\n\nCopy of the agreement Schedule 1\nR1 Financial Agreement Act 1994 page 19\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n(3) On and from the establishment of the Debt Retirement Reserve\nTrust Account the contribution payable by the Commonwealth\nunder this clause in respect of the States and the Northern\nTerritory shall be paid into that Account.\n9 The contributions payable after the establishment of the Debt\nRetirement Reserve Trust Account by the Northern Territory\nunder sub-clause 7(3) shall be:\n(a) in respect of so much of the year ending on 30 June next\nfollowing the establishment of the Debt Retirement\nReserve Trust Account; and\n(b) in respect of each succeeding year,\nof equal monthly instalments during the period referred to in\nparagraph (a) or during the year referred to in paragraph (b) or\nof such other amounts as are determined by agreement between\nthe Commonwealth and the Northern Territory.\n10 The Commonwealth shall reimburse, in such amounts and at\nsuch times as agreed between the Commonwealth and the State,\neach State for the excess, as assessed by agreement between the\nCommonwealth and the State, of the amount of the costs to the\nState incurred from 1 July 1990 in respect of the redemption,\nrepayment and purchase, by the Commonwealth of the\nsecurities from that date over the amount of the costs that would\nhave been so incurred under the Principal Agreement.\n11 The Commonwealth shall reimburse, in such amounts and at\nsuch times as agreed between the Commonwealth and the\nNorthern Territory, for the excess, as assessed by agreement\nbetween the Commonwealth and that Territory of the amount of\nthe costs to that Territory incurred from 1 July 1990 in respect\nof the redemption, repayment and purchase, by the\nCommonwealth of the securities from that date over the amount\nof the costs that would have been so incurred under the 1986\nArrangements.\n12(1) Each State and the Northern Territory shall repay to the\nCommonwealth all expenses incurred or payments made by the\n\nSchedule 1 Copy of the agreement\npage 20 Financial Agreement Act 1994 R1\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\nCommonwealth in the performance of this Agreement in\nrelation to the State and the Northern Territory, including the\nfollowing expenses and payments:-\n(a) Loan flotation charges;\n(b) Management charges;\n(c) Stamp duties on transfer of securities;\n(d) Commission on payment of interest;\n(e) Expenses incurred in the conversion, renewal, redemption\nor consolidation of loans; and\n(f) Exchange on transference of moneys.\n(2) Unless it is otherwise agreed between the Commonwealth and a\nState, the Commonwealth will not do anything in connection\nwith a loan of that State existing on the 30th June, 1927, or\nraised thereafter pursuant to the Principal Agreement, which, if\ndone by that State, would be a breach of any now existing\nagreement by that State with any Bank.\n(3) A certificate by the auditor-general of the Commonwealth\nstating the amount to be repaid by a State to the Commonwealth\nand the matter in respect of which the repayment is to be made\nshall, in the event of a dispute, be conclusive as to the amount\nand matter stated.\n13 Each State agrees with the Commonwealth that it will by the\nfaithful performance of its obligations under this Agreement\nindemnify the Commonwealth against all liabilities whatsoever\nin respect of the public debt of that State (other than the\nliabilities of the Commonwealth under this Agreement to pay\ninterest and to make sinking fund contributions or, after its\nestablishment, contributions to the Debt Retirement Reserve\nTrust Account), not falling payable under the Principal\nAgreement prior to the 1 July 1990 in respect of which this\nAgreement provides that sinking fund contributions or, after its\nestablishment, contributions to the Debt Retirement Reserve\nTrust Account shall be made.\n\nCopy of the agreement Schedule 1\nR1 Financial Agreement Act 1994 page 21\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n14 The Northern Territory agrees with the Commonwealth that it\nwill by the faithful performance of its obligations under this\nAgreement indemnify the Commonwealth against all liabilities\nwhatsoever in respect of all loans of that Territory for which this\nAgreement provides that, after its establishment, contributions\nto the Debt Retirement Reserve Trust Account shall be made.\n15 Separate accounts shall be kept by the Commonwealth for each\nState and, so far as relevant, for the Northern Territory in\nrespect of Debt, Interest, and Sinking Funds or, after its\nestablishment, contributions for the purposes of the Debt\nRetirement Reserve Trust Account.\n16(1) This Agreement rescinds the Principal Agreement, except as\nprovided by this clause, but with effect from the date on which\nthis Agreement, other than Clauses 7, 8, 10, 11 and 13, comes\ninto effect.\n(2) Sub-clauses 12A(1), (2) and (4) to (12), inclusive, of the\nPrincipal Agreement continue to operate until the date on which\nthe Debt Retirement Reserve Trust Account is established and,\nfor the purposes of their continued operation, references in sub-\nclause 12A(9) of the Principal Agreement to clauses 12B and\n12C are taken to be references to clauses 7 and 8, respectively,\nof this Agreement.\n(3) This Agreement rescinds, with effect from the date referred to in\nsub-clause (1), the provisions of the 1986 Arrangements in\nrelation to debt outstanding as at 1 July 1990, being debt arising\nfrom securities the subject of those Arrangements issued or\ncreated in respect of the Northern Territory by the\nCommonwealth.\nIN WITNESS WHEREOF this agreement has been signed for and on\nbehalf of the parties respectively as at the day and year first above written.\nSIGNED by the Honourable PAUL JOHN )\n\nSchedule 1 Copy of the agreement\npage 22 Financial Agreement Act 1994 R1\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\nKEATING, Prime Minister of the )\nCommonwealth of Australia )\nin the presence of ) Paul Keating\n)\nMichael Keating )\nSIGNED by the Honourable JOHN )\nJOSEPH FAHEY, Premier of the )\nState of New South Wales, )\nin the presence of ) John Fahey\n)\nR. Wilkins )\nSIGNED by the Honourable JEFFREY GIBB )\nKENNET, Premier of the State of Victoria, )\nin the presence of ) J. Kennett\n)\nKen Baxter )\nSIGNED by the Honourable WAYNE\nKEITH\n)\nGOSS, Premier of the State of Queensland, )\nin the presence of ) Wayne Goss\n)\nK. Rudd )\n\nCopy of the agreement Schedule 1\nR1 Financial Agreement Act 1994 page 23\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\nSIGNED by the Honourable RICHARD )\nFAIRFAX COURT, Premier of the )\nState of Western Australia, in the presence of ) Richard F. Court\n)\nDon Saunders )\nSIGNED by the Honourable DEAN CRAIG )\nBROWN, Premier of the State of South\nAustralia,\n)\nin the presence of ) Dean Brown\n)\nM. Schilling )\nSIGNED by the Honourable RAYMOND )\nJOHN GROOM, Premier of the State of )\nTasmania, in the presence of ) R. J. Groom\n)\nDan Norton )\nSIGNED by ROSEMARY FOLLETT, )\nChief Minister of the Australian Capital )\nTerritory, in the presence of ) Rosemary Follett\n)\nDavid Rosalky )\nSIGNED by the Honourable MARSHALL )\n\nSchedule 1 Copy of the agreement\npage 24 Financial Agreement Act 1994 R1\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\nBRUCE PERRON, Chief Minister of the )\nNorthern Territory, in the presence of ) M. Perron\n)\nNeil Conn )\n\nEndnotes\nAbout the endnotes 1\nR1 Financial Agreement Act 1994 page 25\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\nEndnotes\n1 About the endnotes\nAmending and modifying laws are annotated in the legislation history and\nthe amendment history. Current modifications are not included in the\nrepublished law but are set out in the endnotes.\nNot all editorial amendments made under the Legislation Act 2001, part 11.3\nare annotated in the amendment history. Full details of any amendments can\nbe obtained from the Parliamentary Counsel’s Office.\nUncommenced amending laws and expiries are listed in the legislation\nhistory and the amendment history. These details are underlined.\nUncommenced provisions and amendments are not included in the\nrepublished law but are set out in the last endnote.\nIf all the provisions of the law have been renumbered, a table of renumbered\nprovisions gives details of previous and current numbering.\nThe endnotes also include a table of earlier republications.\nIf the republished law includes penalties, current information about penalty\nunit values appears on the republication inside front cover.\n2 Abbreviation key\nam = amended ord = ordinance\namdt = amendment orig = original\nch = chapter p = page\ncl = clause par = paragraph\ndef = definition pres = present\ndict = dictionary prev = previous\ndisallowed = disallowed by the Legislative (prev...) = previously\nAssembly prov = provision\ndiv = division pt = part\nexp = expires/expired r = rule/subrule\nGaz = Gazette reg = regulation/subregulation\nhdg = heading renum = renumbered\nIA = Interpretation Act 1967 reloc = relocated\nins = inserted/added R[X] = Republication No\nLA = Legislation Act 2001 s = section/subsection\nLR = legislation register sch = schedule\nLRA = Legislation (Republication) Act 1996 sdiv = subdivision\nmod = modified / modification sub = substituted\nNo = number SL = Subordinate Law\nnum = numbered underlining = whole or part not commenced\no = order or to be expired\nom = omitted/repealed\n\nEndnotes\n3 Legislation history\npage 26 Financial Agreement Act 1994 R1\nAuthorised by the ACT Parliamentary Counsel—also accessible at www.legislation.act.gov.au\n3 Legislation history\nFinancial Agreement Act 1994 A1994-19\nnotified 20 May 1994 (Gaz 1994 No S87)\ncommenced 20 May 1994 (s 2)\nas amended by\nLegislation (Consequential Amendments) Act 2001 A2001-44\npt 143\nnotified 26 July 2001 (Gaz 2001 No 30)\ns 1, s 2 commenced 26 July 2001 (IA s 10B)\npt 143 commenced 12 September 2001 (s 2 and Gaz 2001\nNo S65)\n4 Amendment history\nApplication of Legislation Act\ns 2 sub A2001-44 amdt 1.1625\nCopy of the agreement\nsch 1 hdg (prev sch hdg) renum R1 LA\n\nAuthorised by the ACT Parliamentary Counsel—also accessible at\nwww.legislation.act.gov.au\n© Australian Capital Territory 2002","sortOrder":0}],"analysis":{"issue_detection":{"absurdities":[],"contradictions":[]},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":true,"description":"Yes. The 1994 Agreement substantially updates and broadens the mechanics of intergovernmental debt management compared with the original 1927 Principal Agreement. Concretely it: replaces the older Sinking Fund model with a Commonwealth‑held Debt Retirement Reserve Trust Account (Schedule 1, cl 6); sets new, quantified minimum contribution rates for States/NT (0.85%) and for the Commonwealth (0.28%) (cls 7 and 8); changes Loan Council composition to include the Territories and establishes the Council’s power to make resolutions (preamble and cl 4); and rescinds the Principal Agreement while preserving specified transitional provisions (cl 16). Those changes expand the Agreement from a purely debt‑taking/assumption framework into an ongoing, centrally administered debt‑retirement and coordination regime, shifting operational control and some fiscal mechanics to the Commonwealth while preserving payment obligations and indemnities for States and the Northern Territory (cls 6–14)."},"complexity_factors":["Short enabling Act but long substantive Schedule (the Agreement) with many operative clauses","Around 20+ defined terms in Schedule 1 clause 3 (e.g. bondholder, face value, gross cost, net public debt, securities)","Cross‑references to an external Principal Agreement (1927 and supplements) and to the 1986 Arrangements (multiple provisions rely on or preserve prior clauses) (Schedule 1, cls 3, 16 and preamble)","Phased and retroactive commencement rules (clauses 1(1), 2(2): certain clauses deemed to operate from 1 July 1990)","Nested conditional payment formulas for contributions that depend on whether the Debt Retirement Reserve Trust Account is established (Schedule 1, cl 7(2)–(3))","Multiple operational rules for the Loan Council (representation, deputies, written votes, quorum, convening meetings) with delegation and substitution mechanics (Schedule 1, cl 4(1)–(8))","Separate accounting rules for Trust Account balances, interest attribution and application to securities redemption (Schedule 1, cl 6(6)–(9))","Several reimbursement, indemnity and conclusive‑certificate provisions that create enforcement and evidentiary consequences (Schedule 1, cls 12(1), 12(3), 13–14)","Exceptions and preserved clauses from the Principal Agreement (Schedule 1, cl 16), producing conditional legal status for some earlier rules"],"plain_english_summary":"**What this law does (plain terms)**\n\n- The Financial Agreement Act 1994 (ACT) is a short Act whose main effect is to approve and adopt a multi‑party Financial Agreement (the text is in Schedule 1). The Agreement is made under section 105A of the Commonwealth Constitution and records how the Commonwealth, the six States, the Australian Capital Territory and the Northern Territory manage and retire State and Territory public debt.\n\n- Mechanically, the Act does three things:\n  - it approves the 1994 Financial Agreement (Schedule 1) so its terms bind the parties who adopt it (clause 4 of the Act and the Agreement itself);\n  - it excludes the operation of the Legislation Act 2001 for instruments made under the Agreement (s 2 of the Act), so some ordinary statutory procedural requirements do not apply to instruments made under the Agreement; and\n  - it sets out in the Agreement: governance for the Loan Council (representation and voting rules), creation of a Debt Retirement Reserve Trust Account to replace the old Sinking Fund, formulas and minimum rates for annual contributions by States/NT and by the Commonwealth, rules for using those funds to buy or redeem securities, reimbursement and indemnity obligations, and the rescission of the older Principal Agreement except where preserved (see Schedule 1 clauses 1, 2, 4–9, 12–16).\n\n**Who pays and who decides (straightforward)**\n\n- Who pays: States and the Northern Territory must make annual contributions to cover the redemption/repayment/purchase of their public securities (Schedule 1, cl 7 for States; cl 7(3) for the Northern Territory). Each contribution must be at least 0.85% of the State’s or Territory’s net public debt measured at the prior 30 June (cl 7(2) and 7(3)). The Commonwealth also pays a contribution equal to 0.28% of each jurisdiction’s net public debt (cl 8(2)). States/NT also must reimburse the Commonwealth for expenses the Commonwealth incurs in performing the Agreement (cl 12(1)).\n\n- Who decides: the Australian Loan Council continues under the Agreement (Schedule 1, cl 4). It comprises one Commonwealth representative (the Prime Minister or nominee) and one representative from each State (the Premier or nominee). The Commonwealth representative chairs the Loan Council (cl 4(1),(4)). The Loan Council may make rules of procedure and may make resolutions about borrowings, raisings and other financial arrangements by the Commonwealth, States, local bodies, or government‑owned entities (cl 4(8)–(9)). The Agreement records how meetings are convened, voting and quorum, deputies and written votes (cl 4(6)–(7)).\n\n**Why it matters (official claim and practical consequences)**\n\n- The Agreement, as expressed in the Schedule, is presented as a modernisation and replacement of the old Principal Agreement (1927 and later supplements). The stated purposes include: revising the Loan Council’s powers, updating restrictions and approvals for State borrowings, and providing a mechanism (the Debt Retirement Reserve Trust Account) to manage the retirement of State/Territory debt (preamble and cl 3–9, 16).\n\n- Practical consequences and trade‑offs:\n  - Centralisation of debt‑management functions: the Commonwealth holds and operates separate trust accounts for each State/NT and applies those balances to buy, redeem or repay that jurisdiction’s securities (cl 6(2)–(7)). That reduces the States’ direct control over a single pooled Sinking Fund and places administration with the Commonwealth public account machinery (cl 6(8)–(9)).\n  - Binding payment obligations on States/NT: States/NT must make regular monthly contributions and reimbursements (cl 7, cl 12). Those payments constrain their fiscal cash flows and create a recurring budget item (minimum 0.85% of net public debt for States/NT).\n  - Commonwealth fiscal exposure and offset: the Commonwealth continues to pay interest on taken‑over State debts (cl 5(1)), but it is also entitled to receive interest and contributions and to be reimbursed for expenses; it also contributes 0.28% of net public debt into the Trust Account (cl 8). This design shifts mechanics of debt servicing and retirement towards the Commonwealth while preserving cost recovery from States/NT via reimbursements and indemnities (cl 12–14).\n  - Loan Council has rule and resolution powers but the Agreement explicitly limits those to making resolutions (preamble and cl 4(9)). The Agreement structures representation and voting to keep the Commonwealth chairing the Council (cl 4(4)). The procedural detail (deputies, written votes, quorum) gives the Council operational discretion (cl 4(6)–(8)).\n\n**Costs, incentives and implementation issues (concrete mechanisms)**\n\n- Who bears costs: States and the Northern Territory carry direct cash costs through contributions (cl 7) and reimbursements for expenses (cl 12). The Commonwealth bears the operational responsibility of holding and applying the Trust Account balances and initially pays interest on taken‑over debts (cl 5, cl 6). The Commonwealth’s 0.28% contribution is an offset but smaller than the States’ minimum 0.85% requirement (cl 7(2), cl 8(2)).\n\n- Incentives and behavioural effects:\n  - States/NT gain an established mechanism to retire outstanding securities but are obliged to make minimum cash contributions. That creates a steady pressure to allocate budgetary resources to debt retirement rather than other uses.\n  - The Loan Council’s role in making resolutions about borrowings (cl 4(9)) creates an institutional forum where borrowings can be coordinated. The Agreement leaves room for the Loan Council to except particular borrowings from its own reach, which allows flexibility but also creates space for negotiation and potential administrative discretion.\n  - The Commonwealth’s chairing role and control of the Trust Account centralises information and operational control of debt retirement, which may affect bargaining power in intergovernmental negotiations.\n\n- Trade‑offs and risks:\n  - Implementation risk: the Agreement depends on the Commonwealth establishing and operating the Debt Retirement Reserve Trust Account (cl 1(2)(b), cl 6). Delays or failures in account administration would affect scheduled redemptions and accounting between parties.\n  - Compliance burden: the Agreement requires monthly instalments (or agreed alternatives) and accounting by the Commonwealth for separate accounts per jurisdiction (cl 6(2)–(5), cl 7(1)–(2)). States/NT must coordinate with Commonwealth mechanics for payments and reimbursements (cl 7(4), cl 12(1)).\n  - Concentrated vs diffuse impacts: the principal financial obligations fall on the States/NT (concentrated), while the Commonwealth carries administration and residual exposure (diffuse across national balance sheet). Potential for negotiation or lobbying is concentrated where specific exceptions or reimbursement rules are set (cl 12–13).\n\n**Effects on private enterprise and contract freedom**\n\n- The Agreement mostly regulates intergovernmental financial arrangements rather than private contracts. It does, however, affect private bondholders indirectly because it sets who repays or redeems securities and how redemptions are funded (see definitions of securities and net public debt in cl 3, and the Trust Account application rules in cl 6(6)–(7)). Clause 12(2) also prevents the Commonwealth taking actions in connection with a State loan that would breach the State’s agreements with banks unless the Commonwealth and the State agree otherwise — this preserves certain contract freedoms to third‑party lenders (cl 12(2)).\n\n**What changes mechanically compared with the old Principal Agreement**\n\n- The Agreement rescinds the Principal Agreement with specified exceptions and retains some provisions until the Debt Retirement Reserve Trust Account is established (cl 16). Key mechanical changes recorded in the Agreement include: replacement of the Sinking Fund with the Debt Retirement Reserve Trust Account (cl 1(2)(b), cl 6); a new schedule of contributions and minimum rates (cl 7–8); expanded representation to include the Territories on the Loan Council (preamble, cl 4); and the Loan Council’s power limited to making resolutions (preamble, cl 4(9)).\n\n**Where to look in the text for the concrete rules**\n\n- Loan Council membership and powers: Schedule 1, clause 4.\n- Trust Account and how funds are used: Schedule 1, clause 6.\n- State and Northern Territory contribution rules and minimum rates: Schedule 1, clause 7.\n- Commonwealth contribution rate: Schedule 1, clause 8.\n- Reimbursement of Commonwealth expenses and indemnities: Schedule 1, clauses 12–14.\n- Rescission of the older Principal Agreement and transitional provisions: Schedule 1, clause 16.\n\n(References in parentheses are to clauses in Schedule 1, which contains the full 1994 Financial Agreement.)"},"kimi_summary":{"content_quality":"ok","complexity_score":7,"scope_assessment":{"changed":false,"description":"The legislation remains focused on its original purpose of approving the 1994 Financial Agreement and establishing the framework for intergovernmental debt management. While it incorporates historical agreements by reference, this is necessary context rather than scope creep. The Act does not appear to have expanded beyond its core function of governing public debt arrangements between the Commonwealth, States and Territories."},"complexity_factors":["Extensive cross-referencing to previous agreements (1927 Principal Agreement, 1986 Arrangements, multiple Supplemental Agreements from 1928-1976)","Nested conditional logic with multiple time periods (pre- and post-establishment of Debt Retirement Reserve Trust Account)","Dual accounting systems operating simultaneously during transition periods","Complex defined terms including 'net public debt', 'face value', and 'securities' with currency conversion provisions","Intergovernmental financial mechanics involving interest calculations, sinking funds, and trust accounts","Clause 7 contains particularly dense arithmetic formulas for calculating state contributions with multiple variables","Rescission of prior agreements with selective preservation of certain clauses (clause 16)","Different rules applying to States versus Northern Territory in several clauses"],"plain_english_summary":"This Act approves a 1994 financial agreement between the Commonwealth, six States and two Territories to modernise how governments manage and retire debt. It replaces older arrangements, brings the ACT and Northern Territory into the Loan Council (as a recommending body), creates a Debt Retirement Reserve Trust Account, sets required annual contributions from states, the NT and the Commonwealth, and limits states’ direct borrowing without Commonwealth involvement.\n\nIt matters because it coordinates borrowing, protects national creditworthiness and formalises territory participation."}},"importantCases":[],"_links":{"self":"/api/acts/financial-agreement-act-1994","history":"/api/acts/financial-agreement-act-1994/history","analysis":"/api/acts/financial-agreement-act-1994/analysis","conflicts":"/api/acts/financial-agreement-act-1994/conflicts","importantCases":"/api/acts/financial-agreement-act-1994/important-cases","documents":"/api/acts/financial-agreement-act-1994/documents"}}