{"id":"financial-agreement-between-the-commonwealth-states-and-territories-approval-act-1994","name":"Financial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994","slug":"financial-agreement-between-the-commonwealth-states-and-territories-approval-act-1994","collection":"act","jurisdiction":"nt","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":30100,"registerId":"nt-financial-agreement-between-the-commonwealth-states-and-territories-approval-act-1994-current","compilationNumber":null,"startDate":"2026-04-01","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Financial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994","content":"NORTHERN TERRITORY OF AUSTRALIA\nFINANCIAL AGREEMENT BETWEEN THE COMMONWEALTH, STATES\nAND TERRITORIES (APPROVAL) ACT 1994\nAs in force at 20 June 2018\nTable of provisions\n1 Short title ......................................................................................... 1\n2 Approval of agreement .................................................................... 1\nSchedule\nENDNOTES\n\n\n\nNORTHERN TERRITORY OF AUSTRALIA\n____________________\nAs in force at 20 June 2018\n____________________\nFINANCIAL AGREEMENT BETWEEN THE COMMONWEALTH, STATES\nAND TERRITORIES (APPROVAL) ACT 1994\nAn Act to approve an agreement between the Commonwealth, the\nStates, the Territory and the Australian Capital Territory with respect to\npublic debts\n1 Short title\nThis Act may be cited as the Financial Agreement Between the\nCommonwealth, States and Territories (Approval) Act 1994.\n2 Approval of agreement\nThe agreement set out in the Schedule is approved.\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n2\nSchedule\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(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 Northern\nTerritory of Australia in respect of which for the time being the Agreement is in\nforce being in this Agreement referred to as a \"State\" and all of those parties\nas the context so permits or requires being in this Agreement referred to as\n\"the States\").\nWHEREAS:\n(A) an Agreement (in this Agreement called \"the Original Agreement\") was\nmade the 12th December 1927 between the parties to this Agreement\nwith respect to the public debts of the States;\n(B) the provisions of the Original Agreement (which, as varied by the\nSupplemental Agreements, is in this Agreement called the \"Principal\nAgreement\") have been varied by the following agreements made in\npursuance of section 105A of the Constitution of the Commonwealth of\nAustralia:\n(i) Agreement made the 1st July 1928, a copy of which is\nset out in the Schedule to the Tasmania Sinking Fund\nAgreement Act 1928;\n(ii) Agreement made the 21st July 1931, a copy of which is\nset out in the Schedule to the Debt Conversion\nAgreement Act 1931;\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n3\n(iii) Agreement made the 22nd October 1931, a copy of\nwhich is set out in the Schedule to the Debt Conversion\nAgreement Act (No. 2) 1931;\n(iv) Agreement made the 3rd July 1934, a copy of which is\nset out in the Schedule to the Soldier Settlement Loans\n(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 1944;\n(vi) Agreement made the 11th February 1966, a copy of\nwhich is set out in the Schedule to the Financial\nAgreement Act 1966; and\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 as \"the\nSupplemental Agreements\");\n(C) the parties, other than those of the eighth and ninth parts, have agreed\nthat in pursuance of section 105A of the Constitution provision as\nspecified in this Agreement different from that in the Principal\nAgreement should be made as to;\n(i) the powers of the Loan Council;\n(ii) the restriction on a State from borrowing by the issue of\nsecurities in its own name in domestic and overseas\nmarkets;\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 of\nthe 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 only;\nand\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n4\n(iii) the Northern Territory and the Commonwealth make into\nthe Debt Retirement Reserve Trust Account the\npayments that they would otherwise have made under\nthe 1986 Arrangements;\nNOW IT IS HEREBY AGREED as follows:\n1(1) This Agreement, other than this clause, shall have no force or effect\nand shall not be binding upon any party until, in respect of each party,\neither:\n(a) it is signed with the prior authority of the Parliament or, in the case\nof each Territory, the Legislative Assembly, of that party; or\n(b) after having been signed, it is approved by the Parliament or, in\nthe case of each Territory, the Legislative Assembly, of that party.\n(2) The Commonwealth will take, as soon as possible, all practicable steps\nto seek the enactment of legislation relating to:\n(a) the cessation of the National Debt Sinking Fund created by the\nNational Debt Sinking Fund Act 1966;\n(b) the establishment of the Debt Retirement Reserve Trust Account;\nand\n(c) thereupon, the payment from the National Debt Sinking Fund or,\nin the case of the Northern Territory, the Northern Territory Debt\nSinking Fund, into the Debt Retirement Reserve Trust Account,\nbut so that the payment is made to the credit of the accounts\nestablished in respect of the relevant States or the Northern\nTerritory, as the case may be, of the moneys then standing to the\ncredit of the accounts in the National Debt Sinking Fund or the\nNorthern Territory Debt Sinking Fund, respectively, including any\nlater amounts which, but for the abolition of the National Debt\nSinking Fund or the Northern Territory Debt Sinking Fund, would,\nwhen received, have been paid into the National Debt Sinking\nFund or the Northern Territory Debt Sinking Fund.\n2(1) This Agreement, as varied from time to time, shall be known as\n\"the 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 and\nfrom 1 July 1990.\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n5\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, the\nprincipal amount, excluding any amount payable by way of\npremium, remaining to be repaid in respect of the securities;\n(b) in relation to securities repayable in an overseas currency, the\nequivalent in Australian currency of the principal amount,\nexcluding any amount payable by way of premium, remaining\nto be repaid in respect of the securities, converted at the\nReserve Bank of Australia selling rate to the Commonwealth\nGovernment at the time of conversion or at such rate as is\nagreed between the Commonwealth and the States;\ngross cost, in relation to the purchase of securities, means the\namount actually paid for the securities, including interest, brokerage\nand 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 credit\nof the State:\n(A) in relation to the period until the establishment of the\nDebt Retirement Reserve Trust Account, in the Sinking\nFund; and\n(B) thereafter, in the Debt Retirement Reserve Trust\nAccount; and\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 Northern\nTerritory Debt Sinking Fund; and\n(D) thereafter, in the Debt Retirement Reserve Trust\nAccount;\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n6\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 face\nvalue of the securities issued or created in respect of the\nNorthern Territory in accordance with the 1986 Arrangements\nthat have not been purchased, redeemed or otherwise repaid\nor in respect of which the Northern Territory has not otherwise\nbeen freed and discharged from liability;\nsecurities means:\n(a) where the context involves a State;\nInscribed Stock and Bonds\nInstalment Stock\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 the\nCommonwealth under the Principal Agreement or issued or\ncreated in respect of a State; and\n(b) where the context involves the Northern Territory;\nInscribed Stock and Bonds\nRegistered Stock\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n7\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 continued\nin existence by the National Debt Sinking Fund Act 1966;\nthe Loan Council means the Australian Loan Council continued in\nexistence pursuant to this Agreement;\nthe Sinking Fund means the National Debt Sinking Fund created\nby the National Debt Sinking Fund Act 1966; and\nthe 1986 Arrangements means the Arrangements entered into\nbetween the Commonwealth of Australia and the Northern Territory\ndated the 26th May 1986 under which, among other things, there\nwas created the Northern Territory Debt Sinking Fund within the\nCommonwealth Trust Fund.\n(2) In this Agreement:\n(a) a reference to a year is, unless the contrary intention appears, a\nreference to a financial year commencing on a 1st July;\n(b) the expression \"in writing\" includes any mode of representing or\nreproducing words and figures in a written form; and\n(c) except where inconsistent with the context, words in the singular\ninclude the plural and words in the plural include the singular.\n4(1) The Australian Loan Council created under the Principal Agreement is\ncontinued in existence hereunder but so that it shall consist of one\nrepresentative of the Commonwealth who shall be:\n(a) the Prime Minister of the Commonwealth; or\n(b) a Minister or other person nominated in writing by the Prime\nMinister,\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 Premier of\nthat State,\nprovided that the nomination of the Minister shall be deemed to include\nanother Minister of the Commonwealth or of the State, as the case may\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n8\nbe, who is for the time being acting for the Minister nominated and\nreferences in this clause to a representative shall be read so as to\ninclude a Minister who is so acting.\n(2) Any nomination of a substitute representative of the Commonwealth or\nof a State shall be tabled at the meeting of the Loan Council next\nsucceeding the nomination.\n(3) The representative of the Commonwealth on the Loan Council shall\nhold office during the pleasure of the Prime Minister of the\nCommonwealth and a representative of a State shall hold office during\nthe pleasure of his or her Premier.\n(4) The representative of the Commonwealth shall be the Chairman of the\nLoan Council.\n(5) A decision in which all the representatives for the time being of the\nLoan Council concur shall be not affected by any vacancy then existing\namong the representatives.\n(6) A meeting of the Loan Council may at any time be convened by the\nrepresentative of the Commonwealth, and shall be so convened upon\nthe request of at least four State representatives.\n(7) A majority of the representatives of the Loan Council shall constitute a\nquorum of the Loan Council for the exercise of its powers at any\nmeeting, provided that:\n(a) a representative may at any time appoint in writing a deputy to act\nin his absence, and any deputy so appointed may in the absence\nof the representative exercise all the powers and functions of the\nrepresentative and his or her presence shall be deemed the\npresence of the representative; and\n(b) an absent representative who has not appointed a deputy may\nvote by letter, telegram, or by facsimile and in such case that\nrepresentative shall be counted as being present in relation only\nto the questions on which he or she has voted.\n(8) The Loan Council may make rules of procedure including rules relating\nto places, times, and notices of meetings, and conduct of business at\nmeetings, including voting on a resolution and from time to time may\nalter such rules.\n(9) The Loan Council may make resolutions, which are not to operate as\nthey would have operated had clause 3(15) of the original Agreement\nnot been rescinded, in relation to:\n(a) borrowings;\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n9\n(b) raisings; and\n(c) other financial arrangements\nby the Commonwealth, a State, a local governing body or any entity\nowned or controlled wholly or as to a major part by any of them, save\nfor any of the foregoing excepted from time to time by the Loan\nCouncil.\n(10) In this clause the expressions \"Prime Minister\" and \"Premier\" include\nthe persons for the time being respectively acting as such.\n5(1) Subject to this clause the Commonwealth will continue to pay to\nbondholders from time to time interest payable on the Public Debts of\nthe States taken over by the Commonwealth under the Principal\nAgreement other than debts due by the States to the Commonwealth.\n(2) Each State shall continue to pay in each year to the Commonwealth, as\nit falls due, the whole of the interest on any debt included in the public\ndebt of that State taken over by the Commonwealth under the Principal\nAgreement, and on any moneys borrowed by the Commonwealth\nunder the Principal Agreement 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 moneys\nborrowed by the Commonwealth on behalf of the Northern Territory\nunder the 1986 Arrangements then unpaid.\n(4) The method by which payments shall be made by a State under sub-\nclause (2) or the Northern Territory under sub-clause (3) of this clause\nshall be arranged from time to time between the Commonwealth and,\nrespectively, that State or the Northern Territory.\n(5) The rate of interest payable under sub-clause (2) of this clause in\nrespect of moneys borrowed by the Commonwealth on behalf of a\nState shall be the full rate of interest payable by the Commonwealth in\nrespect of the loan by which such moneys were borrowed or such other\nrate of interest as may be payable by the State to the Commonwealth\nunder any agreement made or to be made between the\nCommonwealth and that State in respect of such moneys and such\ninterest shall be payable by that State for the full term of that loan.\n(6) The rate of interest payable under sub-clause (3) of this clause in\nrespect of moneys borrowed by the Commonwealth on behalf of the\nNorthern Territory shall be the full rate of interest payable by the\nCommonwealth in respect of the loan by which such moneys were\nborrowed or such other rate of interest as may be payable by the\nNorthern Territory to the Commonwealth under any agreement made or\nto be made between the Commonwealth and the Northern Territory in\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n10\nrespect of such moneys and such interest shall be payable by the\nNorthern Territory for the full term 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 account in\nthe Debt Retirement Reserve Trust Account in respect of each State.\n(3) The Commonwealth shall establish and maintain a separate account in\nthe Debt Retirement Reserve Trust Account in respect of the Northern\nTerritory.\n(4) There shall be paid by the Commonwealth into each of those accounts\nin the Debt Retirement Reserve Trust Account established under\nsub-clause 6(2):\n(a) amounts equal to the amounts received from the State under\nsub-clause 7(2); and\n(b) amounts being the contributions by the Commonwealth under\nclause 8.\n(5) There shall be paid by the Commonwealth into the accounts in the\nDebt Retirement Reserve Trust Account established under\nsub-clause 6(3):\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 under\nclause 8.\n(6) Moneys standing to the credit of an account established in respect of a\nState in the Debt Retirement Reserve Trust Account shall be applied by\nthe Commonwealth in connection with the purchase, redemption,\nincluding redemption on conversion, and repayment of securities of that\nState. The gross cost, in the case of purchase, or the cost at face\nvalue, in the case of redemption or repayment, shall be charged to the\naccount established in respect of that State in the Debt Retirement\nReserve Trust Account.\n(7) Moneys standing to the credit of the account established in respect of\nthe Northern Territory 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 the Northern Territory. The gross cost, in the\ncase of purchase, or the cost at face value, in the case of redemption\nor repayment, shall be charged to the account established in respect of\nthat Territory in the Debt Retirement Reserve Trust Account.\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n11\n(8) Moneys standing to the credit of an account established in respect of a\nState in the Debt Retirement Reserve Trust Account will be held within\nthe Commonwealth Public Account established pursuant to\nparagraph 21(1)(a) of the Audit Act 1901 or that provision as amended,\nmodified or re-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 established in\nrespect of a State within the Debt Retirement Reserve Trust Account\nshall be added to the moneys standing to the credit of that account.\n(9) Moneys standing to the credit of the account established in respect of\nthe Northern Territory in the Debt Retirement Reserve Trust Account\nwill be held within the Commonwealth Public Account established\npursuant to paragraph 21(1)(a) of the Audit Act 1901 or that provision\nas amended, modified or re-enacted from time to time. An amount\nequal to interest earned on that part of the balances in the\nCommonwealth Public Account attributable to the credit balance in the\naccount established 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 purchased,\nredeemed or repaid, the securities shall be deemed to have been\ncancelled on the date of the purchase, redemption or repayment.\n7(1) Each State shall, in respect of the public debt of the State, pay by equal\nmonthly instalments during each year commencing on 1 July 1990 or in\nsuch other amounts as are determined by agreement between the\nCommonwealth and the relevant State a contribution calculated in\nrespect of that year as provided in this clause.\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 establishment of\nthe Debt Retirement Reserve Trust Account, to the Commission\nfor credit to the account of the 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) of\nthe Principal Agreement, preserved by sub-clause 16(2),\nin respect of the relevant year or, where the Debt\nRetirement Reserve Trust Account has operated for only\npart of the year, the other part of that year;\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n12\n(ii) contributions by the Commonwealth pursuant to clause 8\nas it relates to the State in respect of the relevant year\nor, where the Debt Retirement Reserve Trust Account\nhas operated for only part of the year, the other part of\nthat 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 only\npart 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 6(8)\nin respect of the relevant year, or where the Debt\nRetirement Reserve Trust Account has operated for only\npart of the year, the interest referred to in sub-clause\n6(8) for that part of that year;\n(ii) contributions by the Commonwealth pursuant to clause 8\nin respect of the relevant year or where the Debt\nRetirement Reserve Trust Account has operated for only\npart of the year, the contribution made into the Debt\nRetirement Reserve Trust Account for that part of the\nyear; and\n(iii) the moneys standing at the commencement of the\nrelevant year to the credit of an account in respect of the\nState in the Debt Retirement Reserve Trust Account,\nis equal to the total of those parts of its public debt which falls to be\nredeemed or is repaid or purchased in that year, or any greater amount\nwhich the State elects to have redeemed, repaid or purchased in that\nyear, but so that in any event that contribution shall not be less than an\namount equal to 0.85 per centum of the net public debt of the State as\nat the 30th June immediately preceding the year in which the\ncontribution is payable.\n(3) The Northern Territory shall pay a contribution in respect of each year:\n(a) in respect of the period from 1 July 1990 until the establishment of\nthe Debt Retirement Reserve Trust Account, to the\nCommonwealth for credit to the Northern Territory Debt Sinking\nFund; 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\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n13\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 relevant\nyear or, where the Debt Retirement Reserve Trust\nAccount has operated for only part of the year, the other\npart of that year;\n(ii) contributions by the Commonwealth pursuant to clause 8\nas it relates to the Territory in respect of the relevant\nyear or, where the Debt Retirement Reserve Trust\nAccount has operated for only part of the year, the other\npart of that year; and\n(iii) the moneys standing to the credit of the Northern\nTerritory Debt Sinking Fund as at the commencement of\nthat year including where the Debt Retirement Reserve\nTrust Account has operated for only 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 6(9)\nin respect of the relevant year or, where the Debt\nRetirement Reserve Trust Account has operated for only\npart of the year, the interest referred to in sub-clause\n6(9) for that part of that year;\n(ii) contributions by the Commonwealth pursuant to clause 8\nin respect of the relevant year or, where the Debt\nRetirement Reserve Trust Account has operated for only\npart of the year, the contribution made into the Debt\nRetirement Reserve Trust Account for that part of the\nyear; 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 Reserve\nTrust Account,\nis equal to the total of those parts of its public debt which falls to be\nredeemed or is repaid or purchased in that year or any greater amount\nwhich the Northern Territory elects to have redeemed, repaid or\npurchased in that year, but so that in any event that contribution shall\nnot be less than an amount equal to 0.85 per centum of the net public\ndebt of the Northern Territory as at the 30th June immediately\npreceding the year in which the contribution is payable.\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n14\n8(1) The Commonwealth shall, in respect of the public debt of each State\nand of the Northern Territory, pay for credit to the account of the State\nin the National Debt Sinking Fund and that Territory in the Northern\nTerritory Debt Sinking Fund by equal monthly instalments during each\nyear commencing 1 July 1990 or in such other amounts as are\ndetermined by agreement between the Commonwealth and the\nrelevant State or the Commonwealth and the Northern Territory, as the\ncase may be, a contribution calculated in respect of that year as\nprovided in this clause.\n(2) The Commonwealth shall pay a contribution in respect of each of those\nyears in relation to the public debt of a State and in relation to the\npublic debt of the Northern Territory that is equivalent to 0.28 per\ncentum of the net public debt of the State or the Northern Territory, as\nthe case may be, at the 30th June immediately preceding the year in\nwhich the contribution is payable.\n(3) On and from the establishment of the Debt Retirement Reserve Trust\nAccount the contribution payable by the Commonwealth under this\nclause in respect of the States and the Northern Territory shall be paid\ninto that Account.\n9 The contributions payable after the establishment of the Debt\nRetirement Reserve Trust Account by the Northern Territory under\nsub-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 Reserve Trust\nAccount; and\n(b) in respect of each succeeding year,\nof equal monthly instalments during the period referred to in paragraph\n(a) or during the year referred to in paragraph (b) or of such other\namounts as are determined by agreement between the Commonwealth\nand the Northern Territory.\n10 The Commonwealth shall reimburse, in such amounts and at such\ntimes as agreed between the Commonwealth and the State, each State\nfor the excess, as assessed by agreement between the\nCommonwealth and the State, of the amount of the costs to the State\nincurred from 1 July 1990 in respect of the redemption, repayment and\npurchase, by the Commonwealth of the securities from that date over\nthe amount of the costs that would have been so incurred under the\nPrincipal Agreement.\n11 The Commonwealth shall reimburse, in such amounts and at such\ntimes as agreed between the Commonwealth and the Northern\nTerritory, that Territory for the excess, as assessed by agreement\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n15\nbetween the Commonwealth and that Territory, of the amount of the\ncosts to that Territory incurred from 1 July 1990 in respect of the\nredemption, repayment and purchase, by the Commonwealth of the\nsecurities from that date over the amount of the costs that would have\nbeen so incurred under the 1986 Arrangements.\n12(1) Each State and the Northern Territory shall repay to the\nCommonwealth all expenses incurred or payments made by the\nCommonwealth in the performance of this Agreement in relation to the\nState and the Northern Territory, including the following expenses and\npayments:\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 or\nconsolidation of loans; and\n(f) Exchange on transference of moneys.\n(2) Unless it is otherwise agreed between the Commonwealth and a State,\nthe Commonwealth will not do anything in connection with a loan of\nthat State existing on the 30th June, 1927, or raised thereafter pursuant\nto the Principal Agreement, which, if done by that State, would be a\nbreach of any now existing agreement by that State with any Bank.\n(3) A certificate by the Auditor-General of the Commonwealth stating the\namount to be repaid by a State to the Commonwealth and the matter in\nrespect of which the repayment is to be made shall, in the event of a\ndispute, be conclusive as to the amount and matter stated.\n13 Each State agrees with the Commonwealth that it will by the faithful\nperformance of its obligations under this Agreement indemnify the\nCommonwealth against all liabilities whatsoever in respect of the public\ndebt of that State (other than the liabilities of the Commonwealth under\nthis Agreement to pay interest and to make sinking fund contributions\nor, after its establishment, contributions to the Debt Retirement\nReserve Trust Account), not falling payable under the Principal\nAgreement prior to the 1 July 1990 in respect of which this Agreement\nprovides that sinking fund contributions or, after its establishment,\ncontributions to the Debt Retirement Reserve Trust Account shall be\nmade.\n14 The Northern Territory agrees with the Commonwealth that it will by the\nfaithful performance of its obligations under this Agreement indemnify\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n16\nthe Commonwealth against all liabilities whatsoever in respect of all\nloans of that Territory for which this Agreement provides that, after its\nestablishment, contributions to the Debt Retirement Reserve Trust\nAccount shall be made.\n15 Separate accounts shall be kept by the Commonwealth for each State\nand, so far as relevant, for the Northern Territory in respect of Debt,\nInterest, and Sinking Funds or, after its establishment, contributions for\nthe purposes of the Debt Retirement Reserve Trust Account.\n16(1) This Agreement rescinds the Principal Agreement, except as provided\nby this clause, but with effect from the date on which this Agreement,\nother than Clauses 7, 8, 10, 11 and 13, comes into effect.\n(2) Sub-clauses 12A(1), (2) and (4) to (12), inclusive, of the Principal\nAgreement continue to operate until the date on which the Debt\nRetirement Reserve Trust Account is established and, for the purposes\nof their continued operation, references in sub-clause 12A(9) of the\nPrincipal Agreement to clauses 12B and 12C are taken to be\nreferences to clauses 7 and 8, respectively, of 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 relation to\ndebt outstanding as at 1 July 1990, being debt arising from securities\nthe subject of those Arrangements issued or created in respect of the\nNorthern Territory by the Commonwealth.\nIN WITNESS WHEREOF this agreement has been signed for and on behalf of\nthe parties respectively as at the day and year first above written.\nSIGNED by the Honourable PAUL JOHN * Signature omitted\nKEATING, Prime Minister of the\nCommonwealth of Australia,\nin the presence of Dr Michael Keating\nSIGNED by the Honourable JOHN * Signature omitted\nJOSEPH FAHEY, Premier of the State of\nNew South Wales, in the presence of Mr\nRoger Wilkins\nSIGNED by the Honourable JEFFREY * Signature omitted\nGIBB KENNETT, Premier of the State\nof Victoria, in the presence of\nMr Ken Baxter\nSIGNED by the Honourable WAYNE * Signature omitted\nKEITH GOSS, Premier of the State of\nQueensland, in the presence of\nMr Kevin Rudd\n\nSchedule\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n17\nSIGNED by the Honourable RICHARD * Signature omitted\nFAIRFAX COURT, Premier of the State of\nWestern Australia, in the presence of\nMr Don Saunders\nSIGNED by the Honourable DEAN CRAIG * Signature omitted\nBROWN, Premier of the State of South\nAustralia, in the presence of\nMr Michael Schilling\nSIGNED by the Honourable RAYMOND * Signature omitted\nJOHN GROOM, Premier of the State of\nTasmania, in the presence of\nDr Dan Norton\nSIGNED by ROSEMARY FOLLETT, * Signature omitted\nChief Minister of the Australian Capital\nTerritory, in the presence of\nDr David Rosalky\nSIGNED by the Honourable MARSHALL * Signature omitted\nBRUCE PERRON, Chief Minister of the\nNorthern Territory, in the presence of\nDr Neil Conn\n\nENDNOTES\nFinancial Agreement Between the Commonwealth, States and Territories (Approval) Act 1994\n18\nENDNOTES\n1 KEY\nKey to abbreviations\namd = amended od = order\napp = appendix om = omitted\nbl = by-law pt = Part\nch = Chapter r = regulation/rule\ncl = clause rem = remainder\ndiv = Division renum = renumbered\nexp = expires/expired rep = repealed\nf = forms s = section\nGaz = Gazette sch = Schedule\nhdg = heading sdiv = Subdivision\nins = inserted SL = Subordinate Legislation\nlt = long title sub = substituted\nnc = not commenced\n2 LIST OF LEGISLATION\nFinancial Agreement Between the Commonwealth, States and Territories (Approval)\nAct 1994 (Act No. 57, 1994)\nAssent date 4 October 1994\nCommenced 4 October 1994\nStatute Law Revision Act 2018 (Act No. 10, 2018)\nAssent date 23 May 2018\nCommenced 20 June 2018 (Gaz S41, 20 June 2018)\n3 GENERAL AMENDMENTS\nGeneral amendments of a formal nature (which are not referred to in the table\nof amendments to this reprint) are made by the Interpretation Legislation\nAmendment Act 2018 (Act No. 22, 2018) to: s 1.\n4 LIST OF AMENDMENTS\ns 2 amd No. 10, 2018, s 6","sortOrder":0}],"analysis":{"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":"This Agreement revises and replaces the earlier Principal Agreement (dating back to 1927 and varied by supplements). Compared with the original framework it (a) brings the Territories (ACT and NT) formally into Loan Council representation, (b) changes the Loan Council’s formal legal role to making resolutions about borrowings and related matters (cl.4(9)), and (c) replaces the National Debt Sinking Fund model with a Debt Retirement Reserve Trust Account held within the Commonwealth Public Account while preserving separate sub‑accounts for each jurisdiction (cl.6). It also fixes new numeric contribution rules (States/NT minimum 0.85% floor; Commonwealth 0.28%) and contains transitional and rescission mechanics that explicitly unwind parts of the Principal Agreement (cl.7–8, cl.16). Those changes broaden and modernise the operational scope of the intergovernmental debt framework beyond the original 1927 arrangements rather than merely re‑enacting them."},"complexity_factors":["Schedule contains around 15 defined terms in the interpretation clause (cl.3)","Frequent cross‑references to a prior Principal Agreement and the 1986 Arrangements (multiple clauses, incl. recitals and cl.16)","Transitional and retrospective clauses (cl.1(2), cl.2(2), cl.16(1)–(3))","Nested calculations and floors for contributions (formulas and minima in cl.7(2) and cl.7(3))","Separate but parallel regimes for States and the Northern Territory (duplicated clause structure in cl.6–9)","Multiple administrative mechanisms delegated to other actors or later agreement (Commonwealth/State operational agreements, Auditor‑General certificates)","Several operational powers left to Loan Council rules (procedural delegation in cl.4(8))","Detailed account mechanics combined with accounting references to the Commonwealth Public Account (cl.6(8)–(9))","Conclusive certificate mechanism for disputes (cl.12(3))","Rescission of a long prior treaty‑like agreement subject to specific exceptions (cl.16)"],"plain_english_summary":"This Act approves a Financial Agreement between the Commonwealth, the six States, the ACT and the NT that governs how State/Territory public debts are managed. It continues and re‑specifies the Loan Council, creates a Commonwealth‑held Debt Retirement Reserve Trust Account with per‑jurisdiction subaccounts, and fixes contribution rules (States/NT minimum 0.85% of net public debt; Commonwealth 0.28%).\n\nIt leaves States/NT liable for interest and administration costs, affects treasuries and bondholders, and centralises operational custody and coordination of borrowing and debt retirement."},"issue_detection":{"absurdities":[],"contradictions":[]},"kimi_summary":{"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":false,"description":"The legislation remains tightly focused on its original purpose: approving the 1994 Financial Agreement that updates debt management arrangements between the Commonwealth, States and Territories. While it incorporates by reference nearly 70 years of prior agreements (1927-1986), this is necessary context rather than scope creep. The core function—approving the specific agreement signed 25 February 1994—has not expanded beyond the original intent."},"complexity_factors":["Extensive cross-referencing to historical agreements dating back to 1927, 1931, 1966, 1976, and 1986 arrangements","Dual accounting systems operating during transition period (old Sinking Fund vs new Debt Retirement Reserve Trust Account)","Nested conditional clauses for calculating contributions (e.g., clause 7 with multiple sub-paragraphs (a)(i)-(iii) and (b)(i)-(iii))","Multiple defined terms (12+ definitions in clause 3 including 'net public debt', 'securities', 'face value' with currency conversion rules)","Bifurcated treatment of States vs Northern Territory throughout (parallel but slightly different clauses for NT)","Retrospective operation clauses (deemed commencement from 1 July 1990 for certain provisions)","Rescission of prior agreements with savings provisions (clause 16 preserving specific sub-clauses of old agreement)","Mathematical formulas for contribution calculations (0.85% and 0.28% percentages with base date calculations)"],"plain_english_summary":"**What this law does:**\n\nThis is a Northern Territory law that rubber-stamps a 1994 deal between the Commonwealth, all six States, and both Territories about how they manage public debt (money governments borrow).\n\n**Key points:**\n\n* **The backstory:** Since 1927, there have been agreements about State debts. The Commonwealth took over State debts after Federation and has been managing them ever since. This 1994 agreement updates those old arrangements.\n\n* **What changes:**\n  * **The Loan Council:** A body where the Commonwealth and States coordinate borrowing gets updated rules. The ACT and Northern Territory now get a seat at the table (though they only get full voting rights on certain matters).\n  * **New piggy bank:** The old \"National Debt Sinking Fund\" (a savings account for paying off debt) gets replaced with a new \"Debt Retirement Reserve Trust Account.\"\n  * **Payment rules:** States and the NT must make regular payments into this account to gradually pay off their debts. The minimum payment is 0.85% of their net debt each year. The Commonwealth chips in 0.28%.\n  * **Who pays interest:** The Commonwealth continues to pay interest to bondholders (people who lent money), but the States and NT must reimburse the Commonwealth for those payments.\n\n* **Who it affects:**\n  * The Northern Territory Government (this is the NT's approval law)\n  * All Australian States and the Commonwealth (they signed the deal)\n  * Anyone holding government bonds (the rules about repayment affect them)\n\n* **Why it matters:**\n  This keeps the federation's debt management system ticking over. It ensures States can't go on independent borrowing sprees without coordination, and it makes sure debts get paid off in an orderly way. Without this agreement, the old 1927 system would have become unworkable.\n\n**In short:** It's the legislative approval for a handshake deal that modernises how Australian governments manage and pay off their collective debts, giving Territories more say and updating the banking arrangements."}},"importantCases":[],"_links":{"self":"/api/acts/financial-agreement-between-the-commonwealth-states-and-territories-approval-act-1994","history":"/api/acts/financial-agreement-between-the-commonwealth-states-and-territories-approval-act-1994/history","analysis":"/api/acts/financial-agreement-between-the-commonwealth-states-and-territories-approval-act-1994/analysis","conflicts":"/api/acts/financial-agreement-between-the-commonwealth-states-and-territories-approval-act-1994/conflicts","importantCases":"/api/acts/financial-agreement-between-the-commonwealth-states-and-territories-approval-act-1994/important-cases","documents":"/api/acts/financial-agreement-between-the-commonwealth-states-and-territories-approval-act-1994/documents"}}