{"id":"nsw:act-2012-058","name":"Fiscal Responsibility Act 2012","slug":"fiscal-responsibility-act-2012","collection":"act","jurisdiction":"nsw","status":"in_force","isInForce":true,"actNumber":"58 of 2012","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":30243,"registerId":"nsw-act-2012-058-current","compilationNumber":null,"startDate":"2026-04-01","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Part 1","sectionType":"part","heading":"Preliminary","content":"# Part 1 Preliminary\n\nPart 1 Preliminary","sortOrder":0},{"sectionNumber":"1","sectionType":"section","heading":"Name of Act","content":"#### 1 Name of Act\n\n1 Name of Act\n\n> This Act is the [Fiscal Responsibility Act 2012](/view/html/inforce/current/act-2012-058).","sortOrder":1},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n2 Commencement\n\n> This Act commences on the date of assent to this Act.","sortOrder":2},{"sectionNumber":"3","sectionType":"section","heading":"Object of Act","content":"#### 3 Object of Act\n\n3 Object of Act\n\n> > (1) The object of this Act is to maintain the AAA credit rating of the State of New South Wales.\n> \n> > (2) The purpose of that object is—\n> > \n> > > (a) to limit the cost of government borrowing, and\n> > \n> > > (b) to enable access to the broadest possible investor base for government borrowing, and\n> > \n> > > (c) to maintain business and consumer confidence, thereby sustaining economic activity and employment in the State.","sortOrder":3},{"sectionNumber":"4","sectionType":"section","heading":"Application of Act","content":"#### 4 Application of Act\n\n4 Application of Act\n\n> This Act applies to and in respect of the State budget.","sortOrder":4},{"sectionNumber":"5","sectionType":"section","heading":"Definitions","content":"#### 5 Definitions\n\n5 Definitions\n\n> > (1) In this Act—\n> > \n> > budget papers means the budget papers of the Government tabled in Parliament in connection with the annual Appropriation Bills.\n> > \n> > long-term average general government revenue growth of the State means the average annual growth rate of general government revenue over a sufficiently long previous period to smooth out the influence of transient factors. The regulations may prescribe the relevant rate.\n> > \n> > long-term fiscal gap means the change in the primary balance of the general government sector as a share of gross state product, calculated on the basis of no policy changes—\n> > \n> > > (a) from 2009–10 to 2050–51, or\n> > \n> > > (b) after a re-assessment under section 8—over a similar sufficiently long period to assess fiscal pressures associated with the ageing population and other long-term trends. The regulations may prescribe the relevant period.\n> > \n> > For the purpose of this definition, the primary balance is revenue less expenditure, including net capital expenditure but not including interest transactions.\n> > \n> > the State’s unfunded superannuation liability means the total net employer liabilities of the State under defined benefit superannuation schemes for the total state sector.\n> \n> > (2) Expressions used in this Act (to the extent they are not otherwise defined in this Act) have the same meaning as similar expressions used by the Australian Bureau of Statistics in the preparation of government finance statistics.\n> \n> > (3) Notes included in this Act do not form part of this Act.","sortOrder":5},{"sectionNumber":"Part 2","sectionType":"part","heading":"Fiscal targets and principles","content":"# Part 2 Fiscal targets and principles\n\nPart 2 Fiscal targets and principles","sortOrder":6},{"sectionNumber":"6","sectionType":"section","heading":"Fiscal targets","content":"#### 6 Fiscal targets\n\n6 Fiscal targets\n\n> The fiscal targets for achieving the object of this Act are as follows—\n> \n> > (a) The annual growth in general government expenses of the State is less than the long-term average general government revenue growth of the State.\n> \n> > (b) The elimination of the State’s unfunded superannuation liability by 2030.","sortOrder":7},{"sectionNumber":"7","sectionType":"section","heading":"Principles of sound financial management","content":"#### 7 Principles of sound financial management\n\n7 Principles of sound financial management\n\n> > (1) The policy objectives of the Government should be pursued in accordance with the principles of sound financial management set out in this section in order to support the object of this Act.\n> \n> > (2) Principle No 1 is responsible and sustainable spending, taxation and infrastructure investment, including—\n> > \n> > > (a) aligning general government revenue and expense growth, and\n> > \n> > > (b) stable and predictable taxation policies, and\n> > \n> > > (c) investment in infrastructure that has the highest benefit for the community.\n> \n> > (3) Principle No 2 is effective financial and asset management, including sound policies and processes for—\n> > \n> > > (a) performance management and reporting, and\n> > \n> > > (b) asset maintenance and enhancement, and\n> > \n> > > (c) funding decisions, and\n> > \n> > > (d) risk management practices.\n> \n> > (4) Principle No 3 is achieving intergenerational equity, including ensuring that—\n> > \n> > > (a) policy decisions are made having regard to their financial effects on future generations, and\n> > \n> > > (b) the current generation funds the cost of its services.","sortOrder":8},{"sectionNumber":"8","sectionType":"section","heading":"Budget reporting in relation to fiscal targets and principles","content":"#### 8 Budget reporting in relation to fiscal targets and principles\n\n8 Budget reporting in relation to fiscal targets and principles\n\n> The Treasurer is to include the following in the budget papers—\n> \n> > (a) a statement of the Government’s fiscal strategy having regard to the object of this Act and the fiscal targets and principles provided by this Act,\n> \n> > (b) a report on the Government’s performance against that object and those targets and principles,\n> \n> > (c) the reasons for any departure from that object and those targets and principles, together with the action planned to achieve that object and those targets and principles within the forward years of the budget,\n> \n> > (d) an assessment of the impact of the measures in the budget on the State’s long-term fiscal gap,\n> \n> > (e) in the case of the budget papers for 2016–17 and for each 5 years thereafter—an updated report on long-term fiscal pressures and a re-assessment of the State’s long-term fiscal gap.\n> \n> Note—\n> \n> Section 10 of the [General Government Liability Management Fund Act 2002](/view/html/inforce/current/act-2002-060) requires the Management Committee (constituted under that Act to advise the Secretary of the Treasury on the management of the Fund) to review from time to time the long-term fiscal target of eliminating total State sector unfunded superannuation liabilities by 2030.","sortOrder":9},{"sectionNumber":"Part 3","sectionType":"part","heading":"Miscellaneous","content":"# Part 3 Miscellaneous\n\nPart 3 Miscellaneous","sortOrder":10},{"sectionNumber":"9","sectionType":"section","heading":"Effect of Act","content":"#### 9 Effect of Act\n\n9 Effect of Act\n\n> > (1) Nothing in this Act places on any person any obligation enforceable in a court of law or administrative review body.\n> \n> > (2) Without limiting subsection (1), a failure to comply with a provision of this Act—\n> > \n> > > (a) does not prevent the introduction of any Bill in, or the passage of a Bill through, a House of Parliament or prevent assent being given to any Bill, and\n> > \n> > > (b) does not affect the validity of any legislation, and\n> > \n> > > (c) does not affect the validity of any action taken by any public official or agency, and\n> > \n> > > (d) does not expose any person to civil or criminal liability.\n> \n> > (3) Accordingly, no court or administrative review body has jurisdiction or power to consider any question involving compliance or non-compliance with this Act.\n> \n> > (4) This section does not apply to the other provisions of this Part or to Schedule 1.","sortOrder":11},{"sectionNumber":"10","sectionType":"section","heading":"Regulations","content":"#### 10 Regulations\n\n10 Regulations\n\n> The Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act.","sortOrder":12},{"sectionNumber":"11","sectionType":"section","heading":"Acts not affected by this Act","content":"#### 11 Acts not affected by this Act\n\n11 Acts not affected by this Act\n\n> This Act does not affect the provisions of any of the following Acts—\n> \n> > Government Sector Audit Act 1983\n> \n> > [Government Sector Finance Act 2018](/view/html/inforce/current/act-2018-055)\n> \n> > [State Owned Corporations Act 1989](/view/html/inforce/current/act-1989-134)\n> \n> **s 11:** Am 2018 No 70, Schs 3.23, 4.35.","sortOrder":13},{"sectionNumber":"12","sectionType":"section","heading":null,"content":"#### 12\n\n12 (Repealed)","sortOrder":14},{"sectionNumber":"13","sectionType":"section","heading":"Review of Act","content":"#### 13 Review of Act\n\n13 Review of Act\n\n> > (1) The Treasurer is to review this Act to determine whether the policy objectives of the Act remain valid and whether the terms of the Act remain appropriate for securing those objectives.\n> \n> > (2) The review is to include an assessment of the State’s long-term average general government revenue growth.\n> \n> > (3) The review is to be undertaken as soon as possible after the period of 5 years from the commencement of this Act.\n> \n> > (4) A report of the outcome of the review is to be tabled in each House of Parliament within 12 months after the end of the period of 5 years.","sortOrder":16},{"sectionNumber":"Schedule 1","sectionType":"schedule","heading":null,"content":"# Schedule 1\n\nSchedule 1 (Repealed)\n\n**sch 1:** Rep 1987 No 15, sec 30C.","sortOrder":17}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"The legislation remains tightly focused on its original purpose of setting fiscal targets and reporting requirements to maintain NSW's credit rating. The repeal of section 12 and Schedule 1 (both referencing 1987 amendments, suggesting they were transitional or machinery provisions) does not indicate scope creep. The 2018 amendment to section 11 merely updates a cross-reference to the Government Sector Finance Act 2018, reflecting legislative renaming rather than expansion of purpose."},"complexity_factors":["Only 5 defined terms in section 5, with straightforward definitions","Simple two-part structure: preliminary matters, then fiscal targets and reporting requirements","No nested exceptions or complex conditional logic—section 9 is actually a broad exclusion of legal enforceability","Cross-references limited to one note about the General Government Liability Management Fund Act 2002 and a short list of unaffected Acts in section 11","Length is very short (approximately 13 operative sections, with two repealed)","Conceptual complexity is low—targets are expressed as simple mathematical comparisons (expense growth < revenue growth) and a fixed date (2030)"],"plain_english_summary":"This is a New South Wales law that sets rules for how the state government should manage its money, with the main goal of keeping the state's AAA credit rating.\n\n**What it does:**\n- **Sets two key financial targets:** (1) Government spending must grow slower than average revenue growth over the long term, and (2) The state must pay off its unfunded superannuation (pension) debts by 2030.\n- **Establishes three principles for good financial management:** responsible spending and investment, effective management of assets and finances, and fairness between generations (so today's taxpayers don't dump costs on future generations).\n- **Requires budget reporting:** The Treasurer must explain in the annual budget papers how the government is tracking against these targets and principles, and justify any departures from them.\n\n**Who it affects:**\nPrimarily the NSW Treasurer and government agencies preparing the state budget. It doesn't directly affect ordinary citizens, businesses, or public servants in their daily work.\n\n**Why it matters:**\nThe law aims to keep NSW's credit rating at AAA (the highest possible). A good credit rating means lower interest rates when the government borrows money for infrastructure and services, which ultimately saves taxpayer dollars. However—and this is crucial—**this law has no teeth**. Section 9 explicitly states that nobody can be taken to court for breaking it, and no government decision is invalid if it ignores the Act. It's essentially a political commitment dressed up as legislation—a way for governments to publicly promise fiscal discipline without legal consequences if they break that promise."},"flash_summary":{"complexity_score":2,"scope_assessment":{"changed":false,"description":"The Act has always been aspirational and non-enforceable, with reporting requirements. Its scope has not expanded beyond its original intent to set fiscal targets and principles for budget reporting."},"complexity_factors":["Short Act with only 13 sections and a repealed schedule","Few defined terms (5 definitions in Section 5)","No cross-references to other complex legislation","Simple conditional logic (e.g., targets are straightforward)"],"plain_english_summary":"This Act sets out fiscal targets and principles for the New South Wales Government to manage the state budget. The main targets are: (1) keep annual growth in government spending below the long-term average growth in government revenue, and (2) eliminate the state's unfunded superannuation liability by 2030. The Act also lists principles of sound financial management, like responsible spending, effective asset management, and intergenerational equity. The Treasurer must report on progress toward these targets and principles in the budget papers. **However, the Act is not legally enforceable.** Section 9 says no one can take the government to court for failing to meet these targets or principles, and non-compliance does not affect the validity of any law or government action. So this Act is essentially a statement of intent and a reporting requirement, not a binding rule. It affects government budgeting and reporting, but has no legal teeth."},"issue_detection":{"absurdities":[],"contradictions":[]},"summary":{"complexity_score":4,"scope_assessment":{"changed":true,"description":"The existence of the Fiscal Responsibility Amendment (Wellbeing Budget) Bill 2023 suggests pressure to expand the Act's scope beyond purely financial measures to include broader community wellbeing indicators — a significant philosophical shift from the original financially-focused intent. However, this amendment has not yet passed into law. The multiple amendments since 2012 also suggest the Act's specific targets or mechanisms have been adjusted over time from their original form."},"complexity_factors":["Only metadata and status information was provided — the actual operative legal provisions were not included, significantly limiting full analysis","Fiscal responsibility legislation typically involves economic and accounting concepts (surpluses, net debt, capital expenditure) that require explanation for lay readers","The Act has been amended multiple times (versions in 2012, 2018, and 2021), suggesting evolving obligations over time","Interaction with broader budget and appropriations law adds contextual complexity","The proposed Wellbeing Budget amendment introduces potential future complexity around non-financial metrics"],"plain_english_summary":"## NSW Fiscal Responsibility Act 2012\n\n**What is this?**\nThis is a New South Wales (NSW) state government law administered by the Treasurer. Based on the metadata available, it establishes rules and targets for how the NSW government must manage public money and the state's finances responsibly.\n\n**Who does it affect?**\n- **NSW taxpayers and residents** — indirectly, through how the government spends and manages public funds\n- **The NSW government and Treasury** — directly, by imposing fiscal (financial) rules and reporting obligations they must follow\n- **Future generations** — the law is designed to prevent the government from racking up unsustainable debt\n\n**Why does it matter?**\nFiscal responsibility laws like this one are essentially a set of financial guardrails for government. They typically require governments to aim for budget surpluses (spending less than they earn), keep debt under control, and be transparent about their financial position. Think of it as a household budget rule applied to the entire state.\n\n**Note:** A proposed amendment called the *Fiscal Responsibility Amendment (Wellbeing Budget) Bill 2023* has been introduced (by a non-government member) which would broaden the focus beyond pure financial targets to include measures of community wellbeing — though this has not yet become law.\n\n⚠️ *The actual operative provisions (the detailed rules) of the Act were not included in the text provided — only the administrative/status information was available for analysis. The summary above reflects what this type of legislation typically contains.*"}},"importantCases":[],"_links":{"self":"/api/acts/fiscal-responsibility-act-2012","history":"/api/acts/fiscal-responsibility-act-2012/history","analysis":"/api/acts/fiscal-responsibility-act-2012/analysis","conflicts":"/api/acts/fiscal-responsibility-act-2012/conflicts","importantCases":"/api/acts/fiscal-responsibility-act-2012/important-cases","documents":"/api/acts/fiscal-responsibility-act-2012/documents"}}