{"id":"C2004A04936","name":"Local Government (Financial Assistance) Act 1995","slug":"local-government-financial-assistance-act-1995","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"86 of 1995","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":38844,"registerId":"commonwealth-C2004A04936-current","compilationNumber":null,"startDate":"2026-04-01","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Part 1","sectionType":"part","heading":"Preliminary","content":"An Act to provide for financial assistance for local government purposes by means of grants to the States, the Australian Capital Territory and the Northern Territory, and for related purposes\n\n## Part 1—Preliminary\n\n#### 1 Short title\n\n  This Act may be cited as the Local Government (Financial Assistance) Act 1995.\n\n#### 2 Commencement\n\n  This Act commences on the day on which it receives the Royal Assent.\n\n#### 3 Objects of Act\n\n  (1) This section explains the objects of the Parliament in enacting this Act.\n  (2) The Parliament wishes to provide financial assistance to the States for the purposes of improving:\n    (a) the financial capacity of local governing bodies; and\n    (b) the capacity of local governing bodies to provide their residents with an equitable level of services; and\n    (c) the certainty of funding for local governing bodies; and\n    (d) the efficiency and effectiveness of local governing bodies; and\n    (e) the provision by local governing bodies of services to Aboriginal and Torres Strait Islander communities.\n  (3) The financial assistance is to be provided by the making to the States, for local government purposes, of general grants under section 9 and additional funding under section 12.\n  (4) In providing this financial assistance the Parliament’s goals are to:\n    (a) increase the transparency and accountability of the States in respect of the allocation of funds under this Act to local governing bodies; and\n    (b) promote consistency in the methods by which grants are allocated to achieve equitable levels of services by local governing bodies.\n  (5) To achieve those goals this Act provides for:\n    (a) the formulation of national principles for the purposes of the allocation of funds by the States to local governing bodies (section 6); and\n    (b) the making of an annual report to the Parliament about the operation of this Act (subsection 16(1)); and\n    (c) an assessment of the performance of local governing bodies (subsection 16(3)).\n\n#### 4 Definitions\n\n  (1) In this Act:\n\n> base figure means:\n\n    (a) in relation to the year beginning on 1 July 1995, the amount worked out using the formula:\n    ![](image.002.png)\n\n> where:\n\n> Initial amount has the meaning given by subsection (2).\n\n> Relevant final factor means the final factor for the year; or\n\n    (b) in relation to a later year (the current year), the amount worked out using the formula:\n    ![](image.003.png)\n\n> where:\n\n> Previous year base figure means the base figure for the year immediately before the current year.\n\n> Relevant final factor means the final factor for the current year.\n\n  (2) In this Act, unless the contrary intention appears:\n\n> additional previous year funding amount, in relation to a State for a year (the current year) means:\n\n    (a) if the current year is the year beginning on 1 July 1995:\n    (i) in relation to a State other than the Australian Capital Territory—the amount that would have been payable to the State under section 10A of the repealed Act for the year immediately preceding the current year if the amount had been calculated using the final factor within the meaning of that Act for that preceding year instead of the estimated factor for that preceding year; or\n    (ii) in relation to the Australian Capital Territory—an amount determined by the Treasurer in writing; or\n    (b) if the current year is a later year—the amount that would have been payable to the State under section 12 of this Act for the year immediately preceding the current year if the amount had been calculated using the final factor for that preceding year instead of the estimated factor for that preceding year.\n\n> estimated additional previous year funding amount, in relation to a State for a year, means the amount estimated under subsection 7(4) or (5), as the case may be, in relation to the State for the year.\n\n> estimated factor, in relation to a year, means the factor estimated under subsection 7(3) in relation to the year.\n\n> estimated initial amount means the amount estimated under subsection 7(1).\n\n> final factor, in relation to a year, means the factor worked out under section 8 in relation to the year.\n\n> initial amount means the sum of:\n\n    (a) the amount that would have been the base figure under the repealed Act for the year that began on 1 July 1994 if that amount had been calculated using the final factor within the meaning of that Act for that year instead of the estimated factor; and\n    (b) an amount determined by the Treasurer in writing to be the amount by which the amount referred to in paragraph (a) would have been increased if the Australian Capital Territory had been a State for the purposes of the repealed Act.\n\n> local governing body means:\n\n    (a) a local governing body established by or under a law of a State, other than a body whose sole or principal function is to provide a particular service, such as the supply of electricity or water; or\n    (b) a body declared by the Minister, on the advice of the relevant State Minister, by notice published in the Gazette, to be a local governing body for the purposes of this Act.\n\n> Local Government Grants Commission, in relation to a State, means the body named in a declaration in force under section 5 as the Local Government Grants Commission of the State.\n\n> relevant State Minister means:\n\n    (a) in relation to, or in relation to a body in, a State (other than the Australian Capital Territory)—the Minister of the State who is for the time being responsible for the administration of the law of the State that establishes the Local Government Grants Commission of the State; or\n    (b) in relation to, or in relation to a body in, the Australian Capital Territory:\n    (i) subject to subparagraph (ii), the Minister for Urban Services of the Territory; or\n    (ii) if another Minister of the Territory is prescribed by the regulations for the purposes of this paragraph—that other Minister.\n\n> repealed Act means the Local Government (Financial Assistance) Act 1986.\n\n> State includes the Australian Capital Territory and the Northern Territory.\n\n> Statistician means the Australian Statistician.\n\n> year means the financial year beginning on 1 July 1995 or a later financial year.\n\n  (3) The Treasurer has power to make written determinations for the purposes of this Act.\n  (4) The Minister has power to make declarations for the purposes of paragraph (b) of the definition of “local governing body” in subsection (2).\n\n#### 4A Population estimates\n\n  (1) For the purposes of:\n    (a) causing a factor to be worked out under subsection 8(1) in relation to the current year mentioned in that subsection; and\n    (b) applying section 10 in respect of the current year mentioned in that section;\n  the following apply:\n    (c) the expression population of the State means the population of the State on 31 December in the year immediately before the current year as set out in an estimate of that population on that date made by the Statistician for the purposes of this section;\n    (d) the expression population of Australia means the total population of all of the States on 31 December in the year immediately before the current year as set out in an estimate of that population on that date made by the Statistician for the purposes of this section.\n  (2) The Statistician, in making an estimate for the purposes of this section of the population of a State, must have regard to the latest statistics in relation to the population available to the Statistician on the day on which the estimate is made.\n  (3) The Minister must, as soon as practicable after the Statistician makes an estimate of the population of each State for the purposes of this section, cause to be given to the Treasurer of each State a written notice setting out the population of the State and the total population of all of the States.\n\n#### 5 Local Government Grants Commissions\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) If:\n    (a) the principal function of a body established by a law of a State is the making of recommendations to the Government of the State with respect to theprovision of financial assistance to local governing bodies in the State; and\n    (b) the Minister is satisfied that the membership of the body includes at least 2 people who are or have been associated with local government in the State, whether as members of a local governing body or otherwise;\n  the Minister may, by notice published in the Gazette, declare the body to be the Local Government Grants Commission of the State for the purposes of this Act.\n\n#### 6 National principles governing allocation by States among local governing bodies\n\n  (1) The Minister, after consulting the relevant State Ministers and with a body or bodies representative of local government, must formulate national principles for the purpose of allocating among local governing bodies amounts payable to States (other than the Australian Capital Territory) under this Act in the year beginning on 1 July 1996 and later years.\n  (2) In formulating national principles, the Minister:\n    (a) is to have regard to the need to ensure that the allocation of funds for local government purposes under section 9 is made, as far as practicable, on a full horizontal equalisation basis; but\n    (b) must ensure that no local governing body in a State will be allocated an amount under section 9 in a year that is less than the amount that would be allocated to the body if 30% of the amount to which the State is entitled under that section in respect of the year were allocated among local governing bodies in the State on a per capita basis.\n  (3) The reference in paragraph (2)(a) to the allocation of funds for local government purposes on a full horizontal equalisation basis is a reference to an allocation of funds that:\n    (a) ensures that each local governing body in a State is able to function, by reasonable effort, at a standard not lower than the average standard of other local governing bodies in the State; and\n    (b) takes account of differences in the expenditure required to be incurred by local governing bodies in the performance of their functions and in their capacity to raise revenue.\n  (4) The Minister may, after consulting with relevant State Ministers and with a body or bodies representative of local government, revoke or vary any principles formulated under subsection (1).\n  (5) The Minister must cause to be given to the relevant State Minister of each State other than the Australian Capital Territory and to a body or bodies representative of local government a copy of any instrument formulating principles under subsection (1) and a copy of any instrument under subsection (4) revoking or varying any of those principles.\n  (6) National principles formulated under subsection (1), and revocations or variations of national principles under subsection (4), are legislative instruments.\n\n> Note 1: Section 42 (disallowance) of the Legislation Act 2003 does not apply to the principles: see subsection 44(1) of that Act.\n\n> Note 2: Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 does not apply to the principles: see subsection 54(1) of that Act.\n\n  (7) If there are no national principles in force under this section, paragraph 11(2)(d) is to be read as requiring the Commission to make the recommendations on the same basis as the basis on which the Minister is, under subsection (2) of this section, required to act in formulating national principles (see paragraphs (2)(a) and (b)).\n  (8) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.\n\n## Part 2—Grants Of financial assistance\n\n#### 7 Estimates by Treasurer and Minister\n\n  (1) The Treasurer must, as soon as practicable after the commencement of this Act, make a written estimate of the initial amount.\n  (2) The Minister must, before the start of each year (the current year) after the year beginning on 1 July 1995, make a written estimate of the base figure for the year immediately preceding the current year.\n  (3) The Treasurer must:\n    (a) as soon as practicable after the commencement of this Act, make a written estimate of the factor, calculated to 4 decimal places, to be worked out under subsection 8(1) in relation to the year beginning on 1 July 1995; and\n    (b) before the start of each later year, make a written estimate of the factor, calculated to 4 decimal places to be worked out under subsection 8(1) in relation to the year.\n  (3A) In making an estimate for the purpose of paragraph 3(b), the Treasurer must, so far as the estimate relates to the population of Australia, consult the Statistician.\n  (4) The Treasurer must, as soon as practicable after the commencement of this Act, make a written estimate of the additional previous year funding amount in relation to each State for the year beginning on 1 July 1995.\n  (5) The Minister must, before the start of each year (the relevant year) after the year beginning on 1 July 1995, make a written estimate of the additional previous year funding amount in relation to each State for the relevant year.\n  (6) The Treasurer must, as soon as practicable after an estimate is made under subsection (1), (3) or (4), cause to be given to the Minister a written notice:\n    (a) setting out the estimate; and\n    (b) explaining the basis on which the estimate was made;\n  and the Minister must cause a copy of the notice to be given to the Treasurer of each State.\n  (7) The Minister must, as soon as practicable after an estimate is made under subsection (2) or (5), cause to be given to the Treasurer of each State a written notice:\n    (a) setting out the estimate; and\n    (b) explaining the basis on which the estimate was made.\n\n#### 8 Determination of final factor\n\n  (1) The Treasurer must, not later than 30 June in each year (the current year), cause a factor in relation to the current year to be worked out by:\n    (a) calculating, to 4 decimal places, the factor using the formula:\n    ![](image.004.png)\n    where:\n    index number means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Statistician in respect of the March quarter in the current year.\n    population of Australia has the meaning given by paragraph 4A(1)(d).\n    previous index number means the index number in respect of the March quarter in the year immediately before the current year.\n    previous population of Australia means the population of Australia that was used in working out the factor under this section in relation to the year immediately before the current year; and\n    (b) if the factor calculated under paragraph (a) would, if it were calculated to 5 decimal places, end in a number greater than 4—increasing that factor by 0.0001; and\n    (c) if the Treasurer considers that there are special circumstances for doing so—increasing or decreasing the factor calculated under paragraph (a) (as increased by any amount under paragraph (b)) by such amount as the Treasurer considers appropriate.\n  (1A) For the purposes of the formula in paragraph (1)(a), if the Statistician changes the index reference period for an index number, only index numbers published in terms of the new index reference period are to be used after the change.\n  (2) In making a decision under paragraph (1)(c), the Treasurer is to have regard to the following matters:\n    (a) the objects of the Parliament in enacting this Act, as set out in section 3; and\n    (d) any other matters that the Treasurer thinks relevant.\n  (3) The Treasurer must, not later than 30 June in each year, cause to be given to the Minister a written notice:\n    (a) setting out the factor worked out under subsection (1) in relation to the year; and\n    (b) explaining the basis on which the factor was worked out.\n  (4) The Minister must cause a copy of the notice to be given to the Treasurer of each State.\n\n#### 9 State entitlements for local government purposes\n\n  (1) Subject to this section and to section 11, each State is entitled to the payment, in respect of a year (the current year), by way of financial assistance for local government purposes, of a general grant, being:\n    (a) if the current year is the year beginning on 1 July 1995, the amount worked out using the formula:\n    ![](image.005.png)\n    (b) if the current year is a later year, the amount worked out using the formula:\n    ![](image.006.png)\n    where:\n    Relevant estimated factor means the estimated factor for the current year.\n    Projected population of the State means the population of the State on 31 December in the year immediately before the current year as set out in a preliminary estimate of that population on that date made by the Statistician according to assumptions specified by the Minister in writing for the purpose, after consulting the Statistician.\n    Projected population of Australia means the total population of all the States on 31 December in the year immediately before the current year as set out in a preliminary estimate of that population on that date made by the Statistician according to assumptions specified by the Minister in writing for the purpose, after consulting the Statistician.\n    Estimated previous year base figure means the amount estimated under subsection 7(2) in relation to the year immediately before the current year.\n    Note: For estimated initial amount and estimated factor see subsection 4(2).\n  (2) A State is not entitled to a payment under this section in respect of a year unless:\n    (a) if the year is the year beginning on 1 July 1995—an estimate under subsection 7(1) has been made in relation to that year; and\n    (b) if the year is a later year—an estimate under subsection 7(2) has been made in relation to the immediately preceding year; and\n    (c) in any case—an estimate under subsection 7(3) has been made in relation to the year.\n  (3) A State is not entitled to a payment under this section in respect of a year until 15 August in the year.\n  (4) So far as practicable, the amount to which a State is entitled under this section in respect of a year must be paid in equal quarterly instalments.\n\n#### 10 Adjustment of estimates—section 9 payments\n\n  (1) This section applies to a State in respect of a year (the current year) if the amount worked out under subsection 9(1) (the preliminary grant amount) in relation to the State in respect of the current year is greater or less than:\n    (a) if the current year is the year beginning on 1 July 1995, the amount (the final grant amount) worked out using the formula:\n    ![](image.007.png)\n    (b) if the current year is a later year, the amount (the final grant amount) worked out using the formula:\n    ![](image.008.png)\n    where:\n    Relevant final factor means the final factor for the current year.\n    Population of the State has the meaning given by paragraph 4A(1)(c).\n    Population of Australia has the meaning given by paragraph 4A(1)(d).\n    Previous year base figure means the base figure for the year immediately before the current year.\n    Note 1: For initial amount and final factor see subsection 4(2).\n    Note 2: For base figure see subsection 4(1).\n  (4) If the final grant amount for a State in respect of a year exceeds the preliminary grant amount for the State in respect of the year, the State is entitled, in addition to the payment to which it is entitled under section 9 in respect of the year, to the payment in respect of the year, by way of financial assistance for local government purposes, of an amount equal to the excess.\n  (5) In addition to any other conditions to which a payment under this Act is subject, payment of an amount to a State under this Act is subject to the condition that if the final grant amount for the State in respect of a year is less than the preliminary grant amount for the State in respect of the year, the State will pay to the Commonwealth an amount equal to the difference.\n  (6) If an amount is payable to a State under subsection (4) in respect of a year, the amount is to be paid to the State in the following year by equal quarterly instalments at the times when instalments to which the State is entitled under section 9 in respect of the following year are paid.\n  (6A) Despite subsection (6), if the Minister considers that it is appropriate, the Minister may decide that an amount payable to a State under subsection (4) is to be paid at such times, and in such instalments, as the Minister decides. The Minister cannot decide that an amount is to be paid later than it would be paid under subsection (6).\n\n> Note: Example: The Minister may decide that an amount payable to a State in respect of a year be paid in one payment during that year.\n\n  (6B) If the Minister makes a decision under subsection (6A) in relation to a State, the Minister must, as soon as practicable, notify the Treasurer of the State in writing of the decision.\n  (7) If a State is liable to pay an amount to the Commonwealth under subsection (5) in respect of a year, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 9 in respect of the following year.\n\n#### 11 Allocation among local governing bodies—section 9 payments\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) A State is not entitled to payment of an amount under section 9 in respect of a year unless:\n    (a) there is a Local Government Grants Commission of the State; and\n    (b) the Commission has made recommendations with respect to the allocation of the amount among local governing bodies in the State; and\n    (c) the Commission:\n    (i) held public hearings (whether or not it also held private hearings) in connection with the recommendations; and\n    (ii) permitted or required local governing bodies in the State or associations of those bodies to make submissions to it in connection with the recommendations; and\n    (d) the Commission has made the recommendations:\n    (i) if the year is the year beginning on 1 July 1995—in accordance with the principles that were applicable to the State under section 9 of the repealed Act in respect of the immediately preceding year or, if those principles have been modified under section 24, in accordance with those principles as so modified; or\n    (ii) if the year is a later year—in accordance with national principles in force under section 6 of this Act in respect of the later year or, if those principles have been modified under section 26 in relation to the State in respect of the later year, in accordance with those principles as so modified; and\n    (e) the relevant State Minister has given the Minister in writing particulars of the manner in which the State proposes to allocate the amount among local governing bodies in the State; and\n    (f) the Minister is satisfied that, in determining the manner in which the State proposes to allocate the amount among local governing bodies in the State, the State has adopted the recommendations of the Commission; and\n    (g) the State does not allocate the amount among local governing bodies in the State except in accordance with the proposed allocation or in accordance with that proposed allocation as altered with the agreement of the Minister.\n  (3) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.\n\n#### 12 Additional funding for local government purposes\n\n  (1) Subject to this section and section 14, each State is entitled to the payment, in respect of a year (the current year), by way of financial assistance for local government purposes, of the amount worked out using the formula:\n  ![](image.009.png)\n  where:\n  Estimated additional previous year funding amount means the estimated additional previous year funding amount in relation to the State for the current year;\n\n> Estimated factor means the estimated factor for the current year.\n\n> Note: For estimated additional previous year funding amount and estimated factor see subsection 4(2).\n\n  (2) A State is not entitled to a payment under this section in respect of a year until 15 August in the year.\n  (3) A State is not entitled to a payment under this section in respect of a year unless:\n    (a) an estimate under subsection 7(3) has been made in relation to the year; and\n    (b) an estimate under subsection 7(4) or (5), as the case may be, has been made in relation to the State for the year.\n  (4) So far as practicable, an amount to which a State is entitled under this section must be paid in equal quarterly instalments.\n\n#### 13 Adjustment of estimates—section 12 payments\n\n  (1) This section applies to a State in respect of a year (the current year) if the amount worked out under section 12 (the preliminary additional grant amount) in relation to the State in respect of the current year is greater or less than the amount (the final additional grant amount) worked out in relation to the State in respect of the current year using the formula:\n  ![](image.010.png)\n  where:\n\n> Additional previous year funding amount means the additional previous year funding amount in relation to the State for the current year.\n\n> Final factor means the final factor for the current year.\n\n> Note: For additional previous year funding amount and final factor see subsection 4(2).\n\n  (2) If the final additional grant amount for a State in respect of a year exceeds the preliminary additional grant amount for the State in respect of the year, the State is entitled, in addition to the payment to which it is entitled under section 12 in respect of the year, to the payment in respect of the year, by way of financial assistance for local government purposes, of an amount equal to the excess.\n  (3) In addition to any other conditions to which a payment under this Act is subject, payment of an amount to a State under this Act is subject to the condition that, if the final additional grant amount for the State in respect of a year is less than the preliminary additional grant amount for the State in respect of the year, the State will pay to the Commonwealth an amount equal to the difference.\n  (4) If an amount is payable to a State under subsection (2) in respect of a year, the amount is to be paid to the State in the following year by equal quarterly instalments at the times when instalments to which the State is entitled under section 12 in respect of that following year are paid.\n  (4A) Despite subsection (4), if the Minister considers that it is appropriate, the Minister may decide that an amount payable to a State under subsection (2) is to be paid at such times, and in such instalments, as the Minister decides. The Minister cannot decide that an amount is to be paid later than it would be paid under subsection (4).\n\n> Note: Example: The Minister may decide that an amount payable to a State in respect of a year be paid in one payment during that year.\n\n  (4B) If the Minister makes a decision under subsection (4A) in relation to a State, the Minister must, as soon as practicable, notify the Treasurer of the State in writing of the decision.\n  (5) If a State is liable to pay an amount to the Commonwealth under subsection (3), one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 12 in respect of the following year.\n\n#### 14 Allocation among local governing bodies—section 12 payments\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) A State is not entitled to payment of an amount under section 12 in respect of a year unless:\n    (a) there is a Local Government Grants Commission of the State; and\n    (b) the Commission has made recommendations with respect to the allocation of the amount among local governing bodies in the State; and\n    (c) the Commission has made the recommendations:\n    (i) if the year is the year beginning on 1 July 1995—in accordance with any principles that were applicable to the State under paragraph 10C(1)(da) of the repealed Act in respect of the immediately preceding year or, if those principles have been modified under section 25, in accordance with those principles as so modified; or\n    (ii) if the year is a later year—in accordance with any relevant national principles in force under section 6 in respect of the later year that relate to expenditure on local roads by local governing bodies or, if those principles have been modified under section 26 in relation to the State in respect of the later year, in accordance with those principles as so modified; and\n    (d) the relevant State Minister has given the Minister in writing particulars of the manner in which the State proposes to allocate the amount among local governing bodies in the State; and\n    (e) the Minister is satisfied that, in determining the manner in which the State proposes to allocate the amount among local governing bodies in the State, the State has adopted the recommendations of the Commission; and\n    (f) the State does not allocate the amount among local governing bodies in the State except in accordance with the proposed allocation or in accordance with that proposed allocation as altered in accordance with the agreement of the Minister.\n  (3) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.\n\n#### 15 Conditions of payments to States other than the Australian Capital Territory\n\n  Payment of an amount to a State (other than the Australian Capital Territory) under this Act in respect of a year is subject to:\n    (a) a condition, subject to the condition in paragraph (aa), that the State will:\n    (i) if the payment is made under section 9—without undue delay, make unconditional payments to local governing bodies in the State in accordance with the allocation determined as mentioned in section 11; and\n    (ii) if the payment is made under section 10—without undue delay, make unconditional payments to local governing bodies in the State in the same proportion as the payments under section 9 in respect of the year were allocated; and\n    (iii) if the payment is made under section 12—without undue delay, make unconditional payments to local governing bodies in the State in accordance with the allocation determined as mentioned in section 14; and\n    (iv) if the payment is made under section 13—without undue delay, make unconditional payments to local governing bodies in the State in the same proportion as the payments under section 12 in respect of the year were allocated; and\n    (aa) a condition that, if the payment is one from which, according to an agreement between the Commonwealth and the State, the State is to withhold an amount that represents voluntary GST payments that should have, but have not, been paid by local governing bodies—the State will withhold the amount and pay it to the Commonwealth; and\n    (b) a condition that the Treasurer of the State will give the Minister, as soon as practicable after 30 June in each year:\n    (i) a statement, in a form approved by the Minister, setting out the payments made by the State during the year ending on that date in accordance with this Act, and the dates of the payments; and\n    (ii) a certificate by the Auditor‑General of the State certifying that, in his or her opinion, the contents of the statement are correct; and\n    (c) a condition that, if the Minister tells the Treasurer of the State that the Minister is satisfied that the State has, with respect to the whole or a part of the amount, failed to fulfil any of the conditions applicable under paragraphs (a), (aa) and (b) to the payment of the amount, the State will repay to the Commonwealth any amount determined by the Minister that is not more than the amount in respect of which the Minister is so satisfied.\n\n## Part 3—Miscellaneous\n\n#### 16 Reports\n\n  (1) The Minister must, as soon as practicable after 30 June in each year, cause a report or reports to be prepared about the operation of this Act in respect of the year.\n\n> Note: The first report under this subsection will relate to the year beginning on 1 July 1995; see the definition of year in subsection 4(2).\n\n  (2) The Minister must ensure that relevant State Ministers and a body or bodies representative of local government are consulted in connection with the preparation of a report under subsection (1).\n  (3) The report or one of the reports must include an assessment by the Minister (based on comparable national data), in relation to the year, of:\n    (a) the extent (if any) to which the allocation of funds for local government purposes has been made on a full horizontal equalisation basis as mentioned in paragraph 6(2)(a); and\n    (b) the methods used by the Local Government Grants Commissions in making their recommendations; and\n    (c) the performance by local governing bodies of their functions including:\n    (i) their efficiency; and\n    (ii) services provided by them to Aboriginal and Torres Strait Islander communities.\n  (4) The Minister must cause a copy of each report to be laid before each House of the Parliament as soon as practicable after the report has been prepared.\n\n#### 17 Review\n\n  (1) The Minister is to cause a review of the operation of this Act to be carried out not later than 30 June 2001 in consultation with the States and with a body or bodies representative of local government.\n  (2) A review is to examine:\n    (a) the effectiveness of the arrangements under this Act in relation to ensuring that the allocation of funds for local government purposes is made on a full horizontal equalisation basis as mentioned in paragraph 6(2)(a); and\n    (b) the impact of this Act on the raising of revenue by local governing bodies and on the assistance provided by the States to local governing bodies; and\n    (c) the implications of any changes in the functions or responsibilities of local governing bodies; and\n    (d) the eligibility for assistance under this Act of bodies declared by the Minister under section 4 to be local governing bodies; and\n    (e) any other matters relating to local government that the Minister determines.\n\n#### 18 Regulations\n\n  The Governor‑General may make regulations prescribing matters:\n    (a) required or permitted by this Act to be prescribed; or\n    (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.\n\n#### 18A Recoverable payments\n\n  (1) If, apart from this subsection, the Commonwealth does not have power under this Act to pay an amount (the relevant amount) to a State purportedly as an amount under this Act, then the Commonwealth may pay the relevant amount to the State.\n  Recovery\n  (2) If:\n    (a) a payment is made under subsection (1) to a State; and\n    (b) the State is entitled to receive an amount under this Act;\n  then:\n    (c) the relevant amount; or\n    (d) such part of the relevant amount as the Minister determines;\n  may, if the Minister so directs, be recovered by deduction from the amount mentioned in paragraph (b).\n\n#### 18B Reports about recoverable payments\n\n  (1) During the applicable publication period for a reporting period, the Secretary of the Department must cause to be published, in such manner as the Secretary thinks fit, a report that sets out:\n    (a) the number of payments made under subsection 18A(1) during the reporting period; and\n    (b) the total amount of those payments.\n  (2) However, a report is not required if the number mentioned in paragraph (1)(a) is zero.\n  Deferred reporting\n  (3) Subsection (1) of this section does not require a report to deal with a payment unless, before the preparation of the report, a Departmental official was aware the payment was made under subsection 18A(1).\n  (4) For the purposes of this section, if:\n    (a) a payment was made under subsection 18A(1) in a reporting period; and\n    (b) because of subsection (3) of this section, subsection (1) of this section did not require a report to deal with the payment; and\n    (c) during a later reporting period, a Departmental official becomes aware that the payment was made under subsection 18A(1);\n  the payment is subject to a deferred reporting obligation in relation to the later reporting period.\n  (5) If one or more payments made under subsection 18A(1) during a reporting period are subject to a deferred reporting obligation in relation to a later reporting period, the Secretary of the Department must, during the applicable publication period for the later reporting period:\n    (a) prepare a report that sets out:\n    (i) the number of those payments; and\n    (ii) the total amount of those payments; and\n    (iii) the reporting period during which the payments were made; and\n    (b) if a report is required under subsection (1) in relation to the later reporting period—include the paragraph (a) report in the subsection (1) report; and\n    (c) if paragraph (b) does not apply—publish, in such manner as the Secretary thinks fit, the paragraph (a) report.\n  Reporting period\n  (6) For the purposes of this section, a reporting period is:\n    (a) a financial year; or\n    (b) if a shorter recurring period is specified in a legislative instrument made by the Minister—that period.\n  Applicable publication period\n  (7) For the purposes of this section, the applicable publication period for a reporting period is the period of:\n    (a) 4 months; or\n    (b) if a lesser number of months is specified, in relation to the reporting period, in a legislative instrument made by the Minister—that number of months;\n  beginning immediately after the end of the reporting period.\n  Departmental official\n  (8) For the purposes of this section, Departmental official means an official (within the meaning of the Public Governance, Performance and Accountability Act 2013) of the Department.\n\n#### 19 Appropriation\n\n  Payments to a State under this Act are to be made out of the Consolidated Revenue Fund, which is appropriated accordingly.\n\n## Part 4—Repeal And Transitional\n\n#### 20 Repeal\n\n  (1) The Local Government (Financial Assistance) Act 1986 is repealed.\n  (2) Despite the repeal effected by subsection (1), the repealed Act continues to apply in relation to financial years before the year beginning on 1 July 1995.\n\n#### 21 Local governing bodies\n\n  A body that, immediately before the commencement of this Act, was duly declared for the purposes of paragraph (b) of the definition of local governing body in section 3 of the repealed Act to be a local governing body for the purposes of that Act is taken to be declared for the purposes of paragraph (b) of the definition of local governing body in subsection 4(2) of this Act to be a local governing body for the purposes of this Act.\n\n#### 22 Local Government Grants Commissions\n\n  If, immediately before the commencement of this Act, an instrument was in force under section 4 of the repealed Act declaring a body to be the Local Government Grants Commission of a State, the instrument is taken to be a declaration duly made under subsection 5(2) of this Act.\n\n#### 23 Estimate of factor by Treasurer\n\n  If the Treasurer made an estimate before the commencement of this Act under section 5 of the repealed Act in relation to the year beginning on 1 July 1995, the estimate is taken to have been made under subsection 7(3) of this Act.\n\n#### 24 Modification of State principles applicable to 1995‑1996\n\n  A State may, with the Minister's written approval, modify any of the principles referred to in subparagraph 11(2)(d)(i).\n\n#### 25 Modification of principles applicable to 1995‑1996 in respect of section 12 payments\n\n  The Minister may modify any of the principles referred to in subparagraph 14(2)(c)(i).\n\n#### 26 Transitional modification of national principles\n\n  The Minister may determine in writing that any one or more of the national principles in force under section 6 are, in respect of a year referred to in the determination, to have effect, in relation to a State or States so referred to, subject to modifications set out in the determination.\n\n#### 27 Avoidance of double payments to Australian Capital Territory\n\n  The total of the amounts that, apart from this section, would be payable under this Act to the Australian Capital Territory in respect of the year beginning on 1 July 1995 is reduced by any amount or amounts paid to that Territory for local government purposes in respect of that year under the Appropriation Act (No. 2) 1995‑96.\n\n#### 28 Overpayments and underpayments of general grants in respect of 1994‑1995\n\n  (1) If an amount is payable to a State under subsection 8(1) of the repealed Act as it continues to apply under subsection 20(2) of this Act in relation to the year that began on 1 July 1994, the amount is to be paid to the State in the year beginning on 1 July 1995 by equal quarterly instalments at the times when instalments to which the State is entitled under section 9 of this Act in respect of that last‑mentioned year are paid.\n  (2) If a State is liable to pay an amount to the Commonwealth under subsection 8(2) of the repealed Act as it continues to apply under subsection 20(2) in this Act in relation to the year that began on 1 July 1994, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 9 of this Act in respect of the year beginning on 1 July 1995 and, if an amount is so deducted, then, despite the deduction, an amount equal to the deduction is taken, for the purposes of this Act, to have been paid to the State.\n\n#### 29 Overpayments and underpayments of other grants in respect of 1994‑1995\n\n  (1) If an amount is payable to a State under subsection 10B(1) of the repealed Act as it continues to apply under subsection 20(2) of this Act in relation to the year that began on 1 July 1994, the amount is to be paid to the State in the year beginning on 1 July 1995 by equal quarterly instalments at the times when instalments to which the State is entitled under section 12 of this Act in respect of that last‑mentioned year are paid.\n  (2) If a State is liable to pay an amount to the Commonwealth under subsection 10B(2) of the repealed Act as it continues to apply under subsection 20(2) in this Act in relation to the year that began on 1 July 1994, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 12 of this Act in respect of the year beginning on 1 July 1995 and, if an amount is so deducted, then, despite the deduction, an amount equal to the deduction is taken, for the purposes of this Act, to have been paid to the State.\n\n#### 30 Estimates of population by Statistician\n\n  A reference in this Act to a preliminary estimate, or to an estimate, of population made by the Statistician includes a reference to such a preliminary estimate, or estimate, made before the commencement of this Act.","sortOrder":0},{"sectionNumber":"1","sectionType":"section","heading":"Short title","content":"#### 1 Short title\n\n  This Act may be cited as the Local Government (Financial Assistance) Act 1995.","sortOrder":1},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n  This Act commences on the day on which it receives the Royal Assent.","sortOrder":2},{"sectionNumber":"3","sectionType":"section","heading":"Objects of Act","content":"#### 3 Objects of Act\n\n  (1) This section explains the objects of the Parliament in enacting this Act.\n  (2) The Parliament wishes to provide financial assistance to the States for the purposes of improving:\n    (a) the financial capacity of local governing bodies; and\n    (b) the capacity of local governing bodies to provide their residents with an equitable level of services; and\n    (c) the certainty of funding for local governing bodies; and\n    (d) the efficiency and effectiveness of local governing bodies; and\n    (e) the provision by local governing bodies of services to Aboriginal and Torres Strait Islander communities.\n  (3) The financial assistance is to be provided by the making to the States, for local government purposes, of general grants under section 9 and additional funding under section 12.\n  (4) In providing this financial assistance the Parliament’s goals are to:\n    (a) increase the transparency and accountability of the States in respect of the allocation of funds under this Act to local governing bodies; and\n    (b) promote consistency in the methods by which grants are allocated to achieve equitable levels of services by local governing bodies.\n  (5) To achieve those goals this Act provides for:\n    (a) the formulation of national principles for the purposes of the allocation of funds by the States to local governing bodies (section 6); and\n    (b) the making of an annual report to the Parliament about the operation of this Act (subsection 16(1)); and\n    (c) an assessment of the performance of local governing bodies (subsection 16(3)).","sortOrder":3},{"sectionNumber":"4","sectionType":"section","heading":"Definitions","content":"#### 4 Definitions\n\n  (1) In this Act:\n\n> base figure means:\n\n    (a) in relation to the year beginning on 1 July 1995, the amount worked out using the formula:\n    ![](image.002.png)\n\n> where:\n\n> Initial amount has the meaning given by subsection (2).\n\n> Relevant final factor means the final factor for the year; or\n\n    (b) in relation to a later year (the current year), the amount worked out using the formula:\n    ![](image.003.png)\n\n> where:\n\n> Previous year base figure means the base figure for the year immediately before the current year.\n\n> Relevant final factor means the final factor for the current year.\n\n  (2) In this Act, unless the contrary intention appears:\n\n> additional previous year funding amount, in relation to a State for a year (the current year) means:\n\n    (a) if the current year is the year beginning on 1 July 1995:\n    (i) in relation to a State other than the Australian Capital Territory—the amount that would have been payable to the State under section 10A of the repealed Act for the year immediately preceding the current year if the amount had been calculated using the final factor within the meaning of that Act for that preceding year instead of the estimated factor for that preceding year; or\n    (ii) in relation to the Australian Capital Territory—an amount determined by the Treasurer in writing; or\n    (b) if the current year is a later year—the amount that would have been payable to the State under section 12 of this Act for the year immediately preceding the current year if the amount had been calculated using the final factor for that preceding year instead of the estimated factor for that preceding year.\n\n> estimated additional previous year funding amount, in relation to a State for a year, means the amount estimated under subsection 7(4) or (5), as the case may be, in relation to the State for the year.\n\n> estimated factor, in relation to a year, means the factor estimated under subsection 7(3) in relation to the year.\n\n> estimated initial amount means the amount estimated under subsection 7(1).\n\n> final factor, in relation to a year, means the factor worked out under section 8 in relation to the year.\n\n> initial amount means the sum of:\n\n    (a) the amount that would have been the base figure under the repealed Act for the year that began on 1 July 1994 if that amount had been calculated using the final factor within the meaning of that Act for that year instead of the estimated factor; and\n    (b) an amount determined by the Treasurer in writing to be the amount by which the amount referred to in paragraph (a) would have been increased if the Australian Capital Territory had been a State for the purposes of the repealed Act.\n\n> local governing body means:\n\n    (a) a local governing body established by or under a law of a State, other than a body whose sole or principal function is to provide a particular service, such as the supply of electricity or water; or\n    (b) a body declared by the Minister, on the advice of the relevant State Minister, by notice published in the Gazette, to be a local governing body for the purposes of this Act.\n\n> Local Government Grants Commission, in relation to a State, means the body named in a declaration in force under section 5 as the Local Government Grants Commission of the State.\n\n> relevant State Minister means:\n\n    (a) in relation to, or in relation to a body in, a State (other than the Australian Capital Territory)—the Minister of the State who is for the time being responsible for the administration of the law of the State that establishes the Local Government Grants Commission of the State; or\n    (b) in relation to, or in relation to a body in, the Australian Capital Territory:\n    (i) subject to subparagraph (ii), the Minister for Urban Services of the Territory; or\n    (ii) if another Minister of the Territory is prescribed by the regulations for the purposes of this paragraph—that other Minister.\n\n> repealed Act means the Local Government (Financial Assistance) Act 1986.\n\n> State includes the Australian Capital Territory and the Northern Territory.\n\n> Statistician means the Australian Statistician.\n\n> year means the financial year beginning on 1 July 1995 or a later financial year.\n\n  (3) The Treasurer has power to make written determinations for the purposes of this Act.\n  (4) The Minister has power to make declarations for the purposes of paragraph (b) of the definition of “local governing body” in subsection (2).","sortOrder":4},{"sectionNumber":"4A","sectionType":"section","heading":"Population estimates","content":"#### 4A Population estimates\n\n  (1) For the purposes of:\n    (a) causing a factor to be worked out under subsection 8(1) in relation to the current year mentioned in that subsection; and\n    (b) applying section 10 in respect of the current year mentioned in that section;\n  the following apply:\n    (c) the expression population of the State means the population of the State on 31 December in the year immediately before the current year as set out in an estimate of that population on that date made by the Statistician for the purposes of this section;\n    (d) the expression population of Australia means the total population of all of the States on 31 December in the year immediately before the current year as set out in an estimate of that population on that date made by the Statistician for the purposes of this section.\n  (2) The Statistician, in making an estimate for the purposes of this section of the population of a State, must have regard to the latest statistics in relation to the population available to the Statistician on the day on which the estimate is made.\n  (3) The Minister must, as soon as practicable after the Statistician makes an estimate of the population of each State for the purposes of this section, cause to be given to the Treasurer of each State a written notice setting out the population of the State and the total population of all of the States.","sortOrder":5},{"sectionNumber":"5","sectionType":"section","heading":"Local Government Grants Commissions","content":"#### 5 Local Government Grants Commissions\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) If:\n    (a) the principal function of a body established by a law of a State is the making of recommendations to the Government of the State with respect to theprovision of financial assistance to local governing bodies in the State; and\n    (b) the Minister is satisfied that the membership of the body includes at least 2 people who are or have been associated with local government in the State, whether as members of a local governing body or otherwise;\n  the Minister may, by notice published in the Gazette, declare the body to be the Local Government Grants Commission of the State for the purposes of this Act.","sortOrder":6},{"sectionNumber":"6","sectionType":"section","heading":"National principles governing allocation by States among local governing bodies","content":"#### 6 National principles governing allocation by States among local governing bodies\n\n  (1) The Minister, after consulting the relevant State Ministers and with a body or bodies representative of local government, must formulate national principles for the purpose of allocating among local governing bodies amounts payable to States (other than the Australian Capital Territory) under this Act in the year beginning on 1 July 1996 and later years.\n  (2) In formulating national principles, the Minister:\n    (a) is to have regard to the need to ensure that the allocation of funds for local government purposes under section 9 is made, as far as practicable, on a full horizontal equalisation basis; but\n    (b) must ensure that no local governing body in a State will be allocated an amount under section 9 in a year that is less than the amount that would be allocated to the body if 30% of the amount to which the State is entitled under that section in respect of the year were allocated among local governing bodies in the State on a per capita basis.\n  (3) The reference in paragraph (2)(a) to the allocation of funds for local government purposes on a full horizontal equalisation basis is a reference to an allocation of funds that:\n    (a) ensures that each local governing body in a State is able to function, by reasonable effort, at a standard not lower than the average standard of other local governing bodies in the State; and\n    (b) takes account of differences in the expenditure required to be incurred by local governing bodies in the performance of their functions and in their capacity to raise revenue.\n  (4) The Minister may, after consulting with relevant State Ministers and with a body or bodies representative of local government, revoke or vary any principles formulated under subsection (1).\n  (5) The Minister must cause to be given to the relevant State Minister of each State other than the Australian Capital Territory and to a body or bodies representative of local government a copy of any instrument formulating principles under subsection (1) and a copy of any instrument under subsection (4) revoking or varying any of those principles.\n  (6) National principles formulated under subsection (1), and revocations or variations of national principles under subsection (4), are legislative instruments.\n\n> Note 1: Section 42 (disallowance) of the Legislation Act 2003 does not apply to the principles: see subsection 44(1) of that Act.\n\n> Note 2: Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 does not apply to the principles: see subsection 54(1) of that Act.\n\n  (7) If there are no national principles in force under this section, paragraph 11(2)(d) is to be read as requiring the Commission to make the recommendations on the same basis as the basis on which the Minister is, under subsection (2) of this section, required to act in formulating national principles (see paragraphs (2)(a) and (b)).\n  (8) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.","sortOrder":7},{"sectionNumber":"Part 2","sectionType":"part","heading":"Grants Of financial assistance","content":"An Act to provide for financial assistance for local government purposes by means of grants to the States, the Australian Capital Territory and the Northern Territory, and for related purposes\n\n## Part 1—Preliminary\n\n#### 1 Short title\n\n  This Act may be cited as the Local Government (Financial Assistance) Act 1995.\n\n#### 2 Commencement\n\n  This Act commences on the day on which it receives the Royal Assent.\n\n#### 3 Objects of Act\n\n  (1) This section explains the objects of the Parliament in enacting this Act.\n  (2) The Parliament wishes to provide financial assistance to the States for the purposes of improving:\n    (a) the financial capacity of local governing bodies; and\n    (b) the capacity of local governing bodies to provide their residents with an equitable level of services; and\n    (c) the certainty of funding for local governing bodies; and\n    (d) the efficiency and effectiveness of local governing bodies; and\n    (e) the provision by local governing bodies of services to Aboriginal and Torres Strait Islander communities.\n  (3) The financial assistance is to be provided by the making to the States, for local government purposes, of general grants under section 9 and additional funding under section 12.\n  (4) In providing this financial assistance the Parliament’s goals are to:\n    (a) increase the transparency and accountability of the States in respect of the allocation of funds under this Act to local governing bodies; and\n    (b) promote consistency in the methods by which grants are allocated to achieve equitable levels of services by local governing bodies.\n  (5) To achieve those goals this Act provides for:\n    (a) the formulation of national principles for the purposes of the allocation of funds by the States to local governing bodies (section 6); and\n    (b) the making of an annual report to the Parliament about the operation of this Act (subsection 16(1)); and\n    (c) an assessment of the performance of local governing bodies (subsection 16(3)).\n\n#### 4 Definitions\n\n  (1) In this Act:\n\n> base figure means:\n\n    (a) in relation to the year beginning on 1 July 1995, the amount worked out using the formula:\n    ![](image.002.png)\n\n> where:\n\n> Initial amount has the meaning given by subsection (2).\n\n> Relevant final factor means the final factor for the year; or\n\n    (b) in relation to a later year (the current year), the amount worked out using the formula:\n    ![](image.003.png)\n\n> where:\n\n> Previous year base figure means the base figure for the year immediately before the current year.\n\n> Relevant final factor means the final factor for the current year.\n\n  (2) In this Act, unless the contrary intention appears:\n\n> additional previous year funding amount, in relation to a State for a year (the current year) means:\n\n    (a) if the current year is the year beginning on 1 July 1995:\n    (i) in relation to a State other than the Australian Capital Territory—the amount that would have been payable to the State under section 10A of the repealed Act for the year immediately preceding the current year if the amount had been calculated using the final factor within the meaning of that Act for that preceding year instead of the estimated factor for that preceding year; or\n    (ii) in relation to the Australian Capital Territory—an amount determined by the Treasurer in writing; or\n    (b) if the current year is a later year—the amount that would have been payable to the State under section 12 of this Act for the year immediately preceding the current year if the amount had been calculated using the final factor for that preceding year instead of the estimated factor for that preceding year.\n\n> estimated additional previous year funding amount, in relation to a State for a year, means the amount estimated under subsection 7(4) or (5), as the case may be, in relation to the State for the year.\n\n> estimated factor, in relation to a year, means the factor estimated under subsection 7(3) in relation to the year.\n\n> estimated initial amount means the amount estimated under subsection 7(1).\n\n> final factor, in relation to a year, means the factor worked out under section 8 in relation to the year.\n\n> initial amount means the sum of:\n\n    (a) the amount that would have been the base figure under the repealed Act for the year that began on 1 July 1994 if that amount had been calculated using the final factor within the meaning of that Act for that year instead of the estimated factor; and\n    (b) an amount determined by the Treasurer in writing to be the amount by which the amount referred to in paragraph (a) would have been increased if the Australian Capital Territory had been a State for the purposes of the repealed Act.\n\n> local governing body means:\n\n    (a) a local governing body established by or under a law of a State, other than a body whose sole or principal function is to provide a particular service, such as the supply of electricity or water; or\n    (b) a body declared by the Minister, on the advice of the relevant State Minister, by notice published in the Gazette, to be a local governing body for the purposes of this Act.\n\n> Local Government Grants Commission, in relation to a State, means the body named in a declaration in force under section 5 as the Local Government Grants Commission of the State.\n\n> relevant State Minister means:\n\n    (a) in relation to, or in relation to a body in, a State (other than the Australian Capital Territory)—the Minister of the State who is for the time being responsible for the administration of the law of the State that establishes the Local Government Grants Commission of the State; or\n    (b) in relation to, or in relation to a body in, the Australian Capital Territory:\n    (i) subject to subparagraph (ii), the Minister for Urban Services of the Territory; or\n    (ii) if another Minister of the Territory is prescribed by the regulations for the purposes of this paragraph—that other Minister.\n\n> repealed Act means the Local Government (Financial Assistance) Act 1986.\n\n> State includes the Australian Capital Territory and the Northern Territory.\n\n> Statistician means the Australian Statistician.\n\n> year means the financial year beginning on 1 July 1995 or a later financial year.\n\n  (3) The Treasurer has power to make written determinations for the purposes of this Act.\n  (4) The Minister has power to make declarations for the purposes of paragraph (b) of the definition of “local governing body” in subsection (2).\n\n#### 4A Population estimates\n\n  (1) For the purposes of:\n    (a) causing a factor to be worked out under subsection 8(1) in relation to the current year mentioned in that subsection; and\n    (b) applying section 10 in respect of the current year mentioned in that section;\n  the following apply:\n    (c) the expression population of the State means the population of the State on 31 December in the year immediately before the current year as set out in an estimate of that population on that date made by the Statistician for the purposes of this section;\n    (d) the expression population of Australia means the total population of all of the States on 31 December in the year immediately before the current year as set out in an estimate of that population on that date made by the Statistician for the purposes of this section.\n  (2) The Statistician, in making an estimate for the purposes of this section of the population of a State, must have regard to the latest statistics in relation to the population available to the Statistician on the day on which the estimate is made.\n  (3) The Minister must, as soon as practicable after the Statistician makes an estimate of the population of each State for the purposes of this section, cause to be given to the Treasurer of each State a written notice setting out the population of the State and the total population of all of the States.\n\n#### 5 Local Government Grants Commissions\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) If:\n    (a) the principal function of a body established by a law of a State is the making of recommendations to the Government of the State with respect to theprovision of financial assistance to local governing bodies in the State; and\n    (b) the Minister is satisfied that the membership of the body includes at least 2 people who are or have been associated with local government in the State, whether as members of a local governing body or otherwise;\n  the Minister may, by notice published in the Gazette, declare the body to be the Local Government Grants Commission of the State for the purposes of this Act.\n\n#### 6 National principles governing allocation by States among local governing bodies\n\n  (1) The Minister, after consulting the relevant State Ministers and with a body or bodies representative of local government, must formulate national principles for the purpose of allocating among local governing bodies amounts payable to States (other than the Australian Capital Territory) under this Act in the year beginning on 1 July 1996 and later years.\n  (2) In formulating national principles, the Minister:\n    (a) is to have regard to the need to ensure that the allocation of funds for local government purposes under section 9 is made, as far as practicable, on a full horizontal equalisation basis; but\n    (b) must ensure that no local governing body in a State will be allocated an amount under section 9 in a year that is less than the amount that would be allocated to the body if 30% of the amount to which the State is entitled under that section in respect of the year were allocated among local governing bodies in the State on a per capita basis.\n  (3) The reference in paragraph (2)(a) to the allocation of funds for local government purposes on a full horizontal equalisation basis is a reference to an allocation of funds that:\n    (a) ensures that each local governing body in a State is able to function, by reasonable effort, at a standard not lower than the average standard of other local governing bodies in the State; and\n    (b) takes account of differences in the expenditure required to be incurred by local governing bodies in the performance of their functions and in their capacity to raise revenue.\n  (4) The Minister may, after consulting with relevant State Ministers and with a body or bodies representative of local government, revoke or vary any principles formulated under subsection (1).\n  (5) The Minister must cause to be given to the relevant State Minister of each State other than the Australian Capital Territory and to a body or bodies representative of local government a copy of any instrument formulating principles under subsection (1) and a copy of any instrument under subsection (4) revoking or varying any of those principles.\n  (6) National principles formulated under subsection (1), and revocations or variations of national principles under subsection (4), are legislative instruments.\n\n> Note 1: Section 42 (disallowance) of the Legislation Act 2003 does not apply to the principles: see subsection 44(1) of that Act.\n\n> Note 2: Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 does not apply to the principles: see subsection 54(1) of that Act.\n\n  (7) If there are no national principles in force under this section, paragraph 11(2)(d) is to be read as requiring the Commission to make the recommendations on the same basis as the basis on which the Minister is, under subsection (2) of this section, required to act in formulating national principles (see paragraphs (2)(a) and (b)).\n  (8) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.\n\n## Part 2—Grants Of financial assistance\n\n#### 7 Estimates by Treasurer and Minister\n\n  (1) The Treasurer must, as soon as practicable after the commencement of this Act, make a written estimate of the initial amount.\n  (2) The Minister must, before the start of each year (the current year) after the year beginning on 1 July 1995, make a written estimate of the base figure for the year immediately preceding the current year.\n  (3) The Treasurer must:\n    (a) as soon as practicable after the commencement of this Act, make a written estimate of the factor, calculated to 4 decimal places, to be worked out under subsection 8(1) in relation to the year beginning on 1 July 1995; and\n    (b) before the start of each later year, make a written estimate of the factor, calculated to 4 decimal places to be worked out under subsection 8(1) in relation to the year.\n  (3A) In making an estimate for the purpose of paragraph 3(b), the Treasurer must, so far as the estimate relates to the population of Australia, consult the Statistician.\n  (4) The Treasurer must, as soon as practicable after the commencement of this Act, make a written estimate of the additional previous year funding amount in relation to each State for the year beginning on 1 July 1995.\n  (5) The Minister must, before the start of each year (the relevant year) after the year beginning on 1 July 1995, make a written estimate of the additional previous year funding amount in relation to each State for the relevant year.\n  (6) The Treasurer must, as soon as practicable after an estimate is made under subsection (1), (3) or (4), cause to be given to the Minister a written notice:\n    (a) setting out the estimate; and\n    (b) explaining the basis on which the estimate was made;\n  and the Minister must cause a copy of the notice to be given to the Treasurer of each State.\n  (7) The Minister must, as soon as practicable after an estimate is made under subsection (2) or (5), cause to be given to the Treasurer of each State a written notice:\n    (a) setting out the estimate; and\n    (b) explaining the basis on which the estimate was made.\n\n#### 8 Determination of final factor\n\n  (1) The Treasurer must, not later than 30 June in each year (the current year), cause a factor in relation to the current year to be worked out by:\n    (a) calculating, to 4 decimal places, the factor using the formula:\n    ![](image.004.png)\n    where:\n    index number means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Statistician in respect of the March quarter in the current year.\n    population of Australia has the meaning given by paragraph 4A(1)(d).\n    previous index number means the index number in respect of the March quarter in the year immediately before the current year.\n    previous population of Australia means the population of Australia that was used in working out the factor under this section in relation to the year immediately before the current year; and\n    (b) if the factor calculated under paragraph (a) would, if it were calculated to 5 decimal places, end in a number greater than 4—increasing that factor by 0.0001; and\n    (c) if the Treasurer considers that there are special circumstances for doing so—increasing or decreasing the factor calculated under paragraph (a) (as increased by any amount under paragraph (b)) by such amount as the Treasurer considers appropriate.\n  (1A) For the purposes of the formula in paragraph (1)(a), if the Statistician changes the index reference period for an index number, only index numbers published in terms of the new index reference period are to be used after the change.\n  (2) In making a decision under paragraph (1)(c), the Treasurer is to have regard to the following matters:\n    (a) the objects of the Parliament in enacting this Act, as set out in section 3; and\n    (d) any other matters that the Treasurer thinks relevant.\n  (3) The Treasurer must, not later than 30 June in each year, cause to be given to the Minister a written notice:\n    (a) setting out the factor worked out under subsection (1) in relation to the year; and\n    (b) explaining the basis on which the factor was worked out.\n  (4) The Minister must cause a copy of the notice to be given to the Treasurer of each State.\n\n#### 9 State entitlements for local government purposes\n\n  (1) Subject to this section and to section 11, each State is entitled to the payment, in respect of a year (the current year), by way of financial assistance for local government purposes, of a general grant, being:\n    (a) if the current year is the year beginning on 1 July 1995, the amount worked out using the formula:\n    ![](image.005.png)\n    (b) if the current year is a later year, the amount worked out using the formula:\n    ![](image.006.png)\n    where:\n    Relevant estimated factor means the estimated factor for the current year.\n    Projected population of the State means the population of the State on 31 December in the year immediately before the current year as set out in a preliminary estimate of that population on that date made by the Statistician according to assumptions specified by the Minister in writing for the purpose, after consulting the Statistician.\n    Projected population of Australia means the total population of all the States on 31 December in the year immediately before the current year as set out in a preliminary estimate of that population on that date made by the Statistician according to assumptions specified by the Minister in writing for the purpose, after consulting the Statistician.\n    Estimated previous year base figure means the amount estimated under subsection 7(2) in relation to the year immediately before the current year.\n    Note: For estimated initial amount and estimated factor see subsection 4(2).\n  (2) A State is not entitled to a payment under this section in respect of a year unless:\n    (a) if the year is the year beginning on 1 July 1995—an estimate under subsection 7(1) has been made in relation to that year; and\n    (b) if the year is a later year—an estimate under subsection 7(2) has been made in relation to the immediately preceding year; and\n    (c) in any case—an estimate under subsection 7(3) has been made in relation to the year.\n  (3) A State is not entitled to a payment under this section in respect of a year until 15 August in the year.\n  (4) So far as practicable, the amount to which a State is entitled under this section in respect of a year must be paid in equal quarterly instalments.\n\n#### 10 Adjustment of estimates—section 9 payments\n\n  (1) This section applies to a State in respect of a year (the current year) if the amount worked out under subsection 9(1) (the preliminary grant amount) in relation to the State in respect of the current year is greater or less than:\n    (a) if the current year is the year beginning on 1 July 1995, the amount (the final grant amount) worked out using the formula:\n    ![](image.007.png)\n    (b) if the current year is a later year, the amount (the final grant amount) worked out using the formula:\n    ![](image.008.png)\n    where:\n    Relevant final factor means the final factor for the current year.\n    Population of the State has the meaning given by paragraph 4A(1)(c).\n    Population of Australia has the meaning given by paragraph 4A(1)(d).\n    Previous year base figure means the base figure for the year immediately before the current year.\n    Note 1: For initial amount and final factor see subsection 4(2).\n    Note 2: For base figure see subsection 4(1).\n  (4) If the final grant amount for a State in respect of a year exceeds the preliminary grant amount for the State in respect of the year, the State is entitled, in addition to the payment to which it is entitled under section 9 in respect of the year, to the payment in respect of the year, by way of financial assistance for local government purposes, of an amount equal to the excess.\n  (5) In addition to any other conditions to which a payment under this Act is subject, payment of an amount to a State under this Act is subject to the condition that if the final grant amount for the State in respect of a year is less than the preliminary grant amount for the State in respect of the year, the State will pay to the Commonwealth an amount equal to the difference.\n  (6) If an amount is payable to a State under subsection (4) in respect of a year, the amount is to be paid to the State in the following year by equal quarterly instalments at the times when instalments to which the State is entitled under section 9 in respect of the following year are paid.\n  (6A) Despite subsection (6), if the Minister considers that it is appropriate, the Minister may decide that an amount payable to a State under subsection (4) is to be paid at such times, and in such instalments, as the Minister decides. The Minister cannot decide that an amount is to be paid later than it would be paid under subsection (6).\n\n> Note: Example: The Minister may decide that an amount payable to a State in respect of a year be paid in one payment during that year.\n\n  (6B) If the Minister makes a decision under subsection (6A) in relation to a State, the Minister must, as soon as practicable, notify the Treasurer of the State in writing of the decision.\n  (7) If a State is liable to pay an amount to the Commonwealth under subsection (5) in respect of a year, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 9 in respect of the following year.\n\n#### 11 Allocation among local governing bodies—section 9 payments\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) A State is not entitled to payment of an amount under section 9 in respect of a year unless:\n    (a) there is a Local Government Grants Commission of the State; and\n    (b) the Commission has made recommendations with respect to the allocation of the amount among local governing bodies in the State; and\n    (c) the Commission:\n    (i) held public hearings (whether or not it also held private hearings) in connection with the recommendations; and\n    (ii) permitted or required local governing bodies in the State or associations of those bodies to make submissions to it in connection with the recommendations; and\n    (d) the Commission has made the recommendations:\n    (i) if the year is the year beginning on 1 July 1995—in accordance with the principles that were applicable to the State under section 9 of the repealed Act in respect of the immediately preceding year or, if those principles have been modified under section 24, in accordance with those principles as so modified; or\n    (ii) if the year is a later year—in accordance with national principles in force under section 6 of this Act in respect of the later year or, if those principles have been modified under section 26 in relation to the State in respect of the later year, in accordance with those principles as so modified; and\n    (e) the relevant State Minister has given the Minister in writing particulars of the manner in which the State proposes to allocate the amount among local governing bodies in the State; and\n    (f) the Minister is satisfied that, in determining the manner in which the State proposes to allocate the amount among local governing bodies in the State, the State has adopted the recommendations of the Commission; and\n    (g) the State does not allocate the amount among local governing bodies in the State except in accordance with the proposed allocation or in accordance with that proposed allocation as altered with the agreement of the Minister.\n  (3) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.\n\n#### 12 Additional funding for local government purposes\n\n  (1) Subject to this section and section 14, each State is entitled to the payment, in respect of a year (the current year), by way of financial assistance for local government purposes, of the amount worked out using the formula:\n  ![](image.009.png)\n  where:\n  Estimated additional previous year funding amount means the estimated additional previous year funding amount in relation to the State for the current year;\n\n> Estimated factor means the estimated factor for the current year.\n\n> Note: For estimated additional previous year funding amount and estimated factor see subsection 4(2).\n\n  (2) A State is not entitled to a payment under this section in respect of a year until 15 August in the year.\n  (3) A State is not entitled to a payment under this section in respect of a year unless:\n    (a) an estimate under subsection 7(3) has been made in relation to the year; and\n    (b) an estimate under subsection 7(4) or (5), as the case may be, has been made in relation to the State for the year.\n  (4) So far as practicable, an amount to which a State is entitled under this section must be paid in equal quarterly instalments.\n\n#### 13 Adjustment of estimates—section 12 payments\n\n  (1) This section applies to a State in respect of a year (the current year) if the amount worked out under section 12 (the preliminary additional grant amount) in relation to the State in respect of the current year is greater or less than the amount (the final additional grant amount) worked out in relation to the State in respect of the current year using the formula:\n  ![](image.010.png)\n  where:\n\n> Additional previous year funding amount means the additional previous year funding amount in relation to the State for the current year.\n\n> Final factor means the final factor for the current year.\n\n> Note: For additional previous year funding amount and final factor see subsection 4(2).\n\n  (2) If the final additional grant amount for a State in respect of a year exceeds the preliminary additional grant amount for the State in respect of the year, the State is entitled, in addition to the payment to which it is entitled under section 12 in respect of the year, to the payment in respect of the year, by way of financial assistance for local government purposes, of an amount equal to the excess.\n  (3) In addition to any other conditions to which a payment under this Act is subject, payment of an amount to a State under this Act is subject to the condition that, if the final additional grant amount for the State in respect of a year is less than the preliminary additional grant amount for the State in respect of the year, the State will pay to the Commonwealth an amount equal to the difference.\n  (4) If an amount is payable to a State under subsection (2) in respect of a year, the amount is to be paid to the State in the following year by equal quarterly instalments at the times when instalments to which the State is entitled under section 12 in respect of that following year are paid.\n  (4A) Despite subsection (4), if the Minister considers that it is appropriate, the Minister may decide that an amount payable to a State under subsection (2) is to be paid at such times, and in such instalments, as the Minister decides. The Minister cannot decide that an amount is to be paid later than it would be paid under subsection (4).\n\n> Note: Example: The Minister may decide that an amount payable to a State in respect of a year be paid in one payment during that year.\n\n  (4B) If the Minister makes a decision under subsection (4A) in relation to a State, the Minister must, as soon as practicable, notify the Treasurer of the State in writing of the decision.\n  (5) If a State is liable to pay an amount to the Commonwealth under subsection (3), one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 12 in respect of the following year.\n\n#### 14 Allocation among local governing bodies—section 12 payments\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) A State is not entitled to payment of an amount under section 12 in respect of a year unless:\n    (a) there is a Local Government Grants Commission of the State; and\n    (b) the Commission has made recommendations with respect to the allocation of the amount among local governing bodies in the State; and\n    (c) the Commission has made the recommendations:\n    (i) if the year is the year beginning on 1 July 1995—in accordance with any principles that were applicable to the State under paragraph 10C(1)(da) of the repealed Act in respect of the immediately preceding year or, if those principles have been modified under section 25, in accordance with those principles as so modified; or\n    (ii) if the year is a later year—in accordance with any relevant national principles in force under section 6 in respect of the later year that relate to expenditure on local roads by local governing bodies or, if those principles have been modified under section 26 in relation to the State in respect of the later year, in accordance with those principles as so modified; and\n    (d) the relevant State Minister has given the Minister in writing particulars of the manner in which the State proposes to allocate the amount among local governing bodies in the State; and\n    (e) the Minister is satisfied that, in determining the manner in which the State proposes to allocate the amount among local governing bodies in the State, the State has adopted the recommendations of the Commission; and\n    (f) the State does not allocate the amount among local governing bodies in the State except in accordance with the proposed allocation or in accordance with that proposed allocation as altered in accordance with the agreement of the Minister.\n  (3) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.\n\n#### 15 Conditions of payments to States other than the Australian Capital Territory\n\n  Payment of an amount to a State (other than the Australian Capital Territory) under this Act in respect of a year is subject to:\n    (a) a condition, subject to the condition in paragraph (aa), that the State will:\n    (i) if the payment is made under section 9—without undue delay, make unconditional payments to local governing bodies in the State in accordance with the allocation determined as mentioned in section 11; and\n    (ii) if the payment is made under section 10—without undue delay, make unconditional payments to local governing bodies in the State in the same proportion as the payments under section 9 in respect of the year were allocated; and\n    (iii) if the payment is made under section 12—without undue delay, make unconditional payments to local governing bodies in the State in accordance with the allocation determined as mentioned in section 14; and\n    (iv) if the payment is made under section 13—without undue delay, make unconditional payments to local governing bodies in the State in the same proportion as the payments under section 12 in respect of the year were allocated; and\n    (aa) a condition that, if the payment is one from which, according to an agreement between the Commonwealth and the State, the State is to withhold an amount that represents voluntary GST payments that should have, but have not, been paid by local governing bodies—the State will withhold the amount and pay it to the Commonwealth; and\n    (b) a condition that the Treasurer of the State will give the Minister, as soon as practicable after 30 June in each year:\n    (i) a statement, in a form approved by the Minister, setting out the payments made by the State during the year ending on that date in accordance with this Act, and the dates of the payments; and\n    (ii) a certificate by the Auditor‑General of the State certifying that, in his or her opinion, the contents of the statement are correct; and\n    (c) a condition that, if the Minister tells the Treasurer of the State that the Minister is satisfied that the State has, with respect to the whole or a part of the amount, failed to fulfil any of the conditions applicable under paragraphs (a), (aa) and (b) to the payment of the amount, the State will repay to the Commonwealth any amount determined by the Minister that is not more than the amount in respect of which the Minister is so satisfied.\n\n## Part 3—Miscellaneous\n\n#### 16 Reports\n\n  (1) The Minister must, as soon as practicable after 30 June in each year, cause a report or reports to be prepared about the operation of this Act in respect of the year.\n\n> Note: The first report under this subsection will relate to the year beginning on 1 July 1995; see the definition of year in subsection 4(2).\n\n  (2) The Minister must ensure that relevant State Ministers and a body or bodies representative of local government are consulted in connection with the preparation of a report under subsection (1).\n  (3) The report or one of the reports must include an assessment by the Minister (based on comparable national data), in relation to the year, of:\n    (a) the extent (if any) to which the allocation of funds for local government purposes has been made on a full horizontal equalisation basis as mentioned in paragraph 6(2)(a); and\n    (b) the methods used by the Local Government Grants Commissions in making their recommendations; and\n    (c) the performance by local governing bodies of their functions including:\n    (i) their efficiency; and\n    (ii) services provided by them to Aboriginal and Torres Strait Islander communities.\n  (4) The Minister must cause a copy of each report to be laid before each House of the Parliament as soon as practicable after the report has been prepared.\n\n#### 17 Review\n\n  (1) The Minister is to cause a review of the operation of this Act to be carried out not later than 30 June 2001 in consultation with the States and with a body or bodies representative of local government.\n  (2) A review is to examine:\n    (a) the effectiveness of the arrangements under this Act in relation to ensuring that the allocation of funds for local government purposes is made on a full horizontal equalisation basis as mentioned in paragraph 6(2)(a); and\n    (b) the impact of this Act on the raising of revenue by local governing bodies and on the assistance provided by the States to local governing bodies; and\n    (c) the implications of any changes in the functions or responsibilities of local governing bodies; and\n    (d) the eligibility for assistance under this Act of bodies declared by the Minister under section 4 to be local governing bodies; and\n    (e) any other matters relating to local government that the Minister determines.\n\n#### 18 Regulations\n\n  The Governor‑General may make regulations prescribing matters:\n    (a) required or permitted by this Act to be prescribed; or\n    (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.\n\n#### 18A Recoverable payments\n\n  (1) If, apart from this subsection, the Commonwealth does not have power under this Act to pay an amount (the relevant amount) to a State purportedly as an amount under this Act, then the Commonwealth may pay the relevant amount to the State.\n  Recovery\n  (2) If:\n    (a) a payment is made under subsection (1) to a State; and\n    (b) the State is entitled to receive an amount under this Act;\n  then:\n    (c) the relevant amount; or\n    (d) such part of the relevant amount as the Minister determines;\n  may, if the Minister so directs, be recovered by deduction from the amount mentioned in paragraph (b).\n\n#### 18B Reports about recoverable payments\n\n  (1) During the applicable publication period for a reporting period, the Secretary of the Department must cause to be published, in such manner as the Secretary thinks fit, a report that sets out:\n    (a) the number of payments made under subsection 18A(1) during the reporting period; and\n    (b) the total amount of those payments.\n  (2) However, a report is not required if the number mentioned in paragraph (1)(a) is zero.\n  Deferred reporting\n  (3) Subsection (1) of this section does not require a report to deal with a payment unless, before the preparation of the report, a Departmental official was aware the payment was made under subsection 18A(1).\n  (4) For the purposes of this section, if:\n    (a) a payment was made under subsection 18A(1) in a reporting period; and\n    (b) because of subsection (3) of this section, subsection (1) of this section did not require a report to deal with the payment; and\n    (c) during a later reporting period, a Departmental official becomes aware that the payment was made under subsection 18A(1);\n  the payment is subject to a deferred reporting obligation in relation to the later reporting period.\n  (5) If one or more payments made under subsection 18A(1) during a reporting period are subject to a deferred reporting obligation in relation to a later reporting period, the Secretary of the Department must, during the applicable publication period for the later reporting period:\n    (a) prepare a report that sets out:\n    (i) the number of those payments; and\n    (ii) the total amount of those payments; and\n    (iii) the reporting period during which the payments were made; and\n    (b) if a report is required under subsection (1) in relation to the later reporting period—include the paragraph (a) report in the subsection (1) report; and\n    (c) if paragraph (b) does not apply—publish, in such manner as the Secretary thinks fit, the paragraph (a) report.\n  Reporting period\n  (6) For the purposes of this section, a reporting period is:\n    (a) a financial year; or\n    (b) if a shorter recurring period is specified in a legislative instrument made by the Minister—that period.\n  Applicable publication period\n  (7) For the purposes of this section, the applicable publication period for a reporting period is the period of:\n    (a) 4 months; or\n    (b) if a lesser number of months is specified, in relation to the reporting period, in a legislative instrument made by the Minister—that number of months;\n  beginning immediately after the end of the reporting period.\n  Departmental official\n  (8) For the purposes of this section, Departmental official means an official (within the meaning of the Public Governance, Performance and Accountability Act 2013) of the Department.\n\n#### 19 Appropriation\n\n  Payments to a State under this Act are to be made out of the Consolidated Revenue Fund, which is appropriated accordingly.\n\n## Part 4—Repeal And Transitional\n\n#### 20 Repeal\n\n  (1) The Local Government (Financial Assistance) Act 1986 is repealed.\n  (2) Despite the repeal effected by subsection (1), the repealed Act continues to apply in relation to financial years before the year beginning on 1 July 1995.\n\n#### 21 Local governing bodies\n\n  A body that, immediately before the commencement of this Act, was duly declared for the purposes of paragraph (b) of the definition of local governing body in section 3 of the repealed Act to be a local governing body for the purposes of that Act is taken to be declared for the purposes of paragraph (b) of the definition of local governing body in subsection 4(2) of this Act to be a local governing body for the purposes of this Act.\n\n#### 22 Local Government Grants Commissions\n\n  If, immediately before the commencement of this Act, an instrument was in force under section 4 of the repealed Act declaring a body to be the Local Government Grants Commission of a State, the instrument is taken to be a declaration duly made under subsection 5(2) of this Act.\n\n#### 23 Estimate of factor by Treasurer\n\n  If the Treasurer made an estimate before the commencement of this Act under section 5 of the repealed Act in relation to the year beginning on 1 July 1995, the estimate is taken to have been made under subsection 7(3) of this Act.\n\n#### 24 Modification of State principles applicable to 1995‑1996\n\n  A State may, with the Minister's written approval, modify any of the principles referred to in subparagraph 11(2)(d)(i).\n\n#### 25 Modification of principles applicable to 1995‑1996 in respect of section 12 payments\n\n  The Minister may modify any of the principles referred to in subparagraph 14(2)(c)(i).\n\n#### 26 Transitional modification of national principles\n\n  The Minister may determine in writing that any one or more of the national principles in force under section 6 are, in respect of a year referred to in the determination, to have effect, in relation to a State or States so referred to, subject to modifications set out in the determination.\n\n#### 27 Avoidance of double payments to Australian Capital Territory\n\n  The total of the amounts that, apart from this section, would be payable under this Act to the Australian Capital Territory in respect of the year beginning on 1 July 1995 is reduced by any amount or amounts paid to that Territory for local government purposes in respect of that year under the Appropriation Act (No. 2) 1995‑96.\n\n#### 28 Overpayments and underpayments of general grants in respect of 1994‑1995\n\n  (1) If an amount is payable to a State under subsection 8(1) of the repealed Act as it continues to apply under subsection 20(2) of this Act in relation to the year that began on 1 July 1994, the amount is to be paid to the State in the year beginning on 1 July 1995 by equal quarterly instalments at the times when instalments to which the State is entitled under section 9 of this Act in respect of that last‑mentioned year are paid.\n  (2) If a State is liable to pay an amount to the Commonwealth under subsection 8(2) of the repealed Act as it continues to apply under subsection 20(2) in this Act in relation to the year that began on 1 July 1994, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 9 of this Act in respect of the year beginning on 1 July 1995 and, if an amount is so deducted, then, despite the deduction, an amount equal to the deduction is taken, for the purposes of this Act, to have been paid to the State.\n\n#### 29 Overpayments and underpayments of other grants in respect of 1994‑1995\n\n  (1) If an amount is payable to a State under subsection 10B(1) of the repealed Act as it continues to apply under subsection 20(2) of this Act in relation to the year that began on 1 July 1994, the amount is to be paid to the State in the year beginning on 1 July 1995 by equal quarterly instalments at the times when instalments to which the State is entitled under section 12 of this Act in respect of that last‑mentioned year are paid.\n  (2) If a State is liable to pay an amount to the Commonwealth under subsection 10B(2) of the repealed Act as it continues to apply under subsection 20(2) in this Act in relation to the year that began on 1 July 1994, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 12 of this Act in respect of the year beginning on 1 July 1995 and, if an amount is so deducted, then, despite the deduction, an amount equal to the deduction is taken, for the purposes of this Act, to have been paid to the State.\n\n#### 30 Estimates of population by Statistician\n\n  A reference in this Act to a preliminary estimate, or to an estimate, of population made by the Statistician includes a reference to such a preliminary estimate, or estimate, made before the commencement of this Act.","sortOrder":8},{"sectionNumber":"7","sectionType":"section","heading":"Estimates by Treasurer and Minister","content":"#### 7 Estimates by Treasurer and Minister\n\n  (1) The Treasurer must, as soon as practicable after the commencement of this Act, make a written estimate of the initial amount.\n  (2) The Minister must, before the start of each year (the current year) after the year beginning on 1 July 1995, make a written estimate of the base figure for the year immediately preceding the current year.\n  (3) The Treasurer must:\n    (a) as soon as practicable after the commencement of this Act, make a written estimate of the factor, calculated to 4 decimal places, to be worked out under subsection 8(1) in relation to the year beginning on 1 July 1995; and\n    (b) before the start of each later year, make a written estimate of the factor, calculated to 4 decimal places to be worked out under subsection 8(1) in relation to the year.\n  (3A) In making an estimate for the purpose of paragraph 3(b), the Treasurer must, so far as the estimate relates to the population of Australia, consult the Statistician.\n  (4) The Treasurer must, as soon as practicable after the commencement of this Act, make a written estimate of the additional previous year funding amount in relation to each State for the year beginning on 1 July 1995.\n  (5) The Minister must, before the start of each year (the relevant year) after the year beginning on 1 July 1995, make a written estimate of the additional previous year funding amount in relation to each State for the relevant year.\n  (6) The Treasurer must, as soon as practicable after an estimate is made under subsection (1), (3) or (4), cause to be given to the Minister a written notice:\n    (a) setting out the estimate; and\n    (b) explaining the basis on which the estimate was made;\n  and the Minister must cause a copy of the notice to be given to the Treasurer of each State.\n  (7) The Minister must, as soon as practicable after an estimate is made under subsection (2) or (5), cause to be given to the Treasurer of each State a written notice:\n    (a) setting out the estimate; and\n    (b) explaining the basis on which the estimate was made.","sortOrder":9},{"sectionNumber":"8","sectionType":"section","heading":"Determination of final factor","content":"#### 8 Determination of final factor\n\n  (1) The Treasurer must, not later than 30 June in each year (the current year), cause a factor in relation to the current year to be worked out by:\n    (a) calculating, to 4 decimal places, the factor using the formula:\n    ![](image.004.png)\n    where:\n    index number means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Statistician in respect of the March quarter in the current year.\n    population of Australia has the meaning given by paragraph 4A(1)(d).\n    previous index number means the index number in respect of the March quarter in the year immediately before the current year.\n    previous population of Australia means the population of Australia that was used in working out the factor under this section in relation to the year immediately before the current year; and\n    (b) if the factor calculated under paragraph (a) would, if it were calculated to 5 decimal places, end in a number greater than 4—increasing that factor by 0.0001; and\n    (c) if the Treasurer considers that there are special circumstances for doing so—increasing or decreasing the factor calculated under paragraph (a) (as increased by any amount under paragraph (b)) by such amount as the Treasurer considers appropriate.\n  (1A) For the purposes of the formula in paragraph (1)(a), if the Statistician changes the index reference period for an index number, only index numbers published in terms of the new index reference period are to be used after the change.\n  (2) In making a decision under paragraph (1)(c), the Treasurer is to have regard to the following matters:\n    (a) the objects of the Parliament in enacting this Act, as set out in section 3; and\n    (d) any other matters that the Treasurer thinks relevant.\n  (3) The Treasurer must, not later than 30 June in each year, cause to be given to the Minister a written notice:\n    (a) setting out the factor worked out under subsection (1) in relation to the year; and\n    (b) explaining the basis on which the factor was worked out.\n  (4) The Minister must cause a copy of the notice to be given to the Treasurer of each State.","sortOrder":10},{"sectionNumber":"9","sectionType":"section","heading":"State entitlements for local government purposes","content":"#### 9 State entitlements for local government purposes\n\n  (1) Subject to this section and to section 11, each State is entitled to the payment, in respect of a year (the current year), by way of financial assistance for local government purposes, of a general grant, being:\n    (a) if the current year is the year beginning on 1 July 1995, the amount worked out using the formula:\n    ![](image.005.png)\n    (b) if the current year is a later year, the amount worked out using the formula:\n    ![](image.006.png)\n    where:\n    Relevant estimated factor means the estimated factor for the current year.\n    Projected population of the State means the population of the State on 31 December in the year immediately before the current year as set out in a preliminary estimate of that population on that date made by the Statistician according to assumptions specified by the Minister in writing for the purpose, after consulting the Statistician.\n    Projected population of Australia means the total population of all the States on 31 December in the year immediately before the current year as set out in a preliminary estimate of that population on that date made by the Statistician according to assumptions specified by the Minister in writing for the purpose, after consulting the Statistician.\n    Estimated previous year base figure means the amount estimated under subsection 7(2) in relation to the year immediately before the current year.\n    Note: For estimated initial amount and estimated factor see subsection 4(2).\n  (2) A State is not entitled to a payment under this section in respect of a year unless:\n    (a) if the year is the year beginning on 1 July 1995—an estimate under subsection 7(1) has been made in relation to that year; and\n    (b) if the year is a later year—an estimate under subsection 7(2) has been made in relation to the immediately preceding year; and\n    (c) in any case—an estimate under subsection 7(3) has been made in relation to the year.\n  (3) A State is not entitled to a payment under this section in respect of a year until 15 August in the year.\n  (4) So far as practicable, the amount to which a State is entitled under this section in respect of a year must be paid in equal quarterly instalments.","sortOrder":11},{"sectionNumber":"10","sectionType":"section","heading":"Adjustment of estimates—section 9 payments","content":"#### 10 Adjustment of estimates—section 9 payments\n\n  (1) This section applies to a State in respect of a year (the current year) if the amount worked out under subsection 9(1) (the preliminary grant amount) in relation to the State in respect of the current year is greater or less than:\n    (a) if the current year is the year beginning on 1 July 1995, the amount (the final grant amount) worked out using the formula:\n    ![](image.007.png)\n    (b) if the current year is a later year, the amount (the final grant amount) worked out using the formula:\n    ![](image.008.png)\n    where:\n    Relevant final factor means the final factor for the current year.\n    Population of the State has the meaning given by paragraph 4A(1)(c).\n    Population of Australia has the meaning given by paragraph 4A(1)(d).\n    Previous year base figure means the base figure for the year immediately before the current year.\n    Note 1: For initial amount and final factor see subsection 4(2).\n    Note 2: For base figure see subsection 4(1).\n  (4) If the final grant amount for a State in respect of a year exceeds the preliminary grant amount for the State in respect of the year, the State is entitled, in addition to the payment to which it is entitled under section 9 in respect of the year, to the payment in respect of the year, by way of financial assistance for local government purposes, of an amount equal to the excess.\n  (5) In addition to any other conditions to which a payment under this Act is subject, payment of an amount to a State under this Act is subject to the condition that if the final grant amount for the State in respect of a year is less than the preliminary grant amount for the State in respect of the year, the State will pay to the Commonwealth an amount equal to the difference.\n  (6) If an amount is payable to a State under subsection (4) in respect of a year, the amount is to be paid to the State in the following year by equal quarterly instalments at the times when instalments to which the State is entitled under section 9 in respect of the following year are paid.\n  (6A) Despite subsection (6), if the Minister considers that it is appropriate, the Minister may decide that an amount payable to a State under subsection (4) is to be paid at such times, and in such instalments, as the Minister decides. The Minister cannot decide that an amount is to be paid later than it would be paid under subsection (6).\n\n> Note: Example: The Minister may decide that an amount payable to a State in respect of a year be paid in one payment during that year.\n\n  (6B) If the Minister makes a decision under subsection (6A) in relation to a State, the Minister must, as soon as practicable, notify the Treasurer of the State in writing of the decision.\n  (7) If a State is liable to pay an amount to the Commonwealth under subsection (5) in respect of a year, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 9 in respect of the following year.","sortOrder":12},{"sectionNumber":"11","sectionType":"section","heading":"Allocation among local governing bodies—section 9 payments","content":"#### 11 Allocation among local governing bodies—section 9 payments\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) A State is not entitled to payment of an amount under section 9 in respect of a year unless:\n    (a) there is a Local Government Grants Commission of the State; and\n    (b) the Commission has made recommendations with respect to the allocation of the amount among local governing bodies in the State; and\n    (c) the Commission:\n    (i) held public hearings (whether or not it also held private hearings) in connection with the recommendations; and\n    (ii) permitted or required local governing bodies in the State or associations of those bodies to make submissions to it in connection with the recommendations; and\n    (d) the Commission has made the recommendations:\n    (i) if the year is the year beginning on 1 July 1995—in accordance with the principles that were applicable to the State under section 9 of the repealed Act in respect of the immediately preceding year or, if those principles have been modified under section 24, in accordance with those principles as so modified; or\n    (ii) if the year is a later year—in accordance with national principles in force under section 6 of this Act in respect of the later year or, if those principles have been modified under section 26 in relation to the State in respect of the later year, in accordance with those principles as so modified; and\n    (e) the relevant State Minister has given the Minister in writing particulars of the manner in which the State proposes to allocate the amount among local governing bodies in the State; and\n    (f) the Minister is satisfied that, in determining the manner in which the State proposes to allocate the amount among local governing bodies in the State, the State has adopted the recommendations of the Commission; and\n    (g) the State does not allocate the amount among local governing bodies in the State except in accordance with the proposed allocation or in accordance with that proposed allocation as altered with the agreement of the Minister.\n  (3) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.","sortOrder":13},{"sectionNumber":"12","sectionType":"section","heading":"Additional funding for local government purposes","content":"#### 12 Additional funding for local government purposes\n\n  (1) Subject to this section and section 14, each State is entitled to the payment, in respect of a year (the current year), by way of financial assistance for local government purposes, of the amount worked out using the formula:\n  ![](image.009.png)\n  where:\n  Estimated additional previous year funding amount means the estimated additional previous year funding amount in relation to the State for the current year;\n\n> Estimated factor means the estimated factor for the current year.\n\n> Note: For estimated additional previous year funding amount and estimated factor see subsection 4(2).\n\n  (2) A State is not entitled to a payment under this section in respect of a year until 15 August in the year.\n  (3) A State is not entitled to a payment under this section in respect of a year unless:\n    (a) an estimate under subsection 7(3) has been made in relation to the year; and\n    (b) an estimate under subsection 7(4) or (5), as the case may be, has been made in relation to the State for the year.\n  (4) So far as practicable, an amount to which a State is entitled under this section must be paid in equal quarterly instalments.","sortOrder":14},{"sectionNumber":"13","sectionType":"section","heading":"Adjustment of estimates—section 12 payments","content":"#### 13 Adjustment of estimates—section 12 payments\n\n  (1) This section applies to a State in respect of a year (the current year) if the amount worked out under section 12 (the preliminary additional grant amount) in relation to the State in respect of the current year is greater or less than the amount (the final additional grant amount) worked out in relation to the State in respect of the current year using the formula:\n  ![](image.010.png)\n  where:\n\n> Additional previous year funding amount means the additional previous year funding amount in relation to the State for the current year.\n\n> Final factor means the final factor for the current year.\n\n> Note: For additional previous year funding amount and final factor see subsection 4(2).\n\n  (2) If the final additional grant amount for a State in respect of a year exceeds the preliminary additional grant amount for the State in respect of the year, the State is entitled, in addition to the payment to which it is entitled under section 12 in respect of the year, to the payment in respect of the year, by way of financial assistance for local government purposes, of an amount equal to the excess.\n  (3) In addition to any other conditions to which a payment under this Act is subject, payment of an amount to a State under this Act is subject to the condition that, if the final additional grant amount for the State in respect of a year is less than the preliminary additional grant amount for the State in respect of the year, the State will pay to the Commonwealth an amount equal to the difference.\n  (4) If an amount is payable to a State under subsection (2) in respect of a year, the amount is to be paid to the State in the following year by equal quarterly instalments at the times when instalments to which the State is entitled under section 12 in respect of that following year are paid.\n  (4A) Despite subsection (4), if the Minister considers that it is appropriate, the Minister may decide that an amount payable to a State under subsection (2) is to be paid at such times, and in such instalments, as the Minister decides. The Minister cannot decide that an amount is to be paid later than it would be paid under subsection (4).\n\n> Note: Example: The Minister may decide that an amount payable to a State in respect of a year be paid in one payment during that year.\n\n  (4B) If the Minister makes a decision under subsection (4A) in relation to a State, the Minister must, as soon as practicable, notify the Treasurer of the State in writing of the decision.\n  (5) If a State is liable to pay an amount to the Commonwealth under subsection (3), one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 12 in respect of the following year.","sortOrder":15},{"sectionNumber":"14","sectionType":"section","heading":"Allocation among local governing bodies—section 12 payments","content":"#### 14 Allocation among local governing bodies—section 12 payments\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) A State is not entitled to payment of an amount under section 12 in respect of a year unless:\n    (a) there is a Local Government Grants Commission of the State; and\n    (b) the Commission has made recommendations with respect to the allocation of the amount among local governing bodies in the State; and\n    (c) the Commission has made the recommendations:\n    (i) if the year is the year beginning on 1 July 1995—in accordance with any principles that were applicable to the State under paragraph 10C(1)(da) of the repealed Act in respect of the immediately preceding year or, if those principles have been modified under section 25, in accordance with those principles as so modified; or\n    (ii) if the year is a later year—in accordance with any relevant national principles in force under section 6 in respect of the later year that relate to expenditure on local roads by local governing bodies or, if those principles have been modified under section 26 in relation to the State in respect of the later year, in accordance with those principles as so modified; and\n    (d) the relevant State Minister has given the Minister in writing particulars of the manner in which the State proposes to allocate the amount among local governing bodies in the State; and\n    (e) the Minister is satisfied that, in determining the manner in which the State proposes to allocate the amount among local governing bodies in the State, the State has adopted the recommendations of the Commission; and\n    (f) the State does not allocate the amount among local governing bodies in the State except in accordance with the proposed allocation or in accordance with that proposed allocation as altered in accordance with the agreement of the Minister.\n  (3) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.","sortOrder":16},{"sectionNumber":"15","sectionType":"section","heading":"Conditions of payments to States other than the Australian Capital Territory","content":"#### 15 Conditions of payments to States other than the Australian Capital Territory\n\n  Payment of an amount to a State (other than the Australian Capital Territory) under this Act in respect of a year is subject to:\n    (a) a condition, subject to the condition in paragraph (aa), that the State will:\n    (i) if the payment is made under section 9—without undue delay, make unconditional payments to local governing bodies in the State in accordance with the allocation determined as mentioned in section 11; and\n    (ii) if the payment is made under section 10—without undue delay, make unconditional payments to local governing bodies in the State in the same proportion as the payments under section 9 in respect of the year were allocated; and\n    (iii) if the payment is made under section 12—without undue delay, make unconditional payments to local governing bodies in the State in accordance with the allocation determined as mentioned in section 14; and\n    (iv) if the payment is made under section 13—without undue delay, make unconditional payments to local governing bodies in the State in the same proportion as the payments under section 12 in respect of the year were allocated; and\n    (aa) a condition that, if the payment is one from which, according to an agreement between the Commonwealth and the State, the State is to withhold an amount that represents voluntary GST payments that should have, but have not, been paid by local governing bodies—the State will withhold the amount and pay it to the Commonwealth; and\n    (b) a condition that the Treasurer of the State will give the Minister, as soon as practicable after 30 June in each year:\n    (i) a statement, in a form approved by the Minister, setting out the payments made by the State during the year ending on that date in accordance with this Act, and the dates of the payments; and\n    (ii) a certificate by the Auditor‑General of the State certifying that, in his or her opinion, the contents of the statement are correct; and\n    (c) a condition that, if the Minister tells the Treasurer of the State that the Minister is satisfied that the State has, with respect to the whole or a part of the amount, failed to fulfil any of the conditions applicable under paragraphs (a), (aa) and (b) to the payment of the amount, the State will repay to the Commonwealth any amount determined by the Minister that is not more than the amount in respect of which the Minister is so satisfied.","sortOrder":17},{"sectionNumber":"Part 3","sectionType":"part","heading":"Miscellaneous","content":"An Act to provide for financial assistance for local government purposes by means of grants to the States, the Australian Capital Territory and the Northern Territory, and for related purposes\n\n## Part 1—Preliminary\n\n#### 1 Short title\n\n  This Act may be cited as the Local Government (Financial Assistance) Act 1995.\n\n#### 2 Commencement\n\n  This Act commences on the day on which it receives the Royal Assent.\n\n#### 3 Objects of Act\n\n  (1) This section explains the objects of the Parliament in enacting this Act.\n  (2) The Parliament wishes to provide financial assistance to the States for the purposes of improving:\n    (a) the financial capacity of local governing bodies; and\n    (b) the capacity of local governing bodies to provide their residents with an equitable level of services; and\n    (c) the certainty of funding for local governing bodies; and\n    (d) the efficiency and effectiveness of local governing bodies; and\n    (e) the provision by local governing bodies of services to Aboriginal and Torres Strait Islander communities.\n  (3) The financial assistance is to be provided by the making to the States, for local government purposes, of general grants under section 9 and additional funding under section 12.\n  (4) In providing this financial assistance the Parliament’s goals are to:\n    (a) increase the transparency and accountability of the States in respect of the allocation of funds under this Act to local governing bodies; and\n    (b) promote consistency in the methods by which grants are allocated to achieve equitable levels of services by local governing bodies.\n  (5) To achieve those goals this Act provides for:\n    (a) the formulation of national principles for the purposes of the allocation of funds by the States to local governing bodies (section 6); and\n    (b) the making of an annual report to the Parliament about the operation of this Act (subsection 16(1)); and\n    (c) an assessment of the performance of local governing bodies (subsection 16(3)).\n\n#### 4 Definitions\n\n  (1) In this Act:\n\n> base figure means:\n\n    (a) in relation to the year beginning on 1 July 1995, the amount worked out using the formula:\n    ![](image.002.png)\n\n> where:\n\n> Initial amount has the meaning given by subsection (2).\n\n> Relevant final factor means the final factor for the year; or\n\n    (b) in relation to a later year (the current year), the amount worked out using the formula:\n    ![](image.003.png)\n\n> where:\n\n> Previous year base figure means the base figure for the year immediately before the current year.\n\n> Relevant final factor means the final factor for the current year.\n\n  (2) In this Act, unless the contrary intention appears:\n\n> additional previous year funding amount, in relation to a State for a year (the current year) means:\n\n    (a) if the current year is the year beginning on 1 July 1995:\n    (i) in relation to a State other than the Australian Capital Territory—the amount that would have been payable to the State under section 10A of the repealed Act for the year immediately preceding the current year if the amount had been calculated using the final factor within the meaning of that Act for that preceding year instead of the estimated factor for that preceding year; or\n    (ii) in relation to the Australian Capital Territory—an amount determined by the Treasurer in writing; or\n    (b) if the current year is a later year—the amount that would have been payable to the State under section 12 of this Act for the year immediately preceding the current year if the amount had been calculated using the final factor for that preceding year instead of the estimated factor for that preceding year.\n\n> estimated additional previous year funding amount, in relation to a State for a year, means the amount estimated under subsection 7(4) or (5), as the case may be, in relation to the State for the year.\n\n> estimated factor, in relation to a year, means the factor estimated under subsection 7(3) in relation to the year.\n\n> estimated initial amount means the amount estimated under subsection 7(1).\n\n> final factor, in relation to a year, means the factor worked out under section 8 in relation to the year.\n\n> initial amount means the sum of:\n\n    (a) the amount that would have been the base figure under the repealed Act for the year that began on 1 July 1994 if that amount had been calculated using the final factor within the meaning of that Act for that year instead of the estimated factor; and\n    (b) an amount determined by the Treasurer in writing to be the amount by which the amount referred to in paragraph (a) would have been increased if the Australian Capital Territory had been a State for the purposes of the repealed Act.\n\n> local governing body means:\n\n    (a) a local governing body established by or under a law of a State, other than a body whose sole or principal function is to provide a particular service, such as the supply of electricity or water; or\n    (b) a body declared by the Minister, on the advice of the relevant State Minister, by notice published in the Gazette, to be a local governing body for the purposes of this Act.\n\n> Local Government Grants Commission, in relation to a State, means the body named in a declaration in force under section 5 as the Local Government Grants Commission of the State.\n\n> relevant State Minister means:\n\n    (a) in relation to, or in relation to a body in, a State (other than the Australian Capital Territory)—the Minister of the State who is for the time being responsible for the administration of the law of the State that establishes the Local Government Grants Commission of the State; or\n    (b) in relation to, or in relation to a body in, the Australian Capital Territory:\n    (i) subject to subparagraph (ii), the Minister for Urban Services of the Territory; or\n    (ii) if another Minister of the Territory is prescribed by the regulations for the purposes of this paragraph—that other Minister.\n\n> repealed Act means the Local Government (Financial Assistance) Act 1986.\n\n> State includes the Australian Capital Territory and the Northern Territory.\n\n> Statistician means the Australian Statistician.\n\n> year means the financial year beginning on 1 July 1995 or a later financial year.\n\n  (3) The Treasurer has power to make written determinations for the purposes of this Act.\n  (4) The Minister has power to make declarations for the purposes of paragraph (b) of the definition of “local governing body” in subsection (2).\n\n#### 4A Population estimates\n\n  (1) For the purposes of:\n    (a) causing a factor to be worked out under subsection 8(1) in relation to the current year mentioned in that subsection; and\n    (b) applying section 10 in respect of the current year mentioned in that section;\n  the following apply:\n    (c) the expression population of the State means the population of the State on 31 December in the year immediately before the current year as set out in an estimate of that population on that date made by the Statistician for the purposes of this section;\n    (d) the expression population of Australia means the total population of all of the States on 31 December in the year immediately before the current year as set out in an estimate of that population on that date made by the Statistician for the purposes of this section.\n  (2) The Statistician, in making an estimate for the purposes of this section of the population of a State, must have regard to the latest statistics in relation to the population available to the Statistician on the day on which the estimate is made.\n  (3) The Minister must, as soon as practicable after the Statistician makes an estimate of the population of each State for the purposes of this section, cause to be given to the Treasurer of each State a written notice setting out the population of the State and the total population of all of the States.\n\n#### 5 Local Government Grants Commissions\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) If:\n    (a) the principal function of a body established by a law of a State is the making of recommendations to the Government of the State with respect to theprovision of financial assistance to local governing bodies in the State; and\n    (b) the Minister is satisfied that the membership of the body includes at least 2 people who are or have been associated with local government in the State, whether as members of a local governing body or otherwise;\n  the Minister may, by notice published in the Gazette, declare the body to be the Local Government Grants Commission of the State for the purposes of this Act.\n\n#### 6 National principles governing allocation by States among local governing bodies\n\n  (1) The Minister, after consulting the relevant State Ministers and with a body or bodies representative of local government, must formulate national principles for the purpose of allocating among local governing bodies amounts payable to States (other than the Australian Capital Territory) under this Act in the year beginning on 1 July 1996 and later years.\n  (2) In formulating national principles, the Minister:\n    (a) is to have regard to the need to ensure that the allocation of funds for local government purposes under section 9 is made, as far as practicable, on a full horizontal equalisation basis; but\n    (b) must ensure that no local governing body in a State will be allocated an amount under section 9 in a year that is less than the amount that would be allocated to the body if 30% of the amount to which the State is entitled under that section in respect of the year were allocated among local governing bodies in the State on a per capita basis.\n  (3) The reference in paragraph (2)(a) to the allocation of funds for local government purposes on a full horizontal equalisation basis is a reference to an allocation of funds that:\n    (a) ensures that each local governing body in a State is able to function, by reasonable effort, at a standard not lower than the average standard of other local governing bodies in the State; and\n    (b) takes account of differences in the expenditure required to be incurred by local governing bodies in the performance of their functions and in their capacity to raise revenue.\n  (4) The Minister may, after consulting with relevant State Ministers and with a body or bodies representative of local government, revoke or vary any principles formulated under subsection (1).\n  (5) The Minister must cause to be given to the relevant State Minister of each State other than the Australian Capital Territory and to a body or bodies representative of local government a copy of any instrument formulating principles under subsection (1) and a copy of any instrument under subsection (4) revoking or varying any of those principles.\n  (6) National principles formulated under subsection (1), and revocations or variations of national principles under subsection (4), are legislative instruments.\n\n> Note 1: Section 42 (disallowance) of the Legislation Act 2003 does not apply to the principles: see subsection 44(1) of that Act.\n\n> Note 2: Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 does not apply to the principles: see subsection 54(1) of that Act.\n\n  (7) If there are no national principles in force under this section, paragraph 11(2)(d) is to be read as requiring the Commission to make the recommendations on the same basis as the basis on which the Minister is, under subsection (2) of this section, required to act in formulating national principles (see paragraphs (2)(a) and (b)).\n  (8) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.\n\n## Part 2—Grants Of financial assistance\n\n#### 7 Estimates by Treasurer and Minister\n\n  (1) The Treasurer must, as soon as practicable after the commencement of this Act, make a written estimate of the initial amount.\n  (2) The Minister must, before the start of each year (the current year) after the year beginning on 1 July 1995, make a written estimate of the base figure for the year immediately preceding the current year.\n  (3) The Treasurer must:\n    (a) as soon as practicable after the commencement of this Act, make a written estimate of the factor, calculated to 4 decimal places, to be worked out under subsection 8(1) in relation to the year beginning on 1 July 1995; and\n    (b) before the start of each later year, make a written estimate of the factor, calculated to 4 decimal places to be worked out under subsection 8(1) in relation to the year.\n  (3A) In making an estimate for the purpose of paragraph 3(b), the Treasurer must, so far as the estimate relates to the population of Australia, consult the Statistician.\n  (4) The Treasurer must, as soon as practicable after the commencement of this Act, make a written estimate of the additional previous year funding amount in relation to each State for the year beginning on 1 July 1995.\n  (5) The Minister must, before the start of each year (the relevant year) after the year beginning on 1 July 1995, make a written estimate of the additional previous year funding amount in relation to each State for the relevant year.\n  (6) The Treasurer must, as soon as practicable after an estimate is made under subsection (1), (3) or (4), cause to be given to the Minister a written notice:\n    (a) setting out the estimate; and\n    (b) explaining the basis on which the estimate was made;\n  and the Minister must cause a copy of the notice to be given to the Treasurer of each State.\n  (7) The Minister must, as soon as practicable after an estimate is made under subsection (2) or (5), cause to be given to the Treasurer of each State a written notice:\n    (a) setting out the estimate; and\n    (b) explaining the basis on which the estimate was made.\n\n#### 8 Determination of final factor\n\n  (1) The Treasurer must, not later than 30 June in each year (the current year), cause a factor in relation to the current year to be worked out by:\n    (a) calculating, to 4 decimal places, the factor using the formula:\n    ![](image.004.png)\n    where:\n    index number means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Statistician in respect of the March quarter in the current year.\n    population of Australia has the meaning given by paragraph 4A(1)(d).\n    previous index number means the index number in respect of the March quarter in the year immediately before the current year.\n    previous population of Australia means the population of Australia that was used in working out the factor under this section in relation to the year immediately before the current year; and\n    (b) if the factor calculated under paragraph (a) would, if it were calculated to 5 decimal places, end in a number greater than 4—increasing that factor by 0.0001; and\n    (c) if the Treasurer considers that there are special circumstances for doing so—increasing or decreasing the factor calculated under paragraph (a) (as increased by any amount under paragraph (b)) by such amount as the Treasurer considers appropriate.\n  (1A) For the purposes of the formula in paragraph (1)(a), if the Statistician changes the index reference period for an index number, only index numbers published in terms of the new index reference period are to be used after the change.\n  (2) In making a decision under paragraph (1)(c), the Treasurer is to have regard to the following matters:\n    (a) the objects of the Parliament in enacting this Act, as set out in section 3; and\n    (d) any other matters that the Treasurer thinks relevant.\n  (3) The Treasurer must, not later than 30 June in each year, cause to be given to the Minister a written notice:\n    (a) setting out the factor worked out under subsection (1) in relation to the year; and\n    (b) explaining the basis on which the factor was worked out.\n  (4) The Minister must cause a copy of the notice to be given to the Treasurer of each State.\n\n#### 9 State entitlements for local government purposes\n\n  (1) Subject to this section and to section 11, each State is entitled to the payment, in respect of a year (the current year), by way of financial assistance for local government purposes, of a general grant, being:\n    (a) if the current year is the year beginning on 1 July 1995, the amount worked out using the formula:\n    ![](image.005.png)\n    (b) if the current year is a later year, the amount worked out using the formula:\n    ![](image.006.png)\n    where:\n    Relevant estimated factor means the estimated factor for the current year.\n    Projected population of the State means the population of the State on 31 December in the year immediately before the current year as set out in a preliminary estimate of that population on that date made by the Statistician according to assumptions specified by the Minister in writing for the purpose, after consulting the Statistician.\n    Projected population of Australia means the total population of all the States on 31 December in the year immediately before the current year as set out in a preliminary estimate of that population on that date made by the Statistician according to assumptions specified by the Minister in writing for the purpose, after consulting the Statistician.\n    Estimated previous year base figure means the amount estimated under subsection 7(2) in relation to the year immediately before the current year.\n    Note: For estimated initial amount and estimated factor see subsection 4(2).\n  (2) A State is not entitled to a payment under this section in respect of a year unless:\n    (a) if the year is the year beginning on 1 July 1995—an estimate under subsection 7(1) has been made in relation to that year; and\n    (b) if the year is a later year—an estimate under subsection 7(2) has been made in relation to the immediately preceding year; and\n    (c) in any case—an estimate under subsection 7(3) has been made in relation to the year.\n  (3) A State is not entitled to a payment under this section in respect of a year until 15 August in the year.\n  (4) So far as practicable, the amount to which a State is entitled under this section in respect of a year must be paid in equal quarterly instalments.\n\n#### 10 Adjustment of estimates—section 9 payments\n\n  (1) This section applies to a State in respect of a year (the current year) if the amount worked out under subsection 9(1) (the preliminary grant amount) in relation to the State in respect of the current year is greater or less than:\n    (a) if the current year is the year beginning on 1 July 1995, the amount (the final grant amount) worked out using the formula:\n    ![](image.007.png)\n    (b) if the current year is a later year, the amount (the final grant amount) worked out using the formula:\n    ![](image.008.png)\n    where:\n    Relevant final factor means the final factor for the current year.\n    Population of the State has the meaning given by paragraph 4A(1)(c).\n    Population of Australia has the meaning given by paragraph 4A(1)(d).\n    Previous year base figure means the base figure for the year immediately before the current year.\n    Note 1: For initial amount and final factor see subsection 4(2).\n    Note 2: For base figure see subsection 4(1).\n  (4) If the final grant amount for a State in respect of a year exceeds the preliminary grant amount for the State in respect of the year, the State is entitled, in addition to the payment to which it is entitled under section 9 in respect of the year, to the payment in respect of the year, by way of financial assistance for local government purposes, of an amount equal to the excess.\n  (5) In addition to any other conditions to which a payment under this Act is subject, payment of an amount to a State under this Act is subject to the condition that if the final grant amount for the State in respect of a year is less than the preliminary grant amount for the State in respect of the year, the State will pay to the Commonwealth an amount equal to the difference.\n  (6) If an amount is payable to a State under subsection (4) in respect of a year, the amount is to be paid to the State in the following year by equal quarterly instalments at the times when instalments to which the State is entitled under section 9 in respect of the following year are paid.\n  (6A) Despite subsection (6), if the Minister considers that it is appropriate, the Minister may decide that an amount payable to a State under subsection (4) is to be paid at such times, and in such instalments, as the Minister decides. The Minister cannot decide that an amount is to be paid later than it would be paid under subsection (6).\n\n> Note: Example: The Minister may decide that an amount payable to a State in respect of a year be paid in one payment during that year.\n\n  (6B) If the Minister makes a decision under subsection (6A) in relation to a State, the Minister must, as soon as practicable, notify the Treasurer of the State in writing of the decision.\n  (7) If a State is liable to pay an amount to the Commonwealth under subsection (5) in respect of a year, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 9 in respect of the following year.\n\n#### 11 Allocation among local governing bodies—section 9 payments\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) A State is not entitled to payment of an amount under section 9 in respect of a year unless:\n    (a) there is a Local Government Grants Commission of the State; and\n    (b) the Commission has made recommendations with respect to the allocation of the amount among local governing bodies in the State; and\n    (c) the Commission:\n    (i) held public hearings (whether or not it also held private hearings) in connection with the recommendations; and\n    (ii) permitted or required local governing bodies in the State or associations of those bodies to make submissions to it in connection with the recommendations; and\n    (d) the Commission has made the recommendations:\n    (i) if the year is the year beginning on 1 July 1995—in accordance with the principles that were applicable to the State under section 9 of the repealed Act in respect of the immediately preceding year or, if those principles have been modified under section 24, in accordance with those principles as so modified; or\n    (ii) if the year is a later year—in accordance with national principles in force under section 6 of this Act in respect of the later year or, if those principles have been modified under section 26 in relation to the State in respect of the later year, in accordance with those principles as so modified; and\n    (e) the relevant State Minister has given the Minister in writing particulars of the manner in which the State proposes to allocate the amount among local governing bodies in the State; and\n    (f) the Minister is satisfied that, in determining the manner in which the State proposes to allocate the amount among local governing bodies in the State, the State has adopted the recommendations of the Commission; and\n    (g) the State does not allocate the amount among local governing bodies in the State except in accordance with the proposed allocation or in accordance with that proposed allocation as altered with the agreement of the Minister.\n  (3) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.\n\n#### 12 Additional funding for local government purposes\n\n  (1) Subject to this section and section 14, each State is entitled to the payment, in respect of a year (the current year), by way of financial assistance for local government purposes, of the amount worked out using the formula:\n  ![](image.009.png)\n  where:\n  Estimated additional previous year funding amount means the estimated additional previous year funding amount in relation to the State for the current year;\n\n> Estimated factor means the estimated factor for the current year.\n\n> Note: For estimated additional previous year funding amount and estimated factor see subsection 4(2).\n\n  (2) A State is not entitled to a payment under this section in respect of a year until 15 August in the year.\n  (3) A State is not entitled to a payment under this section in respect of a year unless:\n    (a) an estimate under subsection 7(3) has been made in relation to the year; and\n    (b) an estimate under subsection 7(4) or (5), as the case may be, has been made in relation to the State for the year.\n  (4) So far as practicable, an amount to which a State is entitled under this section must be paid in equal quarterly instalments.\n\n#### 13 Adjustment of estimates—section 12 payments\n\n  (1) This section applies to a State in respect of a year (the current year) if the amount worked out under section 12 (the preliminary additional grant amount) in relation to the State in respect of the current year is greater or less than the amount (the final additional grant amount) worked out in relation to the State in respect of the current year using the formula:\n  ![](image.010.png)\n  where:\n\n> Additional previous year funding amount means the additional previous year funding amount in relation to the State for the current year.\n\n> Final factor means the final factor for the current year.\n\n> Note: For additional previous year funding amount and final factor see subsection 4(2).\n\n  (2) If the final additional grant amount for a State in respect of a year exceeds the preliminary additional grant amount for the State in respect of the year, the State is entitled, in addition to the payment to which it is entitled under section 12 in respect of the year, to the payment in respect of the year, by way of financial assistance for local government purposes, of an amount equal to the excess.\n  (3) In addition to any other conditions to which a payment under this Act is subject, payment of an amount to a State under this Act is subject to the condition that, if the final additional grant amount for the State in respect of a year is less than the preliminary additional grant amount for the State in respect of the year, the State will pay to the Commonwealth an amount equal to the difference.\n  (4) If an amount is payable to a State under subsection (2) in respect of a year, the amount is to be paid to the State in the following year by equal quarterly instalments at the times when instalments to which the State is entitled under section 12 in respect of that following year are paid.\n  (4A) Despite subsection (4), if the Minister considers that it is appropriate, the Minister may decide that an amount payable to a State under subsection (2) is to be paid at such times, and in such instalments, as the Minister decides. The Minister cannot decide that an amount is to be paid later than it would be paid under subsection (4).\n\n> Note: Example: The Minister may decide that an amount payable to a State in respect of a year be paid in one payment during that year.\n\n  (4B) If the Minister makes a decision under subsection (4A) in relation to a State, the Minister must, as soon as practicable, notify the Treasurer of the State in writing of the decision.\n  (5) If a State is liable to pay an amount to the Commonwealth under subsection (3), one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 12 in respect of the following year.\n\n#### 14 Allocation among local governing bodies—section 12 payments\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) A State is not entitled to payment of an amount under section 12 in respect of a year unless:\n    (a) there is a Local Government Grants Commission of the State; and\n    (b) the Commission has made recommendations with respect to the allocation of the amount among local governing bodies in the State; and\n    (c) the Commission has made the recommendations:\n    (i) if the year is the year beginning on 1 July 1995—in accordance with any principles that were applicable to the State under paragraph 10C(1)(da) of the repealed Act in respect of the immediately preceding year or, if those principles have been modified under section 25, in accordance with those principles as so modified; or\n    (ii) if the year is a later year—in accordance with any relevant national principles in force under section 6 in respect of the later year that relate to expenditure on local roads by local governing bodies or, if those principles have been modified under section 26 in relation to the State in respect of the later year, in accordance with those principles as so modified; and\n    (d) the relevant State Minister has given the Minister in writing particulars of the manner in which the State proposes to allocate the amount among local governing bodies in the State; and\n    (e) the Minister is satisfied that, in determining the manner in which the State proposes to allocate the amount among local governing bodies in the State, the State has adopted the recommendations of the Commission; and\n    (f) the State does not allocate the amount among local governing bodies in the State except in accordance with the proposed allocation or in accordance with that proposed allocation as altered in accordance with the agreement of the Minister.\n  (3) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.\n\n#### 15 Conditions of payments to States other than the Australian Capital Territory\n\n  Payment of an amount to a State (other than the Australian Capital Territory) under this Act in respect of a year is subject to:\n    (a) a condition, subject to the condition in paragraph (aa), that the State will:\n    (i) if the payment is made under section 9—without undue delay, make unconditional payments to local governing bodies in the State in accordance with the allocation determined as mentioned in section 11; and\n    (ii) if the payment is made under section 10—without undue delay, make unconditional payments to local governing bodies in the State in the same proportion as the payments under section 9 in respect of the year were allocated; and\n    (iii) if the payment is made under section 12—without undue delay, make unconditional payments to local governing bodies in the State in accordance with the allocation determined as mentioned in section 14; and\n    (iv) if the payment is made under section 13—without undue delay, make unconditional payments to local governing bodies in the State in the same proportion as the payments under section 12 in respect of the year were allocated; and\n    (aa) a condition that, if the payment is one from which, according to an agreement between the Commonwealth and the State, the State is to withhold an amount that represents voluntary GST payments that should have, but have not, been paid by local governing bodies—the State will withhold the amount and pay it to the Commonwealth; and\n    (b) a condition that the Treasurer of the State will give the Minister, as soon as practicable after 30 June in each year:\n    (i) a statement, in a form approved by the Minister, setting out the payments made by the State during the year ending on that date in accordance with this Act, and the dates of the payments; and\n    (ii) a certificate by the Auditor‑General of the State certifying that, in his or her opinion, the contents of the statement are correct; and\n    (c) a condition that, if the Minister tells the Treasurer of the State that the Minister is satisfied that the State has, with respect to the whole or a part of the amount, failed to fulfil any of the conditions applicable under paragraphs (a), (aa) and (b) to the payment of the amount, the State will repay to the Commonwealth any amount determined by the Minister that is not more than the amount in respect of which the Minister is so satisfied.\n\n## Part 3—Miscellaneous\n\n#### 16 Reports\n\n  (1) The Minister must, as soon as practicable after 30 June in each year, cause a report or reports to be prepared about the operation of this Act in respect of the year.\n\n> Note: The first report under this subsection will relate to the year beginning on 1 July 1995; see the definition of year in subsection 4(2).\n\n  (2) The Minister must ensure that relevant State Ministers and a body or bodies representative of local government are consulted in connection with the preparation of a report under subsection (1).\n  (3) The report or one of the reports must include an assessment by the Minister (based on comparable national data), in relation to the year, of:\n    (a) the extent (if any) to which the allocation of funds for local government purposes has been made on a full horizontal equalisation basis as mentioned in paragraph 6(2)(a); and\n    (b) the methods used by the Local Government Grants Commissions in making their recommendations; and\n    (c) the performance by local governing bodies of their functions including:\n    (i) their efficiency; and\n    (ii) services provided by them to Aboriginal and Torres Strait Islander communities.\n  (4) The Minister must cause a copy of each report to be laid before each House of the Parliament as soon as practicable after the report has been prepared.\n\n#### 17 Review\n\n  (1) The Minister is to cause a review of the operation of this Act to be carried out not later than 30 June 2001 in consultation with the States and with a body or bodies representative of local government.\n  (2) A review is to examine:\n    (a) the effectiveness of the arrangements under this Act in relation to ensuring that the allocation of funds for local government purposes is made on a full horizontal equalisation basis as mentioned in paragraph 6(2)(a); and\n    (b) the impact of this Act on the raising of revenue by local governing bodies and on the assistance provided by the States to local governing bodies; and\n    (c) the implications of any changes in the functions or responsibilities of local governing bodies; and\n    (d) the eligibility for assistance under this Act of bodies declared by the Minister under section 4 to be local governing bodies; and\n    (e) any other matters relating to local government that the Minister determines.\n\n#### 18 Regulations\n\n  The Governor‑General may make regulations prescribing matters:\n    (a) required or permitted by this Act to be prescribed; or\n    (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.\n\n#### 18A Recoverable payments\n\n  (1) If, apart from this subsection, the Commonwealth does not have power under this Act to pay an amount (the relevant amount) to a State purportedly as an amount under this Act, then the Commonwealth may pay the relevant amount to the State.\n  Recovery\n  (2) If:\n    (a) a payment is made under subsection (1) to a State; and\n    (b) the State is entitled to receive an amount under this Act;\n  then:\n    (c) the relevant amount; or\n    (d) such part of the relevant amount as the Minister determines;\n  may, if the Minister so directs, be recovered by deduction from the amount mentioned in paragraph (b).\n\n#### 18B Reports about recoverable payments\n\n  (1) During the applicable publication period for a reporting period, the Secretary of the Department must cause to be published, in such manner as the Secretary thinks fit, a report that sets out:\n    (a) the number of payments made under subsection 18A(1) during the reporting period; and\n    (b) the total amount of those payments.\n  (2) However, a report is not required if the number mentioned in paragraph (1)(a) is zero.\n  Deferred reporting\n  (3) Subsection (1) of this section does not require a report to deal with a payment unless, before the preparation of the report, a Departmental official was aware the payment was made under subsection 18A(1).\n  (4) For the purposes of this section, if:\n    (a) a payment was made under subsection 18A(1) in a reporting period; and\n    (b) because of subsection (3) of this section, subsection (1) of this section did not require a report to deal with the payment; and\n    (c) during a later reporting period, a Departmental official becomes aware that the payment was made under subsection 18A(1);\n  the payment is subject to a deferred reporting obligation in relation to the later reporting period.\n  (5) If one or more payments made under subsection 18A(1) during a reporting period are subject to a deferred reporting obligation in relation to a later reporting period, the Secretary of the Department must, during the applicable publication period for the later reporting period:\n    (a) prepare a report that sets out:\n    (i) the number of those payments; and\n    (ii) the total amount of those payments; and\n    (iii) the reporting period during which the payments were made; and\n    (b) if a report is required under subsection (1) in relation to the later reporting period—include the paragraph (a) report in the subsection (1) report; and\n    (c) if paragraph (b) does not apply—publish, in such manner as the Secretary thinks fit, the paragraph (a) report.\n  Reporting period\n  (6) For the purposes of this section, a reporting period is:\n    (a) a financial year; or\n    (b) if a shorter recurring period is specified in a legislative instrument made by the Minister—that period.\n  Applicable publication period\n  (7) For the purposes of this section, the applicable publication period for a reporting period is the period of:\n    (a) 4 months; or\n    (b) if a lesser number of months is specified, in relation to the reporting period, in a legislative instrument made by the Minister—that number of months;\n  beginning immediately after the end of the reporting period.\n  Departmental official\n  (8) For the purposes of this section, Departmental official means an official (within the meaning of the Public Governance, Performance and Accountability Act 2013) of the Department.\n\n#### 19 Appropriation\n\n  Payments to a State under this Act are to be made out of the Consolidated Revenue Fund, which is appropriated accordingly.\n\n## Part 4—Repeal And Transitional\n\n#### 20 Repeal\n\n  (1) The Local Government (Financial Assistance) Act 1986 is repealed.\n  (2) Despite the repeal effected by subsection (1), the repealed Act continues to apply in relation to financial years before the year beginning on 1 July 1995.\n\n#### 21 Local governing bodies\n\n  A body that, immediately before the commencement of this Act, was duly declared for the purposes of paragraph (b) of the definition of local governing body in section 3 of the repealed Act to be a local governing body for the purposes of that Act is taken to be declared for the purposes of paragraph (b) of the definition of local governing body in subsection 4(2) of this Act to be a local governing body for the purposes of this Act.\n\n#### 22 Local Government Grants Commissions\n\n  If, immediately before the commencement of this Act, an instrument was in force under section 4 of the repealed Act declaring a body to be the Local Government Grants Commission of a State, the instrument is taken to be a declaration duly made under subsection 5(2) of this Act.\n\n#### 23 Estimate of factor by Treasurer\n\n  If the Treasurer made an estimate before the commencement of this Act under section 5 of the repealed Act in relation to the year beginning on 1 July 1995, the estimate is taken to have been made under subsection 7(3) of this Act.\n\n#### 24 Modification of State principles applicable to 1995‑1996\n\n  A State may, with the Minister's written approval, modify any of the principles referred to in subparagraph 11(2)(d)(i).\n\n#### 25 Modification of principles applicable to 1995‑1996 in respect of section 12 payments\n\n  The Minister may modify any of the principles referred to in subparagraph 14(2)(c)(i).\n\n#### 26 Transitional modification of national principles\n\n  The Minister may determine in writing that any one or more of the national principles in force under section 6 are, in respect of a year referred to in the determination, to have effect, in relation to a State or States so referred to, subject to modifications set out in the determination.\n\n#### 27 Avoidance of double payments to Australian Capital Territory\n\n  The total of the amounts that, apart from this section, would be payable under this Act to the Australian Capital Territory in respect of the year beginning on 1 July 1995 is reduced by any amount or amounts paid to that Territory for local government purposes in respect of that year under the Appropriation Act (No. 2) 1995‑96.\n\n#### 28 Overpayments and underpayments of general grants in respect of 1994‑1995\n\n  (1) If an amount is payable to a State under subsection 8(1) of the repealed Act as it continues to apply under subsection 20(2) of this Act in relation to the year that began on 1 July 1994, the amount is to be paid to the State in the year beginning on 1 July 1995 by equal quarterly instalments at the times when instalments to which the State is entitled under section 9 of this Act in respect of that last‑mentioned year are paid.\n  (2) If a State is liable to pay an amount to the Commonwealth under subsection 8(2) of the repealed Act as it continues to apply under subsection 20(2) in this Act in relation to the year that began on 1 July 1994, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 9 of this Act in respect of the year beginning on 1 July 1995 and, if an amount is so deducted, then, despite the deduction, an amount equal to the deduction is taken, for the purposes of this Act, to have been paid to the State.\n\n#### 29 Overpayments and underpayments of other grants in respect of 1994‑1995\n\n  (1) If an amount is payable to a State under subsection 10B(1) of the repealed Act as it continues to apply under subsection 20(2) of this Act in relation to the year that began on 1 July 1994, the amount is to be paid to the State in the year beginning on 1 July 1995 by equal quarterly instalments at the times when instalments to which the State is entitled under section 12 of this Act in respect of that last‑mentioned year are paid.\n  (2) If a State is liable to pay an amount to the Commonwealth under subsection 10B(2) of the repealed Act as it continues to apply under subsection 20(2) in this Act in relation to the year that began on 1 July 1994, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 12 of this Act in respect of the year beginning on 1 July 1995 and, if an amount is so deducted, then, despite the deduction, an amount equal to the deduction is taken, for the purposes of this Act, to have been paid to the State.\n\n#### 30 Estimates of population by Statistician\n\n  A reference in this Act to a preliminary estimate, or to an estimate, of population made by the Statistician includes a reference to such a preliminary estimate, or estimate, made before the commencement of this Act.","sortOrder":18},{"sectionNumber":"16","sectionType":"section","heading":"Reports","content":"#### 16 Reports\n\n  (1) The Minister must, as soon as practicable after 30 June in each year, cause a report or reports to be prepared about the operation of this Act in respect of the year.\n\n> Note: The first report under this subsection will relate to the year beginning on 1 July 1995; see the definition of year in subsection 4(2).\n\n  (2) The Minister must ensure that relevant State Ministers and a body or bodies representative of local government are consulted in connection with the preparation of a report under subsection (1).\n  (3) The report or one of the reports must include an assessment by the Minister (based on comparable national data), in relation to the year, of:\n    (a) the extent (if any) to which the allocation of funds for local government purposes has been made on a full horizontal equalisation basis as mentioned in paragraph 6(2)(a); and\n    (b) the methods used by the Local Government Grants Commissions in making their recommendations; and\n    (c) the performance by local governing bodies of their functions including:\n    (i) their efficiency; and\n    (ii) services provided by them to Aboriginal and Torres Strait Islander communities.\n  (4) The Minister must cause a copy of each report to be laid before each House of the Parliament as soon as practicable after the report has been prepared.","sortOrder":19},{"sectionNumber":"17","sectionType":"section","heading":"Review","content":"#### 17 Review\n\n  (1) The Minister is to cause a review of the operation of this Act to be carried out not later than 30 June 2001 in consultation with the States and with a body or bodies representative of local government.\n  (2) A review is to examine:\n    (a) the effectiveness of the arrangements under this Act in relation to ensuring that the allocation of funds for local government purposes is made on a full horizontal equalisation basis as mentioned in paragraph 6(2)(a); and\n    (b) the impact of this Act on the raising of revenue by local governing bodies and on the assistance provided by the States to local governing bodies; and\n    (c) the implications of any changes in the functions or responsibilities of local governing bodies; and\n    (d) the eligibility for assistance under this Act of bodies declared by the Minister under section 4 to be local governing bodies; and\n    (e) any other matters relating to local government that the Minister determines.","sortOrder":20},{"sectionNumber":"18","sectionType":"section","heading":"Regulations","content":"#### 18 Regulations\n\n  The Governor‑General may make regulations prescribing matters:\n    (a) required or permitted by this Act to be prescribed; or\n    (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.","sortOrder":21},{"sectionNumber":"18A","sectionType":"section","heading":"Recoverable payments","content":"#### 18A Recoverable payments\n\n  (1) If, apart from this subsection, the Commonwealth does not have power under this Act to pay an amount (the relevant amount) to a State purportedly as an amount under this Act, then the Commonwealth may pay the relevant amount to the State.\n  Recovery\n  (2) If:\n    (a) a payment is made under subsection (1) to a State; and\n    (b) the State is entitled to receive an amount under this Act;\n  then:\n    (c) the relevant amount; or\n    (d) such part of the relevant amount as the Minister determines;\n  may, if the Minister so directs, be recovered by deduction from the amount mentioned in paragraph (b).","sortOrder":22},{"sectionNumber":"18B","sectionType":"section","heading":"Reports about recoverable payments","content":"#### 18B Reports about recoverable payments\n\n  (1) During the applicable publication period for a reporting period, the Secretary of the Department must cause to be published, in such manner as the Secretary thinks fit, a report that sets out:\n    (a) the number of payments made under subsection 18A(1) during the reporting period; and\n    (b) the total amount of those payments.\n  (2) However, a report is not required if the number mentioned in paragraph (1)(a) is zero.\n  Deferred reporting\n  (3) Subsection (1) of this section does not require a report to deal with a payment unless, before the preparation of the report, a Departmental official was aware the payment was made under subsection 18A(1).\n  (4) For the purposes of this section, if:\n    (a) a payment was made under subsection 18A(1) in a reporting period; and\n    (b) because of subsection (3) of this section, subsection (1) of this section did not require a report to deal with the payment; and\n    (c) during a later reporting period, a Departmental official becomes aware that the payment was made under subsection 18A(1);\n  the payment is subject to a deferred reporting obligation in relation to the later reporting period.\n  (5) If one or more payments made under subsection 18A(1) during a reporting period are subject to a deferred reporting obligation in relation to a later reporting period, the Secretary of the Department must, during the applicable publication period for the later reporting period:\n    (a) prepare a report that sets out:\n    (i) the number of those payments; and\n    (ii) the total amount of those payments; and\n    (iii) the reporting period during which the payments were made; and\n    (b) if a report is required under subsection (1) in relation to the later reporting period—include the paragraph (a) report in the subsection (1) report; and\n    (c) if paragraph (b) does not apply—publish, in such manner as the Secretary thinks fit, the paragraph (a) report.\n  Reporting period\n  (6) For the purposes of this section, a reporting period is:\n    (a) a financial year; or\n    (b) if a shorter recurring period is specified in a legislative instrument made by the Minister—that period.\n  Applicable publication period\n  (7) For the purposes of this section, the applicable publication period for a reporting period is the period of:\n    (a) 4 months; or\n    (b) if a lesser number of months is specified, in relation to the reporting period, in a legislative instrument made by the Minister—that number of months;\n  beginning immediately after the end of the reporting period.\n  Departmental official\n  (8) For the purposes of this section, Departmental official means an official (within the meaning of the Public Governance, Performance and Accountability Act 2013) of the Department.","sortOrder":23},{"sectionNumber":"19","sectionType":"section","heading":"Appropriation","content":"#### 19 Appropriation\n\n  Payments to a State under this Act are to be made out of the Consolidated Revenue Fund, which is appropriated accordingly.","sortOrder":24},{"sectionNumber":"Part 4","sectionType":"part","heading":"Repeal And Transitional","content":"An Act to provide for financial assistance for local government purposes by means of grants to the States, the Australian Capital Territory and the Northern Territory, and for related purposes\n\n## Part 1—Preliminary\n\n#### 1 Short title\n\n  This Act may be cited as the Local Government (Financial Assistance) Act 1995.\n\n#### 2 Commencement\n\n  This Act commences on the day on which it receives the Royal Assent.\n\n#### 3 Objects of Act\n\n  (1) This section explains the objects of the Parliament in enacting this Act.\n  (2) The Parliament wishes to provide financial assistance to the States for the purposes of improving:\n    (a) the financial capacity of local governing bodies; and\n    (b) the capacity of local governing bodies to provide their residents with an equitable level of services; and\n    (c) the certainty of funding for local governing bodies; and\n    (d) the efficiency and effectiveness of local governing bodies; and\n    (e) the provision by local governing bodies of services to Aboriginal and Torres Strait Islander communities.\n  (3) The financial assistance is to be provided by the making to the States, for local government purposes, of general grants under section 9 and additional funding under section 12.\n  (4) In providing this financial assistance the Parliament’s goals are to:\n    (a) increase the transparency and accountability of the States in respect of the allocation of funds under this Act to local governing bodies; and\n    (b) promote consistency in the methods by which grants are allocated to achieve equitable levels of services by local governing bodies.\n  (5) To achieve those goals this Act provides for:\n    (a) the formulation of national principles for the purposes of the allocation of funds by the States to local governing bodies (section 6); and\n    (b) the making of an annual report to the Parliament about the operation of this Act (subsection 16(1)); and\n    (c) an assessment of the performance of local governing bodies (subsection 16(3)).\n\n#### 4 Definitions\n\n  (1) In this Act:\n\n> base figure means:\n\n    (a) in relation to the year beginning on 1 July 1995, the amount worked out using the formula:\n    ![](image.002.png)\n\n> where:\n\n> Initial amount has the meaning given by subsection (2).\n\n> Relevant final factor means the final factor for the year; or\n\n    (b) in relation to a later year (the current year), the amount worked out using the formula:\n    ![](image.003.png)\n\n> where:\n\n> Previous year base figure means the base figure for the year immediately before the current year.\n\n> Relevant final factor means the final factor for the current year.\n\n  (2) In this Act, unless the contrary intention appears:\n\n> additional previous year funding amount, in relation to a State for a year (the current year) means:\n\n    (a) if the current year is the year beginning on 1 July 1995:\n    (i) in relation to a State other than the Australian Capital Territory—the amount that would have been payable to the State under section 10A of the repealed Act for the year immediately preceding the current year if the amount had been calculated using the final factor within the meaning of that Act for that preceding year instead of the estimated factor for that preceding year; or\n    (ii) in relation to the Australian Capital Territory—an amount determined by the Treasurer in writing; or\n    (b) if the current year is a later year—the amount that would have been payable to the State under section 12 of this Act for the year immediately preceding the current year if the amount had been calculated using the final factor for that preceding year instead of the estimated factor for that preceding year.\n\n> estimated additional previous year funding amount, in relation to a State for a year, means the amount estimated under subsection 7(4) or (5), as the case may be, in relation to the State for the year.\n\n> estimated factor, in relation to a year, means the factor estimated under subsection 7(3) in relation to the year.\n\n> estimated initial amount means the amount estimated under subsection 7(1).\n\n> final factor, in relation to a year, means the factor worked out under section 8 in relation to the year.\n\n> initial amount means the sum of:\n\n    (a) the amount that would have been the base figure under the repealed Act for the year that began on 1 July 1994 if that amount had been calculated using the final factor within the meaning of that Act for that year instead of the estimated factor; and\n    (b) an amount determined by the Treasurer in writing to be the amount by which the amount referred to in paragraph (a) would have been increased if the Australian Capital Territory had been a State for the purposes of the repealed Act.\n\n> local governing body means:\n\n    (a) a local governing body established by or under a law of a State, other than a body whose sole or principal function is to provide a particular service, such as the supply of electricity or water; or\n    (b) a body declared by the Minister, on the advice of the relevant State Minister, by notice published in the Gazette, to be a local governing body for the purposes of this Act.\n\n> Local Government Grants Commission, in relation to a State, means the body named in a declaration in force under section 5 as the Local Government Grants Commission of the State.\n\n> relevant State Minister means:\n\n    (a) in relation to, or in relation to a body in, a State (other than the Australian Capital Territory)—the Minister of the State who is for the time being responsible for the administration of the law of the State that establishes the Local Government Grants Commission of the State; or\n    (b) in relation to, or in relation to a body in, the Australian Capital Territory:\n    (i) subject to subparagraph (ii), the Minister for Urban Services of the Territory; or\n    (ii) if another Minister of the Territory is prescribed by the regulations for the purposes of this paragraph—that other Minister.\n\n> repealed Act means the Local Government (Financial Assistance) Act 1986.\n\n> State includes the Australian Capital Territory and the Northern Territory.\n\n> Statistician means the Australian Statistician.\n\n> year means the financial year beginning on 1 July 1995 or a later financial year.\n\n  (3) The Treasurer has power to make written determinations for the purposes of this Act.\n  (4) The Minister has power to make declarations for the purposes of paragraph (b) of the definition of “local governing body” in subsection (2).\n\n#### 4A Population estimates\n\n  (1) For the purposes of:\n    (a) causing a factor to be worked out under subsection 8(1) in relation to the current year mentioned in that subsection; and\n    (b) applying section 10 in respect of the current year mentioned in that section;\n  the following apply:\n    (c) the expression population of the State means the population of the State on 31 December in the year immediately before the current year as set out in an estimate of that population on that date made by the Statistician for the purposes of this section;\n    (d) the expression population of Australia means the total population of all of the States on 31 December in the year immediately before the current year as set out in an estimate of that population on that date made by the Statistician for the purposes of this section.\n  (2) The Statistician, in making an estimate for the purposes of this section of the population of a State, must have regard to the latest statistics in relation to the population available to the Statistician on the day on which the estimate is made.\n  (3) The Minister must, as soon as practicable after the Statistician makes an estimate of the population of each State for the purposes of this section, cause to be given to the Treasurer of each State a written notice setting out the population of the State and the total population of all of the States.\n\n#### 5 Local Government Grants Commissions\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) If:\n    (a) the principal function of a body established by a law of a State is the making of recommendations to the Government of the State with respect to theprovision of financial assistance to local governing bodies in the State; and\n    (b) the Minister is satisfied that the membership of the body includes at least 2 people who are or have been associated with local government in the State, whether as members of a local governing body or otherwise;\n  the Minister may, by notice published in the Gazette, declare the body to be the Local Government Grants Commission of the State for the purposes of this Act.\n\n#### 6 National principles governing allocation by States among local governing bodies\n\n  (1) The Minister, after consulting the relevant State Ministers and with a body or bodies representative of local government, must formulate national principles for the purpose of allocating among local governing bodies amounts payable to States (other than the Australian Capital Territory) under this Act in the year beginning on 1 July 1996 and later years.\n  (2) In formulating national principles, the Minister:\n    (a) is to have regard to the need to ensure that the allocation of funds for local government purposes under section 9 is made, as far as practicable, on a full horizontal equalisation basis; but\n    (b) must ensure that no local governing body in a State will be allocated an amount under section 9 in a year that is less than the amount that would be allocated to the body if 30% of the amount to which the State is entitled under that section in respect of the year were allocated among local governing bodies in the State on a per capita basis.\n  (3) The reference in paragraph (2)(a) to the allocation of funds for local government purposes on a full horizontal equalisation basis is a reference to an allocation of funds that:\n    (a) ensures that each local governing body in a State is able to function, by reasonable effort, at a standard not lower than the average standard of other local governing bodies in the State; and\n    (b) takes account of differences in the expenditure required to be incurred by local governing bodies in the performance of their functions and in their capacity to raise revenue.\n  (4) The Minister may, after consulting with relevant State Ministers and with a body or bodies representative of local government, revoke or vary any principles formulated under subsection (1).\n  (5) The Minister must cause to be given to the relevant State Minister of each State other than the Australian Capital Territory and to a body or bodies representative of local government a copy of any instrument formulating principles under subsection (1) and a copy of any instrument under subsection (4) revoking or varying any of those principles.\n  (6) National principles formulated under subsection (1), and revocations or variations of national principles under subsection (4), are legislative instruments.\n\n> Note 1: Section 42 (disallowance) of the Legislation Act 2003 does not apply to the principles: see subsection 44(1) of that Act.\n\n> Note 2: Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 does not apply to the principles: see subsection 54(1) of that Act.\n\n  (7) If there are no national principles in force under this section, paragraph 11(2)(d) is to be read as requiring the Commission to make the recommendations on the same basis as the basis on which the Minister is, under subsection (2) of this section, required to act in formulating national principles (see paragraphs (2)(a) and (b)).\n  (8) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.\n\n## Part 2—Grants Of financial assistance\n\n#### 7 Estimates by Treasurer and Minister\n\n  (1) The Treasurer must, as soon as practicable after the commencement of this Act, make a written estimate of the initial amount.\n  (2) The Minister must, before the start of each year (the current year) after the year beginning on 1 July 1995, make a written estimate of the base figure for the year immediately preceding the current year.\n  (3) The Treasurer must:\n    (a) as soon as practicable after the commencement of this Act, make a written estimate of the factor, calculated to 4 decimal places, to be worked out under subsection 8(1) in relation to the year beginning on 1 July 1995; and\n    (b) before the start of each later year, make a written estimate of the factor, calculated to 4 decimal places to be worked out under subsection 8(1) in relation to the year.\n  (3A) In making an estimate for the purpose of paragraph 3(b), the Treasurer must, so far as the estimate relates to the population of Australia, consult the Statistician.\n  (4) The Treasurer must, as soon as practicable after the commencement of this Act, make a written estimate of the additional previous year funding amount in relation to each State for the year beginning on 1 July 1995.\n  (5) The Minister must, before the start of each year (the relevant year) after the year beginning on 1 July 1995, make a written estimate of the additional previous year funding amount in relation to each State for the relevant year.\n  (6) The Treasurer must, as soon as practicable after an estimate is made under subsection (1), (3) or (4), cause to be given to the Minister a written notice:\n    (a) setting out the estimate; and\n    (b) explaining the basis on which the estimate was made;\n  and the Minister must cause a copy of the notice to be given to the Treasurer of each State.\n  (7) The Minister must, as soon as practicable after an estimate is made under subsection (2) or (5), cause to be given to the Treasurer of each State a written notice:\n    (a) setting out the estimate; and\n    (b) explaining the basis on which the estimate was made.\n\n#### 8 Determination of final factor\n\n  (1) The Treasurer must, not later than 30 June in each year (the current year), cause a factor in relation to the current year to be worked out by:\n    (a) calculating, to 4 decimal places, the factor using the formula:\n    ![](image.004.png)\n    where:\n    index number means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Statistician in respect of the March quarter in the current year.\n    population of Australia has the meaning given by paragraph 4A(1)(d).\n    previous index number means the index number in respect of the March quarter in the year immediately before the current year.\n    previous population of Australia means the population of Australia that was used in working out the factor under this section in relation to the year immediately before the current year; and\n    (b) if the factor calculated under paragraph (a) would, if it were calculated to 5 decimal places, end in a number greater than 4—increasing that factor by 0.0001; and\n    (c) if the Treasurer considers that there are special circumstances for doing so—increasing or decreasing the factor calculated under paragraph (a) (as increased by any amount under paragraph (b)) by such amount as the Treasurer considers appropriate.\n  (1A) For the purposes of the formula in paragraph (1)(a), if the Statistician changes the index reference period for an index number, only index numbers published in terms of the new index reference period are to be used after the change.\n  (2) In making a decision under paragraph (1)(c), the Treasurer is to have regard to the following matters:\n    (a) the objects of the Parliament in enacting this Act, as set out in section 3; and\n    (d) any other matters that the Treasurer thinks relevant.\n  (3) The Treasurer must, not later than 30 June in each year, cause to be given to the Minister a written notice:\n    (a) setting out the factor worked out under subsection (1) in relation to the year; and\n    (b) explaining the basis on which the factor was worked out.\n  (4) The Minister must cause a copy of the notice to be given to the Treasurer of each State.\n\n#### 9 State entitlements for local government purposes\n\n  (1) Subject to this section and to section 11, each State is entitled to the payment, in respect of a year (the current year), by way of financial assistance for local government purposes, of a general grant, being:\n    (a) if the current year is the year beginning on 1 July 1995, the amount worked out using the formula:\n    ![](image.005.png)\n    (b) if the current year is a later year, the amount worked out using the formula:\n    ![](image.006.png)\n    where:\n    Relevant estimated factor means the estimated factor for the current year.\n    Projected population of the State means the population of the State on 31 December in the year immediately before the current year as set out in a preliminary estimate of that population on that date made by the Statistician according to assumptions specified by the Minister in writing for the purpose, after consulting the Statistician.\n    Projected population of Australia means the total population of all the States on 31 December in the year immediately before the current year as set out in a preliminary estimate of that population on that date made by the Statistician according to assumptions specified by the Minister in writing for the purpose, after consulting the Statistician.\n    Estimated previous year base figure means the amount estimated under subsection 7(2) in relation to the year immediately before the current year.\n    Note: For estimated initial amount and estimated factor see subsection 4(2).\n  (2) A State is not entitled to a payment under this section in respect of a year unless:\n    (a) if the year is the year beginning on 1 July 1995—an estimate under subsection 7(1) has been made in relation to that year; and\n    (b) if the year is a later year—an estimate under subsection 7(2) has been made in relation to the immediately preceding year; and\n    (c) in any case—an estimate under subsection 7(3) has been made in relation to the year.\n  (3) A State is not entitled to a payment under this section in respect of a year until 15 August in the year.\n  (4) So far as practicable, the amount to which a State is entitled under this section in respect of a year must be paid in equal quarterly instalments.\n\n#### 10 Adjustment of estimates—section 9 payments\n\n  (1) This section applies to a State in respect of a year (the current year) if the amount worked out under subsection 9(1) (the preliminary grant amount) in relation to the State in respect of the current year is greater or less than:\n    (a) if the current year is the year beginning on 1 July 1995, the amount (the final grant amount) worked out using the formula:\n    ![](image.007.png)\n    (b) if the current year is a later year, the amount (the final grant amount) worked out using the formula:\n    ![](image.008.png)\n    where:\n    Relevant final factor means the final factor for the current year.\n    Population of the State has the meaning given by paragraph 4A(1)(c).\n    Population of Australia has the meaning given by paragraph 4A(1)(d).\n    Previous year base figure means the base figure for the year immediately before the current year.\n    Note 1: For initial amount and final factor see subsection 4(2).\n    Note 2: For base figure see subsection 4(1).\n  (4) If the final grant amount for a State in respect of a year exceeds the preliminary grant amount for the State in respect of the year, the State is entitled, in addition to the payment to which it is entitled under section 9 in respect of the year, to the payment in respect of the year, by way of financial assistance for local government purposes, of an amount equal to the excess.\n  (5) In addition to any other conditions to which a payment under this Act is subject, payment of an amount to a State under this Act is subject to the condition that if the final grant amount for the State in respect of a year is less than the preliminary grant amount for the State in respect of the year, the State will pay to the Commonwealth an amount equal to the difference.\n  (6) If an amount is payable to a State under subsection (4) in respect of a year, the amount is to be paid to the State in the following year by equal quarterly instalments at the times when instalments to which the State is entitled under section 9 in respect of the following year are paid.\n  (6A) Despite subsection (6), if the Minister considers that it is appropriate, the Minister may decide that an amount payable to a State under subsection (4) is to be paid at such times, and in such instalments, as the Minister decides. The Minister cannot decide that an amount is to be paid later than it would be paid under subsection (6).\n\n> Note: Example: The Minister may decide that an amount payable to a State in respect of a year be paid in one payment during that year.\n\n  (6B) If the Minister makes a decision under subsection (6A) in relation to a State, the Minister must, as soon as practicable, notify the Treasurer of the State in writing of the decision.\n  (7) If a State is liable to pay an amount to the Commonwealth under subsection (5) in respect of a year, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 9 in respect of the following year.\n\n#### 11 Allocation among local governing bodies—section 9 payments\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) A State is not entitled to payment of an amount under section 9 in respect of a year unless:\n    (a) there is a Local Government Grants Commission of the State; and\n    (b) the Commission has made recommendations with respect to the allocation of the amount among local governing bodies in the State; and\n    (c) the Commission:\n    (i) held public hearings (whether or not it also held private hearings) in connection with the recommendations; and\n    (ii) permitted or required local governing bodies in the State or associations of those bodies to make submissions to it in connection with the recommendations; and\n    (d) the Commission has made the recommendations:\n    (i) if the year is the year beginning on 1 July 1995—in accordance with the principles that were applicable to the State under section 9 of the repealed Act in respect of the immediately preceding year or, if those principles have been modified under section 24, in accordance with those principles as so modified; or\n    (ii) if the year is a later year—in accordance with national principles in force under section 6 of this Act in respect of the later year or, if those principles have been modified under section 26 in relation to the State in respect of the later year, in accordance with those principles as so modified; and\n    (e) the relevant State Minister has given the Minister in writing particulars of the manner in which the State proposes to allocate the amount among local governing bodies in the State; and\n    (f) the Minister is satisfied that, in determining the manner in which the State proposes to allocate the amount among local governing bodies in the State, the State has adopted the recommendations of the Commission; and\n    (g) the State does not allocate the amount among local governing bodies in the State except in accordance with the proposed allocation or in accordance with that proposed allocation as altered with the agreement of the Minister.\n  (3) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.\n\n#### 12 Additional funding for local government purposes\n\n  (1) Subject to this section and section 14, each State is entitled to the payment, in respect of a year (the current year), by way of financial assistance for local government purposes, of the amount worked out using the formula:\n  ![](image.009.png)\n  where:\n  Estimated additional previous year funding amount means the estimated additional previous year funding amount in relation to the State for the current year;\n\n> Estimated factor means the estimated factor for the current year.\n\n> Note: For estimated additional previous year funding amount and estimated factor see subsection 4(2).\n\n  (2) A State is not entitled to a payment under this section in respect of a year until 15 August in the year.\n  (3) A State is not entitled to a payment under this section in respect of a year unless:\n    (a) an estimate under subsection 7(3) has been made in relation to the year; and\n    (b) an estimate under subsection 7(4) or (5), as the case may be, has been made in relation to the State for the year.\n  (4) So far as practicable, an amount to which a State is entitled under this section must be paid in equal quarterly instalments.\n\n#### 13 Adjustment of estimates—section 12 payments\n\n  (1) This section applies to a State in respect of a year (the current year) if the amount worked out under section 12 (the preliminary additional grant amount) in relation to the State in respect of the current year is greater or less than the amount (the final additional grant amount) worked out in relation to the State in respect of the current year using the formula:\n  ![](image.010.png)\n  where:\n\n> Additional previous year funding amount means the additional previous year funding amount in relation to the State for the current year.\n\n> Final factor means the final factor for the current year.\n\n> Note: For additional previous year funding amount and final factor see subsection 4(2).\n\n  (2) If the final additional grant amount for a State in respect of a year exceeds the preliminary additional grant amount for the State in respect of the year, the State is entitled, in addition to the payment to which it is entitled under section 12 in respect of the year, to the payment in respect of the year, by way of financial assistance for local government purposes, of an amount equal to the excess.\n  (3) In addition to any other conditions to which a payment under this Act is subject, payment of an amount to a State under this Act is subject to the condition that, if the final additional grant amount for the State in respect of a year is less than the preliminary additional grant amount for the State in respect of the year, the State will pay to the Commonwealth an amount equal to the difference.\n  (4) If an amount is payable to a State under subsection (2) in respect of a year, the amount is to be paid to the State in the following year by equal quarterly instalments at the times when instalments to which the State is entitled under section 12 in respect of that following year are paid.\n  (4A) Despite subsection (4), if the Minister considers that it is appropriate, the Minister may decide that an amount payable to a State under subsection (2) is to be paid at such times, and in such instalments, as the Minister decides. The Minister cannot decide that an amount is to be paid later than it would be paid under subsection (4).\n\n> Note: Example: The Minister may decide that an amount payable to a State in respect of a year be paid in one payment during that year.\n\n  (4B) If the Minister makes a decision under subsection (4A) in relation to a State, the Minister must, as soon as practicable, notify the Treasurer of the State in writing of the decision.\n  (5) If a State is liable to pay an amount to the Commonwealth under subsection (3), one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 12 in respect of the following year.\n\n#### 14 Allocation among local governing bodies—section 12 payments\n\n  (1) In this section:\n\n> State does not include the Australian Capital Territory.\n\n  (2) A State is not entitled to payment of an amount under section 12 in respect of a year unless:\n    (a) there is a Local Government Grants Commission of the State; and\n    (b) the Commission has made recommendations with respect to the allocation of the amount among local governing bodies in the State; and\n    (c) the Commission has made the recommendations:\n    (i) if the year is the year beginning on 1 July 1995—in accordance with any principles that were applicable to the State under paragraph 10C(1)(da) of the repealed Act in respect of the immediately preceding year or, if those principles have been modified under section 25, in accordance with those principles as so modified; or\n    (ii) if the year is a later year—in accordance with any relevant national principles in force under section 6 in respect of the later year that relate to expenditure on local roads by local governing bodies or, if those principles have been modified under section 26 in relation to the State in respect of the later year, in accordance with those principles as so modified; and\n    (d) the relevant State Minister has given the Minister in writing particulars of the manner in which the State proposes to allocate the amount among local governing bodies in the State; and\n    (e) the Minister is satisfied that, in determining the manner in which the State proposes to allocate the amount among local governing bodies in the State, the State has adopted the recommendations of the Commission; and\n    (f) the State does not allocate the amount among local governing bodies in the State except in accordance with the proposed allocation or in accordance with that proposed allocation as altered in accordance with the agreement of the Minister.\n  (3) For the purposes of this section, any possibility of a reduction in the amount allocated to any local governing body in complying with the condition in paragraph 15(aa) is to be disregarded.\n\n#### 15 Conditions of payments to States other than the Australian Capital Territory\n\n  Payment of an amount to a State (other than the Australian Capital Territory) under this Act in respect of a year is subject to:\n    (a) a condition, subject to the condition in paragraph (aa), that the State will:\n    (i) if the payment is made under section 9—without undue delay, make unconditional payments to local governing bodies in the State in accordance with the allocation determined as mentioned in section 11; and\n    (ii) if the payment is made under section 10—without undue delay, make unconditional payments to local governing bodies in the State in the same proportion as the payments under section 9 in respect of the year were allocated; and\n    (iii) if the payment is made under section 12—without undue delay, make unconditional payments to local governing bodies in the State in accordance with the allocation determined as mentioned in section 14; and\n    (iv) if the payment is made under section 13—without undue delay, make unconditional payments to local governing bodies in the State in the same proportion as the payments under section 12 in respect of the year were allocated; and\n    (aa) a condition that, if the payment is one from which, according to an agreement between the Commonwealth and the State, the State is to withhold an amount that represents voluntary GST payments that should have, but have not, been paid by local governing bodies—the State will withhold the amount and pay it to the Commonwealth; and\n    (b) a condition that the Treasurer of the State will give the Minister, as soon as practicable after 30 June in each year:\n    (i) a statement, in a form approved by the Minister, setting out the payments made by the State during the year ending on that date in accordance with this Act, and the dates of the payments; and\n    (ii) a certificate by the Auditor‑General of the State certifying that, in his or her opinion, the contents of the statement are correct; and\n    (c) a condition that, if the Minister tells the Treasurer of the State that the Minister is satisfied that the State has, with respect to the whole or a part of the amount, failed to fulfil any of the conditions applicable under paragraphs (a), (aa) and (b) to the payment of the amount, the State will repay to the Commonwealth any amount determined by the Minister that is not more than the amount in respect of which the Minister is so satisfied.\n\n## Part 3—Miscellaneous\n\n#### 16 Reports\n\n  (1) The Minister must, as soon as practicable after 30 June in each year, cause a report or reports to be prepared about the operation of this Act in respect of the year.\n\n> Note: The first report under this subsection will relate to the year beginning on 1 July 1995; see the definition of year in subsection 4(2).\n\n  (2) The Minister must ensure that relevant State Ministers and a body or bodies representative of local government are consulted in connection with the preparation of a report under subsection (1).\n  (3) The report or one of the reports must include an assessment by the Minister (based on comparable national data), in relation to the year, of:\n    (a) the extent (if any) to which the allocation of funds for local government purposes has been made on a full horizontal equalisation basis as mentioned in paragraph 6(2)(a); and\n    (b) the methods used by the Local Government Grants Commissions in making their recommendations; and\n    (c) the performance by local governing bodies of their functions including:\n    (i) their efficiency; and\n    (ii) services provided by them to Aboriginal and Torres Strait Islander communities.\n  (4) The Minister must cause a copy of each report to be laid before each House of the Parliament as soon as practicable after the report has been prepared.\n\n#### 17 Review\n\n  (1) The Minister is to cause a review of the operation of this Act to be carried out not later than 30 June 2001 in consultation with the States and with a body or bodies representative of local government.\n  (2) A review is to examine:\n    (a) the effectiveness of the arrangements under this Act in relation to ensuring that the allocation of funds for local government purposes is made on a full horizontal equalisation basis as mentioned in paragraph 6(2)(a); and\n    (b) the impact of this Act on the raising of revenue by local governing bodies and on the assistance provided by the States to local governing bodies; and\n    (c) the implications of any changes in the functions or responsibilities of local governing bodies; and\n    (d) the eligibility for assistance under this Act of bodies declared by the Minister under section 4 to be local governing bodies; and\n    (e) any other matters relating to local government that the Minister determines.\n\n#### 18 Regulations\n\n  The Governor‑General may make regulations prescribing matters:\n    (a) required or permitted by this Act to be prescribed; or\n    (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.\n\n#### 18A Recoverable payments\n\n  (1) If, apart from this subsection, the Commonwealth does not have power under this Act to pay an amount (the relevant amount) to a State purportedly as an amount under this Act, then the Commonwealth may pay the relevant amount to the State.\n  Recovery\n  (2) If:\n    (a) a payment is made under subsection (1) to a State; and\n    (b) the State is entitled to receive an amount under this Act;\n  then:\n    (c) the relevant amount; or\n    (d) such part of the relevant amount as the Minister determines;\n  may, if the Minister so directs, be recovered by deduction from the amount mentioned in paragraph (b).\n\n#### 18B Reports about recoverable payments\n\n  (1) During the applicable publication period for a reporting period, the Secretary of the Department must cause to be published, in such manner as the Secretary thinks fit, a report that sets out:\n    (a) the number of payments made under subsection 18A(1) during the reporting period; and\n    (b) the total amount of those payments.\n  (2) However, a report is not required if the number mentioned in paragraph (1)(a) is zero.\n  Deferred reporting\n  (3) Subsection (1) of this section does not require a report to deal with a payment unless, before the preparation of the report, a Departmental official was aware the payment was made under subsection 18A(1).\n  (4) For the purposes of this section, if:\n    (a) a payment was made under subsection 18A(1) in a reporting period; and\n    (b) because of subsection (3) of this section, subsection (1) of this section did not require a report to deal with the payment; and\n    (c) during a later reporting period, a Departmental official becomes aware that the payment was made under subsection 18A(1);\n  the payment is subject to a deferred reporting obligation in relation to the later reporting period.\n  (5) If one or more payments made under subsection 18A(1) during a reporting period are subject to a deferred reporting obligation in relation to a later reporting period, the Secretary of the Department must, during the applicable publication period for the later reporting period:\n    (a) prepare a report that sets out:\n    (i) the number of those payments; and\n    (ii) the total amount of those payments; and\n    (iii) the reporting period during which the payments were made; and\n    (b) if a report is required under subsection (1) in relation to the later reporting period—include the paragraph (a) report in the subsection (1) report; and\n    (c) if paragraph (b) does not apply—publish, in such manner as the Secretary thinks fit, the paragraph (a) report.\n  Reporting period\n  (6) For the purposes of this section, a reporting period is:\n    (a) a financial year; or\n    (b) if a shorter recurring period is specified in a legislative instrument made by the Minister—that period.\n  Applicable publication period\n  (7) For the purposes of this section, the applicable publication period for a reporting period is the period of:\n    (a) 4 months; or\n    (b) if a lesser number of months is specified, in relation to the reporting period, in a legislative instrument made by the Minister—that number of months;\n  beginning immediately after the end of the reporting period.\n  Departmental official\n  (8) For the purposes of this section, Departmental official means an official (within the meaning of the Public Governance, Performance and Accountability Act 2013) of the Department.\n\n#### 19 Appropriation\n\n  Payments to a State under this Act are to be made out of the Consolidated Revenue Fund, which is appropriated accordingly.\n\n## Part 4—Repeal And Transitional\n\n#### 20 Repeal\n\n  (1) The Local Government (Financial Assistance) Act 1986 is repealed.\n  (2) Despite the repeal effected by subsection (1), the repealed Act continues to apply in relation to financial years before the year beginning on 1 July 1995.\n\n#### 21 Local governing bodies\n\n  A body that, immediately before the commencement of this Act, was duly declared for the purposes of paragraph (b) of the definition of local governing body in section 3 of the repealed Act to be a local governing body for the purposes of that Act is taken to be declared for the purposes of paragraph (b) of the definition of local governing body in subsection 4(2) of this Act to be a local governing body for the purposes of this Act.\n\n#### 22 Local Government Grants Commissions\n\n  If, immediately before the commencement of this Act, an instrument was in force under section 4 of the repealed Act declaring a body to be the Local Government Grants Commission of a State, the instrument is taken to be a declaration duly made under subsection 5(2) of this Act.\n\n#### 23 Estimate of factor by Treasurer\n\n  If the Treasurer made an estimate before the commencement of this Act under section 5 of the repealed Act in relation to the year beginning on 1 July 1995, the estimate is taken to have been made under subsection 7(3) of this Act.\n\n#### 24 Modification of State principles applicable to 1995‑1996\n\n  A State may, with the Minister's written approval, modify any of the principles referred to in subparagraph 11(2)(d)(i).\n\n#### 25 Modification of principles applicable to 1995‑1996 in respect of section 12 payments\n\n  The Minister may modify any of the principles referred to in subparagraph 14(2)(c)(i).\n\n#### 26 Transitional modification of national principles\n\n  The Minister may determine in writing that any one or more of the national principles in force under section 6 are, in respect of a year referred to in the determination, to have effect, in relation to a State or States so referred to, subject to modifications set out in the determination.\n\n#### 27 Avoidance of double payments to Australian Capital Territory\n\n  The total of the amounts that, apart from this section, would be payable under this Act to the Australian Capital Territory in respect of the year beginning on 1 July 1995 is reduced by any amount or amounts paid to that Territory for local government purposes in respect of that year under the Appropriation Act (No. 2) 1995‑96.\n\n#### 28 Overpayments and underpayments of general grants in respect of 1994‑1995\n\n  (1) If an amount is payable to a State under subsection 8(1) of the repealed Act as it continues to apply under subsection 20(2) of this Act in relation to the year that began on 1 July 1994, the amount is to be paid to the State in the year beginning on 1 July 1995 by equal quarterly instalments at the times when instalments to which the State is entitled under section 9 of this Act in respect of that last‑mentioned year are paid.\n  (2) If a State is liable to pay an amount to the Commonwealth under subsection 8(2) of the repealed Act as it continues to apply under subsection 20(2) in this Act in relation to the year that began on 1 July 1994, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 9 of this Act in respect of the year beginning on 1 July 1995 and, if an amount is so deducted, then, despite the deduction, an amount equal to the deduction is taken, for the purposes of this Act, to have been paid to the State.\n\n#### 29 Overpayments and underpayments of other grants in respect of 1994‑1995\n\n  (1) If an amount is payable to a State under subsection 10B(1) of the repealed Act as it continues to apply under subsection 20(2) of this Act in relation to the year that began on 1 July 1994, the amount is to be paid to the State in the year beginning on 1 July 1995 by equal quarterly instalments at the times when instalments to which the State is entitled under section 12 of this Act in respect of that last‑mentioned year are paid.\n  (2) If a State is liable to pay an amount to the Commonwealth under subsection 10B(2) of the repealed Act as it continues to apply under subsection 20(2) in this Act in relation to the year that began on 1 July 1994, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 12 of this Act in respect of the year beginning on 1 July 1995 and, if an amount is so deducted, then, despite the deduction, an amount equal to the deduction is taken, for the purposes of this Act, to have been paid to the State.\n\n#### 30 Estimates of population by Statistician\n\n  A reference in this Act to a preliminary estimate, or to an estimate, of population made by the Statistician includes a reference to such a preliminary estimate, or estimate, made before the commencement of this Act.","sortOrder":25},{"sectionNumber":"20","sectionType":"section","heading":"Repeal","content":"#### 20 Repeal\n\n  (1) The Local Government (Financial Assistance) Act 1986 is repealed.\n  (2) Despite the repeal effected by subsection (1), the repealed Act continues to apply in relation to financial years before the year beginning on 1 July 1995.","sortOrder":26},{"sectionNumber":"21","sectionType":"section","heading":"Local governing bodies","content":"#### 21 Local governing bodies\n\n  A body that, immediately before the commencement of this Act, was duly declared for the purposes of paragraph (b) of the definition of local governing body in section 3 of the repealed Act to be a local governing body for the purposes of that Act is taken to be declared for the purposes of paragraph (b) of the definition of local governing body in subsection 4(2) of this Act to be a local governing body for the purposes of this Act.","sortOrder":27},{"sectionNumber":"22","sectionType":"section","heading":"Local Government Grants Commissions","content":"#### 22 Local Government Grants Commissions\n\n  If, immediately before the commencement of this Act, an instrument was in force under section 4 of the repealed Act declaring a body to be the Local Government Grants Commission of a State, the instrument is taken to be a declaration duly made under subsection 5(2) of this Act.","sortOrder":28},{"sectionNumber":"23","sectionType":"section","heading":"Estimate of factor by Treasurer","content":"#### 23 Estimate of factor by Treasurer\n\n  If the Treasurer made an estimate before the commencement of this Act under section 5 of the repealed Act in relation to the year beginning on 1 July 1995, the estimate is taken to have been made under subsection 7(3) of this Act.","sortOrder":29},{"sectionNumber":"24","sectionType":"section","heading":"Modification of State principles applicable to 1995‑1996","content":"#### 24 Modification of State principles applicable to 1995‑1996\n\n  A State may, with the Minister's written approval, modify any of the principles referred to in subparagraph 11(2)(d)(i).","sortOrder":30},{"sectionNumber":"25","sectionType":"section","heading":"Modification of principles applicable to 1995‑1996 in respect of section 12 payments","content":"#### 25 Modification of principles applicable to 1995‑1996 in respect of section 12 payments\n\n  The Minister may modify any of the principles referred to in subparagraph 14(2)(c)(i).","sortOrder":31},{"sectionNumber":"26","sectionType":"section","heading":"Transitional modification of national principles","content":"#### 26 Transitional modification of national principles\n\n  The Minister may determine in writing that any one or more of the national principles in force under section 6 are, in respect of a year referred to in the determination, to have effect, in relation to a State or States so referred to, subject to modifications set out in the determination.","sortOrder":32},{"sectionNumber":"27","sectionType":"section","heading":"Avoidance of double payments to Australian Capital Territory","content":"#### 27 Avoidance of double payments to Australian Capital Territory\n\n  The total of the amounts that, apart from this section, would be payable under this Act to the Australian Capital Territory in respect of the year beginning on 1 July 1995 is reduced by any amount or amounts paid to that Territory for local government purposes in respect of that year under the Appropriation Act (No. 2) 1995‑96.","sortOrder":33},{"sectionNumber":"28","sectionType":"section","heading":"Overpayments and underpayments of general grants in respect of 1994‑1995","content":"#### 28 Overpayments and underpayments of general grants in respect of 1994‑1995\n\n  (1) If an amount is payable to a State under subsection 8(1) of the repealed Act as it continues to apply under subsection 20(2) of this Act in relation to the year that began on 1 July 1994, the amount is to be paid to the State in the year beginning on 1 July 1995 by equal quarterly instalments at the times when instalments to which the State is entitled under section 9 of this Act in respect of that last‑mentioned year are paid.\n  (2) If a State is liable to pay an amount to the Commonwealth under subsection 8(2) of the repealed Act as it continues to apply under subsection 20(2) in this Act in relation to the year that began on 1 July 1994, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 9 of this Act in respect of the year beginning on 1 July 1995 and, if an amount is so deducted, then, despite the deduction, an amount equal to the deduction is taken, for the purposes of this Act, to have been paid to the State.","sortOrder":34},{"sectionNumber":"29","sectionType":"section","heading":"Overpayments and underpayments of other grants in respect of 1994‑1995","content":"#### 29 Overpayments and underpayments of other grants in respect of 1994‑1995\n\n  (1) If an amount is payable to a State under subsection 10B(1) of the repealed Act as it continues to apply under subsection 20(2) of this Act in relation to the year that began on 1 July 1994, the amount is to be paid to the State in the year beginning on 1 July 1995 by equal quarterly instalments at the times when instalments to which the State is entitled under section 12 of this Act in respect of that last‑mentioned year are paid.\n  (2) If a State is liable to pay an amount to the Commonwealth under subsection 10B(2) of the repealed Act as it continues to apply under subsection 20(2) in this Act in relation to the year that began on 1 July 1994, one‑quarter of the amount is to be deducted from each quarterly instalment that, apart from this subsection, would be payable to the State under section 12 of this Act in respect of the year beginning on 1 July 1995 and, if an amount is so deducted, then, despite the deduction, an amount equal to the deduction is taken, for the purposes of this Act, to have been paid to the State.","sortOrder":35},{"sectionNumber":"30","sectionType":"section","heading":"Estimates of population by Statistician","content":"#### 30 Estimates of population by Statistician\n\n  A reference in this Act to a preliminary estimate, or to an estimate, of population made by the Statistician includes a reference to such a preliminary estimate, or estimate, made before the commencement of this Act.","sortOrder":36}],"analysis":{"flash_summary":{"complexity_score":8,"scope_assessment":{"changed":true,"description":"This Act replaces the Local Government (Financial Assistance) Act 1986 (section 20) and continues the Commonwealth’s grant programme while introducing new or emphasised mechanisms: formal national allocation principles (section 6) with powers for the Minister to modify or vary them (sections 6(4), 24–26); a clearer written‑estimate and adjustment framework for preliminary and final payments (sections 7, 10, 13); explicit recoverable‑payment and reporting obligations (sections 18A, 18B); and expanded annual reporting and a scheduled review of the Act’s operation (sections 16, 17).  Those additions broaden the Act’s operational detail and increase Commonwealth executive rule‑making and adjustment powers compared with the prior statute, while continuing the same high‑level object of providing financial assistance to States for local government purposes (section 3)."},"complexity_factors":["Multiple interdependent numeric formulas and definitions (base figure, initial amount, estimated/final factor) embedded across sections 4, 7, 8, 9, 10, 12 and 13","Two separate grant streams (general grants under section 9 and additional funding under section 12) with parallel but distinct adjustment and allocation rules","Estimate vs final adjustment cycle that creates timing and reconciliation steps (sections 7, 10, 13) and repayment/deduction mechanics (sections 10(5),(7); 13(3),(5))","Shared responsibilities and conditional entitlements linking Commonwealth officers (Treasurer, Minister), State Treasurers, Local Government Grants Commissions and Auditor‑Generals (sections 5, 7, 8, 11, 15)","Discretions held by the Treasurer and Minister (factor adjustments, payment timing, principle modifications, recoverable payments) that affect outcomes (sections 6, 8(1)(c), 10(6A), 13(4A), 18A, 24–26)","Reliance on population and CPI data produced by the Statistician and specification of preliminary vs final population estimates (section 4A, section 8, section 9)","Administrative and compliance requirements (public hearings, submissions, audited statements, reporting obligations) that create operational complexity for States (sections 11, 15, 16, 18B)","Transitional provisions linking the repealed 1986 Act and the new regime (sections 20–30), adding layering of historical calculations"],"plain_english_summary":"What this Act does (mechanics)\n\n- Replaces the 1986 Act and sets out a continuing Commonwealth scheme of payments to States, the Australian Capital Territory and the Northern Territory to support local governing bodies (see section 20 and sections 9 and 12).  Payments are of two kinds: a general grant (section 9) and additional funding (section 12).\n- The sums payable are calculated from statutory formulas that use a base figure, a factor linked to CPI and population, and population estimates prepared by the Australian Statistician (definitions in section 4; population rules in section 4A; factor worked out by the Treasurer in section 8).  The Treasurer and the Minister must make written estimates and notify States in advance (section 7).\n- Payments are made out of the Consolidated Revenue Fund (section 19) and, as far as practicable, in equal quarterly instalments (sections 9(4), 12(4)).  There are adjustment rules: preliminary (estimated) payments may be increased or require repayment depending on later, final calculations (sections 10 and 13).  If a State owes money back, repayments are usually deducted from its next instalments (sections 10(7), 13(5)).\n- The Treasurer has an express power to adjust the CPI/population factor for \"special circumstances\" (section 8(1)(c)).  The Minister has powers to formulate, vary or modify national allocation principles, and to make certain transitional modifications (sections 6, 24–26).  The Minister also has timing discretion for paying any adjustments (sections 10(6A), 13(4A)).\n- A State’s entitlement is conditional on procedural and accountability steps: the State must have a Local Government Grants Commission that makes recommendations after public hearings and submissions (sections 5, 11 and 14); the State must provide the Commonwealth particulars of how it will allocate the funds and the Minister must be satisfied the State has adopted the Commission’s recommendations (section 11(2)(e)–(f); section 14(2)(d)–(e)).  The State Treasurer must provide a statement and an Auditor‑General’s certificate about payments made (section 15(b)).\n- The Act requires annual reporting by the Commonwealth Minister on how the Act has operated, including an assessment of whether funds have been allocated on a \"full horizontal equalisation\" basis, the Grants Commissions’ methods, and local governing bodies’ performance (section 16).  A review of the Act is to be undertaken by 30 June 2001 (section 17).\n- The Act includes a mechanism allowing the Commonwealth to make payments it would not otherwise have power to make, and to recover such payments by deduction from amounts later payable (section 18A), together with reporting obligations about such recoverable payments (section 18B).\n\nWho it affects and who decides\n\n- Who pays: the Commonwealth pays amounts under the Act from the Consolidated Revenue Fund (section 19).  If preliminary payments exceed final calculations, States may have to repay the Commonwealth (sections 10(5), 13(3)).\n- Who receives: States (including the ACT and NT); the States are required to pass the money to local governing bodies in the State in the prescribed manner (sections 9, 11, 12, 14, 15(a)).\n- Who decides allocation at State/local level: Local Government Grants Commissions advise States on allocations; the relevant State Minister proposes the State allocation to the Commonwealth and the State must adopt the Commission’s recommendations for the Commonwealth payment to flow (sections 5, 11, 14).\n- Commonwealth decision-makers and discretions: the Treasurer calculates the annual factor and may adjust it for special circumstances (section 8); the Minister formulates national allocation principles, may vary or modify them in specified ways, and may exercise timing and recovery discretions (sections 6, 10(6A), 13(4A), 18A).\n\nParliament’s stated purposes and how the Act tries to achieve them\n\n- The Parliament’s stated objects are to improve local governing bodies’ financial capacity, service equity, funding certainty, efficiency and services for Aboriginal and Torres Strait Islander communities (section 3(2)).  To achieve these aims the Act relies on: (a) transfer of funds to States for local government purposes (sections 9 and 12); (b) national allocation principles to promote consistency (section 6); and (c) reporting, transparency and an assessment of performance (sections 16 and 17).\n\nTesting the stated purposes against mechanisms, costs and trade‑offs (source‑grounded)\n\n- Transparency and accountability (claimed instrument): the Act creates reporting obligations (section 16), requires Grants Commissions to hold public hearings and accept submissions (section 11(2)(c)), and requires States to deliver audited statements on payments (section 15(b)).  These mechanisms impose administrative and audit tasks on States and commissions and create recurring reporting costs.\n\n- Consistency and allocation rules (claimed instrument): the Minister must formulate national principles (section 6) and the Grants Commissions must make recommendations in accordance with those principles for most years (sections 11(2)(d), 14(2)(c)).  Trade‑off: national principles centralise the basis of allocation (increasing uniformity) but give the Commonwealth influence over how States distribute funds to individual local bodies; the Minister and Treasurer retain powers to modify or vary principles or to make transitional modifications (sections 6(4), 24–26), which creates administrative discretion that can alter allocations without the usual tabling/disallowance processes for some instruments (see notes to section 6).\n\n- Funding certainty vs estimate/adjustment risk: the Act provides for estimated (preliminary) payments ahead of final figures (sections 7, 9, 12) to give predictable cash flows, but it also requires later adjustments (sections 10 and 13).  That framework reduces timing uncertainty for immediate payments but creates a repayment/deduction risk for States if final calculations reduce entitlements (sections 10(5), 10(7), 13(3), 13(5)).  Incentive effect: States bear the financial risk of final adjustments (they may have to return money or face reduced instalments), while the Commonwealth bears timing exposure until final figures are known.\n\n- Administrative and compliance burden: conditions for State entitlement include establishing or recognising Grants Commissions, holding public hearings and permitting submissions, providing written particulars of allocation, and delivering audited statements (sections 5, 11, 14, 15(b)).  These create recurring workload for State treasuries, Grants Commissions and the Auditor‑General.\n\n- Discretion and implementation risk: the Treasurer may increase or decrease the final factor for \"special circumstances\" (section 8(1)(c)), and the Minister can vary principles and payment timing (sections 6(4), 10(6A), 13(4A), 24–26).  These discretions are concrete implementation levers that can affect amounts and timing; they concentrate decision power at Commonwealth executive officers.\n\n- Effects on local choice, revenue raising and competition: the Act directs money to States for distribution to local governing bodies (sections 9, 12) and requires States to forward payments \"without undue delay\" (section 15(a)).  The Act does not itself change the rights of private firms, but the funds can change local governing bodies’ budgets and therefore their capacity to procure services, price services, or set local fees.  The Act requires a review of the impact on local revenue raising (section 17(2)(b)), acknowledging possible substitution effects where Commonwealth funds alter State or local incentives to raise revenue.\n\n- Concentrated benefits and diffuse costs: benefits are concentrated on local governing bodies (the recipients of the funds), while costs are borne by the Commonwealth (appropriations from the Consolidated Revenue Fund—section 19) and ultimately by taxpayers.  Administrative burdens fall on States and their audit offices.\n\n- Risk of capture/pressure around principles: the Minister’s power to set and modify national principles (section 6) and to make transitional or State‑specific modifications (sections 24–26), combined with the notes that limit ordinary disallowance/sunsetting for the principles (notes to section 6), means rule‑setting sits with the executive and can be adjusted without the usual parliamentary disallowance routes.  The mechanism is described in those provisions; whether it produces capture is an empirical question not resolved in the text.\n\nKey implementation points to watch (source‑grounded)\n\n- Accuracy and timing of population estimates by the Statistician feed directly into the factor and payments (section 4A, section 8).\n- The Treasurer’s and the Minister’s estimates and written notices (section 7) start the payment cycle; they are formalised, written steps that trigger State entitlement (section 9(2)).\n- States must have functioning Grants Commissions and comply with procedural steps to receive funding (sections 5, 11, 14).  The Minister may withhold or recover funds if conditions are not met (section 15(c), sections 10(5), 13(3), 18A).\n\nBottom line\n\nMechanically, the Act sets a detailed system of Commonwealth payments to States for local government purposes using specified formulas, annual estimates and final adjustments, backed by conditions that tie payments to State adoption of Grants Commission recommendations and to reporting/audit requirements (sections 9–15, 16).  Parliament’s stated objectives (section 3) are pursued by national principles (section 6), routine reporting (section 16) and a review clause (section 17).  The Act shifts the majority of operational complexity—estimation, adjustment, allocation and compliance—to the Treasurer, the Minister and State‑level Grants Commissions, creating predictable payment pathways but also introducing adjustment risk, administrative cost and executive discretion (sections 7, 8, 10, 11, 12, 13, 15, 18A)."},"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"},"kimi_summary":{"_metrics":{"completionTokens":685},"content_quality":"ok","complexity_score":8,"scope_assessment":{"changed":false,"description":"The legislation appears consistent with its original purpose of providing financial assistance to local government through States, with national principles for equitable distribution. The 1995 Act replaced the 1986 Act with a similar structure, adding some administrative refinements like recoverable payments reporting (sections 18A-18B added later) but not fundamentally expanding beyond the core grant-making function."},"complexity_factors":["Multiple interlocking formulas with variables defined across different sections (base figure, final factor, estimated factor, initial amount)","Extensive cross-referencing between sections — e.g., section 9 entitlements depend on estimates made under section 7 and definitions in section 4","Conditional logic with multiple pathways: different rules for 1995-96 vs later years, different treatment for ACT/NT vs other States","Nested definitions: 'local governing body' excludes service-specific bodies but allows Ministerial declarations","Transitional provisions that preserve and modify the repealed 1986 Act's framework","Multiple adjustment mechanisms (sections 10 and 13) for reconciling estimated vs actual amounts with recovery conditions","Legislative instrument exclusions (national principles not subject to disallowance or sunsetting under Legislation Act 2003)","Reporting obligations with deferred reporting triggers and publication periods in sections 18A-18B"],"plain_english_summary":"This Act sets up a system where the **Commonwealth (federal government) gives money to States and Territories** to help fund **local councils** (local governing bodies like city councils and shires).\n\n**What it does:**\n- **Provides two types of grants:**\n  - **General grants** (Section 9): Ongoing funding to help councils deliver services\n  - **Additional funding** (Section 12): Extra money, originally tied to local roads\n\n- **How the money flows:**\n  1. Commonwealth pays States/Territories\n  2. States must pass the money on to local councils\n  3. States can't keep the money — they must distribute it according to recommendations from an independent **Local Government Grants Commission** in each State\n\n- **Fairness rules:** The Act requires funding to be allocated on a **\"horizontal equalisation\"** basis — meaning councils with less ability to raise their own revenue (through rates) get more help, so all residents get a similar standard of services regardless of where they live\n\n- **Safety net:** No council can receive less than what they'd get if 30% of the State's total grant was divided purely by population (per capita)\n\n- **Transparency requirements:** States must report annually on how they distributed the money, and the Minister must report to Parliament on whether the system is working fairly\n\n**Who it affects:**\n- **Local councils** — they receive the funding\n- **State and Territory governments** — they distribute the money and must follow national principles\n- **Residents** — benefit from more equitable local services, especially Aboriginal and Torres Strait Islander communities who are specifically mentioned as a priority\n\n**Why it matters:** This is the main way the federal government supports local government across Australia. It ensures smaller or poorer councils don't fall behind, and creates national standards for how funding decisions are made."},"summary":{"complexity_score":7,"scope_assessment":{"changed":false,"description":"The Act's scope is consistent with its stated objects. It does what it says on the tin: providing federal financial assistance to states and territories for local government purposes via two grant streams, with accountability and equalisation conditions attached. There is no evidence of scope creep beyond the original intent. The GST withholding condition in section 15(aa) is a minor addition reflecting later tax reforms but does not fundamentally alter the Act's purpose."},"complexity_factors":["Multiple interdependent formulas for calculating grant amounts (base figure, final factor, preliminary and final grant amounts) that cannot be rendered without the embedded images referenced in the Act","Two-stage payment structure (estimated amounts paid upfront, then adjusted against final figures) with overpayment recovery and underpayment top-up mechanisms running across overlapping financial years","Layered eligibility conditions — states must satisfy multiple procedural and substantive requirements before being entitled to each payment stream","Different rules apply depending on whether it is the first year (1995-96) or a later year, creating parallel conditional frameworks throughout the Act","Complex interplay between Commonwealth and state roles: federal Minister sets principles, state Grants Commissions make recommendations, state governments allocate, all subject to federal oversight and clawback","Transitional provisions dealing with carryover obligations from the repealed 1986 Act, including adjustments for over- and under-payments from the 1994-95 year","The ACT and NT are treated as 'States' for most purposes but with specific carve-outs and different rules in several sections","Horizontal equalisation concept requires qualitative judgment about council capacity and expenditure needs, adding interpretive complexity to the quantitative formulas","Recoverable payments provisions (ss 18A-18B) add an additional administrative and reporting layer for payments made outside ordinary statutory authority"],"plain_english_summary":"## What This Law Does\n\nThe **Local Government (Financial Assistance) Act 1995** is the legal framework through which the **Commonwealth (federal) government sends money to state and territory governments** to support local councils across Australia.\n\n### Who Does It Affect?\n- **Local councils** (called \"local governing bodies\") across every state and territory — they are the ultimate recipients of the funding\n- **State and territory governments** — they receive the money from the Commonwealth and must pass it on to councils\n- **Residents of those councils** — especially those in under-resourced areas, and Aboriginal and Torres Strait Islander communities\n\n### How Does It Work?\n\nThe law creates **two streams of funding**:\n\n1. **General grants (section 9):** The main bucket of money. Each state gets a share calculated using population data and a cost-adjustment factor (based on inflation — specifically the Consumer Price Index, a standard measure of how prices change over time). The money must be distributed to councils according to a principle called **\"horizontal equalisation\"** — meaning councils that have less capacity to raise their own money (e.g., poorer or more remote areas) get proportionally more, so every council can deliver a similar standard of services with reasonable effort. At least 30% of each state's share must be distributed on a simple per-person (\"per capita\") basis.\n\n2. **Additional funding (section 12):** A separate top-up payment, historically linked to local road funding, also adjusted annually for inflation and population changes.\n\n### Key Rules and Safeguards\n\n- **Payments flow through the states** — but states cannot keep or redirect the money. They must pass it on to councils **unconditionally and without undue delay**.\n- Each state must have a **Local Government Grants Commission** — an independent body that recommends how money should be divided among councils. The Commission must hold public hearings before making recommendations.\n- The federal Minister sets **national principles** for how the money is shared. These are legal instruments (i.e., they have the force of law).\n- The Commonwealth uses **estimated figures** at the start of each year and adjusts up or down once final figures are confirmed. If a state was overpaid, it must repay the difference; if underpaid, it gets a top-up.\n- If a state fails to comply with the conditions (e.g., doesn't pass the money on), the federal Minister can require the state to **repay the Commonwealth**.\n- Annual **reports to Parliament** must assess how well the money is being distributed and how councils are performing.\n\n### Why Does It Matter?\n\nThis law is the backbone of federal financial support for local government in Australia. It helps ensure that councils in rural, remote, and disadvantaged areas — which often can't raise enough money through rates (local property taxes) alone — can still provide basic services like roads, parks, and community facilities. Without this funding, there would be a stark gap between what wealthy urban councils can offer versus struggling regional ones."}},"importantCases":[],"_links":{"self":"/api/acts/local-government-financial-assistance-act-1995","history":"/api/acts/local-government-financial-assistance-act-1995/history","analysis":"/api/acts/local-government-financial-assistance-act-1995/analysis","conflicts":"/api/acts/local-government-financial-assistance-act-1995/conflicts","importantCases":"/api/acts/local-government-financial-assistance-act-1995/important-cases","documents":"/api/acts/local-government-financial-assistance-act-1995/documents"}}