//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the official source for authoritative text.
Commonwealth act
This Act has been repealed and is no longer in force. It is retained for historical reference.
This Act implements a program of across-the-board reductions in Commonwealth expenditure by cutting payments to a set of recipients, changing eligibility or evidence rules for some benefits, and allowing executive direction and regulation to carry those reductions into effect. The Preamble states the legislative purpose as carrying out a plan agreed between the Commonwealth and the States to meet a "grave Financial Emergency" by re‑establishing financial stability through "common sacrifice" (Preamble).
Key mechanical changes
Salary and wage cuts for Commonwealth officers and employees: a fixed flat reduction from annual pay (section 10) followed by a further percentage reduction calculated under the First Schedule (section 11 and First Schedule). The Act sets minimum floors and caps for some groups (s.10 provisos; s.11 provisos). The law also prescribes how annual salaries are to be calculated from hourly, daily or weekly rates (s.14) and how fractions of a pound are rounded (s.15).
Parliamentary salaries and allowances are reduced by tiered percentages (section 9). Ministerial allowances receive a specific reduction rate (s.9(1) proviso).
Ministers and other specified Cabinet arrangements: the Governor‑General designates which Ministers administer the Parts of the Act (s.4), and the Governor‑General may make regulations to implement the Act (s.55).
Ministerial and committee discretion: many reductions or adjustments are to be made by the responsible Minister "upon the receipt of a recommendation of the Committee" (e.g. s.12(1)(ii), s.17(2), s.12(1)(iii)). The Committee is composed of a Public Service Board member (as Chair), the Public Service Arbitrator and a Governor‑General appointee (s.13). The Governor‑General also has specific powers (e.g. to make arrangements with States about taxation deductions (s.19) and to act on committee recommendations for war pensions (s.42(3))).
Want the full deep dive?
Zoe can write the in-depth analysis on top of the summary above: how it works, who it affects and what each part actually does.
Direct links to the current provisions in Financial Emergency Act 1931.
Zoe has indexed the source text for search and analysis. Use the official register for the original document and download formats.
View on official registerSourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Pensions and superannuation cuts: specified Commonwealth pensions are cut by fixed percentages (e.g. 20% reductions under s.22 for certain statutory pensions; 20% reduction in Commonwealth superannuation contributions (s.24) with corresponding pension reductions (s.24)). The Superannuation Act is amended to allow adjustments to units and paid‑up pensions where contributors move salary groups (s.25).
Maternity allowance changes: the base amount is reduced (s.28) and an income test and prescribed evidence requirement are added (s.29, s.30). The Commissioner may investigate and require confidential income reports; failure to comply or false statements carry summary penalties (s.31 and inserted s.11a).
Invalid and old‑age pensions adjustments: maximum rates are lowered (s.35), definitions of income are narrowed (s.34), and mechanisms to recover improperly paid pension amounts are inserted (s.37/inserted s.38aa).
War pensions: many dependants’ pensions are reduced by 22.5% (s.42), with specified exceptions (s.42(2)). Regulations can establish committees to recommend further reductions or cancellations (s.43). The Act also narrows who qualifies as a dependent in certain cases (s.44) and changes backdating rules for awards and restorations of pension (ss.45–47).
Bounties: all bounties listed in the Second Schedule are reduced by 20% (s.52). The Gold Bounty Act is given special transitional and formula rules for 1931 and thereafter, including exchange‑rate adjustments (s.53).
Court sittings: the High Court’s sittings as a Full Court are limited to places specified by the Governor‑General’s Gazette notices while such notices remain in force (s.51).
Contracts and discharged liabilities: where a payment under a contract is reduced under this Part, payment of the reduced amount fully discharges the Commonwealth’s liability under that contract for the reduced payment (s.16).
Who pays and who decides
Primary payers of the cost reductions are recipients of Commonwealth pay, allowances, pensions and bounties: public servants and other Commonwealth payees, recipients of maternity and invalid/old‑age pensions, certain war pension dependants, and bounty claimants (ss.9–11, 17, 22–24, 28, 35, 42, 52–53).
Decision power is concentrated in the executive: Ministers (acting under orders published by the Governor‑General) implement reductions and may direct particular adjustments (s.4, s.12, s.17). The Governor‑General has regulation‑making power (s.55) and specific powers to make arrangements with States (s.19). A statutory Committee advises the Minister and is explicitly involved in recommendations (s.13). Regulations may create additional committees (s.43).
Incentives, costs, trade‑offs and administrative burdens (source‑grounded)
Incentives and private choices: cuts to public salaries and pensions reduce disposable income for affected individuals (ss.10–11; ss.22–24; ss.35, 42). That mechanical effect will tend to reduce recipients’ purchasing power unless offset elsewhere. Bounty reductions (s.52–53) lower direct support to listed industries and may change producers’ revenue calculations for cotton, flax, iron and steel, wine export, sulphur, power alcohol and Papua/New Guinea bounties (Second Schedule).
Contract freedom and legal certainty: the Act overrides existing contracts and awards by statute for the Commonwealth and related authorities and treats reduced payments as a full discharge of contractual liability (s.10, s.11, s.16). This removes private parties’ contractual remedies against the Commonwealth for the reduced amounts.
Concentrated benefits and diffuse costs: the Act spreads fiscal savings across many Commonwealth payments; beneficiaries of any single reduction are the Commonwealth balance sheet and, indirectly, the general revenue (Preamble; s.24 on reduced Commonwealth contributions). The costs are concentrated on identifiable groups (public servants, pensioners, bounty recipients). The text does not create a competing benefit stream for those groups.
Administrative burden and compliance: new evidence rules for maternity allowances (s.30), investigation powers and summary offences for false reporting (s.31, inserted s.11a), and recovery provisions for improperly paid pensions (inserted s.38aa) increase administrative workload for the Commissioner, Departments and courts. Calculation rules (First Schedule and s.14) add complexity for payroll and pension administrators.
Discretion and implementation risk: multiple provisions require ministerial directions "on receipt of a recommendation of the Committee" (e.g. s.12(1)(ii), s.17(2)), and the Governor‑General may set rates and make arrangements with States (s.19). That discretion centralises decision‑making in the executive and in appointed committees (s.13, s.43), which is a practical mechanism to handle exceptions but creates implementation variability and reliance on administrative processes.
Interaction with States and tax treatment: the Act prevents States taxing reduced Commonwealth salaries and pensions at higher rates than those prescribed (s.19). The Governor‑General can arrange for State taxation to be collected by deduction from salaries (s.19(4)), creating an interface between Commonwealth reductions and State revenue procedures.
Transitional and timing rules
What to watch in implementation
Sources cited: Preamble; ss.1–4, 9–19, 22–25, 28–32, 33–39, 40–50, 51–55; First and Second Schedules.