This Act centralises how NSW government agencies manage money: it defines which organisations are "GSF agencies", requires financial policies, reporting and audits, and gives the Treasurer broad powers to direct banking, investments, borrowing, guarantees and use of financial services. Accountable authorities must comply, keep records and manage risks. Practically, agencies may have interest redirected to Treasury, pay guarantee fees, and rely on NSW Treasury Corporation for borrowings; the Treasurer decides approvals, directions and many transactional terms.
The Government Sector Finance Act 2018 (NSW) is the foundational financial management statute for the NSW government sector. It establishes the framework for how NSW government agencies manage public money, prepare budgets, make expenditure, enter financial arrangements, and report to Parliament and the public.
The Act replaced earlier NSW financial legislation and harmonised the rules for financial management, accountability, and reporting across the government sector. Its ten Parts address the full lifecycle of public money: from the objects and definitions through to the performance reporting and administrative machinery.
Main concepts
GSF agency: A government sector finance agency, being a budget-dependent entity for which money is appropriated by the Parliament of NSW, together with a range of other entities prescribed in the regulations. Departments are GSF agencies.
Accountable authority: For a GSF agency, the person or body responsible for the agency's affairs; for universities and their controlled entities, the governing body (Senate, Council, or Board).
Government money (section 1.4): Any public money collected, received or held by any person for or on behalf of the State, any territorial, casual and other revenues of the Crown, and any money directed to form part of the Consolidated Fund or Special Deposits Account.
Current sections
Direct links to the current provisions in Government Sector Finance Act 2018.
(b) a body or group of persons (whether incorporated or unincorporated),
(c) a partnership or joint venture,
(d) the trustee (or, if there is more than one trustee, the trustees together) of a trust,
(e) any other legal, administrative or fiduciary arrangement or other organisational structure capable of deploying resources to achieve objectives.
Note.
Section 21 (1) of the Interpretation Act 1987 defines person to include an individual, a corporation and a body corporate or politic.
(2) To avoid doubt, entities are not limited to those that are formed or located in the State.
Part 3
Roles and responsibilities
Part 3 Roles and responsibilities
Part 3 Roles and responsibilities
Division 3
Treasurer
Division 3 Treasurer
Division 3.1 Treasurer
3
Giving of Treasurer’s directions
3 Giving of Treasurer’s directions
3.1 Giving of Treasurer’s directions
(1) The Treasurer may give written directions (called Treasurer’s directions) for or with respect to each of the following—
(a) the principles, practices, arrangements and procedures to be applied or followed by GSF agencies, government officers and accountable authorities for GSF agencies for the purposes of promoting compliance with the provisions of this Act and the regulations,
(b) any matter that is, by or under this Act or any other Act, required or permitted to be included in the Treasurer’s directions,
(c) any matter of a kind prescribed by the regulations for which the Treasurer’s directions are authorised to make provision.
Note.
Section 9.8 allows the Treasurer to delegate any functions concerning the giving of Treasurer’s directions, but only to the accountable authority for the Treasury or certain other senior government officers of the Treasury.
(2) A Treasurer’s direction—
(a) cannot be inconsistent with this Act, and
(b) must be published on the NSW legislation website and may also be published on the Treasury’s website or in any other way the Treasurer considers appropriate, and
(c) takes effect on the day it is published on the NSW legislation website or any later day specified in the direction, and
(d) may be amended, replaced or revoked by a further Treasurer’s direction.
(3) A Treasurer’s direction may do any of following (or any combination of the following)—
(a) apply generally or be limited in its application by reference to one or more specified circumstances, factors or exceptions,
(b) authorise any matter or thing to be from time to time determined, applied or regulated by any specified person, group of persons or body,
(c) apply, adopt or incorporate (whether with or without modification) any publication as in force at a particular time or as in force from time to time,
(d) give exemptions from the direction (whether from all of the direction or specified provisions of the direction) or authorise specified entities to give those exemptions.
(4) To avoid doubt, a Treasurer’s direction concerning reporting requirements for a particular annual reporting period (whether for a GSF agency or for the NSW Government) may be given even if that period has already commenced or has ended.
(5) Except to the extent required by this Act or the regulations, the Treasurer may (but need not) consult with responsible Ministers for GSF agencies or any other persons or entities that the Treasurer considers appropriate before giving Treasurer’s directions or amending, replacing or revoking them.
Part 4
Budget, appropriations and Special Deposits Account
Part 4 Budget, appropriations and Special Deposits Account
Part 4 Budget, appropriations and Special Deposits Account
Division 4
Budget
Division 4 Budget
Division 4.1 Budget
4
Budget Papers
4 Budget Papers
4.1 Budget Papers
(1) The Budget Papers are the Budget Papers of the Government tabled in Parliament in connection with Bills for annual Appropriation Acts.
(2) The Treasurer is responsible for the preparation and presentation of the Budget Papers.
(3) Unless an annual Appropriation Act provides differently, the Budget Papers tabled in Parliament in connection with the Bill for the Act—
(a) do not form part of the Act, and
(b) do not affect the application of any amount appropriated by the Act.
Part 5
Expenditure and gifts
Part 5 Expenditure and gifts
Part 5 Expenditure and gifts
Division 5
Expenditure
Division 5 Expenditure
Division 5.1 Expenditure
5
Budget control authorities
5 Budget control authorities
5.1 Budget control authorities
(1) The Treasurer may issue Budget control authorities to regulate expenditure of money by GSF agencies that are part of the General Government Sector.
(2) A Budget control authority may be—
(a) a standing authority regulating expenditures of money in general terms, or
(b) limited as to the period during which it may operate to regulate expenditures of money, or
(c) limited as to the nature of the transactions in respect of which expenditures of money may occur, or
(d) limited to a particular transaction or series of transactions, or
(e) contained in the Treasurer’s directions or in a separate written document given to the GSF agencies concerned.
(3) Without limiting subsections (1) and (2), a Budget control authority may include provisions that—
(a) set limits or caps on expenditures of money (whether by reference to amounts, percentages, ratios, growth factors or any other measures), and
(b) require additional authorisations for particular expenditures of money, and
(c) regulate expenditures of money using cash accounting methodology or accrual accounting methodology (or both).
Part 6
Financial services and arrangements
Part 6 Financial services and arrangements
Part 6 Financial services and arrangements
Division 6
Introduction
Division 6 Introduction
Division 6.1 Introduction
6
Application of Part
6 Application of Part
6.1 Application of Part
(1) For the purposes of this Part, each Minister (except the Treasurer) is to be treated as both a GSF agency and the accountable authority for the agency.
(2) To avoid doubt, an accountable authority for a GSF agency or government officer cannot do anything for or on behalf of a GSF agency that would contravene this Part if it were done directly by the agency.
(3) A provision of the Treasurer’s directions given, or of regulations made, for the purposes of any provisions of this Part that applies to GSF agencies generally is not to be read as applying to the New South Wales Treasury Corporation unless those directions or regulations provide for it expressly.
(4) The Treasurer must consult the New South Wales Treasury Corporation in accordance with section 3.5 about any proposed provisions in the Treasurer’s directions or regulations that will expressly apply to it for the purposes of this Part.
(5) The provisions of this Part apply despite any powers, privileges or other rights under the general law of the Crown, Ministers or other entities acting for or on behalf of the Crown.
Note.
This Part is a paramount provision of this Act. Section 1.8 requires a person or other entity to whom a paramount provision applies to comply with the provision (including any regulations made for the purposes of that provision) even if it may result in a non-criminal contravention of other legislation. It also provides that compliance does not result in any civil liability and displaces the operation of the Corporations Act 2001 of the Commonwealth to enable compliance.
Part 7
Reporting
Part 7 Reporting
Part 7 Reporting
Division 7
Interpretation
Division 7 Interpretation
Division 7.1 Interpretation
7
Application and objects of Part
7 Application and objects of Part
7.1 Application and objects of Part
(1) The provisions of this Part apply in addition to, and without limiting, any other reporting requirements that an entity may have under other legislation (including legislation of the Commonwealth).
(2) The objects of this Part are—
(a) to promote transparency and accountability with respect to the reporting of certain financial and other information concerning the State, GSF agencies and reporting GSF agencies, and
(b) to facilitate the use of that information by its users (whether within or outside the government sector) to make informed decisions.
(3) The following modifications have effect in relation to this Part in its application to the Audit Office as a GSF agency—
(a) the financial statements or reports prepared for the Audit Office under this Part that require auditing are to be given to and audited by the auditor appointed under section 47 of the Government Sector Audit Act 1983 in accordance with section 48 of that Act instead of being given to and audited by the Auditor-General,
(b) the Auditor General (and not a Minister) is to cause any document relating to the Audit Office that is permitted or required to be tabled in Parliament under this Part to be presented to the Clerks of both Houses of Parliament and section 9.12 is taken to apply to the presented document regardless of whether or not the House concerned is sitting.
Note.
This Part (subject to subsection (1) and sections 7.4 and 7.10) is a paramount provision of this Act. Section 1.8 requires a person or other entity to whom a paramount provision applies to comply with the provision (including any regulations made for the purposes of that provision) even if it may result in a non-criminal contravention of other legislation. It also provides that compliance does not result in any civil liability and displaces the operation of the Corporations Act 2001 of the Commonwealth to enable compliance.
Part 8
Performance information of GSF agencies
Part 8 Performance information of GSF agencies
Part 8 Performance information of GSF agencies
8
Application of Part
8 Application of Part
8.1 Application of Part
(1) This Part applies in relation to GSF agencies.
(2) However, this Part does not apply in relation to GSF agencies to the extent that the application of the Part to them is excluded by or under the regulations.
Part 9
Administration
Part 9 Administration
Part 9 Administration
Division 9
Information sharing
Division 9 Information sharing
Division 9.1 Information sharing
9
Relevant agency information
9 Relevant agency information
9.1 Relevant agency information
Relevant agency information about a GSF agency is information concerning any of the following—
(a) the banking information of the agency,
(b) the cash flows of the agency,
(c) the assets, rights and liabilities of the agency,
(d) the sources and application of the agency’s funding,
(e) financial arrangements entered into by or on behalf of the agency,
(f) information for use in preparing the Budget,
(g) annual reporting information about the agency required under Division 7.3,
(h) records or other information required to be kept under Part 8 concerning the agency’s performance,
(i) any other information of a kind prescribed by the regulations.
Part 10
Miscellaneous
Part 10 Miscellaneous
Part 10 Miscellaneous
10
Status of Workers Compensation Insurance Fund
10 Status of Workers Compensation Insurance Fund
10.1 Status of Workers Compensation Insurance Fund
The Workers Compensation Insurance Fund is not—
(a) a controlled entity of the Government of New South Wales for the purposes of the preparation of the Consolidated State Financial Statements, or
Schedule 1 Savings, transitional and other provisions
Schedule 1 Savings, transitional and other provisions
sch 1: Am 2018 (685), Sch 1; 2019 (257), Sch 2 [1] [2]; 2020 No 6, Sch 1.1[3]–[5]; 2021 (320), Sch 1[1]–[5]; 2022 No 29, Sch 1.3[4]; 2022 (639), sec 3; 2022 No 63, Sch 1[10]; 2023 No 1, Sch 1[2]; 2023 No 7, Sch 2.29; 2023 No 18, Sch 3[3]; 2023 No 35, Sch 3.6.
9A
Special provisions relating to deferred commencement of annual reporting provisions of the Act
9A Special provisions relating to deferred commencement of annual reporting provisions of the Act
9A Special provisions relating to deferred commencement of annual reporting provisions of the Act
(1) The references in this Act, section 7.6(5)(a) to annual reporting information and the requirement under this Act, Division 7.3 to prepare annual reporting information are to be read on and from 1 July 2021 until 30 June 2023 as references to, respectively—
(ii) the requirement to prepare annual reports under the Annual Reports (Departments) Act 1985, and
(2) The references in this Act, section 7.7(3)(a) to annual reporting information and the requirement under this Act, Division 7.3 to prepare annual reporting information are to be read on and from 1 July 2021 until 30 June 2023 as references to, respectively—
(2) A reference in an affected provision to an annual report of the GSF agency must be read, on and from 1 July 2023, as a reference to annual reporting information for the GSF agency.
11
Existing expenditure control authorities
11 Existing expenditure control authorities
11 Existing expenditure control authorities
Any expenditure control authority under section 10 of the Public Finance and Audit Act 1983 continues in force as a Budget control authority under this Act to the extent that the authority applies to entities (or kinds of entities) that are GSF agencies.
12
Existing delegations and authorisations to approve payment
12 Existing delegations and authorisations to approve payment
12 Existing delegations and authorisations to approve payment
(1) Any delegation given under a replaced Act or replaced Regulation continues in force as a delegation for the purposes of Division 9.2 of this Act.
(2) Any delegation made pursuant to an authorisation to delegate the committing or incurring of expenditure for the purposes of section 12A of the Public Finance and Audit Act 1983 continues in force as a delegation for the purposes of Division 9.2 of this Act.
(3) Any authorisation to approve payment for the purposes of section 13 of the Public Finance and Audit Act 1983 is taken to be a delegation given for the purposes of Division 9.2 of this Act.
(4) The following provisions apply in relation to a delegation or authorisation that becomes a delegation (a transferred delegation) for the purposes of Division 9.2 of this Act by operation of this clause—
(a) the transferred delegation is taken to have been given by the same person under Division 9.2,
(b) the transferred delegation delegates to the same entities (or the same kinds of entities), but only to the extent that those entities are permissible delegates under Division 9.2,
(c) the transferred delegation delegates the same functions (or the same kinds of functions), but only to the extent that those functions or corresponding functions under this Act can be delegated under Division 9.2,
(d) Division 2 of this Part applies in relation to references in a transferred delegation to a replaced Act or replaced Regulation (or a provision of such an Act or Regulation).
(5) This clause does not apply in respect of a delegation given under the Public Finance and Audit Act 1983 to the extent that it relates to a function under a provision of that Act that is not repealed by the amending Act.
13
Existing financial arrangements
13 Existing financial arrangements
13 Existing financial arrangements
(1) Any approval for a financial arrangement given under a provision of the Public Authorities (Financial Arrangements) Act 1987 continues in force as a financial arrangement approval under this Act (and may be amended and revoked accordingly)—
(a) for a joint financing arrangement or joint venture arrangement—until the arrangement ends, or
(2) Any guarantees provided (or taken to have been provided) by or under the Public Authorities (Financial Arrangements) Act 1987 in relation to these financial arrangements continue to be in force until they end despite the repeal of that Act by the amending Act.
(3) In this clause—
approval, in relation to a financial arrangement, includes an exemption or other authorisation that permits entering into the arrangement.
14
Existing investment powers
14 Existing investment powers
14 Existing investment powers
(1) This clause applies if a GSF agency was an authority with an investment power (an existing investment power) under Part 1, 2, 3 or 4 of Schedule 4 to the Public Authorities (Financial Arrangements) Act 1987.
This clause operates to authorise the exercise of existing investment powers without the need for a financial arrangement approval. See section 6.22 (2) (a) of this Act.
(3) The Treasurer may, by written order given to the accountable authority for a GSF agency, direct that subclause (2) is to cease to apply to some or all of the agency’s existing investment powers specified in the order.
(4) To avoid doubt, a reference to a GSF agency in this clause includes an entity that is a GSF agency only for the purposes of some or all of the provisions of Part 6 of this Act.
15
Continuation of certain provisions of Public Authorities (Financial Arrangements) Act 1987
15 Continuation of certain provisions of Public Authorities (Financial Arrangements) Act 1987
(a) section 8A (Special provisions relating to ownership of buildings, structures or other fixtures) in relation to agreements entered into before the replacement day for the Act,
(b) section 12 (Provisions relating to authorities which obtain financial accommodation) and Schedule 2 (Provisions relating to securities etc) in relation to financial accommodations obtained before the replacement day for the Act,
(c) section 44 (Validation of certain financial adjustments) in relation to arrangements and transactions entered into before the replacement day for the Act.
(2) Any terms and conditions imposed by the Treasurer under section 9 (Treasury advances) of the Public Authorities (Financial Arrangements) Act 1987 on an advance continue to apply to an advance made before the replacement day for the Act.
Any agreement in force under section 15 (Agreement with bank, building society or credit union) of the Public Finance and Audit Act 1983 is taken to be a State financial service agreement for the purposes of this Act until the agreement ends.
17
Existing fund manager approvals
17 Existing fund manager approvals
17 Existing fund manager approvals
An approval of the Treasurer in force under section 25 of the Public Authorities (Financial Arrangements) Act 1987 given to an authority under that Act that becomes a GSF agency to engage an approved funds manager (other than the New South Wales Treasury Corporation) continues in force as a funds manager approval under this Act.
18
Relationship of Division with Division 6.4 of this Act
18 Relationship of Division with Division 6.4 of this Act
18 Relationship of Division with Division 6.4 of this Act
This Division does not limit any other powers that a GSF agency has under Division 6.4 of this Act to enter into financial arrangements.
19
Existing appropriations
19 Existing appropriations
19 Existing appropriations
(1) This clause applies to an appropriation (an existing unused appropriation) that was given before the commencement of Part 4 of this Act if, immediately before that commencement, the appropriation had not been applied (whether wholly or partly).
(2) Part 4 of this Act extends to an existing unused appropriation to the extent to which it has not been applied.
(3) Without limiting subclause (2), an existing unused appropriation given as the Treasurer’s advance is taken to be a Treasurer’s State contingencies appropriation for the purposes of section 4.12 of this Act.
20
Existing working accounts
20 Existing working accounts
20 Existing working accounts
(1) This clause applies to a working account established under section 13A of the Public Finance and Audit Act 1983 for an authority within the meaning of that Act (an existing working account) if—
(a) the account was in existence immediately before the replacement day for that section (the section 13A replacement day), and
(b) the authority is a GSF agency for the purposes of this Act.
(2) An existing working account is taken to be a working account established under section 4.17 of this Act for the GSF agency (a continued working account) concerned.
(3) Any money (including money that is not working account money) held in an existing working account is taken to form part of the continued working account.
(4) To avoid doubt, subclause (3) does not authorise the payment into a continued working account of money that is not working account money received on or after the section 13A replacement day.
(5) Subject to any regulations made for the purposes of section 4.17, the operation of an existing working account, and the purposes for which money may be paid out of the account, continue to be subject to any terms and conditions specified in the instrument that established the account.
(6) This section expires at the end of 31 December 2022.
(7) In this clause—
working account money has the same meaning as in section 4.17 of the Act.
Section 4.7, as amended by the amending Act, extends to government money that was received or recovered by a GSF agency before the commencement of the amending Act, Schedule 1.
33
Application of existing deemed appropriations and delegations
33 Application of existing deemed appropriations and delegations
33 Application of existing deemed appropriations and delegations
(1) This clause applies in relation to—
(a) an existing deemed appropriation to the responsible Minister for a GSF agency, and
(b) a delegation given by the responsible Minister to a person that authorises the application of all or part of the existing deemed appropriation by the person.
(2) On and from the commencement of the amending Act, Schedule 1—
(a) the existing deemed appropriation is taken to have been given to the lead Minister for the GSF agency, and
(b) the delegation continues in effect as if the delegation had been given by the lead Minister for the GSF agency.
(3) In this clause—
existing deemed appropriation, to a responsible Minister for a GSF agency, means an appropriation taken to have been given to the Minister under the Act, section 4.7 as in force before the commencement of the amending Act, Schedule 1.
34
Application of amendments
34 Application of amendments
34 Application of amendments
(1) Section 5.7, as amended by the amendment Act, applies to an act of grace payment made to a person before the commencement date.
(2) The Chief Commissioner of State Revenue may nominate an act of grace payment (a nominated act of grace payment) for section 5.7, as amended by the amendment Act, even if the act of grace payment was made to a person before the commencement date.
(3) Despite subclause (2), section 5.7(3B), to the extent it applies the Taxation Administration Act 1996, Part 8 in relation to a person whom a nominated act of grace payment is made, does not apply to an act of grace payment made before the commencement date.
commencement date means the date of assent to the amendment Act.
Schedule 2
Schedule 2
Schedule 2 (Repealed)
sch 2: Ins 2020 No 6, Sch 1.1[6]. Rep 2018 No 55, sec 10.5(1).
Source text: opening excerpt
Sourced from legislation.nsw.gov.au, CC BY 4.0.
Part 1 Preliminary
Part 1 Preliminary
Part 1 Preliminary
Division 1 Introduction
Division 1 Introduction
Division 1.1 Introduction
1 Name of Act
1 Name of Act
1.1 Name of Act
This Act is the Government Sector Finance Act 2018.
1 Commencement
1 Commencement
1.2 Commencement
(1) This Act commences on a day or days to be appointed by proclamation, except as provided by this section.
(2) Section 10.4 (Regulations) and Schedule 1 commence on the date of assent to this Act.
1 Objects of Act
1 Objects of Act
1.3 Objects of Act
The objects of this Act are as follows—
(a) to promote and support sound financial management, budgeting, performance, financial risk management, transparency and accountability in the government sector and by GSF agencies and government officers,
(b) to facilitate the effective devolution of roles and responsibilities in connection with financial management to support efficient and effective government,
(c) to require the efficient, effective and economical use and management of government resources and related money in accordance with the principles of sound financial management,
(d) to promote appropriate stewardship of government resources and related money,
(e) to facilitate cooperation and collaboration within and between GSF agencies for the purpose of achieving common objectives and whole of Government objectives,
(f) to facilitate the keeping and sharing of performance information in the government sector for the purposes of decisions about resource allocation.
Division 1 Interpretation generally
Division 1 Interpretation generally
Division 1.2 Interpretation generally
1 General definitions
1 General definitions
1.4 General definitions
In this Act—
Budget control authority (section 5.1): An authority issued by the Treasurer or a Minister to enable a GSF agency to spend money. Budget control authorities are the mechanism by which appropriations are devolved to agencies.
Act of grace payment (section 5.7): A payment authorised by a Minister even though the payment is not otherwise authorised by law or required to meet an obligation, in circumstances where the Minister is satisfied there are special circumstances. Subject to terms and conditions set by the Minister.
Special Deposits Account (Part 4): The account into which certain public money is held that is not part of the Consolidated Fund, including trust money and money held pending specific purposes.
Financial arrangement (section 6.7): An arrangement involving money or financial instruments, including borrowings, guarantees, derivatives, insurance, and foreign currency transactions.
Annual GSF financial statements (section 7.6): The annual financial statements that each reporting GSF agency must prepare and have audited.
Consolidated State Financial Statements (section 7.17): The whole-of-government financial statements that consolidate the annual financial statements of all reporting GSF agencies.
Who it affects
The Act affects every NSW government department, statutory body, and other entity classified as a GSF agency or reporting GSF agency. This includes:
Government departments and statutory authorities: Must comply with the full suite of financial management, reporting, and accountability obligations.
Accountable authorities: The heads of GSF agencies have personal responsibility for ensuring the agency complies with the Act, and must exercise due diligence in financial management.
Government officers: Any person in a GSF agency must comply with the applicable requirements when performing financial management functions on behalf of the agency.
Universities: For some provisions (reporting requirements and certain accountable authority obligations), universities and their controlled entities are treated as GSF agencies.
Contracting parties: Persons receiving grants, act of grace payments, or entering financial arrangements with GSF agencies are subject to the terms and conditions imposed under the Act.
Key obligations
Budget and appropriations (Part 4): GSF agencies must manage expenditure within the Budget control authority issued by the Treasurer or Minister. Budget Papers must be tabled each year. Agencies cannot incur expenditure except as authorised by an appropriation Act or another law.
Expenditure conditions (Part 5): Expenditure must be proper (that is, for the agency's purposes, efficient, and effective) and money must not be spent except as authorised. Gifts of public property (section 5.6) and transfers for no or inadequate consideration require specific authorisation.
Act of grace payments (section 5.7): Ministers may authorise act of grace payments in special circumstances. The recipient must comply with any terms and conditions imposed. Breach of conditions permits recovery as a debt. For nominated act of grace payments, the Chief Commissioner of State Revenue may enforce compliance as if it were a tax liability.
Financial arrangements (Part 6): GSF agencies cannot enter financial arrangements except as authorised by the Act. Banking account arrangements, borrowings, guarantees, insurance, foreign currency transactions, and other financial services must comply with the Act's requirements.
Reporting (Part 7): Reporting GSF agencies must prepare annual GSF financial statements and provide them to the Auditor-General (section 7.6). Annual reporting information must be tabled in Parliament. The Treasurer must prepare Consolidated State Financial Statements.
Powers and discretions
Treasurer's powers (Part 4): The Treasurer may issue Budget control authorities, approve special transfers between appropriations, and authorise the Special Deposits Account arrangements.
Ministerial delegation for act of grace payments (section 5.7(4)): Ministers may delegate the power to make act of grace payments only to the accountable authority of a GSF agency, a person employed in a Public Service agency responsible to that Minister, or a prescribed person.
Chief Commissioner of State Revenue (section 5.7(3A), (3B)): For nominated act of grace payments, the Chief Commissioner may enforce compliance with terms and conditions as if they were tax liabilities, including use of Parts 8 and 9 of the Taxation Administration Act 1996.
Secretary of Finance (various sections): Has functions throughout the Act including approval of certain financial arrangements, direction on banking account structuring, and guidance on financial reporting.
Penalties and enforcement
Recovery of act of grace payments (section 5.7(3) and (3A)): Where a term or condition of an act of grace payment is contravened, the payment may be recovered as a debt by the Crown or, for nominated payments, by the Chief Commissioner as if it were unpaid tax.
Financial arrangement breaches: GSF agencies that enter financial arrangements without proper authorisation are subject to disciplinary and accountability consequences within the public sector accountability framework.
The Act does not itself create criminal offences. Enforcement is primarily through accountability mechanisms, audit, Parliamentary scrutiny, and civil debt recovery.
Process and timelines
Budget Papers (section 4.1): Must be tabled in Parliament in connection with the Budget Bill each year, covering forward estimates for at least three years beyond the Budget year.
Annual financial statements (section 7.6): Must be prepared for each annual reporting period (generally the financial year ending 30 June) and provided to the Auditor-General within a period prescribed by the regulations.
Consolidated State Financial Statements (section 7.17): Must be prepared within a period prescribed by regulations after the end of the NSW Government's annual reporting period.
Interactions with other law
Constitution Act 1902 (NSW): The Consolidated Fund is created by section 39 of the Constitution Act. Appropriations require parliamentary authority. The Government Sector Finance Act implements those constitutional requirements and provides the detailed framework for managing appropriated money.
Government Sector Audit Act 1983 (NSW): The Auditor-General and Audit Office operate under this Act to audit GSF financial statements. The Government Sector Finance Act cross-references the audit report requirements in that Act.
Taxation Administration Act 1996 (NSW): For nominated act of grace payments, enforcement mechanisms under Parts 8 and 9 of the Taxation Administration Act apply as if the payment were a tax liability.
State Owned Corporations Act 1989 (NSW): Company State owned corporations (as defined) are treated differently from ordinary GSF agencies; the Government Sector Finance Act applies to them only to the extent specified.
Gotchas
Act of grace payments are not deductible from insurance losses: The Federal Court in Swiss Re International SE v LCA Marrickville [2021] FCA 1206 confirmed that grants made under section 5.7 (including COVID-19 business support grants) are acts of grace. As a matter of their essential character, they are merciful beneficences and are not taken into account to reduce an insured's loss under an indemnity insurance contract. Insurance lawyers advising on business interruption claims involving government grant receipts must apply this characterisation.
Budget control authority is separate from appropriation: An appropriation Act gives Parliament's authority to spend; a Budget control authority under section 5.1 is the administrative mechanism by which that authority is devolved to the agency. Both must be in place for valid expenditure.
University treatment varies by provision: Universities and their controlled entities are treated as GSF agencies only for specified purposes. They are not subject to the full Act. Their accountable authority is their governing body (Senate, Council, or Board), not a chief executive.
Gifts of public property require authorisation (section 5.6): Government agencies cannot give away public property, even for nominal consideration, without specific authorisation under section 5.6 or another law. This catches common commercial practices like gifting assets on decommissioning or transferring assets below market value between agencies.
Practical examples
Example 1: COVID-19 small business grants under section 5.7
During the COVID-19 pandemic, the NSW Government made act of grace payments to eligible small businesses under section 5.7. As confirmed by the Federal Court in Swiss Re International SE v LCA Marrickville [2021] FCA 1206 (at [406]-[408]), these payments were acts of grace in the sense of merciful beneficences by the NSW Government to eligible businesses. A business that received a COVID-19 grant under section 5.7 was not required to bring that grant into account as a deduction from its insured loss under a business interruption insurance policy.
Example 2: Agency expenditure without budget authority
A NSW government department commits to a contract for IT services that exceeds its Budget control authority. The expenditure is not authorised under the Government Sector Finance Act. The accountable authority is responsible for the non-compliance and must report it. The Auditor-General may qualify the agency's annual financial statements if the breach is material.
Example 3: Financial arrangement approval
A statutory body proposes to enter a derivative arrangement to hedge foreign currency risk on a major construction project. Under Part 6, the arrangement must be authorised in accordance with the Act. The accountable authority must obtain the required approval and ensure the arrangement is properly documented and reported.
(b) for a university or its controlled entities (including ones that are to be treated as GSF agencies or reporting GSF agencies for the purposes of provisions of this Act)—means the governing body of the university (that is, its Senate, Council or Board).
annual Appropriation Act means an Act with the object of appropriating sums of revenue or moneys for the ordinary annual services of the Government (as referred to in section 5A of the Constitution Act 1902).
annual GSF financial statements for a reporting GSF agency—see section 7.6.
annual reporting information for a reporting GSF agency—see section 7.11.
annual reporting period—
(a) for a GSF agency—see section 2.10, or
(b) for the NSW Government—see section 2.11.
arrangement for the purposes of Part 6—see section 6.5.
assets means any legal or equitable estate or interest (whether present or future, whether vested or contingent and whether personal or assignable) in real or personal property of any description (including money), and includes securities, choses in action and documents.
Audit Office means the Audit Office of New South Wales established by the Government Sector Audit Act 1983.
audit report, in relation to a statement or report, means an audit report for the statement or report prepared by the Auditor-General under section 34 of the Government Sector Audit Act 1983.
Auditor-General means the Auditor-General referred to in section 27B of the Government Sector Audit Act 1983.
Australian Accounting Standards means the standards issued by the Australian Accounting Standards Board, as in force from time to time.
authorised in relation to financial arrangement for a GSF agency—see section 6.22.
banking account—see section 6.4.
banking account structuring—see section 6.4.
banking information of a GSF agency—see section 6.4.
banking service—see section 6.4.
borrowing—see section 6.8.
Budget control authority means a Budget control authority issued under section 5.1.
Budget Papers—see section 4.1.
company State owned corporation means a company State owned corporation within the meaning of the State Owned Corporations Act 1989.
conduct includes an omission.
Consolidated Fund means the fund formed as referred to in section 39 of the Constitution Act 1902.
Consolidated State Financial Statements—see section 7.17.
constituent Act, in relation to a GSF agency or other entity, means the Act by or under which the agency or entity is appointed or constituted.
contractor means—
(a) a person engaged under a contract for services (but not a contract of service) to perform or provide services for or on behalf of a GSF agency, or
(b) a person who is provided by a person referred to in paragraph (a) (including as a subcontractor) to perform the contracted services for or on behalf of a GSF agency.
controlled entity—see section 2.2.
Corporations legislation means the Corporations legislation to which Part 1.1A of the Corporations Act 2001 of the Commonwealth applies.
delegable function—see section 9.7.
Department means a Department within the meaning of the Government Sector Employment Act 2013.
derivative arrangement—see section 6.10.
enter into a financial arrangement or other arrangement includes participating in the arrangement.
entity—see section 2.1.
expenditure of money includes—
(a) the commitment of money for expenditure, and
(b) the incurring of expenditure, and
(c) the making of payments.
financial arrangement—see section 6.7.
financial arrangement approval—see section 6.23.
financial service—see section 6.6.
function includes a power, authority or duty, and exercise a function includes perform a duty.
funds manager approval—see section 6.35.
General Government Sector means New South Wales agencies or activities listed or described as part of the General Government Sector by the Australian Bureau of Statistics (which are listed or described in accordance with international statistics conventions).
general law means the common law and equity, including the common law concerning the content and exercise of Executive or prerogative powers, privileges or other rights of the Crown.
governing body, in relation to a GSF agency, means—
(a) a board, council or other body comprised of individuals that are collectively responsible for managing the affairs of the agency, or
(b) any other entity declared by the regulations to be the governing body for the agency,
but does not include—
(c) any board, council or other body with merely advisory functions, or
(d) any entity (or entity of a kind) prescribed by the regulations not to be a governing body.
government money means—
(a) any public money (including any securities and revenues, loans and other moneys whatsoever) collected, received or held by any person for or on behalf of the State (as referred to in section 39 (1) of the Constitution Act 1902), and
(b) any territorial, casual and other revenues of the Crown (including all royalties), from whatever source arising, within New South Wales, and as to the disposal of which the Crown may otherwise be entitled absolutely, conditionally or in any other way (as referred to in section 39 (2) of the Constitution Act 1902), and
(c) any money that, under any Act, is directed or authorised to be paid to, or is expressed to form part of, the Consolidated Fund or the Special Deposits Account (including money in working accounts in the Special Deposits Account), and
(d) any money (or money of a kind) prescribed by the regulations as government money,
but does not include anything prescribed by the regulations not to be government money.
government officer—see section 2.9.
Note.
Section 2.9 also defines when a government officer is a government officer of a GSF agency.
government property means all property held by, for or on behalf of the State or a GSF agency (whether or not it is held on trust) except—
(a) government money or related money, or
(b) property held on trust for the benefit of an entity other than a GSF agency.
government resources means government money and government property.
GSF agency—see section 2.4.
head of a GSF agency means—
(a) for a Public Service agency—the person who is the head of the Public Service agency (within the meaning of the Government Sector Employment Act 2013), or
(b) for any other agency—the person who is the chief executive officer (however described) of the agency or otherwise responsible for the agency’s day to day management, but not its governing body (if any).
investment—see section 6.9.
joint financing arrangement—see section 6.11.
joint venture—see section 6.12.
joint venture arrangement—see section 6.12.
kind, in relation to an entity, matter or thing, includes a class of entity, matter or thing.
law means legislation or the general law.
legislation includes Acts, statutory rules and environmental planning instruments.
liabilities means any liabilities, debts or obligations (whether present or future, whether vested or contingent and whether personal or assignable).
misconduct, in relation to a government officer to whom the Government Sector Employment Act 2013 applies, includes (but is not limited to) misconduct for the purposes of that Act.
New South Wales Treasury Corporation means the New South Wales Treasury Corporation constituted by the Treasury Corporation Act 1983.
NSW Health entity—see section 2.3.
paramount provision of this Act—see section 1.8.
person handling government resources means each of the following—
(a) a government officer,
(b) a person exercising functions as an accountable authority for a GSF agency,
(c) a person exercising functions as a delegate or subdelegate in connection with the use, management or disposal of government resources or related money,
(d) a person providing services to a GSF agency in connection with the use, management or disposal of government resources or related money (including as a contractor, consultant or volunteer),
(e) any other person (or person of a kind) prescribed by the regulations exercising functions in connection with the use, management or disposal of government resources or related money,
principal entity in relation to a joint financing arrangement—see section 6.11.
property means property of all kinds, whether real or personal and whether tangible or intangible and, in particular, includes choses in action.
Public Service agency has the same meaning as in the Government Sector Employment Act 2013.
related money means—
(a) any money, except government money, held by the Treasurer or another Minister or a GSF agency or government officer in the course of their official functions, including money that is held on trust for another entity or for a purpose, and
(b) any money (or money of a kind), except government money, prescribed by the regulations as related money,
but does not include anything prescribed by the regulations not to be related money.
relevant agency information about a GSF agency—see section 9.1.
reporting GSF agency—see section 7.3.
responsible manager for an SDA account—see section 4.16.
responsible Minister—
(a) for a GSF agency—see section 2.6, and
(b) for a university or its controlled entities (including ones that are to be treated as GSF agencies or reporting GSF agencies for the purposes of provisions of this Act)—means the Minister administering the constituent Act for its governing body (that is, its Senate, Council or Board).
rights means any rights, powers, privileges or immunities (whether present or future, whether vested or contingent and whether personal or assignable).
SDA account means an account in the Special Deposits Account.
secondary entity in relation to a joint financing arrangement—see section 6.11.
separate GSF agency—see section 2.5.
separate GSF agency delegable function of a Minister in relation to a separate GSF agency—see section 9.7.
Special Deposits Account—see section 4.15.
State owned corporation means a company State owned corporation or a statutory State owned corporation.
statutory special purpose fund means a fund established by or under an Act (except an SDA account) that limits the use of money in that fund to specified purposes.
statutory State owned corporation means a statutory State owned corporation within the meaning of the State Owned Corporations Act 1989.
Treasurer’s directions means any directions given by the Treasurer under Division 3.1.
trust means a trust at general law.
trust money means money that is held in trust.
university means a university established or continued by an Act of New South Wales.
Workers Compensation Insurance Fund means the Workers Compensation Insurance Fund established under the Workers Compensation Act 1987 (including the assets and liabilities of that Fund).
Workers Compensation Nominal Insurer means the Workers Compensation Nominal Insurer referred to in section 154A of the Workers Compensation Act 1987.
working day means any day that is not a Saturday, Sunday or public holiday.
Note.
The Interpretation Act 1987 contains definitions and other provisions that affect the interpretation and application of this Act.
1 Notes
1 Notes
1.5 Notes
Notes included in this Act do not form part of this Act.
Division 1 Application of Act
Division 1 Application of Act
Division 1.3 Application of Act
1 Act binds Crown
1 Act binds Crown
1.6 Act binds Crown
This Act binds the Crown.
1 Extraterritorial operation of Act
1 Extraterritorial operation of Act
1.7 Extraterritorial operation of Act
(1) It is the intention of the Parliament of New South Wales that the operation of this Act should, as far as possible, include operation in relation to the activities of Ministers, GSF agencies, accountable authorities for GSF agencies and government officers whether occurring in or outside the territorial limits of the State.
(2) Without limiting subsection (1), it is the intention of the Parliament of New South Wales that the provisions of this Act have an operation in relation to those activities even if the rules of private international law (whether under general law or legislation) would require the application of a law other than this Act instead of the provisions of this Act.
(3) In this section—
activities include conduct and transactions.
Division 1 Relationship of Act with other laws
Division 1 Relationship of Act with other laws
Division 1.4 Relationship of Act with other laws
1 Relationship with other legislation generally
1 Relationship with other legislation generally
1.8
This is an opening excerpt, not the complete document.