Local Government (Financial Assistance) (Final Factor for 2019-20 and Estimated Factor for 2020-21) Determination 2020

This instrument, the Local Government (Financial Assistance) (Final Factor for 2019‑20 and Estimated Factor for 2020‑21) Determination 2020, sets numeric factors that the Minister has determined for application under the Local Government (Financial Assistance) Act 1995 (the Act). It is a ministerial determination made by Michael Sukkar, Minister for Housing and Assistant Treasurer, dated 26 June 2020 (instrument header) and made under the authority in s 3 of the instrument ("This instrument is made under the Local Government (Financial Assistance) Act 1995").

Mechanically the instrument delivers two discrete outputs:

• A final factor for the 2019‑20 year: the instrument states expressly that “for the purposes of subsection 8(1) of the Act, the factor in relation to the 2019‑20 year is 1.0366” (s 5).
• An estimated factor for the 2020‑21 year: the instrument states “for the purposes of paragraph 7(3)(b) of the Act, the estimated factor in relation to the 2020‑21 year is 0.4817” (s 7).

The instrument records the calculation steps required by the Act (subsection 8(1)) and reports how those steps were carried out for each year (ss 6 and 8). For each year the instrument:

• applies the paragraph 8(1)(a) formula from the Act using specified inputs (population estimates and All Groups CPI numbers or Treasury CPI forecast), with the precise ABS catalogue references and dates noted in the instrument (s 6(2) notes 1-4; s 8(2) notes 1-4);
• applies the paragraph 8(1)(b) modification (rounding): in both years the calculated result under paragraph (a) was increased by 0.0001 because the fifth decimal place was greater than 4 (s 6(3); s 8(3)); and
• applies the paragraph 8(1)(c) modification for “special circumstances” to adjust the factor to account for the Commonwealth’s administrative decision to bring forward the first two quarterly payments between adjacent years (s 6(4); s 8(4)). The instrument defines the monetary elements used in that multiplicative adjustment (e.g. “2018‑19 amount”, “2019‑20 amount”, “2019‑20 final entitlement”, “sub (3) factor” in s 6(4) and analogous definitions in s 8(4)).

Commencement is immediate: the instrument’s commencement clause provides that the whole instrument commences “the day after this instrument is registered” (s 2(1) and the table in s 2). The instrument also records that expressions have the same meaning in this instrument as in the Act, by operation of the Legislation Act 2003 (s 4 and its note). No penalty, enforcement mechanism or new substantive duty is created by this instrument itself; instead, it provides numeric inputs and calculation history for application under the Act’s existing framework.

The instrument therefore operates as a formulaic, data‑driven administrative determination of two factors used under the Local Government (Financial Assistance) Act 1995, fixing the numeric outcomes and recording the data sources, rounding step and timing‑adjustment methodology used to arrive at those numbers.

This instrument revolves around a narrowly defined set of statutory concepts and computational steps drawn from the Act. The principal concepts recited and employed by the instrument are:

• Factor: The discrete numeric value that is the subject of this determination. The instrument gives the 2019‑20 final factor as 1.0366 (s 5) and the 2020‑21 estimated factor as 0.4817 (s 7). The instrument states that these are determined “for the purposes” of particular provisions of the Act (s 5 for subsection 8(1) and s 7 for paragraph 7(3)(b)), signalling that these numbers are to be used by reference to those statutory calculation regimes.

• Paragraph 8(1)(a) formula: The Act prescribes a formula in paragraph 8(1)(a) to produce a factor. The instrument applies that formula and records the inputs used. While the instrument reproduces the arithmetic result rather than restating the full statutory text of the formula, it documents that population estimates and All Groups Consumer Price Index (CPI) numbers were the inputs for each year (s 6(2) notes 1-4; s 8(2) notes 1-4).

• Paragraph 8(1)(b) rounding modification: Paragraph 8(1)(b) of the Act governs an upward adjustment in the fifth decimal place when appropriate. The instrument explicitly applies this rule in both year calculations, increasing the computed factor by 0.0001 because the fifth decimal digit exceeded 4 (s 6(3); s 8(3)).

• Paragraph 8(1)(c) special circumstances adjustment: Paragraph 8(1)(c) of the Act permits modification of the computed factor where special circumstances exist. The instrument invokes that paragraph to account for the Commonwealth’s administrative decision to bring forward the first two quarterly payments between years. For 2019‑20 it accounts for the Commonwealth bringing forward the first two payments in 2019‑20 into 2018‑19 and bringing forward the first two payments of 2020‑21 into 2019‑20 (s 6(4)). For 2020‑21 it accounts for the Commonwealth bringing forward the first two quarterly payments in 2020‑21 into 2019‑20 (s 8(4)). In each case the instrument applies a multiplicative adjustment to the sub(3) factor and defines the monetary components used in that ratio.

• Data provenance: The instrument specifies the authoritative data sources and dates used in the calculations. For population estimates the instrument cites ABS Catalogue Number 3101.0 and the dates the Statistician made the estimates (s 6(2) notes 1-2; s 8(2) notes 1-2). For CPI it cites ABS Catalogue Number 6401.0 for the March 2020 and March 2019 quarters in the 2019‑20 calculation (s 6(2) notes 3-4), and for 2020‑21 it uses the Department of the Treasury’s CPI forecast for the 2021 March quarter together with the ABS March 2020 CPI (s 8(2) notes 3-4).

The instrument explicitly operates “for the purposes” of provisions of the Local Government (Financial Assistance) Act 1995 (ss 5 and 7). The Act, by its name and cross‑references in the instrument, is the governing statutory regime in which local government financial assistance entitlements and calculations are made. The instrument therefore affects the following categories of actors, identified by function rather than by external assumption:

• The decision‑maker: The Minister who made the determination, Michael Sukkar, is the named maker of the instrument (header and date). The instrument records the Minister’s action in fixing the numeric factors. The instrument does not delegate or create new decision points; it is the Minister’s fixed determination of the factor values required by the Act (s 5; s 7).

• Administrators responsible for implementing the Act: Commonwealth officials who administer the Act must take the factors determined here and apply them under the statutory mechanisms of the Act. The instrument supplies the numeric inputs and the documented calculation methodology (ss 6 and 8), so administrators are required to use these numbers in downstream calculations that the Act mandates.

• Parties whose statutory entitlements under the Act depend on the s 8(1) factor or the paragraph 7(3)(b) estimated factor: while the instrument does not enumerate recipients, it is the operative input for whatever payment, entitlement or allocation regime in the Act that requires these factors. The instrument’s numbers will therefore affect the quantum of allocations where those calculations rely on the determined factor in subsection 8(1) or the estimated factor under paragraph 7(3)(b).

• Accounting, audit and compliance functions of affected entities: Because the instrument records sources (ABS catalogue numbers, dates and Treasury forecast), entities and auditors that must verify entitlements or financial statements will need to rely on the instrument’s stated inputs, the recorded adjustments under paragraph 8(1)(b), and the multiplicative timing adjustment under paragraph 8(1)(c) when reconciling payments and entitlements.

• Data providers referenced in the calculation: the ABS (Statistician) and the Department of the Treasury are indirectly implicated. The instrument depends on ABS population estimates (noting the dates those estimates were made: e.g., 18 June 2020 for estimates as at 31 December 2018 and 31 December 2019 in the relevant notes) and on CPI numbers or Treasury forecasts (ss 6(2) notes 1-4; s 8(2) notes 1-4). Changes or errors in those underlying data series would affect the reproducibility of the instrument’s arithmetic.

The instrument itself is narrowly framed and does not contain prescriptive duties, compliance offences or rights of appeal. Nevertheless, it creates operational obligations for those performing calculations and distributing funds under the Act by fixing the numbers they must use. The key legal roles and de facto duties or entitlements created or impacted by the instrument are these:

• Obligation to use the determined factor under the Act’s calculation rules: The instrument plainly states the numbers to be used “for the purposes” of particular provisions of the Act (s 5 in relation to subsection 8(1); s 7 in relation to paragraph 7(3)(b)). That wording indicates the instrument supplies the official figures to be applied in the statutory calculations under the Act. Administrative personnel and finance teams tasked with applying the Act must use the determined factors as inputs when performing the statutory computations specified in the Act.

• Duty to apply the rounding rule under paragraph 8(1)(b): The instrument records the application of paragraph 8(1)(b) to increase the calculated figure by 0.0001 because “the fifth decimal place was greater than 4” in both year computations (s 6(3); s 8(3)). The instrument thereby documents the rounding step that must be followed when reproducing or auditing the computation. This is a procedural duty for administrators and auditors verifying the arithmetic.

• Duty to apply the paragraph 8(1)(c) special circumstance adjustment: The instrument applies a multiplicative adjustment under paragraph 8(1)(c) to account for a Commonwealth decision to bring forward the first two quarterly payments between financial years (s 6(4); s 8(4)). The instrument defines the monetary variables used in those adjustments (e.g., “2018‑19 amount”, “2019‑20 amount”, “2020‑21 amount”, “2018‑19 final entitlement”, “2019‑20 final entitlement”, and “sub (3) factor”). This establishes the required computational methodology for administrators and auditors reconciling payments where the timing change occurred.

• Right to rely on the instrument when performing statutory calculations: Entities and auditors have a right, by implication, to rely on the numbers and the specified data sources set out in the instrument when computing entitlements or preparing financial statements under the Act. The instrument specifies the inputs (for example, ABS catalogue numbers and dates for population and CPI data) and so provides the authoritative record of the Minister’s decision on those inputs.

The Determination contains no penalty regime, enforcement provisions, or administrative sanctions. It is an executory, numeric instrument and does not itself prescribe offences or civil penalties. The instrument’s approach to enforcement and compliance is therefore indirect and procedural:

• No penalties in the instrument: Nowhere in the text of the Determination are offences, penalties, infringement notices, or remedial enforcement powers specified. The instrument simply records the Minister’s numerical determinations and the computational steps used to arrive at them (see ss 5-8).

• Enforcement depends on the parent Act and administrative practice: Any enforcement, sanctioning, reconciliation or recovery of overpayments resulting from application of the factors determined here would have to follow the provisions of the Local Government (Financial Assistance) Act 1995 and any relevant appropriation, financial management or administrative law regimes. The Determination references the Act as its authority (s 3) and depends on the Act for substantive effect; it does not create or modify enforcement powers.

• Audit and compliance consequences arise through accounting and reconciliation: The instrument’s practical enforcement mechanism is the requirement that administering officials, auditors and recipients use the specified numbers and the recorded adjustment steps when performing statutory calculations. Failure to apply the correct factor or the recorded adjustments (for example, omitting the paragraph 8(1)(b) rounding or the paragraph 8(1)(c) timing multiplier) would be a procedural error to be detected and corrected through internal control, audit, or statutory reconciliation processes rather than by a penalty in the Determination itself.

• Reliance on external data providers: The instrument depends on ABS estimates and Treasury forecasts. Disputes or questions about the data sources (for example if ABS revises a release) would be resolved by reference to the instrument’s recorded data provenance and to the Act (the instrument cites the dates the Statistician made particular estimates, see s 6(2) notes and s 8(2) notes).

• Legal challenge would be to the Minister’s exercise of statutory power: If an affected party wished to challenge the Determination, the path would be administrative law review of the Minister’s exercise of power under the parent Act (judicial review). The Determination itself does not provide an internal appeal mechanism. The instrument does not reference review, and it does not purport to oust review rights under general law.

The Determination explicitly situates itself within the framework of the Local Government (Financial Assistance) Act 1995 and the Legislation Act 2003, and it relies on statistical and forecasting outputs from ABS and the Department of the Treasury. The key statutory interactions set out in the text are:

• Primary statutory authority: The instrument is made under the Local Government (Financial Assistance) Act 1995 (s 3). The Determination therefore derives its legal force from that Act; its numbers are intended for use “for the purposes of” specified sections and paragraphs of that Act (s 5 refers to subsection 8(1); s 7 refers to paragraph 7(3)(b)). Any legal effect the Determination has depends on the Act’s substantive allocation scheme and procedures.

• Cross‑reference to the Legislation Act 2003 for definitions: Section 4 of the Determination notes that paragraph 13(1)(b) of the Legislation Act 2003 means expressions have the same meaning in this instrument as in the Local Government (Financial Assistance) Act 1995 “as in force from time to time.” That means definitions in the parent Act are imported into the Determination by reference and will follow any subsequent changes to the Act unless the Act or subsequent amending instruments provide otherwise. The Determination itself defines “the Act” as the Local Government (Financial Assistance) Act 1995 (s 4).

• Dependence on ABS statistical releases and Treasury forecasts: The Determination uses population estimates and CPI numbers published by the Australian Bureau of Statistics and a CPI forecast from the Department of the Treasury. The instrument identifies specific ABS catalogue numbers and the dates on which the Statistician made certain population estimates (e.g., ABS Catalogue Number 3101.0 with specific dates cited in s 6(2) notes and s 8(2) notes). It also specifies the ABS Catalogue Number 6401.0 for CPI data (s 6(2) notes) and the use of a Treasury CPI forecast for the 2021 March quarter in the 2020‑21 calculation (s 8(2) note 3). This creates an operational dependency on those external data regimes and their release schedules and provenance.

• Relationship with budgetary and payment timings governed by financial management law: The instrument’s paragraph 8(1)(c) modifications adjust the calculated factors to accommodate the Commonwealth’s administrative decision to bring forward certain quarterly payments between financial years (s 6(4); s 8(4)). That interaction implicates government budget management and the treatment of appropriations and payments across financial years. The Determination documents how the factor calculations are adjusted mathematically to reflect those timing choices; the legal permissibility and downstream accounting effects of moving payments remain governed by appropriation law, the parent Act, and financial reporting standards.

The Determination contains a short and explicit amendment/commencement history within its own text and a bland note about table data. Relevant particulars in the instrument are these:

• Date of the instrument and maker: The instrument header shows it was made and dated 26 June 2020 by Michael Sukkar, Minister for Housing and Assistant Treasurer. That is the making date recorded on the face of the instrument.

• Commencement mechanics: Section 2 contains a commencement table. It states that “the whole of this instrument” commences “the day after this instrument is registered” (s 2(1) table). The instrument also contains the standard Legislation Office note that the table relates only to provisions as originally made and will not be amended to deal with later amendments (s 2 note).

• No in‑text amendments recorded: The Determination text, as provided, does not record any subsequent amendments, variations, or revocations. There is no provision within the instrument that purports to amend prior determinations or to be amended; it is a standalone instrument fixing specific factors for the named years.

• Table information not part of the instrument: Section 2(2) states explicitly that “Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.” That is a standard drafting note explaining that publication metadata is not legislative content. It indicates the instrument’s text is fixed, whereas ancillary table commentary in published versions can be updated without amending the instrument itself.

• No listed repeal or sunset: The Determination contains no clause that provides for automatic expiry, sunset, or repeal. Its content is year‑specific (2019‑20 final factor and 2020‑21 estimated factor) and hence practically superseded by later determinations for subsequent years, but the instrument itself contains no express amending or repealing provision.

• Dependence on Act amendments: Section 4 incorporates by reference that expressions have the same meaning as in the Act “as in force from time to time” (s 4 note referring to paragraph 13(1)(b) of the Legislation Act 2003). That means if the definitions or operative provisions of the Act were later amended, the imported meanings might change the interpretation of this Determination; the instrument itself does not need amendment to reflect such definitional changes, because the Legislation Act mechanism imports the Act’s contemporary meanings.

The Determination itself contains no record of litigation, dispute, judicial consideration, or administrative review. The instrument is a numeric, procedural exercise and does not purport to engage in adjudicative determinations that typically generate litigation records. The text contains no references to cases, legal proceedings, or disputes.

Matters to note from the instrument about potential for challenge or litigation, inferred from institutional context and the instrument’s text:

• No express internal review pathway: The Determination does not set out any administrative internal review or appeal mechanism for challenging the numbers it fixes. Consequently, any challenge to the lawfulness or validity of the Determination would be by judicial review of the Minister’s statutory power under the Local Government (Financial Assistance) Act 1995, not by appeal under the instrument itself.

• Potential grounds for challenge (procedural and data issues): Although the instrument records the inputs and rounding steps used, a challenger could theoretically seek review on grounds such as procedural unfairness, error of law, irrationality or failure to take into account relevant considerations, or misapplication of the statutory formula, if facts supported such a claim. The Determination documents the data sources and dates used (s 6(2) notes 1-4; s 8(2) notes 1-4) and the rounding and multiplicative adjustments (ss 6(3)-(4); 8(3)-(4)), so any review would focus on whether the Minister followed the statutory scheme and properly used the specified inputs and statutory discretion under paragraphs 8(1)(b) and (c).

• No reported reported cases named in the instrument: The Determination does not refer to any judicial authority, nor does it recite prior decisions. It is therefore silent on precedent, and does not cite any case law to justify its adjustments.

• Practical litigation exposure is to be assessed in the context of the Act: Given the Determination’s technical and procedural nature, litigation arising directly from it would be exceptional and would depend on the material consequences of the factor on entitlements, payment timings, and whether any affected party has standing and an arguable legal basis to challenge the Minister’s exercise of power under the Act.

Therefore, the instrument itself contains no litigation history. Lawyers assessing litigation risk will need to look to the parent Act for remedies and to the administrative law framework (judicial review) if a party seeks to contest the determination.

The Determination is short and tightly focused, but several concrete practical issues and traps for practitioners and administrators can be extracted from its text. These are operational, accounting and statutory‑interpretive points grounded in the instrument’s content:

• Rounding step alters the raw arithmetic by 0.0001: In both year computations the instrument increased the calculated figure by 0.0001 because the fifth decimal place was greater than 4 (s 6(3); s 8(3)). That is a small numeric adjustment, but because the factor is applied within the Act’s payment calculations, even a tiny change may have measurable fiscal effects when multiplied across nationwide entitlements. Auditors and administrators must reproduce the rounding step exactly; failing to add the 0.0001 where the instruction requires it will produce an incorrect result.

• Timing adjustment for brought‑forward quarterly payments is multiplicative and requires precise monetary inputs: The paragraph 8(1)(c) modification for “special circumstances” is expressed as a multiplicative adjustment to the sub(3) factor (s 6(4); s 8(4)) and uses defined monetary variables (e.g. “2018‑19 amount”, “2019‑20 amount”, “2019‑20 final entitlement”, “sub (3) factor”, etc.). Practically this means implementing the adjustment requires access to, and agreement on, the precise monetary figures defined in the instrument. Different interpretations of what the defined “amounts” are could lead to divergent computed factors. Administrators must ensure they use the exact monetary definitions set out in the Determination when replicating the calculation.

• Use of a Treasury CPI forecast for 2020‑21 calculation introduces forecast risk: The Determination uses the Department of the Treasury’s forecast of the All Groups CPI for the 2021 March quarter in calculating the 2020‑21 estimated factor (s 8(2) note 3). That choice makes the estimated factor sensitive to forecast revisions or to the accuracy of Treasury’s projection. The instrument labels the 2020‑21 number an “estimated factor” (s 7), but parties relying on that number should be aware it is based on a forecast rather than an observed ABS figure for the 2021 March quarter.

• Dependence on specific ABS releases and dates: The instrument explicitly cites ABS catalogue numbers and dates for population estimates and CPI numbers (s 6(2) notes; s 8(2) notes). Administrators must use the same ABS releases and the same dates (for example, the Statistician’s estimate as at 31 December 2018 made on 18 June 2020) to replicate the calculation. Using different ABS releases, updated series, or post‑publication revisions could produce different arithmetic.

Compliance with this Determination is primarily computational and documentary. The instrument sets numbers and records the data sources and adjustment steps that administrators, finance officers, auditors and recipients must use when applying the statutory calculations under the Act. Follow this practical checklist to implement the Determination’s requirements and to document compliance for audit purposes:

1. Confirm legal authority and scope

   • Record that the Determination was made under the Local Government (Financial Assistance) Act 1995 (s 3) and that expressions in the Determination have the same meaning as in the Act by virtue of paragraph 13(1)(b) of the Legislation Act 2003 (s 4 note).
   • Note the instrument’s date (26 June 2020 as recorded in the instrument header) and check the registration date so you know the commencement date (s 2(1) table).

2. Apply the correct factor values

   • For 2019‑20 use the final factor 1.0366 as stated in s 5.
   • For 2020‑21 use the estimated factor 0.4817 as stated in s 7, noting its estimated status.

3. Reproduce the paragraph 8(1)(a) formula inputs exactly

   • For 2019‑20, use the population estimates and CPI numbers referenced in s 6(2) notes 1-4:
     • Population estimates: ABS Catalogue Number 3101.0 with the dates the Statistician made the estimates as cited (for example, estimate as at 31 December 2018 made on 18 June 2020; estimate as at 31 December 2017 made on 20 June 2019).
     • CPI numbers: ABS Catalogue Number 6401.0 for the All Groups CPI (weighted average of the 8 capital cities) for the 2020 March quarter (published 29 April 2020) and the 2019 March quarter (published 24 April 2019) as noted.
   • For 2020‑21, use the population estimates and CPI inputs referenced in s 8(2) notes 1-4:
     • Population estimates: ABS Catalogue Number 3101.0 with the dates cited (for example, estimate as at 31 December 2019 made on 18 June 2020; estimate as at 31 December 2018 made on 18 June 2020).
     • CPI: use the Department of the Treasury’s most recent forecast of the All Groups CPI for the 2021 March quarter and ABS Catalogue Number 6401.0 for the 2020 March quarter (published 29 April 2020).

4. Apply the paragraph 8(1)(b) rounding step exactly