An Act to establish a Commonwealth Grants Commission to make Recommendations concerning the Granting of Financial Assistance to the States and autonomous Territories, the financing of works and services in respect of the other Territories and the financing of works and services in respect of indigenous persons
1 Short title
This Act may be cited as the Commonwealth Grants Commission Act 1973.
2 Commencement
This Act shall come into operation on a date to be fixed by Proclamation.
4 Interpretation
In this Act, unless the contrary intention appears:
Chairperson means the Chairperson of the Commission.
Commission means the Commonwealth Grants Commission established by this Act.
indigenous person means:
(a) a person of the Aboriginal race of Australia; or
(b) a descendant of an indigenous inhabitant of the Torres Strait Islands.
local government authority means an authority, established by or under a law of a State, that is, in accordance with provision made by the regulations, a local government authority for the purposes of this Act.
member means the Chairperson or another member of the Commission appointed under section 8.
special assistance has the meaning given by section 5.
5 Meaning of special assistance
(1) References in this Act to the grant of special assistance to a State shall be read as references to the grant of financial assistance to a State for the purpose of making it possible for the State, by reasonable effort, to function at a standard not appreciably below the standards of other States.
(1A) References in this Act to the grant of special assistance to the Australian Capital Territory shall be read as references to the grant of financial assistance to that Territory for the purpose of making it possible for that Territory, having regard to the special circumstances arising from the location in it of the national capital and the seat of Government of the Commonwealth, by reasonable effort, to function in respect of matters for which the Australian Capital Territory Executive has responsibility, at standards not appreciably below the standards of the States and the Northern Territory.
(2) References in this Act to the grant of special assistance to the Northern Territory shall be read as references to the grant of financial assistance to that Territory for the purpose of making it possible for that Territory, by reasonable effort, to function, in respect of matters for which the Ministers of that Territory have executive authority, at standards not appreciably below the standards of the States.
6 Extension of Act to external Territories
This Act extends to:
(a) the Territory of Heard Island and McDonald Islands; and
(b) the Territory of Norfolk Island; and
(c) each of the other external Territories.
7 Establishment of Commonwealth Grants Commission
(1) The body by the name of the Grants Commission established by the subsection for which this subsection was substituted by the Commonwealth Grants Commission Act 1976 continues in existence, by force of this subsection, under and subject to the provisions of this Act, under the name Commonwealth Grants Commission.
(2) The Commission has such functions as are conferred on it by this Act.
(3) For the purposes of the finance law (within the meaning of the Public Governance, Performance and Accountability Act 2013):
(a) the Commission is a listed entity; and
(b) the Secretary of the Commission is the accountable authority of the Commission; and
(c) the following persons are officials of the Commission:
(i) the Chairperson;
(ii) the other members;
(iii) the Secretary;
(iv) persons engaged under the Public Service Act 1999 to assist the Commission; and
(d) the purposes of the Commission include the functions of the Commission referred to in subsection (2).
8 Membership of Commission
(1) The Commission shall consist of a Chairperson and not less than 2 other members.
(2) The members shall be appointed by the Governor‑General.
(3) A member holds office, subject to this Act, for such period, being not less than one year or more than 5 years, as is specified in the instrument of the member’s appointment, but is eligible for re‑appointment.
(5) A member may be appointed as a full‑time member or as a part‑time member.
(5A) A person who is employed by the Commonwealth or by a State in a full‑time capacity is not eligible for appointment as a part‑time member.
(6) The performance of the functions or the exercise of the powers of the Commission is not affected by reason only of:
(a) there being a vacancy in the office of Chairperson; or
(b) the number of other members falling below 2 for a period of not more than 6 months.
(6A) If the Chairperson was, immediately before the Chairperson’s appointment, a Judge of a Federal Court or of the Supreme Court of a State or Territory, the Chairperson is to have the same designation, rank, status and precedence as a Judge of the Supreme Court of the Australian Capital Territory.
9 Salary and allowances of member who has status of Judge
If subsection 8(6A) applies to the Chairperson, the Chairperson is to be paid salary, an annual allowance and travelling allowance at such respective rates as are fixed from time to time by the Parliament and such other allowances (if any) as are prescribed.
9A Remuneration of other members
(1) A member, other than a member to whom subsection 8(6A) applies, shall be paid such remuneration as is determined by the Remuneration Tribunal, but, if no determination of that remuneration is in operation, the member is to be paid remuneration at the rate that was applicable immediately before the commencement of this section.
(2) A member, other than a member to whom subsection 8(6A) applies, shall be paid such allowances as are prescribed.
(3) This section has effect subject to the Remuneration Tribunal Act 1973.
10 Leave of absence
(1) A full‑time member has such recreation leave entitlements as are determined by the Remuneration Tribunal.
(2) The Minister may grant a full‑time member leave of absence, other than recreation leave, on such terms and conditions as to remuneration or otherwise as the Minister determines.
11 Resignation and retirement
(1) A member may resign the member’s appointment by giving the Governor‑General a written resignation.
(1A) The resignation takes effect on the day it is received by the Governor‑General or, if a later day is specified in the resignation, on that later day.
(2) The Governor‑General may, with the consent of the member, retire a member from office on the ground of invalidity.
12 Termination of appointments
(1) The Governor‑General may suspend a member from office for misbehaviour or physical or mental incapacity.
(2) Where the Governor‑General suspends a member from office, the Minister shall cause a statement of the grounds of the suspension to be laid before each House of the Parliament within 7 sitting days of the House after the suspension.
(3) Where such a statement has been laid before a House of the Parliament, that House may, within 15 sitting days of that House after the day on which the statement has been laid before it, by resolution, declare that the member ought to be restored to office and, if each House so passes such a resolution, the Governor‑General shall terminate the suspension.
(4) If, at the expiration of 15 sitting days of a House of the Parliament after the day on which the statement has been laid before that House, that House has not passed such a resolution, the Governor‑General may remove the member from office.
(4A) If a part‑time member becomes employed by the Commonwealth or by a State in a full‑time capacity, the Governor‑General shall remove the member from office.
(5) A member shall not be removed from office except as provided by this section.
(7) A member who is suspended from office under this section is not entitled to be paid any remuneration or allowances in respect of the period of the member’s suspension unless the member is restored to office.
13 Acting members
(1) Where:
(a) the Governor‑General suspends the Chairperson from office;
(b) if the Chairperson is a full‑time member—the Chairperson is, or is expected to be, absent from duty or from Australia; or
(c) if the Chairperson is a part‑time member—the Chairperson is, or is expected to be, unable (whether on account of illness or otherwise) to perform the duties of the Chairperson’s office;
the Minister may appoint one of the other members to act as Chairperson on such terms and conditions as the Minister determines, and may also appoint another person to be an acting member, during the suspension, absence or inability, as the case requires.
(1A) An acting Chairperson may be appointed as an acting full‑time Chairperson or as an acting part‑time Chairperson.
(2) Where:
(a) the Governor‑General suspends a member other than the Chairperson from office;
(b) a full‑time member other than the Chairperson is, or is expected to be, absent from duty or from Australia; or
(c) a part‑time member is, or is expected to be, unable (whether on account of illness or otherwise) to perform the functions of the part‑time member’s office;
the Minister may appoint a person to be an acting member during the suspension, absence or inability, as the case requires.
(3) An acting member may be appointed as an acting full‑time member or as an acting part‑time member.
(4) An acting member has all the powers, and shall perform all the duties, of a member.
(5) The Minister may, at any time, terminate an appointment under this section.
(6) A person appointed an acting member under subsection (1) or (2) holds office on such terms and conditions as the Minister determines.
(7) Sections 10 and 11 apply in relation to an acting member appointed under this section in like manner as they apply in relation to a member.
(8) The validity of an act done by the Commission shall not be questioned in any proceedings on a ground arising from the fact that the occasion for the appointment of a person purporting to be appointed under this section had not arisen or that an appointment under this section had ceased to have effect.
14 Meetings
(1) The Commission shall hold such meetings as are necessary for the performance of its functions.
(2) The meetings of the Commission shall be convened by the Chairperson.
(3) Where the Minister requests the Chairperson to do so, the Chairperson shall forthwith convene a meeting of the Commission.
(4) At a meeting of the Commission, a quorum is constituted by a majority of the members holding office.
(5) The Chairperson shall preside at all meetings of the Commission at which the Chairperson is present.
(6) If the Chairperson is not present at a meeting of the Commission, the members present shall elect one of their number to preside at the meeting.
(7) Questions arising at a meeting of the Commission shall be determined by a majority of the votes of the members present and voting.
(8) The Chairperson has a deliberative vote and, in the event of an equality of votes, also has a casting vote.
(9) In this section, a reference to the Chairperson includes an acting Chairperson.
15 Duties of Chairperson
(1) It is the duty of the Chairperson to ensure the efficient and orderly conduct of the business of the Commission and, for that purpose, the Chairperson has, in addition to any other power, duty or function under this Act, power:
(a) to determine the form of the records of meetings of the Commission to be kept in accordance with this Act and the procedure to be adopted at such a meeting;
(b) to determine which members shall take part in a particular inquiry by the Commission; and
(c) to direct and control travel by members in connection with their duties.
(2) Where the services of APS employees are made available to the Commission, the use of those services by members of the Commission is subject to the control of the Chairperson.
16 Assistance to States
The Commission shall inquire into and report to the Minister upon:
(a) any application made by a State for the grant, under section 96 of the Constitution, of special assistance to the State;
(b) any matters, being matters relating to a grant of assistance made under that section to a State either before or after the commencement of this Act, that are referred to the Commission by the Minister; and
(c) any matters, being matters relating to the making of a grant of assistance under that section to a State, that are referred to the Commission by the Minister.
16A Assistance to the Northern Territory
The Commission shall inquire into and report to the Minister upon:
(a) any application made by the Northern Territory for a grant of special assistance to that Territory;
(b) any matters, being matters relating to a grant of financial assistance made by the Commonwealth to the Northern Territory, that are referred to the Commission by the Minister; and
(c) any matters, being matters relating to the making of a grant of financial assistance by the Commonwealth to the Northern Territory, that are referred to the Commission by the Minister.
16AA Assistance to the Australian Capital Territory
The Commission shall inquire into and report to the Minister upon:
(a) any application made by the Australian Capital Territory to the Commission for a grant of special assistance to that Territory;
(b) any matters, being matters relating to a grant of financial assistance made by the Commonwealth to the Australian Capital Territory, that are referred to the Commission by the Minister; and
(c) any matters, being matters relating to the making of a grant of financial assistance by the Commonwealth to the Australian Capital Territory, that are referred to the Commission by the Minister.
16AB Inquiries relating to GST revenue grants
(1) This section applies to a reference of a matter to the Commission under section 16, 16A or 16AA of this Act, so far as the matter relates to grants of assistance (GST revenue grants) made under Division 1 of Part 2 of the Federal Financial Relations Act 2009 for the 2021‑22 payment year, or a later payment year, within the meaning of that Act.
Note: An example of a matter referred to in this section is the Minister seeking a recommendation about the GST revenue sharing relativities that the Minister determines for a financial year under section 8 of the Federal Financial Relations Act 2009.
(2) In framing the terms of the reference, the Minister is to pursue the objective of ensuring, consistently with the Federal Financial Relations Act 2009, that the States, the Australian Capital Territory and the Northern Territory each have the fiscal capacity to provide services (including associated infrastructure) at a standard that is at least as high as the standard for whichever of New South Wales and Victoria has the higher standard.
(3) However, so far as the reference relates to GST revenue grants for any of the first 5 payment years covered by subsection (1), the Minister is to frame the terms of the reference:
(a) so as to make an appropriate and even transition over those 5 years from the arrangements that applied before those payment years (the previous arrangements) to arrangements based on subsection (2) of this section (the new arrangements); and
(b) so that the respective GST revenue sharing relativities for the States and Territories that the Minister determines for each of those 5 payment years under section 8 of the Federal Financial Relations Act 2009 can be worked out:
(i) consistently with the Federal Financial Relations Act 2009; and
(ii) using the proportion of the relativities derived from the previous arrangements, and the proportion of the relativities derived from the new arrangements, set out in this table:
| Transitional proportions |
| Item | Payment year | Proportion of the relativities derived from the previous arrangements | Proportion of the relativities derived from the new arrangements |
| 1 | the 2021‑22 payment year | 5/6 | 1/6 |
| 2 | the 2022‑23 payment year | 4/6 | 2/6 |
| 3 | the 2023‑24 payment year | 3/6 | 3/6 |
| 4 | the 2024‑25 payment year | 2/6 | 4/6 |
| 5 | the 2025‑26 payment year | 1/6 | 5/6 |
16B Inquiries relating to Jervis Bay Territory
The Commission must inquire into and report to the Minister upon any matters, being matters relating to the financing of works and services provided by the Commonwealth or an authority of the Commonwealth in respect of the Jervis Bay Territory, that are referred to the Commission by the Minister.
16D Inquiries relating to external Territories
The Commission must inquire into and report to the Minister upon any matters, being matters relating to the financing of works and services provided by the Commonwealth or an authority of the Commonwealth in respect of a particular external Territory, that are referred to the Commission by the Minister.
17 Assistance to States for local government purposes
(1) The Commission shall inquire into and report to the Minister upon any matters:
(a) being matters relating to the making of a grant of assistance to a State, under section 96 of the Constitution, for local government purposes; or
(b) being matters relating to a grant of assistance made to a State, under section 96 of the Constitution, for local government purposes;
that are referred to the Commission by the Minister.
(2) In subsection (1), a reference to a grant of assistance to a State for local government purposes shall be read as a reference to a grant of moneys to the State for the purpose of being applied by the State in payments to local government authorities situated in the State, or by way of expenditure for purposes declared by the regulations to be purposes to which this subsection applies.
18 Inquiries relating to indigenous persons
(1) The Commission must inquire into and report to the Minister upon any matters that the Minister refers to the Commission relating to:
(a) works and services in respect of indigenous persons that are provided or funded (directly or indirectly) by the Commonwealth or an authority of the Commonwealth; or
(b) a grant of financial assistance under section 96 of the Constitution to a State for the purpose of being applied by the State, or an authority of the State, to pay for works and services in respect of indigenous persons in the State; or
(c) a grant of financial assistance made by the Commonwealth to a Territory, or an authority of the Territory, for the purpose of being applied by the Territory or the authority to pay for works and services in respect of indigenous persons in the Territory.
(2) Subsection (1) applies whether or not:
(a) the works or services are provided or funded exclusively in respect of Indigenous persons; or
(b) the financial assistance is applied exclusively in respect of Indigenous persons.
19 Inquiries by Commission
(1) Where the Commission is required to inquire into and report upon an application or matter, the Chairperson may determine in writing that the powers of the Commission under this Act may, for the purposes of the inquiry and report on that application or matter or on such part of that application or matter as is specified in the determination, be exercised by a Division of the Commission constituted, subject to subsection (3), by such members as are specified in the determination.
(2) Where the Chairperson has made a determination under subsection (1) the Chairperson may, in writing, at any time before the Division of the Commission specified in the determination has completed the inquiry and report, revoke the determination or, subject to subsection (3), amend the determination in relation to the membership of the Division or in any other respect, and, where the membership of the Division of the Commission is changed, the Division as constituted after the change may complete the inquiry and report.
(2A) A determination made under subsection (1) is not a legislative instrument.
(3) A Division of the Commission exercising the powers of the Commission in respect of an application or matter shall consist of the Chairperson and not less than 2 other members.
(4) For the purposes of an inquiry and report on an application or matter, or on a part of an application or matter, specified in a determination under subsection (1), the Commission shall be deemed to consist of the Division of the Commission specified in the determination.
(5) At a meeting of a Division of the Commission:
(a) if the Chairperson is present—the Chairperson shall preside; or
(b) in any other case—a member of the Division appointed for the purpose by the Chairperson shall preside.
(6) At a meeting of a Division of the Commission, a majority of the members constituting the Division form a quorum.
(7) The Chairperson has, at a meeting of a Division of the Commission, a deliberative vote and, in the event of an equality of votes, also a casting vote.
(8) A meeting of a Division of the Commission may be held notwithstanding that a meeting of another Division of the Commission is being held at the same time.
20 Commission may take evidence
(1) Where an application or matter is referred to the Commission under this Act, the Commission may, for the purpose of inquiring into the application or matter, take evidence from persons who appear as witnesses before the Commission.
(2) Subsection (1) does not prevent the Commission from inquiring into an application or matter in such other manner as it sees fit.
21 Evidence to be on oath
The evidence given by a witness appearing before the Commission shall be given on oath or affirmation.
22 Administration of oath
A member may administer an oath or affirmation to a person appearing as a witness before the Commission.
23 Penalty for refusing to give evidence
(1) Where the Commission takes evidence in the course of inquiry into a matter, a person appearing as a witness before the Commission shall not, without lawful excuse, refuse or fail to answer a question, being a question relevant to the inquiry, that is put to the person by the Commission.
Penalty: 10 penalty units.
(2) For the purposes of subsection (1), a question shall be deemed to have been put to a witness by the Commission:
(a) if it is put by any of the members who are exercising the powers of the Commission in relation to the matter; or
(b) if, with the approval of a majority of the members who are exercising the powers of the Commission in relation to the matter, it is put by a person authorized by a majority of those members to appear in connexion with the taking of the evidence.
24 Giving false evidence
A person shall not, in the course of giving evidence before the members of the Commission who are exercising the powers of the Commission in relation to a matter, make a statement that the person knows to be false or misleading in a material particular.
Penalty: Imprisonment for 5 years.
25 Reports to be laid before Parliament
(1) The Minister may cause a report made by the Commission under section 16, 16A, 16B, 16D, 17 or 18 to be laid before each House of the Parliament.
(2) Before a proposed law relating to the subject of a report made by the Commission under section 16, 16A, 16AA, 16B, 16D, 17 or 18 is introduced into the Parliament, the Minister shall cause the report to be laid before each House of the Parliament.
(3) The Minister may cause to be attached to a report of the Commission that is laid before the Houses of the Parliament under this section such statement, recommendation or comment by the Minister as the Minister thinks proper.
27 Regulations
The Governor‑General may make regulations, not inconsistent with this Act, prescribing all matters which by this Act are required or permitted to be prescribed or which are necessary or convenient to be prescribed for carrying out or giving effect to this Act, and, in particular, for regulating the practice and procedure of the Commission.