Federal-state relationship

The Australian Government provides explicit financial support to all Australian states and territories in the form of:

• the payment of grants under the principle of the Horizontal Fiscal Equalisation scheme, and
• the Australian Government’s Disaster Recovery Funding Arrangements, which provides reimbursement for eligible costs for natural disasters.

In response to the Global Financial Crisis, the Australian Government has also previously provided support in the form of a voluntary guarantee over Australian state and territory borrowings from July 2009 to December 2010.

The following links contain more information about the fiscal relationship between the Australian Government and its states and territories.

• Commonwealth-State financial relations: Summary from the Queensland Government.
• Commonwealth Grants Commission: An independent statutory body, which recommends how the revenues raised from Goods and Services Tax (GST) should be distributed to the states and territories to achieve horizontal fiscal equalisation.