Now lawMoney & Tax Introduced in the House of Representatives, 12 May 2026

States' project money cap rose to $40 billion

This law added money in the last weeks of 2025-26. That is the government's money year, from July 2025 to June 2026. The money is for the states, new programs and big purchases. It also lifted the yearly limit on federal project money for the states. The government pointed to the war in the Middle East as a reason.

Official name: Appropriation Bill (No. 6) 2025-2026

Who it affects

• State and territory governments: The federal government can now pay them up to $40 billion in project money for 2025-26.
• Local councils: Some extra federal money for councils can be paid through this law.
• Government agencies buying big things: Money for buildings or big systems worth over $10 million can come from this law.

Spending decided after mid-year update

The government cannot spend public money unless Parliament agrees. All tax and other money goes into one pot called the Consolidated Revenue Fund. A law must say how much comes out and what it is for.

Spending for 2025-26 was approved in rounds. First came a short-term law called a Supply Act. Then came the main spending laws. Then came a mid-year top-up in March 2026.

This bill is a late extra round. It pays for choices made since the budget update that the Treasurer puts out partway through the year. The Treasurer is the minister in charge of the government's money.

There are two of these bills. Bill No. 5 covers the normal running costs of government. The Constitution, Australia's founding rule book, says that money must sit in its own bill.

This bill covers the other spending. Its full name is Appropriation Bill (No. 6). An appropriation is money that Parliament lets the government spend.

Where the details are

The amounts sit in a list at the back of the bill. They are sorted by each minister's area and each agency.

The government's own notes on the bill do not list the new items. They send readers to other budget papers that were shared with Parliament at the same time.

What the words mean

The first part explains the words in the bill. It says all three sets of 2025-26 budget papers can be used to work out what the law means.

It also counts money moved between parts of the government as a real payment. No cash leaves the pot. But the spending still gets counted and can be seen.

Five kinds of money

The first kind is money for states, territories and councils. Each amount is tied to a set goal.

The second is for new programs run for the government, such as grants or benefits. A program counts as new if its goals change. It also counts as new if an agency gets this kind of money for the first time.

The third pays for things owned and money owed that are linked to those programs.

The fourth pays for big items worth more than $10 million. These could be a new building or major software. It can also pay off old debts.

The last kind is for government bodies that are set up as separate legal bodies. Some agencies and government companies are like this. Their department passes the money on.

Higher cap for state projects

Most federal money for the states goes through another law, the Federal Financial Relations Act 2009. It passes through a separate fund called the Federation Reform Fund. Parliament sets a limit each year on how much can be paid out of it.

Project payments pay states to do certain projects or make changes to how things are run. Some reward states for changes that matter to the whole country.

For 2025-26, Parliament set the limit at $37 billion in an earlier law, the Supply Act (No. 2). At the time, the Treasury, the government's money department, expected to spend about $25.4 billion.

The government's notes say the war in the Middle East has made things less certain. By the 2026-27 Budget, expected spending had gone up to about $28.1 billion. So this bill lifts the limit to $40 billion for 2025-26. The new limit applies from the day the law starts.

The notes say that since 2014-15 the limit has usually been set $10 billion to $15 billion above expected spending. The spare room is for new programs and big surprises, such as large natural disasters.

There is a separate $5 billion limit on general grants that the states can spend as they choose. That does not change.

No new emergency fund

Most spending bills give the Finance Minister, who looks after government spending, an emergency fund. It pays for urgent costs that nobody planned for.

The government's notes say this bill does not add a new one.

Special accounts and end date

Some money sits in separate funds that can only be spent on one purpose. If a spending line in this bill has the same purpose as one of those funds, the money can be moved into it.

The money is set aside by law from the day the law starts. Amounts can shift when work moves between departments, or when the goods and services tax (GST) is paid back.

The law switches itself off at the start of 1 July 2028.

Start date

The bill was brought into the House of Representatives on 12 May 2026. That was the same day as the 2026-27 Budget bills. The House passed it on 25 May 2026.

The Senate, Parliament's second house, got it on 22 June 2026. It passed it on 25 June 2026.

The Governor-General, who stands in for the King, signed it into law on 26 June 2026. It became Act No. 52 of 2026 and started that day. That was four days before the money year ended.

Its journey through Parliament

Official sources

• Bill page on aph.gov.au
• Text of the bill
• Explanatory memorandum

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