Treasurer Josh Frydenberg and assistant finance minister Zed Seselja have announced the easing of a regulatory burden on charities by moving towards lifting financial-reporting thresholds.

Australian charities hit hard by the pandemic's impacts will receive relief from burdensome financial-reporting requirements under an agreement signed by federal, state and territory treasurers.

The Council on Federal Financial Relations, consisting of the Commonwealth, State and Territory Treasurers, reports to National Cabinet agreed to develop a framework by mid-2021 to lift the financial reporting thresholds to benefit more than 5000 small and medium charities.

The CFFR oversees the financial relationship between the Commonwealth and the States and Territories, including the Intergovernmental Agreement on Federal Financial Relations.

More than 3000 charities will no longer need to produce reviewed financial statements, saving each around $2400 in annual accounting expenses. Around 2000 charities will no longer be required to produce audited financial statements, saving around $3000 annually.