Federal Financial Relations (General purpose financial assistance) Determination 2009 No. 8 (November)

Overview

The Federal Financial Relations Act 2009 was enacted to implement the payment provisions of the Intergovernmental Agreement on Federal Financial Relations, which aims to establish a robust foundation for collaboration on policy development and service delivery between the Commonwealth and the States. This Act addresses the need for ongoing financial support for the States’ service delivery efforts through various forms of assistance, including general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments. The Federal Financial Relations Act 2009 was enacted by the Parliament of Australia to ensure that the financial support mechanisms outlined in the Intergovernmental Agreement are effectively implemented. The policy objective is to enhance the transparency and accountability of the financial assistance provided to the States, while ensuring that the Minister can meet the obligations under the Agreement without the hindrance of disallowance provisions. The Act provides for the Minister to credit amounts to the COAG Reform Fund for the purpose of delivering general purpose financial assistance to the States. This assistance, which is in the form of general revenue assistance other than GST revenue grants, is intended to support the States' service delivery efforts for any purpose. The determinations made by the Minister regarding general purpose financial assistance are legislative instruments and will be registered on the Federal Register of Legislative Instruments. Importantly, these determinations are exempt from the disallowance provisions, allowing the Minister to meet the obligations under the Intergovernmental Agreement without the risk of the determinations being disallowed. The Act commenced on the day it was made, ensuring that the financial support mechanisms are promptly implemented to facilitate the new federal financial framework.

Scope and Application

The Federal Financial Relations Act 2009 applies to the Commonwealth of Australia, the States, and the territories, encompassing the intergovernmental agreements and financial support mechanisms that facilitate service delivery and policy development across the nation. The Act specifically governs the provision of general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments, which are intended to bolster the States' efforts in key service delivery sectors and specific reform initiatives. The Minister for Finance is responsible for crediting amounts to the COAG Reform Fund to provide this financial assistance, which is mandated under the Intergovernmental Agreement on Federal Financial Relations that commenced on 1 January 2009. Determinations made by the Minister concerning general purpose financial assistance are registered as legislative instruments on the Federal Register of Legislative Instruments and, while subject to transparency measures, are exempt from disallowance provisions to ensure compliance with the intergovernmental obligations. The Act's application extends across the entire Commonwealth, providing a uniform framework for the distribution of financial support across all jurisdictions.

Key Provisions

The Federal Financial Relations Act 2009 sets out the framework for providing financial assistance to the States. Under section 9, the Minister is empowered to credit amounts to the COAG Reform Fund to provide general purpose financial assistance to the States. This assistance is to be used by the States for any purpose and is intended to supplement the GST payments they receive. This assistance is not GST revenue, which is provided separately. The Act ensures that the Minister’s determinations regarding this assistance are legislative instruments, meaning they are subject to registration on the Federal Register of Legislative Instruments, but they are exempt from disallowance provisions. This exemption ensures that the Minister can meet the obligation under the Intergovernmental Agreement to make payments in a prescribed manner without the risk of these determinations being disallowed. The obligations imposed on the parties by the Federal Financial Relations Act 2009 are primarily focused on ensuring the timely and appropriate distribution of financial assistance to the States. Section 9 requires the Minister to credit amounts to the COAG Reform Fund for general purpose financial assistance. The Act also mandates that these determinations be legislative instruments and registered on the Federal Register of Legislative Instruments. This requirement enhances transparency and ensures that the process for distributing financial assistance is clear and accountable. Furthermore, the Act clarifies that these determinations are not subject to disallowance, which is crucial for the Minister to meet the obligations under the Intergovernmental Agreement. Breaches of the provisions in the Federal Financial Relations Act 2009 can lead to civil or criminal consequences, although the Act itself does not specify the exact nature of these consequences. Given the legislative instruments status of the Minister's determinations, any failure to comply with the requirements of the Act could potentially lead to legal challenges or other civil actions. However, the Act does not explicitly outline penalties for breaches, leaving it to other relevant legislation or judicial interpretation to determine the specific consequences. The legislative instruments are subject to review and potential revocation if they are found to be inconsistent with the Act or if they fail to meet procedural requirements. The Federal Financial Relations Act 2009, therefore, establishes a clear framework for the distribution of general purpose financial assistance to the States, ensuring that these payments are made in a transparent and accountable manner. The Act imposes specific obligations on the Minister to credit the COAG Reform Fund and to make these determinations as legislative instruments. While the Act does not explicitly detail the penalties for breaches, the legislative nature of the determinations means that any non-compliance could lead to legal repercussions. This framework supports the broader objectives of the Intergovernmental Agreement on Federal Financial Relations, facilitating effective service delivery and policy development across Australia.