EXPLANATORY STATEMENT
Federal Financial Relations ACt
Federal Financial Relations (General purpose financial assistance) Determination No. 10 (January 2010)
The Intergovernmental Agreement on Federal Financial Relations provides a robust foundation for collaboration on policy development and service delivery, and facilitates the implementation of economic and social reforms in areas of national importance.
In agreeing the new framework for federal financial relations, the Commonwealth committed to the provision of on‑going financial support for the States’ service delivery efforts through:
• general purpose financial assistance, including the on‑going provision of GST payments, to be used by the States for any purpose;
• National Specific Purpose Payments (National SPPs) to be spent in the key service delivery sectors; and
• National Partnership payments to support the delivery of specified outputs or projects, to facilitate reforms or to reward those jurisdictions that deliver on nationally significant reforms.
The new federal financial framework commenced on 1 January 2009. The payment provisions of the Intergovernmental Agreement are implemented through the Federal Financial Relations Act 2009
General purpose financial assistance
The Federal Financial Relations Act 2009 provides for the Minister to credit amounts to the COAG Reform Fund for the purpose of providing general purpose financial assistance to the States in the form of general revenue assistance other than GST revenue grants.
• The COAG Reform Fund Act 2008 established the COAG Reform Fund and specifies that it is a Special Account for the purposes of the Financial Management and Accountability Act 1997.
To improve transparency, the Minister’s determinations in respect of general purpose financial assistance are legislative instruments and will be registered on the Federal Register of Legislative Instruments, but will not be disallowable.
• This clarifies that determinations made by the Minister under subsection 9(1) would not otherwise be legislative instruments within the meaning of section 5 of the Legislative Instruments Act 2003.
• The Minister has an obligation under the Intergovernmental Agreement to make payments of general purpose financial assistance in a prescribed manner. Exemption from the disallowance provisions will allow the Minister to meet this obligation.
Commencement
The determination commences on the day it was made.
Overview
The Federal Financial Relations (General purpose financial assistance) Determination No. 10, enacted in 2010, implements provisions of the Intergovernmental Agreement on Federal Financial Relations to provide ongoing financial support to the states through general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments. This legislation was enacted by the Commonwealth to improve transparency and ensure the ongoing provision of financial support to states for service delivery efforts. The determination provides for the Minister to credit amounts to the COAG Reform Fund to facilitate the provision of general purpose financial assistance, which is a legislative instrument registered on the Federal Register of Legislative Instruments. The objective of this determination is to provide clarity on the Minister's obligation to make payments of general purpose financial assistance in a prescribed manner and to exempt these determinations from disallowance provisions.
Scope and Application
The Federal Financial Relations (General purpose financial assistance) Determination No. 10, made under the Federal Financial Relations Act 2009, applies to the Commonwealth Minister responsible for federal financial relations. This legislation pertains specifically to the provision of general purpose financial assistance to the States, which includes ongoing financial support through mechanisms such as the COAG Reform Fund. The Act applies to the Commonwealth, and its purpose is to facilitate the implementation of economic and social reforms in areas of national importance as agreed under the Intergovernmental Agreement on Federal Financial Relations. The Act clarifies that determinations made by the Minister regarding general purpose financial assistance are legislative instruments, ensuring transparency and accountability, while also exempting them from disallowance provisions to allow for timely and efficient fulfilment of the Minister's obligations under the Intergovernmental Agreement. The Act commenced on the day it was made, on 1 January 2009, and its geographic reach is national, impacting all states and territories within Australia.
Key Provisions
The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 10 outlines the specific provisions for the provision of general purpose financial assistance to the States as stipulated in the Federal Financial Relations Act 2009. This assistance is intended to support the States in their service delivery efforts and is part of the broader framework established under the Intergovernmental Agreement on Federal Financial Relations. The determination specifically references the obligation to credit amounts to the COAG Reform Fund for this purpose (subsection 9(1)).
In terms of obligations, the Act imposes several responsibilities on the Minister responsible for federal financial relations. The Minister must credit the COAG Reform Fund with the specified amounts of general purpose financial assistance. This is mandated by the Intergovernmental Agreement, and the Minister's determinations are legislative instruments that will be registered on the Federal Register of Legislative Instruments. It is also stipulated that these determinations are not subject to disallowance, which ensures that the Minister can continue to fulfil the obligations set out in the Agreement (subsection 9(1)).
The legislation does not explicitly detail offences, penalties, or consequences for non-compliance in the explanatory statement. However, the importance of the Intergovernmental Agreement and the obligation to make payments of general purpose financial assistance suggest that failure to comply could lead to legal or political repercussions. The primary focus of the Act seems to be on ensuring the smooth and transparent provision of financial assistance to the States, with the legislative instruments framework intended to support this objective.