Federal Financial Relations (General Purpose Financial Assistance) Determination No.104 (November 2017)

Overview

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 104, enacted in November 2017, pertains to the provision of general purpose financial assistance from the Commonwealth to the states and territories, in accordance with the Intergovernmental Agreement on Federal Financial Relations (IGA). This determination was formulated following extensive consultation with the states and was agreed upon by the Council of Australian Governments on 29 November 2008. The primary legislative instrument in this context is the Federal Financial Relations Act 2009, which empowers the Minister to credit funds to the Council of Australian Governments Reform Fund for the purpose of disbursing general purpose financial assistance to the states. These payments are subject to certain conditions outlined in the COAG Reform Fund Act 2008, which specifies that the fund is a special account as defined under the Public Governance, Performance and Accountability Act 2013. The policy objective of this determination is to facilitate the collaboration between the Commonwealth and the states in policy development and service delivery, as stipulated in the IGA.

Scope and Application

The Federal Financial Relations (General purpose financial assistance) Determination No. 104, made under the Federal Financial Relations Act 2009, applies to the Commonwealth government and the States and Territories of Australia, governing the distribution of general purpose financial assistance to the latter. This determination outlines specific payments to the States for particular purposes, ensuring compliance with the Intergovernmental Agreement on Federal Financial Relations and the Council of Australian Governments (COAG) Reform Fund. The geographic reach of this legislation is national, encompassing all Australian states and territories. However, the determination specifies certain conditions and exclusions, such as the maximum debit limit of $5 billion for the 2017-18 financial year for general purpose financial assistance payments. This determination also notes that the amounts paid are not subject to disallowance, ensuring the Commonwealth's obligation under the IGA is met. The amounts allocated to each state are detailed, with specific payments outlined for Western Australia, the Australian Capital Territory, and other states, subject to the overall debit limit.

Key Provisions

The Federal Financial Relations (General purpose financial assistance) Determination No. 104 sets out the terms and conditions for the provision of general purpose financial assistance from the Commonwealth to the States, in line with the Intergovernmental Agreement on Federal Financial Relations (IGA) (subsection 7(2) of the COAG Reform Fund Act 2008). This determination, made by the Treasurer, outlines the total amount credited to the COAG Reform Fund for general purpose financial assistance in the 2017-18 financial year, which must not exceed $5,000,000,000.00, as specified under subsection 9(3) of the Federal Financial Relations Act 2009. The determination also details the amounts allocated to each State for various purposes, such as compensating Western Australia for lost royalty revenue due to excise changes and assisting the Australian Capital Territory with municipal costs and water and sewerage services. The obligations imposed by this determination include adherence to the specific conditions outlined in the written agreement between the Commonwealth and the States, ensuring that the grants are used for the purposes agreed upon under the IGA. The Commonwealth must also ensure that the total amount of general purpose financial assistance granted does not exceed the prescribed debit limit for the financial year. The determination specifies the amounts allocated to each State, ensuring transparency and compliance with the IGA's payment arrangements. Failure to comply with the terms and conditions set out in this determination may result in legal and financial repercussions. Although the determination itself is not subject to disallowance, breaches of the IGA could lead to disputes and potential legal actions between the Commonwealth and the States. Furthermore, misuse of funds allocated for specific purposes could lead to scrutiny and review by relevant authorities. The determination does not specify explicit penalties for non-compliance, but any breach of the IGA could have significant implications, including financial penalties or the need for remedial payments.