Federal Financial Relations (General Purpose Financial Assistance) Determination No.105 (December 2017)

Overview

The Federal Financial Relations (General purpose financial assistance) Determination No. 105, made in December 2017, was enacted to manage and allocate general purpose financial assistance to the States and Territories in accordance with the Federal Financial Relations Act 2009 and the Intergovernmental Agreement on Federal Financial Relations. This determination was established to facilitate the Commonwealth's obligation to provide financial support to the States under the IGA. The determination was made by the Treasurer and is not subject to disallowance, ensuring the Commonwealth's compliance with the IGA. The objective is to credit funds to the COAG Reform Fund and disburse them as grants to the States under specified conditions and limits, ensuring transparency and accountability in the use of these funds. The determination sets out the specific amounts allocated to each state, with a total debit limit of $5 billion for the 2017-18 financial year, of which $342 million had been allocated by the end of December 2017.

Scope and Application

The Federal Financial Relations (General purpose financial assistance) Determination No. 105 applies to the financial assistance provided by the Commonwealth to the States and Territories through the COAG Reform Fund under the Federal Financial Relations Act 2009. The determination sets out the terms and conditions for the distribution of general purpose financial assistance, including the total cumulative amounts allocated to each State and Territory for the 2017-18 financial year. The determination applies nationally, encompassing all States and Territories, and it does not specify exclusions or thresholds beyond those outlined in the determination itself. The determination ensures that the Commonwealth's obligation under the Intergovernmental Agreement on Federal Financial Relations to make payments of general purpose financial assistance is met, as it is exempt from disallowance provisions. The amounts are debited from the COAG Reform Fund in accordance with written agreements between the Commonwealth and the States, ensuring transparency and accountability in the financial assistance provided.

Key Provisions

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 105 (2017) establishes the framework under which the Commonwealth provides general purpose financial assistance to the States and Territories. This assistance is intended to support various initiatives and compensate for specific financial impacts, such as the loss of royalty revenue due to changes in excise policies or additional costs arising from Canberra’s role as the national capital. The determination specifies the total amount credited to the COAG Reform Fund for these grants, ensuring compliance with the debit limit set out in subsection 9(3) of the Federal Financial Relations Act 2009, which mandates that the total grant amount for the 2017-18 financial year must not exceed $5 billion (subsection 7(2) of the COAG Reform Fund Act 2008). The actual payments disbursed under this determination for the year 2017-18 amounted to $342,552,228.30, leaving a remaining debit limit of $4,657,447,771.70. The Act imposes several obligations on the Commonwealth and the States, including the requirement to set out the terms and conditions of financial assistance in a written agreement between the Commonwealth and the States, as specified by subsection 7(2) of the COAG Reform Fund Act 2008. These obligations ensure transparency and accountability in the disbursement and utilisation of the funds. The Commonwealth is also obligated to adhere to the debit limits set for the financial year, ensuring that the total amount of general purpose financial assistance does not exceed the specified cap of $5 billion. Breaching the provisions of the determination or the underlying legislation could result in legal consequences. Although the determination itself is exempt from disallowance under the Legislation Act 2003, any misuse of the funds allocated under the determination could lead to legal actions. There are no specific criminal offences or penalties outlined in the determination for breaches of the Act. However, any mismanagement or improper use of the funds could result in civil litigation or administrative actions. The Commonwealth is also obligated to ensure that the funds are used in accordance with the terms of the written agreements and the overall objectives of the IGA, failure to do so could lead to further scrutiny and potential financial repercussions.