Federal Financial Relations (General Purpose Financial Assistance) Determination No.107 (February 2018)

Overview

The Federal Financial Relations (General purpose financial assistance) Determination No. 107 was enacted in February 2018, establishing the framework for the distribution of general purpose financial assistance from the Commonwealth to the States and Territories. This legislation was introduced to address the financial imbalances and support service delivery in various policy areas as agreed upon under the Intergovernmental Agreement on Federal Financial Relations. The determination is a legislative instrument created under the Federal Financial Relations Act 2009, and while it is registered on the Federal Register of Legislation, it is exempt from disallowance under the Legislation Act 2003, ensuring the Commonwealth's obligation to provide such assistance is met. The determination outlines the specific payments to be made to various states and territories for particular purposes, such as compensating Western Australia for lost royalty revenue from excise changes and supporting the Australian Capital Territory for municipal services and planning influences. The amounts disbursed are subject to a debit limit set by the Federal Financial Relations Act, ensuring fiscal responsibility in the distribution of funds.

Scope and Application

The Federal Financial Relations (General purpose financial assistance) Determination No. 107, made under the Federal Financial Relations Act 2009, applies to the Commonwealth and the States and Territories of Australia, specifically outlining the terms for the provision of general purpose financial assistance to the States. This assistance is channelled through the COAG Reform Fund, as established under the COAG Reform Fund Act 2008, and is intended to compensate for specific financial impacts or to assist in meeting additional costs associated with particular state functions, such as municipal services in the Australian Capital Territory or compensation for loss of royalty revenue due to excise amendments. The determination is subject to a debit limit of $5 billion for the 2017-18 financial year, ensuring that the total amount of general purpose financial assistance does not exceed this threshold. The application of this determination is limited to the geographic jurisdiction of Australia, encompassing all states and territories. The determination is not subject to disallowance, allowing for its immediate implementation and compliance with the Commonwealth's obligations under the Intergovernmental Agreement on Federal Financial Relations.

Key Provisions

The Federal Financial Relations (General purpose financial assistance) Determination No. 107 (February 2018) outlines the specifics of general purpose financial assistance provided by the Commonwealth to the States and Territories through the COAG Reform Fund. Section 7(2) of the COAG Reform Fund Act 2008 mandates that the terms and conditions of this assistance be documented in a written agreement between the Commonwealth and the States. This determination specifies the payment conditions and the total amount of general purpose financial assistance that can be granted in the financial year starting on 1 July 2017, which must not exceed $5,000,000,000.00, as per subsection 9(3) of the Federal Financial Relations Act 2009. As of 21 February 2018, the total cumulative payments for general purpose financial assistance stood at $467,594,305.92, leaving a remaining debit limit of $4,532,405,694.08 for the 2017-18 financial year. The determination imposes several obligations on the parties involved. It requires the Commonwealth to adhere to the agreed terms and conditions of the general purpose financial assistance outlined in the written agreement with the States. The determination also mandates that the total amount of assistance granted does not exceed the specified debit limit for the financial year. Furthermore, the Commonwealth must ensure that payments are made in a manner consistent with the obligations under the Intergovernmental Agreement on Federal Financial Relations. These obligations are crucial for maintaining the integrity and purpose of the financial assistance provided. Breach of the obligations stipulated in this determination can lead to various consequences. While the determination itself is exempt from the disallowance provisions of the Legislation Act 2003, failure to comply with the terms and conditions set out in the written agreement could result in disputes or legal challenges. The determination does not specify particular offences or penalties, but non-compliance with the terms could lead to civil or criminal consequences depending on the nature of the breach. Additionally, the Commonwealth's obligation to provide general purpose financial assistance is a contractual obligation under the Intergovernmental Agreement, and failure to fulfil this obligation could have broader implications for federal-state relations.