Federal Financial Relations (General Purpose Financial Assistance) Determination No. 109 (April 2018)

Overview

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 109, issued in April 2018, serves to implement the provisions of the Federal Financial Relations Act 2009, which facilitates the Commonwealth's obligation to provide general purpose financial assistance to the States as part of the broader framework established by the Intergovernmental Agreement on Federal Financial Relations. This determination was introduced to address the need for a structured and transparent mechanism for the distribution of general purpose financial assistance in alignment with the commitments under the IGA, ensuring that funds are allocated in a manner that supports policy development and service delivery across the nation. Enacted by the Parliament of Australia, the policy objective of this determination is to ensure that the Commonwealth's financial assistance is distributed in accordance with the agreed terms and conditions, thereby fostering collaborative governance and mutual accountability between the Commonwealth and the States.

Scope and Application

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 109 applies to the Commonwealth government in its capacity to provide general purpose financial assistance to the states and territories of Australia. This assistance is governed by the Federal Financial Relations Act 2009 and the Intergovernmental Agreement on Federal Financial Relations, which was agreed upon by the Council of Australian Governments on 29 November 2008. The determination sets out specific conditions and payment arrangements for the general purpose financial assistance, ensuring compliance with the requirements stipulated in the Intergovernmental Agreement. The determination, as a legislative instrument, is registered on the Federal Register of Legislation and is not subject to disallowance, enabling the Treasurer to meet the Commonwealth's obligation to provide such assistance. The determination applies to all states and territories of Australia, with specific amounts allocated to each jurisdiction based on agreed-upon criteria and circumstances, such as compensation for the impact on royalties of excise amendments or costs associated with municipal services in the Australian Capital Territory. The total amount of general purpose financial assistance for the 2017-18 financial year is capped at $5 billion, with the actual payments not exceeding this limit.

Key Provisions

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 109 (April 2018) outlines the framework and specific conditions under which the Commonwealth provides general purpose financial assistance to the States and Territories, as mandated by the Federal Financial Relations Act 2009 (FFR Act) and the Intergovernmental Agreement on Federal Financial Relations (IGA). Under section 7(2) of the COAG Reform Fund Act 2008, the terms and conditions for these grants are detailed in written agreements between the Commonwealth and the States, which are included in Schedule D to the IGA. These agreements specify the purpose and allocation of financial assistance, ensuring transparency and accountability in the distribution of funds. The obligations imposed by the Act include the requirement for the Commonwealth to credit a specified amount to the COAG Reform Fund for the purpose of providing general purpose financial assistance to the States. This crediting process is governed by subsection 9(3) of the FFR Act, which stipulates that the total amount credited to the COAG Reform Fund for the financial year starting on 1 July 2017 must not exceed $5,000,000,000.00. Furthermore, the determination ensures that the Commonwealth meets its obligations under the IGA by making payments in a prescribed manner, which is facilitated by the exemption from the disallowance provisions of the Legislation Act 2003. This exemption allows the Treasurer to make determinations regarding the allocation of funds without the need for parliamentary approval, ensuring timely and efficient disbursement of financial assistance. Breaches of the provisions outlined in the determination may lead to civil or criminal consequences, although specific offences, penalties, or consequences are not detailed in the explanatory statement. The determination is a legislative instrument and is registered on the Federal Register of Legislation, which means it is subject to the legal framework governing such instruments. The overarching goal is to ensure that the financial assistance provided to the States and Territories is used effectively to support various policy areas, thereby promoting the overall welfare and service delivery across Australia.