Federal Financial Relations (General Purpose Financial Assistance) Determination No. 11 (February 2010)

Overview

The Federal Financial Relations Act 2009 was enacted to implement the payment provisions of the Intergovernmental Agreement on Federal Financial Relations, which provides a robust framework for collaboration on policy development and service delivery, and facilitates the implementation of economic and social reforms in areas of national importance. This Act was introduced to address the need for ongoing financial support for the States' service delivery efforts through general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments. The Federal Financial Relations Act 2009 was enacted by the Parliament of Australia and its policy objective is to provide greater transparency and accountability in the distribution of federal financial assistance to the States. The Act 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 Federal Financial Relations Act 2009 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. This exemption from the disallowance provisions allows the Minister to meet the obligation under the Intergovernmental Agreement to make payments of general purpose financial assistance in a prescribed manner. The determinations in respect of general purpose financial assistance are legislative instruments and will be registered on the Federal Register of Legislative Instruments. The Act commenced on the day it was made.

Scope and Application

The Federal Financial Relations Act 2009 applies to the Commonwealth Government and the states and territories of Australia, establishing the framework for the provision of general purpose financial assistance to support the states’ service delivery efforts. This assistance is provided through the COAG Reform Fund, which was established under the COAG Reform Fund Act 2008. The Act mandates the Minister to credit amounts to the Fund for the purpose of providing general revenue assistance to the states, excluding GST revenue grants. Determinations made by the Minister regarding these payments are legislative instruments and are registered on the Federal Register of Legislative Instruments, though they are exempt from disallowance to ensure compliance with the obligations under the Intergovernmental Agreement on Federal Financial Relations. The Act’s provisions commenced on 1 January 2009, marking the start of the new federal financial framework designed to facilitate economic and social reforms across key service delivery sectors.

Key Provisions

The Federal Financial Relations Act 2009 (sections 8-11) outlines the process for the Minister to credit amounts to the COAG Reform Fund for general purpose financial assistance to the States. This assistance is to be used by the States for any purpose, ensuring flexibility in the allocation of funds. The Act specifies that these payments will be made in a prescribed manner as agreed under the Intergovernmental Agreement on Federal Financial Relations. Furthermore, the Act mandates that any determinations made by the Minister regarding these financial assistance payments must be registered on the Federal Register of Legislative Instruments, although they will not be subject to disallowance. The obligations imposed by the Act on the Commonwealth Minister and the States are significant. The Minister is required to credit amounts to the COAG Reform Fund as per the determinations made under section 9(1) of the Act. This is in line with the commitment to ongoing financial support for the States’ service delivery efforts. The Act ensures that these payments are made transparently and in accordance with the prescribed manner as stipulated in the Intergovernmental Agreement. The States, in turn, are expected to use the received financial assistance for their general purposes as agreed. In terms of breaches and consequences, the Act does not explicitly detail specific offences or penalties for non-compliance. However, the framework ensures that the Minister’s determinations are registered on the Federal Register of Legislative Instruments, thereby maintaining transparency and accountability. Any failure to comply with the prescribed manner of payments could potentially lead to disputes under the Intergovernmental Agreement, but the Act itself does not prescribe specific penalties for breaches of the payment provisions. The primary mechanism for ensuring compliance lies in the registration of legislative instruments and adherence to the agreed terms of the intergovernmental agreement.