EXPLANATORY STATEMENT
Federal Financial Relations (General Purpose Financial Assistance) Determination No. 112 (29 June 2018)
Background
The Intergovernmental Agreement on Federal Financial Relations (the IGA) provides a foundation for collaboration on policy development and service delivery between the Commonwealth and the States and Territories (the States).
Consultation
The IGA was subject to extensive consultation with the States and was agreed by the Council of Australian Governments on 29 November 2008. The IGA and individual National Partnership agreements are publicly available on the Council for Federal Financial Relations website.
General purpose financial assistance
The Federal Financial Relations Act 2009 (FFR Act) provides for the Minister to credit an amount to the COAG Reform Fund for the purpose of providing general purpose financial assistance to the States. Once the amount is credited to the COAG Reform Fund it is debited from the Fund to make the grants to the States.
The COAG Reform Fund Act 2008 (COAG Act) establishes the COAG Reform Fund and specifies that it is a special account for the purposes of the Public Governance, Performance and Accountability Act 2013.
The Treasurer’s determinations in respect of general purpose financial assistance are legislative instruments and are registered on the Federal Register of Legislation, but are not disallowable. The Commonwealth has an obligation under the IGA to make payments of general purpose financial assistance in a prescribed manner. Exemption from the disallowance provisions of the Legislation Act 2003 allows the Treasurer to ensure that this obligation is met.
This payment includes a one-off grant to the Northern Territory to offset the reduction in the Territory’s 2018-19 GST share. This payment was announced in the 2018-19 Budget.
Payment conditions
Subsection 7(2) of the COAG Act requires that the terms and conditions on which financial assistance is granted through the COAG Reform Fund are to be set out in a written agreement between the Commonwealth and the States.
Debit limits
Under subsection 9(3) of the Federal Financial Relations Act 2009, the total amount credited to the COAG Reform Fund for the purpose of making a grant of general purpose financial assistance in the financial year starting on 1 July 2017 must not exceed $5,000,000,000.00.
The amounts specified in Table 1 are the total amounts determined in the 2017-18 financial year in respect of general purpose financial assistance, including this determination.
The total amount determined for general purpose financial assistance payments to date in the 2017-18 financial year does not exceed the debit limit.
Table 1: Total cumulative general purpose financial assistance payments in 2017-18
State |
|
| Amount of General purpose financial assistance | ||
New South Wales |
| $44,364,723.00 | |||
Victoria |
| $22,182,361.35 | |||
Queensland |
| - | |||
Western Australia |
| $710,016,926.27 | |||
South Australia |
| - | |||
Tasmania |
| - | |||
Australian Capital Territory |
| $39,561,659.16 | |||
Northern Territory |
| $262,147,706.64 | |||
Total |
| $1,078,273,376.42 | |||
General debit limit for 2017-18 |
|
| $5,000,000,000.00 | ||
Remaining debit limit for 2017-18 |
|
| $3,921,726,623.58 | ||
Commencement
The determination commenced on the day it was made.
Summary of relevant agreements for general purpose financial assistance
Payment title | Purpose | Relevant agreement |
Taxation compensation in respect of Snowy Hydro Limited | The Commonwealth provides compensation payments to New South Wales and Victoria, in the form of general purpose financial assistance, for Commonwealth taxes paid by Snowy Hydro Ltd in proportion to the States' shareholdings. Payments are made in accordance with the Snowy Hydro Tax Compensation Deed between the Commonwealth, New South Wales and Victoria. These taxes would have previously been payable to the States through tax equivalence regime payments. | Schedule D – Payment arrangements of the Intergovernmental Agreement |
Commonwealth assistance to the Northern Territory | The Commonwealth is providing a one-off general purpose financial assistance payment to the Northern Territory to offset the reduction in the Territory’s GST share, as announced in the 2018-19 Budget. | Schedule D – Payment arrangements of the Intergovernmental Agreement and ministerial agreement |
Amounts of general purpose financial assistance on 29 June 2018 ($)
|
| NSW | VIC | QLD | WA | SA | TAS | ACT | NT | Total |
General Revenue Assistance |
|
|
|
|
|
|
|
|
|
|
Taxation compensation in respect of Snowy Hydro Ltd |
| 44,364,723.00 | 22,182,361.35 | - | - | - | - | - | - | 66,547,084.35 |
Commonwealth Assistance to the Northern Territory |
| - | - | - | - | - | - | - | 259,600,000.00 | 259,600,000.00 |
Total General Revenue Assistance |
| 44,364,723.00 | 22,182,361.35 | - | - | - | - | - | 259,600,000.00 | 326,147,084.35 |
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
It is difficult to assess the human rights compatibility of either the determination or the making of payments of general purpose financial assistance, as the amounts paid to each State can be used for any purpose. Generally, payments will promote multiple human rights by supporting service delivery in a range of policy areas, at the discretion of each State. Consequently, neither this determination nor the making of general purpose financial assistance payments more generally could be said to have a detrimental impact on any human right.