Federal Financial Relations (General Purpose Financial Assistance) Determination No. 15 (June 2010)

Overview

The Federal Financial Relations Act 2009 was enacted to formalise the financial relationship between the Australian federal government and the states, aligning with the commitments made under the Intergovernmental Agreement on Federal Financial Relations. This Act was introduced to address the need for a robust framework to facilitate collaboration on policy development and service delivery, ensuring the ongoing provision of financial assistance to states for their service delivery efforts. The Commonwealth Parliament enacted this legislation to commit to the provision of general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments. The policy objective is to enhance transparency and accountability in financial relations, while providing flexibility for the states to use the funds for various purposes. The Federal Financial Relations Act 2009 specifically addresses the provision of general purpose financial assistance by enabling the Minister to credit amounts to the COAG Reform Fund, which is a Special Account established under the COAG Reform Fund Act 2008. This Act ensures that the Minister's determinations regarding general purpose financial assistance are legislative instruments and are registered on the Federal Register of Legislative Instruments, thereby improving transparency. However, these determinations are exempt from the disallowance provisions to ensure that the Minister can meet the obligations under the Intergovernmental Agreement without unnecessary procedural delays.

Scope and Application

The Federal Financial Relations Act 2009 applies to the Commonwealth Minister for Finance, who is responsible for crediting amounts to the COAG Reform Fund to provide general purpose financial assistance to the states. The Act is part of the broader intergovernmental agreement on federal financial relations that provides a framework for the Commonwealth to offer ongoing financial support to the states for their service delivery efforts. The general purpose financial assistance offered under the Act is intended to be used by the states for any purpose and is distinct from the National Specific Purpose Payments and National Partnership payments that are provided for in the agreement. The Act applies nationally as it is a Commonwealth Act, but its provisions are implemented through the COAG Reform Fund which is a Special Account under the Financial Management and Accountability Act 1997. The Minister’s determinations in respect of general purpose financial assistance are legislative instruments and will be registered on the Federal Register of Legislative Instruments, however, they are exempt from disallowance provisions. This ensures that the Minister can continue to meet the obligation of making payments of general purpose financial assistance in a prescribed manner as agreed under the Intergovernmental Agreement.

Key Provisions

The Federal Financial Relations Act 2009 outlines several key provisions, particularly concerning general purpose financial assistance (section 9). This assistance is intended to support the states in their service delivery efforts, including the provision of GST payments for any purpose. The Act provides for the Minister to credit amounts to the COAG Reform Fund, which serves as a Special Account under the Financial Management and Accountability Act 1997 (section 9(1)). It is important to note that the determinations made by the Minister in respect of these financial assistance payments are legislative instruments and are subject to registration on the Federal Register of Legislative Instruments. However, these determinations are not subject to disallowance, which means they cannot be invalidated by Parliament (section 5 of the Legislative Instruments Act 2003). The Act imposes specific obligations on the Minister, primarily to make payments of general purpose financial assistance in a prescribed manner as agreed upon under the Intergovernmental Agreement on Federal Financial Relations (section 9(1)). This obligation is facilitated by the exemption from disallowance provisions, ensuring the Minister can meet these commitments without parliamentary intervention. The timing of these determinations is critical, as they commence on the day they are made, ensuring prompt and effective financial support to the states (section 9(1)). Failure to comply with the requirements of the Act can lead to significant consequences. Although the Explanatory Statement does not detail specific offences or penalties, breaches of the Act could potentially lead to legal challenges or other forms of accountability, given the importance of the commitments made under the Intergovernmental Agreement on Federal Financial Relations. The precise nature and extent of any penalties or consequences for non-compliance would need to be determined within the broader legal context and any relevant administrative or judicial proceedings.