Federal Financial Relations (General Purpose Financial Assistance) Determination No. 27 (June 2011)

Overview

The Federal Financial Relations Act 2009 was enacted to facilitate the implementation of the new framework for federal financial relations as outlined in the Intergovernmental Agreement on Federal Financial Relations, which came into effect on 1 January 2009. This Act aims to address the need for ongoing financial support for the states' service delivery efforts, ensuring that the states have the necessary resources to carry out their responsibilities effectively. The Federal Financial Relations Act 2009 provides for the Minister to credit amounts to the COAG Reform Fund for the purpose of offering general purpose financial assistance to the states, thus improving transparency and ensuring that the states receive the support they need to deliver services. The policy objective of this Act is to promote collaboration on policy development and service delivery, and to facilitate the implementation of economic and social reforms in areas of national importance. The Federal Financial Relations Act 2009 was enacted by the Commonwealth Parliament, which is the legislative body of the Australian government responsible for making laws at the federal level. The Act 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, and that the Minister's determinations in respect of general purpose financial assistance are legislative instruments that will be registered on the Federal Register of Legislative Instruments. This exemption from the disallowance provisions allows the Minister to meet their obligation under the Intergovernmental Agreement to make payments of general purpose financial assistance in a prescribed manner. The determination commences on the day it was made.

Scope and Application

The Federal Financial Relations Act 2009 applies to the Commonwealth Government, specifically the Minister responsible for federal financial relations, in relation to the provision of financial assistance to the States. This Act implements the payment provisions outlined in the Intergovernmental Agreement on Federal Financial Relations, which includes the allocation of general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments. The Act ensures the ongoing provision of financial support to States for their service delivery efforts, thereby facilitating economic and social reforms in areas of national importance. The Act's jurisdictional reach is national, as it concerns the distribution of federal funds across all states in Australia. The Act does not include specific exclusions or exemptions, but rather defines the manner in which the Commonwealth is to provide financial assistance to the States, with the Minister's determinations being legislative instruments registered on the Federal Register of Legislative Instruments. These determinations, however, are exempt from disallowance provisions to ensure compliance with the Intergovernmental Agreement obligations.

Key Provisions

The Federal Financial Relations Act 2009, as outlined in the Explanatory Statement, sets forth key provisions for the provision of financial assistance to states through various schemes. Section 9(1) specifies that the Minister can credit amounts to the COAG Reform Fund for the purpose of providing general purpose financial assistance to states, which includes general revenue assistance other than GST revenue grants. This fund was established under the COAG Reform Fund Act 2008 and is designated as a Special Account under the Financial Management and Accountability Act 1997 (section 9). To enhance transparency, the Minister's determinations regarding general purpose financial assistance are registered as legislative instruments on the Federal Register of Legislative Instruments, though they are exempt from disallowance provisions (section 9). This exemption is crucial as it allows the Minister to meet the obligations set forth in the Intergovernmental Agreement, which mandates the prescribed manner of making such payments. The Act imposes specific obligations on the Minister and the states. The Minister is obligated to credit amounts to the COAG Reform Fund as stipulated in the Intergovernmental Agreement, ensuring that these payments are made in the prescribed manner (section 9). The states, on the other hand, must utilise the funds received for their intended purposes as outlined in the Agreement. The Act also ensures that the Minister’s determinations are transparent and registered as legislative instruments, which contributes to accountability and clarity in the financial assistance process (section 9). The states must adhere to the conditions and stipulations of the Intergovernmental Agreement to be eligible for these financial supports. Breaches of the obligations set out in the Federal Financial Relations Act 2009 could lead to various consequences. While the Act does not explicitly outline specific offences or penalties for non-compliance, failure to adhere to the prescribed manner of making payments could result in legal and financial repercussions. Such breaches could potentially be addressed under broader administrative or contractual laws, where appropriate. The Act's emphasis on transparency and registration of legislative instruments suggests a framework designed to minimise non-compliance through clear guidelines and oversight. However, the precise civil or criminal consequences for non-compliance are not detailed in the provided text.