Federal Financial Relations (General Purpose Financial Assistance) Determination No. 33 (December 2011)

Overview

The Federal Financial Relations Act 2009, enacted to support the implementation of the Intergovernmental Agreement on Federal Financial Relations, addresses the need for a structured framework to facilitate collaboration and coordination in service delivery and economic reforms across Australia. The Act was introduced by the Parliament of Australia to ensure the effective distribution of financial assistance to the States, enabling them to meet their service delivery obligations. The policy objective is to provide ongoing financial support for the States' service delivery efforts through various forms of assistance, including general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments. This Act, along with the determinations made under it, seeks to enhance transparency and accountability in the distribution of these funds while ensuring that the Minister can fulfill their obligations under the Intergovernmental Agreement without the risk of disallowance.

Scope and Application

The Federal Financial Relations Act 2009 governs the provision of financial assistance by the Commonwealth to the States, implementing the payment provisions outlined in the Intergovernmental Agreement on Federal Financial Relations (IGA). The Act applies to the Commonwealth Government and the States, specifically focusing on the distribution of general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments to support various service delivery sectors and reforms. This legislation provides a framework for the ongoing financial support of the States in their service delivery efforts, with the payments being credited to the COAG Reform Fund. Notably, the Act excludes GST revenue grants from the general purpose financial assistance, which are managed separately. The Minister’s determinations concerning general purpose financial assistance are legislative instruments registered on the Federal Register of Legislative Instruments, but they are exempt from disallowance to ensure compliance with the Intergovernmental Agreement. The Act came into effect on 1 January 2009, following extensive consultations with all jurisdictions and public availability of the IGA.

Key Provisions

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 33, made under section 9(1) of the Federal Financial Relations Act 2009, outlines the framework for the provision of general purpose financial assistance to the states. This assistance is provided through the COAG Reform Fund, which is established under the COAG Reform Fund Act 2008 as a Special Account under the Financial Management and Accountability Act 1997. The amounts credited to the fund by the Minister for the purpose of general purpose financial assistance are intended to support the states' service delivery efforts (sections 1, 2). In line with the Intergovernmental Agreement on Federal Financial Relations (IGA), the Minister is obligated to make payments of general purpose financial assistance in a prescribed manner. This obligation is facilitated by the exemption of the Minister's determinations regarding this assistance from the disallowance provisions, which ensures that the Minister can meet this commitment without hindrance (section 3). This approach is intended to improve transparency, as these determinations are legislative instruments and are registered on the Federal Register of Legislative Instruments (section 4). The IGA, which underpins the provisions of this determination, was the result of extensive consultation with the states and was signed by all jurisdictions in December 2008. It is publicly available on the Ministerial Council for Federal Financial Relations website, and there is ongoing consultation with the states regarding general revenue assistance arrangements (section 5). The determination itself came into effect on the day it was made, providing immediate effect to the provisions it sets out (section 6). Breach of the obligations or requirements outlined in the determination could lead to legal consequences. While the determination does not specify particular offences, any actions taken by the Minister that fail to comply with the Intergovernmental Agreement could potentially result in legal challenges or other repercussions. Additionally, the failure to credit amounts to the COAG Reform Fund as required could be viewed as a non-compliance with the Act, potentially leading to administrative or legal consequences. However, the specific penalties for such breaches are not outlined in the determination itself (sections 3, 6).