Federal Financial Relations (General purpose financial assistance) Determination No. 48 (March 2013)

Overview

The Federal Financial Relations Act 2009 was enacted by the Parliament of Australia to implement the Intergovernmental Agreement on Federal Financial Relations (IGA), which commenced on 1 January 2009. This Act aims to establish a framework for ongoing financial support to states for their service delivery efforts, ensuring collaboration on policy development and service delivery. The Act facilitates the provision of general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments to support key service sectors, reforms, and specified outputs or projects. The policy objective is to enhance transparency and accountability in financial assistance to states, with Minister's determinations on general purpose financial assistance being legislative instruments and registered on the Federal Register of Legislative Instruments, though exempt from disallowance to meet the Intergovernmental Agreement obligations. The Act was developed through extensive consultation with all states, reflecting a commitment to collaborative federalism and the effective implementation of economic and social reforms. The IGA, along with the COAG Reform Fund Act 2008, provides a structured approach to funding that aims to improve the efficiency and effectiveness of public services across Australia.

Scope and Application

The Federal Financial Relations Act 2009 applies to the Commonwealth government and the various states and territories of Australia, providing the framework for the distribution of financial assistance to the states as outlined in the Intergovernmental Agreement on Federal Financial Relations. This Act facilitates the transfer of funds from the Commonwealth to the states for general service delivery, as well as for specific purposes and national partnerships. The Act specifically governs general purpose financial assistance, which is provided through the Minister crediting amounts to the COAG Reform Fund, established under the COAG Reform Fund Act 2008. The Act does not extend to GST revenue grants, which are managed separately. Determinations made by the Minister regarding general purpose financial assistance are legislative instruments and are registered on the Federal Register of Legislative Instruments, although they are exempt from disallowance provisions to ensure the Minister can meet their obligations under the Intergovernmental Agreement. The Act commenced on 1 January 2009, following extensive consultation with all jurisdictions and the public availability of the Intergovernmental Agreement.

Key Provisions

The Federal Financial Relations Act 2009 (the Act) primarily outlines the provisions for the provision of general purpose financial assistance (GPFA) to the states as part of the intergovernmental agreement on federal financial relations. Section 9(1) requires the Minister to credit amounts to the COAG Reform Fund for the purpose of providing GPFA, which is intended to support states in their service delivery efforts (s9). This fund, established under the COAG Reform Fund Act 2008, is designated as a Special Account for the purposes of the Financial Management and Accountability Act 1997 (s9). The Act ensures that the Minister's determinations in respect of GPFA are legislative instruments and will be registered on the Federal Register of Legislative Instruments. However, these determinations are not subject to disallowance (s9(2)). This exemption from disallowance provisions allows the Minister to comply with the obligations under the Intergovernmental Agreement to make payments of GPFA in a prescribed manner. The Act imposes specific obligations on the Minister to make determinations regarding the provision of GPFA to the states. Under section 9(1), the Minister is required to credit amounts to the COAG Reform Fund for the purpose of providing GPFA. This obligation is further reinforced by the need to ensure that these determinations are made in a manner that adheres to the intergovernmental agreement. Additionally, the Act mandates that these determinations be legislative instruments and registered on the Federal Register of Legislative Instruments, which provides transparency and accountability in the financial assistance process. The exemption from disallowance ensures that the Minister can meet these obligations without the risk of having the determinations annulled by Parliament. The Act does not explicitly outline specific offences, penalties, or civil and criminal consequences for breach of its provisions. However, the nature of the obligations imposed on the Minister under the Act suggests that failure to comply with the requirements for providing GPFA could potentially lead to legal consequences under the broader framework of federal financial relations. Given the critical role of GPFA in supporting states' service delivery efforts, non-compliance could result in legal actions or disputes under the Intergovernmental Agreement or other relevant legislation. The absence of specific penalties in the Act implies that any breaches would be addressed under the general legal and administrative frameworks governing federal financial relations in Australia.