Federal Financial Relations (General purpose financial assistance) Determination No. 50 (May 2013)

Overview

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 50, made under the Federal Financial Relations Act 2009, was enacted in May 2013. This legislation aims to provide general purpose financial assistance to the states in the form of general revenue assistance other than GST revenue grants. This determination was introduced to address the need for ongoing financial support for the states' service delivery efforts, as agreed upon in the Intergovernmental Agreement on Federal Financial Relations (the IGA). The IGA, signed by all jurisdictions in December 2008, provides a framework for collaboration on policy development and service delivery, and facilitates the implementation of economic and social reforms in areas of national importance. The determination was made by the Minister and is registered on the Federal Register of Legislative Instruments, although it is not subject to disallowance, in order to improve transparency and ensure the Minister can meet the obligation to make payments of general purpose financial assistance in a prescribed manner. The Federal Financial Relations Act 2009 and the COAG Reform Fund Act 2008 are the primary legislative instruments governing the payment provisions of the IGA. The COAG Reform Fund, established under the latter Act, is a Special Account for the purposes of the Financial Management and Accountability Act 1997. The Minister has an obligation to make payments of general purpose financial assistance in a prescribed manner, and the exemption from disallowance provisions in the Legislative Instruments Act 2003 ensures that the Minister can meet this obligation. Extensive consultation with the states has occurred throughout the development of the IGA and ongoing consultation on general revenue assistance arrangements continues.

Scope and Application

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 50 applies to the Commonwealth Government and the states in Australia, specifically targeting the provision of general purpose financial assistance as outlined in the intergovernmental agreement. This assistance is intended to support the states in their service delivery efforts, encompassing any expenditure they deem necessary. The geographic reach of this legislation is nationwide, impacting all states and territories within the Australian federation. The Act clarifies that general purpose financial assistance provided by the Commonwealth to the states is distinct from GST revenue grants and is instead credited to the COAG Reform Fund, which was established under the COAG Reform Fund Act 2008. The Act also stipulates that the Minister’s determinations regarding this assistance are legislative instruments and will be registered on the Federal Register of Legislative Instruments, although they are exempt from disallowance provisions to ensure the Minister can meet the obligations under the Intergovernmental Agreement. This legislative framework aims to enhance transparency and maintain the flow of financial support to the states for general purposes.

Key Provisions

The main operative sections of the Federal Financial Relations (General Purpose Financial Assistance) Determination No. 50 (May 2013) under the Federal Financial Relations Act 2009 include sections that outline the process and conditions for the distribution of general purpose financial assistance to the states. Section 9(1) of the Act empowers the Minister to credit amounts to the COAG Reform Fund for the purpose of providing general revenue assistance to the states. 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. The Minister's determinations regarding these payments are legislative instruments and must be registered on the Federal Register of Legislative Instruments. Importantly, these determinations are exempt from the disallowance provisions, ensuring the Minister can meet the obligations under the Intergovernmental Agreement (IGA). The obligations and requirements imposed by the Act on the parties involved primarily centre around the provision and use of financial assistance. The Commonwealth is obligated to make payments of general purpose financial assistance to the states in a manner prescribed by the IGA. This includes crediting amounts to the COAG Reform Fund as stipulated. The states, in turn, have the flexibility to use these funds for any purpose as they are general revenue assistance grants, not tied to specific projects or services. The Act also mandates that the Minister's determinations in respect of these payments are to be registered on the Federal Register of Legislative Instruments, enhancing transparency and accountability. Breaching the requirements outlined in the Act can result in various consequences. While the explanatory statement does not specify particular offences, penalties, or detailed civil or criminal consequences for non-compliance, the legislative framework indicates that adherence to the prescribed processes for payment and registration is crucial. Failure to credit amounts to the COAG Reform Fund or to register determinations on the Federal Register of Legislative Instruments could be considered non-compliance. Such breaches might lead to administrative reviews or other corrective actions to ensure the integrity of the federal financial relations framework. The Act’s focus on transparency and accountability underscores the importance of strict adherence to its provisions to maintain the collaborative spirit and efficacy of the IGA.