Federal Financial Relations (General purpose financial assistance) Determination No. 64 (July 2014)

Overview

The Federal Financial Relations Act 2009 was enacted to implement the provisions of the Intergovernmental Agreement on Federal Financial Relations, particularly concerning the distribution of general purpose financial assistance to the States. This Act was introduced to ensure a structured and transparent method of providing financial support to the States for their service delivery efforts, as agreed under the new federal financial framework that commenced on 1 January 2009. The Australian Parliament enacted this legislation to formalise the financial support mechanisms outlined in the Intergovernmental Agreement, thereby addressing the need for clear, ongoing financial assistance to States to facilitate policy development and service delivery. The policy objective of this Act is to provide ongoing financial support to the States for their service delivery efforts, ensuring that such support is consistent with the commitments made under the Intergovernmental Agreement on Federal Financial Relations.

Scope and Application

The Federal Financial Relations Act 2009 applies to the Commonwealth Minister for Finance, the States, and Territories of Australia, establishing a framework for the provision of financial assistance to support service delivery and reform efforts. This Act is instrumental in implementing the payment provisions outlined in the Intergovernmental Agreement on Federal Financial Relations, which was agreed upon and signed by all jurisdictions in December 2008. The Act facilitates the distribution of general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments. The Act does not extend to disallowable legislative instruments, except for the Minister’s determinations concerning general purpose financial assistance, which are subject to registration on the Federal Register of Legislative Instruments. The geographic reach of this legislation is national, impacting all states and territories within Australia. There are no exclusions or exemptions specified within the Act, but the determinations made by the Minister under section 9(1) are not subject to disallowance, allowing for the continuous provision of financial support as per the Intergovernmental Agreement.

Key Provisions

The Federal Financial Relations Act 2009 (sections 1 to 6) outlines the framework for the provision of financial assistance to the States by the Commonwealth. This Act implements the payment provisions of the Intergovernmental Agreement on Federal Financial Relations, which was established to provide ongoing financial support for the States' service delivery efforts. The Act allows the Minister to credit amounts to the COAG Reform Fund (section 9) to provide general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments to the States. These funds are intended to be used for any purpose, to support key service delivery sectors, and to facilitate reforms or reward jurisdictions that deliver on nationally significant reforms, respectively. The Act imposes obligations on the Minister to ensure that payments of general purpose financial assistance are made in a prescribed manner under the Intergovernmental Agreement (section 9). To facilitate this, the Minister’s determinations regarding general purpose financial assistance are legislative instruments and will be registered on the Federal Register of Legislative Instruments. However, these determinations are exempt from the disallowance provisions, which ensures that the Minister can meet the obligations under the Intergovernmental Agreement without the risk of the determinations being disallowed (section 9(1)). Breach of the obligations set out in the Federal Financial Relations Act 2009 could result in legal consequences. While the Act does not explicitly detail criminal or civil penalties for non-compliance, any failure to comply with the Intergovernmental Agreement could lead to legal actions or disputes between the Commonwealth and the States. The specific consequences would depend on the nature of the breach and the terms of the Intergovernmental Agreement. The Act's primary focus is on ensuring the transparent and timely provision of financial assistance as agreed upon in the Intergovernmental Agreement.