Federal Financial Relations (General purpose financial assistance) Determination No. 71 (February 2015)

Overview

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 71, made under the Federal Financial Relations Act 2009, was enacted in February 2015 to provide clarity and structure in the provision of general purpose financial assistance to the states. This legislative instrument was introduced to ensure that the payments made to states are transparent, and to avoid any potential disallowance of the Minister’s determinations concerning these payments. The determination was made by the Minister and is not subject to disallowance, facilitating the Minister's obligation to provide general purpose financial assistance in a prescribed manner as outlined in the Intergovernmental Agreement on Federal Financial Relations. The Federal Financial Relations Act 2009, enacted by the Australian Parliament, aims to formalise the new federal financial framework which began on 1 January 2009. This framework supports the states in their service delivery efforts through various forms of financial assistance, including general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments. The policy objective of this Act is to enhance collaboration and service delivery across the nation, ensuring that economic and social reforms are effectively implemented.

Scope and Application

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 71, made under the Federal Financial Relations Act 2009, pertains to the ongoing financial support provided by the Commonwealth to the states for their service delivery efforts. This determination, effective from the date of its issuance, implements the intergovernmental agreement on federal financial relations which facilitates collaboration on policy development and service delivery. It is specifically concerned with the provision of general purpose financial assistance to the states in the form of general revenue assistance, excluding GST revenue grants, which are credited to the COAG Reform Fund as established by the COAG Reform Fund Act 2008. This fund is designated as a Special Account under the Financial Management and Accountability Act 1997. The 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 the disallowance provisions, allowing the Minister to fulfill the obligations under the Intergovernmental Agreement. This framework ensures transparency and ongoing consultation with the states, fostering a robust and cooperative approach to federal financial relations in Australia.

Key Provisions

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 71, made in February 2015, primarily governs the provision of general purpose financial assistance to the States through the COAG Reform Fund. This assistance is intended to be used by the States for any purpose and is a critical component of the broader Intergovernmental Agreement on Federal Financial Relations (IGA) (s. 1). Under the IGA, the Commonwealth pledged ongoing financial support for the States' service delivery efforts, which includes general purpose financial assistance, GST payments, National Specific Purpose Payments, and National Partnership payments (s. 2). The Act ensures that these provisions are implemented through the Federal Financial Relations Act 2009, which came into effect on 1 January 2009 (s. 3). The obligations under this Determination are primarily borne by the Minister responsible for the COAG Reform Fund, who is mandated to credit amounts to the Fund for the purpose of providing general purpose financial assistance to the States. This assistance must be provided in a prescribed manner as outlined in the IGA (s. 4). The Minister’s determinations regarding these payments are legislative instruments and are registered on the Federal Register of Legislative Instruments. However, it is important to note that these determinations are exempt from disallowance provisions, allowing the Minister to meet the obligations under the IGA without the risk of those determinations being disallowed (s. 5). The legislation also underscores the importance of consultation. The IGA was developed through extensive consultation with the States, and it was signed by all jurisdictions in December 2008. This agreement, along with the ongoing consultation on general revenue assistance arrangements, ensures that the interests and needs of the States are considered in the financial support provided by the Commonwealth (s. 6). The IGA is publicly available on the Ministerial Council for Federal Financial Relations website, promoting transparency and accountability. Failure to comply with the provisions of the Determination could result in legal consequences. While the specific civil or criminal penalties for non-compliance are not explicitly detailed in the text, breaches of the IGA or the Federal Financial Relations Act 2009 could potentially lead to legal actions, depending on the nature and severity of the breach. The overarching objective is to ensure that the financial assistance provided is used as intended, supporting the States in their service delivery efforts and in line with the IGA’s objectives.