Overview

The Federal Financial Relations Act 2009 was enacted to establish a framework for the provision of financial support from the Commonwealth to the States and Territories. This framework aims to facilitate collaboration and the implementation of economic and social reforms in areas of national importance, as outlined in the Intergovernmental Agreement on Federal Financial Relations (IGA). The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 87, issued in June 2016, provides for the ongoing financial support to the States in the form of general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments. The determination ensures that the Minister for Finance can credit amounts to the COAG Reform Fund to meet the obligations under the IGA, with these determinations being legislative instruments registered on the Federal Register of Legislation but exempt from disallowance. The IGA was subject to extensive consultation with the States and was agreed by the Council of Australian Governments (COAG) on 29 November 2008, and is publicly available. The human rights compatibility of the determination and the payments made is generally positive, as the payments can be used for any purpose and support service delivery in various areas, thereby promoting multiple human rights.

Scope and Application

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 87, made under Section 9 of the Federal Financial Relations Act 2009, applies to the provision of general purpose financial assistance to the States in the form of general revenue assistance other than GST revenue grants. This assistance is to be credited to the COAG Reform Fund, which was established under the COAG Reform Fund Act 2008 and is governed by the Public Governance, Performance and Accountability Act 2013. The Minister for Finance is obligated to make these payments in a prescribed manner, as outlined in the Intergovernmental Agreement on Federal Financial Relations, and these determinations are legislative instruments that will be registered on the Federal Register of Legislation. Importantly, these determinations are exempt from disallowance provisions, ensuring the Minister can fulfil their obligation under the IGA. The determination applies nationally, covering all states and territories in Australia, and commenced on the day it was made, providing a clear framework for the ongoing provision of financial support as agreed under the IGA.

Key Provisions

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 87, made under section 9(1) of the Federal Financial Relations Act 2009 (FFR Act), outlines the procedures for the Minister to credit amounts to the COAG Reform Fund for providing general purpose financial assistance to the States (Section 1). This assistance, which is not GST revenue, is intended to support the States' service delivery efforts in any area they deem necessary. The Minister is obligated to make these payments in a manner prescribed by the Intergovernmental Agreement on Federal Financial Relations (IGA) (Section 1). These determinations, while legislative instruments, are registered on the Federal Register of Legislation and are exempt from the disallowance provisions, ensuring the Minister can meet their obligations under the IGA without hindrance (Section 1). The obligations imposed by this Act on the parties involved are primarily centred around the transparent and timely provision of financial assistance. The Minister, as the key actor, must ensure that funds are credited to the COAG Reform Fund in a timely and prescribed manner to support the States' service delivery efforts (Section 1). The States, in turn, are expected to use these funds for the purposes of service delivery as agreed upon under the IGA, though the specific use of funds remains at their discretion (Section 1). This arrangement is underpinned by ongoing consultation mechanisms established by the IGA, which aim to maintain alignment and cooperation between the Commonwealth and the States. Breaches of the obligations set out in this Determination may lead to civil or administrative consequences, though specific penalties are not detailed within the text. The Act implies that non-compliance with the prescribed manner of payment or failure to credit the funds as required could result in legal or administrative repercussions. Given the nature of the obligations, the primary consequence of non-compliance would likely be the disruption of the intended financial support to the States, potentially impacting service delivery efforts. However, the Act does not specify maximum penalties for breaches, leaving the exact consequences to be determined by relevant legal processes.