Overview

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 89, issued under the authority of the Treasurer in August 2016, supplements the Federal Financial Relations Act 2009 by establishing a framework for the provision of general purpose financial assistance to the States. This determination was enacted to address the need for a robust and transparent system of financial support for the States to facilitate policy development, service delivery, and economic and social reforms in areas of national importance. The framework was agreed upon by the Commonwealth, the States, and the Territories through the Intergovernmental Agreement on Federal Financial Relations, which was subject to extensive consultation and finalised by the Council of Australian Governments (COAG) on 29 November 2008. The determination itself, which is a legislative instrument registered on the Federal Register of Legislation, aims to improve transparency and ensure compliance with the Minister’s obligations under the Intergovernmental Agreement while exempting the Minister’s determinations from disallowance provisions. The objective is to support the States in their service delivery efforts, thereby indirectly promoting various human rights by enhancing the capacity for service provision.

Scope and Application

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 89, made under Section 16 of the Federal Financial Relations Act 2009, outlines the parameters for the ongoing financial support provided by the Commonwealth to the States and Territories through general purpose financial assistance. This assistance is distinct from GST payments and is intended to be used by the States for any purpose, thereby providing flexibility in how the funds are utilised. The determinations made by the Minister are legislative instruments that are subject to registration on the Federal Register of Legislation but are exempt from disallowance provisions, ensuring the Minister can meet their obligations under the Intergovernmental Agreement on Federal Financial Relations. The framework was agreed upon by the Council of Australian Governments and represents a commitment to fostering collaboration and service delivery across different levels of government. The determination applies to all States and Territories in Australia, operating within the federal framework established by the Intergovernmental Agreement on Federal Financial Relations. This agreement facilitates the implementation of economic and social reforms and provides a transparent mechanism for ongoing financial support. The provisions do not specify any exclusions or exemptions, but the flexibility of general purpose financial assistance means that the application and impact of these funds can vary significantly across different jurisdictions based on their specific needs and priorities. The Minister's ability to make determinations under this framework allows for adjustments and adaptations through subordinate instruments, ensuring the financial support remains effective and relevant.

Key Provisions

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 89, made under the Federal Financial Relations Act 2009, outlines the provisions for the Minister to credit amounts to the COAG Reform Fund (section 16). This fund is intended to provide general purpose financial assistance to the States in the form of general revenue assistance, excluding GST revenue grants. The determination aims to improve transparency and ensures that these determinations are registered on the Federal Register of Legislation (section 9(1)). However, it is important to note that these determinations are not subject to disallowance, which allows the Minister to fulfill their obligation under the Intergovernmental Agreement on Federal Financial Relations (IGA) to make payments in a prescribed manner. The obligations under this Act require the Minister to credit the COAG Reform Fund with the necessary amounts for general purpose financial assistance. This ensures that the States receive the financial support they need for their service delivery efforts. The determination also mandates extensive consultation with the States, which is consistent with the collaborative approach outlined in the IGA. This ongoing consultation helps to maintain a robust framework for federal financial relations and service delivery. In terms of consequences for non-compliance, the Act does not specify any criminal or civil penalties for breaches. However, the failure to make payments as prescribed by the IGA could potentially lead to disputes or legal challenges between the Commonwealth and the States. It is also worth noting that the human rights compatibility of the determination and the making of general purpose financial assistance payments is generally positive, as these payments can support service delivery in various areas. The determination commences on the day it was made, providing immediate effect to the provisions outlined in the Federal Financial Relations (General Purpose Financial Assistance) Determination No. 89. This ensures that the financial support for the States' service delivery efforts is provided in a timely manner, in line with the commitments made under the IGA.