Overview

The Federal Financial Relations Act 2009 was enacted to formalise the framework for financial relations between the Commonwealth and the States and Territories. It was introduced to address the need for a structured and collaborative approach to financial support for service delivery by the States. The Act provides the legislative basis for the ongoing financial assistance that the Commonwealth commits to offering the States, including general purpose financial assistance such as GST payments. The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 93, made by the Treasurer under section 9 of the Act, specifies the manner in which these payments are to be made, in accordance with the Intergovernmental Agreement on Federal Financial Relations. This determination ensures that the Commonwealth meets its obligations under the IGA to provide prescribed financial support to the States, which can be utilised for any purpose, thereby fostering collaborative service delivery across various policy areas.

Scope and Application

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 93 applies to the provision of general purpose financial assistance by the Commonwealth to the States and Territories, as outlined under the Federal Financial Relations Act 2009. This assistance, excluding Goods and Services Tax payments, is allocated through the COAG Reform Fund to support the States' service delivery efforts. The determination facilitates the distribution of funds as agreed under the Intergovernmental Agreement on Federal Financial Relations, which was developed through extensive consultation and is publicly available. The Treasurer, acting under the authority of the Minister, implements these payments to meet the Commonwealth's obligations under the IGA. Notably, these determinations, while legislative instruments, are exempt from disallowance provisions to ensure the ongoing provision of financial support to the States. Geographically, the determination's reach extends to the entire Commonwealth of Australia, impacting all States and Territories by providing them with general purpose financial assistance. This support is intended to enhance service delivery across various policy areas at the discretion of each State. The determination does not specify exclusions, exemptions, or thresholds beyond those outlined in the IGA; however, the manner in which the assistance is used is subject to individual State policy decisions. The application of the determination is further refined through subordinate instruments, ensuring compliance with the overarching federal financial relations framework.

Key Provisions

The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 93, made under the Federal Financial Relations Act 2009, establishes the framework for the Commonwealth's provision of general purpose financial assistance to the States and Territories. Section 9 of the Act mandates that the Minister, currently the Treasurer, credits specified amounts to the COAG Reform Fund for this purpose. Once credited, these funds are then debited from the fund to grant the assistance to the States. The COAG Reform Fund is a Special Account under the Public Governance, Performance and Accountability Act 2013, established by the COAG Reform Fund Act 2008. The obligations under this determination primarily rest with the Treasurer, who is responsible for ensuring that the Commonwealth meets its commitment to provide ongoing financial support for the States' service delivery efforts as stipulated in the Intergovernmental Agreement on Federal Financial Relations. The Commonwealth's obligation to make these payments in a prescribed manner is reinforced by the determination being exempt from the disallowance provisions of the Legislation Act 2003, thereby allowing the Treasurer to fulfill this commitment without interference. The process of developing the IGA involved extensive consultation with the States and was ultimately agreed upon by the Council of Australian Governments on 29 November 2008. In terms of potential legal consequences, while the determination itself is exempt from disallowance, breaches of the obligations outlined in the IGA could have broader implications. There are no explicit offences or penalties outlined in the determination for non-compliance with the financial assistance provisions. However, failure to meet the financial obligations under the IGA could lead to broader political and legal ramifications, as the agreement is foundational to the federal financial relations framework. The human rights compatibility statement indicates that the determination, by virtue of its broad and flexible nature, does not have a detrimental impact on any human right, as it allows each State to use the assistance for purposes that generally support various human rights.