EXPLANATORY STATEMENT
Issued by authority of the Treasurer
Federal Financial Relations Act 2009
Federal Financial Relations (General purpose financial assistance) Determination No. 97 (April 2017)
The Intergovernmental Agreement on Federal Financial Relations (the IGA) provides a foundation for collaboration on policy development and service delivery between the Commonwealth and the States and Territories (the States).
Under this framework, the Commonwealth has committed to the provision of ongoing financial support for the States’ service delivery efforts. This includes general purpose financial assistance, such as Goods and Services Tax (GST) payments, which can be used by the States for any purpose.
The IGA’s payment provisions in respect of general purpose financial assistance (other than GST payments) are implemented by way of a determination by the Treasurer under section 9 of the Federal Financial Relations Act 2009 (the FFR Act).
General purpose financial assistance
The FFR Act provides for the Minister (which is the Assistant Minister to the Treasurer, under current arrangements) to credit amounts to the COAG Reform Fund for the purpose of providing financial assistance to the States in the form of general purpose financial assistance. Once the amounts are credited to the COAG Reform Fund they are debited from the fund to make the grants to the States.
The COAG Reform Fund Act 2008 establishes the COAG Reform Fund and specifies that it is a special account for the purposes of the Public Governance, Performance and Accountability Act 2013.
The Treasurer’s determinations in respect of general purpose financial assistance are legislative instruments and are registered on the Federal Register of Legislation, but are not disallowable. The Commonwealth has an obligation under the IGA to make payments of general purpose financial assistance in a prescribed manner. Exemption from the disallowance provisions of the Legislation Act 2003 allows the Treasurer to ensure that this obligation is met.
Table 2 in the determination
Table 2 in section 13 of Part 3 of the determination is titled, ‘Table 2: Total cumulative payments of general purpose financial assistance in 2016-17.’ The table that appears, however, relates to National Partnership payments rather than payments of general purpose financial assistance. This has no impact on the lawfulness of the crediting to the COAG Reform Fund of the amounts specified in section 10 of Part 3. The table which should have appeared is:
Consultation
The IGA was subject to extensive consultation with the States and was agreed by the Council of Australian Governments on 29 November 2008. The IGA is publicly available on the Council for Federal Financial Relations website.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
It is difficult to assess the human rights compatibility of either the determination or the making of payments of general purpose financial assistance, as the amounts paid to each State can be used for any purpose. Generally, payments will promote multiple human rights by supporting service delivery in a range of policy areas, at the discretion of each State. Consequently, neither this determination nor the making of general purpose financial assistance payments more generally could be said to have a detrimental impact on any human right.
Commencement
The determination commenced on the day it was made.