EXPLANATORY STATEMENT
Federal Financial Relations (General purpose financial assistance) Determination No. 99 (June 2017)
Authority
This determination is made under section 9 of the Federal Financial Relations Act 2009 (FFR Act).
Background
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 Minister (who can be any Treasury portfolio Minister) under section 9 of the FFR Act.
General purpose financial assistance
The FFR Act provides for the Minister to credit amounts to the COAG Reform Fund for the purpose of providing general purpose financial assistance to the States. 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.
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.
Overview
The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 99, enacted in June 2017, is a legislative instrument made under section 9 of the Federal Financial Relations Act 2009. This determination was introduced to address the need for the Commonwealth to provide ongoing financial support to the states and territories for their service delivery efforts, specifically in relation to general purpose financial assistance, such as payments other than Goods and Services Tax (GST). This support is in accordance with the Intergovernmental Agreement on Federal Financial Relations, which outlines the collaborative framework between the Commonwealth and the states and territories. The determination is implemented by the Minister, who may be any Treasury portfolio Minister, and is designed to ensure that the Commonwealth fulfills its obligation to make payments of general purpose financial assistance in a prescribed manner, in line with the IGA. The determination is not subject to disallowance, allowing the Treasurer to meet this obligation effectively.
The determination was subject to extensive consultation with the states and was agreed upon by the Council of Australian Governments on 29 November 2008. It is publicly available on the Council for Federal Financial Relations website. The compatibility of the determination with human rights is difficult to assess due to the general purpose nature of the financial assistance, which can be used by the states for any purpose. However, it is generally accepted that such payments will promote multiple human rights by supporting various service delivery areas, at the discretion of each state. The determination commenced on the day it was made.
Scope and Application
The Federal Financial Relations (General purpose financial assistance) Determination No. 99, made under section 9 of the Federal Financial Relations Act 2009, applies to the Commonwealth's provision of general purpose financial assistance to the States and Territories, excluding Goods and Services Tax payments. This determination ensures the Commonwealth meets its commitment under the Intergovernmental Agreement on Federal Financial Relations, which was agreed upon by the Council of Australian Governments on 29 November 2008 and provides for ongoing financial support to facilitate the States' service delivery efforts. The funds are credited to the COAG Reform Fund, established under the COAG Reform Fund Act 2008, and are subsequently debited to make grants to the States. This legislative instrument is not subject to disallowance, ensuring the Commonwealth's obligation to make these payments is upheld. The determination applies nationally, affecting all States and Territories within Australia, providing them with the flexibility to use the assistance for any purpose, thereby supporting a range of policy areas and promoting various human rights.
Key Provisions
The Federal Financial Relations (General Purpose Financial Assistance) Determination No. 99 outlines the requirements and procedures for the Commonwealth’s provision of general purpose financial assistance to the States. This determination is made under section 9 of the Federal Financial Relations Act 2009 (FFR Act) (s. 1). The payments, excluding GST payments, are implemented in accordance with the Intergovernmental Agreement on Federal Financial Relations (IGA) and are credited to the COAG Reform Fund, from which grants are made to the States (s. 2). The COAG Reform Fund Act 2008 establishes this fund as a special account under the Public Governance, Performance and Accountability Act 2013 (s. 3).
The obligations imposed by this determination include the commitment by the Commonwealth to make payments of general purpose financial assistance in a prescribed manner, as stipulated by the IGA (s. 4). This requirement ensures that the financial support provided aligns with the agreed-upon framework for intergovernmental collaboration. The Treasurer, who can be any Treasury portfolio Minister, has the authority to issue determinations regarding these payments (s. 5). These determinations are registered on the Federal Register of Legislation but are exempt from disallowance under the Legislation Act 2003, ensuring that the Commonwealth’s obligations under the IGA are fulfilled (s. 6).
Breach of the obligations outlined in the determination may not have explicitly stated penalties within the text of the determination itself. However, the legal framework surrounding the FFR Act and the IGA suggests that failure to meet these obligations could have significant political and legal ramifications. The Commonwealth’s commitment to provide financial assistance is legally binding, and any non-compliance could be subject to scrutiny or dispute resolution mechanisms within the IGA framework. Additionally, given the importance of these payments in supporting State service delivery, substantial breaches could potentially lead to broader intergovernmental disputes or require corrective actions to uphold the integrity of the IGA.