EXPLANATORY STATEMENT
Federal Financial Relations ACt 2009
Federal Financial Relations (National Health Reform Payments) Determination 2013-14
The Intergovernmental Agreement on Federal Financial Relations (the IGA) provides a robust foundation for collaboration on policy development and service delivery, and facilitates the implementation of economic and social reforms in areas of national importance.
In agreeing the new framework for federal financial relations, the Commonwealth committed to the provision of financial support for the States’ service delivery efforts through:
• general purpose financial assistance, including the ongoing provision of GST payments, to be used by the States for any purpose;
• National Specific Purpose Payments (National SPPs) to be spent in key service delivery sectors; and
• National Partnership payments to support the delivery of specified outputs or projects, to facilitate reforms, or to reward those jurisdictions that deliver on nationally significant reforms.
The new federal financial framework commenced on 1 January 2009. The payment provisions of the IGA are implemented through the Federal Financial Relations Act 2009 (the Act).
National Health Reform Payments
Under the IGA, the Commonwealth provides National Health Reform payments to the States and Territories as a financial contribution to support State and Territory service delivery in the area of healthcare.
The Act provides for the Minister to determine for each financial year, the total amount and the manner in which National Health Reform payments are distributed between the States and Territories. The Act also requires the Minister have regard to the IGA when making a determination for National Health Reform payments.
Advance payments in respect of the National Health Reform payments are provided throughout the financial year based on estimates of each jurisdictions’ anticipated entitlement. Any adjustment between the advances paid to a jurisdiction and the jurisdictions’ determined entitlement is made in the first practicable payment in the subsequent financial year.
The Minister’s determination in respect of National Health Reform payments is a legislative instrument and will be registered on the Federal Register of Legislative Instruments.
This Determination is in accordance with Part 3A of the Act, which provides for the Minister, by legislative instrument, to determine the total amounts payable, the manner in which these total amounts are indexed, and the manner in which these amounts are divided between the States.
In accordance with the functions of the Administrator of the National Health Funding Pool under paragraph 238(1)(a) of the National Health Reform Act 2011, the Administrator has calculated and advised the amounts required to be paid by the Commonwealth into each State Pool Account of the National Health Funding Pool under the National Health Reform Agreement. These amounts include the reconciliation of actual service delivery in 2013-14, including cross-border services on a provider basis.
Consultation
The IGA and National Health Reform Agreement were subject to extensive consultation with the States and were signed by all jurisdictions. Both agreements are publicly available on the website for the Ministerial Council for Federal Financial Relations. Consultation with the States on National Health Reform funding also occurs regularly, principally through meetings between Heads of Treasuries.
Disallowance of the legislative instrument
This Determination is exempt from disallowance in accordance with Section 44(1) of the Legislative Instruments Act 2003, as the enabling legislation (Federal Financial Relations Act 2009) facilitates the operation of an intergovernmental scheme involving the Commonwealth and all States and Territories, through the provision of financial assistance under the framework established by the Intergovernmental Agreement on Federal Financial Relations. The Federal Financial Relations Act 2009 also authorises the instrument to be made for the purposes of the scheme.
Commencement
The Determination commences on the day it was made.