EXPLANATORY STATEMENT
Federal Financial Relations ACt 2009
National Health Reform Payments Determination 2014-15
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, 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 to have regard to the IGA and the National Health Reform Agreement when making a determination for National Health Reform payments.
Advance payments in respect of National Health Reform are provided throughout the financial year based on estimates of each jurisdiction’s anticipated entitlement. Any adjustment between the advances paid to a jurisdiction and the jurisdiction’s determined entitlement is spread equally across payments for a subsequent quarter in the subsequent financial year.
This 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, and the manner in which these amounts are divided between the States and Territories.
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.
For the purpose of informing this Determination, the Administrator of the National Health Funding Pool has calculated the amounts for Commonwealth payments in respect of 2014-15 activity. These amounts include a reconciliation of actual service delivery in 2014-15.
Table 1: National Health Reform funding in respect of 2014-15 activity
The Administrator of the National Health Funding Pool has also undertaken further reconciliation of service delivery in 2013-14 and updated the amounts for Commonwealth payments in respect of final 2013-14 activity. This further reconciliation corrected errors in hospital services data provided by States and ensured national consistency in the calculation of Commonwealth funding. An adjustment has been included in the 2014-15 entitlement to reflect changes between the 2013-14 entitlement and the updated amounts in respect of 2013-14 activity calculated by the Administrator.
Table 2: Adjustment to 2014-15 entitlement for reconciled 2013-14 activity
Disallowance
Subsection 15A(2) of the Act provides that the Determination is a legislative instrument, but that section 42 (disallowance) of the Legislative Instruments Act 2003 does not apply to it.
Consultation
The IGA and National Health Reform Agreement were subject to extensive consultation with the States and Territories and were signed by all jurisdictions. Both agreements are publicly available on the website for the Council on Federal Financial Relations. Consultation with the States and Territories on National Health Reform funding also occurs regularly, principally through meetings between Heads of Treasuries.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
In accordance with the Intergovernmental Agreement on Federal Financial Relations and the Federal Financial Relations Act 2009, the Commonwealth provides National Health Reform payments to the States and Territories as a financial contribution for the purpose of expenditure in accordance with the National Health Reform Agreement.
This Legislative Instrument determines the total amounts payable in respect of National Health Reform funding for 2014‑15, and the manner in which these amounts are divided between the States and Territories.
Human rights implications
This Legislative Instrument, and the payments to the States and Territories that the instrument supports, assist in the realisation of a number of human rights:
• the right to the highest attainable standard of physical and mental health (art 12(1), ICESCR; art 24, CRC and art 25, CRPD);
• the right of children with disabilities to health care (art 23, CRC); and
• rights concerning the habilitation and rehabilitation of persons with disabilities (art 26, CRPD).
States and Territories’ entitlements to National Health Reform funding have increased by $2.0 billion since 2013-14.
Conclusion
This Legislative Instrument is compatible with human rights as it does not adversely engage any human rights issues.