Federal Financial Relations (National Health Reform Payments) Determination 2014-15

Administered by Department of the Treasury

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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 jurisdictions anticipated entitlement.  Any adjustment between the advances paid to a jurisdiction and the jurisdictions 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 201415, 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.

 

Overview

The Federal Financial Relations Act 2009 was enacted to provide a framework for federal financial relations in Australia, facilitating collaboration on policy development and service delivery between the Commonwealth and the States. This Act was introduced to address the need for a robust financial relationship mechanism that supports service delivery efforts through various forms of financial assistance, including general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments. The Commonwealth Parliament enacted this legislation to ensure an effective distribution of financial resources to the states and territories for specified purposes. The Act empowers the Minister to determine the total amounts payable and the distribution of National Health Reform payments to the States and Territories, having regard to the Intergovernmental Agreement on Federal Financial Relations and the National Health Reform Agreement. The policy objective is to provide financial support to the states and territories to enhance service delivery, particularly in the healthcare sector, in line with nationally agreed reforms and agreements.

Scope and Application

The Federal Financial Relations Act 2009 governs the distribution of National Health Reform payments among the States and Territories of Australia, aiming to support healthcare service delivery in accordance with the National Health Reform Agreement. This Act applies to the Minister for Finance, who is responsible for determining the total amount and the allocation of these payments to each jurisdiction, with due regard to the Intergovernmental Agreement on Federal Financial Relations and the National Health Reform Agreement. The Act's application is national in scope, affecting all States and Territories collectively within the framework of federal financial relations. It does not specify any exclusions or thresholds directly but allows for adjustments in payments based on reconciled service delivery data. The Act may extend its application through subordinate instruments that further define the implementation of these payments. The Minister's determinations are legislative instruments and will be registered on the Federal Register of Legislative Instruments, ensuring transparency and accountability in the distribution process.

Key Provisions

The Federal Financial Relations Act 2009 (the Act) establishes a framework for federal financial relations in Australia, particularly focusing on the distribution of National Health Reform payments to support healthcare service delivery by the States and Territories. Section 238 of the Act allows the Minister to determine the total amount and the distribution method of these payments, taking into account the Intergovernmental Agreement on Federal Financial Relations (IGA) and the National Health Reform Agreement (sections 238(1)(a) and 238(1)(b)). This legislative instrument provides specific determinations for National Health Reform payments for the 2014-15 financial year, detailing how these payments will be allocated among the States and Territories (subsection 15A(2)). The obligations imposed by the Act on the parties involved include ensuring that National Health Reform payments are made in accordance with the determinations provided by the Minister. The Commonwealth is obligated to make these payments based on the estimates of each jurisdiction’s anticipated entitlement and to reconcile any discrepancies by adjusting payments in subsequent quarters (section 238(1)). States and Territories must cooperate with the Commonwealth in providing necessary data and information to facilitate accurate calculations and distributions of these payments. The Administrator of the National Health Funding Pool plays a critical role in calculating and advising the amounts to be paid into each State Pool Account, ensuring that funding is distributed based on actual service delivery and reconciled data (paragraph 238(1)(a)). Breaches of the obligations set out in the Act can lead to various consequences. While the Act does not explicitly outline specific offences, failure to comply with the determinations for National Health Reform payments or to provide accurate data could result in financial discrepancies and potential disputes. The Legislative Instruments Act 2003, however, notes that disallowance does not apply to this Determination (subsection 15A(2)). Non-compliance may also impact the effective delivery of healthcare services, potentially affecting the right to health as recognised under international human rights instruments. It is important for all parties to adhere to the provisions of the Act to ensure the smooth operation of federal financial relations and the delivery of healthcare services.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.