EXPLANATORY STATEMENT

Issued by authority of the Assistant Minister for Competition, Charities and Treasury

Federal Financial Relations Act 2009

Federal Financial Relations (National Health Reform Payments for 2021-22) Determination 2022

Section 15A of the Federal Financial Relations Act 2009 (the Act) provides that the Minister may determine that an amount specified in the determination is to be paid to a State, the Australian Capital Territory or the Northern Territory as specified in the determination for the purpose of making a grant of financial assistances for the purpose of expenditure in accordance with the National Health Reform Agreement. 

The purpose of the Federal Financial Relations (National Health Reform Payments for 2021-22) Determination 2022 (the Determination) is to specify amounts to be paid to each State, the Australian Capital Territory and Northern Territory for the 2021-22 financial year.

Under the Intergovernmental Agreement on Federal Financial Relations (the IGA) and the Act, the Commonwealth provides national health reform payments to the States, the Australian Capital Territory and the Northern Territory, as a financial contribution to support state service delivery in the area of healthcare, particularly public hospitals. The details of the funding arrangements are set out in the National Health Reform Agreement.

Under the National Partnership on COVID-19 Response, the Commonwealth agreed to provide financial assistance for the additional costs incurred by each State, the Australian Capital Territory and Northern Territory health service in responding to the COVID-19 outbreak in 2019-20, 2020-21, 2021-22 and first half of 2022-23. The National Partnership on COVID‑19 Response amends the National Health Reform Agreement so that the additional funding can be paid into the National Health Funding Pool.

Advance payments in respect of national health reform are made throughout the financial year based on estimates of each jurisdiction’s anticipated entitlement for that year. In accordance with the National Health Reform Agreement, any adjustment between the advances paid to a jurisdiction and the jurisdiction’s determined entitlement will be spread equally across payments for a subsequent quarter, or appropriate period where the Administrator deems necessary.

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 in respect of 2021-22 into each State Pool Account of the National Health Funding Pool under the National Health Reform Agreement. The Minister has accepted the Administrator’s advice in making the Determination.

Details of the amounts to be paid to each State, the Australian Capital Territory and Northern Territory for the 2021-22 financial year are outlined in Table 1 in Attachment C. The amounts include:

•                 the Commonwealth’s share of funding for public hospital services under the National Health Reform Agreement which is calculated on an activity basis;

•                 additional amounts applicable to ensure the amount paid to each State, the Australian Capital Territory and Northern Territory meet the minimum amount guaranteed by the Commonwealth;

•                 hospital services payments provided to support public hospitals in testing and treating confirmed and suspected COVID-19 patients;

•                 State public health payments to support additional public health activities in responding to the pandemic and stopping the spread of the disease; and

•                 private hospital financial viability payments that enabled critical health resources from the private hospital sector to be integrated and available to the public hospital sector for the period.

For the 2021-22 financial year, the Commonwealth provided each State, the Australian Capital Territory and the Northern Territory with a minimum funding guarantee for funding related to the National Health Reform Agreement and the hospital services payment component of the National Partnership on COVID-19 Response. Where a State, the Australian Capital Territory or the Northern Territory is eligible for the guarantee, the base amount for calculating that jurisdiction’s entitlement for 2022-23 will be the guaranteed minimum funding amount (see Table 2 in Attachment C).

The IGA and the National Health Reform Agreement (as amended by the National Partnership on COVID‑19 Response) were subject to extensive consultation with the States and Territories and were signed by all jurisdictions. Both agreements are publicly available on the Federal Financial Relations website. Consultation with the States and Territories on national health reform funding also occurs regularly, through the Administrator’s Jurisdictional Advisory Committee meetings.

Details of the Determination are set out in Attachment A.

The Determination is a legislative instrument for the purposes of the Legislation Act 2003. In accordance with subsections 44(1) and 54(1) of the Legislation Act 2003, the Determination is not subject to disallowance or sunsetting under the Act and the Legislation Act 2003 on the grounds that the instrument is part of an intergovernmental scheme and gives effect to agreements between the Commonwealth and each of the States, the Australian Capital Territory and the Northern Territory. The instrument’s operation is effectively mechanical in that it simply details financial assistance to be provided to a State or Territory based on that State or Territory having satisfied the necessary agreed criteria.

A Policy Impact Analysis is not required as the Determination is machinery in nature.

The Determination commenced on the day after it was registered on the Federal Register of Legislation.

A statement of Compatibility with Human Rights is at Attachment B.

ATTACHMENT A

Details of the Federal Financial Relations (National Health Reform Payments for 2021-22) Determination 2022

This Attachment sets out further details of the Federal Financial Relations (National Health Reform Payments for 2021-22) Determination 2022.

Section 1 – Name of the instrument

This section provides that the name of the instrument is the Federal Financial Relations (National Health Reform Payments for 2021-22) Determination 2022 (the Determination).

Section 2 – Commencement

This section provides that the Determination commences on the day after it is registered on the Federal Register of Legislation.

Section 3 – Authority

This section provides that the Determination is made under the Federal Financial Relations Act 2009.

Section 4 – Definitions

This section provides definitions for the purposes of the Determination.

Section 5 – National health reform payments for the 2021-22 financial year

This section sets out the amounts required to be paid by the Commonwealth in respect of the 2021-22 financial year into each State Pool Account of the National Health Funding Pool under the National Health Reform Agreement (as amended by the National Partnership on COVID-19 Response).

Details of the amounts to be paid to each State, the Australian Capital Territory and Northern Territory for the 2021-22 financial year are outlined in Table 1 in Attachment C. The amounts include:

•                 the Commonwealth’s share of funding for public hospital services under the National Health Reform Agreement which is calculated on an activity basis;

•                 additional amounts applicable to ensure the amount paid to each State, the Australian Capital Territory and Northern Territory meet the minimum amount guaranteed by the Commonwealth;

•                 hospital services payments provided to support public hospitals in testing and treating confirmed and suspected COVID-19 patients;

•                 State public health payments to support additional public health activities in responding to the pandemic and stopping the spread of the disease; and

•                 private hospital financial viability payments that enabled critical health resources from the private hospital sector to be integrated and available to the public hospital sector for the period.

The Administrator of the National Health Funding Pool (Administrator) has calculated and advised the amounts required to be paid to each State, the Australian Capital Territory and the Northern Territory, in accordance with paragraph 238(1)(a) of the National Health Reform Act 2011. The Minister has accepted the Administrator’s advice in making the Determination.

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Federal Financial Relations (National Health Reform Payments for 2021-22) Determination 2022

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

The purpose of the Federal Financial Relations (National Health Reform Payments for 2021-22) Determination 2022 is to specify the amount to be paid to each State, the Australian Capital Territory and the Northern Territory for the 2021-22 financial year.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

ATTACHMENT C

Table 1: Details of the amounts to be paid to each State, the Australian Capital Territory and Northern Territory for the 2021-22 financial year

Table 2: Base funding amounts for each State, the Australian Capital Territory and Northern Territory for 2022-23 funding calculation purposes