Federal Financial Relations (National Partnership payments) Determination 2009 No. 7 (August)

Overview

The Federal Financial Relations Act 2009 was enacted to establish a new framework for federal financial relations in Australia, aiming to facilitate collaboration between the Commonwealth and the States in policy development and service delivery. This Act, along with the accompanying Federal Financial Relations (National Partnership payments) Determination 2009, was introduced to provide clarity and structure in the financial support provided to the States, including general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments. The policy objective behind these legislative measures is to ensure robust and transparent financial support to the States, fostering economic and social reforms in areas of national importance, as agreed under the Intergovernmental Agreement on Federal Financial Relations. The determinations made by the Minister under this Act are legislative instruments and are registered on the Federal Register of Legislative Instruments, with an exemption from disallowance to meet the Minister's obligation under the Intergovernmental Agreement.

Scope and Application

The Federal Financial Relations (National Partnership payments) Determination 2009 applies to the implementation of the National Partnership payments as outlined in the Intergovernmental Agreement on Federal Financial Relations. These payments are intended to support the delivery of specified outputs or projects, facilitate reforms, and reward jurisdictions that deliver on nationally significant reforms. The Act applies to the Commonwealth government, which is responsible for crediting amounts to the COAG Reform Fund for the purpose of providing financial assistance to the States in the form of National Partnership payments. The COAG Reform Fund was established by the COAG Reform Fund Act 2008 and is a Special Account for the purposes of the Financial Management and Accountability Act 1997. The Minister’s determinations in respect of National Partnership payments are legislative instruments and will be registered on the Federal Register of Legislative Instruments, but will not be disallowable. This means that the Minister has an obligation under the Intergovernmental Agreement to make National Partnership payments in a prescribed manner, and exemption from the disallowance provisions will allow the Minister to meet this obligation. The geographic or jurisdictional reach of the Act is national, as it applies to all States and territories in Australia. There are no stated exclusions or exemptions, and the Act extends its application through subordinate instruments such as the Intergovernmental Agreement on Federal Financial Relations and the COAG Reform Fund Act 2008.

Key Provisions

The Federal Financial Relations (National Partnership Payments) Determination 2009 outlines the framework for National Partnership payments under the Federal Financial Relations Act 2009. Section 9(1) of the Act mandates the Minister to credit amounts to the COAG Reform Fund for the provision of financial assistance to states in the form of National Partnership payments. These payments are intended to support the delivery of specified outputs or projects, facilitate reforms, or reward jurisdictions that deliver on nationally significant reforms. The obligations imposed on the Minister and the states under this Determination are significant. The Minister has a statutory duty under the Intergovernmental Agreement to make National Partnership payments in a prescribed manner (section 9(1) of the Act). This obligation is facilitated by exempting the Minister's determinations from disallowance provisions, ensuring the Minister can meet this commitment without legislative hurdles. The states, on the other hand, must use the National Partnership payments for the specific purposes outlined in the agreements with the Commonwealth, ensuring the funds are directed towards agreed-upon reforms and projects. Failure to comply with the provisions of the Determination can result in various consequences. While the Determination itself does not explicitly outline specific penalties for non-compliance, breaches of the underlying Intergovernmental Agreement on Federal Financial Relations could lead to legal and financial repercussions. Typically, breaches of such agreements might involve the Commonwealth withholding further payments or taking other corrective actions as deemed necessary to enforce the terms of the agreement. Additionally, under the Financial Management and Accountability Act 1997, mismanagement of funds from the COAG Reform Fund could result in civil or criminal penalties, reflecting the seriousness with which financial accountability is treated in this context.