Federal Financial Relations (National Partnership payments) Determination No. 100 (November 2015)

Overview

The Federal Financial Relations Act 2009, enacted by the Australian Parliament, was introduced to establish a framework for federal financial relations, ensuring robust collaboration between the Commonwealth and the States. This legislation addresses the need for ongoing financial support to the States for service delivery, economic and social reforms, and specific purpose payments. It operationalises the Intergovernmental Agreement on Federal Financial Relations (IGA) signed in December 2008, which facilitates the provision of financial assistance to the States in the form of National Specific Purpose Payments and National Partnership payments. These payments are aimed at supporting key service delivery sectors and specified outputs or projects, as well as facilitating reforms. The Act ensures that determinations regarding National Partnership payments, which are critical for meeting the obligations under the IGA, are exempt from disallowance provisions, allowing the Minister to fulfill these obligations effectively. Extensive consultation with the States was conducted during the formulation of the IGA and National Partnership agreements, ensuring a collaborative approach to federal financial relations.

Scope and Application

The Federal Financial Relations (National Partnership payments) Determination No. 100, 2015, applies to the Minister for Financial Services and Superannuation under the Federal Financial Relations Act 2009, who is responsible for crediting amounts to the COAG Reform Fund for National Partnership payments. This Act, which is a legislative instrument, is designed to facilitate ongoing financial support for state governments' service delivery efforts as part of the Intergovernmental Agreement on Federal Financial Relations (IGA). The National Partnership payments are intended to support specified outputs or projects, facilitate reforms, or reward jurisdictions for delivering nationally significant reforms. The Act's jurisdiction extends to the Commonwealth and the states, as it concerns payments under the IGA, which was signed by all jurisdictions in December 2008. The determination is not subject to disallowance, ensuring that the Minister can continue to meet obligations under the IGA. The legislation does not specify any exclusions or exemptions, but it does allow for flexibility in the application of National Partnership payments through subordinate instruments as individual states meet varying milestones and benchmarks under different National Partnership Agreements.

Key Provisions

The Federal Financial Relations Act 2009, under section 9, allows the Minister for Financial Services and Superannuation to credit amounts to the COAG Reform Fund to provide financial assistance to the States in the form of National Partnership payments. This mechanism is designed to support the delivery of specified outputs, projects, reforms, or to reward jurisdictions that deliver on nationally significant reforms. The COAG Reform Fund Act 2008 specifies that the COAG Reform Fund is a Special Account for the purposes of the Financial Management and Accountability Act 1997, ensuring that the fund is managed with appropriate financial oversight and accountability. The Act imposes certain obligations on the Minister in making these payments. Firstly, the Minister must adhere to the terms set out in the Intergovernmental Agreement on Federal Financial Relations (IGA), which was agreed upon and signed by all jurisdictions in December 2008. This includes making National Partnership payments in a prescribed manner, as outlined by the IGA. Additionally, the Minister's determinations regarding these payments are legislative instruments and must be registered on the Federal Register of Legislative Instruments. Importantly, these determinations are exempt from the disallowance provisions, allowing the Minister to meet the obligation of making payments without the risk of the determinations being disallowed by Parliament. Failure to comply with the requirements of the Act could lead to significant consequences. Although the Act itself does not explicitly state penalties for non-compliance, the broader legislative framework, including the Financial Management and Accountability Act 1997, may impose administrative or disciplinary measures for breaches of financial management standards. Furthermore, if the payments are not made in accordance with the IGA, this could lead to disputes and potential legal actions between the Commonwealth and the States, although the Act does not specify penalties for such breaches. The human rights compatibility of the payments is generally positive as they support service delivery in various areas, thereby promoting multiple human rights. The determination, which provides the operational details for the National Partnership payments, comes into effect on the day it was made. This ensures that the payments can be processed promptly, in line with the obligations under the IGA. The transparency and accountability of these payments are enhanced by the requirement for the Minister’s determinations to be registered on the Federal Register of Legislative Instruments, allowing for public scrutiny and ensuring that the payments are made in accordance with the agreed terms.