EXPLANATORY STATEMENT
Issued by authority of the Treasurer/Assistant Treasurer/Minister for Financial Services and SuperannuationFederal Financial Relations ACt 2009
Federal Financial Relations (National Partnership payments) Determination
No. 102 (January 2016)
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 on‑going financial support for the States’ service delivery efforts through:
• general purpose financial assistance, including the on‑going provision of GST payments, to be used by the States for any purpose;
• National Specific Purpose Payments (National SPPs) to be spent in the key service delivery sectors; and
• National Partnership payments to support the delivery of specified outputs or projects, to facilitate reforms or to reward jurisdictions that deliver on nationally significant reforms.
The federal financial framework commenced on 1 January 2009. The payment provisions of the IGA are implemented through the Federal Financial Relations Act 2009.
National Partnership payments
The Federal Financial Relations Act 2009 provides for the Minister to credit 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 Act 2008 established the COAG Reform Fund and specifies that it is a Special Account for the purposes of the Financial Management and Accountability Act 1997.
To improve transparency, 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 clarifies that determinations made by the Minister under subsection 9(1) would not otherwise be legislative instruments within the meaning of section 5 of the Legislative Instruments Act 2003.
• The Minister has an obligation under the IGA to make National Partnership payments in a prescribed manner. Exemption from the disallowance provisions allows the Minister to meet this obligation.
Consultation
The IGA was subject to extensive consultation with the States and was signed by all jurisdictions in December 2008. The IGA is publicly available on the Council for Federal Financial Relations website. There is also extensive consultation with the States on National Partnership payments as they are also required to sign relevant National Partnership agreements.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
It is difficult to assess the human rights compatibility of either the determination or the making of National Partnership payments as the amounts paid to each state vary each month, since individual States meet varying milestones and benchmarks under different National Partnership Agreements. However, in general, National Partnership Agreements will promote multiple human rights by facilitating the provision of additional funding to the States to support service delivery in a range of areas. As such, neither this determination nor the making of National Partnership payments could be said to have a detrimental impact on any human rights.
Commencement
The determination commences on the day it was made.
Overview
The Federal Financial Relations Act 2009 was enacted to implement the intergovernmental agreement on federal financial relations and establish a framework for the ongoing financial support of states' service delivery efforts. This includes the provision of general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments, which support specified outputs, facilitate reforms, or reward jurisdictions delivering nationally significant reforms. The Act was passed by the Australian Parliament and its policy objective is to enhance collaboration on policy development and service delivery between the Commonwealth and the states. The Federal Financial Relations (National Partnership payments) Determination No. 102, made in January 2016, outlines the process for making National Partnership payments, which are legislative instruments registered on the Federal Register of Legislative Instruments but are exempt from disallowance to ensure the Minister can meet their obligations under the Intergovernmental Agreement. This determination is also not subject to disallowance, allowing for the necessary flexibility in payments to states based on their achievements under National Partnership Agreements.
Scope and Application
The Federal Financial Relations (National Partnership payments) Determination No. 102 applies to the Minister for Financial Services and Superannuation in relation to the provision of financial assistance to the States in the form of National Partnership payments as stipulated under the Federal Financial Relations Act 2009. These payments are intended to support the delivery of specified outputs or projects, facilitate reforms, or reward jurisdictions that implement nationally significant reforms. The Act applies across the Commonwealth of Australia, as it is a national framework designed to improve collaboration on policy development and service delivery among federal, state, and territory governments. The payments are tailored to the individual needs and achievements of each state under the relevant National Partnership Agreements. The Act does not extend to disallowance, which allows the Minister to meet the obligations under the Intergovernmental Agreement on Federal Financial Relations without legislative hindrance. While the specific human rights compatibility of each payment varies due to the differing conditions and achievements of each state, the overall framework of the National Partnership payments is intended to support the provision of additional funding to the States, thereby promoting multiple human rights through enhanced service delivery.
Key Provisions
The Federal Financial Relations Act 2009 (sections 9 and 10) establishes the framework for National Partnership payments, which are intended to provide financial support to the states for specific outputs, projects, reforms, or as an incentive for nationally significant reforms. These payments are credited to the COAG Reform Fund, a Special Account as per the COAG Reform Fund Act 2008, and the Financial Management and Accountability Act 1997. Determinations made by the Minister regarding these payments are legislative instruments registered on the Federal Register of Legislative Instruments, but they are exempt from disallowance provisions to ensure compliance with the Intergovernmental Agreement on Federal Financial Relations (IGA). This legislative arrangement aims to maintain transparency and accountability in the allocation of federal funds for state-level initiatives.
The obligations under the Federal Financial Relations Act 2009 include the Minister's duty to credit amounts to the COAG Reform Fund for National Partnership payments as stipulated in the IGA. This obligation is underpinned by extensive consultation with the states, which have signed the IGA and relevant National Partnership agreements. The IGA and its subsequent agreements are publicly available, ensuring transparency and stakeholder engagement. Furthermore, the Minister must adhere to the prescribed manner of making these payments, which reflects the commitments made under the IGA. These obligations are designed to ensure that federal funding is appropriately directed to support state-level service delivery and reforms.
Breaches of the provisions outlined in the Federal Financial Relations Act 2009 may lead to various consequences. While specific offences, penalties, or civil/criminal consequences for breaches are not detailed in the provided text, the legislative framework underscores the importance of adhering to the agreed-upon terms. Non-compliance could potentially undermine the integrity of the federal financial relations and the intended objectives of the National Partnership payments. Given the nature of the Act and its alignment with the IGA, any significant deviations from the prescribed processes or obligations could be subject to scrutiny and corrective measures, though the exact penalties are not specified in the text. The Act's focus on transparency and accountability suggests that there are mechanisms in place to address and mitigate any breaches to ensure the continued effectiveness of the federal financial support system.