Overview

The Federal Financial Relations Act 2009 was enacted to provide a legislative foundation for the ongoing financial support to the states and territories from the Commonwealth, as part of the broader framework established by the Intergovernmental Agreement on Federal Financial Relations. This Act was introduced to address the need for a structured and consistent approach to the financial support provided by the Commonwealth to the states and territories, ensuring that it aligns with national priorities and reforms. The Federal Financial Relations (National Partnership payments) Determination No. 118, made by the Treasurer under section 16 of the Federal Financial Relations Act 2009, outlines the manner in which these National Partnership payments are to be made. The policy objective underpinning this determination is to facilitate collaborative policy development and service delivery between the Commonwealth and the states and territories, ensuring that financial assistance is provided in a timely and consistent manner to support agreed outputs, projects, reforms, and to reward jurisdictions that achieve nationally significant reforms.

Scope and Application

The Federal Financial Relations (National Partnership payments) Determination No. 118 (April 2017) applies to the Assistant Minister to the Treasurer, who 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 determination ensures that the Commonwealth meets its obligation under the Intergovernmental Agreement on Federal Financial Relations to make these payments in a prescribed manner. The payments are made to support the delivery of specified outputs or projects, facilitate reforms, and reward jurisdictions that deliver on nationally significant reforms. The geographic and jurisdictional reach of this Act is national, as it applies to all states and territories within Australia. The determination is not subject to disallowance and is registered on the Federal Register of Legislation. There are no stated exclusions, exemptions, or thresholds within the determination itself, though the actual payments may vary depending on individual States meeting milestones and benchmarks under different National Partnership agreements. The application of this Act may be extended or restricted through subordinate instruments, as the determination is subject to the provisions of the Federal Financial Relations Act 2009 and the COAG Reform Fund Act 2008.

Key Provisions

The Federal Financial Relations (National Partnership payments) Determination No. 118, made under section 16 of the Federal Financial Relations Act 2009 (FFR Act), sets out the provisions for making National Partnership payments. These payments, as stipulated in the Intergovernmental Agreement on Federal Financial Relations (IGA), are to be made on the 7th of each month or the first business day thereafter (section 1(2)). The IGA facilitates collaboration between the Commonwealth and the States on policy development and service delivery, with the Commonwealth committed to providing ongoing financial support in the form of National Partnership payments. These payments support the delivery of specified outputs or projects, facilitate reforms, and reward jurisdictions that deliver nationally significant reforms. Extraordinary payments can also be made if necessary (section 1(1)(a)). Under this Determination, the Minister (currently the Assistant Minister to the Treasurer) credits amounts to the COAG Reform Fund to provide financial assistance to the States in the form of National Partnership payments (section 1(3)). These amounts are debited from the COAG Reform Fund to make the grants to the States. The COAG Reform Fund is established by the COAG Reform Fund Act 2008 and serves as a special account for the purposes of the Public Governance, Performance and Accountability Act 2013. The Minister’s determinations regarding National Partnership payments are legislative instruments and are registered on the Federal Register of Legislation. However, they are exempt from the disallowance provisions of the Legislation Act 2003, ensuring that the Commonwealth’s obligation under the IGA to make these payments is met. While it is challenging to assess the human rights compatibility of the Determination or the making of National Partnership payments in general, the determination suggests that these payments support multiple human rights by funding service delivery across various policy areas. As individual States meet milestones and benchmarks under different National Partnership agreements, the amounts paid to each State vary each month. Consequently, neither the Determination nor the making of National Partnership payments could be said to have a detrimental impact on any human right. This is in accordance with the Statement of Compatibility with Human Rights prepared under the Human Rights (Parliamentary Scrutiny) Act 2011. The IGA and individual National Partnership agreements are publicly available on the Council for Federal Financial Relations website, reflecting the extensive consultation with the States that the IGA underwent and was agreed upon by the Council of Australian Governments on 29 November 2008. The Determination commenced on the day it was made, ensuring that the provisions for making National Partnership payments are in effect from that date. The Commonwealth’s obligation to provide financial assistance to the States in the form of National Partnership payments is thus legally binding and operational from the commencement date of the Determination. This arrangement underscores the commitment of the Commonwealth to support the States in delivering essential services and reforms, as outlined in the IGA.