EXPLANATORY STATEMENT
Federal Financial Relations (National Partnership payments) Determination No. No. 119 (May, 2017)
This determination is made under section 16 of the Federal Financial Relations Act 2009 (FFR Act).
Background
The Intergovernmental Agreement on Federal Financial Relations (the IGA) provides a foundation for collaboration on policy development and service delivery between the Commonwealth and the States and Territories (the States).
When developing this framework, the Commonwealth committed to the provision of on‑going financial support for the States’ service delivery efforts. This includes the provision of National Partnership payments to support the delivery of specified outputs or projects, to facilitate reforms, and to reward jurisdictions that deliver on nationally significant reforms. Under the IGA, National Partnership payments are made on the 7th of each month, or the first business day thereafter. Extraordinary payments can be made if necessary.
The IGA’s payment provisions in respect of National Partnerships are implemented by way of a determination by the Treasurer under section 16 of the FFR Act.
National Partnership payments
The FFR Act (s 16) provides that the Minister (who can be any Treasury portfolio Minister) may credit amounts to the COAG Reform Fund for the purpose of providing financial assistance to the States in the form of National Partnership payments. Once the amounts are credited to the COAG Reform Fund they are debited from the fund to make the payments to the States.
The COAG Reform Fund Act 2008 establishes the COAG Reform Fund and provides that it is a special account for the purposes of the Public Governance, Performance and Accountability Act 2013.
The Treasurer’s determinations in respect of National Partnership payments are legislative instruments and are registered on the Federal Register of Legislation, but are not disallowable. The Commonwealth has an obligation under the IGA to make National Partnership payments in a prescribed manner. Exemption from the disallowance provisions of the Legislation Act 2003 allows the Minister to ensure that this obligation is met.
Consultation
The IGA was subject to extensive consultation with the States and was agreed by the Council of Australian Governments on 29 November 2008. The IGA and individual National Partnership agreements are publicly available on the Council for Federal Financial Relations website.
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 more generally. The amounts paid to each State vary each month as individual States meet milestones and benchmarks under different National Partnership agreements. However, in general, National Partnership payments support multiple human rights by funding service delivery in a wide range of policy areas. Consequently, neither this determination nor the making of National Partnership payments more generally could be said to have a detrimental impact on any human right.
Commencement
The determination commenced on the day it was made.
Overview
Federal Financial Relations (National Partnership payments) Determination No. 119, enacted in May 2017, is a legislative instrument made under section 16 of the Federal Financial Relations Act 2009 (FFR Act). This determination is crucial in implementing the Intergovernmental Agreement on Federal Financial Relations (IGA), which was established to foster collaboration between the Commonwealth and the States and Territories in policy development and service delivery. The primary problem it addresses is ensuring the timely and effective provision of National Partnership payments to support the States in delivering specified outputs, facilitating reforms, and rewarding jurisdictions that achieve nationally significant reforms. This determination is made by the Minister, who can be any Treasury portfolio Minister, and is not subject to disallowance as per the Legislation Act 2003. The objective is to meet the Commonwealth's obligation under the IGA to make these payments in a prescribed manner, thereby supporting service delivery across various policy areas and indirectly contributing to multiple human rights.
Scope and Application
The Federal Financial Relations (National Partnership payments) Determination No. 119, made under section 16 of the Federal Financial Relations Act 2009, applies to the provision of National Partnership payments from the Commonwealth to the States and Territories, aimed at supporting specified outputs or projects, facilitating reforms, and rewarding jurisdictions that deliver on nationally significant reforms. This determination outlines the mechanism through which the Commonwealth fulfills its commitment under the Intergovernmental Agreement on Federal Financial Relations (IGA) to provide ongoing financial support for the States' service delivery efforts. The payments are made on the 7th of each month, or the first business day thereafter, and can include extraordinary payments if necessary. The determination is legislative in nature and is registered on the Federal Register of Legislation, although it is exempt from disallowance provisions, ensuring that the Commonwealth's obligation under the IGA is met. The scope of the determination is national, extending to all States and Territories of Australia. The determination is not subject to disallowance, facilitating the consistent and timely provision of financial support in line with the IGA.
Key Provisions
The main operative sections of this determination are sections 1 and 2. Section 1 sets out the terms and conditions under which National Partnership payments will be made, while Section 2 specifies the manner in which these payments are to be implemented, debited from the COAG Reform Fund, and the obligation of the Commonwealth to adhere to these provisions as stipulated under the Intergovernmental Agreement on Federal Financial Relations (IGA). These sections are critical as they establish the framework for financial assistance to the States through National Partnership payments, ensuring that the payments are made in a consistent and transparent manner in line with the IGA.
The obligations imposed by this determination on the parties involved primarily focus on the Commonwealth's responsibility to credit the COAG Reform Fund with the necessary amounts for National Partnership payments (Section 1). Once these amounts are credited, the Commonwealth must ensure that they are appropriately debited from the fund and transferred to the States in accordance with the agreed payment schedule (Section 2). This obligation is rooted in the commitment under the IGA, which mandates the Commonwealth to provide ongoing financial support to the States. The determination also emphasises the importance of transparency and public accountability by ensuring that the IGA and related agreements are publicly available for scrutiny.
There are no explicit offences, penalties, or consequences outlined in this determination for breach of its provisions. However, the importance of adhering to the terms and conditions set out in the determination cannot be understated. Non-compliance with the IGA's payment provisions could potentially lead to broader legal and political repercussions, given the intergovernmental nature of the agreement. The determination’s exemption from disallowance under the Legislation Act 2003 underscores the importance of these payments and the need for the Commonwealth to meet its obligations as stipulated. While specific penalties are not detailed in this determination, any failure to adhere to the IGA could result in significant interstate financial and policy disputes, thereby impacting the delivery of services and reforms across Australia.