EXPLANATORY STATEMENT
Federal Financial Relations (National Partnership Payments) Determination No. 122 (7 July 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
The Federal Financial Relations (National Partnership Payments) Determination No. 122, made under section 16 of the Federal Financial Relations Act 2009 (FFR Act), was enacted on 7 July 2017. This determination was introduced to formalise the process of making National Partnership payments to the States, as committed to under the Intergovernmental Agreement on Federal Financial Relations (IGA). The Federal Financial Relations Act provides the legal framework for these payments, which are intended to support the States in delivering specified outputs, facilitating reforms, and rewarding jurisdictions that achieve nationally significant reforms. The determination was made by the Minister, who, according to the FFR Act, can be any Treasury portfolio Minister, and it was subject to extensive consultation with the States, as well as approval by the Council of Australian Governments on 29 November 2008. The determination outlines the process by which the Minister credits amounts to the COAG Reform Fund for National Partnership payments and ensures that these payments are made in a prescribed manner, as required under the IGA.
Scope and Application
The Federal Financial Relations (National Partnership Payments) Determination No. 122, made under section 16 of the Federal Financial Relations Act 2009, governs the provision of National Partnership payments from the Commonwealth to the States and Territories. These payments are part of the broader framework established by the Intergovernmental Agreement on Federal Financial Relations (IGA), aimed at facilitating collaboration on policy development and service delivery. The Act applies to all States and Territories in Australia, as it is designed to support their service delivery efforts and reward nationally significant reforms. Payments are made on a monthly basis, with an option for extraordinary payments if required. The determination ensures that the Commonwealth meets its obligations under the IGA by crediting amounts to the COAG Reform Fund for this purpose, which is then debited to make payments to the States. This legislation is integral to the financial support mechanism provided by the Commonwealth to assist in the execution of agreed-upon national reforms and projects across various policy areas. The determination is not subject to disallowance and came into effect on the day it was made.
Key Provisions
The main operative sections of the Federal Financial Relations (National Partnership Payments) Determination No. 122 (7 July 2017) are primarily concerned with the implementation of financial assistance to the States and Territories in the form of National Partnership payments, as outlined in section 16 of the Federal Financial Relations Act 2009 (FFR Act). The determination specifies the process by which amounts are credited to the COAG Reform Fund and subsequently debited to make payments to the States, ensuring ongoing financial support for service delivery and reform initiatives. The Commonwealth’s commitment under the Intergovernmental Agreement on Federal Financial Relations (IGA) is to provide these payments on a monthly basis, with additional extraordinary payments possible if necessary.
The obligations and requirements imposed by this determination on the parties it governs include the Commonwealth’s responsibility to credit specified amounts to the COAG Reform Fund for National Partnership payments and to ensure that these payments are made in accordance with the IGA. The Minister, who can be any Treasury portfolio Minister, must ensure that this process is followed as stipulated. Furthermore, the determination emphasises the importance of transparency and public accountability by making the IGA and individual National Partnership agreements publicly available on the Council for Federal Financial Relations website.
In terms of consequences for breach, the determination does not explicitly outline specific offences or penalties for non-compliance. However, the Commonwealth’s obligation to make National Partnership payments is a binding commitment under the IGA. Failure to meet this obligation could have significant political and financial implications for the Commonwealth, as it would be seen as a breach of the agreement reached with the States and Territories. Additionally, the determination’s exemption from the disallowance provisions of the Legislation Act 2003 ensures that the Minister can continue to meet this obligation without the risk of the determination being disallowed.