EXPLANATORY STATEMENT
Federal Financial Relations ACt 2009
Federal Financial Relations (National Partnership payments) Determination
No. 65 (June 2013)
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 those jurisdictions that deliver on nationally significant reforms.
The new federal financial framework commenced on 1 January 2009. The payment provisions of the Intergovernmental Agreement 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 Intergovernmental Agreement to make National Partnership payments in a prescribed manner. Exemption from the disallowance provisions will allow 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 Ministerial Council for Federal Financial Relations website. There is also extensive consultation with the States on National Partnership payments as all parties are required to sign the National Partnership agreement.
Commencement
The determination commences on the day it was made.
Overview
The Federal Financial Relations (National Partnership payments) Determination No. 65 (June 2013) was enacted under the Federal Financial Relations Act 2009 to provide a framework for the distribution of National Partnership payments from the Commonwealth to the states. This legislation was introduced to address the need for a structured and transparent method of delivering financial support to states for specified outputs or projects, reforms, or achievements in nationally significant reforms. The determinations made by the Minister under this Act are legislative instruments and are registered on the Federal Register of Legislative Instruments, though they are exempt from disallowance provisions to ensure the Minister can meet the obligations outlined in the Intergovernmental Agreement on Federal Financial Relations. The framework established by this Act aims to enhance transparency and collaboration in federal financial relations, facilitating the implementation of economic and social reforms across Australia.
Scope and Application
The Federal Financial Relations (National Partnership payments) Determination No. 65 applies to the Minister for Finance in relation to the implementation of National Partnership payments under the Federal Financial Relations Act 2009. It provides for the crediting of amounts to the COAG Reform Fund for the purpose of providing financial assistance to the states in the form of National Partnership payments, which are intended to support the delivery of specified outputs or projects, facilitate reforms, or reward jurisdictions that deliver on nationally significant reforms. The determination applies nationally across Australia, as it is a Commonwealth instrument that governs the financial relationship between the federal government and the states. The Act extends its application through subordinate instruments such as the determinations made by the Minister, which are legislative instruments registered on the Federal Register of Legislative Instruments but are not subject to disallowance. This allows the Minister to meet the obligation to make National Partnership payments in a prescribed manner under the Intergovernmental Agreement on Federal Financial Relations.
Key Provisions
The Federal Financial Relations (National Partnership Payments) Determination No. 65 outlines the key provisions for the provision of National Partnership payments under the Federal Financial Relations Act 2009. This legislation establishes the framework for the Commonwealth to provide financial assistance to the states for specified purposes, particularly through National Partnership payments (section 9(1)). The payments are intended to support the delivery of specific outputs or projects, facilitate reforms, or reward jurisdictions that implement nationally significant reforms.
The determination requires the Minister to credit amounts to the COAG Reform Fund to facilitate these payments. The COAG Reform Fund Act 2008 specifies that the COAG Reform Fund is a Special Account under the Financial Management and Accountability Act 1997 (section 3). This setup ensures that the funds are managed with appropriate accountability and transparency. To further enhance transparency, the Minister’s determinations regarding National Partnership payments are legislative instruments and will be registered on the Federal Register of Legislative Instruments. Importantly, these determinations are not subject to disallowance, ensuring that the Minister can meet the obligations under the Intergovernmental Agreement (IGA) without procedural hindrances (section 5 of the Legislative Instruments Act 2003).
The obligations imposed by this determination primarily concern the Commonwealth Minister, who must make National Partnership payments in a prescribed manner as outlined in the IGA. This obligation ensures that the financial support is provided as agreed upon in the Intergovernmental Agreement on Federal Financial Relations, which was extensively consulted on and signed by all jurisdictions in December 2008. The IGA is publicly available, and the National Partnership agreement also requires the involvement and agreement of all parties, thereby ensuring a collaborative approach to federal financial relations.
There are no specific offences or penalties mentioned within the text of the determination itself. However, breaches of the IGA or failure to comply with the obligations under the Federal Financial Relations Act 2009 could potentially lead to legal consequences. These could include disputes or actions taken by the affected states under the broader legislative framework. The focus of this determination is on the procedural aspects of making National Partnership payments and ensuring they are in line with the agreed terms, rather than detailing specific penalties for non-compliance.