EXPLANATORY STATEMENT
Federal Financial Relations ACt 2009
Federal Financial Relations (National Partnership payments) Determination
No. 67 (August 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. 67 (August 2013) is a legislative instrument established under the Federal Financial Relations Act 2009. This Act was enacted in 2009 to provide a new framework for federal financial relations in Australia, aiming to support state service delivery efforts through various forms of financial assistance. The determination, introduced to enhance transparency and accountability in the disbursement of National Partnership payments, allows the Minister to credit amounts to the COAG Reform Fund for this purpose. Notably, these determinations are legislative instruments that are registered on the Federal Register of Legislative Instruments but are exempt from disallowance, ensuring the Minister can meet obligations under the Intergovernmental Agreement. The determination aims to facilitate better collaboration between the federal government and the states in implementing economic and social reforms.
Scope and Application
The Federal Financial Relations (National Partnership payments) Determination No. 67, which came into effect in August 2013, provides specific implementation details for National Partnership payments as outlined in the Federal Financial Relations Act 2009. This legislation applies to all Australian states and territories, facilitating collaboration and financial support for service delivery efforts in areas of national importance. The Act allows the Minister to credit the COAG Reform Fund to provide financial assistance to the states in the form of National Partnership payments. These payments are designed to support the delivery of specified outputs or projects, facilitate reforms, or reward jurisdictions that deliver on nationally significant reforms. The Act extends its application through subordinate instruments, which are registered on the Federal Register of Legislative Instruments but are not subject to disallowance. This ensures that the Minister can fulfill the obligation to make National Partnership payments in a prescribed manner as per the Intergovernmental Agreement.
Key Provisions
The Federal Financial Relations (National Partnership Payments) Determination No. 67 (August 2013) provides a legislative framework for the National Partnership payments under the Federal Financial Relations Act 2009 (section 9). The Minister is authorised 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 (section 9(1)). This mechanism is designed to support the delivery of specified outputs or projects, facilitate reforms, or reward jurisdictions that deliver on nationally significant reforms. The payments are part of the broader federal financial relations framework established by the Intergovernmental Agreement on Federal Financial Relations (IGA).
The obligations imposed by this Act on the parties involved include adherence to the prescribed manner of making National Partnership payments, as outlined in the IGA. The Minister is mandated to make these payments in accordance with the terms agreed upon by all jurisdictions (section 9). Additionally, the requirement for extensive consultation with the States, as mandated by the IGA, ensures that all parties are involved in the agreement and signing of the National Partnership agreement. This ensures that the payments are made transparently and in line with the agreed-upon reforms and projects.
Failure to comply with the requirements of the Federal Financial Relations Act 2009 may lead to civil or criminal consequences. While the determinations are exempt from disallowance provisions, any failure to make the National Partnership payments as required by the IGA could result in legal action or other penalties as stipulated in the broader legislative framework. However, the specific penalties for non-compliance are not detailed in the explanatory statement, and would need to be referred to in the primary legislation or associated regulations. The determination itself highlights the importance of adhering to the agreed-upon processes and obligations to ensure the effective implementation of the federal financial relations framework.