EXPLANATORY STATEMENT
Federal Financial Relations ACt 2009
Federal Financial Relations (National Partnership payments) Determination
No. 84 (September 2014)
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 jurisdictions that deliver on nationally significant reforms.
The federal financial framework commenced on 1 January 2009. The payment provisions of the IGA 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 IGA to make National Partnership payments in a prescribed manner. Exemption from the disallowance provisions allows 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 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. 84 (September 2014) is a legislative instrument that provides for the Minister to credit amounts to the Council of Australian Governments (COAG) Reform Fund to deliver financial assistance to the states in the form of National Partnership payments. The Federal Financial Relations Act 2009 provides the legal basis for these payments, which were introduced to support the delivery of specified outputs or projects, facilitate reforms, and reward jurisdictions that deliver on nationally significant reforms. The determination was made by the Minister and is not subject to disallowance as it is necessary to meet the obligation under the Intergovernmental Agreement on Federal Financial Relations (the IGA). The IGA, which was signed by all jurisdictions in December 2008, 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. The policy objective is to improve transparency by ensuring that the Minister's determinations in respect of National Partnership payments are legislative instruments and will be registered on the Federal Register of Legislative Instruments.
Scope and Application
The Federal Financial Relations (National Partnership payments) Determination No. 84, made under the Federal Financial Relations Act 2009, pertains to the provision of National Partnership payments to the states as a form of financial assistance. This determination applies to the Minister for Finance, who is tasked with crediting amounts to the COAG Reform Fund for this purpose. The payments are intended to support the delivery of specified outputs or projects, facilitate reforms, or reward jurisdictions that achieve nationally significant reforms. The COAG Reform Fund Act 2008 established the fund as a Special Account for the purposes of the Financial Management and Accountability Act 1997. This determination ensures that the Minister's decisions regarding National Partnership payments are legislative instruments and will be registered on the Federal Register of Legislative Instruments, although they will not be subject to disallowance. This exemption allows the Minister to meet their obligations under the Intergovernmental Agreement on Federal Financial Relations (IGA). The IGA was extensively consulted on with the states and signed by all jurisdictions in December 2008, and the determination commences on the day it was made.
Key Provisions
The Federal Financial Relations (National Partnership payments) Determination No. 84, made in September 2014 under the Federal Financial Relations Act 2009, establishes the framework for National Partnership payments. These payments are designed to support specified outputs or projects, facilitate reforms, or reward jurisdictions for nationally significant reforms. The determination mandates the Minister to credit amounts to the COAG Reform Fund for this purpose (section 9). This mechanism ensures that the payments are allocated transparently and in accordance with the Intergovernmental Agreement on Federal Financial Relations (IGA).
Under this determination, the Minister is obligated to make National Partnership payments in a prescribed manner, as stipulated by the IGA. The payments are intended to support specific initiatives and reforms agreed upon by the Commonwealth and the States. The Minister's determinations regarding these payments are legislative instruments and will be registered on the Federal Register of Legislative Instruments (section 5). Notably, these determinations are exempt from disallowance, ensuring that the Minister can fulfill the obligations set out in the IGA without legislative interference.
The obligations imposed by this Act on the parties involved include the requirement for extensive consultation with the States. The IGA, which underpins these payments, was developed through extensive consultation with all jurisdictions and was signed by all parties in December 2008. This collaborative approach is mirrored in the process for National Partnership payments, where all parties must sign the National Partnership agreement. This ensures that the payments align with the agreed-upon reforms and initiatives.
While the Act does not explicitly outline specific offences or penalties for non-compliance, the importance of adhering to the IGA and the obligations under the determination is paramount. Breaches of the IGA or failure to make the prescribed payments could potentially lead to disputes or legal actions between the Commonwealth and the States, although the Act itself does not detail maximum penalties. The determination and its compliance are critical to maintaining the collaborative framework established by the IGA, which is fundamental to effective federal financial relations in Australia.