Federal Financial Relations (National Partnership payments) Determination No. 91 (April 2015)

Overview

The Federal Financial Relations Act 2009, enacted to provide a structured approach to financial interactions between the Commonwealth and the States, addresses the need for ongoing financial support to the States for service delivery and reform efforts. This Act was introduced to facilitate the implementation of economic and social reforms in areas of national importance, as agreed under the Intergovernmental Agreement on Federal Financial Relations (IGA). The Act allows for the provision of National Partnership payments, which are designed to support the delivery of specified outputs or projects, facilitate reforms, or reward jurisdictions that deliver on nationally significant reforms. These payments are managed through the COAG Reform Fund, established under the COAG Reform Fund Act 2008. To ensure transparency and efficiency, determinations regarding these payments made by the Minister are legislative instruments that will be registered on the Federal Register of Legislative Instruments, though they are exempt from disallowance provisions to enable the Minister to fulfil the obligations under the IGA. The enactment of this Act and the accompanying determinations were the result of extensive consultation with the States and were signed by all jurisdictions in December 2008.

Scope and Application

The Federal Financial Relations (National Partnership payments) Determination No. 9 (April 2015) applies to the financial arrangements between the Commonwealth and the states as outlined in the Intergovernmental Agreement on Federal Financial Relations (IGA). This legislation applies to the Commonwealth government and the various state and territory governments, focusing on the provision of financial assistance in the form of National Partnership payments. These payments are intended to support the delivery of specified outputs or projects, facilitate reforms, or reward jurisdictions that implement nationally significant reforms. The geographic reach of this Act is national, impacting all states and territories within Australia. The Act does not extend or restrict its application through subordinate instruments. It is worth noting that the Minister’s determinations regarding National Partnership payments, which are legislative instruments, will be registered on the Federal Register of Legislative Instruments but will not be disallowable. This is to ensure the Minister can meet the obligations under the IGA to make National Partnership payments in a prescribed manner. The IGA and the National Partnership agreements are subject to extensive consultation with the states, and the IGA is publicly available on the Council for Federal Financial Relations website.

Key Provisions

The main operative sections of the Federal Financial Relations (National Partnership Payments) Determination No. 9 (April 2015) pertain to the crediting of amounts to the COAG Reform Fund for National Partnership payments, which are intended to provide financial assistance to the states. Section 9(1) of the Federal Financial Relations Act 2009 empowers the Minister to make these payments, which are designed to support the delivery of specified outputs or projects, facilitate reforms, or reward jurisdictions that deliver on nationally significant reforms. These payments are to be made in accordance with the Intergovernmental Agreement on Federal Financial Relations (IGA), which was signed by all jurisdictions in December 2008. The Act imposes several obligations on the parties involved. The Commonwealth, through the Minister, is obligated to credit amounts to the COAG Reform Fund for National Partnership payments as specified in the IGA. The states, in turn, must enter into National Partnership agreements that outline the specific outputs, projects, or reforms for which they will receive funding. These agreements are subject to consultation and must be signed by the relevant jurisdictions. The Minister’s determinations regarding National Partnership payments are legislative instruments, which means they must be registered on the Federal Register of Legislative Instruments but are exempt from disallowance. This exemption allows the Minister to meet the obligation to make payments as required under the IGA. The determination outlines various consequences for breaches of the legislation. While the explanatory statement does not detail specific offences or penalties for breaches of the National Partnership payments provisions, breaches of other sections under the Federal Financial Relations Act 2009 can lead to significant civil or criminal consequences. For example, failure to comply with certain financial management requirements could result in penalties under the Financial Management and Accountability Act 1997. Additionally, any breaches of the IGA or National Partnership agreements could potentially lead to disputes or legal actions between the Commonwealth and the states, although the specific penalties or consequences for such breaches are not outlined in the explanatory statement.