EXPLANATORY STATEMENT
Federal Financial Relations ACt
Federal Financial Relations (National Specific Purpose Payments) Determination 2009 No.1
The Intergovernmental Agreement on Federal Financial Relations 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 Specific Purpose Payments
The Federal Financial Relations Act 2009 provides an appropriation for the Commonwealth to make an on‑going financial contribution from 1 January 2009 to support State service delivery in the areas of:
• healthcare;
• schools;
• skills and workforce development;
• disability services; and
• affordable housing.
The Act provides for the Minister to determine the amount of financial assistance payable to the States as National SPPs in 2008‑09. This transitional arrangement is necessary to allow the Government to reconcile the total amount to be paid for the year, with the amount already paid under existing arrangements, in order to determine the correct payment for the remainder of the year.
The amounts and distribution of National SPPs in the Federal Financial Relations (National Specific Purpose Payments) Determination 2009 No.1 will ensure that each State will receive the full amount of these payments for 2008-09 as agreed by the Council of Australian Governments in November 2008, once payments to date by line agencies are accounted for.
To improve transparency, the Treasurer’s determination is a legislative instruments and will be registered on the Federal Register of Legislative Instruments, but will not be disallowable.
• Determinations made by the Minister under subsections 11(2)(a), 12(2)(a), 13(2)(a) and 14(2)(a) would not otherwise be legislative instruments within the meaning of section 5 of the Legislative Instruments Act 2003.
The exemption will allow the Treasurer to fulfil his obligation to make these payments to the States within the financial year. If the Treasurer was to wait for the determination to be tabled in Parliament for the required number of sitting days, they would not be able to make the payment until 2009-10.
• If the payments were delayed until the following financial year, then this would have significant impact on the fiscal positions of the States.
Commencement
The determination commences on the day it was made.