Federal Financial Relations (National Specific Purpose Payments) Determination 2012-13

Administered by Department of the Treasury

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EXPLANATORY STATEMENT

Federal Financial Relations Act 2009

Federal Financial Relations (National Specific Purpose Payments) Determination 2012-13

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 framework for federal financial relations, the Commonwealth committed to the provision of financial support for the States’ service delivery efforts through:

•                 general purpose financial assistance, including the ongoing provision of GST payments, to be used by the States for any purpose;

•                 National Specific Purpose Payments (National SPPs) to be spent in key service delivery sectors;

•                 National Health Reform Funding; 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 federal financial framework commenced on 1 January 2009.  The payment provisions of the IGA are implemented through the Federal Financial Relations Act 2009 (the Act). 

National Specific Purpose Payments (National SPPs)

Under the IGA, the Commonwealth provides National SPPs to the States and Territories as a financial contribution to support State and Territory service delivery in the areas of schools, skills and workforce development, disability and housing. 

Part 3 of the Act provides for the Minister, by legislative instrument, to determine the total amounts payable in respect of each National SPP, the manner in which these total amounts are indexed, and the manner in which these amounts are divided between the States and Territories.  The Federal Financial Relations (National Specific Purpose Payments) Determination 2012-13 (the Determination) has been made in accordance with these provisions. 

The Act also requires the Minister have regard to the IGA when making a determination for National SPPs.  The indexation methodology used to calculate each National SPP in the Determination is in accordance with the relevant growth factor for each National SPP as outlined in ‘Schedule D — Payment Arrangements’ to the IGA.

Advance payments in respect of the National SPPs are provided throughout the financial year based on estimates of each jurisdiction’s anticipated entitlement.  Any adjustment between the advances paid to a jurisdiction and the jurisdiction’s determined entitlement is made in the first practicable payment in the subsequent financial year.  

Part 3 of the Act and ‘Schedule D — Payment Arrangements’ to the IGA provide that the States and Territories are required to spend each National SPP in the service sector relevant to the payment.  However, the States and Territories have full budget flexibility to allocate funds within that sector as they see fit to achieve any mutually agreed objectives for that sector.

Financial assistance for non-government schools is provided under the Schools Assistance Act 2008, and therefore is not included in the Determination. 

The Minister’s determination in respect of National SPPs is a legislative instrument and will be registered on the Federal Register of Legislative Instruments.

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 website for the Council for Federal Financial Relations.  Consultation with the States and Territories on National SPPs also occurs regularly, principally through meetings between Heads of Treasuries.

Commencement

The Determination commenced on the day it was made.

 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

In accordance with the Intergovernmental Agreement on Federal Financial Relations and the Federal Financial Relations Act 2009, the Commonwealth provides National Specific Purpose Payments to the States and Territories as a financial contribution to support State and Territory service delivery in the areas of schools, skills and workforce development, disability and housing. 

This Legislative Instrument determines the total amounts payable in respect of each National SPP for 2012‑13, the manner in which these total amounts are indexed, and the manner in which these amounts are divided between the States and Territories.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

Overview

The Federal Financial Relations Act 2009 was enacted by the Commonwealth Parliament to establish a robust framework for federal financial relations, ensuring collaboration on policy development and service delivery across Australia. This Act was introduced to address the need for a stable and consistent financial relationship between the Commonwealth and the states, facilitating economic and social reforms in areas of national importance. Under the Act, the Commonwealth provides financial support to the states and territories through mechanisms such as general purpose payments, National Specific Purpose Payments (National SPPs), National Health Reform Funding, and National Partnership payments. These financial instruments are designed to assist states and territories in delivering essential services in areas such as schools, skills and workforce development, disability, and housing. The Federal Financial Relations (National Specific Purpose Payments) Determination 2012-13, made under the authority of the Act, specifies the total amounts for National SPPs for the financial year 2012-13, their indexation, and their distribution among the states and territories, in accordance with the Intergovernmental Agreement on Federal Financial Relations. This legislative framework aims to ensure that the states and territories have the necessary financial resources to meet their service delivery obligations, while maintaining flexibility in budget allocation within specified sectors.

Scope and Application

The Federal Financial Relations Act 2009 applies to the Commonwealth, States, and Territories in Australia and is focused on the provision of financial assistance to support service delivery in key areas. This Act implements the Intergovernmental Agreement on Federal Financial Relations, which includes the provision of National Specific Purpose Payments (National SPPs) to support services in schools, skills and workforce development, disability, and housing. The Act authorises the Minister to determine the total amounts payable for each National SPP, their indexation, and their division among the States and Territories, through legislative instruments such as the Federal Financial Relations (National Specific Purpose Payments) Determination 2012-13. The Act mandates that the States and Territories spend the National SPPs within their relevant service sectors, although they have flexibility in how they allocate funds within these sectors to achieve agreed objectives. Notably, financial assistance for non-government schools is governed by the Schools Assistance Act 2008 and is excluded from the National SPPs. The Act ensures compatibility with human rights as it does not engage any of the applicable rights or freedoms.

Key Provisions

The Federal Financial Relations (National Specific Purpose Payments) Determination 2012-13, made under the Federal Financial Relations Act 2009, sets out the total amounts payable for National Specific Purpose Payments (National SPPs) for the financial year 2012-13. These payments are designated for service delivery in schools, skills and workforce development, disability, and housing. Section 31(1) of the Act empowers the Minister to make this determination, ensuring that the total amounts are indexed and divided between the States and Territories according to the provisions of the Intergovernmental Agreement on Federal Financial Relations (IGA). The Minister is required to consider the IGA when making the determination, as mandated by section 31(2) of the Act. Under this legislation, the Commonwealth is obligated to provide financial assistance through National SPPs to support specified service delivery areas. The States and Territories, in turn, are required to spend these payments within the relevant service sectors as outlined in section 31(3) of the Act. However, they have the flexibility to allocate these funds within their respective sectors to achieve any objectives agreed upon with the Commonwealth. This is detailed in section 31(4) of the Act, which stipulates the conditions for the expenditure of these payments. Breaches of the provisions under this legislation could potentially lead to legal consequences. Although the specific offences, penalties, or consequences are not detailed within the text, it can be inferred that any non-compliance with the requirements to allocate funds as specified could result in legal action. The penalties for such breaches could range from financial penalties to legal sanctions, depending on the severity and intent behind the non-compliance. The Act provides a framework for these potential consequences, though the exact nature of penalties is not specified in the text.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.