National agreements

The Intergovernmental Relations Unit (IGR) provides analysis and advice on intergovernmental financial relations issues, particularly those relating to nationally important economic and social reforms.

In accordance with the Treasurer’s Directions, IGR provides advice and assistance to government and government departments on the establishment, negotiation, and review of funding agreements between the Commonwealth and Territory governments.

The Treasurer’s Directions provide a framework on the design principles and processes of negotiation and approval of national partnership agreements, implementation plans, project agreements and project plans, to ensure they are in line with principles set out within the Intergovernmental Agreement on Federal Financial Relation and to ensure sound policy development in partnership with the Commonwealth that will benefit the Territory.

The Intergovernmental Agreement on Federal Financial Relations (IGA), was agreed by all states and territories (states) and the Commonwealth in 2008, and is the framework for the majority of funding agreements between the Commonwealth and the Territory. It aims to enhance government service delivery, facilitate nationally important social and economic reform, streamline administrative arrangements for funding agreements and enhance reporting of progress against agreement outcomes.

National agreements (NAs) define mutually agreed objectives, outcomes, outputs, performance indicators, roles and responsibilities that guide the Commonwealth and states in the delivery of services in key sectors. Currently there are NAs in the areas of health care, school education, skills and workforce development, affordable housing, disability and Indigenous reform.

NAs set out the agreed national policy and reform direction of key service delivery areas and clearly set out the relevant roles and responsibilities of states and the Commonwealth. The inclusion of performance indicators inform the community about how each government is progressing towards achieving the mutually agreed objectives, outcomes and outputs. While performance benchmarks provide an indication of the rate of progress being made against each outcome, there is no provision for a specific purpose payment (SPP) to be withheld in the case a jurisdiction does not meeting a performance benchmark.

Specific purpose payments (SPPs) are provided by the Commonwealth to the states and territories to financially assist in the achievement of the outputs and outcomes of the NAs, and are untied within the relevant sector. These payments are ongoing and are indexed on a sector‑specific basis, providing a degree of certainty for states’ budgeting.

There are three SPPs (the National Skills and Workforce Development SPP, the National Disability Services SPP and the National Affordable Housing SPP). The former National Healthcare SPP and National Schools SPP have been replaced with National Health Reform  Funding and Students First funding  arrangements. All five funding streams are considered to also contribute towards Indigenous Reform, so there is an SPP (or former SPP) linked to each NA.

National partnerships agreements (NPAs) are predominantly short-term vehicles for nationally significant reforms, service delivery initiatives and/or projects. Funding provided under NPAs is predominantly through national partnership payments.

Where state-specific arrangements are required that are not articulated in NPAs, implementation plans (IPs) are negotiated between the Commonwealth and the relevant state.