Garnaut Fitzgerald Review of Commonwealth-State Funding

CHAPTER 13: Commonwealth–State Financial Relations
for the 21 st Century
13.3 The new model and
intergovernmental issues
The proposed model would be based on a new intergovernmental agreement, building
on the 1999 Intergovernmental Agreement. The new intergovernmental agreement
would set out the Commonwealth’s commitment to maintain grants to the two largest
national programs and total payments to each State in real per capita terms. It would lay
down the basic principles for operation of the three cooperative national programs.
Ministerial Councils would develop specific agreements for the Health and Aged Care,
Education and Training, and Indigenous Community Development Programs. They
would specify multi-year objectives for the national programs and be reviewed annually.
Multi-year rolling budgets and performance indicators would be identified, by which
performance against objectives would be assessed.
The agreement for each national program would also specify minimum service
outcomes and an estimated minimum level of real per capita expenditure necessary to
deliver that level of service. Each State would be required to achieve the agreed
outcomes, sometimes partially specified in terms of minimum levels of services.
However the States would be free to achieve these outcomes and levels of service with
the most cost-effective means available to them and without obligation to commit
specified amounts of inputs. States would also be free to provide services above the
agreed minimum standard.
The new approach would give effect to the objectives set out in the recent SPP
Principles agreed by all the States.
In regard to education and training, existing bodies have roles in setting broad objectives
to meet the needs of the community in areas such as access, choice, equity and
excellence in schooling, and vocational preparation. The Australian National Training
Authority is the Commonwealth statutory authority that currently provides a national
focus for vocational education and training. The Australian National Training Authority
administers national programs and the Commonwealth component of funding for the
national vocational education and training system. It also plays an advisory role to the
Ministerial Council of Commonwealth, State and Territory Ministers, which is responsible
for vocational education and training. Under the new arrangements, the Ministerial
Council for Education and Training would consider whether these established bodies
would continue in the same or modified roles.
FINAL REPORT [199]