In 2008, the Australian government signed the Intergovernmental Agreement on Federal Financial Relations, a significant milestone in the country`s federal financial management system. The agreement set out the roles, responsibilities, and financial arrangements between the Australian Federal Government and the state and territory governments.
One of the primary objectives of the agreement was to provide greater transparency and accountability in financial relations between the federal government and state and territory governments. The agreement aimed to achieve this by setting out the rules and principles of financial management and by providing clear guidance on how funds would be allocated and spent.
Under the agreement, the federal government committed to providing funding to the states and territories through a number of channels, including general-purpose grants, specific-purpose payments, and national partnership payments. These funding streams were designed to support state and territory governments in delivering essential services such as health, education, and social services.
The agreement also introduced a number of reforms to improve financial management across all levels of government. One of the most significant of these was the reform of the financial reporting framework, which aimed to provide clearer and more consistent financial information to the public and to decision-makers.
In addition to these reforms, the agreement established a number of bodies to oversee the implementation of the new financial arrangements. These bodies included the Council of Australian Governments (COAG), which was responsible for providing strategic guidance and direction on financial management, and the National Partnership Payments Commission, which was responsible for overseeing the allocation and use of national partnership payments.
Overall, the Intergovernmental Agreement on Federal Financial Relations was a significant development in the history of Australian federal financial management. By setting out clear rules and principles for financial management and by introducing reforms to improve transparency and accountability, the agreement helped to ensure that public funds were used effectively and efficiently to deliver essential services to all Australians.