On 28 August 2020, the Council on Federal Financial Relations (CFFR) implemented new governance arrangements for Commonwealth-state funding agreements, known as the Federation Funding Agreements (FFA) Framework. The Framework can be conceived as comprising five elements: the Intergovernmental Agreement on Federal Financial Relations (IGA FFR); CFFR and its role as gatekeeper; the FFA architecture; the FFA Principles; and the administrative arrangements.
Intergovernmental Agreement on Federal Financial Relations
The IGA FFR outlines the objectives, principles and institutional arrangements governing financial relations between the Commonwealth and the states and territory (states) governments. It recognises that the states have primary responsibility for many areas of service delivery, but that coordinated action is necessary to address Australia’s economic and social challenges. It provides the foundation for the establishment of funding agreements between the Commonwealth and the states.
Council on Federal Financial Relations
On 29 May 2020, CFFR was asked by National Cabinet to take responsibility for all Commonwealth-state funding agreements and review the stock of existing agreements with a view to consolidation and rationalisation. CFFR’s aim is to make sure that agreements are negotiated and administered efficiently, including through the standardisation of agreements where possible. CFFR's level of involvement in the negotiation of agreements may be determined by National Cabinet, or by its own selection of a negotiation pathway. CFFR will assume more direct involvement in agreement negotiation where an agreement is of national significance, provides substantial economic benefit, may post major social or fiscal risks, or involves particular complexities.
The new FFA architecture consolidated all existing federal funding agreements into two forms of agreements: National Agreements and sectoral FFAs. National Agreements contain significant policy content and act as sources of ongoing funding, and have relatively complex and bespoke terms and conditions.
The sectoral FFAs covering Health, Education and Skills, Infrastructure, Environment, and Affordable Housing, Community Services and Other, consolidated all existing National Partnership Agreements, Streamlined Agreements and Project Agreements as schedules. New agreements under the relevant sectoral FFA are now termed FFA Schedules.
All current and expired National Agreements, sectoral FFAs and their related FFA Schedules are available on this website.
Eight FFA Principles were developed by CFFR and endorsed by National Cabinet to formalise CFFR’s role in influencing the policy direction and content of new agreements under the FFA Framework. These Principles outline how new agreements should be constructed and the process for their negotiation. The FFA Principles should be read alongside the complementary IGA FFR Principles.
The eight FFA Principles are as follows: