The Council of Australian Governments (COAG) held its 24th meeting today in Canberra. The Prime Minister, Premiers, Chief Ministers and the President of the Australian Local Government Association, were again joined by Commonwealth, State and Territory Treasurers.
The meeting was held against the backdrop of great uncertainty concerning the global economy and continuing turbulence in financial markets. Leaders and Treasurers resolved to meet the challenges of the global financial crisis head on.
COAG agreed to press forward with reforms necessary for Australia to weather the impact of the current international economic and financial difficulties, and to meet the longer term imperative for the nation of boosting productivity and workforce participation, and improving the delivery of services to the community. Many of the reforms that Leaders and Treasurers agreed upon today are about improving health and education and training outcomes. Significant additional resources have been allocated to these areas.
As well, a new era in federal financial relations was inaugurated with major reforms to specific purpose payments arrangements in particular. The Intergovernmental Agreement (IGA) and other documents giving effect to these new arrangements are to be finalised by COAG Senior Officials no later than 12 December 2008.
Global Financial Market Conditions
COAG discussed the most recent developments affecting the global economy, in particular the continued turbulence in financial and equity markets that has seen a sharp drop in global growth in both advanced and emerging economies that is expected to be deeper and more prolonged than previously thought.
COAG acknowledged that the global financial crisis will affect the Australian economy through trade and financial linkages and its effects on confidence, and noted that official forecasts for Australian economic growth have been revised down significantly as a result of the crisis. Leaders noted that Australia stands well placed to weather the fallout from the crisis, recognising the support from the Commonwealth’s Economic Security Strategy, recent easing in monetary policy and the continued strong capital position of Australia’s banks and other financial institutions.
COAG commended the coordinated international efforts to address the crisis, and urged all policy makers to continue to work cooperatively to resolve the crisis.
Federal Financial Relations
Intergovernmental Agreement on Federal Financial Relations
COAG has reaffirmed its commitment to cooperative working arrangements through an historic new IGA that provides an overarching framework for the Commonwealth’s financial relations with the States and Territories (the States).
The IGA represents the most significant reform of Australia’s federal financial relations in decades. It is aimed at improving the quality and effectiveness of government services by reducing Commonwealth prescriptions on service delivery by the States, providing them with increased flexibility in the way they deliver services to the Australian people. In addition, it provides a clearer specification of roles and responsibilities of each level of government and an improved focus on accountability for better outcomes and better service delivery. This is accompanied by a major rationalisation of the number of payments to the States for Specific Purpose Payments (SPPs), reducing the number of such payments from over 90 to five.
Central to these reforms is a substantial financial package that provides an additional $7.1 billion in SPP funding to the States over five years to improve services for all Australians. Commonwealth-State financial relations will be placed on a secure footing with the creation of five new national SPPs, including total funding of:
- $60.5 billion in a National Healthcare SPP;
- $18 billion in a National Schools SPP;
- $6.7 billion in a National Skills and Workforce Development SPP;
- $5.3 billion in a National Disability Services SPP; and
- $6.2 billion in a National Affordable Housing SPP.
Each National Agreement/SPP contains the objectives, outcomes, outputs and performance indicators, and clarifies the roles and responsibilities that will guide the Commonwealth and States in the delivery of services across the relevant sectors. The performance of all governments in achieving mutually-agreed outcomes and benchmarks specified in each SPP will be monitored and assessed by the independent COAG Reform Council and reported publicly on an annual basis. COAG agreed that the new SPPs are central to achieving service delivery improvements and reforms.
COAG has previously agreed to a new form of payment - National Partnership (NP) payments - to fund specific projects and to facilitate and/or reward States that deliver on nationally‑significant reforms. The financial arrangements will include incentive payments to reward performance, funding for which will be decided at a later date.
The first wave of NPs will begin in 2009, including:
- Hospitals and Health Workforce Reform;
- Preventative Health;
- Taking Pressure off Public Hospitals;
- Smarter Schools - Quality Teaching;
- Smarter Schools - Low Socio-economic Status (SES) School Communities;
- Smarter Schools - Literacy and Numeracy;
- Productivity Places Program;
- Early Childhood Education;
- Fee Waiver for Childcare Places;
- Indigenous Remote Service Delivery;
- Indigenous Economic Development;
- Remote Indigenous Housing;
- Indigenous Health;
- Social Housing;
- Homelessness; and
- Seamless National Economy.
This new federal financial framework is the culmination of extensive joint work by all levels of government. It will begin on 1 January 2009 and provides a solid foundation for COAG to pursue economic and social reforms to underpin growth, prosperity and social cohesion into the future.
COAG also agreed that the new National SPPs would be distributed among the States on an equal per capita basis phased in over five years (with the exception of the schools SPP which is to be distributed according to full-time student enrolments in government schools).
COAG agreed that shared investments will be matched by strong accountability. Each Agreement has robust transparency measures to achieve this. Strong, fair transparency measures applied consistently across all sectors are a non-negotiable feature of the new Agreements.
Health and Ageing
COAG today agreed to an historic package of reform to the health and hospital system. The measures agreed will mean that the Commonwealth will provide $64.4 billion in funding over five years for the State health systems, an increase of $22.4 billion over the previous Australian Health Care Agreements. This includes an increase to the SPPs base of $4.8 billion over the forward estimates and a package of reforms under the new hospitals and health workforce reform NP of $1.7 billion, including a $1.1 billion health workforce package.
A further package to take the pressure off public hospitals has also been agreed. The package, which totals $750 million in 2008-09, will support emergency departments by providing funding for 1.9 million emergency department services.
In addition, the Commonwealth has committed to a more generous indexation formula which delivers 7.3 per cent per year compared to 5.3 per cent under the previous agreement.
Reform of Roles and Responsibilities for Funding and Service Delivery between Governments
COAG agreed to consider in 2009 an ambitious program of reforms to roles and responsibilities for funding and delivery of services to the community. The goals of such reforms will be to deliver more integrated and responsive services for individuals and families, to clarify accountabilities between governments and to improve performance of service systems. COAG requested officials to bring back specific proposals in relation to community mental health, disability services and aged care in the first half of 2009 as part of this program.
High-quality schooling supported by strong community engagement is central to Australia’s future prosperity and social cohesion. COAG agreed to a package of reforms to enable our school education system to pursue high-quality schooling for all Australian students. The measures agreed will mean that the Commonwealth will provide an additional $3.5 billion over five years in school funding.
COAG today agreed to an additional $635 million as part of the National Schools SPP to align historical Commonwealth funding rates between primary and secondary government schools. It was also agreed the government schools component of the National Schools SPP will be adjusted each year using a composite growth factor comprising growth in average school recurrent costs and growth in enrolments in government schools. This will provide an estimated additional $412 million over the forward estimates period.
The government schools component of the National Schools SPP will be distributed among the States on the basis of full-time student enrolments in government schools.
The Agreement brings total SPP and funding for non-government schools to around $42 billion from 2009 to 2012, compared to $34.1 billion in the previous schools agreement (excluding Indigenous funding), an increase of more than $7.9 billion or 23.1 per cent over 2005-2008 funding.
Schools funding in the future will be complemented by over $2.2 billion comprising NPs for literacy and numeracy ($540 million), improving principal leadership development and teacher quality ($550 million), and improving educational outcomes in low SES school communities ($1.1 billion).
Additional Commonwealth funding of $807 million is provided for the legitimate additional costs of implementing the National Secondary Schools Computer Fund.
The Commonwealth has agreed to provide $970 million over five years for an Early Childhood Education NP. This includes providing $955 million to achieve universal access to early childhood education for all children in the year before school by 2013.
COAG agreed that the National Skills and Workforce Development Agreement would provide an estimated $6.7 billion over the forward estimates from 1 January 2009 to increase the skill levels of Australians. In addition, COAG agreed to the delivery of training under the productivity places program NP.
The reforms agreed today for the productivity agenda will deliver:
- universal access to early learning programs to improve children’s school readiness;
- evidence-based teaching to ensure all children attain sound literacy and numeracy skills;
- strong school leadership and high-quality principals and teachers in all our schools, particularly our most disadvantaged schools; and
- increases in Year 12 or equivalent attainment to ensure young people make a more successful transition to work or further study;
- reforms to the delivery of vocational education and training, at school, for jobseekers and to current workers to ensure our current and future skill needs are met.
Today, COAG agreed to asignificant package of investment for housing, a total commitment of nearly $10 billion in the National Affordable Housing Agreement (NAHA) and its associated NPs. This includes additional funding towards:
- Homelessness - $800 million over five years;
- Remote Indigenous Housing - $1.94 billion over 10 years ($834.6 million over five years); and
- Social Housing - $400 million over two years;
These agreements commit governments to pursue reforms in social housing, homelessness and Indigenous housing. The package will provide relief for many Australians facing social housing stress or homelessness. Further details on the agreements are provided at Attachment C to the communiqué.
The Commonwealth and the States agreed to a new NAHA, commencing on 1 January 2009 and providing $6.2 billion over five years from 2008-09, an increase of $46 million over the current forward estimates. The NAHA will consolidate existing housing SPPs and fund a range of measures including social housing, assistance to people in the private rental market, support and accommodation for people who are homeless or at risk of homelessness, and home purchase assistance.
Under the new national disability agreement, the Commonwealth will provide approximately $5.3 billion in funding over five years to the States for specialist disability services, an increase of $408 million. Today, the States and Commonwealth committed to help people with a disability to achieve economic and social inclusion, enjoy choice, wellbeing and the opportunity to live as independently as possible, and to support their families and carers. To achieve these outcomes, States and the Commonwealth will support services that provide skills and support people with a disability to live as independently as possible. It will also provide services that assist people with disability to live in stable and sustainable living arrangements and assist families and their carers in their caring role.
In this National Agreement, the Commonwealth is giving the States an additional $1.3 billion in funding over five years, including $901 million from the Disability Assistance Package to be rolled into the base of the SPP, an additional $408 million to help with reform, and providing the highest ever level of indexation - around six per cent - making a $5.3 billion Commonwealth commitment over the next five years.
As part of the new disability reform, each State will improve access to disability care, including consideration of a single point of access. This, along with nationally-consistent assessment processes and a quality assurance system, will help to build end to end disability services systems within each State. A renewed focus on early intervention will be matched by more consistent access to disability aids and equipment. There will be greater flexibility in funding. Service providers will be better able to develop, train and employ care workers. Governments will also work together to measure better the level of unmet demand for disability services.
COAG has previously agreed to six ambitious targets for closing the gap between Indigenous and non-Indigenous Australians across urban, rural and remote areas:
- to close the gap in life expectancy within a generation;
- to halve the gap in mortality rates for Indigenous children under five within a decade;
- to ensure all Indigenous four years olds in remote communities have access to early childhood education within five years;
- to halve the gap in reading, writing and numeracy achievements for Indigenous children within a decade;
- to halve the gap for Indigenous students in year 12 attainment or equivalent attainment rates by 2020; and
- to halve the gap in employment outcomes between Indigenous and non‑Indigenous Australians within a decade.
Since the targets were agreed in December 2007 and March 2008, all governments have been working together to develop fundamental reforms to address these targets. Governments have also acknowledged that this is an extremely significant undertaking that will require substantial investment. COAG has agreed this year to initiatives for Indigenous Australians of $4.6 billion across early childhood development, health, housing, economic development and remote service delivery.
In giving effect to this commitment to closing the gap on Indigenous disadvantage, COAG agreed to the first ever NP agreement in October 2008. This agreement comprises $564 million of joint funding over six years to address the needs of Indigenous children in their early years. As part of the initiative, 35 Children and Family Centres are to be established across Australia in areas of high Indigenous population and disadvantage to deliver integrated services that offer early learning, child care and family support programs. The funding will also increase access to ante-natal care, teenage reproductive and sexual health services, and child and maternal health services.
This NP is now joined by a new National Agreement on Indigenous Reform and two new NPs which cover the areas of Economic Development ($228.8 million - $172.7 million Commonwealth funding and $56.2 million State funding over five years) and Remote Service Delivery ($291.2 million over six years). Further details are provided at Attachment D to the communiqué.
Taken together with the Indigenous Health NP and the Remote Indigenous Housing NP, these new agreements represent a fundamental response to COAG’s commitment to closing the gap. Sustained improvement in outcomes for Indigenous people can only be achieved by systemic change. Through these agreements, all governments will be held publicly accountable for their performance in improving outcomes in these key areas.
National Indigenous Reform Agreement
COAG agreed to the National Indigenous Reform Agreement (NIRA) which captures the objectives, outcomes, outputs, performance measures and benchmarks that all governments have committed to achieving through their various National Agreements and NPs in order to close the gap in Indigenous disadvantage. The NIRA provides an overarching summary of action being taken against the closing the gap targets as well as the operation of the mainstream national agreements in health, schools, vocational education and training (VET), disability services and housing and several NPs. The NIRA will be a living document, refined over time based on the effectiveness of reforms in closing the gap on Indigenous disadvantage.
Closing the Gap COAG Meeting in 2009
In October 2008, COAG agreed to convene a dedicated meeting in 2009 on closing the gap on Indigenous disadvantage.
COAG has asked for advice on how the NPs and National Agreements will collectively lead to a closing of the gap and what further reforms are needed. In addition to this, COAG has asked for a Regional and Urban Strategy to coordinate the delivery of services to Indigenous Australians and examine the role that private and community sector initiatives in education, employment, health and housing can make to the success of the overall strategy.
COAG noted that it will work to develop a further reform proposal, including benchmarks and indicators for improvements in services and related outputs relevant to family and community safety, for consideration at the Closing the Gap COAG meeting to be held in 2009.
Revised Framework of the Overcoming Indigenous Disadvantage Report
In April 2002, COAG commissioned the Productivity Commission’s Steering Committee for the Review of Government Service Provision to produce a regular report against key indicators of Indigenous disadvantage, with a focus on areas where governments can make a difference. The resulting Overcoming Indigenous Disadvantage (OID) Report has been published every two years since 2003.
COAG agreed to a new framework for the OID Report that is aligned with the closing the gap targets.
Seamless National Economy
COAG agreed to a new NP to deliver a seamless economy, with the Commonwealth committing to provide funding of $550 million over five years to facilitate the implementation of and reward the delivery of reform priorities. This NP draws together 12 months of intense efforts to deliver regulatory reforms which will benefit businesses and strengthen the economy.
An ambitious reform agenda including 27 priority areas for reform to reduce the costs of regulation and enhance the productivity and workforce mobility in areas of shared Commonwealth and State responsibility was agreed by COAG in March 2008.
In July 2008, COAG identified eight competition reforms for inclusion in the Business Regulation Competition Working Group work program, in addition to the reform of regulation-making and review processes. Over the course of the last 12 months, governments have moved from general commitments to reform to specific actions across the 27 areas to make a real difference to the economy.
Today COAG committed to a number of reforms, building on its already extensive business regulation and competition reform agenda to deliver a seamless national economy.
COAG agreed to examine further planning and zoning policies and processes from a competition perspective as recommended in July by the Australian Competition and Consumer Commission’s inquiry into grocery prices. This will ensure COAG can better understand whether competition issues are adequately incorporated into planning and zoning regulation.
Recognising the need for greater coordination and oversight in chemicals and plastics regulation, COAG agreed to a new governance structure for chemicals and plastics reform. COAG also responded to the recommendations of the Productivity Commission Research Report on Chemicals and Plastics Regulation, with further reforms to be considered in 2009.
To progress food regulation reforms, COAG agreed to examine reforms to the voting arrangements of the Australia and New Zealand Food Regulation Ministerial Council. COAG also agreed to consider options to improve national consistency in the monitoring and enforcement of food standards and options to improve food labelling law and policy in early 2009.
COAG agreed that a national electronic conveyancing system would be implemented, which will establish a single electronic system for completing real property transactions and lodging land title dealings.
COAG also agreed to increased harmonisation in relation to directors' liability and asked the Ministerial Council for Corporations to report back to COAG on further reforms by mid 2009.
COAG agreed there would be continued progress on regulatory reform with the objective of all jurisdictions improving the efficiency of regulation.
The National Public-Private Partnerships (PPP) package endorsed by COAG today is an important element of the Commonwealth’s commitment to a long-term infrastructure strategy. It offers major reform gains in terms of consistency and harmonisation of PPP policy and practices across jurisdictions. The package aims to encourage the consideration of PPPs, ensure consistent application of best practice across Australia and encourage private sector investment in public infrastructure in Australia. More effective use of PPPs can benefit the community through improved services and better value for money, provide savings to governments and make it easier and less expensive for business to bid for PPP projects.
Climate Change and Water
COAG agreed to a set of national principles to apply to new Feed-in Tariff schemes and to inform the reviews of existing schemes. These principles will promote national consistency of schemes across Australia.
COAG also agreed that the determination of streamlined roles and responsibilities under the National Energy Efficiency Strategy and a proposed single overarching framework for accelerating energy efficiency reforms should be deferred for consideration until early 2009 to allow for a more informed strategy in consultation with industry.
COAG endorsed a set of principles and a process for jurisdictions to review and streamline their existing climate change mitigation measures, with the aim of achieving a coherent and streamlined set of climate change measures in 2009.
COAG noted progress on the development of the national expanded Renewable Energy Target and agreed to consider the final design of the scheme at its first meeting in 2009.
COAG agreed to a number of initiativesto improve the operation of water markets and trading through faster processing of temporary water trades, and to coordinate water information and research through the development of a national water modelling strategy. COAG also agreed to the adoption of the enhanced national urban water reform framework to improve the security of urban water.
COAG released a report on progress with environmental water recovery in the Murray Darling Basin, which was commissioned at its October 2008 meeting and that is now to be updated every six months. The report shows that the Commonwealth and Basin jurisdictions collectively recovered water entitlements for an average of 177 gigalitres of water per annum, at a cost of nearly $295 million.
Inter-Jurisdictional Exchange of Criminal History Information for People working with Children
Leaders agreed in principle at the April 2007 COAG meeting to a framework to improve access to inter-jurisdictional criminal history information by child-related employment screening schemes.
COAG at this meeting affirmed the importance of an inter-jurisdictional exchange being put in place as soon as possible, and endorsed a set of implementation actions, the establishment of a project implementation committee under the auspices of COAG and an implementation plan. The implementation plan includes that jurisdictions will prepare, introduce and seek passage of legislative amendments within nine months, to enable the information exchange to commence in 12 months. COAG noted that all jurisdictions, with the exception of Victoria and the Australian Capital Territory, would exchange information on non-conviction charges for screening of people working with children.
The development of the National Framework for Protecting Australia’s Children, noted by COAG at its meeting in July 2008, is being progressed by the Commonwealth in close consultation with the Community and Disbability Services Ministers’ Conferencel and will be released in early 2009.
Review of the Report on Government Services
As requested at its July 2008 meeting, COAG agreed to the terms of reference for a review of the Report on Government Services, to be undertaken by a combined Senior Officials and Heads of Treasuries Working Group, to take place in the first half of 2009. This review will coincide with the first stage of the review of existing data collection and quality processes, also agreed at the July 2008 meeting. The reviews are aimed at improving data quality so that transparency and accountability in relation to government service delivery are improved.
COAG Meetings in 2009
Apart from its earlier commitment to hold a specific closing the gap COAG meeting in 2009, COAG agreed that there would be an opportunity over the next year to consider further the broad allocation of responsibilities within the federation.
COAG Funding Package
|Additional Base and Indexation||500.0||674.5||913.5||1,190.9||1,500.1||4,779.0|
|Hospitals and Health Workforce Reform||536.5||166.1||294.9||379.8||375.7||1,753.0|
|Additional Investment in Emergency Departments||750.0||-||-||-||-||750.0|
|Productivity Agenda Sector|
|10 per cent AGSRC for Primary Schools||61.1||130.5||139.3||147.6||156.6||635.1|
|Upfront Payment including Digital Education Revolution||807.0||-||-||-||-||807.0|
|Productivity Agenda NPs||33.3||191.9||265.0||618.0||548.8||1,657.0|
|Smarter Schools - Quality Teaching||22.0||40.0||60.0||243.0||185.0||550.0|
|Smarter Schools - Literacy and Numeracy (a)||-||-||-||-||-||-|
|Smarter Schools - Low SES schools||11.3||151.9||205.0||375.0||363.8||1,107.0|
|Universal Access (a)||-||-||-||-||-||-|
|Skills and Workforce Development Sector|
|Skills and Workforce Development SPP||-||4.2||9.8||11.3||11.4||36.7|
|Skills and Workforce Development NP||-||-||-||-||-||-|
|Productivity Places Program (a)||-||-||-||-||-||-|
|Disability Services sector|
|Disability Services SPP||70.0||23.0||70.9||101.3||142.6||407.8|
|Additional SPP for Disability Reform||70.0||23.0||70.9||101.3||142.6||407.8|
|Affordable Housing Sector|
|National Affordable Housing SPP||-||1.3||7.4||14.9||22.7||46.4|
|Affordable Housing NPs||200.0||275.0||105.0||110.0||110.0||800.0|
|Indigenous Reform Sector|
|Indigenous Reform NPs||439.5||213.7||245.2||494.1||574.2||1,966.8|
|Indigenous Economic Development||15.0||39.8||39.8||38.9||39.2||172.7|
|Indigenous Remote Service Delivery||24.5||31.2||32.4||33.4||32.5||154.0|
|Business Regulation and Competition NP||100.0||-||-||200.0||250.0||550.0|
|Seamless National Economy||100.0||-||-||200.0||250.0||550.0|
|Total COAG Funding Package||3,497.4||1,767.5||2,231.2||3,574.6||4,087.5||15,158.1|
(a) Funding already in Commonwealth forward estimates.
- Attachment A: Health and Ageing
- Attachment B: Productivity Agenda
- Attachment C: Affordable Housing
- Attachment D: Indigenous Reform
Review of the Report on Government Services – Terms of Reference
On 29 November 2008, COAG agreed to the terms of reference for a review of the Report on Government Services, to be undertaken by a combined Senior Officials and Heads of Treasuries Working Group. The terms of reference sets out the scope and timing of the review, with a report to COAG from the Working Group planned for September 2009. This review will coincide with the review of existing data collection and quality processes agreed by COAG at its July 2008 meeting. These reviews are aimed at improving data quality so that transparency and accountability in government service delivery are improved.
Business Regulation and Competition
On 29 November 2008, COAG agreed further regulatory reforms, building on its extensive business regulation and competition reform agenda to deliver a seamless national economy, as detailed in the attachments below.
National Principles for Feed-in Tariff Schemes
COAG agreed to a set of national principles to apply to new Feed-in Tariff schemes and to inform the reviews of existing schemes. These principles will promote national consistency of schemes across Australia.
Complementarity Principles for Climate Change Mitigation Measures
On 29 November 2008 COAG endorsed a set of principles for jurisdictions to review and streamline their existing climate change mitigation measures, with the aim of achieving a coherent and streamlined set of climate change measures in 2009
Environmental Water Recovery in the Murray-Darling Basin
In October 2008, COAG commissioned a report on progress with the recovery of environmental water in the Murray-Darling Basin. Environmental water has been recovered though water purchasing from the market, savings from infrastructure improvements and land/water purchases. The initial report indicates that in the four years to the end of September 2008, the Commonwealth and Basin jurisdictions have collectively recovered water entitlements at an average of 177 gigalitres of water per annum at a cost of nearly $295 million.
The water recovery figures are presented in terms of long-term cap equivalents, which allow comparisons to be made across the Basin. This report will be updated every six months and will be publicly released.
We have archived some of the reports linked to this meeting communique. You can view these reports on the Australian Government web archive.