COAG meeting sees windfall for states

By Adam Coleman

Government leaders at the Council of Australian Governments (COAG) meeting in Canberra pressed forward with reforms to help weather the impact of the global financial crisis.

Attending the event were the Prime Minister, Premiers, Chief Ministers and the President of the Australian Local Government Association, along with Commonwealth, State and Territory Treasurers.

At the meeting, significant attention and financial resources were allocated to improving the areas of health and education. 

A new era in federal financial relations was heralded with the inauguration of a new Intergovernmental Agreement (IGA) and major reforms to specific purpose payments including an additional $7.1 billion in finding for the states. 

COAG also agreed to a “historic” reform package for the health and hospital system.

The package will see the Commonwealth provide $64.4 billion in funding over five years for State health systems, an increase of $22.4 billion over previous Australian Health Care Agreements.

Boost for federal/state relations

A new Intergovernmental Agreement (IGA) was announced at the meeting that will provide an overarching framework for the Commonwealth’s financial relations with the States and Territories.

The new IGA aims to improve the performance and efficiency of government services by reducing Commonwealth prescriptions on service delivery by the States.

It is also designed to define more specifically the roles and responsibilities of each level of government.

While the IGA will see a reduction in the number of payments to the States for Specific Purpose Payments (SPPs) from over 90 to five, the announced reforms will see an additional $7.1 billion in SPP funding over five years.

COAG announced 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 Disabilities Services SPP; and

• $6.2 billion in a National Affordable Housing SPP.

The Intergovernmental Agreement (IGA) and other documents introducing these new arrangements will be finalised by senior COAG officials no later than 12 December 2008.

Healthy Sums

The COAG meeting also agreed to reforms of the health and hospital system including the Commonwealth’s provision of $64.4 billion in funding over five years for the State’s ailing health systems.

The reform package includes reforms under the new hospital and health workforce reform NP of $1.7 billion, including a $1.1 billion health workforce package.

The meeting also agreed on a further package to ease pressure on public hospitals totaling $750 million in 2008-09, to support emergency departments and to fund 1.9 million emergency department services.

For further information on the outcomes of the 24th COAG meeting click here.

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