1. Reforming financial relations - improving the quality and effectiveness of government services Nigel Ray Executive Director Intergovernmental Relations 2009 22 July 2009

2. New framework for federal financial relations

3. Four key elements of the new framework Rationalised and centralised payments Incentives for reform Financial reporting Performance reporting

4. Four key elements of the new framework Rationalised and centralised payments Incentives for reform Financial reporting Performance reporting Rationalised and centralised payments

5. Rationalising payments Australia Health Care Agreement Organ donation Non-govt schools - current Govt schools - current Non-govt capital Targeted programs Targeted programs Indigenous education Disability Services Young disabled CSHA SAAP Computers In schools Aged care NursesHealth Elective surgery AusLink Financial assistance grants Local roads Other local Royalties Snowy ACT Youth health National public health Govt capital GST payments Ind. house Skilling Australia’s Workforce National schools SPP National healthcare SPP National disability services SPP National affordable housing SPP National skills and workforce development SPP National Partnership project payments COAG National Partnership payments Payments to local government General revenue assistance

6. Four key elements of the new framework Rationalised and centralised payments Incentives for reform Financial reporting Performance reporting Rationalised and centralised payments Performance reporting Financial reporting Incentives for reform

7. Australia’s Future Tax System (AFTS) Review

8. Chart 1 Vertical fiscal imbalance since federation (Grants as a percentage of total state revenue)  Source: Mathews and Jay 1997, Australian Treasury estimates

9. But there is still work to be done