Federal-State Funding Agreements

The Hon. D.G.E. HOOD (15:38): My question is to the Treasurer. Treasurer, given the federal government's recent statement about reducing the number of federal-state funding agreements, can the Treasurer update the chamber on the South Australian government's view on this particular issue?

The Hon. R.I. LUCAS (Treasurer) (15:39): The South Australian government, as with most other governments, was broadly supportive of the commonwealth government's proposal. There were approximately a hundred federal-state agreements of varying sizes and complexities, which had been generated over many, many years. In recent times, we have seen quite a number of recent federal-state funding agreements as a result of COVID-related issues.

There was broad agreement in terms of the reduction in numbers. However, from the state and territory viewpoint, the view of the Board of Treasurers in particular was that, although in and of itself the mere reduction of the number of federal-state funding agreements is noteworthy and laudable as a goal, there was much more that could be achieved, if the process was also utilised to try to reduce the extent of complexity of some of those agreements, in particular through giving greater discretion to state and territory governments in terms of the funding that might be applied by state and territory governments through those agreements.

That is, reducing the extent of federal requirements, which had increasingly become more prescriptive over recent years in these federal-state agreements, and reducing the extent of the latitude that state and territory governments might have in terms of the funding that was being provided. That was a view that was shared by state and territory governments of all persuasions, Labor and Liberal.

We welcome the fact that the first stage of that process has been achieved. A significant number of agreements has been reduced, and I will need to bring back the precise number we have arrived at. It is somewhere between 10 and 20 from, as I said, about 100 agreements. They have now been broadly collapsed into a number of broader category areas and all new agreements are to be incorporated as attachments or appendices to the reduced number of agreements.

For example, on behalf of the state government, together with other state and territory treasurers, I signed five federation funding agreements in the broad categories of health, education and skills, infrastructure, environment, and affordable housing, community services and other. The state and territory governments remain interested, and we are engaging through the Council on Federal Financial Relations (CFFR) with the federal Treasurer in what we would see as an important second stage. The federal government has given broad agreement in terms of continuing those discussions to see whether or not the level of prescription that might exist within those particular agreements might be reduced and greater discretion given to state and territory governments.

It is likely that when push comes to shove that will be a difficult goal to achieve because federal governments and federal bureaucrats have increasingly been interested in being more prescriptive with those agreements, so when we get to the stage with portfolio ministers and treasurers in trying to see greater discretion for state and territory governments, it will be an interesting challenge for the initial cabinet process to see whether or not that particular goal can be achieved.

I will conclude by saying it is my very strong view, supporting the Board of Treasurers' position, that it is in the best interests of the federation, certainly in the best interests of state and territory governments, if greater flexibility can be given to state and territory governments in relation to how that federal funding is able to be applied in pursuit of what might be shared goals. We agree they should be shared goals and they should be measurable, which is the most important issue from the federal government's viewpoint. They want to see goals, which are able to be measured, and state and territory governments measured against their performance in achieving their shared goals.