Part 2: Payments for specific purposes
Overview
The Commonwealth provides payments to the States for specific purposes in policy areas for which the States have primary responsibility. These payments cover most functional areas of State and local government activity, including health, education, skills and workforce development, community services, housing, Indigenous affairs, infrastructure and the environment.
The Commonwealth currently supports the States in certain service delivery sectors through three National Specific Purpose Payments (National SPPs) — Skills and Workforce Development, Disability Services and Affordable Housing. The States are required to spend each National SPP in the relevant sector.
The National SPPs are ongoing and are indexed each year by growth factors specified in the Intergovernmental Agreement on Federal Financial Relations (the Intergovernmental Agreement). They are distributed among the States in accordance with population shares based on the Australian Statistician's determination as at 31 December of the relevant year.
The Commonwealth also supports the States through the provision of public hospitals funding. This funding is currently calculated by reference to the level of estimated efficient growth in hospital activity in each State. At the 1 April 2016 Council of Australian Governments (COAG) meeting, the Commonwealth and the States signed a three year Heads of Agreement for public hospitals ahead of consideration of longer‑term funding arrangements. The Commonwealth will provide an estimated additional $2.9 billion over three years for public hospital services with growth capped at 6.5 per cent per year. Further details are included in the Health section of this Part.
Between 2018 and 2020, the Commonwealth will also provide $1.2 billion in additional funding for government and non‑government schools. Funding, which will grow by 3.56 per cent and enrolments each year, will be contingent on reform efforts by the States and non‑government schools sector to improve education outcomes.
These funding arrangements for schools and hospitals provide an opportunity to develop longer‑term funding arrangements and further reforms that focus on quality and sustainability into the future.
Under the Intergovernmental Agreement, National Partnership payments to the States are the key vehicle to facilitate reforms or support the delivery of projects and services. National Partnerships are typically entered into for a fixed period of time, reflecting the nature of the project or reform involved.
To the fullest extent possible, payments are aligned with the achievement of milestones and are made after the States have achieved the outcomes or outputs specified in the relevant National Partnership.
National Partnerships are publicly available on the Federal Financial Relations website.
Total payments for specific purposes
Total payments for specific purposes by category are shown in Table 2.1.
| $million | NSW | VIC | QLD | WA | SA | TAS | ACT | NT | Total(a) |
|---|---|---|---|---|---|---|---|---|---|
| 2015‑16 | |||||||||
| National Specific Purpose Payments | 1,353 | 1,056 | 847 | 460 | 300 | 91 | 69 | 43 | 4,220 |
| National Health Reform funding | 5,552 | 4,175 | 3,525 | 1,822 | 1,224 | 375 | 325 | 199 | 17,196 |
| Students First funding | 4,809 | 3,915 | 3,301 | 1,561 | 1,129 | 368 | 265 | 284 | 15,636 |
| National Partnership payments(b) | 3,478 | 2,107 | 2,476 | 1,726 | 661 | 276 | 106 | 724 | 12,908 |
| Total payments for specific purposes | 15,192 | 11,253 | 10,150 | 5,569 | 3,315 | 1,111 | 765 | 1,250 | 49,958 |
| 2016‑17 | |||||||||
| National Specific Purpose Payments | 1,379 | 1,080 | 864 | 471 | 305 | 92 | 71 | 44 | 4,306 |
| National Health Reform funding | 5,717 | 4,373 | 3,630 | 2,012 | 1,268 | 365 | 341 | 206 | 17,912 |
| Students First funding | 5,242 | 4,240 | 3,651 | 1,673 | 1,194 | 397 | 280 | 319 | 16,996 |
| National Partnership payments(b) | 4,897 | 2,068 | 3,346 | 1,763 | 1,158 | 379 | 182 | 623 | 16,068 |
| Total payments for specific purposes | 17,235 | 11,760 | 11,491 | 5,918 | 3,925 | 1,233 | 874 | 1,191 | 55,280 |
| 2017‑18 | |||||||||
| National Specific Purpose Payments | 1,410 | 1,107 | 883 | 484 | 310 | 93 | 47 | 44 | 4,377 |
| National Health Reform funding | 6,022 | 4,596 | 3,853 | 2,155 | 1,326 | 378 | 365 | 229 | 18,923 |
| Students First funding | 5,552 | 4,469 | 3,833 | 1,857 | 1,265 | 410 | 294 | 316 | 17,997 |
| National Partnership payments(b) | 4,130 | 1,910 | 3,491 | 1,836 | 1,294 | 256 | 142 | 465 | 14,727 |
| Total payments for specific purposes | 17,114 | 12,081 | 12,060 | 6,332 | 4,195 | 1,136 | 848 | 1,055 | 56,025 |
| 2018-19 | |||||||||
| National Specific Purpose Payments | 930 | 1,135 | 903 | 497 | 203 | 94 | 47 | 45 | 3,855 |
| National Health Reform funding | 6,340 | 4,829 | 4,089 | 2,307 | 1,387 | 390 | 392 | 253 | 19,987 |
| Students First funding | 5,747 | 4,690 | 3,971 | 2,050 | 1,337 | 417 | 313 | 308 | 18,833 |
| National Partnership payments(b) | 3,464 | 2,228 | 3,057 | 1,644 | 1,011 | 325 | 114 | 225 | 12,616 |
| Total payments for specific purposes | 16,482 | 12,883 | 12,019 | 6,498 | 3,937 | 1,225 | 866 | 830 | 55,291 |
| 2019-20 | |||||||||
| National Specific Purpose Payments | 945 | 746 | 591 | 513 | 205 | 60 | 48 | 29 | 3,138 |
| National Health Reform funding | 6,674 | 5,074 | 4,337 | 2,470 | 1,449 | 403 | 420 | 278 | 21,106 |
| Students First funding | 5,996 | 4,933 | 4,209 | 2,157 | 1,395 | 430 | 331 | 325 | 19,777 |
| National Partnership payments(b) | 2,378 | 1,570 | 2,249 | 1,095 | 575 | 207 | 120 | 218 | 8,959 |
| Total payments for specific purposes | 15,993 | 12,322 | 11,386 | 6,235 | 3,624 | 1,101 | 919 | 851 | 52,981 |
(a) As State allocations for a small number of programmes have yet to be determined, these payments are not included in State totals. As a result, total payments may not equal the sum of State totals.
(b) Includes financial assistance grants for local government and payments direct to local government.
Total payments for specific purposes by sector are shown in Table 2.2.
| $million | 2015‑16 | 2016‑17 | 2017‑18 | 2018-19 | 2019-20 |
|---|---|---|---|---|---|
| Health | 17,906 | 18,723 | 19,552 | 20,598 | 21,712 |
| Education | 16,260 | 17,574 | 18,429 | 18,873 | 19,817 |
| Skills and workforce development | 1,852 | 1,992 | 1,499 | 1,522 | 1,548 |
| Community services | 2,981 | 2,558 | 2,854 | 4,885 | 1,530 |
| Affordable housing | 1,883 | 1,936 | 1,759 | 1,387 | 1,409 |
| Infrastructure | 6,999 | 9,178 | 8,754 | 5,046 | 3,956 |
| Environment | 590 | 692 | 491 | 228 | 150 |
| Contingent | 49 | 28 | 11 | .. | .. |
| Other(a) | 1,438 | 2,601 | 2,676 | 2,752 | 2,859 |
| Total payments for specific purposes | 49,958 | 55,280 | 56,025 | 55,291 | 52,981 |
(a) Includes financial assistance grants for local government.
Total payments for specific purposes by sector and category are shown in Table 2.3.
| $million | 2015‑16 | 2016‑17 | 2017‑18 | 2018-19 | 2019-20 |
|---|---|---|---|---|---|
| Health | |||||
| National Health Reform funding | 17,196 | 17,912 | 18,923 | 19,987 | 21,106 |
| National Partnerships | 710 | 811 | 629 | 611 | 606 |
| Total health payments | 17,906 | 18,723 | 19,552 | 20,598 | 21,712 |
| Education | |||||
| Students First funding | 15,636 | 16,996 | 17,997 | 18,833 | 19,777 |
| National Partnerships | 624 | 578 | 432 | 40 | 40 |
| Total education payments | 16,260 | 17,574 | 18,429 | 18,873 | 19,817 |
| Skills and workforce development | |||||
| National Skills and Workforce Development SPP | 1,455 | 1,476 | 1,499 | 1,522 | 1,548 |
| National Partnerships | 397 | 516 | - | - | - |
| Total skills and workforce development payments | 1,852 | 1,992 | 1,499 | 1,522 | 1,548 |
| Community services | |||||
| National Disability SPP | 1,440 | 1,487 | 1,516 | 949 | 185 |
| National Partnerships | 1,541 | 1,071 | 1,338 | 3,936 | 1,344 |
| Total community services payments | 2,981 | 2,558 | 2,854 | 4,885 | 1,530 |
| Affordable housing | |||||
| National Affordable Housing SPP | 1,324 | 1,343 | 1,363 | 1,383 | 1,405 |
| National Partnerships | 559 | 593 | 397 | 4 | 4 |
| Total affordable housing payments | 1,883 | 1,936 | 1,759 | 1,387 | 1,409 |
| Infrastructure | |||||
| National Partnerships | 6,999 | 9,178 | 8,754 | 5,046 | 3,956 |
| Environment | |||||
| National Partnerships | 590 | 692 | 491 | 228 | 150 |
| Contingent payments | |||||
| National Partnerships | 49 | 28 | 11 | .. | .. |
| Other | |||||
| National Partnerships(a) | 1,438 | 2,601 | 2,676 | 2,752 | 2,859 |
| Total payments for specific purposes | 49,958 | 55,280 | 56,025 | 55,291 | 52,981 |
(a) Includes financial assistance grants for local government.
Further information on each of these payments is contained in this Part. New measures associated with payments to the States are included in Budget Paper No. 2, Budget Measures 2016‑17.
Total payments to the States for specific purposes, as categorised by Government Finance Statistics functions, are set out in Appendix B, which is available online.