· other payments by Australian Government departments or agencies to the States for the provision of services that are normally the responsibility of State governments.

For convenience, the Commission refers to, and treats, all such payments as specific purpose payments (SPPs).

3 In the 2004 Review, the scope of the adjusted budget was restricted to transactions that had a direct impact on State budgets. Payments through the States or to non‑Government organisations were outside the scope of equalisation (referred to as 'out of scope').

4 In that review, the Commission expanded the scope of the adjusted budget to include capital SPPs. Table 1 summaries the coverage of SPPs.

Table 1 Coverage of specific purpose payments

	Included	Excluded
SPPs shown in Commonwealth of Australia Final Budget Outcome (FBO).	Recurrent and capital payments paid to the States for State type services.	Recurrent and capital payments paid through the States for State type services.
		Payments for services normally provided by the Australian Government or local governments.
Australian Government payments not shown in Commonwealth of Australia Final Budget Outcome.	Recurrent and capital payments paid to the States for State type services.	Recurrent and capital payments paid through the States or direct to non‑government organisations for State type services.
		Payments for services normally provided by the Australian Government or local governments.

TREATMENT OF SPECIFIC PURPOSE PAYMENTS

5 The Commission applied the SPP guidelines to decide the treatment of each SPP, unless the terms of reference directed otherwise. Figure 1 shows the SPP guidelines.

Out of Scope

6 This treatment was used if the payment:

· financed services that were not part of the adjusted budget, for example a service normally provided by the Australian Government; and/or

· did not have a direct impact on State budgets, for example payments made by the Australian Government through the States.

7 Under this treatment, the Commission excluded the payment from its SPP revenue and removed the expense financed by the SPP from its related expense category. Neither the payment nor the expense it financed was subject to equalisation.

Exclusion

8 This treatment was used if:

· the payment was reimbursement for services provided for the Australian Government;

· the payment was distributed consistently with the Commission's assessment of States' needs and it was simpler to exclude it;

· the payment was minor[2] and it was simpler to exclude it rather than introduce additional factors into the relevant assessment; and

· the use of inclusion would impose a constraint on States budgets that was not allowed for in the relevant assessment.

9 Under this treatment, the Commission excluded the payment from its SPP revenue and removed the expense financed by the SPP from its related expense category. The practical effect of exclusion and out of scope in State relativities was the same.

Figure 1 SPP Guidelines, 2007 Update

Inclusion

10 This treatment was used if the payment was made to the Statesfor a function within the adjusted budget for which needs were assessed.

11 Under this treatment, the Commission included the payment in its SPP revenue and the expense financed by the SPP in its related expense category. In this way, the expense financed from the payment was equalised in the relevant expense category and the payment was treated as revenue available to finance those services.

Backcasting

12 Where there is a major change in the Commonwealth‑State financial arrangements, the conditions likely to apply in the application year could be significantly different from those applying in the assessment years. In these circumstances, the Commission backcasts the new arrangement into its assessments. It does this by adjusting the assessment year expenses and revenues to reflect what they would have been had the new arrangements been in place in those years. Backcasting produces relativities that better reflect States' requirements for Australian Government assistance in the year of application.

13 The Commission has reviewed the SPPs that will commence in 2006‑07 and 2007‑08. Although these payments will affect the year in which the 2007 Update relativities will be applied, the Commission decided not to backcast them. Annually, they are relatively small programs and do not represent a major change in Commonwealth‑State relations.

SOURCE OF SPP DATA

14 The Commission sourced its SPP data from the Commonwealth of Australia Final Budget Outcome (FBO) and information collected from Australian Government agencies.

TREATMENT OF SPECIFIC PURPOSE PAYMENTS IN THE 2007 UPDATE

Treatment required by the terms of reference

15 Quarantine components of the Australian Health Care Grants. Clause 6 asked the Commission to treat some components of payments made under the Australian Health Care Agreements as part of the combined pool of GST Revenue and Health Care Grants (HCGs). Accordingly, the Commission quarantined the following components:

· payments in relation to mental health;

· payments in relation to the National Health Development Fund;

· payments in relation to the Pathways Home Initiative;

· all payments under an adjustment module, including those related to the Critical and Urgent Treatment (CUT) Waiting List Initiative;

· compliance payment arrangements (in this case including the maximum available compliance payments in the assessments);

· payments to South Australia for the administration and management of the hospital at Woomera; and

· payments to Queensland in recognition of the cost associated with the movement of Papua New Guinea's citizens across the Torres Strait.

16 The Commission applied the exclusion method to all components, except the compliance payment. It included the full amount of the compliance payment in its assessments. Table 2 shows the quarantined amounts.

Table 2 Quarantined Australian health care agreements payments 2001-02 to 2005-06

Source:The Commonwealth of Australia Final Budget Outcome, supplemented by data from the Department of Health and Aged Care.

17 Quarantine some SPPs. Clause 5 asked the Commission continue to quarantine those SPPs quarantined in previous terms of reference. Accordingly, the Commission quarantined the following payments:

· national competition payments;

· payments to the States to reimburse them for revenue lost as a result of the establishment of a national scheme of companies, securities and future regulation;

· payments which are funded from the Natural Heritage Trust of Australia and the Regional Telecommunications Infrastructure Fund;

· payments for the fringe benefit tax transitional grants for the public and not‑for‑profit hospitals;

· payments for building IT strengths — Tasmanian 'Intelligent Island';

· payments for the extension of the First Home Owners scheme;

· payments for the Roads to Recovery program;

· Australian Government payments made to the Sinking Fund on State Debt; and

· payments for the Victorian Cytology Service made under the Public Health Outcome Funding Agreements;

· Residual Adjustment Amounts;

· payments to Tasmania under the Supplementary Tasmanian Regional Forestry Agreement; and

· payments to the Northern Territory for Royal Darwin Hospital: Equipped, Prepared and Ready.

18 These payments have been treated by exclusion for all assessment years.

19 Non‑compliance with SPP conditions. Clause 9 instructed the Commission to ensure that the reduction in the level of an SPP paid to a State, due to its non‑compliance with the conditions of the SPP, should not influence its assessed relativity. It said additional guidance in relation to any actual reductions for non‑compliance would be provided to the Commission if and when the need arose. No guidance was provided to the Commission in the 2007 Update.

Treatment of other Australian Government payments

20 The Commission also included some Australian Government payments not shown in Commonwealth of Australia's Final Budget Outcome paid to the States for State type services. They were:

· payments for Indigenous purposes;

· payments for emergency services; and

· payments for National Action Plan on Salinity and Water Quality.

21 Payments for Indigenous purposes. The Commission included in its assessments Australian Government payments to the States for Indigenous purposes. These included:

· payments to the States administered by the former Aboriginal and Torres Strait Islander Services (ATSIS). After the closure of ATSIS, the programs were disseminated across various Australian Government departments or agencies. In the 2007 Update, we only included the payments for the Community Housing and Infrastructure Program (CHIP). These payments are now administered by the Department of Families, Community Services and Indigenous Affairs (FACSIA); and

· payments to the States for the Indigenous Health and Substance Abuse Program administered by Office of Aboriginal and Torres Strait Islander Health (OATSIH).

22 Table 3 shows the amounts.

Table 3 Payments for indigenous purposes treated by inclusion

Source:Information provided by ATSIS, FACSIA and OATSIH.

23 Payments for Emergency Services. The Commission included in its assessments payments made by Emergency Management Australia (EMA) for emergency services. Table 4 shows the amounts.

Table 4 Payments by Emergency Management Australia (EMA) for emergency services treated by inclusion

Source:Information provided by EMA.

24 Payments for National Action Plan on Salinity and Water Quality. The Commission included in its assessments payments made to the States to implement the National Action Plan for Salinity and Water Quality (NAPSWQ) Program. These payments were made as Commonwealth own‑purpose outlays (COPOs) in 2001‑02 and 2002‑03, and as a SPP from 2003‑04 onwards. Table 5 shows the payments for the period prior to 2003‑04 by the Department of Agriculture, Fisheries and Forestry.

Table 5 Payments for national action plan for salinity and water quality treated by inclusion, 2001‑02 and 2002‑03

Source:Information provided by the Department of Agriculture, Fisheries and Forestry.

INFORMATION ON THE PAYMENTS RELEVANT TO THE 2007 UPDATE

25 The following section provides information on the Australian Government revenue payments of relevance to the 2007 Update:

· Table 6 shows the total amounts of SPPs under each treatment — part of the pool, inclusion, exclusion and out of scope — and whether their treatment has been directed by the terms of reference or decided by the Commission.

· Table 7 shows the per capita SPPs treated by inclusion in each year of the 2007 Update. It also shows each State's per capita receipts relative to the average. Figure 2 illustrates the per capita receipts for the last assessment year (2005‑06).

· Table 8 provides a summary of the treatment accorded each SPP in this update. Those payments where treatments are prescribed by the terms of reference are marked with an asterisk.

· Table 9 provides details of each SPP program paid for recurrent purposes, its treatment, and reasons for the treatment where it is not inclusion.

· Table 10 provides details of each SPP program paid for capital purposes, its treatment, and reasons for the treatment where it is not inclusion.

This chapter was prepared by the Budget Analysis and Relativities section of the Commonwealth Grants Commission. If you have any questions about its content please contact Priscilla Kan on (02) 6229 8849 or priscilla.kan@cgc.gov.au.

Date: 23 February 2007

Table 6 Specific purpose payments^(a) 2001‑02 to 2005‑06 — method of treatment

(a) Excludes SPPs treated as State revenue

Table 7 Specific purpose payments treated by inclusion - average per capita and States' relative receipts, 2001‑02 to 2005‑06

(a) Calculated as the State's per capita receipts divided by average per capita receipts.

Figure 2 States' relative receipt of specific purpose payments treated by inclusion, 2005‑06

Table 8 Treatment of specific purpose payments^(a)

Table 8 Treatment of specific purpose payments^(a) (continued)

(a) Including SPPs and other Australian Government revenue payments not published in FBO.

(b) Paid as SPPs from 2002‑03.

(d) These payments were paid as other Australian Government revenue payments for 2001‑02 and 2002‑03 and paid as SPPs from 2003‑04.

* Method adopted as required by the terms of reference.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Public order and safety
Legal Aid	To provide funding to State legal aid commission for the provision of legal assistance on the Australian Government matters.	Distributed according to needs planning model on an analysis of relevant demographics, and risk and cost factors.	Specified service levels and units included in the agreements.	2001‑02 to 2005‑06	Out of scope	Australian Government matter.
Gun Buyback Scheme	In accordance with the Handgun Buyback Act 2003, to compensate eligible persons for the surrender of handguns, parts and accessories and for money expended in direct connection with administration and awareness raising of the Council of Australian Government reforms.	Funding provided to States on a reimbursement basis.	No matching conditions.	2003-04 and 2004‑05	Exclusion	States act as agents for the Australian Government.
Film and Literature Classifications	Payments to States for participation in the new national cooperative censorship scheme as per the inter‑governmental agreement signed on 28 November 1995.	In first year of operation all jurisdictions received same base amount and adjusted by CPI movement in later years.	N/A	2001-02 to 2005-06	Exclusion	Minor payment where the introduction of additional factors into the assessment would not be warranted.
Commonwealth Heads of Government Meeting - Payment to Queensland Police	Payment to Queensland Police for security arrangements relating to the Commonwealth Heads of Government Meeting Brisbane 2002.	Payment to Queensland only.	N/A	2001-02	Out of scope	Australian Government matter.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Education
Government Schools	To provide supplementary assistance to State education authorities through per capita general recurrent grants which can be applied to staff salaries, teacher professional development, curriculum development and maintenance and general operation provisions.	Calculated on per student basis and adjusted based on movements in average government school recurrent costs.	No matching conditions.	2001-02 to 2005-06	Inclusion
Non‑Government Schools (payment through the States)	To provide supplementary assistance to non‑government schools and systems through per capita general recurrent grants which can be applied to staff salaries, teacher professional development, curriculum development and maintenance and general operation provisions.	Funding to non‑government schools depends on number of eligible students enrolled in non‑government schools, their distribution among schools with varying funding levels and adjusted based on movements in average government school recurrent costs. Establishment grants are available in respect of newly commencing schools. From 2001, funding are available to distance education student in non‑government schools.	No input conditions. General recurrent funds payable in accordance with the objectives of the program and in the particular year for which funds have been allocated.	2001-02 to 2005-06	Out of scope	The payment is for on passing and does not have a direct impact on State budgets.
Vocational Education and Training Funding Act	To provide a nationally identifiable and consistent vocational education and training system. The funds are paid to Australian National Training Authority (ANTA) for allocation to the States.	The recurrent funding allocations are based on ANTA's recommendations in the annual 'Directors and Recourse Allocation' report to the Ministerial Council each year. The allocations are based on a population share (mix of historical and current).	Each State receives funding if it gives a commitment to increase the number of new apprentices. A State will receive additional funding if it gives a commitment to match the additional Australian Government funding in the year.	2001-02 to 2004-05	Inclusion

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Targeted Programs - Government Schools and Joint Initiatives (school programs - government schools)	To provide assistance to for the improvement of literacy, numeracy and educational outcomes for educationally disadvantaged students, to promote the study of other languages, and to assist in the transition from school to work.	N/A	No input conditions. Funds may be used at the discretion of the education authority.	2001-02 to 2005-06	Inclusion
Targeted Programs -Non‑Government Schools (joint school programs - non‑govt schools) (payment through States)	To provide assistance to non‑government schools and systems for the improvement of literacy, numeracy and education outcomes for educationally disadvantaged students, to promote the study of other languages, and to assist in the transition from school to work.	N/A	No input conditions. Funds may be used at the discretion of the education authority.	2001-02 to 2005-06	Out of scope	The payment is for on passing and does not have a direct impact on State budgets.
Indigenous Education Strategic Initiatives Program - Government	To provide supplementary recurrent funding to State education providers in the pre‑school, school and vocational education and training sectors, as well as project based funding aimed at improving indigenous education outcomes.	N/A	No input conditions. Recipients to use their best endeavours to reach performance targets annually.	2001-02 to 2005-06	Inclusion
Indigenous education strategic initiatives program - non‑government (payment through the States)	To provide supplementary recurrent funding to non‑government education providers in the pre‑school, school and vocational education and training sectors, as well as project based funding aimed at improving indigenous education outcomes.	N/A	No input conditions. Recipients to use their best endeavours to reach performance targets annually.	2001-02 to 2003-04	Out of scope	The payment is for on passing and does not have a direct impact on State budgets.

Payment

Program Description

Interstate Distribution

Conditions

Year of Payment in U2007

Treatment in U2007

Reason if the treatment not inclusion in U2007

Skilling Australia's Workforce

Funds are used to promote a national vocational education and training system.

The arrangements were previously set out and reported under the Vocational Education and Training Funding Act 1992. The Act has since been repealed and funding and reporting arrangements are not set out in the Skilling Australia's Workforce Act 2005 and subsequent agreements with the States and Territories.

2005‑06

Inclusion

Australian Technical Colleges

The Australian Government is establishing 24 Australian Technical Colleges over four years. Students will combine academic courses leading to Year 12 certificate with a School‑based New Apprenticeship in a trade, leading to a nationally endorsed Training Package qualification.

It is expected that the States will provide recurrent funding to each College at current per‑student rates.

Most of the funding is classified as Australian Government own purpose expenses (COPOs) and paid by private consortia. In addition to this funding, the Australian Government will fund each student at a College at the same rate as existing government and non‑government secondary school students.

2005‑06

Inclusion for SPPs and COPOs paid to State government colleges; and

Out of scope for SPPs and COPOs paid to non‑government colleges

The payment is for on passing to private consortia and does not have a direct impact on State budgets.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Health
Blood Transfusion Services	To provide funds for the Australian Red Cross Service towards its recurrent costs in providing a national blood transfusion services.	Per annum each State and Territory provides an estimate (operating and capital grants) that they propose to pay the Aust Red Cross, this is used to determine the Australian Government contribution.	The Australian Government pays 40% of operating costs, the Red Cross contribute a small amount and State/Territory paying the balance.	2001-02 and 2002-03	Inclusion
Health Program Grants	To provide alternative funding to Medicare benefits, with the aim of improving access to approved health services and/or where fee for service is inappropriate, by reimbursing service costs to State government organisations for two types of services: pathology and medical/general practitioner services.	Organisations are funded at the discretion of the Minister (or delegate). Payments are made to give effect to specific health policy objectives and on the basis of how many services are provided in the years.	Program based on a financial year basis.	2001-02 to 2005-06	Exclusion	States act as Australian Government agents.
Health Care Grants	Grants under the Australian Health Care Agreements to assist States to provide public hospital services free of charge to eligible persons.	Distributed accordance with the Agreements and are subject to a determination by Minister of Health and Aged Care.	No matching requirements, however States and Territories are required to at least maintain a level of public patient services.	2001-02 to 2005-06	Exclusion and part of the pool^{^[3]}	As required by the terms of reference.
National Health Development Fund	Grants under the Australian Health Care Agreements to assist States to improve health system performance.	Allocations in accordance with the Agreements and are subject to a determination by Minister of Health and Aged Care.	N/A	2001-02 and 2002-03	Exclusion	As required by the terms of reference.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Highly Specialised Drugs	To provide access to certain drugs under the Pharmaceutical Benefits Scheme which must be supplied through hospitals to outpatients, because of special need in clinical administration or monitoring.	The Australian Government funds all usage of highly specialised drugs by hospital outpatients.	States and Territories provide funding to in‑patient usage of specialised high cost medicine and Australian Government subsidises access for outpatients.	2001-02 to 2005-06	Out of scope	Australian Government responsibility.
Youth health services	To fund community based organisations to enable them to develop and implement innovative primary health care services for homeless and at‑risk youth.	Based on State and Territory population distributions with ACT and NT receiving a minimum percentage of the overall funding allocation.	States match the Australian Government contribution on a dollar for dollar basis.	2001-02 to 2005-06	Inclusion
National public health	Payments to the States, under the new broad banded arrangements for public health, for subsidies for health promotion and disease prevention. Agreement has five categories: Public Health Outcome Funding Agreement (PHOFAs), COAG Diversion Initiative, the (NGO) Non Government Treatment Grants (NSW only) for funding to NGOs for the purpose of expanding and upgrading existing NGO treatment services, Hepatitis C Education and Prevention Budget Initiative and COAG Illicit Drug Diversion Package.	PHOFAs based on a resource allocation formula, COAG Diversion and Illicit Drugs and Hepatitis C are based on weighted predicted population estimates each year. NSW is the only jurisdiction that received NGO treatment grant funds, outside of the PHOFA.	No matching requirements.	2001-02 to 2005-06	Payments for the Victorian Cytology Service (VCS) made under this SPP arrangement - Exclusion; Remainder of the SPP ‑ Inclusion	Exclusion of VCS — as required by the terms of reference.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Essential vaccines	To provide funds for essential vaccines for immunisation under the Public Health Outcome Funding Agreements and for selected new vaccines recommended by the National Health and Medical Research Council for inclusion in the Standard Vaccination Schedule.	Fund to States and Territories is based on a resource allocation formula of population across jurisdictions, together with other relevant health indicators and determinants includes socio‑economic status, mortality rates, remoteness and program specific usage factors.	Although no incentive procedures are currently in place the present PHOFAs include provisions for their adoption following the review now in progress of vaccine leakage and wastage in the National Immunisation Program.	2001-02 to 2005-06	Inclusion
Repatriation General Hospitals	To provide funds for payments of a non‑treatment nature eg staff transfer costs such as accrued leave credits, income maintenance, superannuation differential, etc to State governments in accordance with agreements reached on integration of repatriation general hospitals.	Payments to each State (NSW, Vic SA and Tas) are provided under a separate Australian Government‑State arrangement.	States to provide list of personnel before payment is made. The Australian Government reimburses the State for the difference between what the former Australian Government Employees were entitled to and the equivalent for State employees where the State entitlement is lower.	2001-02 to 2005-06	Exclusion	States act as agents for the Australian Government.
Hepatitis C Settlement Fund	The fund is designed to provide financial assistance to those who have been infected with Hepatitis C via blood transfusions.	The funding is provided through the States to legal entities acting on behalf of individuals.		2003-04 to 2005-06	Out of scope	The payment is for on passing and does not have a direct impact on State budgets.
Fringe Benefit Tax Transitional Grants for Public and Not‑for‑Profit Hospitals	The FBT cap to apply to public and not‑for‑profit hospitals will be $17 000 of grossed up taxable value per employee. To assist with the transition to this cap, grants are to be provided to public and not‑for‑profit hospitals from 2000‑01, reducing to zero in 2003‑04.	Based on information provided to the Department of Health and Aged Care by each jurisdiction and assessed by Australian Taxation Office.	Distribution and frequency will be assessed on information provided to the Department of Health and Aged Care by each jurisdiction and assessed by Australian Taxation Office.	2001-02 and 2002-03	Exclusion	As required by the terms of reference.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Assistance for Bali victims	Provide one‑off assistance to most State governments for the public hospital costs incurred in the initial treatment of victims of the bombing in Bali on 12 October 2002.			2003-04	Exclusion	Allocation reflects needs.
Supporting Western Sydney - Positron Emission Tomography (PET) Scanner Westmead	Contributions to the purchase and installation of a new PET scanner at Westmead Hospital (NSW) and annual grant towards running costs.	Payment to New South Wales only.		2004-05 and 2005-06	Inclusion
Strengthening Cancer Care - Royal Children's Hospital in Melbourne	One‑off assistance to Royal Children's Hospital in Melbourne for the completion of a world class children's cancer centre, which will be a model for similar centres.	Payment to Victoria only.		2004-05	Inclusion
Royal Darwin Hospital - Equipped, Prepared and Ready	Funding to ensure that it can operate as a National Critical Care and Trauma Response Centre and ensure that in the event of a major incident, it has the capacity to receive and treat as many people as possible.	Payment to the Northern Territory only.		2004-05 and 2005-06	Exclusion	As required by the terms of reference.
Assistance to Tsunami Victims	One‑off assistance to most States for the costs incurred in providing medical teams and other support as part of Australia's assistance to the victims of the December 2004 tsunami.	Payment to all States except Tasmania.		2004-05	Exclusion	Allocation reflects needs.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Organ Transplantation Service	Contribution to certain transplantation costs in New South Wales and South Australia.	The Australian Government is committed to reimburse these States 40 per cent of the cost of certain organ and tissue transplantation‑related services that are conducted by the Australian Red Cross Blood Service.		2005-06	Inclusion
Social security and welfare
Home and Community Care	Funds are provided on a matched basis for the provision of appropriate community care services to help frail aged people and people with a disability live independently in their homes as long as possible.	Distribution is being reviewed, with the view of moving away from historic program based allocation.	The Australian Government provides approximately 60% of funding and the States the remainder.	2001-02 to 2005-06	Inclusion
Aged Care Assessment	To conduct holistic assessments of frail aged clients to determine their care needs and to refer them to appropriate residential or community care services. This program has two components Aged Care Assessment Teams (ACATs) and Psycho geriatric Care Units (PCUs).	ACATs - take into account the number of Aboriginal and Torres Strait Islanders aged 50 to 69 and population dispersion weighted for rural and remote factors. PCUs ‑ The States and NT Governments submit proposals.	Funding is directed towards costs of salaries of assessment staff, overheads and some operating costs. States and NT provide some funding to cover accommodations and infrastructure services eg pays and personnel.	2001-02 to 2005-06	Inclusion
Disabilities Services	Under the terms of the renegotiated Commonwealth‑State Disability Agreement 1997, the Australian Government continues to provide funds to the States to assist in the provision of accommodation support and other services for people with disabilities.	Percentage split NSW: 33.0; Vic: 22.2; QLD: 19.4; WA: 7.7; SA: 11.8; Tas: 3.6; NT: 1.0; ACT: 1.3.	No matching requirements although there is an expectation that State expenditure be maintained in real terms. Recent bilateral agreements contained a condition requiring States to provide significant additional funds which at least met the level of new Australian Government funding.	2001-02 to 2005-06	Inclusion

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Unaccompanied Humanitarian Minors	To assist humanitarian minors without parents in Australia and families providing their care through early intervention, counselling and assistance by State welfare agencies.	Number of refugee minors receiving supervision and care in each location.	This agreement is non‑discretionary and demand driven and is to provide supervision and welfare support to minors as expressed in a MOU and cost share agreement.	2001-02 to 2005-06	Exclusion	Minor payments where the introduction of additional factors into the assessment would not be warranted.
Children's Services	To ensure access to affordable, quality childcare in programs administered by State governments on behalf of the Australian Government.	As negotiated with each State/Territory Government for Occasional Care Neighbourhood Model. Balance of Support for Child Care is generally dependent upon the numbers and amounts of grants in respect of individual services in each State.	Australian Government contributions paid up‑front with State Governments providing the remainder. Conditions for neighbourhood model occasional care places were not specified.	2001-02 to 2005-06	Exclusion	States act as agents for the Australian Government.
Supported Accommodation Assistance Program (SAAP)	This is a jointly funded Australian Govt.‑State program to assist people who are homeless and in crisis. The States are responsible for the day‑to‑day administration of the program. Services are provided by community organisations and local governments under contracts to State government welfare departments.	Distribution of total funding largely historically based on amalgamation of Australian Government and Government recurrent funding on support services for the homeless in 1985. Subsequent additional funding allocated with an adjustment for Tasmania and the Territories.	Continuation of joint Australian Government (60%) and State (40%) base grant and indexed by CPI.	2001-02 to 2005-06	Inclusion
Exceptional Circumstances (EC) Administration	To support the administrative costs of the State rural assistance authorities, including the issuing of EC certificates under the Farm Household Support Act 1992 to eligible farmers to access the exceptional circumstances relief payment (ECRP).	Distribution is related simply to the existence of EC areas (if any) and Rural Partnership Programs (RPPs) in individual States.	N/A	2002-03	Exclusion	Minor payments where the introduction of additional factors into the assessment would not be warranted.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Extension of fringe benefits	To compensate the States for extra costs resulting from the liberalisation of access to the Australian Government's Pensioner Concession card in 1993. In return the States agree to provide a core group of concessions for utilities, municipal and water rates, public transport and motor vehicle registration to all holders.	The split between the States and Territories is based on the percentage of total pensioners in each State/Territory, agreed in 1993.	States/Territories are obligated to confirm annually, that they will continue to provide the core group of concessions to PCC holders with no discrimination between full and part‑rate pensioners.	2001-02 to 2005-06	Inclusion
National illicit drugs strategy	Funding to State and Territory Governments to provide services to families where the young person is suffering from the effect of illicit drug use. In most cases, the governments purchase services from community based organisations.	Based on a funding model including a range of weighting factors.	The Australian Government solely funds the initiative. States manage the program.	2001-02 and 2002-03	Inclusion
Assistance to Solomon Island Evacuees	To reimburse Queensland government for meeting the livings costs of Solomon Island evacuees evacuated from the Solomon Islands in April 2006.			2005-06	Exclusion	Allocation reflects needs.
Housing and community amenities
Assistance for housing	The State Grants (Housing) Act 1971 provides for payments in lieu of Australian Government housing assistance to offset the cost of interest on funds borrowed by the States at that time for public housing.	Total amount payable to each State is in accordance with the Act, as specified in the percentages laid down in Section 5(3) of the Act.	N/A	2001-02	Inclusion

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Assistance for water and sewerage	To compensate the ACT Government for additional costs resulting from the national capital planning influences on the provision of water and sewerage services.	The level of funding is in accordance with the CGC's Third Report on ACT Finances in 1988 and adjusted annually for inflation.	N/A	2001-02 to 2005-06	Out of scope	Payments relating to Public Trading Enterprises (PTEs) are assumed to be for on passing and do not have a direct impact on State budgets.
Natural Heritage Trust of Australia - Bushcare^{^[4]}	To reserve the long term decline in the quality and extent of Australia's native vegetation cover.	Annual bid for funding and following Ministerial approval, funding is released by Financial Agreements. Agencies in each State and Territory are responsible on disbursement to recipients.	A State to match funding dollar for dollar. Projects must comply with a range of general Natural Heritage Trust requirements.	2001-02 to 2005-06	Exclusion	As required by the terms of reference.
Natural Heritage Trust of Australia - Coasts and Clean seas Initiative (changed name to Coastcare)^{^[5]}	To help achieve the repair of Australia's aquatic environment and assist in the conservation and sustainable use of resources in freshwater, estuarine and marine environments.	National competitive process.	Coasts and Clean Seas - proponents are required to provide matching contributions. Coastcare - States contribute the total funding.	2001-02 to 2005-06	Exclusion	As required by the terms of reference.
Natural Heritage Trust of Australia - National Rivercare Program (changed name to Rivercare)^{^[6]}	To ensure progress towards the sustainable management, rehabilitation and conservation of rivers outside the Murray‑Darling Basin.	Distribution is based on assessments of projects against program priorities.	Matching of funds requested from the program.	2001-02 to 2005-06	Exclusion	As required by the terms of reference.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Natural Heritage Trust of Australia - Endangered Species Program	To protect and conserve Australia's threatened species and ecological communities so they can survive, flourish and retain their potential for evolutionary development.	National program and projects are assessed against the objectives of the program and other related national plans.	States are required to match funding dollar for dollar.	2001-02	Exclusion	As required by the terms of reference.
Natural Heritage Trust of Australia - National Feral Animal Control Program	To ensure effective management of the impact of feral animals on the natural environment and on primary production.	Interstate distribution is broadly lined to State and Australian Government 'Partnership Agreements' and national priorities.	States are required to match funding dollar for dollar.	2001-02	Exclusion	As required by the terms of reference.
Natural Heritage Trust of Australia - Air Pollution in Major Cities	To reduce the impact of air pollution in urban areas and, in doing so, to contribute to the development of sustainable urban environments.	Funds are provided on the basis of achieving planned milestones.	N/A	2001-02 and 2002-03	Exclusion	As required by the terms of reference.
Natural Heritage Trust of Australia ‑ Oceans Policy	To set in place a framework for integrated and ecosystem based planning and management for Australia's marine environment.	Paid under the Natural Heritage Trust Program. Funds are provided on the basis of achieving planned milestones.	Conditions may be placed on approved projects on a case by case basis (on request of the Environment Minister).	2001-02	Exclusion	As required by the terms of reference.
Natural Heritage Trust of Australia - Landcare^{^[7]}	To develop and implement resource management practices which enhance our soil, water and biological resources and which are efficient, sustainable, equitable, and consistent with the principles of ecologically sustainable management.	State and the Australian Government agreement at commencement of program with yearly adjustments based on NRM priorities.	Payments to the States will be in accordance with a signed financial agreement, with specific outputs, outcomes and reports.	2002-03 to 2005-06	Exclusion	As required by the terms of reference.
National Water Initiative ‑ Living Murray	To implement a package of water recovery and water use efficiency activities to address water over‑allocation to improve the health of the Murray Darling Basin.	N/A	Payment to Victoria.	2005-06	Inclusion

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Recreation and culture
Natural Heritage Trust of Australia - National Wetlands Program	To promote the conservation, repair and wise use of wetlands across Australia.	As per Partnership Agreements with each State/Territory.	Conditions may be placed on approved projects on a case by case basis (on request of the Environment Minister). Requires matching eligible contributions from proponent and partner organisations.	2001-02	Exclusion	As required by the terms of reference.
Natural Heritage Trust of Australia - National Reserve System	To assist with the establishment and maintenance of a comprehensive, adequate and representative system of reserves.	Based on applications received and approved on individual application.	States are required to match the Australian Government funding at the rate of one third States, two thirds Australian Government.	2001-02	Exclusion	As required by the terms of reference.
Natural Heritage Trust of Australia - World Heritage Area Management and Upkeep	To meet Australia's national and international obligations to protect, conserve and present Australia's world heritage properties.	Varies from year to year, and is the result of competitive nature of the program.	Bilateral Agreements identify the Australian Government‑State contribution to projects. No formal matching or maintenance conditions apply.	2001-02	Exclusion	As required by the terms of reference.
Management of World Heritage Properties	To meet Australia's obligations under the World Heritage Convention and to implement improved management arrangements to protect and present the Tasmanian Wilderness World Heritage Area.	Payment to Tasmania only.	The funding agreement identifies the Australian Government and State annual contributions for each of the four financial years covered by the Agreement.	2001-02	Exclusion	States act as agents for the Australian Government.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
2004 Olympic / Paralympic Welcome Home Parade	Contribution towards the hosting of national welcome home parades for Australia's 2004 Olympic and Paralympic Teams.	Payment to New South Wales.		2004-05	Exclusion	States act as agents for the Australian Government.
Melbourne Commonwealth Games 2006	Provide funding to the Victorian Government to assist in the upgrading of the Melbourne Cricket Ground, one of the major facilities to be used during the Commonwealth Games.	Funding to be provided over two years as agreed milestones are achieved.	The Australian Government contribution to the capital works represent less than a quarter of the expected costs and the balance will be met by the Victorian Government.	2003-04 and 2005-06	Exclusion	States act as agents for the Australian Government.
Strengthening Tasmania	To undertake refurbishment of buildings in the Low Head Historic Precinct to promote increased visitation, and economic viability and long‑term sustainability to the precinct through the generation of sufficient revenue to provide for adequate management and maintenance of the site's heritage assets as a public facility.			2005-06	Inclusion
Agriculture, forestry and fishing
Natural Heritage Trust of Australia - National Weeds Program	To develop and implement a national co‑operative approach to managing the impact of environmental weeds on Australia's flora and fauna and to implement strategic control plans for major noxious weed species identified as being of national ecological and economic importance.	Projects are assessed against the objectives of the program and other related national plans.	State is required to match funding dollar for dollar. There is also a range of specifications on what items can be funded under the NHT.	2001-02	Exclusion	As required by the terms of reference.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Natural Heritage Trust of Australia - Farm Forestry Program	To encourage the incorporation of commercial tree growing and management into farming systems for the purpose of wood and non‑wood production, increasing agricultural productivity and sustainable natural resource management.	Funds distribution is based on State and the Australian Government assessment of projects against program priorities.	Payments to the States will be in accordance with a signed Financial Agreement, with specific outputs, outcomes and reports.	2001-02	Exclusion	As required by the terms of reference.
Natural Heritage Trust of Australia - Murray Darling 2001	Contribute to the rehabilitation of the Murray‑Darling Basin, with the view to achieving a sustainable future in the Basin, its natural systems and its communities.	The Murray Darling 2001 program is an agreed formula based approach, official annual allocation to State/Territories is 85% with 15% Targeted component to priority regions. Fish Rehabilitation funding on competitive assessments with each funding round.	Financial assistance consistent with the objectives of NHT and a Partnership Agreement. Fish Rehabilitation require a progress report upon completion of each milestone.	2001-02	Exclusion	As required by the terms of reference.
Tasmania Wheat Freight ‑ Shipping	To assist cereal processor users and consumers for the cost of shipping wheat to Tasmania (limited to the shipping across Bass Strait). (To help Tasmania to adjust to changes in wheat marketing which have occurred since 1989 and to the new tax regime from July 2000).	Payment to Tasmania only ($1.2m each year).		2001-02 to 2003-04	Out of scope	Australian Government function.
Exotic Disease Preparedness Program	Supports investigations into the role of wildlife species in the maintenance and spread of emerging animal diseases and incursions of major exotic diseases of animals.	Depends on projects received from various States and judgments about their quality and relevance.	Dollar for dollar input from the States.	2001-02 to 2005-06	Exclusion	Minor payments where the introduction of additional factors into the assessment would not be warranted.
Natural Heritage Trust of Australia ‑ National Landcare Program	To develop and implement resource management practices which enhance our soil, water and biological resources and are efficient, sustainable, equitable, and consistent with the principles of ecological development.	Agreement at commencement of program, with yearly adjustments based on National Resources Management priorities.	Projects shall be agreed on a case by case basis, taking into account of the potential for contributions from all beneficiaries. States are responsible for achieving outcomes for each project.	2001-02	Exclusion	As required by the terms of reference.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
National Landcare Program	Aims to achieve efficient, sustainable and equitable management of natural resources in Australia. Payments mainly assist community landcare group activities and projects which support community landcare, although some State agency projects are also supported.	Agreement at commencement of program, with yearly adjustments based on National Resources Management priorities.	Projects shall be agreed on a case by case basis, taking into account of the potential for contributions from all beneficiaries. States are responsible for achieving outcomes for each project.	2001-02 to 2005-06	Exclusion	Forerunner of Natural Heritage Trust program which was quarantined by the terms of reference.
Farm Business Improvement Program (FarmBis)	Provides a framework for promoting a positive approach to change and builds on the farm sector's culture of continual improvement to help farmers improve the productivity, profitability and sustainability of their business.	Before the commencement of the program, States were asked what funds they would commit to the program. The Australian Government then matched their commitment on a 50:50 basis.	Require matching on a 50:50 basis in the NT, and all States except WA. (Australian Government/ WA agreement utilises WA Rural Adjustment Scheme reserves at a Australian Government to WA ratio of 90:10).	2001-02	Inclusion
Farm Assistance (was Farm Assistance Package for Central/NE South Australia)	To facilitate structural adjustment in the rural sector which contributes to the enhanced viability of farm business enterprises within the Central North East South Australia region through the preparation of business plans; increased farm productivity; grasshopper and locusts control; facilitating redevelopment of properties and research into alternative farming methods.	The amount to be provided for the Projects by the Australian Government and South Australia will be limited to a total of $4.05 million over the term of the Agreement comprising up to: $2 million provided by the Australian Government; and $2.05 million provided by South Australia.	South Australia to match the Australian Government payment.	2001-02	Inclusion
Plant disease and eradication	N/A	Payment to Victoria, Queensland and South Australia.	N/A	2001-02 to 2005-06	Inclusion

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
West 2000 Plus	The program has 2 objectives: (a) to contribute to a competitive, viable and self‑sustaining Western Division of NSW to enhance the economic performance of Landholders and improve the management of the natural resource base; and (b) to contribute to robust, equitable and prosperous communities.	Payment to New South Wales only.	The Australian Government contributes 50 per cent of the funding.	2001-02	Exclusion	The payment is a successor of Rural Adjustment Scheme which was treated by exclusion.
Rural Adjustment Scheme (RAS)	To provide support to farm business enterprises to improve farm productivity, profitability and sustainability, and to eligible farm business enterprises where incomes have been adversely affected by exceptional circumstances such as extreme drought. Farmers in financial difficulty, but without prospects for long‑term profitability, are assisted to exit from the farm sector.	Distribution among the States is related simply to the existence of Exceptional Circumstances (EC) areas (if any) and Rural Partnership Programs (RPP) in individual States.	Exceptional Circumstances certificates are demand driven and is intended to place viable farms in a better position to recover ‑ subsides of up to 50% of the farmer's interest cost are available (90% funded by the Australian Government and 10% by States). For RPPs a specified limit of funding is provided in each Australian Government‑State Agreement for specified organisations.	2001-02	Exclusion	States act as agents for the Australian Government.
Natural Heritage Trust of Australia - National River Health Program	To guide and monitor activities to reverse the degradation of Australia's inland waters.	As per partnership agreements with State and Territories.	States and Territories are required to match funding dollar for dollar, with individual grant agreements stipulating timeframes, project specific outputs and other mandatory performance information.	2001-02	Exclusion	As required by the terms of reference.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Natural Heritage Trust of Australia - Waterwatch Australia	To coordinate and support networks of community members who are working towards the goal of healthy waterways.	As per partnership agreements with State and Territories.	Matching contributions for State agency projects must be consistent with the cost‑sharing arrangement specified in the per partnership agreements in each State and Territory.	2001-02	Exclusion	As required by the terms of reference.
Natural Heritage Trust of Australia - Waste Management Awareness	To promote benefits and practicalities entailed in effective waste management and recycling, with the emphasis on community based activities.	The project involves field trails in several States coordinated by the Institute of Horticulture in Victoria.	$110 000 is being provided from the States (total Australian Government funding is $240 000).	2001-02 and 2002-03	Exclusion	As required by the terms of reference.
Natural Heritage Trust of Australia - Riverworks Tasmania	To carry out remediation work to improve the environment and where appropriate, the general amenity of Tasmanian river systems by removing and reducing sources of pollution.			2001‑02	Exclusion	As required by the terms of reference.
Great Artesian Basin Sustainability Initiative	To assist with the implementation of Great Artesian Basin Management Plan. Grants will be made to States and Territories to assist bore rehabilitation. Supplementary incentives will also be made available for the replacement of open drains with piping.	Initial distribution of funds across the Basin was assessed for each Management Zone defined by hydro‑geologic, bio‑physical and industry characteristics. The available funds were then partitioned up to each zone in proportion to the results of the need analysis.		2002-03	Exclusion	Minor payments where the introduction of additional factors into the assessment would not be warranted.
Forest Industry Structural Adjustment Package	To assist the native forest timber industry become more efficient, sustainable and internationally competitive. It also provides structural adjustment assistance to eligible forest industry workers and businesses who have been adversely affected by the Regional Forest Agreement process.	A MOU has been signed with each of the States with whom a joint FISAP is operating. The MOU specifies the amount of funding for individual States and the amount contributed by States.	Payments are subject to decisions made by advisory committees made up of representatives from State and the Australian Government.	2001-02 to 2004‑05	Out of scope	Payments relating to PTEs are assumed to be for on passing and do not have a direct impact on State budgets.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Skilling Farmers for the Future	To integrate and enhance the existing successful FarmBis and Property Management Planning Programs and incorporate the wild catch fishing industry. It will facilitate farmer self reliance and promote a positive approach to change and a culture of continuous improvement by providing financial assistance to improve skills in business and resource management.	Before the commencement of the program State/NT were asked what funds they would commit to the program. The Australian Government then matched their commitment on a 50:50 basis.	Each State/NT has an agreement for set amounts over the three years of the program.	2001-02 to 2005-06	Inclusion
War Service Land Settlement Scheme	To reimburse SA for the operation and maintenance of the Loxton Irrigation Scheme, to meet the Australian Government obligations.	The major element of the funding is in South Australia as it relates to the Loxton Irrigation Scheme.	$10.5m committed refurbishment of the Loxton Irrigation Scheme, with full responsibility for the scheme transferred to South Australia.	2001-02 to 2003-04	Out of scope	Australian Government responsibility.
Eradication of Red Imported Fire Ant	To provide funding for the eradication of Red Imported Fire Ant infestations detected in Australia.	The Australian Government and State/Territory governments provide funding on agreed basis of expenditure.	The Australian Government to contribute 50% on cost sharing formula.	2001-02 to 2005-06	Exclusion	Allocation reflects needs.
Regional Assistance	To provide support to farm business enterprises to improve farm productivity, profitability and sustainability.			2002-03 to 2004-05	Inclusion
Exceptional Circumstances Assistance^{^[8]}	To support eligible farm business enterprise where incomes have been adversely affected by exceptional circumstances such as drought and to support admin costs of State and territory rural assistance authorities for the issuing of certificates and the delivery of interest rate subsides.	Distribution is related simply to the existence of EC areas (if any) and Rural Partnership Programs (RPPs) in individual States.	N/A	2003-04 to 2005‑06	Exclusion	Minor payments where the introduction of additional factors into the assessment would not be warranted.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
National Action Plan for Salinity and Water Quality (NAPSWQ)^{^[9]}	Aims to motivate and enable regional communities to use coordinated and targeted action to: a) to prevent, stabilise and reverse trends in dry land salinity; b) to improve water quality and secure reliable allocations for human uses.	Payments mainly assist designated regional bodies to prepare Natural Resource Management plans and invest in priority actions.	Funding is matched with additional cash by State and territory governments which have signed bilateral agreements.	2001-02 to 2005-06	Inclusion
Agricultural Development Partnerships	This program provides assistance for structural adjustment, targeted to agricultural industries and regions experiencing significant problems affecting farm profitability and sustainability.			2003-04 and 2004-05	Inclusion
Tasmanian Forests package	To fund additional plantation establishment and productivity improvements to existing plantations and native forests, with the aim of ensuring long‑term supply of sawlogs and veneer logs.	Payment to Tasmania only.		2005-06	Out of scope	As required by the terms of reference.
Mining and mineral resources (other than fuels), manufacturing and constructions
National Business Information Service	To improve the capacity of the Business Information Service and reduce business red tape through joint initiatives with State and Territory Governments.	State/Territory share is dependent on workload in each jurisdiction and share of users.	2000‑01 allocation represents payments set out in MOU as well as expenditure on two joint projects.	2001-02	Inclusion

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Snowy Hydro Ltd‑Co — Tax Compensation	To compensate Victoria and New South Wales for company tax payments by Snowy Hydro Ltd. Snowy Hydro is jointly owned by the Australian, New South Wales and Victorian Governments.	N/A	N/A	2002-03 to 2005-06	Exclusion	Allocation reflects needs.
Transport and communication
Interstate Road Transport	Payments to the States of funds received through the Federal Interstate Registration Scheme that provides an alternative to State registration for vehicles engaged in inter‑State trade. The intention is to provide funds for the maintenance and upkeep of roads used by these vehicles. Also includes payments of amounts equal to penalties arising from prosecutions under the Act.	Funding is allocated according to a formula based on road usage from ABS surveys (with the exception that under a Ministerial agreement of 1986, ACT, Tas and NT receive a fixed 0.5% of funds collected for expenditure on road maintenance.	N/A	2001-02 to 2005-06	State revenue	Australian Government acts as collection agent.
Petroleum Products Freight Subsidy Scheme (payment through the States)	The States Grants (Petroleum Products) Act 1965 provides for grants to be made to the States and the Northern Territory to enable them to subsidise the cost of transporting eligible petroleum products to remote areas of Australia.	Amount is set by the Australian Government and is normally indexed each year.	Each State/NT are provided with an initial pool of funds to pay subsides to distributors. These amounts are topped up throughout the year as claims are paid.	2001-02 to 2005-06	Out of scope	The payment is for on passing and does not have a direct impact on State budgets.
Roads to Recovery - Unincorporated Areas	Funding for the construction, upgrade and maintenance of roads in Christmas and Cocos (Keeling) Islands and unincorporated areas of SA, NSW and Vic not governed by local government authorities.	The Australian Government responsible for providing funding on agreed basis, with bilateral agreements with individual States. States deliver the service.	State road expenditure to be maintained.	2001-02 to 2003-04	Exclusion	As required by the terms of reference.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Supplementary Funding to SA Councils for Local Roads (payment through States)	Supplementary funding to local government in South Australia for local roads to address the State's current disadvantage in local road funding under the FAG arrangement.	Payment to South Australia.		2004-05 and 2005-06	Out of scope	Local Government functions are outside the scope of framework budget.
Upgrade to Eyre Peninsula Rail System	As part of its land transport infrastructure funding the Australian Government provides funding to upgrade South Australia's Eyre Peninsula rail system.	Payment to South Australia. The project is for an integrated rail, road and grain handling infrastructure upgrade. The rail line is owned and operated by the Australian Railroad Group and is used exclusively for transport of grain.	The payment is conditional upon State government, industry and local councils providing a matching contribution.	2004-05	Out of scope	This SPP is treated in the same way as the rail component of Auslink, that is Out of scope. Rail is a PTE activity where the Commission assesses the net impact of the PTE on State budgets. The payment is paid through the State government to the Australian Railroad Group. It does not have direct impact on the State's budget.
Gold Coast Light Rail	One‑off contribution towards a feasibility study into a light rail system from Helensvale to Broadbeach on the Gold Coast.	Payments to Queensland only.		2002-03 to 2004-05	Inclusion
Other purposes
Debt Redemption Assistance	To compensate the States and NT under the Financial Agreement Act 1994 for the additional interest cost of replacing maturing Australian Government debt with their own borrowings. Also for the lower Australian Government sinking fund contributions, that has resulted from the debt redemption arrangement.	Distribution is based on maturing debt levels and debt outstanding for each of the States and NT.	N/A	2001-02 to 2005-06	Interest Cost - Inclusion; Contribution to Sinking Fund - Exclusion	Contribution to sinking fund component excluded as required by the terms of reference.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Financial Assistance Grants for Local Govt ‑ General Assistance	To enable councils to provide a wider range of services to promote equity by providing councils which suffer high costs and/or poor revenue sources a greater share of the grant through the States.	Interstate allocation is on a per capita basis. Payment through States.	N/A	2001-02 to 2005-06	Out of scope	Local government function.
Financial Assistance Grants for Local Govt - Untied Local Roads Grants	To provide untied assistance to local government authorities in place of Specific Purpose Payments formerly passed on to local government by the States for expenditure on local roads.	Level of funding to each States originated from historical relative local road needs and indexed every year. Payment through States.	N/A	2001-02 to 2005-06	Out of scope	Local government function.
Compensation ‑ Companies Regulation	Under the terms of the Corporate Agreement, the Australian Government is obliged to compensate the six States and the Northern Territory for revenue forgone following the commencement of the national scheme for the regulation of companies and securities.	Monthly instalments to the States and NT in accordance with percentages set out in the agreement.	N/A	2001-02 to 2005-06	Out of scope	As required by the terms of reference.
Natural Disaster Relief	Reimbursement of part of the expenditure incurred by the States on personal hardship and distress payments made to persons adversely affected by natural disaster.	Is 'demand driven' based on the level and frequency of State/Territory claims.	Requirement to match the Australian Government funding dollar for dollar, or for State sourced expenditure to be maintained in real terms.	2001-02 to 2005-06	Exclusion	Allocation reflects needs.
Natural Disaster Risk Management Studies (a sub‑program of natural disaster relief agreement)	To encourage States to undertake risk assessment and/or studies to identify, analyse and evaluate the risks from natural disasters. To stimulate the introduction of preventative strategies and measures to reduce unacceptable risks identified by any studies.	Payment through the States.	The Australian Government funds of up to $3m per annum are available for approved studies. Match funding by State and Local Government, to a total funding pool of $9m per annum.	2001-02 and 2002-03	Out of scope	The payment is for on passing and does not have a direct impact on State budgets.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
ACT National Capital influences	To meet the additional municipal type costs the ACT bears flowing from Canberra's role as the national capital. Funding is based upon the findings of the CGC.	Payment to ACT only.	N/A	2001-02 to 2005-06	Out of scope	Australian Government function
Special Revenue Assistance to the ACT[10]	Payments to the ACT that recognise that Australian‑State government financial relations differ from Australian‑ACT financial relations in certain specific respects.			2002-03 to 2004-05	Exclusion	Allocation reflects needs.
Royalties	There are two components for this payment: 1) reimbursement to the Western Australian Government for royalties under the Petroleum (Submerged Lands) Act 1967 (PSLA); and 2) payment to the Northern Territory Government in lieu of uranium royalties from the Ranger project.	Payment to WA and NT are made only after receipt of royalty payment by the producers.	1) Royalties in excess of 4% are passed to WA. 2) 1.25% of net sales processed are paid to NT.	2001-02 to 2005-06	Exclusion for WA payment under Section 130 of the Petroleum (Submerged Lands) Act 1967; State Revenue for other components	Exclusion for the payment to Western Australia under Section 130 of the Petroleum (Submerged Lands) Act 1967 because this is a compensation for the State's complying with contract conditions relating to natural gas sales.
National Aerial Fire Fighting Strategy	Australian Government contribution to the direct costs of leasing and locating the three heli‑tankers to meet anticipated national demand in 2002‑03.			2002-03	Inclusion

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Bushfire Recovery Appeals	Australian Government contributions to public appeals for cash donations to be applied to relief and recovery measures for victims of bushfires. Funds to be applied to measures not covered by existing relief programs.			2002-03	Exclusion	Allocation reflects needs.
Assistance to ACT Softwood Sawmill	Payment to the ACT Softwood Sawmill for assistance after the 2003 bushfire.			2003-04	Exclusion	Allocation reflects needs.
The Prime Minister's and Premier's Cyclone Larry Relief Appeal	Australian Government contribution to the Queensland Government's Tropical Cyclone Larry Relief Appeal.	Payment to Queensland only.		2005-06	Exclusion	Allocation reflects needs.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Education
Government Schools	To provide supplementary assistance to State education authorities for the provision, maintenance and upgrading of school facilities, which can include, amongst other things, land or building purchases, capital works or the provision of equipment.	Capital grants to government schools are provided as block grants and funds for each State are allocated on the basis of total school enrolments.	50% of funds has to be allocated in a year towards facilities for existing school students.	2001-02 to 2005-06	Inclusion
Non‑Government Schools (payment through the States)	To provide supplementary assistance to non‑government schools and systems as well as hostels for rural students, for the provision, maintenance and upgrading of school facilities, which can include, amongst other things, land or building purchases, capital works or the provision of equipment.	Capital grants are committed on a project by project basis. Payments are made according to a schedule approved by the Minister each program year.	50% of funds has to be allocated in a triennium towards facilities for existing school students.	2001-02 to 2005-06	Out of scope	The payment is for on passing and does not have a direct impact on State budgets.
Indigenous Education Strategic Initiatives Program - Non‑Government (payment through the States)	To provide supplementary capital funding to education providers in the pre‑school, school and vocational education and training sectors, as well as project based funding aimed at improving indigenous education outcomes.	N/A	No input conditions. Recipients use their best endeavours to reach performance targets annually.	2001-02	Out of scope	The payment is for on passing and does not have a direct impact on State budgets.
Health
Blood Transfusion Services	To provide funds for the Australian Red Cross Society towards the costs of its approved capital program in providing a national blood transfusion services.	Every year each State and Territory provides an estimate (operating and capital grants) that they propose to pay the Aust Red Cross towards running the Services, this is used to determine the Australian Government contribution.	The capital component is a 50/50 split between the Australian Government and State/Territory. Payment is made once capital work has been completed or progress payment is due.	2001-02 and 2002-03	Out of scope	The payment is for on passing and does not have a direct impact on State budgets.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Federation Fund - Queensland Institute of Medical Research	A one‑off injection to the Queensland Institute of Medical Research for the construction, development and fit‑out of a Comprehensive Cancer Research Centre.	Payment to Queensland only.	Queensland government provided $20 million and a site at the Royal Brisbane Hospital.	2001-02	Exclusion	States act as agents for the Australian Government.
Organ Transplantation Service	Contribution to certain transplantation costs in New South Wales and South Australia.	The Australian Government is committed to reimburse these States 50 per cent of the cost of certain organ and tissue transplantation‑related services that are conducted by the Australian Red Cross Blood Service.		2005-06	Out of scope	The payment is for on passing and does not have a direct impact on State budgets.
Social security and welfare
Home and Community Care	Funds are provided on a matched basis for the provision of appropriate community care services to help the frail aged people and people with disability live independently in their homes as long as possible.	Distribution is being reviewed, with the view of moving away from historic program based allocation.	The Australian Government provides approximately 60% of funding and the States the remainder.	2001-02 to 2003-04	Inclusion
Crisis Accommodation Assistance (an identified program under CSHA)	To provide funds to the States under the Commonwealth‑State Housing Agreement (CSHA) for the purchase, construction, renovation, maintenance and lease of dwellings to provide accommodation for use under the Supported Accommodation Assistance Program.	Funding is distributed on a per capita basis.	State matching funds are determines as a set proportion of CSHA Base Funding. There is no specific matching requirement for the Crisis Accommodation Program.	2001-02 to 2005-06	Inclusion

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Housing and community amenities
Housing Assistance for Indigenous people (an identified program under CSHA)	To assist the Indigenous people for low to moderate income earners to have access to affordable, appropriate and secure rental accommodation, including public and community‑owned rental housing. States can use the grants for construction, upgrades and house maintenance and other related housing function such as asset management and maintenance training for Indigenous housing workers.	The distribution of new funds (from 2002‑03) is based on Indigenous housing needs in rural and remote areas.	State matching funds are assessed as a set proportion of CSHA Base Funding.	2001-02 to 2005-06	Out of scope for payments to Horizon Power for WA; and Inclusion for the remainder of payments.	Out of scope for payments to WA for Horizon Power. Payment is for on passing and does not have a direct impact on State budget.
Community Housing (an identified program under CSHA)	To develop community housing which provides appropriate and affordable rental accommodation for low to moderate income earners. States use the funding to subsidise non‑government organisations in providing low cost accommodation.	Funding is distributed on a per capita basis.	State matching funds are assessed as a set proportion of CSHA Base Funding.	2001-02 to 2005-06	Inclusion
Commonwealth ‑ State Housing Agreement (CSHA) Block Assistance / Base Funding	To provide funds to the States primarily for the provision of public rental housing for low to moderate income households. Base funding has two components: (1) housing assistance such as public and community housing, home purchase assistance and private rental assistance; and (2) GST compensation.	Base Funding is distributed across states and territories on a modified per capita basis. GST Compensation is distributed on a basis assessed by the States.	States matching the Australian Government base funding and contribute almost $1.5 billion over the four years of the 1999 CSHA by way of grant.	2001-02 to 2005-06	Inclusion

Payment	Program Description	Interstate Distribution		Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Social Housing Subsidy Program	Provides matching funds to States for up to twenty years to subsidise the recurrent costs of financial rental accommodation for low to moderate income earners.	Funding is used for the expansion of community housing opportunities in NSW and a private rental leasing scheme in ACT. Funds are committed to NSW and the ACT and funding to other States was removed in the 1996‑97 Budget.		Requirement to match the Australian Government funding dollar for dollar.	2001-02 to 2005-06	Inclusion
Bushfire Mitigation Package	Funding of $15 million over three years for the construction and maintenance of fire trails and associated accessibility measures such as the provision of access gates.	Payment to all States except the NT in 2004‑05.	Funding is contingent on at least a matching contribution from the State for each of its approved projects. Where the project involves a local agency, the Australian government will meet up to one third of the cost of each approved project, with the remaining cost being met by State/local agency arrangements, except for agreed exceptional circumstances.		2004-05 and 2005-06	Out of scope	The payment is for on passing and does not have a direct impact on State budgets.
Federation Fund - Centennial Moore Park trust	To fund the capital improvement plan on Federation Drive, Federation Landscape, Federation Valley and the Avenues of Trees.	Payments to NSW only.	Over three years, $10 million was provided by the Australian Government and $1.5 million by grantee.		2001-02	Out of scope	Australian Government responsibility.
Federal Flood Mitigation Program (payment through the States)	Provides funding to the States and Territories to assist in addressing the problem of repeated flooding in rural towns and regional centres. A joint program between the Australian Government, State and local government.	States are given a notional allocation, the percentage split of annual funding was assessed at the commencement of the program on the basis of flood risk and damage assessments for each State.	States matching the Australian Government funding. States also agree to maintain existing expenditure on flood mitigation works and measures.		2001-02 to 2004-05	Out of scope	The payment is for on passing and does not have a direct impact on State budgets.
Additional First Home Owners Scheme (payment through the States)	The Australian Government is funding an additional First Home Owners Scheme grant for eligible owners contracting between 9 March 2001 and 30 June 2002 to buy or build a new home.	Based on number of eligible new home owners. The grant is $7000 for contracts 9 March and 31 December 2001 and $3000 for contracts from 1 January and 30 June 2002.	The Australian Government fully funds State payment of grants. Deduce.		2001-02 to 2005-06	Out of scope	As required by the terms of reference.

Payment	Program Description		Interstate Distribution	Conditions		Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Lismore Levee Program (payment through the States)	One off payment to accelerate the construction of the Lismore flood levee to redirect flood waters and prevent damage to homes and businesses.		Payment to New South Wales only.	N/A		2001-02	Out of scope	The payment is for on passing and does not have a direct impact on State budgets.
Disaster mitigation package (payment through States)	Funding for a wide range of mitigation measures to help reduce the threat posed by natural disasters such as bushfires, cyclones, floods and landslides across the nation.				2003-04 to 2005-06		Out of scope	The payment is for on passing and does not have a direct impact on State budgets.
Recreation and culture
Natural Heritage Trust of Australia - national reserve system program	To assist with the establishment and maintenance of a comprehensive, adequate and representative system of reserves. States and other groups submit application for funds for the purchase, covenanting or management assistance for areas that contribute to developing a reserve system.	The distribution is based on applications approved.		The States are required to match funding dollars, at the rate of one third for States, two thirds for the Australian Government. There is also a range of specifications on what items can be funded under the Natural Heritage Trust.	2001-02		Exclusion	As required by the terms of reference.
Fuel and energy
Photovoltaic rebate program (PVRP) (payment through States)	To provide rebates to households and community groups who install photovoltaic equipment to make electricity from sunlight for domestic use.	Distribution of funds is based on draw‑downs. The PVRP offers equitable access to consumers.		N/A	2001-02 to 2005-06		Out of scope	This payment is for on passing and does not have a direct impact on State budgets.
Renewable remote power generation	To provide a rebate to the States for the installation of renewable energy generation technologies in areas of Australia currently reliant on diesel for electricity generation.	Based on Diesel Fuel Excise paid by the States for 'public generation'.		N/A	2001-02 to 2005-06		Out of scope	Payments relating to PTEs are assumed to be for on passing and do not have a direct impact on State budgets.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Agriculture, forestry and fishing
Natural Heritage Trust of Australia - Murray Darling 2001	Contribute to the rehabilitation of the Murray‑Darling Basin, with the view to achieving a sustainable future in the Basin, its natural systems and its communities.	Under the Program (except for the Fish Rehabilitation component) there is an agreed formula‑based approach to the official annual allocations to the States/Territory under the 85% threshold component of the program.	N/A	2001-02	Exclusion	As required by the terms of reference.
Natural Heritage Trust of Australia - National Landcare Program (changed name to NHTA ‑ Landcare in 2003‑04)	To develop and implement resource management practices which enhance our soil, water and biological resources and which are efficient, sustainable, equitable, and consistent with the principles of ecologically sustainable development.	State and the Australian Government agreement at commencement of program, with yearly adjustments based on Natural Resources Management priorities.	N/A	2001-02 and 2002-03 and 2004-05	Exclusion	As required by the terms of reference.
Natural Heritage Trust of Australia - Rivercare	To improve water quality and environment conditions in our river systems and wetlands.			2002-03	Exclusion	As required by the terms of reference.
Great Artesian Basin Sustainability Initiative	To promote and facilitate the establishment of sustainable on‑going groundwater management systems for the Great Artesian Basin through strategic investments in groundwater infrastructure renewal and related activities in natural resource management.	An Objective needs analysis assessed the decline in artesian pressures, the potential for pressure recovery by reduced water waste, the net community value of such pressure recovery, and the likely potential additional demands for water in each Zone. The available funds were then partitioned up to each Zone in proportion to the results of the need analysis.		2001-02 to 2005-06	Out of scope	Payments relating to PTEs are assumed to be for on passing and do not have a direct impact on State budgets.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Tasmanian Water infrastructure	To provide funding to Tasmania for the construction of the Warner Creek Dam and the Northern Midlands Water Project. These projects aim to provide reliable sources of irrigation water in their respective regions.	Payment to Tasmania only.		2005-06	Out of scope	Payments relating to PTEs for on passing and do not have a direct impact on State budgets.
Transport and communication
Building IT strengths - Tasmania 'Intelligent Island'	Building of existing Tasmanian government initiatives to further develop an internationally competitive IT & T sector, the Australian Government provides $40 million towards redeveloping Tasmania as an 'Intelligent Island'.	The Intelligent Island Program is a Social Bonus Program resulting from the second partial sale of Telstra. Payment to Tasmania only.	The Australian Government has committed $40 million over 5 years. The Grant funds are to be transferred from the Australian Government to a Trust Fund established by the Tasmanian Government for the purpose of the Program.	2001-02	Exclusion	As required by the terms of reference.
Alice Springs to Darwin Railway	The Australian Government has agreed to provide up to an additional $91.4 million towards the construction of an Alice Springs to Darwin rail link. This is in addition to the $100 million to be provided under the Federation Funds - Projects - Northern Territory.	All funds expended in Northern Territory.	To provide up to $191.4m (comprised of $91.4m for this program and $100m of Federation Funds) towards the construction of a railway between Alice Springs and Darwin.	2001-02 and 2002-03 and 2004-05	Out of scope	Payments relating to PTEs are assumed to be for on passing and do not have a direct impact on State budgets.

Payment	Program Description	Interstate Distribution	Conditions	Year of Payment in U2007	Treatment in U2007	Reason if the treatment not inclusion in U2007
Auslink	Funding for the development, construction and maintenance of land transport projects on a newly defined National Land Transport Network. The program replaces the Roads, Roads to Recovery and the Road Safety Black Spots SPPs and also includes new funding for railways.	Funding paid to all States.		2004-05 and 2005-06	Rail - Out of scope; National highways and State Roads - Inclusion; Roads to recovery - Exclusion; Road Safety Blackspots - Inclusion for State roads and Out of scope for local roads.	Rail - payments relating to PTEs are assumed to be for on passing and do not have a direct impact on State budgets; Roads to recovery - as required by terms of reference; Payment for local roads - local government function.
Road program	The Australian Government funds the National Highway System and contributes to the capital cost of declared Roads of National Importance. Funds are appropriated under the Australian Land Transport Development Act 1988 and administered through a reserved money fund.	Funding allocations to the States are assessed on the calculated cash flow requirements for approved projects as set out in the program of works approved by the Minister. Allocations between the States are not fixed, they will vary each year, as projects are completed.	Funding contribution by State governments as negotiated on a case by case basis for Roads of National Importance projects. The Australian Government fully fund the construction and maintenance of National Highways. The Australian Government funding for Roads of National Importance is limited to projects jointly funded with the States.	2001-02 to 2003-04	Inclusion
Road Safety Blackspots (from 2004‑05 this programs is part of Auslink)	Funding is available for the treatment of road sites where casualty crashes are occurring. State Transport agencies manage programs of works. Funds are appropriated under the Australian Land Transport Development Act 1988 and administered through a reserved money fund.	Funding to the States is assessed by a formula based on each State's proportion of population and casualty crashes. Funding is available on public roads with a proven history of crashes except for National Highways and Roads of National Importance.	N/A	2001-02 to 2003-04	Inclusion - State Roads; Out of scope - Local Roads	Payment for local roads - local government function.

Payment

Program Description

Interstate Distribution

Conditions

Year of Payment in U2007

Treatment in U2007

Reason if the treatment not inclusion in U2007

Federation Funds Projects - Northern Territory

Alice Springs to Darwin ‑ the Australian Government has agreed to contribute $100 million from its Centenary of Federation Fund towards the construction of an Alice Springs to Darwin rail link, matching $100 million committed by both the NT and SA.

All funds expended in Northern Territory.

Payment of the Grant Moneys was subject to written confirmation by