Part 2: Payments for Specific Purposes
Overview of payments
The Commonwealth provides payments to the states for specific purposes in areas administered by the states. 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 amongst the states in accordance with population shares based on the Australian Statistician's determination as at 31 December of that 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. From 1 July 2017, public hospitals funding will be indexed by Consumer Price Index (CPI) and population growth. Further details are included in the Health section of this Part.
The Commonwealth further supports the states through the provision of recurrent funding for all government and non‑government schools. From 1 January 2018, recurrent schools funding will be indexed by CPI, with an allowance for changes in enrolments. Further details are included in the Education section of this Part.
Under the Intergovernmental Agreement, National Partnership payments to the states are the key vehicle to facilitate reforms or support the delivery of specified projects. 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 project milestones and are made after the states have achieved the outcomes or outputs specified in the relevant National Partnership.
National Partnership agreements are publicly available at: www.federalfinancialrelations.gov.au.
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) |
|---|---|---|---|---|---|---|---|---|---|
| 2014‑15 | |||||||||
| National Specific Purpose Payments | 1,323 | 1,029 | 831 | 455 | 296 | 90 | 68 | 43 | 4,135 |
| National Health Reform funding | 4,878 | 3,848 | 3,057 | 1,756 | 1,125 | 334 | 305 | 158 | 15,459 |
| Students First funding | 4,539 | 3,670 | 3,040 | 1,474 | 1,075 | 350 | 253 | 260 | 14,664 |
| National Partnership payments(b) | 3,585 | 2,381 | 2,554 | 2,132 | 627 | 255 | 156 | 567 | 12,272 |
| Total payments for specific purposes | 14,324 | 10,928 | 9,482 | 5,817 | 3,122 | 1,028 | 782 | 1,029 | 46,530 |
| 2015‑16 | |||||||||
| National Specific Purpose Payments | 1,346 | 1,052 | 850 | 471 | 299 | 91 | 69 | 44 | 4,222 |
| National Health Reform funding | 5,243 | 4,104 | 3,229 | 1,823 | 1,198 | 349 | 321 | 175 | 16,441 |
| Students First funding | 4,826 | 3,932 | 3,329 | 1,591 | 1,141 | 370 | 268 | 284 | 15,743 |
| National Partnership payments(b) | 3,557 | 2,572 | 2,657 | 1,594 | 878 | 349 | 127 | 758 | 13,557 |
| Total payments for specific purposes | 14,973 | 11,659 | 10,064 | 5,479 | 3,516 | 1,159 | 786 | 1,261 | 49,962 |
| 2016‑17 | |||||||||
| National Specific Purpose Payments | 1,372 | 1,077 | 870 | 488 | 304 | 91 | 71 | 45 | 4,318 |
| National Health Reform funding | 5,553 | 4,316 | 3,408 | 1,955 | 1,253 | 359 | 344 | 194 | 17,382 |
| Students First funding | 5,250 | 4,226 | 3,628 | 1,702 | 1,212 | 397 | 286 | 310 | 17,012 |
| National Partnership payments(b) | 4,617 | 1,780 | 3,493 | 1,446 | 957 | 340 | 137 | 524 | 14,807 |
| Total payments for specific purposes | 16,792 | 11,399 | 11,399 | 5,591 | 3,726 | 1,188 | 837 | 1,073 | 53,520 |
| 2017‑18 | |||||||||
| National Specific Purpose Payments | 1,401 | 1,104 | 892 | 506 | 309 | 92 | 72 | 47 | 4,423 |
| Public hospitals funding | 5,735 | 4,518 | 3,649 | 2,072 | 1,265 | 378 | 296 | 190 | 18,103 |
| Students First funding | 5,552 | 4,472 | 3,808 | 1,900 | 1,287 | 407 | 299 | 304 | 18,031 |
| National Partnership payments(b) | 3,530 | 1,381 | 2,941 | 1,283 | 679 | 196 | 158 | 421 | 11,992 |
| Total payments for specific purposes | 16,219 | 11,475 | 11,290 | 5,761 | 3,539 | 1,072 | 825 | 962 | 52,549 |
| 2018‑19 | |||||||||
| National Specific Purpose Payments | 1,432 | 1,133 | 915 | 526 | 314 | 93 | 74 | 48 | 4,534 |
| Public hospitals funding | 5,960 | 4,714 | 3,808 | 2,187 | 1,308 | 388 | 308 | 199 | 18,873 |
| Students First funding | 5,705 | 4,675 | 3,916 | 2,093 | 1,356 | 409 | 313 | 292 | 18,760 |
| National Partnership payments(b) | 3,505 | 1,222 | 1,971 | 980 | 765 | 190 | 114 | 209 | 10,052 |
| Total payments for specific purposes | 16,602 | 11,744 | 10,609 | 5,786 | 3,744 | 1,080 | 810 | 748 | 52,220 |
(a) As state allocations for a small number of programmes have yet to be determined, these payments are not included in state totals. As such, 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 | 2014‑15 | 2015‑16 | 2016‑17 | 2017‑18 | 2018‑19 |
|---|---|---|---|---|---|
| Health | 16,804 | 17,184 | 17,690 | 18,308 | 19,045 |
| Education | 15,450 | 16,365 | 17,585 | 18,458 | 18,800 |
| Skills and workforce development | 1,835 | 1,833 | 1,996 | 1,504 | 1,529 |
| Community services | 2,344 | 2,511 | 1,907 | 2,131 | 3,722 |
| Affordable housing | 1,973 | 1,858 | 1,916 | 1,780 | 1,392 |
| Infrastructure | 4,901 | 6,823 | 9,245 | 7,436 | 4,860 |
| Environment | 599 | 775 | 590 | 267 | 111 |
| Contingent | 37 | 33 | 5 | ‑1 | ‑1 |
| Other(a) | 2,585 | 2,580 | 2,586 | 2,666 | 2,762 |
| Total payments for specific purposes | 46,530 | 49,962 | 53,520 | 52,549 | 52,220 |
(a) Includes financial assistance grants for local government.
Total payments for specific purposes by sector and category are shown in Table 2.3.
| $million | 2014‑15 | 2015‑16 | 2016‑17 | 2017‑18 | 2018‑19 |
|---|---|---|---|---|---|
| Health | |||||
| National Health Reform funding | 15,459 | 16,441 | 17,382 | ‑ | ‑ |
| Public hospitals funding | - | - | ‑ | 18,103 | 18,873 |
| National Partnerships | 1,345 | 743 | 308 | 205 | 172 |
| Total health payments | 16,804 | 17,184 | 17,690 | 18,308 | 19,045 |
| Education | |||||
| Students First funding | 14,664 | 15,743 | 17,012 | 18,031 | 18,760 |
| National Partnerships | 786 | 623 | 573 | 427 | 40 |
| Total education payments | 15,450 | 16,365 | 17,585 | 18,458 | 18,800 |
| Skills and workforce development | |||||
| National Skills and Workforce Development SPP | 1,435 | 1,455 | 1,480 | 1,504 | 1,529 |
| National Partnerships | 400 | 377 | 516 | ‑ | ‑ |
| Total skills and workforce development payments | 1,835 | 1,833 | 1,996 | 1,504 | 1,529 |
| Community services | |||||
| National Disability SPP(a) | 1,394 | 1,442 | 1,493 | 1,552 | 1,617 |
| National Partnerships | 951 | 1,069 | 413 | 579 | 2,105 |
| Total community services payments | 2,344 | 2,511 | 1,907 | 2,131 | 3,722 |
| Affordable housing | |||||
| National Affordable Housing SPP | 1,306 | 1,324 | 1,345 | 1,367 | 1,389 |
| National Partnerships | 668 | 534 | 571 | 413 | 4 |
| Total affordable housing payments | 1,973 | 1,858 | 1,916 | 1,780 | 1,392 |
| Infrastructure | |||||
| National Partnerships | 4,901 | 6,823 | 9,245 | 7,436 | 4,860 |
| Environment | |||||
| National Partnerships | 599 | 775 | 590 | 267 | 111 |
| Contingent payments | |||||
| National Partnerships | 37 | 33 | 5 | ‑1 | ‑1 |
| Other | |||||
| National Partnerships(b) | 2,585 | 2,580 | 2,586 | 2,666 | 2,762 |
| Total payments for specific purposes | 46,530 | 49,962 | 53,520 | 52,549 | 52,220 |
(a) Does not include National Disability SPP adjustments to achieve budget neutrality as this is still subject to negotiation (see footnotes to Table 2.7 in this Part for further details).
(b) 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 2015‑16.
Total payments to the states for specific purposes, as categorised by Government Finance Statistics function, are set out in Appendix B, which is available online.