Supplementary Explanatory Memorandum
Chapter 1 - Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations
1.1 The proposed amendments create a new part (Part 1A) of the Bill which adds a schedule (Schedule 2) comprising the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations and also records the intention of the Commonwealth to comply with the Intergovernmental Agreement.
1.2 To fulfil the Governments commitment in clause 4 of the Intergovernmental Agreement in relation to the acknowledgement of the Intergovernmental Agreement in the proposed legislation.
1.3 Clause 2 of the Bill provides that this Bill, once enacted, will commence when it has received royal assent or after the A New Tax System (Goods and Services Tax) Act 1999 ; the GST imposition Acts; and the A New Tax System (Goods and Services Tax Administration) Act 1999 have commenced. The Intergovernmental Agreement will commence between the Commonwealth, the States and the Territories on 1 July 1999 unless otherwise agreed by the Parties.
1.4 At the 9 April 1999 Premiers' Conference, the Prime Minister and the Premiers and Chief Ministers of each State and Territory signed an Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations . The Intergovernmental Agreement sets out the Commonwealth, State and Territory commitments with respect to new Commonwealth-State financial arrangements.
1.5 In clause 4 of the Intergovernmental Agreement the Commonwealth undertook to attach the Intergovernmental Agreement to the A New Tax System (Commonwealth-State Financial Arrangements) Act 1999 and to use its best endeavours to ensure the Act will require compliance with the Intergovernmental Agreement. The States and Territories made the same undertaking in relation to their legislation.
1.6 Sub-clause 9A(1) provides that a copy of the Intergovernmental Agreement is attached to the Act.
1.7 Sub-clause 9A(2) records that it is the Commonwealth's intention to comply with, and give effect to, the Intergovernmental Agreement.