Specific purpose payments

The Australian Government provides specific purpose payments to pursue important national policy objectives in areas that may be administered by the States. Typically the States need to fulfil specified conditions in order to receive these payments, which cover most functional areas of state and local government activity, including education, health, social security, housing and transport.

In 2006-07, specific purpose payments totalled $28.5 billion, an increase of $1.6 billion (6.1 per cent) over 2005‑06.

Detailed tables of specific purpose payments for 2006-07, including state shares of each payment, are provided in Attachment B.

The Australian Government provided a commitment in the Intergovernmental Agreement that it would maintain specific purpose payments in aggregate. The commitment was consistent with the objective of the States being financially better off under the new arrangements. The Australian Government's commitment to maintain specific purpose payments in aggregate is being met. In nominal terms, total specific purpose payments have increased by 59.4 per cent since 1999-2000.