In accordance with principles endorsed at the October 1990 Special Premiers' Conference and the 1991 meeting of Premiers and Chief Ministers, the then Premier and Treasurer of New South Wales issued Memorandum No. TM92/1 (dated 17 February 1992) which proposed a framework for negotiating specific purpose payments with the Commonwealth.

That Memorandum stipulated that:

• each year, at the time of submission of material for Chief Executive Officers and Ministerial Review Meetings, State Government agencies/ departments would provide a schedule of specific purpose payments to be negotiated over the succeeding twelve months. This information was to have been used in developing an agreed negotiating position for each specific purpose payment/ program and ensuring consistency between the policy initiatives taken under various programs.
• Ministers should write to inform the Premier prior to entering into negotiations with the Commonwealth on any new or existing specific purpose payments.
• Upon notice of forthcoming negotiations, an Officers' Group would be established to develop a negotiating position. The group would consist of representatives of relevant line agencies, the Treasury and The Cabinet Office.

Since the issue of Memorandum No. TM92/1, schedules of forthcoming negotiations have not been provided. This has resulted in continuing risk to New South Wales arising from the lack of a firm and consistent negotiating strategy for its specific purpose payments.

Information regarding forthcoming specific purpose payment negotiations is also required in the context of ongoing work relating to intergovernmental financial relations being carried out under the auspices of the Council of Australian Governments and the Financial Premiers' Conference. In this context, Ministers will recall that the Council of Australian Governments, at its June 1993 meeting, agreed to establish a Working Group to identify those functional areas which exhibit inefficiencies in existing intergovernmental arrangements and where there is scope for clarification of roles and responsibilities.

In a related but separate exercise, Heads of Government have initiated a Review of Commonwealth-State Service Provision which will develop benchmarking data and aim to improve the effectiveness and efficiency of service provision.

For these reasons, I would like to draw your attention again to the principles and approach described in the main body and Attachments B and C of Memorandum TM92/1 for the reference of all departments/ agencies involved in negotiations with the Commonwealth Government on specific purpose payments. This is appended as Attachment II to this Memorandum.

In addition, I would like to specify a timetable for the submission of information regarding specific purpose payments to be negotiated over the next year.

The schedule of expected negotiations for specific purpose payment programs over the period October 1993 to December 1994 is to be provided to The Cabinet Office and a copy sent to the Treasury by 12 November 1993. The information should be submitted in the format specified in Attachment I. This information will be used specifically for the Ministerial Review Meeting and the next meeting of the Council of Australian Governments scheduled in December 1993; and the Financial Premiers' Conference in early 1994.

In subsequent years, the schedules of specific purpose payments negotiations are to be provided yearly by 31 October of each year. This will enable the schedules to be utilised in the Ministerial Reviews, the Financial Premiers' Conference, and the preparation of the annual budget, particularly if the negotiations entail critical policy decisions.

If further information is required, contact may be made with David Chivell, Intergovernmental Relations Unit, The Cabinet Office (tel: 228.4324) or Nin Rejante, Economics and Revenue Division, NSW Treasury (tel: 228.4160).

John Fahey
Premier