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Expenditure on children in the Northern Territory

Terms of reference

I, the Hon Josh Frydenberg MP, Treasurer, pursuant to Parts 2 and 4 of the Productivity Commission Act 1998, hereby request that the Productivity Commission undertake a study into Commonwealth and Northern Territory Government expenditure in the Northern Territory in the area of children and family services relevant to the prevention of harm to children.


The Royal Commission into the Protection and Detention of Children in the Northern Territory (Royal Commission) found that funding arrangements in the Northern Territory appear to be characterised by a lack of coordination between the Northern Territory and Commonwealth Governments, and within each government.

The Royal Commission found that Commonwealth and Northern Territory Government investment is not rigorously tracked, monitored or evaluated to ensure that it is appropriately distributed and directed.

The Royal Commission was concerned that government funds were directed to programs without reference to the existence of other programs, their target locations or the outcomes of the services delivered. A study into expenditure in the Northern Territory will supplement information already provided as part of the Royal Commission, and will support the development of a joint funding framework as recommended by the Royal Commission (Rec 39.05 refers).

A joint funding framework is an important step in ensuring the efficient and effective allocation of resources.


The Commonwealth and Northern Territory Governments have agreed to a joint study of children and families funding and services in the Northern Territory as a response to the Royal Commission.

The Productivity Commission will examine ways to improve funding arrangements across and within the Commonwealth and Northern Territory Governments and the services delivered via these funding arrangements. The Productivity Commission should have regard to relevant funding arrangements including for payments to or through the States (such as those made under National Partnerships), and grants (such as those made under the Indigenous Advancement Strategy and other selected programs related to the prevention of harm to children).

In undertaking the study, the Productivity Commission should consider:

  • the objectives, governance and implementation of current funding arrangements including assessment of:
    • the extent of duplication and lack of coordination across Commonwealth and Territory funding arrangements, individual programs and service providers
    • whether the approach to the design of programs aligns with policy objectives
    • the approach to engaging service providers and allocating funds
    • accountability, reporting and monitoring requirements for service providers and governments
    • levels of access to services
    • approaches to service delivery, including continuity of funding for services over time and levels of coordination and integration between services where a variety of service providers are used.
  • principles and approaches for governance and funding to promote better outcomes and improve:
    • the coordination of Commonwealth-Territory funding
    • the coordination, funding, design and administration of programs
    • the delivery of services and levels of access.

The Productivity Commission should have regard to:

  1. the federal financial relations framework, set out in the Intergovernmental Agreement on Federal Financial Relations and the Federal Financial Relations Act 2009
  2. the Commonwealth Grant Rules and Guidelines
  3. existing funding agreements and contractual arrangements between relevant parties
  4. existing accountability controls and conditions under (a), (b) and (c).

The scope of the study does not include an assessment of the Northern Territory’s expenditure relative to the GST revenue received through the Commonwealth Grants Commission assessment process.


The Productivity Commission will commence the study on 1 April 2019.

The Productivity Commission should undertake appropriate consultation including with the Aboriginal and Torres Strait Islander community sector. The Productivity Commission should release a draft report to the public and provide the final report to Government within 12 months.

The Hon Josh Frydenberg MP

[Received 14 March 2019]