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Thursday, 29 March 2007
Page: 22


Senator COONAN (Deputy Leader of the Government in the Senate) (10:42 AM) —I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

PRIMARY INDUSTRIES AND ENERGY RESEARCH AND DEVELOPMENT AMENDMENT BILL 2007

The purpose of this bill is to amend the Primary Industries ad Energy Research ad Development Act 1989 (the act).

The amendments follow the government’s endorsement of the assessment by the Minister for Agriculture, Fisheries and Forestry of the Statutory Rural Research and Development Corporations (RDCS) against the review of the Corporate Governance of Statutory Authorities and Office Holders (the Uhrig report).

The government commissioned the review by

Mr John Uhrig ac to assess the governance arrangements of commonwealth statutory authorities, with particular focus on those that impacted on the business sector.

The objective of the review was to identify issues surrounding existing governance arrangements and to provide options for government to improve the performance of statutory authorities and office holders, and improve their accountability frameworks.

Individual ministers are responsible for the assessment of statutory agencies in their own portfolios with the Minister for Finance and Administration providing a coordination role.

More than 160 Australian government agencies are being assessed against the uhrig report principles and templates.

The amendments to the act will give effect to governance improvements for the eight statutory rdcs.

Six of these RDCS cover the cotton; fisheries; forest and wood products; grains; grape and wine; and sugar industries.

Smaller and emerging rural industries are covered by the rural industries research and development corporation.

Natural resource management research and development is covered by land and water Australia.

The assessment of the eight statutory rdcs concluded that they should continue to be governed by independent, skills-based boards.

Such a governance structure is in line with the board template under the Uhrig report. It ensures the rdcs are best placed to enhance the partnership between industry and government under the rdc model, the rdcs also determine investment strategies that best meet industry and government priorities and maintain key relationships with an extensive range of primary industry stakeholders and research providers.

However, the current administrative practice of appointing serving public servants as government directors on rdc boards was recognised as not consistent with a skills based approach and is to be discontinued. Instead, the skills set for board selection will be expanded to include expertise in public administration.

This decision will also remove the potential for conflict of interest for serving public servants between their responsibilities to the minister and to the board.

As part of the assessment process, consideration was given to the operational and reporting requirements under the act to achieve the appropriate balance between the minister's role, effective communications and accountability and the role of the rdc boards.

The interactions of the act with the commonwealth authorities and companies act 1997 (cac act) in regard to accountability and management obligations of the RDCS were also considered.

These considerations gave rise to a number of other amendments to the act that respond to the uhrig report’s recommendations to improve corporate governance and will improve board expertise, experience and management arrangements.

Two changes to the act in the areas of board selection committees and reporting on selection committee performance will improve governance through providing greater emphasis on the diversity of board membership.

They will also provide a practical response by the government to the recommendations by the recent report of the inquiry into women’s representation on regional and rural bodies of influence.

These amendments to the act will further strengthen the delivery arrangements for rural industries R&D. Together with the seven industry owned rural research and development companies, the eight statutory rdcs operated as a key partnership between the government and industry in delivering more than $541 million dollars in rural research, development and extension in 2005-06.

It is vital that the RDCS meet best practice in their operations. Through the uhrig report assessment process, the government is helping to strengthen the efficiency and effectiveness with which the rdcs pursue the competitiveness, productivity and sustainability of Australia’s rural industries.

The amendments to the act are part of the broader range of responses to the Uhrig report that are being pursued by the government to improve the governance framework for a number of statutory agencies in the Agriculture, Fisheries and Forestry Portfolio.

These include the Australian pesticides and veterinary medicines authority and the Australian wine and brandy corporation. The legislative amendments to improve their governance framework and performance are due to be considered during the current parliamentary session.

I commend the bill.


GOVERNANCE REVIEW IMPLEMENTATION (TREASURY PORTFOLIO AGENCIES) BILL 2007

Today I introduce a Bill which will improve the corporate governance of three statutory authorities in the Treasury portfolio - the Australian Securities and Investments Commission (ASIC), the Corporations and Markets Advisory Committee (CAMAC) and the Australian Prudential Regulation Authority (APRA). 

The Bill is one part of a broader exercise within the Australian Government to improve transparency and consistency in relation to governance arrangements for statutory authorities and office holders.

In June 2003 the Government received the Review of the Corporate Governance of Statutory Authorities and Office Holders.  This is now generally referred to as the Uhrig Review.  The Uhrig Review identified a number of options for the Government to improve consistency and transparency in the relationship between Ministers and statutory authorities and office holders.

The Australian Government announced its response to the Uhrig Review in August 2004. 

As part of its response, the Australian Government agreed that the Financial Management and Accountability Act 1997 (generally known as the FMA Act), should apply to statutory authorities where it is appropriate they be legally and financially part of the Commonwealth and they do not need to own assets.

The Bill implements this decision in relation to ASIC, CAMAC and APRA.

Under the new framework, the three agencies will hold money and property on behalf of the Commonwealth, rather than in their own right.  This reflects their status as agencies that are largely budget-funded, in contrast to agencies that raise funds for commercial activities.

The agencies will also have the power to enter into contracts on behalf of the Commonwealth.  In addition, ASIC and APRA will retain the power to enter into contracts on their own behalf, however the intention is that this power will only be used for regulatory purposes (for example, regulatory agreements).

The Bill will also define the financial reporting requirements of ASIC, CAMAC and APRA under the FMA Act and the responsibilities of the Chief Executives of the agencies.

It is important to note that the above changes will not adversely affect the operational capabilities and independence of the statutory bodies. As noted in the Uhrig Review, it is the authority’s legislative framework (and not its financial framework), which establishes the level of operational independence required to exercise its statutory responsibilities effectively.

While these reforms may be considered to be minor in nature, I note they are an important part of a broader effort to improve governance across Commonwealth agencies.  Improved consistency and transparency in governance will assist all agencies in delivering important services to the community.

In concluding, I note that I have, in accordance with the Corporations Agreement, consulted the Ministerial Council for Corporations (MINCO) prior to introducing this Bill.  I have also obtained MINCO approval of the Bill. 

I therefore present the Explanatory Memorandum to the Bill and commend the Bill to the House.

Ordered that further consideration of the second reading of these bills be adjourned to the first day of the next period of sittings, in accordance with standing order 111.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.