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Government exceeds air travel target.



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Senator Nick Minchin The Hon John Anderson MP

Minister for Finance and Administration

Deputy Prime Minister Minister for Transport and Regional Services

Government Exceeds Air Travel Target. 11 Dec 2003

An Australian Government plan to give smaller airlines 10 per cent of the Sydney- Canberra travel market has exceeded expectations.

A report undertaken by former Finance official Len Early into Government air travel found that the use of smaller airlines by Government departments and agencies had increased to 15.6 per cent in September 2003, well above the Government's objective of 10 per cent on the Canberra-Sydney route.

The Government has welcomed the report of the Independent Assessment of Australian Government Air Travel, which confirmed that departments and agencies had responded positively to the Government’s objective, taking steps to review policies and practices and raising awareness of best fare of the day.

The Government has accepted Mr Early's recommendations (summary attached) as practical suggestions to further improve value for money from air travel services but will require a higher level of reporting by agencies than recommended by Mr Early.

Minister for Finance and Administration, Senator Nick Minchin said he was pleased that departments and agencies had actively pursued the best fare of the day. “Most importantly fair access for those smaller airlines that meet the Government's air travel needs is being achieved.”

Deputy Prime Minister and Minister for Transport and Regional Services, Mr Anderson said, “The Government is keen to ensure all airlines that meet the Government's criteria for provision of best fare of the day should be fully considered. The trend to increased use of smaller airlines needs to be sustained where they fulfil the needs of Australian Government travellers in order to ensure the best possible air travel market exists.”

Senator Minchin said the report had raised a number of issues which will require further work by departments and agencies to ensure better practice is not only achieved but embedded in agency policy and practices.

“My Department will work with departments and agencies to implement the recommendations of Mr Early's report. There will need to be a cooperative approach across departments and agencies to deliver sustainable outcomes.” The Report may be accessed on the Department of Finance and Administration website at www.finance.gov.au/airtravel.

Independent Assessment of Australian Government Air Travel - Summary of Recommendations

Recommendation 1

The Department of Finance and Administration should be given responsibility for negotiating issues that relate to whole-of-government travel arrangements with airlines and with travel service providers. This should not replace individual agency approaches to travel management and should be undertaken in consultation with agencies. As a general principle, individual agencies should be able to seek to opt out of any such arrangements if they have a sound business reason to do so.

Government Response - Agree.

This will require the active support of departments and agencies, particularly those that hold the contracts with travel service providers. Close consultation with agencies will be undertaken

Recommendation 2

The Department of Finance and Administration should take a leading role in improving communication on better practice in travel management, on which departments and agencies can draw in developing travel policies and procedures. This should include:

• facilitating a consumer forum for the sharing of information between departments and agencies, including on tender processes and market developments; and

• provision of practical advice on matters such as how to cost travellers' time in order to determine the most appropriate booking to meet business needs; and how to assess and manage the risks associated with deeply discounted fares.

Government Response - Agree.

Travel Forum to be initiated by the Department of Finance and Administration with presentations to be made on best practice by a range of departments and agencies.

Practical guidance, developed in conjunction with the Travel Forum, will be developed on best fare of the day, including costing of travellers’ time, and use of deeply discounted fares.

Recommendation 3

Agencies should review their travel policies and practices and the advice they provide travellers against better practice.

Government Response - Agree.

The outcomes of such reviews should be evidenced in increased or sustained utilisation of smaller airlines on the Canberra-Sydney route where they represent value for money.

Recommendation 4

With usage of smaller airlines increasing and well above the Government's objective for the Canberra-Sydney route: • Agencies should report to the Department of

Finance and Administration on their airline usage on a monthly basis; and • Line departments and agencies should no longer be required to report to their portfolio Ministers.

Government Response - Agree in principle.

Monthly reporting should maintain departments and agencies' focus on achieving the 10 per cent objective and would be adequate to determine departments and agencies' performance.

Ministers will receive monthly reports from their agencies to support the continued achievement of the Government’s objective.