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Senate Legislative and General Purpose Standing Committees Consolidated reports on the examination of annual reports No. 1 of 2013


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Australian Senate

Senate Legislation Committees

Reports on the examination of annual reports No. 1 of 2013

March 2013

© Parliament of the Commonwealth of Australia 2013

ISSN 1834-4054

This document was printed by the Printing Unit, Department of the Senate, Parliament House, Canberra.

TABLE OF CONTENTS

Community Affairs Committee

Annual reports (No. 1 of 2013), dated March 2013 .................................... 1

Economics Committee

Annual reports (No. 1 of 2013), dated March 2013 .................................. 57

Education, Employment and Workplace Relations Committee

Annual reports (No. 1 of 2013), dated March 2013 ................................ 121

Environment and Communications Committee

Annual reports (No. 1 of 2013), dated March 2013 ................................ 143

Finance and Public Administration Committee

Annual reports (No. 1 of 2013), dated March 2013 ................................ 165

Foreign Affairs, Defence and Trade Committee

Annual reports (No. 1 of 2013), dated March 2013 ................................ 195

Legal and Constitutional Affairs Committee

Annual reports (No. 1 of 2013), dated March 2013 ................................ 241

Rural and Regional Affairs and Transport Committee

Annual reports (No. 1 of 2013), dated March 2013 ................................ 279

The Senate

Community Affairs

Legislation Committee

Annual reports (No. 1 of 2013)

March 2013

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 Commonwealth of Australia 2013

ISBN 978-1-74229-758-3

This document was produced by the Senate Community Affairs Committee Secretariat and printed by the Senate Printing Unit, Parliament House, Canberra

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Membership of the Committee Members

Senator Claire Moore, Chair ALP, Queensland

Senator Rachel Siewert, Deputy Chair AG, Western Australia

Senator Carol Brown ALP, Tasmania

Senator Mark Furner ALP, Queensland

Senator Bridget McKenzie Nationals, Victoria

Senator Dean Smith LP, Western Australia

Secretariat Dr Ian Holland Committee Secretary

Mr Patrick Hodder Research Officer Ms Eloise Menzies Research Officer Ms Carol Stewart Administrative Officer

Suite S1.59 Telephone: (02) 6277 3515

Parliament House Fax: (02) 6277 5829

CANBERRA ACT 2600 Email: community.affairs.sen@aph.gov.au

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Table of Contents

Membership of the Committee ........................................................................ iii

Chapter 1.............................................................................................................. 1

Overview .................................................................................................................... 1

Terms of Reference ................................................................................................ 1

Purpose of annual reports ....................................................................................... 2

Annual reporting requirements ............................................................................... 2

Apparently satisfactory ........................................................................................... 3

Timeliness of reports .............................................................................................. 4

Publishing Standards for the Presentation of Documents to the Parliament .......... 7

Compliance Index ................................................................................................... 8

Letter of Transmittal ............................................................................................... 8

Comments made in the Senate ............................................................................... 8

Bodies not presenting annual reports to the Senate ................................................ 8

Additional Reports .................................................................................................. 8

Chapter 2............................................................................................................ 11

Annual reports of Commonwealth Departments ................................................ 11

Department of Families, Housing, Community Services and Indigenous Affairs .............................................................................................................................. 11

Department of Health and Ageing ........................................................................ 15

Department of Human Services............................................................................ 20

Chapter 3............................................................................................................ 25

Annual reports of Commonwealth Authorities and Agencies............................ 25

Families, Housing, Community Services and Indigenous Affairs Portfolio ........ 25

Health and Ageing Portfolio ................................................................................. 25

Human Services Portfolio ..................................................................................... 26

Food Standards Australia New Zealand ............................................................... 26

Australian Commission on Safety and Quality in Health Care ............................ 27

Indigenous Business Australia ............................................................................. 28

Central Land Council ........................................................................................... 29

Independent Hospital Pricing Authority ............................................................... 29

Aboriginal Land Commissioner (Northern Territory).......................................... 30

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Appendix 1 ......................................................................................................... 33

List of departments, agencies and bodies required to present annual reports to the Senate ................................................................................................................. 33

Families, Housing, Community Services and Indigenous Affairs portfolio ........ 33

Health and Ageing portfolio ................................................................................. 37

Human Services portfolio ..................................................................................... 42

Annual reports from non-Portfolio Agencies ....................................................... 42

Appendix 2 ......................................................................................................... 43

Letter from Ms Helen Conway, Director, Equal Opportunity for Women in the Workplace Agency .................................................................................................. 43

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Chapter 1 Overview

1.1 This is the first Senate Community Affairs Legislation Committee (the committee) report on annual reports for 2013. It provides an overview of the committee's examination of annual reports for the 2011-12 financial year tabled by 31 October 2012.1

Terms of Reference 1.2 On 29 September 2010, a resolution of the Senate allocated the following three portfolios to this committee:

• Health and Ageing

• Families, Housing, Community Services and Indigenous Affairs; and

• Human Services.

1.3 Under Senate Standing Order 25(20), annual reports of departments and agencies shall stand referred to the legislation committees in accordance with an allocation of departments and agencies in a resolution of the Senate. Each committee shall:

(a) Examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory;

(b) Consider in more detail, and report to the Senate on, each annual report which is not apparently satisfactory, and on the other annual reports which it selects for more detailed consideration;

(c) Investigate and report to the Senate on any lateness in the presentation of annual reports;

(d) In considering an annual report, take into account any relevant remarks about the report made in debate in the Senate;

(e) If the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates;

(f) Report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on annual reports tabled by 30 April each year by the tenth sitting day after 30 June of that year;

(g) Draw to the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports; and

1 Copies of this and other committee reports can be obtained from the Senate Table Office, the committee secretariat or online at www.aph.gov.au/senate_ca

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(h) Report to the Senate each year whether there are any bodies which do not present annual reports to the Senate and which should present such reports.

Purpose of annual reports 1.4 The primary purpose of annual reports is accountability, in particular to the Parliament.2 The tabling of annual reports places a great deal of information about government departments and agencies on the public record and assists in the effective examination of the performance of departments and agencies and the administration of government grants.

Annual reporting requirements 1.5 Senate Standing Order 25(20) requires that committees report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on annual reports tabled by 30 April each year by the tenth sitting day after 30 June of that year.

1.6 Pursuant to subsections 63(2) and 70(2) of the Public Service Act 1999, departments of state and executive agencies must prepare annual reports in accordance with the Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies.3

1.7 Amendments to the Requirements for Annual Reports applicable for the 2011-12 reporting period are:

• Consultancy reporting — recognising the functionality provided by the

AusTender database, the requirement to provide details of consultancy contracts let in the reporting year, previously set out in Attachment D to the Requirements, has been omitted.

• Carer recognition — a new requirement has been added for public

service care agencies to report on compliance with the Carer Recognition Act 2010.

• Work health and safety — minor revisions to the existing requirement

reflecting the provisions of the Work Health and Safety Act 2011.

• Freedom of information — simplification of reporting following

accommodation of major reforms to freedom of information reporting in the 2010-11 Requirements.4

2 Department of the Prime Minister and Cabinet, Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies, approved by the Joint Committee of Public Accounts and Audit on 28 June 2012, p. 3, http://www.dpmc.gov.au/guidelines/index.cfm (accessed 13 December 2012).

3 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 2012, p. 1, ss. 3(1).

4 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 2012, p. i.

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1.8 Under section 48 of the Commonwealth Authorities and Companies Act 1997 (the CAC Act), the Minister for Finance and Deregulation outlines the annual reporting requirements for Commonwealth authorities and companies in the Commonwealth Authorities and Companies (Report of Operations) Orders. Section 9 of the CAC Act applies to Commonwealth authorities and specifies the deadline for

the presentation of an annual report to the responsible Minister. Section 36 of the CAC Act outlines the reporting obligations of Commonwealth companies.

1.9 Statutory authorities must report in accordance with their establishing legislation.

1.10 Requirements for the annual reports of non-statutory bodies are set out in the Government Response to recommendations of the then Senate Standing Committee on Finance and Government Operations in its report entitled Reporting Requirements for the Annual Reports of Non-Statutory Bodies. The response was incorporated into the Senate Hansard of 8 December 1987.5

1.11 The committee notes that some of the bodies that are required to produce annual reports to the Senate fall outside the categories listed above. In these cases, examination of the annual report is based on general content and information rather than compliance with legislation and guidelines.

Apparently satisfactory 1.12 Standing order 25(20)(a) requires the committee to report to the Senate on whether annual reports are 'apparently satisfactory'. In making this assessment, the committee considers such aspects as timeliness of presentation and compliance with relevant reporting requirements.

General comments

1.13 This report considers twenty-nine annual reports received during the period of 1 May 2012 to 31 October 2012. Ten reports have been examined to determine whether or not their contents satisfy the detailed legislative requirements as set out in the CAC Act. Thirteen annual reports have been checked to ascertain whether or not their contents satisfy the mandatory criteria for inclusion as set out in the FMA Act. Four statutory office holders, one statutory body, and one regulatory scheme were assessed. The report from the Coordinator General for Remote Indigenous Services is incorporated into the Department of Families, Housing, Community Services and Indigenous Affairs annual report as appendix K.

1.14 A list of the annual reports of departments, agencies and other bodies tabled in the Senate (or presented out of session to the President of the Senate), and referred to the committee for examination, can be found at Appendix 1. The table shows the legislation under which reports are required to be provided, tabling information, and the reporting period during which the report was provided. Reports tabled on or after 1 November 2012 will be considered in the committee's second Report on Annual Reports.

5 Senate Hansard, 8 December 1987, pp. 2643-45.

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1.15 The committee is pleased to note that generally the annual reports examined adhere to the relevant reporting guidelines in a satisfactory manner. The reports continue to maintain high standards of presentation and provide a comprehensive range of information on their functions and activities. However, some specific comments about timeliness and adherence to reporting requirements are given below.

Timeliness of reports 1.16 Under Standing Order 25(20)(c), the committee must also report to the Senate on any lateness in the presentation of annual reports. The Requirements for Annual Reports state that:

A copy of the annual report is to be presented to each House of the Parliament on or before 31 October in the year in which the report is given.

Where an agency's own legislation provides a timeframe for its annual report, for example 'within six months' or 'as soon as practicable after 30 June in each year', that timeframe applies.

1.17 If a department or agency is unable to meet this deadline, the secretary or agency head is to advise the responsible Minister of the reasons for the delay and the expected tabling date. The responsible Minister is to table this explanation in the Parliament.

1.18 Subsection 9(1) of the CAC Act requires the director of a Commonwealth authority to:

(a) prepare an annual report in accordance with Schedule 1 for each financial year; and

(b) give it to the responsible Minister by the deadline for the financial year for presentation to the Parliament.

(2) The deadline is:

(a) the 15th day of the 4th month after the end of the financial year; or

(b) the end of such further period granted under subsection 34C(5) of the Acts Interpretation Act 1901.

1.19 Under section 36 of the CAC Act:

(1) A Commonwealth company must give the responsible Minister:

(a) a copy of the company's financial report, directors' report and auditor's report that the company is required by the Corporations Act 2001 to have for the financial year (or would be required by that Act to have if the company were a public company); and

(b) any additional report under subsection (2); and

(c) in the case of a wholly-owned Commonwealth company — any additional information or report required by the Finance Minister's Orders.

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(1A) The Commonwealth company must give the reports and information by:

(a) if the company is required by the Corporations Act 2001 to hold an annual general meeting — the earlier of the following:

(i) 21 days before the next annual general meeting after the end of the financial year;

(ii) 4 months after the end of the financial year; and

(b) In any other case — 4 months after the end of the financial year; or the end of such further period granted under subsection 34C(5) of the Acts Interpretation Act 1901.

1.20 In the absence of any specific provision, subsection 34C(2) of the Acts Interpretation Act 1901 requires bodies to present annual reports to ministers within 6 months after the end of the period reported upon, and ministers must table reports within 15 sitting days after receipt.

Equal Opportunity for Women in the Workplace Agency report for 2010-11

1.21 In its 2012(2) Report on Annual Reports,6 the committee noted that the Equal Opportunity for Women in the Workplace Agency (EOWA) 2010-11annual report did not comply with the reporting timeframe. Part III, Subsection 12(1) of the Equal Opportunity for Women in the Workplace Act 1999, requires the Equal Opportunity for Women in the Workplace Agency (EOWA), as soon as practicable, and in any event within 6 months after each 31 May, to submit to the Minister a report on its operations. The committee received a letter from EOWA dated 25 October 2012. The letter is included in Appendix 2. The letter explains the reasons for the delayed tabling of the EOWA 2010-11 annual report, and in particular notes that the annual report was originally submitted to the Minister's office within the statutory timeframe on 3 November 2011.

Annual reports for 2011-12

1.22 The majority of the annual reports referred to this committee were tabled within the specified period or shortly thereafter. The committee acknowledges that the Anindilyakwa Land Council, the Northern Land Council, the Tiwi Land Council, the Wreck Bay Aboriginal Community Council, the Indigenous Land Corporation, and the Torres Strait Regional Authority all provided notification that their reports would be delayed.

1.23 The Medical Training Review Panel (MTRP) provides an annual report to the committee each year, in accordance with the requirements of subsection 3GC(4) of the Health Insurance Act 1973. Due to the nature of its report, which is collated from data supplied by universities over the academic calendar year, the Medical Training Review Panel's report is produced on a different cycle to other reports. Nevertheless, the constraint set by section 34C(2) of the Acts Interpretation Act 1901 (explained above) still applies. The committee notes that the Medical Training Review Panel's

6 Community Affairs Legislation Committee, Report on Annual Reports 2012(2), pp. 6-7.

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reports often do not appear to meet this constraint. The Government may wish to consider amending subsection 3GC(4) of the Health Insurance Act 1973 to establish a realistic and workable reporting cycle for the Medical Training Review Panel.

1.24 On 3 October 2012 the Tiwi Land Council wrote to the Minister for Families, Housing, Community Services and Indigenous Affairs requesting an extension until 30 October 2012. The request by the Tiwi Land Council and the Minister's response were tabled on 30 October 2012. On 28 October, the Tiwi Land Council sought a further extension until 14 December 2012. The Minister granted both extensions. The second request by the Tiwi Land Council and the Minister's response were tabled on 19 November 2012. The Tiwi Land Council report was received on 13 December

2012 and tabled on 5 February 2013.

1.25 On 16 October 2012 the Indigenous Land Corporation requested an extension until 15 November 2012. The Minister granted the extension. The request by the Indigenous Land Corporation and the Minister's response were tabled on 19 November 2012. The Indigenous Land Corporation report was received on 14 November and tabled in the Senate on 19 November 2012.

1.26 On 22 October 2012 the Torres Strait Regional Authority requested an extension until 15 November 2012. The Minister granted the extension. The request by the Torres Strait Regional Authority and the Minister's response were tabled on 19 November 2012. The Torres Strait Regional Authority report was received on 14 November and tabled in the Senate on 19 November 2012.

1.27 On 2 October 2012 the Wreck Bay Aboriginal Community Council wrote to the Minister for Families, Housing, Community Services and Indigenous Affairs requesting an extension until 30 November 2012. The Minister granted the extension. The Wreck Bay Aboriginal Community Council request and the Minister's response were tabled on 29 October 2012. On 15 November the Wreck Bay Aboriginal Community Council sought a further extension until 31 January 2013. The Minister granted the extension. The request by the Wreck Bay Aboriginal Community Council and the Minister's response were tabled on 5 February 2013. On 16 January 2013 the Wreck Bay Aboriginal Community Council sought a further extension until 31 March 2013. The Minister granted the extension, but noted that she had asked her Department to 'work with the Wreck Bay Aboriginal Community Council to help ensure that the next annual report is finalised in a more timely manner'.7 The request by the Wreck Bay Aboriginal Community Council and the Minister's response were tabled on 7 February 2013.

1.28 On 9 October 2012 the Northern Land Council wrote to the Minister for Families, Housing, Community Services and Indigenous Affairs requesting an extension until 30 November 2012. The Minister granted the extension. The request by the Northern Land Council and the Minister's response were tabled on 30 October

7 The Hon Jenny Macklin MP, Minister for Families, Housing, Community Services and Indigenous Affairs, Letter to Mr Mal Hansen, CEO, Wreck Bay Aboriginal Community Council, tabled 7 February 2013.

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2012. On 22 November 2012 the Northern Land Council sought a further extension until 15 February 2013. The Minister granted the extension. The request by the Northern Land Council and the Minister's response were tabled on 5 February 2013.

1.29 On 11 October 2012 the Anindilyakwa Land Council wrote to the Minister for Families, Housing, Community Services and Indigenous Affairs requesting an extension until 14 December 2012. The Minister granted the extension. The request by the Anindilyakwa Land Council and the Minister's responses were tabled on 30 October 2012.

1.30 As of 8 March 2013, the committee notes that neither the Northern Land Council or the Anindilyakwa Land Council have submitted their annual reports. It appears that these agencies have failed to submit their reports within a period covered by any extension granted by the Minister and tabled in Parliament. The timely provision of reports appears to be an ongoing issue for the Northern Land Council and the Anindilyakwa Land Council. The committee notes that it has previously identified issues of delays in relation to these agencies in its 2012(2) Report on Annual Reports.8

Compliance with best practice

1.31 The committee commends the following bodies for complying with best practice and tabling their annual reports prior to the Community Affairs supplementary budget estimates that commenced on 17 October 2012:

• Department of Families, Housing, Community Services and Indigenous

Affairs;

• Department of Health and Ageing;

• Department of Human Services;

• Australian Hearing; and

• Australian Organ and Tissue Donation and Transplantation Authority.

Publishing standards for the Presentation of Documents to Parliament 1.32 The Department of Prime Minister and Cabinet has produced Guidelines for the Presentation of Documents to the Parliament. Section 4 covers the Presentation of Government documents (including Department and agency annual reports) to Parliament. Section 4.1, Printing and publishing standards for documents, states that:

Documents to be included in the Parliamentary Papers Series must be printed on International B5 size paper.

The committee is pleased to report that, following on from the Report on Annual Reports 2012(2), General Practice Education and Training Limited, and Health Workforce Australia have complied with these guidelines.

8 Community Affairs Legislation Committee, Report on Annual Reports 2012(2), pp. 5-6.

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Compliance Index 1.33 The committee is pleased to note that in line with new reporting requirements, all annual reports considered for this report included a compliance index.

Letter of transmittal—Aged Care Standards and Accreditation Agency Ltd 1.34 The committee notes that the annual report from the Aged Care Standards and Accreditation Agency Ltd did not have a Letter of Transmittal to the Minister containing a statement that the annual report was prepared in accordance with subsection 36(1) of the CAC Act and was approved by a resolution of the directors. The committee request that the Aged Care Standards and Accreditation Agency Ltd include a Letter of Transmittal in their future annual reports.

Comments made in the Senate 1.35 The committee is obliged, under Senate Standing Order 25(20)(d), to take into account any relevant remarks made about these reports in the Senate. The committee is not aware of any comments made in the Senate regarding the annual reports of departments and agencies within its purview.

Bodies not presenting annual reports to the Senate 1.36 In accordance with Standing order 25(21)(h), the committee is required to report to the Senate on whether there are any bodies which do not present annual reports to the Senate and which should present such reports. In its 2012 (No. 2) report, the committee recommended that the Commonwealth government consider whether an annual report of the National E-Health Transition Authority (NEHTA) should be presented to the Parliament. The committee is not aware of any government response to this recommendation.

Additional Reports In addition to the reports listed in Appendix 1, the following reports were also referred to and received by the committee between the period of 1 July 2012 and 28 February 2013. The committee notes that these reports are referred to it for their information only and the committee is not required by the terms of the Standing Order to report on these:

• Australian Radiation and Nuclear Safety Agency — Quarterly report for the

period 1 April to 30 June 2012 (tabled in the Senate 21/08/2012)

• National Health and Medical Research Council (NHMRC) 2012 —

Implementing the 2010-12 NHMRC Strategic Plan — Section 63 of the National Health and Medical Research Council Act 1992 (tabled in the Senate 21/08/2012)

• Office of the Gene Technology Regulator — Quarterly report for 1 January to

31 March 2012 (tabled in the Senate 14/08/2012)

• Australian Government Department of Health and Ageing 2012 — Australian Government Actuary — Seventh report on the costs of the Australian Government's run-off cover scheme for medical indemnity insurers — 2010-

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11 — Section 34ZW of the Medical Indemnity Act 2002 (tabled in the Senate 14/08/2012)

• Australian Government Department of Health and Ageing 2012 — Australian Government Actuary — First report on the costs of the Australian Government's run-off cover scheme for midwife professional indemnity insurers — 2010-11 — Section 48 of the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 (tabled in the Senate 14/08/2012)

• Australian Radiation and Nuclear Safety Agency — Quarterly report for the

period 1 July to 30 September 2012 (tabled in the Senate 28/11/2012)

• Department of Health and Ageing — Report to Parliament on the second

meeting of the Pharmaceutical Industry Discussion Group (PIDG) to identify and examine potential unintended consequences of the 2010-11 budget measure further Pharmaceutical Benefits Scheme (PBS) pricing reform — September 2011 (tabled in the Senate 12/09/2012)

• Department of Health and Ageing — Independent review of the impact of

Pharmaceutical Benefits Scheme (PBS) cost recovery — November 2011 — Section 99 YBC of the National Health Act 1953 (tabled in the Senate 19/09/2012)

• Department of Health and Ageing — Corrigendum — National Health and

Medical Research Council — Implementing the 2010-12 NHMRC Strategic Plan — Section 17 of the National Health and Medical Research Council Act 1992 (tabled in the Senate 31/10/2012)

• Department of Health and Ageing — Personally Controlled Electronic Health Records — System Operator activities — Annual Report for 2011-12 under section 107 of the Personally Controlled Electronic Health Records Act 2012 (tabled in the Senate 30/10/2012)

• Department of Health and Ageing — Report for 2011-12 on the Operation of the Aged Care Act 1997 (tabled in the Senate 28/11/2012)

• Department of Human Services — Healthcare Identifiers — Service Operator

activities — Annual Report for 2011-12 under section 34 of the Healthcare Identifiers Act 2010 (tabled in the Senate 30/10/2012)

• KPMG — Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Act (No. 2 ) 2008 — Report on the operation of the Act — Review of the impact of the new Medicare Levy Surcharge thresholds on public hospitals — Third year review, Final report, 2012 (tabled in the Senate 10 September 2012)

• Office of the Australian Information Commissioner — Healthcare Identifiers

— Compliance and enforcement activities — Annual Report for 2011-12 under section 30 of the Healthcare Identifiers Act 2010 (tabled in the Senate 30/10/2012)

• Office of the Australian Information Commissioner — Personally Controlled

Electronic Health Records — Compliance and enforcement activities —

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Annual Report for 2011-12 under section 106 of the Personally Controlled Electronic Health Records Act 2012 (tabled in the Senate 30/10/2012)

• Office of the Gene Technology Regulator — Quarterly report for 1 April to 30 June 2012 (tabled in the Senate 14/09/2012)

• The Treasury — Final Budget Outcome 2011-12 — Report by the Treasurer (The Hon Wayne Swan MP) and the Minister for Finance and Deregulation (Senator the Hon Penny Wong) (tabled in the Senate 28/09/2012)

• The Treasury — Mid-Year Economic and Fiscal Outlook 2012-13 —

Statement by the Treasurer (The Hon Wayne Swan MP) and the Minister for Finance and Deregulation (Senator the Hon Penny Wong) (tabled in the Senate 30/10/2012)

• The Treasury — Tax Expenditure Statement 2012 — In accordance with procedural order no. 7 of continuing effect (tabled in the Senate 05/02/2013)

• Indigenous Australians — Closing the Gap — Ministerial Statement by the Prime Minister (The Hon Ms Gillard), dated 6 February 2013 (tabled in the Senate 7/02/2013)

• Closing the Gap: Prime Minister's Report 2013 (tabled in the Senate 7/02/2013)

• Department of Finance and Deregulation — Consolidated financial statements for the year ended 30 June 2012 (tabled in the Senate 5/02/2013)

• Department of Finance and Deregulation — Advances provided under the annual Appropriation Acts — Report for 2011-12 (tabled in the Senate 5/02/2013)

• Office of the Gene Technology Regulator — Quarterly Report for the period 1 July to 30 September 2012 (tabled in the Senate 5/02/2013)

• National Health and Medical Research Council (NHMRC) — NHMRC Licensing Committee — Report on the operation of the Research Involving Human Embryos Act 2002 for the period 1 March to 31 August 2012 (tabled in the Senate 5/02/2013)

• National Health and Medical Research Council (NHMRC) — Strategic plan

2013 to 2015 (tabled in the Senate 5/02/2013)

• Sphere Company — Independent Review of the National Health Performance

Authority, dated November 2012 (tabled in the Senate 5/02/2013)

• Private Health Insurance Administration Council — Report for 2011-12 on

the operations of private health insurers (tabled in the Senate 5/02/2013)

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Chapter 2

Annual reports of Commonwealth Departments 2.1 For the financial year of 2011-12, the annual reports of the following departments were referred to the committee for examination and report:

• Department of Families, Housing, Community Services and Indigenous

Affairs

• Department of Health and Ageing

• Department of Human Services

Department of Families, Housing, Community Services and Indigenous Affairs Tabling of the report

2.2 The 2011-12 annual report was tabled on 10 October 2012 which made it available to senators for examination at the supplementary budget estimates 2012-13 hearings.

Secretary's review

2.3 The secretary, Mr Finn Pratt, noted several significant achievements during 2011-12, both within the department and in collaboration with other portfolios including:

• Stronger Futures in the Northern Territory which will be implemented over

ten years from 2012-13 as part of Closing the Gap for Indigenous Australians. FaHCSIA led the Commonwealth agency National Partnership Agreement negotiations with the Northern Territory government;

• working with communities and other government agencies to begin development of the Remote Jobs and Communities program which from July 2013 will integrate existing services under a single provider with a permanent presence in remote regions;

• establishing the taskforce for the National Disability Insurance Scheme to

begin laying the foundations for disability reform;

• leading implementation of the National Carer Strategy;

• implementing new immunisation requirements linked to Family Tax Benefit Part A;

• launching the new Family Support program;

• introducing income management in five sites across Australia;

• developing the Household Assistance Package;

• introducing the new Work Bonus that offers eligible pensioners an incentive to participate in the workforce;

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• leading the whole-of-government program to integrate a gender perspective

into peace and security as part of the National Action Plan on Women, Peace and Security 2012-2018; and

• delivering social housing through the Social Housing Initiative and the

National Partnership Agreement on Social Housing.1

Changes in administrative arrangements

2.4 There were changes to the FaHCSIA portfolio during 2011-12. Under the Administrative Arrangement Order of 14 December 2011, responsibility for the following functions was transferred from the Department of Sustainability, Environment, Water, Population and Communities to FaHCSIA:

• Housing Affordability Fund

• National Rental Affordability Scheme

• Building Better Regional Cities 2

Changes in ministerial responsibilities

2.5 There were changes to ministerial responsibilities within the FaHCSIA portfolio during the 2011-2012 reporting period. As at 30 June 2012, the ministers and parliamentary secretaries responsible for the portfolio and its agencies were:

• The Hon Jenny Macklin MP, Minister for Families, Community Services and

Indigenous Affairs and Minister for Disability Reform

• The Hon Brendan O'Connor MP, Minister for Housing and Minister for

Homelessness

• The Hon Julie Collins MP, Minister for Community Services, Minister for

Indigenous Employment and Economic Development and Minister for the Status of Women

• Senator the Hon Jan McLucas, Parliamentary Secretary to the Prime Minister

and Parliamentary Secretary for Disabilities and Carers

Performance reporting

2.6 The annual report addresses the key performance indicators (KPIs) as listed in the Portfolio Budget Statements 2011-12. The committee recognises that the department has assisted the assessment of program performance by developing quantitative indicators for KPIs and deliverables, and that quantitative targets were set for some of the KPIs and deliverables. The committee notes that all KPIs were assessed by the department as being achieved or substantially achieved, and that the vast majority of targets were met or exceeded.

1 Department of Families, Housing, Community Services and Indigenous Affairs, 'Secretary's review', Annual Report 2011-12, pp. 2-5.

2 Department of Families, Housing, Community Services and Indigenous Affairs, 'Financial management', Annual Report 2011-12, p. 182.

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Financial performance

2.7 FaHCSIA's financial performance was described as strong in an era of tight financial resourcing. Financial management measures taken by the department included the reduction of staff levels, the quarantining of funds for the enterprise agreement, the reduction of property holdings, and staff consolidation.3

2.8 The department reported a $61.7 million deficit for 2011-12 compared to a deficit of $63.5 million in 2010-11. As in the last financial year, the deficit was attributed to the:

revised net cash appropriation arrangements introduced from 2010-11, whereby asset replacement is now funded through a capital appropriation rather than the departmental operating appropriation.4

Allowing for these revised arrangements, and after 'accounting for the effect of the decrease in the 10-year bond rate on employee provisions', FaHCSIA would have had a small operating surplus of $0.5 million.5

2.9 FaHCSIA experienced an increase in the net cost of services between 2010-11 and 2011-12 from $582.5 million to $594.1 million. At the same time, revenue from government increased from $519 million to $532.4 million.6 The ANAO attributes these changes to 'an increase in contractor and consultancy expenses in 2011-12 associated with indigenous programs', and 'an increase in funding for new government measures relating to clean energy reforms and the National Disability Insurance Scheme.'7

2.10 The ANAO makes audit recommendations to government agencies, and rates its audit findings on a risk scale: Category, A, B and C, corresponding to significant, moderate and low business or financial management risks respectively.8 The

3 Department of Families, Housing, Community Services and Indigenous Affairs, 'Secretary's review', Annual Report 2011-12, p. 7.

4 Department of Families, Housing, Community Services and Indigenous Affairs, 'Financial management', Annual Report 2011-12, p. 182.

5 Department of Families, Housing, Community Services and Indigenous Affairs, 'Secretary's review', Annual Report 2011-12, p. 7; see also Department of Families, Housing, Community Services and Indigenous Affairs, 'Financial management', Annual Report 2011-12, p. 182.

6 Department of Families, Housing, Community Services and Indigenous Affairs, 'Financial statements—Statement of comprehensive income', Annual Report 2011-12, p. 197.

7 The Auditor-General, Audit Report No. 16 2012-13 Audits of the Financial Statements of Australian Government Entities for the Period Ended 30 June 2012, Australian National Audit Office, 2012, p. 170, sec. 6. 331.

8 The Auditor-General, Audit Report No. 51 2011-12 Interim Phase of the Audits of the Financial Statements of Major General Government Sector Agencies for the year ending 30 June 2012, Australian National Audit Office, 2012, p. 17, fn. 4.

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committee commends FaHCSIA on having no category A, B or C findings after the ANAO audit of the FaHCSIA 2011-12 financial statements.9

Transparency and Scrutiny

2.11 The committee notes that in their first report of 2012, the Finance and Public Administration Legislation Committee mentioned the work being undertaken by the Department of Finance and Deregulation and the Australian National Audit Office (ANAO) to draw attention to agencies that may be at risk of breaching section 83 of the Constitution.10 Section 83 of the Constitution states that 'no money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law'.11 In effect, all government spending from consolidated revenue must be in accordance with an authority given by parliament.12

2.12 FaHCSIA notes that the issue of Section 83 breaches arises 'where payments are made [to customers] from special appropriations that do not accord with conditions in the relevant legislation'.13 FaHCSIA points out that it relies on information provided by customers to ascertain the appropriate entitlements. This information is not always accurate, and therefore the potential for some degree of Section 83 breaches will remain.14 However, FaHCSIA states that the potential for breaches 'represent only a very small proportion of the total payments, both in value and number'.15

2.13 The annual report sets out the steps that FaHCSIA has undertaken to review its exposure to section 83 breaches, including identifying all special appropriations and special accounts and the relevant legislation. FaHCSIA is addressing the issue and

9 Department of Families, Housing, Community Services and Indigenous Affairs, 'Financial management', Annual Report 2011-12, p. 182.

10 Finance and Public Administration Legislation Committee, Annual reports (No. 1 of 2012), p. 15, sec. 2. 13; see also The Auditor-General, Audit Report No. 16 2012-13 Audits of the Financial Statements of Australian Government Entities for the Period Ended 30 June 2012, Australian National Audit Office, 2012, p. 17, sec. 12.

11 The Constitution of Australia, Chapter IV—Finance and Trade, sec. 83.

12 The Auditor-General, Audit Report No. 16 2012-13 Audits of the Financial Statements of Australian Government Entities for the Period Ended 30 June 2012, Australian National Audit Office, 2012, p. 74, sec. 5. 30.

13 Department of Families, Housing, Community Services and Indigenous Affairs, 'Financial statements', Annual Report 2011-12, p. 286, note 29.

14 Department of Families, Housing, Community Services and Indigenous Affairs, 'Financial statements', Annual Report 2011-12, p. 286, note 29.

15 Department of Families, Housing, Community Services and Indigenous Affairs, 'Financial statements', Annual Report 2011-12, p. 286, note 29.

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notes that '[w]here possible, amendments to legislation will continue to be progressed'.16

Department of Health and Ageing Tabling of the report

2.14 The department tabled their annual report on 11 October 2012 in the House, and tabled in the Senate on 30 October 2012. The department's early tabling in the House made it available to the committee for scrutiny during the supplementary budget estimates 2012-13 hearings.

Secretary's review

2.15 The secretary, Professor Jane Halton, noted numerous significant achievements in a busy year, including:

• The introduction of the world's first plain packaging legislation for tobacco

products as part of the preventive health program;

• The implementation of the five year $2.2 billion National Mental Health

Reform package that aims to move the mental health system away from crisis-driven activity towards prevention, early intervention and care in the community;

• The ten year $3.7 billion Living Longer Living Better reform package aimed at providing older Australians with more choice, control and easier access to a full range of services;

• Collaborating with State and Territory governments to transition of over 1 000

Home and Community Care service providers to Commonwealth funding arrangements;

• Introducing measures resulting from the National Health Reform Agreement

such as the activity-based funding systems for public hospitals to commence on 1 July 2012, and establishing 19 Medicare Locals on 1 July 2011, 18 Medicare Locals by 1 January 2012, and the remaining 24 Medicare Locals on 1 July 2012;

• Establishing Rural and Regional Health Australia to provide information on

rural and remote health and aged care programs, policies and services;

• Delivering 42 projects under the National Rural and Remote Health

Infrastructure Program;

• Implementing the Indigenous Chronic Disease package including primary

health care teams and social marketing campaigns;

16 Department of Families, Housing, Community Services and Indigenous Affairs, 'Financial statements', Annual Report 2011-12, p. 287, note 29; see also The Auditor-General, Audit Report No. 16 2012-13 Audits of the Financial Statements of Australian Government Entities for the Period Ended 30 June 2012, Australian National Audit Office, 2012, p. 17, sec. 12.

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• Implementing Pharmaceutical Benefits Scheme pricing reforms and

expanding Medicare funding of magnetic resonance imaging;

• Continuing preparations for the launch of the Personally Controlled Electronic Health Record system on 1 July 2012; and

• Collaborating with General Practice Education and Training Limited to train the future general practice workforce, and from 1 January 2012, implementing the Practice Nurse Incentive Program.17

2.16 The committee notes that the department led the Australian delegation in Geneva that drafted the first global public health treaty, the Protocol to Eliminate Illicit Trade in Tobacco Products.18 The committee acknowledges that the department has been involved in various international health forums, both 'to promote and protect the health of the Australian population and to ensure Australia's health system is responsive to international best practice'.19 The committee commends Professor Halton on her appointment to the position as chair of the Organisation for Economic Co-Operation and Development (OECD) Health Committee and her election to the executive board of the World Health Organisation in May 2012.20

Chief Medical Officer's Report

2.17 Professor Chris Baggoley, Chief Medical Officer, addressed three main issues in his report, namely risk factors, quality of care, and future challenges and opportunities. Professor Baggoley noted that although life expectancy in Australia compares well internationally, the incidence of 'somewhat preventable diseases' such as heart disease, stroke and cancer is increasing. Professor Baggoley identified a small number of preventable risk factors that account for much of the morbidity and mortality of these diseases, including tobacco use, excessive alcohol consumption, obesity and insufficient physical exercise.21

2.18 Recent changes under the National Health Reform identified by Professor Baggoley as important for improving access to clinically appropriate care included the Local Hospital Networks, Medicare Locals, and the transition to patient-centred care.22

2.19 The challenges and opportunities facing Australia's health system include the increasing prevalence of some diseases or conditions such as dementia, new health

17 Department of Health and Ageing, 'Secretary's review', Annual Report 2011-2012, pp. 3-10.

18 Department of Health and Ageing, 'Performance reporting—Outcome 1: Population Health', Annual Report 2011-2012, p. 63.

19 Department of Health and Ageing, 'Performance reporting: Outcome 10—Health System Capacity and Quality', Annual Report 2011-2012, p. 230.

20 Department of Health and Ageing, 'Executive Team', Annual Report 2011-2012, p. 23.

21 Department of Health and Ageing, 'Chief Medical Officer's Report', Annual Report 2011-2012, pp. 11-17.

22 Department of Health and Ageing, 'Chief Medical Officer's Report', Annual Report 2011-2012, pp. 14-16.

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technologies such as personally controlled electronic health records, and new areas of medical research such as genetics.23

Changes in administrative arrangements

2.20 Changes in the Health and Ageing portfolio resulted from the Council of Australian Governments National Health Reform Agreement on 2 August 2011and the subsequent National Health Reform Act 2011.

• The Australian Commission on Safety and Quality in Health Care which was previously contained within the department, commenced operations as an independent statutory authority on 1 July 2011;

• The Independent Hospital Pricing Authority commenced operation on 15 December 201124 'to determine a national efficient price for hospital services';25 and

• The National Health Performance Authority commenced operation on 21

October 201126 to develop performance reports on Local Hospital Networks, public and private hospitals, and other primary health care service providers.27

2.21 Since the establishment of the Australian National Preventive Health Agency (ANPHA) on 1 January 2011, responsibility for the National Tobacco Campaign and management of the expansion phase of the National Binge Drinking Strategy have been transferred from the department to ANPHA.28

Changes in ministerial responsibilities

2.22 On 12 December 2011, the Prime Minister announced that the Minister for Mental Health and Ageing would be included in the cabinet. This meant that the health portfolio now has two cabinet ministers.

2.23 On 14 December 2011, the Hon Tanya Plibersek MP replaced the Hon Nicola Roxon as Minister for Health. As at 30 June 2012, the ministers and parliamentary secretaries responsible for the portfolio and its agencies were:

• The Hon Tanya Plibersek MP, Minister for Health

• The Hon Mark Butler MP, Minister for Mental Health and Ageing

• The Hon Warren Snowdon MP, Minister for Indigenous Health

23 Department of Health and Ageing, 'Chief Medical Officer's Report', Annual Report 2011-2012, pp. 16-17.

24 Department of Health and Ageing, 'Portfolio Outcomes', Annual Report 2011-2012, p. 36.

25 Department of Health and Ageing, 'Portfolio Outcomes', Annual Report 2011-2012, p. 31.

26 Department of Health and Ageing, 'Portfolio Outcomes', Annual Report 2011-2012, p. 36.

27 Department of Health and Ageing, 'Portfolio Outcomes', Annual Report 2011-2012, p. 31.

28 Department of Health and Ageing, 'Performance reporting: Outcome 1—Population Health', Annual Report 2011-2012, p. 64; Australian National Preventive Health Agency, Annual Report 2011-12.

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• The Hon Catherine King MP, Parliamentary Secretary for Health and Ageing

Performance reporting

2.24 The annual report addresses the key performance indicators (KPIs) as listed in the Portfolio Budget Statements 2011-12. The committee acknowledges that the Department of Health and Ageing has developed a significant number of quantitative measures across all outcomes for performance reporting and that this facilitates measuring many aspects of performance. The committee also acknowledges that the vast majority of performance indicators were met or substantially met.

2.25 The committee notes the work conducted by the department in the area of tobacco control and efforts to reduce the prevalence of smoking including approaches specifically targeted at Indigenous communities and people from culturally and linguistically diverse communities. The committee notes that the progress of the National Tobacco Campaign is discussed in the first ANPHA annual report. 29

2.26 Beginning in June 2011, the department has been involved in the implementation of the Australia New Zealand Therapeutics Products Agency. Implementation will occur over a five-year period and is being overseen by a Ministerial Council that includes the Australian and New Zealand Health Ministers.30

2.27 Following a number of reviews of the Therapeutic Goods Administration (TGA), the Commonwealth released its response, TGA Reforms: a blueprint for the TGA's future (the Blueprint). The TGA has commenced implementing the reforms and recommendations contained in the Blueprint.31

2.28 The department supports the Closing the Gap target for Indigenous health by managing a range of initiatives. Over the period 1998-2009, the gap between Indigenous and non-Indigenous child mortality did narrow,32 but the committee notes that a further closing of the gap is predicated on a greater reduction in Indigenous child mortality than has occurred over the previous decade. However, there was no significant narrowing of the gap between Indigenous and non-Indigenous chronic disease mortality rates over the same period.33 Although Indigenous chronic disease mortality rates fell during the period (as did non-Indigenous mortality rates), there will need to be a significantly greater decrease in the incidence of Indigenous chronic disease mortality for the Closing the Gap target to be met.

29 Australian National Preventive Health Agency, Annual Report 2011-12, pp. 48-49.

30 Department of Health and Ageing, 'Performance reporting: Outcome 1— Population Health', Annual Report 2011-2012, p. 69.

31 Department of Health and Ageing, 'Performance reporting: Outcome 1—Population Health', Annual Report 2011-2012, p. 71.

32 Department of Health and Ageing, 'Performance reporting: Outcome 8—Indigenous Health', Annual Report 2011-2012, p. 189.

33 Department of Health and Ageing, 'Performance reporting: Outcome 8—Indigenous Health', Annual Report 2011-2012, p. 189.

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2.29 The department has continued to work in collaboration with the National E-Health Transition Authority (NEHTA) to promote the use of Healthcare Identifiers and the PCEHR system. The department aimed to have 500 000 Australians registered in the first and second wave PCEHR lead implementation sites before the national launch of eHealth records in 2012-13. However, technical incompatibilities meant that only 100 000 people had consented to participate in the local sites.34

2.30 The committee has undertaken an inquiry into the supply of health professionals in rural areas,35 and notes that the department delivers a number of initiatives designed to increase the supply of health professionals in regional Australia. The department administers the General Practice Rural Incentives Program (GPRIP) 'to provide financial incentives to encourage doctors to move to and/or remain in regional, remote and rural Australia'.36 In the 2009-10 budget papers, the scheme was originally introduced as a $64.3 million program over four years.37 The program was extended in 2012-13 with a further $34.9 million.38 The program comprises a General Practitioner (GP) component, a Registrar component and a Rural Relocation Incentive Grant. The committee acknowledges that the vast majority of the program expenses are incurred in retention payments made to doctors already serving in remote and rural locations. The Department of Human Services administers GPRIP, and according to Medicare in 2011-12, $88.4 million was paid under the GP component, $18.4 million under the Registrar component, and $603 038 was paid under the Rural Relocation Incentive Grant.39 The committee acknowledges that there has been an increase of 6.9 per cent in the number of GPs working in rural and regional Australia between 1 July 2010 and 30 September 2012,40 but notes that in the financial year 2011-12, only 22 doctors out of a target of 70 relocated to rural or remote locations.41 This follows on from the 2010-11 financial year when 39 out of a target of 70 doctors relocated to

34 Department of Health and Ageing, 'Performance reporting: Outcome 10—Health System Capacity and Quality', Annual Report 2011-2012, p. 222.

35 Senate Standing Committee on Community Affairs, The Factors Affecting the Supply of Health Services and Medical Professionals in Rural Areas, August 2012.

36 Department of Health and Ageing, 'Performance Reporting: Outcome 12—Health Workforce Capacity, Annual Report 2011-2012, p. 262.

37 The Hon Wayne Swan MP and the Hon Lindsay Tanner MP, Budget Paper No. 2, Budget Measures 2009-10, Commonwealth Treasury and Department of Finance and Deregulation, 12 May 2009, p. 316.

38 The Hon Wayne Swan MP and Senator the Hon Penny Wong, Budget Paper No. 2, Budget Measures 2012-13, Commonwealth Treasury and Department of Finance and Deregulation, 8 May 2012, p. 176.

39 Department of Human Services, 'Chapter 7 — providing health, rehabilitation and other services', Annual Report 2011-2012, pp. 189-190.

40 Department of Health and Ageing, 'Performance Reporting: Outcome 12—Health Workforce Capacity, Annual Report 2011-2012, p. 253.

41 Department of Health and Ageing, 'Performance Reporting: Outcome 12—Health Workforce Capacity, Annual Report 2011-2012, p. 262.

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rural or remote locations.42 Given that the relocation target of 70 doctors has been set through the forward estimates for each year until 2015-16,43 the committee is keen to hear about what the Department has considered in terms of increasing the uptake of the relocation component of GPRIP.

Financial performance

2.31 In 2011-12, the department recorded an operating deficit of $28.6 million under the net cash appropriation model introduced by the Commonwealth in 2010-11. After allowing for the 'elimination of unfunded depreciation' within these revised arrangements and 'the increase in employee provisions as a result of discount movements', the department recorded an operating surplus of $0.194 million.44

2.32 John Barbeler, Chief Financial Officer, noted that at 30 June 2012, current assets exceeded current liabilities by $50.9 million.45

2.33 Following the 2011-12 budget, 159 Health and Ageing programs were consolidated into 18 flexible funds that commenced operation from 1 July 2011. Designed to improve the government's response to emerging health and ageing issues, the movement of the program into funds is outlined in the annual report.46 Whilst the committee welcomes the reduction in red tape and the potential for greater flexibility in funding, the committee is keen to ensure that the allocation of monies under the new system can be traced without any loss of transparency.

Department of Human Services Tabling of the report

2.34 The 2011-12 annual report was presented out of session on 16 October 2012 (and tabled on 29 October 2012). The department's early presentation made it available to senators for the supplementary budget estimates 2012-13 hearings.

Secretary's review

2.35 The secretary, Ms Kathryn Campbell, noted several achievements including customer payments, job placements for people with disabilities, and improvements and extensions of the department's mobile and outreach services. In particular the Department:

42 Department of Health and Ageing, 'Performance Reporting: Outcome 12—Health Workforce Capacity, Annual Report 2010-2011, p. 299.

43 Department of Health and Ageing, 'Outcome 12—Health Workforce Capacity, Program 12. 1: Key Performance Indicators', Portfolio Budget Statements 2012-13, p. 218, table 12. 5.

44 Department of Health and Ageing, 'Financial Statements: Financial Performance— Departmental', Annual Report 2010-2011, p. 355.

45 Department of Health and Ageing, 'Chief Financial Officer's Report', Annual Report 2011- 2012, pp. 18-20.

46 Department of Health and Ageing, 'Management and Accountability: 3.6—Activities Consolidated to Establish Flexible Funds', Annual Report 2011-2012, pp. 328-335.

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• made payments totalling more than $144.7 billion on behalf of the

government;

• expanded the number of sites where Australians can access Medicare, Centrelink and Child Support services;

• supported Australians affected by floods in New South Wales, Victoria and Queensland, with 56 000 claims paid to affected people, and payments totalling $69.9 million;

• worked with separated parents to transfer more than $3.2 billion in child

support payments;

• helped more than 1300 job seekers find job placements through 14 Local Connections to Work sites;

• made more than 14 200 job placements of people with disabilities;

• improved and extended mobile and outreach services; and

• made Clean Energy Advance payments of over $1.3 billion to more than six million families, pensioners and other income support recipients. 47

Changes in administrative arrangements

2.36 There were changes to the Human Services portfolio during the 2011-2012 reporting period. On 1 July 2011, Centrelink and Medicare were integrated into the Department of Human Services under the Human Services Legislation Amendment Act 2011. Consequently, 'the department had to transform both its organisational structure and its organisational culture'.48

2.37 On 10 October 2012, the Department of Human Services briefed the committee on the changes and provided suggestions on how to most effectively structure the Senate estimates process to account for the changes. At the 2012-13 supplementary estimates hearings in October 2012 during questions to the Department of Human Services, the committee drew attention to the potential for a lack of transparency in the new departmental structure.49

Ministerial changes

2.38 On 14 December 2011, the Hon Brendan O'Connor MP replaced the Hon Tanya Plibersek MP as Minister for Human Services. On 5 March 2012, Senator the Hon Kim Carr was appointed Minister for Human Services.

47 Department of Human Services, 'Secretary's Review', Annual Report 2011-12, p. 2.

48 Department of Human Services, 'Overview of the Department', Annual Report 2011-12, p. 10.

49 Committee Hansard, 18 October 2012, p. 142.

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Performance reporting

2.39 The annual report addresses the KPIs as listed in the Portfolio Budget Statements 2011-12. The committee acknowledges that the Department of Human Services met all of its KPIs.50

2.40 The committee has questioned Human Services about call centre waiting times.51 The committee notes that the Department has strategies to improve call centre service delivery. The main strategies are to:

• reduce the need for customers to call

• increase the use of self-service

• improve call centre technology

• increase the efficiency of the call network

• adjust resources to cope with demand. 52

2.41 The Department plays a key role in service delivery and payments to Australians and their families. The range of payments includes $22.1 billion in family-related payments (such as Paid Parental Leave, Family Tax Benefit and Child Care Benefit), 750 000 payments to job seekers (such as Newstart), and Age Pension payments to over 2.2 million Australians.53 The Department also supports 'more than 50 000 people with disability, injury or health conditions to get jobs and training through CRS Australia', and employs social workers to support 'young people at risk of homelessness'.54

2.42 Human Services delivers social, employment and health programs in partnership with works with other portfolio Departments. At supplementary estimates in October 2012 the committee drew attention to one of these partnership programs, the Pilot of Drought Reform Measures in Western Australia.55 The pilot measure was delivered in partnership with the Western Australian Government and the Department of Agriculture, Fisheries and Forestry. The annual report stated that the pilot measure ceased on 30 June 2012.56 The committee subsequently received a briefing from the Department of Human Services and the Department of Agriculture, Fisheries and

50 Department of Human Services, 'Overview of the Department', Annual Report 2011-12, pp. 18-19.

51 Committee Hansard, 18 October 2012, p. 155.

52 Department of Human Services, 'Delivering Services', Annual Report 2011-12, p. 67.

53 Department of Human Services, 'Supporting the Government's Priorities', Annual Report 2011- 12, pp. 25-26.

54 Department of Human Services, 'Supporting the Government's Priorities', Annual Report 2011- 12, p. 25.

55 Committee Hansard, 18 October 2012, p. 168.

56 Department of Human Services, 'Supporting the Government's Priorities', Annual Report 2011- 12, p. 41; Department of Human Services, 'Supporting Families, Workforce participation and Older Australians', Annual Report 2011-12, p. 161.

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Forestry regarding the future of drought reform programs. The committee was directed to a forthcoming communique, now available as a public document, by the Council of Australian Government's Standing Council on Primary Industries,57 and a review of the pilot of drought reform measures in Western Australia.58

2.43 The Department notes that its top priority for the year was service delivery. New developments in regional, rural and remote Australia included Mobile Offices, Community Access Points and Community Agents.59 Selected service centres now provide Self-Service Terminals that enable customers to conduct transactions with Medicare, Centrelink and Child Support services.

2.44 The Department aims to prevent incorrect payments through a range of measures that include education, support to customers and health professionals, and the detection and prosecution of non-compliance and fraud. In 2011-12 the Department 'achieved payment correctness of 97.62 per cent'.60

Financial performance

2.45 In 2011-12, the Department recorded an operating deficit of $14.8 million before depreciation. This compares with the combined operating deficit of Medicare, Centrelink and Human Services in 2010-11 of $128.1 million.61 Total income was $4.3 billion, including $3.9 billion in government appropriation. Expenses were $4.6 billion of which staff expenses comprised 63 per cent of the total. Expenses therefore exceeded income in 2011-12 by $299.4 million, which includes depreciation and amortisation of $266 million.62 Departmental assets of $2.02 billion exceeded departmental liabilities of $1.4 billion by $620 million.63

57 Council of Australian Government's Standing Council on Primary Industries, SCoPI 2 communique, 26 October 2012, http://www.mincos.gov.au/communiques/scopi.

58 Keogh, M., Granger, R. and Middleton, S., Drought Pilot Review Panel, a review of the pilot of drought reform measures in Western Australia, Department of Agriculture, Fisheries and Forestry, 2011, Canberra.

59 Department of Human Services, 'Delivering Services', Annual Report 2011-12, pp. 71-73.

60 Department of Human Services, Ensuring Compliance and Business Integrity, Annual Report 2011-12, p. 221.

61 Department of Human Services, 'Financial Overview and Financial Statements', Annual Report 2011-12, p. 303.

62 Department of Human Services, 'Financial Overview and Financial Statements', Annual Report 2011-12, pp. 303-305, 311.

63 Department of Human Services, 'Financial Overview and Financial Statements', Annual Report 2011-12, p. 306.

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Chapter 3

Annual reports of Commonwealth Authorities and Agencies 3.1 For the financial year 2011-12, the annual reports of the following statutory bodies were referred to the committee for examination and report during the period 1 May to 31 October 2012:

Families, Housing, Community Services and Indigenous Affairs Portfolio • Aboriginal Hostels Limited

• Aboriginal Land Commissioner, Northern Territory

• Australian Institute of Family Studies

• Central Land Council

• Coordinator-General for Remote Indigenous Services 1

• Indigenous Business Australia

• Outback Stores Pty Ltd

• Social Security Appeals Tribunal

Health and Ageing Portfolio • Aged Care Commissioner

• Aged Care Standards and Accreditation Agency Ltd

• Australian Commission on Safety and Quality in Health Care

• Australian Institute of Health and Welfare

• Australian National Preventive Health Agency

• Australian Organ and Tissue Donation and Transplantation Authority

• Australian Radiation Protection and Nuclear Safety Agency

• Cancer Australia

• Food Standards Australia New Zealand

• Health Workforce Australia

• Independent Hospital Pricing Authority

• National Blood Authority

• National Health and Medical Research Council

• National Industrial Chemicals Notification and Assessment Scheme

1 The Coordinator-General for Indigenous Services is included in the Department of Families, Housing, Community Services and Indigenous Affairs' Annual Report 2011-12 as Appendix K.

31

• Office of the Gene Technology Regulator

• Private Health Insurance Ombudsman

• Professional Services Review

Human Services Portfolio • Australian Hearing

3.2 The committee chose selected reports on which to make more detailed comment. Examined in more detail are the annual reports of:

• Food Standards Australia New Zealand

• The Australian Commission on Safety and Quality in Health Care

• Indigenous Business Australia

• Central Land Council

• Independent Hospital Pricing Authority

• Aboriginal Land Commissioner (Northern Territory)

Food Standards Australia New Zealand 2.11 Food Standards Australia New Zealand (FSANZ) was established as a Commonwealth statutory authority under the Food Standards Australia New Zealand Act 1991 to protect public health and safety, provide adequate information to consumers, and prevent misleading or deceptive conduct.2

3.3 The FSANZ annual report was readable against the deliverables and KPIs in the Portfolio Budget Statements 2011-12 and all performance targets were either met or substantially met.3 FSANZ did not meet the statutory timeframe for two out of fifteen regulatory measures concerning applications and proposals. However, the committee notes that FSANZ granted approval for the first measure within one month of the due date and the second measure within ten days of the due date.

3.4 In its second report on annual reports for 2012 the committee commented on the progress of the primary production and processing standard for seed sprouts and the delay in finalising primary production and processing standards for meat and meat products.4 The committee is pleased to note that the primary production and processing standard for seed sprouts is now gazetted.5

2 Food Standards Australia New Zealand, Annual Report 2011-2012, p. 18.

3 Food Standards Australia New Zealand, Annual Report 2011-2012, pp. 22-24; Department of Health and Ageing, 'FSANZ—Agency Budget Statements', Portfolio Budget Statements 2011- 12, pp. 609-613.

4 Senate Standing Committee on Community Affairs, Report on Annual Reports 2012 (2), p. 17, secs. 2.14, 2.15.

5 Food Standards Australia New Zealand, Annual Report 2011-2012, p. 22.

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3.5 The committee recognises that FSANZ developed a draft primary production and processing standard for the major species of meat and meat products in 2010-11, and that FSANZ considered the management of the remaining minor meat species and wild game in 2011-12. In 2011-12 FSANZ conducted the first round of public consultation for major and minor species standards with a view to developing 'a draft standard and implementation package covering all meat species for a further round of public consultation in the future'.6 The committee notes that the Portfolio Budget Statements 2012-13 state that FSANZ will complete the primary production and processing standards for meat and meat products in 2012-13.7

Australian Commission on Safety and Quality in Health Care 3.6 The Australian Commission on Safety and Quality in Health Care (ACSQHC) was established by the Commonwealth, state and territory governments on 1 January 2006. The ACSQHC existed in unincorporated form within the Department of Health and Ageing. The committee would like to acknowledge the work of Professor Chris Baggoley in developing national health care standards during this period.

3.7 The ACSQHC commenced as an independent statutory authority on 1 July 2011 under the National Health Reform Act 2011 funded jointly by all governments in Australia.8 This is the first annual report that the committee has received from the ACSQHC.

3.8 Following the passage of the National Health Reform Act 2011 the ACSQHC has transitioned from a program-based approach to an approach focussed on the development of national health care and clinical standards and accreditation schemes.9

3.9 Mr Bill Beerworth, Chair of the ACSQHC, notes that a priority for the ACSQHC in its first year as an independent body has been the continued 'development and implementation of the National Safety and Quality Health Service (NSQHS) Standards for accreditation'.10

3.10 The committee notes that the ACSQHC coordinates the National Antimicrobial Stewardship Network and that the Australian Health Ministers' Advisory Council has 'endorsed the establishment of a new subcommittee to coordinate a national strategy for antimicrobial resistance in Australia'.11 The

6 Food Standards Australia New Zealand, Annual Report 2011-2012, p. 43.

7 Department of Health and Ageing, 'FSANZ—Agency Budget Statements', Portfolio Budget Statements 2012-13, p. 418.

8 Australian Commission on Safety and Quality in Health Care, Annual Report 2011-12, p. 4.

9 Australian Commission on Safety and Quality in Health Care, Annual Report 2011-12, p. 14.

10 Australian Commission on Safety and Quality in Health Care, Annual Report 2011-12, p. 10.

11 Australian Commission on Safety and Quality in Health Care, Annual Report 2011-12, p. 52.

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committee understands that this refers to the Antimicrobial Resistance Standing Committee (AMRSC).12

3.11 Antimicrobial resistance has been a key concern of the committee in recent estimates hearings. The committee is encouraged by the initiation of a steering group comprising the secretaries of the Departments of Health and Ageing and Agriculture, Fisheries and Forestry and the Chief Medical and Veterinary Officers, particularly if it leads to national leadership and coordination activities across portfolios.13 However, the committee is keen to hear of the progress made by the ACSQHC and its liaison with the AMRSC particularly as it relates to national data-gathering, surveillance and reporting activities in the human sphere.

Indigenous Business Australia 3.12 Indigenous Business Australia (IBA) is a statutory authority under the CAC Act and is enabled by the Aboriginal and Torres Strait Islander Act 2005.14

3.13 In its second report on annual reports for 2012 the committee noted that the slow progress in enabling long term transferable tenure on Indigenous land had impacted negatively on the implementation of the IBA Home Ownership on Indigenous Land (HOIL) program.15 On 1 July 2012, the Home Ownership Program and the HOIL program were merged into the Indigenous Home Ownership Program.16

IBA notes that the merging of the home ownership programs should enable IBA to provide approximately 650 home loans in 2012-13 up from 404 in 2011-12.17

3.14 The committee commends IBA on achieving all its targets related to the Indigenous Home Ownership program.18 The committee acknowledges that there has been a slight increase in Indigenous home ownership from 35.9 per cent in 2006 to 37.4 per cent in 2011. However, the committee notes that Indigenous home ownership rates are well below the non-Indigenous rate of 69.6 per cent. Evidence given at the most recent Cross-Portfolio Indigenous Affairs estimates hearing suggested that

12 Professor Debora Picone, CEO Australian Commission on Safety and Quality in Health Care, Committee Hansard, p. 50; Senate Standing Committee on Community Affairs, Answer to Question on Notice No. 283, Budget Estimates 2012-2013, Department of Health and Ageing, http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=clac_ctte /estimates/bud_1213/DoHA/index.htm

13 Professor Jane Halton, Secretary of the Department of Health and Ageing, Committee Hansard, p. 53.

14 Indigenous Business Australia, Annual Report 2011-12, ifc.

15 Senate Standing Committee on Community Affairs, Report on Annual Reports 2012 (2), p. 20, sec. 2.30.

16 Indigenous Business Australia, Annual Report 2011-12, p. 45.

17 Indigenous Business Australia, Annual Report 2011-12, pp. 11, 45, 70.

18 Indigenous Business Australia, Annual Report 2011-12, p. 45.

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progress on land tenure reform may be needed if Indigenous people are to have greater opportunities to own their own home.19

Central Land Council 3.15 The Central Land Council was formed in 1974 and is a statutory authority operating under the Aboriginal Land Rights (Northern Territory) Act 1976.20

3.16 The committee finds the Central Land Council annual report to be well-presented, engaging and informative. The committee congratulates the Central Land Council on the launch of its new website, which the committee considers to be a well-managed and accessible place to find information about the Council and its activities.

3.17 The committee notes the Central Land Council's leadership change that occurred in May 2012. The Chairman Mr Lindsay Bookie was removed by the Council after he had invited members of the Northern Territory legislative assembly and political candidates to participate in a closed session Council meeting. Central Land Council Director Mr David Ross notes that the Council has occasionally invited political representatives to attend its meetings only in open sessions as guests, and that the Council does not accept political interference in its operations. Mr Ross stated that the Council handling of the event 'demonstrated its commitment to sound governance'.21 The new chairman is Mr Phillip Wilyuka.

Independent Hospital Pricing Authority 3.18 The Independent Hospital Pricing Authority (IHPA) was established on 15 December 2011 as a prescribed agency under the National Health Reform Act 2011.22 The IHPA reports as a prescribed agency under the FMA Act. This is the first annual report that the committee has received from the IHPA.

3.19 Under the National Health Reform Agreement in August 2011, the Council of Australian Governments (COAG) 'unanimously agreed to the establishment of Activity Based Funding (ABF) as the primary funding methodology for public hospitals throughout Australia'.23 ABF allocates payments to hospitals based on 'the number and mix of patients they treat'. ABF operates by classifying patients into clinically relevant groups, counting each patient episode, costing a representative sample of patient episodes, and recognising instances where additional costs may be present such as 'providing health services in remote areas, or to children'.24

19 Senate Community Affairs Legislation Committee, Proof Estimates Hansard, 15 February 2013, p. 65.

20 Central Land Council, Annual Report 2011-12, p. 6.

21 Central Land Council, Annual Report 2011-12, pp. 4-5.

22 Independent Hospital Pricing Authority, Annual Report 2011-12, p. 3.

23 Independent Hospital Pricing Authority, Annual Report 2011-12, p. 3.

24 Independent Hospital Pricing Authority, Annual Report 2011-12, p. 25.

35

3.20 The IHPA was 'charged with determining the National Efficient Price (NEP) for public hospital services' as a precondition for ABF.25 In its first six months, the IHPA delivered the NEP for public hospital services.26

3.21 The inaugural NEP was $4 808 per National Weighted Activity Unit (NWAU). The NWAU allocates a weight to various procedures and allows costs to be determined and comparison to be made across a range of activities.27 The Commonwealth government uses the NEP to determine its funding allocations to the Local Hospitals Networks.28

3.22 The committee notes that the IHPA, the ACSQHC and the Australian National Health Performance Authority (ANHPA) will be working in partnership to deliver on pricing, quality and performance measures. The committee anticipates reviewing the ANHPA annual report in its second report on annual reports for 2013.

Aboriginal Land Commissioner (Northern Territory) 3.23 The Aboriginal Land Commissioner is a statutory office holder and reports under section 61 of the Aboriginal Land Rights (Northern Territory) Act 1976.

3.24 The committee acknowledges the long period of service that the Hon Howard Olney AM QC has given in the office of Aboriginal Land Commissioner:

on a full-time basis between 25 May 1988 and 31 December 1991, and, almost continuously, between 18 March 1998 and 3 May 2005 on a full-time basis, and then on a part-time basis almost continuously between 6 May 2005 and 27 April 2012.29

3.25 During 2011-12 Mr Olney was Aboriginal Land Commissioner on a part-time basis until 27 April 2012. The Hon Justice JR Mansfield AM also acted as Aboriginal Land Commissioner on a part-time basis from 23 November 2011. Mr Olney continued in his role in order to finalise the Report to the Minister on an application to establish a new Land Council (proposed to be known as Katherine Regional Land Council).30

3.26 The committee notes that the proposed new Land Council is contained wholly within the area of responsibility of the Northern Land Council and that Mr Olney provided his Final Report to the Minister on 27 April 2012.31

25 Independent Hospital Pricing Authority, Annual Report 2011-12, p. 4.

26 Independent Hospital Pricing Authority, Annual Report 2011-12, p. 9.

27 Independent Hospital Pricing Authority, Annual Report 2011-12, p. 29.

28 Independent Hospital Pricing Authority, Annual Report 2011-12, p. 4.

29 The Hon JR Mansfield, Aboriginal Land Commissioner, Annual Report 2011-12, p. 1.

30 The Hon JR Mansfield, Aboriginal Land Commissioner, Annual Report 2011-12, p. 1.

31 The Hon JR Mansfield, Aboriginal Land Commissioner, Annual Report 2011-12, pp. 3-4.

36

31

Senator Claire Moore

Chair

37

38

33

Appendix 1

List of departments, agencies and bodies required to present annual reports to the Senate Families, Housing, Community Services and Indigenous Affairs portfolio

Department/Agency/Body Type Legislation Reporting

Year

Date tabled Senate

Date tabled House of Represent-

atives

Date received out of session by President of the Senate (if applicable)

Date

submitted to/ received by Minister (if available)

Received during period for Report 1

of 2012

Received during period for Report 2

of 2012

Aboriginal Hostels Limited (AHL) CAC Act - company

(limited by guarantee)

Section 36 of the Commonwealth Authorities and Companies Act 1997

2011-12 30/10/12 30/10/12 n/a 10/10/12;

10/10/12

√

Aboriginal Land Commissioner, Northern Territory

Statutory office holder Section 61 of the Aboriginal Land Rights (Northern

Territory) Act 1976

2011-12 30/10/12 29/10/12 n/a 02/10/12;

02/10/12

√

Anindilyakwa Land Council1 CAC Act - statutory authority

Section 37 of the Aboriginal Land Rights (Northern Territory) Act 1976 and section 9 of the Commonwealth Authorities and Companies Act 1997

2011-12

1 See the committee's comments in Chapter 1, p. 7.

39

34

Department/Agency/Body Type Legislation Reporting

Year

Date tabled Senate

Date tabled House of Represent-

atives

Date received out of session by President of the Senate (if applicable)

Date

submitted to/ received by Minister (if available)

Received during period for Report 1

of 2012

Received during period for Report 2

of 2012

Australian Institute of Family Studies (AIFS) FMA Act - Prescribed

agency

Section 114LC of the Family Law Act 1975, section 70 and subsection 70(1) of the Public Service Act 1999

2011-12 30/10/12 29/10/12 n/a 26/09/12;

27/09/12

√

Central Land Council CAC Act -

statutory authority

Section 37 of the Aboriginal Land Rights (Northern Territory) Act 1976, section 9 of the Commonwealth Authorities and Companies Act 1997 and the Native Title Act 1993

2011-12 30/10/12 30/10/12 n/a 02/10/12;

02/10/12

√

Coordinator-General for Remote Indigenous Services2 Statutory office holder

Section 28 of the Coordinator-General for Remote Indigenous Services Act 2009

2011-12 10/10/12 10/10/12 n/a 6/09/12;

7/09/12

√

Department of Families, Housing, Community Services and Indigenous Affairs

Department of State Section 63 of the Public Service Act 1999 (PS Act)

2011-12 10/10/12 10/10/12 n/a 06/09/12;

07/09/12

√

2 The Coordinator-General for Indigenous Services is included in the Department of Families, Housing, Community Services and Indigenous Affairs' Annual Report 2011- 12 as Appendix K.

40

35

Department/Agency/Body Type Legislation Reporting

Year

Date tabled Senate

Date tabled House of Represent-

atives

Date received out of session by President of the Senate (if applicable)

Date

submitted to/ received by Minister (if available)

Received during period for Report 1

of 2012

Received during period for Report 2

of 2012

Equal Opportunity for Women in the Workplace Agency (EOWA)

FMA Act - Prescribed agency

Section 12 of the Equal Opportunity for Women in the Workplace Act 1999

2011-12 27/11/12 27/11/12 n/a 08/11/12;

08/11/12

√

Executive Director of Township Leasing

Statutory office holder Section 20R of the Aboriginal Land Rights (Northern

Territory)Act 1976

2011-12 20/11/12 1/11/12 n/a 02/10/12;

02/10/12

√

Indigenous Business Australia (IBA) CAC Act - statutory

authority

Section 189 of the Aboriginal and Torres Strait Islander Act 2005 and section 9 of the Commonwealth Authorities and Companies Act 1997

2011-12 31/10/12 31/10/12 n/a 02/10/12;

02/10/12

√

Indigenous Land Corporation (ILC) CAC Act - statutory

authority

Section 9 of the Commonwealth Authorities and Companies Act 1997

2011-12 19/11/12 26/11/12 14/11/12 √

Northern Land Council 3 CAC Act - statutory authority

Section 37 of the Aboriginal Land Rights (Northern Territory) Act 1976, section 9 of the Commonwealth Authorities and Companies Act 1997 and the Native Title Act 1993

2011-12

3 See the committee's comments in Chapter 1, pp. 6-7.

41

36

Department/Agency/Body Type Legislation Reporting

Year

Date tabled Senate

Date tabled House of Represent-

atives

Date received out of session by President of the Senate (if applicable)

Date

submitted to/ received by Minister (if available)

Received during period for Report 1

of 2012

Received during period for Report 2

of 2012

Outback Stores Pty Ltd CAC Act -

company (limited by shares)

Section 36 of the Commonwealth Authorities and Companies Act 1997

2011-12 31/10/12 31/10/12 n/a 21/09/12;

21/09/12

√

Social Security Appeals Tribunal (SSAT) Statutory body Section 25 of the Social Security (Administration) Act 1999

2011-12 30/10/12 29/10/12 n/a 02/10/12;

02/10/12

√

Tiwi Land Council CAC Act -

statutory authority

Section 9 of the Commonwealth Authorities and Companies Act 1997

2011-12 05/02/13 5/02/13 13/12/12 √

Torres Strait Regional Authority CAC Act - statutory

authority

Section 144ZB Aboriginal and Torres Strait Islander Act 2005 and Section 9 of the Commonwealth Authorities and Companies Act 1997

2011-12 19/11/12 26/11/12 14/11/12 √

Wreck Bay Aboriginal Community Council4 CAC Act - statutory

authority

Section 9 of the Commonwealth Authorities and Companies Act 1997

2011-12

4 See the committee's comments in Chapter 1, p. 6.

42

37

Health and Ageing portfolio

Department/Agency/Body Type Legislation Reporting

Year

Date tabled Senate

Date tabled House of Represent-

atives

Date received out of session by President of the Senate (if applicable)

Date

submitted to/ received by Minister (if available)

Received during period for Report 1

of 2012

Received during period for Report 2 of

2012

Aged Care Commissioner Statutory office holder - Departmental body

Section 95A-12 of the Aged Care Act 1997 2011-12 30/10/12 11/10/12 n/a 21/08/12;

22/08/2012

√

Aged Care Standards and Accreditation Agency Ltd (ACSAA)

CAC Act - company (limited by guarantee)

Section 9 of the Commonwealth Authorities and Companies Act 1997

2011-12 29/10/12 29/10/12 24/10/12 26/09/12;

26/09/12

√

Australian Commission on Safety and Quality in Health Care

CAC Act - Commonwealth authority

Section 111 of the National Health Reform Act 2011 and Section 9 of the Commonwealth Authorities and Companies Act 1997

2011-12 29/10/12 29/10/12 15/10/12 28/09/12;

10/10/12

√

Australian Institute of Health and Welfare (AIHW) CAC Act - statutory

authority

Section 9 of the Commonwealth Authorities and Companies Act 1997

2011-12 31/10/12 31/10/12 n/a 12/10/12;

17/10/12

√

43

38

Department/Agency/Body Type Legislation Reporting

Year

Date tabled Senate

Date tabled House of Represent-

atives

Date received out of session by President of the Senate (if applicable)

Date

submitted to/ received by Minister (if available)

Received during period for Report 1

of 2012

Received during period for Report 2 of

2012

Australian National Preventive Health Agency (ANPHA)

FMA Act - Prescribed agency

Section 53 of the Australian National Preventive Health Agency Act 2010 and Sections 63 and 70 of the Public Service Act 1999

2011-12 30/10/12 11/10/12 n/a 26/09/12;

26/09/12

√

Australian Organ and Tissue Donation and Transplantation Authority

FMA Act - Prescribed agency

Subsection 28(1) of the Australian Organ and Tissue Donation and Transplantation Authority Act

2011-12 10/10/12 10/10/12 n/a 14/09/12;

17/09/12

√

Australian Radiation Protection and Nuclear Safety Agency (ARPANSA)

FMA Act - Prescribed agency

Section 60(6) of the Australian Radiation Protection and Nuclear Safety Act 1998

2011-12 30/10/12 30/10/12 n/a 15/09/12;

15/09/12

√

Cancer Australia FMA Act -

Prescribed agency

Section 37 of the Cancer Australia Act 2006 and Section 57 of the Financial Management and Accountability Act 1997

2011-12 31/10/12 31/10/12 n/a 17/09/12;

17/09/12

√

Department of Health and Ageing Department of the State

Section 63 of the Public Service Act 1999 (PS Act) 2011-12 30/10/12 11/10/12 n/a 31/08/12;

31/08/12

√

44

39

Department/Agency/Body Type Legislation Reporting

Year

Date tabled Senate

Date tabled House of Represent-

atives

Date received out of session by President of the Senate (if applicable)

Date

submitted to/ received by Minister (if available)

Received during period for Report 1

of 2012

Received during period for Report 2 of

2012

Food Standards Australia New Zealand (FSANZ) CAC Act - statutory

authority

Section 152 of the Food Standards Australia New Zealand Act 1991 and Schedule 1of the Commonwealth Authorities and Companies Act 1997

2011-12 30/10/12 30/10/12 n/a 16/10/12;

17/10/12

√

General Practice Education and Training Limited (GPET) CAC Act - company

(limited by guarantee)

Section 9 of the Commonwealth Authorities and Companies Act 1997

2011-12 27/11/12 27/11/12 n/a 24/10/12;

24/10/12

√

Health Workforce Australia (HWA) CAC Act - statutory

authority

Section 9 of the Commonwealth Authorities and Companies Act 1997

2011-12 29/10/12 29/10/12 12/10/12 27/09/12;

02/10/12

√

Independent Hospital Pricing Authority (IHPA) FMA Act - Prescribed

agency

Section 193 of the National Health Reform Amendment (Independent Hospital Pricing Authority) Act 2011 and section 57 of the Financial Management and Accountability Act 1997

2011-12 30/10/12 11/10/12 n/a 07/09/12;

07/09/12

√

Medical Training Review Panel (MTRP)5 Statutory authority

Subsection 3GC(4) of the Health Insurance Act 1973 2011-12

5 See the committee's comments in Chapter 1, pp. 5-6.

45

40

Department/Agency/Body Type Legislation Reporting

Year

Date tabled Senate

Date tabled House of Represent-

atives

Date received out of session by President of the Senate (if applicable)

Date

submitted to/ received by Minister (if available)

Received during period for Report 1

of 2012

Received during period for Report 2 of

2012

National Blood Authority (NBA) FMA Act - Prescribed

agency

Section 44 of the National Blood Authority Act 2003 2011-12 29/10/12 29/10/12 24/10/12 25/09/12;

09/10/12

√

National Health and Medical Research Council (NHMRC) FMA Act - Prescribed

agency

Section 83 of the National Health and Medical Research Council Act 1992 and Section 63 of the Public Service Act 1999

2011-12 31/10/12 31/10/12 n/a 09/10/12;

10/10/12

√

National Health Performance Authority (NHPA) FMA Act - Prescribed

agency

Section 111 of the National Health Reform Act 2011 and Section 57 of the Financial Management and Accountability Act 1997

2011-12 27/11/12 26/11/12 n/a 29/10/12;

29/10/12

√

National Industrial Chemicals Notification and Assessment Scheme (NICNAS)

Regulatory Scheme - Departmental body

Section 108 of the Industrial Chemicals (Notification and Assessment) Act 1989

2011-12 31/10/12 31/10/12 n/a 26/09/12;

03/10/12

√

Office of the Gene Technology Regulator Statutory office holder -

Departmental body

Section 136 of the Gene Technology Act 2000 2011-12 30/10/12 29/10/12 n/a 21/09/12;

21/09/12

√

46

41

Department/Agency/Body Type Legislation Reporting

Year

Date tabled Senate

Date tabled House of Represent-

atives

Date received out of session by President of the Senate (if applicable)

Date

submitted to/ received by Minister (if available)

Received during period for Report 1

of 2012

Received during period for Report 2 of

2012

Pharmaceutical Benefits Pricing Authority (PBPA) 6 Non-statutory body

Section 99YBC of the National Health Act 1953 2011-12 30/10/12 11/10/12 n/a 31/08/12;

31/08/12

√

Private Health Insurance Administration Council (PHIAC)

CAC Act - statutory authority

Section 9 of the Commonwealth Authorities and Companies Act 1997

2011-12 19/11/12 26/11/12 05/11/12 √

Private Health Insurance Ombudsman (PHIO) FMA Act - Prescribed

agency

Section 253-50 of the Private Health Insurance Act 2007 2011-12 30/10/12 30/10/12 n/a 24/09/12;

08/10/12

√

Professional Services Review (PSR) FMA Act - Prescribed

agency

Section 106ZQ of the Health Insurance Act 1973 2011-12 29/10/12 29/10/12 16/10/12 05/10/12;

10/10/12

√

6 Incorporated into the Department of Health and Ageing's Annual Report 2011-12 as Appendix 2.

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42

Human Services portfolio

Department/Agency/Body Type Legislation Reporting

Year

Date tabled Senate

Date tabled House of Represent-

atives

Date received out of session by President of the Senate (if applicable)

Date

submitted to/ received by Minister (if available)

Received during period for Report 1

of 2012

Received during period for Report 2 of

2012

Australian Hearing CAC Act -

statutory authority

Section 9 of the Commonwealth Authorities and Companies Act 1997

2011-12 10/10/12 10/10/12 n/a 24/09/12;

24/09/12

√

Department of Human Services Department of the State

Section 63 of the Public Service Act 1999 (PS Act) 2011-12 29/10/12 29/10/12 16/10/12 28/09/12;

28/09/12

√

Annual reports from non-Portfolio Agencies

Department/Agency/Body Type Legislation Reporting

Year

Date tabled Senate

Date tabled House of Represent-

atives

Date received out of session by President of the Senate (if applicable)

Date

submitted to/ received by Minister (if available)

Received during period for Report 1

of 2012

Received during period for Report 2 of

2012

Australian Health Practitioner Regulation Agency7 Statutory Agency

Schedule 3, Clause 8 of the Health Practitioner Regulation National Law Act 2009, as in force in each state and territory

2011-12 5/02/13 5/02/13 12/12/12 √

7 The Australian Health Practitioner Regulation Agency supplies an annual report to the Ministerial Council of the Council of Australian Governments which supplies a copy to each state and territory Parliament and to the Commonwealth.

48

43

Appendix 2

Letter from Ms Helen Conway, Director, Equal Opportunity for Women in the Workplace Agency

49

50

51

52

53

54

55

56

The Senate

Economics

Legislation Committee

Annual reports (No. 1 of 2013)

March 2013

57

ii

© C

ommonwealth of Australia 2013

ISBN 978-1-74229-759-0

Printed by the Senate Printing Unit, Parliament House, Canberra.

58

iii

Senate Economics Legislation Committee

Members

Senator Mark Bishop, Chair Western Australia, ALP

Senator David Bushby, Deputy Chair Tasmania, LP

Senator Alan Eggleston Western Australia, LP

Senator Doug Cameron New South Wales, ALP

Senator Anne Urquhart Tasmania, ALP

Senator Nick Xenophon South Australia, IND

Secretariat

Mr Tim Bryant, Secretary Ms Morana Kavgic, A/g Research Officer

PO Box 6100 Parliament House Canberra ACT 2600 Ph: 02 6277 3540 Fax: 02 6277 5719 E-mail: economics.sen@aph.gov.au Internet: www.aph.gov.au/senate_economics

59

60

TABLE OF CONTENTS

Membership of Committee iii

Abbreviations ............................................................................................................. ix

Chapter 1: Overview .................................................................................................. 1

Introduction ............................................................................................................ 1

Terms of reference .................................................................................................. 1

Purpose and requirements of annual reports .......................................................... 2

Changes to reporting re

quirements ......................................................................... 2

Reports referred to the committee .......................................................................... 3

Additional reports referred to the committee ......................................................... 5

Organisational and operational changes ................................................................. 6

Timeliness ............................................................................................................... 7

Remarks made in the Senate................................................................................... 9

Other comments on reports .................................................................................... 9

Chapter 2: Individu al 2011-2012 Annual Reports ............................................... 11

Reports under the Indu

stry, Innovation, Science, Research

and Tertiary Education portfolio .......................................................................... 11

Reports under the Resources, Energy and Tourism portfolio .............................. 17

Reports under the Treasury portfolio ................................................................... 21

Appendix 1:

Industry, Inno

vation, Science, Research and Tertiary Education portfolio:

List of annual reports tabled in the Senate in the period 1 May to 31 October 2012, and later .............................................. 37

Appendix 2:

Resources, Energy

and Tourism Portfolio:

List of annual reports tabled in the Senate in the period 1 May to 31 October 2012, and later .............................................. 41

61

vi

Appendix 3:

Treasury portfolio:

List of annual reports tabled in the Senate in the period 1 May to 31 October 2012, and later .............................................. 43

Appendix 4: Industry, Innovation, Science, Research and Tertiary Education portfolio structure .............................................................. 49

Appendix 5: Resources, Energy and Tourism portfolio structure ...................... 51

Appendix 6: Treasury portfolio structure .............................................................. 53

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vii

Abbreviations

ANAO Australian National Audit Office

AOSSG Asian-Oceanian Standard-Setters Group

ASIC Act Australian Securities and Investments Commission Act 2001

IAASB International Auditing and Assurance Standards Board

ACRE Australian Centre for Renewable Energy

ADI Authorised Deposit-taking Institution

AER Australian Energy Regulator

ARENA Australian Renewable Energy Agency

AWPA Australian Workforce and Productivity Agency

BREE Bureau of Resources and Energy Economics

CAC Act Commonwealth Authorities and Companies Act 1997

CRICOS Commonwealth Register of Institutions and Courses for Overseas Students

DEEWR Department of Education, Employment and Workplace Relations

DIISR Department of Innovation, Industry, Science and Research

DIISRTE Department of Industry, Innovation, Science, Research and Tertiary Education

DRET Department of Resources, Energy and Tourism

ESD ecologically sustainable development

FMA Act Financial Management and Accountability Act 1997

FOI Freedom of Information

GFC Global Financial Crisis

CGS Commonwealth Government Securities

HoR House of Representatives

63

viii

IIF Innovation Investment Fund

IP intellectual property

IPS Information Publication Scheme

KPI key performance indicator

MoU Memorandum of Understanding

MYEFO Mid-Year Economic and Fiscal Outlook

NCGP National Competitive Grants Program

NDS National Disability Strategy

NOPSA National Offshore Petroleum Safety Authority

NOPSEMA National Offshore Petroleum Safety and Environmental Management Authority

NOPTA National Offshore Petroleum Titles Administrator

OECD Organisation for Economic Cooperation and Development

OSP Office of Spatial Policy

PJC Parliamentary Joint Committee on Corporations and Financial Services

PM&C Department of Prime Minister and Cabinet

PM&C guidelines Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies, last revised on 28 June 2012

RMBS residential mortgage backed securities

SG superannuation guarantee

SKA Square Kilometre Array

TASA Tax Agent Services Act 2009

WLAN wireless local area network

64

Chapter 1

Overview

Introduction

1.1 This is the Senate Economics Legislation Committee's (the committee) first report on annual reports in 2013. It provides an overview of the committee's examination of annual reports for the 2011-12 financial year tabled on or before 31 October 2012, and includes an overview of one annual report for which a formal extension was granted.

Terms of reference

1.2 Annual reports of departments and agencies are referred to Senate committees under Senate Standing Order 25(20). The Senate Economics Legislation Committee is responsible for the scrutiny of departments and agencies in the following portfolios:

 Industry, Innovation, Science, Research and Tertiary Education;

 Resources, Energy and Tourism; and

 Treasury.

1

1.3 The structures and outcomes for each of these portfolios are summarised in Appendices 5, 6 and 7, respectively.

1.4 Standing order 25(20)2 requires the committee to:

(a) examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory;

(b) consider in more detail, and report to the Senate on, each annual report which is not apparently satisfactory, and on the other annual reports which it selects for more detailed consideration;

(c) investigate and report to the Senate on any lateness in the presentation of annual reports;

(d) in considering an annual report, take into account any relevant remarks about the report made in debate in the Senate;

(e) if the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates;

(f) report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on annual reports tabled by 30 April each year by the te

nth sitting day after 30 June of that year;

1 Journals of the Senate, No. 74, 8 February 2012, pp 2043-2044.

2 Standing Orders and other orders of the Senate, June 2009, p. 28.

65

Page 2

(g) draw to the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports; and

(h) report to the Senate each year whether there are any bodies which do not present annual reports to the Senate and which should present such reports.

Purpose and requirements of annual reports

1.5 Annual reports provide information on the success (or otherwise) of departments and agencies in meeting their targets and therefore assist in ensuring the public accountability of government departments and agencies. Their tabling in the Parliament, and scrutiny by Senate committees, allows Parliament to make informed judgments on the executive's performance in administering government programs.

1.6 The requirements are set down in the following instruments:

 Departments of State and Executive Agencies present their annual reports

pursuant to sections 63(2) and 70(2) of the Public Service Act 1999,3 and the Department of the Prime Minister and Cabinet's (PM&C) Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies, revised 28 June 2012.

 Commonwealth authorities and companies present their annual reports pursuant to their own enabling legislation and/or sections 9, 36 and 48 of the Commonwealth Authorities and Companies Act 1997 (CAC Act).

 For non-statutory bodies, the requirements are contained in the Government response to the report of the Senate Standing Committee on Finance and Public Administration on Non-statutory bodies, Senate Hansard, 8 December 1987, pp 2643-45.

1.7 The legislation governing the annual reports of various agencies and the tabling information is shown in Appendices 1, 2 and 3.

1.8 The enabling legislation of some agencies may require that agency to report on matters other than those included in the guidelines, or impose different reporting requirements. The committee's view is that such agencies, while bound by their enabling legislation, should also comply with the PM&C guidelines, to the extent that the requirements do not conflict.

Changes to reporting requirements

1.9 This report examines the requirements released by the Department of the Prime Minister and Cabinet, and approved by the Joint Committee of Public Accounts

3 The financial statements must be produced in accordance with the amended Financial Management and Accountability Orders (Financial Statements for reporting periods ending on or after 1 July 2008).

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and Audit. Requirements for Annual Reports for 2011-12 include significant amendments relating to:

 consultancy reporting;

 carer recognition (applicable to public service care agencies);

 work health and safety; and

 freedom of information. 4

1.10 Attention also needs to be given to other information to be included by legislation, including advertising and market research and ecologically sustainable development and environmental performance.

1.11 The specific requirement for disability reporting in individual annual reports has been discontinued given that it occurs through other mechanisms. To preserve the level of parliamentary scrutiny of disability issues, each report must now include an explicit and transparent reference to other reporting mechanisms, noting where agency level information can be found. A suggested form of words to satisfy the requirement is set out in the PM&C Requirements for Annual Reports released in June 2012, p. 26.

Reports referred to the committee

1.12 Under Standing Order 25(20)(f), the committee is required to report on the annual reports of departments and agencies tabled in the Senate by 31 October each year by the tenth sitting day of the following year. This year that date is 14 March 2013.5

1.13 This report examines the annual reports 2011-12 of the following 36 bodies:

Departments of State

 Department of Industry, Innovation, Science, Research and Tertiary Education [includes IP Australia, a prescribed non-statutory agency];

 Department of Resources, Energy and Tourism [includes Geoscience Australia];

 Department of the Treasury;

Prescribed agencies under the FMA Act

 Auditing and Assurance Standards Board (independent statutory agency);

 Australian Accounting Standards Board (independent statutory agency);

 Australian Bureau of Statistics (statutory agency);

4 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 2012, p. i.

5 The committee is also required to report on annual reports tabled in the Senate by 30 April each year by the tenth sitting day after 30 June of that year.

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 Australian Competition and Consumer Commission [includes the Australian

Energy Regulator] (independent statutory authority);

 Australian Office of Financial Management (non-statutory agency);

 Australian Research Council (statutory agency);

 Australian Securities and Investments Commission (statutory agency);

 Australian Skills Quality Authority (independent statutory agency);

 Australian Taxation Office (statutory agency);

 Commonwealth Grants Commission (statutory agency);

 Corporations and Markets Advisory Committee (statutory agency);

 Inspector-General of Taxation (statutory agency);

 National Competition Council (statutory agency);

 National Offshore Petroleum Safety and Environmental Management Authority (statutory agency);

 Productivity Commission (statutory agency);

 Royal Australian Mint (non-statutory agency);

 Tertiary Education Quality and Standards Agency (statutory agency);

Statutory bodies/authorities not under the FMA Act

 Australian Statistics Advisory Council;

 Companies Auditors and Liquidators Disciplinary Board (independent statutory body);

 Financial Reporting Council (statutory body);

 Financial Reporting Panel (independent statutory authority);

 Skills Australia (independent statutory body);

 Superannuation Complaints Tribunal;

 Tax Practitioners Board (independent statutory authority);

Non-statutory bodies

 Takeovers Panel;

Commonwealth authorities (under the CAC Act)

 Australian Institute of Aboriginal and Torres Strait Islander Studies (statutory

authority);

 Australian Institute of Marine Science (statutory authority);

 Australian Reinsurance Pool Corporation;

 Australian Nuclear Science and Technology Organisation;

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 Commonwealth Scientific and Industrial Research Organisation [includes

Science and Industry Endowment Fund];

 Reserve Bank of Australia;

 Tourism Australia; and

Commonwealth companies (under the CAC Act)

 Australian Solar Institute Limited (limited by guarantee).

1.14 Comments on these individual reports are contained in Chapter 2, where reports are listed in alphabetical order under each portfolio.

1.15 Some of the aforementioned reports which are within the Treasury portfolio may also be subject to scrutiny by the Parliamentary Joint Committee on Corporations and Financial Services (PJC), established by Part 14 of the Australian Securities and Investments Commission Act 2001. Section 243 specifies the committee's duties, which include:

(b) to examine each annual report that is prepared by a body established by this Act and of which a copy has been laid before a House, and to report to both Houses on matters that appear in, or arise out of, that annual report and to which, in the Parliamentary Committee's opinion, the Parliament's attention should be directed...

1.16 In fulfilment of the committee's duties under subsection 243(b), the PJC may report on the following 10 bodies:

 Auditing and Assurance Standards Board;

 Australian Accounting Standards Board;

 Australian Securities and Investments Commission;

 Companies Auditors and Liquidators Disciplinary Board;

 Corporations and Markets Advisory Committee;

 Financial Reporting Council;

 Financial Reporting Panel;

 Office of the Australian Accounting Standards Board;

 Office of the Auditing and Assurance Standards Board; and

 Takeovers Panel.

Additional reports referred to the committee

1.17 In addition to the aforementioned reports, the following reports were also referred to the committee in the reporting period. The committee notes that these reports are referred for information only, and the committee is not required to report on them by the terms of the Standing Order:

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 Productivity Commission - Inquiry Report No. 57 - Economic Regulation of

Airport Services, 14 December 2011;

 Australian Government response to the Productivity Commission Inquiry into the Economic Regulation of Airport Services;

 Productivity Commission - Inquiry Report No. 60 - Default Superannuation Funds in Modern Awards, 5 October 2012;

 Australian Research Council - Strategic Plan 2012-13 to 2014-15;

 Reserve Bank of Australia - Payments System Board Annual Report 2012;

 Reserve Bank of Australia - Equity & Diversity Annual Report 2012;

 The Treasury - Final Budget Outcome 2011-12;

 The Treasury - Tax Expenditure Statement 2012;

 The Treasury - Mid-Year Economic and Fiscal Outlook 2012-13; and

 Department of Finance and Deregulation - Consolidated Financial Statements

for the year ended 30 June 2012.

Organisational and operational changes

1.18 In response to the changes in the machinery of government on 12 December 2011, this report also contains analysis of annual reports tabled under the Tertiary Education and Skills portfolio, now the third outcome for the Department of Industry, Innovation, Science, Research and Tertiary Education (formerly the Department of Innovation, Industry, Science and Research). These include Skills Australia, Australian Skills Quality Authority, and Tertiary Education Quality and Standards Agency, all of which were formerly under the Education, Employment and Workplace Relations portfolio otherwise administered by DEEWR and scrutinised by the Senate Education, Employment and Workplace Relations Legislation Committee.

1.19 The committee notes that this report contains examination of inaugural annual reports of the Australian Skills Quality Authority established on 24 March 2011, and the Tertiary Education Quality and Standards Agency which commenced operation on 31 July 2011.

1.20 Skills Australia presented its last annual report under this name, as it transitioned to the Australian Workforce and Productivity Agency on 1 July 2012.

1.21 The Australian Renewable Energy Agency (ARENA) is a new agency under the Resources, Energy and Tourism portfolio, established on 1 July 2012 as an independent statutory authority under the Australian Renewable Energy Agency Act

2011. It incorporates projects and measures previously managed by the Australian Solar Institute, the Australian Centre for Renewable Energy Board, and the Department of Resources, Energy and Tourism, as part of the Clean Energy Future Package announced by the Prime Minister on 8 July 2011. This report therefore looks at the final annual report by the Australian Solar Institute, while the last annual report

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by the Australian Centre for Renewable Energy Board will be examined in Annual reports (No. 2) 2013.

1.22 On 15 September 2011, the Parliament passed a package of amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and associated Acts implementing reforms to the regulation of upstream petroleum in Commonwealth

offshore areas. The reforms included creating the National Offshore Petroleum Titles Administrator (NOPTA) within the Department of Resources, Energy and Tourism, and expanding the National Offshore Petroleum Safety Authority (NOPSA) into the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA). NOPSEMA acquired responsibilities for work health and safety, integrity of facilities and wells, and environmental management in Commonwealth offshore areas. Both NOPTA and NOPSEMA commenced operations on 1 January 2012.

1.23 The government confirmed the closure of the Financial Reporting Panel, an independent statutory authority under the Treasury portfolio, due to lower than expected referral rates. On 21 June 2012 legislation to effect the closure was introduced into Parliament. On 23 August 2012, the Corporations Legislation Amendment (Financial Reporting Panel) Bill 2012 was passed in the Senate. The legislation disbanded the Financial Reporting Panel by repealing its functions and powers effective as of 1 October 2012. This report therefore examines the Panel's final annual report.

Timeliness

1.24 Standing Order 25(20)(c) requires the committee to report to the Senate on the late presentation of annual reports. The committee commends the departments and agencies discussed in this report for their timeliness.

Departments and FMA Act entities

1.25 Subsection 4(1) of Part 1 of the PM&C Requirements for Annual Reports states that annual reports of departments and agencies under the FMA Act framework are to be presented to each House of Parliament on or before 31 October in the year the report is given. Furthermore, if Senate Supplementary Estimates hearings are scheduled to occur prior to 31 October, it is best practice for annual reports to be tabled prior to those hearings. In 2012, hearings for the committee's portfolios commenced on 17 October.

CAC Act entities

1.26 Section 9 of the CAC Act stipulates that the deadline for furnishing the minister with the annual reports of Commonwealth authorities is the 15th day of the 4th month after the end of the financial year; that is, 15 October.

1.27 Section 36 of the CAC Act stipulates that Commonwealth companies must give their annual reports to the responsible minister by the earlier of the following:

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 four months after the end of the financial year, or

 21 days before the next annual general meeting of the company after the end

of the financial year.

Other entities

1.28 Entities reporting in accordance with their own legislation are often required to prepare for the relevant minister their annual report 'as soon as is practicable' after a particular date. The committee draws attention to subsections 34C(2) and 34C(3) of the Acts Interpretation Act 1901, which stipulate that where no date for providing a report to a minister is specified, the report should be presented no more than six months after the reporting period, and the minister must provide the report to the Parliament within 15 sitting days after they receive it.

Government policy for all annual reports

1.29 While the legislative requirements for the tabling of annual reports vary between different types of agencies,6 the Government's policy is 'that all annual reports should be tabled by 31 October'.7

Requests for an extension

1.30 The committee notes that this report includes the examination of one annual report which was tabled after the 31 October deadline. This is the Australian Skills Quality Authority annual report 2011-12, for which an extension was requested. On 9 November 2012 Senator the Hon. Chris Evans, the then Minister for Tertiary Education, Skills, Science and Research, granted a request for an extension to 30 November 2012 for the tabling of the Australian Skills Quality Authority annual report. The details of the extension were tabled in Parliament in accordance with paragraph 34C(7)(b) of the Acts Interpretation Act 1901.

1.31 Annual reports tabled in the Senate after 31 October and before the tabling of this report are listed in Table 1. These and other reports received after 31 October 2012 will be discussed in the committee's Annual reports (No. 2 of 2013).

6 The various requirements are set out in the Committee's report Annual reports (No. 1 of 2009), March 2009, p. 4.

7 Department of the Prime Minister and Cabinet, Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies, 28 June 2012, p. 2; Department of the Prime Minister and Cabinet, Guidelines for the Presentation of Government Documents to the Parliament (Including Government Responses to Committee Reports, Ministerial Statements, Annual Reports and Other Instruments), December 2012, paragraph 4.8.

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Table 1: Reports tabled in the Senate after 31 October

Agency Sent to

Minister

Received by Minister Tabled/presented* in Senate

Australian Centre for Renewable Energy (ACRE) Board 6 Dec 7 Dec 11 Dec*

Australian Prudential Regulation Authority 26 Oct 26 Oct 19 Nov

(9 Nov*)

IIF Investments Pty Ltd

Foreign Investments Review Board

31 Oct

17 Jan

31 Oct

17 Jan

28 Nov

25 Feb (22 Feb*)

Remarks made in the Senate

1.32 Senate Standing Order 25(20)(d) directs the committee to take into account remarks made in the Senate when considering annual reports.

1.33 Two annual reports considered in this report were the subject of debate in the Senate chamber:

 On 10 October 2012, Senator Bridget McKenzie made some comments on the Australian Research Council's annual report 2011-12. In her speech Senator McKenzie noted the ARC's mission and key objectives, and made further comments on the government's role in supporting science research.8

 On 27 February 2013, Senator Mitch Fifield made a reference to the Reserve Bank of Australia's (RBA) annual report in Senate Questions without notice. Senator Fifield referred to the foreword to the RBA’s annual report in relation to the dividends paid to the government and the replenishment of the Reserve Bank Reserve Fund.9

Other comments on reports

1.34 Taking into account the reporting guidelines specified by the legislation under which departments and agencies present their annual reports, the committee considers that the reports it has examined are generally apparently satisfactory.

8 See:

http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query%3DId%3A%22chamber% 2Fhansards%2F9d7d8cb5-a0ef-4c67-9936-653fc7cde168%2F0213%22

9 See:

http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=(%22annual%20report%2 2%20Dataset%3Ajournals,hansards,hansards80)%20(Alert_Mod_Time%3A%3E%3D2013022 7183103%20%7C%20Alert_Create_Time%3A%3E%3D20130227183103);rec=3

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1.35 Despite this, the committee considers that some aspects of agency annual reports could be improved. One of the things that the committee examines is whether annual reports contain discussion of external scrutiny and parliamentary accountability.

External scrutiny and accountability

1.36 It is required that annual reports:

… must provide information on the most significant developments in external scrutiny of the department and the department's response, including particulars of:

(a) judicial decisions and decisions of administrative tribunals that have had, or may have, a significant impact on the operations of the department; and

(b) reports on the operations of the department by the Auditor-General (other than the report on financial statements), a Parliamentary committee or the Commonwealth Ombudsman.10

1.37 Annual reports should be a primary reference document for parliamentarians and others looking for information about external scrutiny of government agencies. As noted, the primary purpose of annual reports is accountability to the Parliament - it is therefore important that details about external scrutiny are included in a clear manner in annual reports. Details on parliamentary scrutiny should be included in annual reports, including appearances at Senate estimates hearings (which are the subject of bi-annual reports to the Senate) and any evidence or submissions made to parliamentary inquiries. The reports should also note that they are subject to scrutiny by

this and any other committee.

Compliance indices or lists of requirements

1.38 The inclusio

n of a compliance index or a list of requirements in annual reports is mandatory for all departments and agencies under the FMA Act and CAC Act. The index preferably should include a nil return entry where the agency has nothing to report under an item. A compliance index is a useful feature of reports and considerably assists the committee's task of assessing reports. It also assists agencies by clearly showing that their compliance obligations have been met. It can be particularly useful for agencies with reporting requirements under various Acts.

1.39 The committee commends the great majority of agencies for their inclusion of compliance indices in their 2011-12 annual reports.

10 Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies. Clause 11 of Schedule 1 of the Commonwealth Authorities and Companies (Report of Operations) Orders 2008 states that the same requirements apply to Commonwealth authorities that present their annual reports in accordance with the provisions of section 9 of the CAC Act.

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Chapter 2

Individual 2011-2012 Annual Reports

Reports under the Industry, Innovation, Science, Research and Tertiary Education portfolio

Australian Institute of Aboriginal and Torres Strait Islander Studies - annual report 2011-12

Reporting requirements

1.2 The committee considers that AIATSIS has met its reporting requirements under the CAC Act.

1.3 Although the sections of the report referring to contracts and consultancies contain information on the value of contracts,1 they should specify which consultancies were ongoing as opposed to which were new.

1.4 The committee acknowledges that AIATSIS has implemented the recommendation from the committee's report Annual reports (No. 1) 2012 regarding the details required to be included in the letter of transmittal.

Operational matters

1.5 The report states that AIATSIS' utmost priority is the need to address its long term funding situation. Its research grants program was suspended this year, and there is uncertainty over the future financial capacity of the Institute to manage and preserve its collections. The Institute was confronted with a budgetary challenge when government funding for its archival digitalisation program ended in June 2011. This year AIATSIS recorded an operating loss of $3.2 million, agreed to by the Minister for Finance and Deregulation. The loss, together with a two-year government investment and the exemption from the efficiency dividend enabled the Institute to maintain employment for over 30 of its staff. A new enterprise agreement came into effect in May 2012.

Australian Institute of Marine Science - annual report 2011-12

Reporting requirements

1.6 The committee considers that AIMS has met its reporting requirements under the CAC Act.

1 Australian Institute of Aboriginal and Torres Strait Islander Studies, Annual Report 2011-12, pp 113 and 166-167.

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1.7 The report identifies the principles and reasons for engaging consultants, but does not show expenditure on consultancy services.2

Operational matters

1.8 The core capabilities of AIMS as a tropical marine research agency are climate change, biodiversity, water quality and marine microbiology, in which the Institute holds a strong publication record - in 2011 it published a record 177 journal articles.

1.9 The report states that a major risk currently facing AIMS is a serious shortfall in base funding, as outside costs are rising at a faster rate than the increase in revenue resulting from indexation.

1.10 As of November 2011, AIMS has a new CEO, Mr John Gunn.

Australian Nuclear Science and Technology Organisation - annual report 2011-12

Reporting requirements

1.11 The committee considers that ANSTO has met its reporting requirements under the Acts.

1.12 The annual report does not mention ANSTO's appearance at Senate estimates or the regular examination of its annual report by this committee in the section on reviews by outside bodies3. This information would be a useful addition to the report for the purpose of external scrutiny and accountability.

1.13 The report contains information on indemnities and insurance premiums for employees, but does not state the value of the premiums.4

Operational matters

1.14 ANSTO contributes to ongoing nuclear and national security, including counter-terrorism preparedness. It also contributes to national food security - this year it looked at the use of irradiation as a chemical-free alternative to pesticides.

1.15 ANSTO has taken initial steps towards delivering on the vision outlined in its 2055 Infrastructure Plan, with the view of transforming its Lucas Heights waste storage campus to make it more accessible to the public. It also opened a national imaging facility and a facility for the measurement of environmental radioactivity.

2 Australian Institute of Marine Science, Annual Report 2011-12, p. 59.

3 Australian Nuclear Science and Technology Organisation, Annual Report 2011-12, p. 92.

4 Australian Nuclear Science and Technology Organisation, Annual Report 2011-12, p. 92.

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1.16 ANSTO reported the strong financial performance of its commercial groups for this year.

Australian Research Council - annual report 2011-12

Reporting requirements

1.17 The committee considers that the ARC has met its reporting requirements under the Acts.

1.18 The committee notes that deliverables and key performance indicators (KPIs) for all three ARC programs were revised in 2011-12.5 One KPI for the Linkage program was not met. The report does not contain a statement on whether the ARC has historically met each of its KPIs.

1.19 The report includes a correction of errors to the previous two annual reports.6

Operational matters

1.20 Amongst other activities, the ARC administers one grant program, the National Competitive Grants Program (NCGP). Two new funding initiatives were developed under NCGP this year: the Special Research Initiative in Synchrotron Science and the Special Research Initiative for an Aboriginal and Torres Strait Islander Researchers’ Network. This year the ARC received 28 appeals in relation to NCGP proposals, of which five research misconduct allegations were upheld. The ARC identified the increasingly large number of proposals submitted for funding under the NCGP as a key challenge in this reporting year.

1.21 The ARC released a new strategic plan in 2011-12, and completed a review of their risk-management framework. It also finalised a new enterprise agreement.

1.22 There is a reference to two ANAO audit reports which found that:

…in the period under consideration the ARC had more than 20 instances of grant program guidelines for which there was no evidence of the required approval (by the Expenditure Review Committee) being obtained prior to their release.

And that:

…the ARC had not met the requirements of the Commonwealth Grant Guidelines with regard to posting of grants information on its website.7

1.23 In relation to the above, the ARC stated that it ‘has subsequently implemented processes to ensure that it complies with both these requirements’.

5 Australian Research Council, Annual Report 2011-12, pp 41, 60 and 76.

6 Australian Research Council, Annual Report 2011-12, p. 226.

7 Australian Research Council, Annual Report 2011-12, p. 93.

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1.24 The ARC recorded an operating deficit of $0.386 million for this year 'due to the removal of depreciation funding as part of Operation Sunlight net cash appropriations framework.'8

1.25 As noted in Chapter 1, this annual report was subject to some comments made by Senator Bridget McKenzie in the Senate on 10 October 2012.

Australian Skills Quality Authority - annual report 2011-12

Reporting requirements

1.26 The committee considers that ASQA has met its reporting requirements under the Acts.

1.27 ASQA noted that it would develop service standards once it completes its establishment phase and is able to accurately measure the timeframes for various regulatory tasks. The report also noted that ASQA is unable to provide reporting on ecologically sustainable development for this year, as not all of its offices were open for the 12 month reporting period.

Operational matters

1.28 ASQA commenced operations on 1 July 2011 as a body set up to provide national consistency in the regulation of vocational education and training. It has an audit and monitoring regime and the power to apply sanctions. This reporting year ASQA undertook 420 course accreditation activities, with 92 per cent completed within the reporting period. It received a total of 4873 applications in relation to registration, of which 611 were transferred from regulators in NSW, Victoria, Western Australia, the ACT and Northern Territory on its first day of operation. ASQA signed MoUs with state and territory government agencies for the purpose of their referral of powers to ASQA.

1.29 This year it suspended the registration of 22 providers, and communicated with providers to assist them with the transition. It assessed the registration and reregistration of courses on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) and established a regulator-provider forum with English Australia which considers issues relating to the regulation of providers delivering to overseas students. ASQA removed the requirement for applicants to submit a course concept proposal from 1 July 2012. It commenced planning for

targeted regulatory activity focused on the aged care training sector in 2012-13.

1.30 ASQA had an operating surplus of $5.9 million (22 per cent of departmental revenue). It received an award for the functionality of its website.

8 Australian Research Council, Annual Report 2011-12, p. 117.

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Commonwealth Scientific and Industrial Research Organisation [includes Science and Industry Endowment Fund] - annual report 2011-12

Reporting requirements

1.31 The committee considers that CSIRO has met its reporting requirements under the Acts.

1.32 The compliance index does not include a reference to page numbers to identify where relevant information can be found in the report. This should be rectified in future reports.

1.33 The report does not contain a reference to the organisation’s ethics policy, which is a requirement under the CAC Act.

1.34 The annual report does not mention CSIRO's appearance at Senate estimates or the regular examination of its annual report by this committee in the section on reviews by outside bodies. This information would be a useful addition to the report for the purpose of external scrutiny and accountability.

Operational matters

1.35 In 2012 it was announced that the $2.5 billion SKA radio telescope would be deployed in Australia, New Zealand and South Africa, making it the world’s largest radio telescope. Australia’s SKA Pathfinder is on track to be operational next year, as is the Pawsey Supercomputer.

1.36 CSIRO released the State of the Climate 2012 report, which provides observations of Australia’s climate and an analysis of contributing climactic factors.

1.37 CSIRO reported a surplus for 2011-12 of $200.5 million, largely attributable to the WLAN licensing agreements. The CSIRO wireless local area network (WLAN) team won the European Patent Office Non-European Inventor Award for 2012.

Department of Industry, Innovation, Science, Research and Tertiary Education [includes IP Australia] - annual report 2011-12

Reporting requirements

1.38 The committee considers that the Department and IP Australia have met their reporting requirements under the Acts.

1.39 For future annual reports, the committee proposes the introduction of a snapshot of key achievements and highlights in the reporting year.

1.40 The committee suggests that the Department make a reference to its annual report being scrutinised by this committee in future annual reports, to be incorporated in the section on external scrutiny.

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1.41 The Department's report includes corrections to the previous annual report.9

Operational matters

1.42 The changes in the machinery of government announced on 12 December 2011 transferred the tertiary education and skills functions from the Department of Education, Employment and Workplace Relations to the former Department of Innovation, Industry, Science and Research (DIISR), which presented the Department with a series of adjustments in logistical and human resources areas.

1.43 The Department received an unqualified audit report on its financial statements. However, the ANAO report noted:

Note 28 Compliance with Statutory Conditions for Payments from the Consolidated Revenue Fund discloses information on the Department of Industry, Innovation, Science, Research and Tertiary Education's review of its exposure to risks of not complying with statutory conditions on payments from special appropriations and special accounts. Non-compliance with statutory conditions may lead to a contravention of section 83 of the Constitution, which requires that no money shall be drawn from the Treasury of the Commonwealth except under an appropriation made by law.

As disclosed in Note 28, debts raised totalling $43,272,172 under the Social Security (Administration) Act 1999 have been identified in 2011-12 as potential breaches of section 83 of the Constitution.10

Skills Australia- annual report 2011-12

Reporting requirements

1.44 The committee considers that Skills Australia has met its reporting requirements under the Act.

1.45 The letter of transmittal lacks a full date. The letter should be dated in full, on the day the signatory approves the final text of the report for printing.

1.46 The annual report contains no reference to the agency's appearance at Senate estimates or this committee’s reviews of the agency’s annual reports. This information could be added to future annual reports for the purpose of external scrutiny and accountability. The report does, however, refer to submissions made to parliamentary inquiries, including one conducted by this committee.

9 Department of Industry, Innovation, Science, Research and Tertiary Education, Annual Report 2011-12, p. 109.

10 Department of Industry, Innovation, Science, Research and Tertiary Education, Annual Report 2011-12, p. 117.

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Operational matters

1.47 Skills Australia transitioned to Australian Workforce and Productivity Agency (AWPA) on 1 July 2012, which makes this its last annual report presented under the former name, and the first one to include the work of AWPA. One of the key roles under its expanded array of functions is to administer a new National Workforce Development Fund to train current and prospective workers in cooperation with businesses.

Tertiary Education Quality and Standards Agency- annual report 2011-12

Reporting requirements

1.48 The committee considers that TEQSA has met its reporting requirements under the Acts.

1.49 The committee considers that allowances for some aspects of this year's reporting need to be made as the agency is new. In what is its first annual report, TEQSA noted that it will implement a client service charter, and do further work on the website in 2012-13. Likewise, actual performance against KPIs will become more evident as the work of the agency progresses. The agency was unable to provide numeric data on its environmental performance for this year due to its relocation and shared leasing arrangements with other agencies at its previous location.

1.50 The annual report does not mention TEQSA's appearance at Senate estimates. This information would be a useful addition to the report for the purpose of external scrutiny and accountability.

Operational matters

1.51 This was TEQSA's first year of operations as Australia's first national regulator of the higher education sector. It commenced in a quality assurance capacity on 29 July 2011 before assuming full regulatory functions on 29 January 2012.

1.52 Among other achievements, TEQSA released the National Register of Higher Education Providers; and its Regulatory Risk Framework; and negotiated the transition of business from state and territory governments.

Reports under the Resources, Energy and Tourism portfolio

Australian Solar Institute - annual report 2011-12

Reporting requirements

1.53 The committee considers that the ASI has met its reporting requirements under the Acts.

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1.54 The section of the report relating to external scrutiny and the reports issued on the operations of the ASI does not mention the ASI's appearance at Senate estimates or its annual report being reviewed by this committee.11

1.55 This was the last annual report of the ASI.

Operational matters

1.56 This was the second full financial year of operations for the company, during which it invested in innovative solar research and development, skills and capacity building across the solar industry.

1.57 In June 2011, the government announced that the ASI would be merged into a new and larger government-owned organisation, the Australian Renewable Energy Agency (ARENA). The transition of ASI to ARENA was to be completed by 1 January 2013, and the ASI would be deregistered by 30 June 2013. The ASI programs would be preserved under the larger umbrella of the new agency. The ASI's activities in this year focused on implementing a smooth transition of its operations into ARENA.

1.58 The ASI recorded an operating surplus of over $23 million for this year.

Department of Resources, Energy and Tourism [includes Geoscience Australia] - annual report 2011-12

Reporting requirements

1.59 The committee considers that DRET and Geoscience Australia have met their reporting requirements under the Acts.

1.60 The two glossaries in the report are actually only lists of abbreviations and should therefore either be renamed or expanded to include definitions of any specific terminology used.12

1.61 The committee suggests that the Department and Geoscience Australia add a reference to their annual reports being scrutinised by this committee in future annual reports, to be incorporated in the section on external scrutiny.

1.62 The section of the report referring to the Department’s service charter does not include complaints data.13

11 Australian Solar Institute, Annual Report 2011-12, p. 48.

12 Department of Resources, Energy and Tourism, Annual Report 2011-12, pp 304-305 and 497.

13 Department of Resources, Energy and Tourism, Annual Report 2011-12, p. 104.

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Operational matters

1.63 Two new units within the Department were established and commenced operations on 1 July 2011: the Office of Spatial Policy (OSP) and the Bureau of Resources and Energy Economics (BREE). The committee also notes a changed program structure for the Department.14

1.64 The government released its report of the Strategic review of Geoscience Australia in May 2011, in which it made 11 recommendations that Geoscience Australia worked to address during the year. This included undertaking a review of the current policy and legislative arrangements for the release of offshore acreage, preparing a funding submission and a new strategic plan, reviewing the KPI framework, and establishing the Office of Spatial Policy.

National Offshore Petroleum Safety and Environmental Management Authority - annual report 2011-12

Reporting requirements

1.65 The committee considers that NOPSEMA has met its reporting requirements under the Acts.

1.66 NOPSEMA's report also comprises the annual report of the NOPSEMA Advisory Board.

Operational matters

1.67 NOPSEMA is an independent national regulator of health and safety, well integrity and environmental management in Commonwealth waters and designated coastal waters where a state/territory has conferred its regulatory functions.

1.68 The agency went through substantive legislative regime changes during the reporting period and transitioned from NOPSA to NOPSEMA on 1 January 2012. The restructure incorporated the regulatory and business functions of the former NOPSA, in addition to new functions and responsibilities for environmental management regulation. There was a transfer of responsibility for regulatory oversight of environment plans and oil spill contingency plans from the previous state and territory designated authorities to NOPSEMA.

1.69 NOPSEMA de

livered its target of 31 topic-based safety inspections across a range of facilities this year. There were 79 environmental management incidents reported to NOPSEMA during the reporting period. Well levies were collected for the first time, and an environment plan levy was introduced from 1 January 2012 to enable NOPSEMA to fund its new function of environmental management through

14 Department of Resources, Energy and Tourism, Annual Report 2011-12, p. 124.

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cost recovery. NOPSEMA also commenced work on a comprehensive stakeholder relations framework.

1.70 NOPSEMA reported one serious OHS incident, and one worker's compensation claim for this financial year, but noted that there was a downward trend in injury frequency, with no work-related fatalities reported.

Tourism Australia - annual report 2011-12

Reporting requirements

1.71 The committee considers that Tourism Australia has partially met its reporting requirements under the Acts.

1.72 The report contains a PM&C list of requirements, but not a CAC Act compliance index, which differs from the PM&C index.

1.73 The letter of transmittal should include details of when and how the report was adopted, and state that directors are responsible for the preparation of contents of the report,

as prescribed by the Commonwealth Authorities (Annual Reporting) Orders 2011.

1.74 The report does not contain a reference to any ministerial directions, which is a requirement under the Commonwealth Authorities (Annual Reporting) Orders.

1.75 The section on contracts and consultancies refers to ongoing contracts and their value, but does not specify whether there were any new contracts.15

1.76 The report should contain information on staffing and remuneration levels.

1.77 The report should contain a reference to the agency's ethics policy.

Operational matters

1.78 This year Tourism Australia focused on improving information and standards by promoting the T-QUAL accreditation program. It launched a There's nothing like Australia for Business Events global marketing campaign and website. Tourism Australia also unveiled its India 2020 strategic plan to secure a greater share of this growing market.

15 Tourism Australia, Annual Report 2011-12, p. 61.

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Reports under the Treasury portfolio

Auditing and Assurance Standards Board - annual report 2011-12

Reporting requirements

1.79 The committee considers that the AUASB has broadly met its reporting requirements under the Acts. Although the annual report is clearly ordered, some improvement is needed as to the quality of content. Recommendations set out in the paragraphs below should be implemented in the production of future annual reports.

1.80 As prescribed by the ASIC Act, the report also covers the operations of the Office of the Auditing and Assurance Standards Board, which provides technical and administrative support and advice to the AUASB.

1.81 The Human Resources management section16 should include staff classification levels and salary ranges for each level, as per PM&C requirements which AUASB is to follow as an agency under the FMA Act.

1.82 It would be desirable for the part of the report referring to external scrutiny17 to note that AUASB annual reports are scrutinised by the Senate Economics Legislation Committee and the Parliamentary Joint Committee on Corporations and Financial Services.

1.83 The section on disability reporting should include a full statement covering information on the new National Disability Strategy, as per PM&C guidelines.18

1.84 The section on environmental performance19 should include more information, for example how the agency's activities accorded with principles of ecologically sustainable development, and what measures were taken or are being taken to minimise impact on the environment.

1.85 A glossary explaining specific terms, such as 'comfort letter engagements',20 which may not be familiar to readers, would be a useful addition to the report.

Operational matters

1.86 As a member of the International Auditing and Assurance Standards Board (IAASB), this financial year the AUASB participated in IAASB task forces with the aim of forming a single set of global auditing standards; worked with its New Zealand

16 Auditing and Assurance Standards Board, Annual Report 2011-12, p. 40.

17 Auditing and Assurance Standards Board, Annual Report 2011-12, p. 39.

18 Auditing and Assurance Standards Board, Annual Report 2011-12, p. 41.

19 Auditing and Assurance Standards Board, Annual Report 2011-12, p. 91.

20 Auditing and Assurance Standards Board, Annual Report 2011-12, pp 4, 8 and 10.

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counterpart to better harmonise Australian and New Zealand auditing standards; and issued new standards and guidance to address specific local industry and regulatory requirements.

1.87 This annual report is also subject to review by the Parliamentary Joint Committee on Corporations and Financial Services (PJC) in its report on Annual reports.

Australian Accounting Standards Board - annual report 2011-12

Reporting requirements

1.88 The committee considers that the AASB has broadly met its reporting requirements under the Acts. The report is very similar to that of AUASB in layout and the structure of content and requires similar amendments.

1.89 As prescribed by the ASIC Act, the report also covers the operations of the Office of the Australian Accounting Standards Board, which provides technical and administrative services and advice to the AASB.

1.90 Although the report states that 'salaries and other entitlements of the technical and administrative employees are linked to relevant industry salary scales and entitlements',21 the ranges of salaries and entitlements should be included in the report.

1.91 The Chairman's review states that 'the funding base of the AASB remains a concern', but does not offer any further insight or explanations.

1.92 The report lists one exempt contract and the reason for its exemption, however, it does not state the value of the contract,22 which is a PM&C requirement.

1.93 The part of the report referring to external scrutiny23 could in future note that AASB annual reports are scrutinised by the Senate Economics Legislation Committee and the Parliamentary Joint Committee on Corporations and Financial Services.

1.94 The section on disability reporting should include a full statement covering information on the new National Disability Strategy, as per PM&C guidelines.

1.95 The section on environmental performance24 should include more information, for example how the agency's activities accorded with principles of ecologically sustainable development, and what measures were taken or are being taken to minimise impact on the environment.

21 Australian Accounting Standards Board, Annual Report 2011-12, p. 44.

22 Australian Accounting Standards Board, Annual Report 2011-12, p. 44.

23 Australian Accounting Standards Board, Annual Report 2011-12, p. 42.

24 Australian Accounting Standards Board, Annual Report 2011-12, p. 94.

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Operational matters

1.96 In 2011 the AASB Chairman became the Chair of the Asian-Oceanian Standard Setters Group. The report details the help provided to the AOSSG in its establishment as a body set to improve the input of the region to international accounting standard setting.

1.97 This annual report is also subject to review by the Parliamentary Joint Committee on Corporations and Financial Services (PJC) in its report on Annual reports.

Australian Bureau of Statistics - annual report 2011-12

Reporting requirements

1.98 The committee considers that the ABS has met its reporting requirements under the Acts.

1.99 The report does not contain a statement on whether the ABS has historically met each of its KPIs. This should be included in future reports.

1.100 The section on external scrutiny in the annual report contains no reference to the agency's appearance at Senate estimates or this committee’s reviews of the agency’s annual reports.25 This information could be added to future annual reports for the purpose of external scrutiny and accountability. Other than this, the committee is satisfied with the range and quality of information presented in the report.

Operational matters

1.101 The ABS recorded notable success in the five-yearly Census of Population and Housing for 2011, with the participation rate of over 98%.

1.102 The ABS is engaging in the transformation of statistical information management and has undertaken an organisational restructure to refine the ways of data acquisition, to modernise the communication of statistical information and to better assist other agencies to manage their own information with statistical potential. The ABS developed a framework to identify the essential statistical assets regardless of which organisations produce them. Data integration continues to be a priority for the ABS.

25 Australian Bureau of Statistics, Annual Report 2011-12, p. 140.

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Australian Competition and Consumer Commission and the Australian Energy Regulator - annual report 2011-12

Reporting requirements

1.103 The committee considers that the ACCC and AER have met their reporting requirements under the Acts and compliments them on a well-structured report.

1.104 The committee suggests that the ACCC add a reference to its annual report being scrutinised by this committee, to be incorporated in the section on external scrutiny.26

1.105 It would be preferable to include data on energy performance or any other numerical data under the section on environmental performance in the report.27

1.106 The annual report includes two corrections to the 2010-11 report.

Operational matters

1.107 This year the ACCC undertook a strategic review of its enforcement and compliance priorities. It also undertook proceedings against large corporations such as Apple, Google and Harvey Norman, and worked to ensure competitive conduct in the supermarket sector. It held inquiries into the retail fuel market, including what is known as 'shopper docket' discounting for petrol. It pursued a number of international airlines for cartel conduct relating to the carriage of air freight.

1.108 AER is part of the ACCC and regulates the national energy market.

Australian Office of Financial Management - annual report 2011-12

Reporting requirements

1.109 The committee considers that the AOFM has met its reporting requirements under the Acts.

1.110 The section of the report on ecologically sustainable development (ESD) states that environmental impact is published in the Treasury’s annual report. It would be desirable, however, to include in the AOFM report some information on how its activities accorded with principles of ESD and what measures were taken to minimise impact on the environment.28

26 Australian Competition and Consumer Commission, Annual Report 2011-12, p. 133.

27 Australian Competition and Consumer Commission, Annual Report 2011-12, pp 189 and 271-272.

28 Australian Office of Financial Management, Annual Report 2011-12, p. 156.

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1.111 The report does not contain a statement on whether the AOFM has historically met each of its KPIs.

1.112 The report contains no reference to the agency's appearance at Senate estimates or this committee’s reviews of AOFM’s annual reports. This information could be added to future annual reports for the purpose of external scrutiny and accountability.

Operational matters

1.113 The AOFM is responsible for the management of Australian government debt, cash balances and investment in financial assets. This financial year a strong demand for Commonwealth Government Securities (CGS) continued, with CGS outperforming other Australian dollar denominated debt securities.

1.114 The AOFM recorded an operating surplus on agency activities of $3.14 million, largely due to lower than expected costs of undertaking additional issuance activity in response to the GFC.

1.115 A review of the operation of the AOFM’s risk and internal control environment was conducted, and an internal audit plan approved.

Australian Reinsurance Pool Corporation - annual report 2011-12

Reporting requirements

1.116 The committee considers that the ARPC has met its reporting requirements under the CAC Act.

1.117 The report doesn't contain a glossary, which would be useful to provide definitions of specific terminology used, such as 'retrocession' and 'cedant reviews'.

1.118 As an observation, the reference page for the compliance index in the index itself is erroneous.29

Operational matters

1.119 During the year the Minister issued a new direction to ARPC in respect of payments to be made by ARPC to the Commonwealth over the next four years.30.

1.120 The ARPC's aim is to insulate both the economy and the Commonwealth from the financial effect of a terrorist event. In 2012 the ARPC provided the Commonwealth with a buffer of $2.76 billion before it would be called upon to meet a claim.

29 Australian Reinsurance Pool Corporation, Annual Report 2011-12, p. 115.

30 Australian Reinsurance Pool Corporation, Annual Report 2011-12, pp 33 and 45.

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Australian Securities and Investments Commission- annual report 2011-12

Reporting requirements

1.121 The committee considers that ASIC has met its reporting requirements under the Acts.

1.122 The report refers to ANAO recommendations, but does not specify what the recommendations were.

Operational matters

1.123 This year, amongst its other regulatory activities, ASIC aligned its corporate structure into three clusters to better reflect their priorities: Investors and Financial Consumers; Markets; and Registry and Licensing. ASIC has also established an Emerging Risk Committee to analyse and mitigate potential risks for markets and consumers. It launched the national Business Names Register in May 2012 to replace the eight previous state and territory services.

Australian Statistics Advisory Council - annual report 2011-12

Reporting requirements

1.124 The committee considers that ASAC has met its reporting requirements under the ABS Act.

1.125 The report should include an explicit statement noting what advice was provided to the Minister in the reporting year.

1.126 The section on FOI procedures should include a statement on the new National Disability Strategy,31 as per PM&C guidelines.

Operational matters

1.127 ASAC provides advice to the Minister and the Australian Statistician in relation to the collection and dissemination of official statistics provided for public purposes. It supports the activities of the Australian Bureau of Statistics from which it receives secretariat services. Its operational costs are met from within the ABS budget.

Australian Taxation Office - annual report 2011-12

Reporting requirements

1.128 The committee considers that the ATO has met its reporting requirements under the Acts. The report is comprehensive and informative, and also includes information on the operations of the Australian Valuation Office, ATO’s only

31 Australian Statistics Advisory Council, Annual Report 2011-12, p. 16.

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commercial business line providing independent valuation services to government organisations.

1.129 The report includes corrections to annual reports from the previous year.32 The corrections are considerable and relate to a number of matters, including whistleblowing reports, the research and development tax offset, first home saver accounts, lost and unclaimed superannuation money, and consultancy services.

Operational matters

1.130 The report relates to the administration of the wide range of laws entrusted to the ATO, including revenue laws, the Australian Business Register, and aspects of superannuation. There has been a 10.3% increase in the net tax collections from the previous year, largely from pay as you go withholding and company tax. There was a $4.2 billion increase in tax refunds. The ATO noted in the annual report that the complexity of the income taxation law remains a concern.

1.131 The ATO undertook a broad range of activities to support the Stronger Super reform agenda. This year there was a decrease in the number and value of lost and unclaimed accounts for the first time. Other highlights include the implementation of a new Progress of return enquiry tool enabling taxpayers to check on the progress of their tax return online; an enhancement of the SuperSeeker tool allowing people to see information on their superannuation accounts and lost superannuation; the implementation of the Compliance program 2011-12; the publishing of Your Case Matters 2012, showing data and analysis about tax and superannuation litigation; the launch of a Tax Practitioner Action Plan 2011-15; the publication of small business benchmarks in Reporting Correctly; and additional guidelines issued for taxpayers and their advisers.

1.132 The ATO received 41% more objections and reviews this year, and completed almost 600,000 audits and reviews resulting in adjustments. Most taxpayer objections related to income tax assessments. The ATO completed 271 criminal investigations for serious tax fraud related offences. 24% of 295 allegations of fraud or serious misconduct by ATO employees were substantiated after investigation, of which 68% related to unauthorised access to taxpayer records, a 45% increase from last year.

1.133 The Australian National Audit Office noted the following in their report on the ATO’s legal and regulatory requirements:

Note 24F Compliance with statutory conditions for payments from the Consolidated Revenue Fund discloses information on the Australian Taxation Office's review of its exposure to risks of not complying with

statutory conditions on payments from special appropriation and special accounts. Non-compliance with statutory conditions may lead to a contravention of section 83 of The Constitution, which requires that no

32 Australian Taxation Office, Annual Report 2011-12, pp 194-196.

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money shall be drawn from the Treasury of the Commonwealth except under an appropriation made by law.

As also disclosed in Note 24F, payments totalling $4.9 million were made in 2011-12 which were not fully supported by section 16 of the Taxation Administration Act 1953, and thus were in breach of section 83 of the Constitution.33

Companies Auditors and Liquidators Disciplinary Board - annual report 2011-12

Reporting requirements

1.134 The committee considers that CALDB has met its reporting requirements under the ASIC Act, but suggests that more content be added to future annual reports.

1.135 The report does not have a table of contents. It contains no reference to work health and safety, or environmental matters. In addition, under the Freedom of Information section of the report, it should indicate where FOI requests can be submitted.

1.136 Although the report states that 'Members of the Board are remunerated in accordance with rates determined by the Commonwealth Remuneration Tribunal',34 the information on salary ranges and benefits should be included in the report for the purpose of transparency and accountability.

Operational matters

1.137 The role of the Board is to consider applications for the cancellation or suspension of the registration of registered auditors or liquidators under the provisions of the Corporations Act. At the beginning of the financial year, there were three extant applications before the Board, two of which were conduct matters that were later withdrawn. The Board gazetted its decision in the case of one application, an administrative matter. Only one new application, an administrative matter, was received in the reporting year.

1.138 The annual report notes the government's discussion paper from December 2011 which suggests that disciplinary matters involving registered liquidators would be removed from the Board’s jurisdiction.35

1.139 This annual report may also be subject to review by the Parliamentary Joint Committee on Corporations and Financial Services (PJC) in its report on Annual reports.

33 Australian Taxation Office, Annual Report 2011-12, p. 199.

34 Companies Auditors and Liquidators Disciplinary Board, Annual Report 2011-12, p. 11.

35 Companies Auditors and Liquidators Disciplinary Board, Annual Report 2011-12, p. 1.

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Commonwealth Grants Commission - annual report 2011-12

Reporting requirements

1.140 The committee considers that the agency has partially met its reporting requirements under the Acts.

1.141 The committee notes that the annual report does not contain a compliance index, which is a mandatory requirement for this reporting year for agencies under the FMA Act. Attention should be paid that this is corrected in future annual reports.

1.142 The report does not include a reference to disability reporting mechanisms, or a statement noting where agency level information can be found.

1.143 The report does not include a table showing expenditure on consultancy contracts over the three most recent financial years, which was suggested in the PM&C requirements. It does, however, include mandatory information for 2011-12.

1.144 The report contains a brief description of the Commission's assets, but not an assessment of their effectiveness, as suggested in the PM&C guidelines.

1.145 It is noted that in addition to a number of lump sum bonus payments to employees, one retention bonus payment of $3000 was made. For the purpose of transparency, it would be useful to provide more information on the circumstances, including any reasons for such a payment to be made.

Operational matters

1.146 The Commission's main activity this year was the presentation of the Report on GST Revenue Sharing Relativities 2012 Update, with recommendations on how the GST should be shared among the states and territories adopted by the Treasurer.

Corporations and Markets Advisory Committee - annual report 2011-12

Reporting requirements

1.147 The committee considers that CAMAC has met its reporting requirements under the Acts.

1.148 Staff classification levels and salary range could be presented in the body of the report under the Human Resources Management section, rather than only in the financial statements.

1.149 It would be advisable for the part of the report referring to external scrutiny to note that CAMAC annual reports are scrutinised by the Senate Economics Legislation Committee and the Parliamentary Joint Committee on Corporations and Financial Services.

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Operational matters

1.150 CAMAC undertakes reviews and reports on matters relating to corporations regulation and financial products, services and markets; and responds to ministerial requests for advice..

1.151 CAMAC noted that in financial year 2012-13 it would consider proposals for improving the operation of managed investment provisions in Chapter 5C of the Corporations Act 2001 in a subsequent review, as these were not examined in this year's report.

1.152 This annual report is also subject to review by the Parliamentary Joint Committee on Corporations and Financial Services (PJC) in its report on Annual reports.

Department of the Treasury - annual report 2011-12

Reporting requirements

1.153 The committee considers that the Treasury has met its reporting requirements under the Acts and commends it for a well-structured report.

1.154 The committee suggests that Treasury add a reference to its annual report being scrutinised by this committee in future annual reports, to be incorporated in the section on external scrutiny.

Operational matters

1.155 The Treasury received an unqualified audit report on its financial statements. However, the ANAO noted:

Note 29 Compliance with Statutory Conditions for Payments from the Consolidated Revenue Fund discloses information on the Department of Treasury's review of its exposure to risks of not complying with statutory conditions on payments from special appropriations and special accounts. Non-compliance with statutory conditions may lead to a contravention of section 83 of the Constitution, which requires that no money shall be drawn from the Treasury of the Commonwealth except under an appropriation made by law.

As disclosed in Note 29, three groups of payments were made in 2011-12 potentially in breach of section 83 of the Constitution, totalling $4,320,123, in respect of which the Department of the Treasury is seeking legal advice as at the date of this report.36

36 Department of the Treasury, Annual Report 2011-12, p. 152.

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1.156 The committee would like to express its appreciation to the Treasury for regularly appearing at estimates and contributing to three committee inquiries in 2011-12, as well as to other parliamentary inquiries.

Financial Reporting Council - annual report 2011-12

Reporting requirements

1.157 The committee considers that the Council has met its reporting requirements under the ASIC Act.

1.158 Although the annual report states that FRC expenditures are reported in Treasury’s annual financial statements,37 it would be advisable that the report contain an assessment of success and financial performance against FRC objectives. For the purpose of transparency and accountability, it would also be desirable to include the range of the members’ remuneration.

Operational matters

1.159 The FRC oversees the effectiveness of the financial reporting framework in Australia, and most notably the accounting and auditing standards setting processes. This was Ms Lynn Wood’s first year in the role of FRC Chairperson.

Financial Reporting Panel - annual report 2011-12

Reporting requirements

1.160 The committee considers that the Panel has met its reporting requirements under the Acts.

1.161 The report contains a compliance index and generally follows the PM&C requirements. The report gives a very basic overview, explaining that most information relating to management and financial performance of the Panel is incorporated in Treasury's annual report.

1.162 The FOI section should contain an Information Publication Scheme statement. The section notes that one FOI request was received in this operating year, but does not state whether it was granted.38

1.163 Information on external scrutiny39 could contain a reference to this committee's examination of the Panel's annual report.

37 Financial Reporting Council, Annual Report 2011-12, p. 36.

38 Financial Reporting Panel, Annual Report 2011-12, pp 14-16.

39 Financial Reporting Panel, Annual Report 2011-12, p. 12.

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Operational matters

1.164 The Panel's function is to resolve disputes between ASIC and a company, disclosing entity or a registered scheme over the application of accounting standards in its financial reports. The government confirmed the closure of the FRP due to lower than expected referral rates. Since commencing operation in 2006, the Panel had been referred only five matters. No matters were received in 2011-12. On 21 June 2012 legislation to effect the closure was introduced into Parliament. On 23 August 2012, the Corporations Legislation Amendment (Financial Reporting Panel) Bill 2012 was passed in the Senate. The legislation disbanded the Financial Reporting Panel by repealing its functions and powers effective as of 1 October 2012.

Inspector-General of Taxation - annual report 2011-12

Reporting requirements

1.165 The committee considers that the IGT has broadly met its reporting requirements under the Acts.

1.166 The report contains a statement on ongoing consultancies, but does not refer to any new consultancies. If there were no new consultancies in this year, the report should note this. The section also lacks a statement on consultancy contracts over the three most recent years.

1.167 The report should note whether the IGT gives performance pay to its employees, and if so, the number of employees at each level who receive it, the aggregated amount at each level, and the average bonus payment at each level.

1.168 The section on disability reporting lacks the NDIS statement recommended for inclusion by the PM&C guidelines.

1.169 The report should note that the IGT appears at estimates and that its annual report is scrutinised by this committee.

Operational matters

1.170 The IGT's key role is to review systemic tax administration issues and report to the government. In this reporting year, the IGT conducted a review into the ATO's approach to alternative dispute resolution, and small and medium enterprise (SME) active compliance activities. It also conducted a review into the ATO's large business risk review and audit policies, procedures and practices.

National Competition Council - annual report 2011-12

Reporting requirements

1.171 The committee considers that the NCC has met its reporting requirements under the Acts.

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1.172 In the section on external scrutiny, it would be advisable to note that the NCC annual report is scrutinised by this committee.

Operational matters

1.173 The role of the NCC is to make recommendations concerning access to infrastructure services under the National Access Regime and recommendations and decisions under the National Gas Law.

Productivity Commission - annual report 2011-12

Reporting requirements

1.174 The committee considers that the Productivity Commission has met its reporting requirements under the Acts.

1.175 The committee would suggest that, rather than readers being advised to refer to the Commission’s online Enterprise Agreement to view salary ranges by classification, these details should be included in the body of the report.

Operational matters

1.176 The report opens with an overview of the changes in the economic structure and its adaptability, with the main factors being the mining boom, the labour market and a structural change in the services sector.

1.177 The report contains references to the Commission’s inquiry, research, advisory and other associated activities. Some of the topics that the Commission looked at include disability care and support, urban water, the retail industry, the economic regulation of airport services, the impacts and benefits of COAG reforms, climate change adaptation, electricity network regulation, default superannuation, and the compulsory licensing of patents.

1.178 The Australian Government Competitive Neutrality Complaints Office (AGCNCO) as an autonomous office within the Commission received four formal complaints in 2011-12, one of which was formally investigated.

Reserve Bank of Australia - annual report 2011-12

Reporting requirements

1.179 The committee considers that the RBA has met its reporting requirements under the CAC Act.

1.180 The FOI section of the report does not include a reference to the Information Publication Scheme. This should be included in future annual reports.40

40 Reserve Bank of Australia, Annual Report 2011-12, p. 66.

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Operational matters

1.181 The RBA sponsors Australian and international economic research. One of its responsibilities is to ensure that there are sufficient high-quality banknotes in circulation to meet public demand. Demand for banknotes has been growing strongly in recent years, and the level of counterfeiting declined substantially from the previous year. A subsidiary of the RBA, Note Printing Australia, and Securency International Pty Ltd were charged in 2011 with conspiring to bribe public officials in a number of countries between 1999 and 2004. The Bank noted that it continues to explore divestment of its interest in Securency.

1.182 In March 2012, the RBA signed a bilateral local currency swap agreement with the people's Bank of China. As part of this, it opened an office in Beijing.

1.183 As noted in Chapter 1, this annual report was subject to some comments made by Senator Mitch Fifield in the Senate on 27 February 2013.

Royal Australian Mint - annual report 2011-12

Reporting requirements

1.184 The committee considers that the Mint has broadly met its reporting requirements under the Acts.

1.185 References to the realisation of key performance indicators for financial year 2011-12 are made throughout the report, except for one KPI where the success in meeting the targets for timeliness of numismatic orders produced and delivered is not elaborated on or quantified. In addition, although performance information includes sufficient references for the current financial year, there is no statement noting if the agency has historically met each KPI. PM&C requirements for annual reports suggest that performance against KPIs over three years be provided.

1.186 The Mint is an agency which has a service charter in place. While the report contains a general reference to the agency's services, complaints and responses, it does not contain complaints data.

1.187 The report does not include a table showing expenditure on consultancy contracts over the three most recent financial years, which was suggested in the PM&C guidelines. It does, however, include mandatory information for the financial year being examined.

1.188 The report lists the contracts exempt from AusTender, but does not state their value, which is a PM&C requirement.

1.189 Information on work health and safety, as well as environmental reporting is well-presented in this annual report.

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Operational matters

1.190 The Mint documented two significant outcomes this year: the successful implementation of a new circulating coin supply chain model developed with commercial banks; and "better than expected" revenue from commercial activities despite the global financial downturn. It achieved an operating surplus of $6.113 million. Global interest in the Mint's products has seen international partnerships being developed which enables new target markets being reached.

1.191 In 2011-12 the Mint supplied four Pacific Island countries with new circulating coins and had three coin reform programs underway.

1.192 The Mint was a finalist in the Comcare Work Health and Safety Awards, and received two awards at the 2011 Canberra and Capital Region Tourism Awards.

1.193 The Mint has made efforts to improve efficiency in manufacturing and capacity with the purchase of new equipment and software. The annual report states that consolidating the growth achieved in this financial year is a strategic focus in 2012-13, together with addressing system and process issues that lead to waste and inefficiency; and developing new products.

Superannuation Complaints Tribunal - annual report 2011-12

Reporting requirements

1.194 The committee considers that the Tribunal has met its reporting requirements under the Superannuation (Resolution of Complaints) Act 1993, and commends it for including a PM&C compliance index even though it is not bound to observe PM&C requirements.

1.195 The part referring to external scrutiny could state that this committee examines and reports on the Tribunal's annual report.

1.196 Employees' salary and performance pay scales could be included in the report for the purpose of greater transparency.

1.197 The part on the FOI requests mentions that 12 were received in the financial year, but not how many were granted or refused.

1.198 The report offers an interesting insight into the history of superannuation.41

Operational matters

1.199 This operating year the Tribunal undertook a major project to re-engineer its complaints resolution process. The number of superannuation-related complaints

41 Superannuation Complaints Tribunal, Annual Report 2011-12, pp xii-xv.

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received increased by 6.5% during the year to 2,619, the majority of which related to administration of superannuation. Two matters were referred to ASIC.

Takeovers Panel - annual report 2011-12

Reporting requirements

1.200 The committee considers that the Panel has met its reporting requirements under the Acts, and commends it for including a compliance index in its report.

1.201 The report notes that the Panel 'has adopted Treasury's policies and procedures in relation to the Commonwealth disability strategies',42 however, it would be useful to include a statement in the Panel's report as to what those policies entail.

Operational matters

1.202 The primary objective of the Panel is ‘to improve certainty, efficiency and fairness of Australia’s takeovers market.’43 Its principal work is around deciding applications for declarations of unacceptable circumstances, and making orders to remedy them. The annual report states that this reporting year the Panel received the least number of applications since 2000 - 16 compared to an average of 30.

1.203 The Panel was subject to two judicial reviews during the reporting period: in the case of CMI Limited, and Bentley Capital Limited. Both have been resolved.

Tax Practitioners Board - annual report 2011-12

Reporting requirements

1.204 The committee considers that the Tax Practitioners Board has met its requirements under the Tax Agent Services Act 2009 (TASA) and commends it for a well-structured report, and in particular for including a compliance index even though the TPB is not covered by the FMA or CAC Acts.

1.205 The report states that the TPB is implementing improvements to their complaint management processes, as identified with the Ombudsman.

1.206 The Board’s resources are provided by the ATO and its financial operations reported as part of the ATO’s financial statements. Although the report states that information on remuneration, performance pay and health and safety44 is covered in the ATO's annual report, it would be helpful to include some aspects of this information in the Board's annual report.

42 Takeovers Panel, Annual Report 2011-12, p. 31.

43 Takeovers Panel, Annual Report 2011-12, p. 21.

44 Tax Practitioners Board, Annual Report 2011-12, p. 64.

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Operational matters

1.207 This was the Board's second operating year. It received 22,366 agent applications for registration, of which it finalised 18,786. It received and resolved almost 1,300 complaints about tax practitioners and unregistered agents, terminated the registration of seven agents, and commenced its first civil penalties actions under the TASA, of which one culminated in the Federal Court's imposing a $30,000 penalty on an unregistered agent for preparing tax returns for a fee.

Senator Mark Bishop Chair

101

102

Appendix 1

Industry, Innovation, Science, Research and Tertiary Education portfolio

List of annual reports tabled in the Senate in the period 1 May to 31 October 2012, and later

Reporting body Legislation Date of

transmittal letter

Date sent to Minister

Date received by Minister

Date tabled/ presented*

Australian Institute of Aboriginal and Torres Strait Islander Studies

Commonwealth Authorities and Companies Act 1997

19 Sep 19 Sep 19 Sep Senate

29 Oct (24 Oct*)

HoR 29 Oct

Australian Institute of Marine Science

Commonwealth Authorities and Companies Act 1997

24 Sep 25 Sep 26 Sep Senate

30 Oct

HoR 30 Oct

Australian Nuclear Science and Technology Organisation

Commonwealth Authorities and Companies Act 1997

Australian Nuclear Science and Technology Organisation Act 1987

17 Sep 10 Sep 10 Sep Senate

30 Oct

HoR 11 Oct

Australian Research Council

Australian Research Council Act 2001

Public Service Act 1999

FMA Act

24 Sep 24 Sep 25 Sep Senate

10 Oct

HoR 10 Oct

103

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Reporting body Legislation Date of

transmittal letter

Date sent to Minister

Date received by Minister

Date tabled/ presented*

Australian Skills Quality Authority

National Vocational Education and Training Regulator Act 2011

Public Service Act 1999

FMA Act

24 Sep 1 Oct 2 Oct Senate

5 Feb (30 Nov*)

HoR 5 Feb

Commonwealth Scientific and Industrial Research Organisation [incl. Science and Industry Endowment Fund]

Commonwealth Authorities and Companies Act 1997

18 Sep 10 Sep

correction 23 Oct

10 Sep

correction 23 Oct

Senate 30 Oct

HoR 11 Oct; correction 29 Oct

Department of Industry, Innovation, Science, Research and Tertiary Education [includes IP Australia]

Public Service Act 1999

Financial Management and Accountability Act 1997 (FMA Act)

2 Oct 4 Oct 5 Oct Senate

30 Oct

HoR 30 Oct

IIF Investments Pty Limited Corporations Act 2001

Commonwealth Authorities and Companies Act 1997

30 Oct 31 Oct 31 Oct Senate

28 Nov

HoR 28 Nov

Skills Australia Skills Australia Act 2008 (Australian Workforce and Productivity Agency Act 2008)

October

(precise date not given)

11 Oct 12 Oct Senate

29 Oct (25 Oct*)

HoR 29 Oct

104

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Reporting body Legislation Date of

transmittal letter

Date sent to Minister

Date received by Minister

Date tabled/ presented*

Tertiary Education Quality and Standards Agency

Tertiary Education Quality and Standards Agency Act 2011

Financial Management and Accountability Act 1997 (FMA Act)

Public Service Act 1999

5 Sep 12 Sep 13 Sep Senate

30 Oct

HoR 30 Oct

105

106

Appendix 2

Resources, Energy and Tourism Portfolio

List of annual reports tabled in the Senate in the period 1 May to 31 October 2012, and later

Reporting body

Legislation Date of

transmittal letter

Date sent to Minister

Date received by Minister

Date tabled/ presented*

Australian Centre for Renewable Energy (ACRE) Board

Australian Centre for Renewable Energy Act 2010

29 Nov 6 Dec 7 Dec Senate

5 Feb (11 Dec*)

HoR 5 Feb

Australian Solar Institute Limited Commonwealth Authorities and

Companies Act 1997

Corporations Act 2001

28 Sep 12 Oct 12 Oct Senate

30 Oct

HoR 29 Oct

Department of Resources, Energy and Tourism [includes Geoscience Australia]

Public Service Act 1999

Offshore Petroleum and Greenhouse Gas Storage Act 2006

Financial Management and Accountability Act 1997

4 Sep 3 Oct 3 Oct Senate

29 Oct (24 Oct*)

HoR 29 Oct

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Reporting body

Legislation Date of

transmittal letter

Date sent to Minister

Date received by Minister

Date tabled/ presented*

National Offshore Petroleum Safety and Environmental Management Authority

Offshore Petroleum and Greenhouse Gas Storage Act 2006

Financial Management and Accountability Act 1997

Public Service Act 1999

5 Oct 18 Oct 22 Oct Senate

30 Oct

HoR 29 Oct

Tourism Australia

Tourism Australia Act 2004

Commonwealth Authorities and Companies Act 1997

11 Oct 12 Oct 12 Oct Senate

30 Oct

HoR 29 Oct

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Appendix 3

Treasury portfolio

List of annual reports tabled in the Senate in the period 1 May to 31 October 2012, and later

Reporting body

Legislation Date of

transmittal letter

Date sent to Minister

Date received by Minister

Date tabled/ presented*

Auditing and Assurance Standards Board

Australian Securities and Investments Commission Act 2001

Financial Management and Accountability Act 1997

9 Oct 5 Oct 5 Oct Senate

30 Oct

HoR 30 Oct

Australian Accounting Standards Board

Australian Securities and Investments Commission Act 2001

Financial Management and Accountability Act 1997

9 Oct 5 Oct 5 Oct Senate

30 Oct

HoR 30 Oct

Australian Bureau of Statistics

Public Service Act 1999

Australian Bureau of Statistics Act 1975

Financial Management and Accountability Act 1997

5 Sep 10 Sep 10 Sep Senate

10 Oct (corrigendum 30 Oct)

HoR 10 Oct

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Reporting body

Legislation Date of

transmittal letter

Date sent to Minister

Date received by Minister

Date tabled/ presented*

Australian Competition and Consumer Commission [includes Australian Energy Regulator]

Competition and Consumer Act 2010

Financial Management and Accountability Act 1997

Public Service Act 1999

27 Aug 18 Sep 18 Sep Senate

29 Oct (16 Oct*)

HoR 29 Oct

Australian Office of Financial Management

Financial Management and Accountability Act 199

Public Service Act 1999 (Category E)

2 Oct 5 Sep 5 Sep Senate

30 Oct

HoR 29 Oct

Australian Prudential Regulation Authority

Australian Prudential Regulation Authority Act 1998

Financial Management and Accountability Act 1997

12 Oct 26 Oct 26 Oct Senate

19 Nov (9 Nov*)

HoR 26 Nov

Australian Reinsurance Pool Corporation

Commonwealth Authorities and Companies Act 1997

11 Sep 10 Oct 10 Oct Senate

31 Oct

HoR 31 Oct

Australian Securities and Investments Commission

Australian Securities and Investments Commission Act 2001

Financial Management and Accountability Act 1997

10 Oct 18 Oct 18 Oct Senate

31 Oct

HoR 31 Oct

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Reporting body

Legislation Date of

transmittal letter

Date sent to Minister

Date received by Minister

Date tabled/ presented*

Australian Statistics Advisory Council

Australian Bureau of Statistics Act 1975

Public Service Act 1999

26 Sep 30 Sep 30 Sep Senate

10 Oct

HoR 10 Oct

Australian Taxation Office Taxation Administration Act

1953

Public Service Act 1999

Financial Management and Accountability Act 1997

4 Oct 15 Oct 15 Oct Senate

30 Oct

HoR 29 Oct

Companies Auditors and Liquidators Disciplinary Board

Australian Securities and Investments Commission Act 2001

5 Oct 26 Sep 26 Sep Senate

29 Oct (16 Oct*)

HoR 29 Oct

Commonwealth Grants Commission

Public Service Act 1999

Commonwealth Grants Commission Act 1973

Financial Management and Accountability Act 1997

25 Sep 26 Sep 26 Sep Senate

31 Oct

HoR 31 Oct

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Reporting body

Legislation Date of

transmittal letter

Date sent to Minister

Date received by Minister

Date tabled/ presented*

Corporations and Markets Advisory Committee

Australian Securities and Investments Commission Act 2011

Financial Management and Accountability Act 1997

Public Service Act 1999

21 Sep 27 Sep 27 Sep Senate

29 Oct (16 Oct*)

HoR 29 Oct

Department of the Treasury Public Service Act 1999

Financial Management and Accountability Act 1997

11 Oct 12 Oct 12 Oct Senate

31 Oct

HoR 31 Oct

Financial Reporting Council

Australian Securities and Investments Commission Act 2001

18 Oct 19 Oct 19 Oct Senate

31 Oct

HoR 31 Oct

Financial Reporting Panel

Australian Securities and Investments Commission Act 2001

16 Oct 19 Oct 19 Oct Senate

30 Oct

HoR 30 Oct

Foreign Investments Review Board

Foreign Acquisitions and takeovers Act 1975

20 Dec 17 Jan 17 Jan Senate

25 Feb (22 Feb*)

HoR 14 March

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Reporting body

Legislation Date of

transmittal letter

Date sent to Minister

Date received by Minister

Date tabled/ presented*

Inspector- General of Taxation

Inspector-General of Taxation Act 2003

Financial Management and Accountability Act 1997

28 Sep 5 Oct 5 Oct Senate

29 Oct (16 Oct*)

HoR 29 Oct

National Competition Council

Competition and Consumer Act 2010

Financial Management and Accountability Act 1997

28 Aug 7 Sep 7 Sep Senate

29 Oct (16 Oct*)

HoR 29 Oct

Productivity Commission Productivity Commission Act

1998

Financial Management and Accountability Act 1997

18 Oct 23 Oct 23 Oct Senate

31 Oct

HoR 31 Oct

Reserve Bank of Australia Commonwealth Authorities and

Companies Act 1997

10 Sep 11 Sep 11 Sep Senate

9 Oct

HoR 20 Sep

Royal Australian Mint Financial Management and

Accountability Act 1997

Public Service Act 1999 (Category E)

9 Oct 16 Oct 16 Oct Senate

30 Oct

HoR 29 Oct

Superannuation Complaints Tribunal

Superannuation (Resolution of Complaints) Act 1993

10 Sep 13 Oct 13 Oct Senate

30 Oct

HoR 29 Oct

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Reporting body

Legislation Date of

transmittal letter

Date sent to Minister

Date received by Minister

Date tabled/ presented*

Takeovers Panel

Australian Securities and Investments Commission Act 2001

Corporations Act 2001

19 Sep 20 Sep 20 Sep Senate

30 Oct

HoR 30 Oct

Tax Practitioners Board

Tax Agent Services Act 2009 26 Oct 11 Oct 11 Oct Senate

30 Oct

HoR 29 Oct

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Appendix 4

Industry, Innovation, Science, Research and Tertiary Education portfolio structure

Minister for Tertiary Education, Skills, Science and Research1 Senator the Hon Chris Evans

Minister for Industry and Innovation2 The Hon Greg Combet AM MP

Department of Industry, Innovation, Science, Research and Tertiary Education Secretary: Dr Don Russell

Agency - Australian Nuclear Science and Technology Organisation (ANSTO) Chief Executive Officer: Dr Adi Paterson

Agency - Australian Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS) Principal (CEO): Mr Russell Taylor

Agency - IP Australia Director General: Mr Philip Noonan

Agency - Australian Research Council (ARC) A/g Chief Executive Officer: Ms Leanne Harvey

Agency - Commonwealth Scientific and Industrial Research Organisation (CSIRO) Chief Executive Officer: Dr Megan Clark

Agency - Australian Skills Quality Authority (ASQA) Chief Commissioner: Mr Chris Robinson

Agency - Australian Institute of Marine Science (AIMS) Chief Executive Officer: Mr John Gunn

Agency - Tertiary Education Quality and Standards Agency (TEQSA) Chief Commissioner: Dr Carol Nicoll

2

Minister Combet is also the Minister for Climate Change and Energy Efficiency 3

Minister O’Connor is also the Minister for Housing and the Minister for Homelessness

4 Senator Lundy is also the Minister for Sport and the Minister for Multicultural Affairs 5 Parliamentary Secretary Dreyfus is also the Cabinet Secretary and Parliamentary Secretary for Climate Change and Energy Efficiency

1 Senator Evans is also Leader of the Government in the Senate

Parliamentary Secretary for Higher Education and Skills The Hon Sharon Bird MP

Parliamentary Secretary for Industry and Innovation5 The Hon Mark Dreyfus QC MP

Minister Assisting for Industry and Innovation4 Senator the Hon Kate Lundy

Minister for Small Business3 The Hon Brendan O’Connor MP

Source: Portfolio Additional Budget Statements 2012-13, Industry, Innova tion, Science, Research and Tertiary Education portfolio, p. 4.

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Appendix 5

Resources, Energy and Tourism portfolio structure and outcomes

Source: Portfolio Additional Budget Statements 2012-13, Re sources, Energy and Tourism portfolio, p. 4.

Portfolio Minister The Hon Martin Ferguson AM MP

Minister for Resources and Energy Minister for Tourism

Department of Resources, Energy and Tourism Portfolio Secretary Mr Drew Clarke Outcome 1: The improved strength, competitiveness and sustainability of the resources, energy and tourism industries to

enhance Australia's prosperity through implementation of government policy and programs.

Geoscience Australia Chief Executive Officer: Dr Chris Pigram Outcome 1: Informed government, industry and community decisions on the

economic, social and environmental management of the nation's natural resources through enabling access to geoscientific and spatial information.

Tourism Australia Managing Director: Mr Andrew McEvoy Outcome 1: Increase demand for Australia as a destination, strengthen the

travel distribution system, and contribute to the development of a sustainable tourism industry through consumer marketing, trade development and

research activities.

Australian Renewable Energy Agency Chief Executive Officer: Mr Ivor Frischknecht Outcome 1: Support improvements in the competitiveness of renewable energy and related technologies and the supply of

renewables energy by administering financial assistance, developing analysis and advice about and sharing information and knowledge with regard to, renewable energy and related technologies.

National Offshore Petroleum Safety and Environmental Management Authority Chief Executive Officer

Ms Jane Cutler

Outcome 1: Promote and enforce the effective management of risks to the workforce, the environment and the structural integrity of facilities, wells and well-related equipment of the Australian offshore petroleum and greenhouse gas

storage industries through regulatory oversight.

Australian Solar Institute Executive Director: Mr Mark Twidell Outcome 1: Encourage innovation and

cost effective developments in solar energy technologies to accelerate commercial deployment through knowledge building and collaborative

research, development and support for Australian industries and research institutions.

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118

Appendix 6

Treasury portfolio structure and outcomes

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Source: Portfolio Additional Budget Statements 2012-13, Treasury portfolio, pp 4-5.

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The Senate

Education, Employment

and Workplace Relations

Legislation Committee

Annual reports (No. 1 of 2013)

March 2013

121

ii

© Commonwealth of Australia 2013

ISBN 978-1-74229-760-6

Printed by the Senate Printing Unit, Parliament House, Canberra

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MEMBERSHIP OF THE COMMITTEE

Members

Senator Gavin Marshall, Chair, ALP, Vic.

Senator Chris Back, Deputy Chair, LP, WA

Senator Catryna Bilyk, ALP, Tas

Senator Bridget McKenzie, Nat., Vic.

Senator Lee Rhiannon, AG, NSW

Senator Matt Thistlethwaite, ALP, NSW

Secretariat

Mr Tim Watling, Secretary

Ms Bonnie Allan, Principal Research Officer

Ms Nerissa Stewart, Senior Research Officer

Mr Isaac Overton, Research Officer

Ms Sarah Bainbridge, Administrative Officer

PO Box 6100 Ph:02 6277 3521

Parliament House Fax: 02 6277 5706

Canberra ACT 2600 E-mail: eewr.sen@aph.gov.au

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TABLE OF CONTENTS

MEMBERSHIP OF THE COMMITTEE ...................................................... iii

CHAPTER 1 ........................................................................................................ 1

Introduction .............................................................................................................. 1

Terms of reference .................................................................................................. 1

Role of annual reports ............................................................................................ 2

Annual reports referred ........................................................................................... 2

Reports not examined ............................................................................................. 2

Method of assessment ............................................................................................. 3

Timeliness in tabling annual reports ...................................................................... 3

General comments on r

eports ................................................................................. 4

CHAPTER 2 ........................................................................................................ 5

Review of annual reports ......................................................................................... 5

Department of Education, Employment and Workplace Relations ....................... 5

Fair Work Australia ................................................................................................ 6

Fair Work Ombudsman .......................................................................................... 7

Australian Curriculum, Assessment and Reporting Authority (ACARA) ............. 7

Comments made in the Senate ............................................................................... 7

Bodies not presenting annual reports to the Senate ................................................ 8

APPENDIX 1 ....................................................................................................... 9

Allocation of annual reports to the committee ...................................................... 9

APP

ENDIX 2 ..................................................................................................... 11

Compliance table of annual reports referred ...................................................... 11

APPENDIX 3 ..................................................................................................... 15

Administrative Arrangements Order for the Department of Education, Employment and Workplace Relations ................................................................ 15

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CHAPTER 1

Introduction

1.1 This is the Senate Education, Employment and Workplace Relations Legislation Committee's (the committee) first report on annual reports for 2013. It provides an overvi

ew of the committee's examination of annual reports for the 2011-12 financial year.

Terms of reference

1.2 This report was prepared pursuant to Standing Order 25(20) relating to the consideration of annual reports by committees. The Standing Order states:

Annual reports of departments and agencies shall stand referred to the committees in accordance with an allocation of departments and agencies in a resolution of the Senate. Each committee shall:

(a) Examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory.

(b) Consider in more detail, and report to the Senate on, each annual report which is not apparently satisfactory, and on the other annual reports which it selects for more detailed consideration.

(c) Investigate and report to the Senate on any lateness in the presentation of annual reports.

(d) In considering an annual report, take into account any relevant remarks about the report made in debate in the Senate.

(e) If the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates.

(f) Report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on annual reports tabled by 30 April eac

h year by the tenth sitting day after 30 June of that year.

(g) Dr

aw to the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports.

(h) Report to the Senate each year whether there are any bodies which do not present annual reports to the Senate and which should present such reports.1

1 Amended 24 August 1994, 13 February 1997, 11 November 1998, 3 December 1998, 13 February 2002, 19 November 2002, 14 August 2006: with effect from 11 September 2006, 13 May 2009: with effect on 14 May 2009.

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Role of annual reports

1.3 Annual reports place a great deal of information about government departments and agencies on the public record. Accordingly, the tabling of annual reports is an important element of accountability to Parliament, assisting in the effective examination of the performance of departments and agencies, and the administration of government programs.

Annual reports referred

1.4 In accordance with Senate Standing Order 25(20)(f) this report examines those annual reports tabled between 1 May 2012 and 31 October 2012. The committee examined the following reports:

Departmental Reports

 Department of Education, Employment and Workplace Relations - Annual Report for 2011-12.

Statutory authorities/bodies

 Fair Work Australia - Report for 2011-12

 Fair Work Ombudsman - Report for 2011-12

 Remuneration Tribunal - Report for 2011-12

 Seafarers Safety, Rehabilitation and Compensation Authority - Report for

2011-12

Commonwealth authorities (under the CAC Act)

 Australian Curriculum, Assessment and Reporting Authority - Report for

2011-12

 Comcare - Report for 2011-12

Commonwealth companies under the CAC Act

 Australian Institute for Teaching and School Leadership Limited - Report for

2011-12

1.5 The tabling dates of these reports are listed at Appendix 2. Details of all annual reports referred to the committee are set out at Appendix 1.

Reports not examined

1.6 The committee is not obliged to report on Acts, statements of corporate intent, surveys, corporate plans or errata. The following documents were referred to the committee but not examined:

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 Report to the Commonwealth, made under Section 24 of the Air Passenger

Ticket Levy (Collection) Act 2001, for the period 1 April 2011 to 31 March 2012

 Fair Work (Building Industry) Act 2012 - Commonwealth Ombudsman's

report on reviews conducted under Division 3, for the period 1 to 30 June 2012.

Method of assessment

1.7 Senate Standing Orders require the committee to examine the annual reports referred to it to determine whether they are timely and ‘apparently satisfactory’. In making this assessment, the committee considers whether the reports comply with the relevant requirements for the preparation of annual reports of departments and authorities.

1.8 The requirements are set down in the following instruments:

 for portfolio departments: the Public Service Act 1999, sections 63(2) and

70(2), and the Requirements for Departmental Annual Report, for Departments, Executive Agencies and FMA Act Bodies, Department of Prime Minister and Cabinet, revised June 2012;

 for Commonwealth authorities and companies: the Commonwealth Authorities and Companies Act 1997, in particular sections 9, 36 and 48; and

 for non-statutory bodies: the guidelines are contained in the Government response to the Senate Standing Committee on Finance and Public Administration Report on Non-Statutory bodies, Senate Hansard, 8 December 1987, pp 2643-45.

Timeliness in tabling annual reports

1.9 Standing Order 25(20)(c) requires the committee to report to the Senate on the late presentation of annual reports.

1.10 Annual reports must be tabled in Parliament by 31 October each year, except where an agency's own legislation specifies a timeframe for its annual report.2 Those agencies reporting under the Commonwealth Authorities and Companies Act 1997 are required to provide their annual reports to the minister by the 15th day of the fourth month after the end of the financial year. Where the financial year ends on 30 June, this deadline translates to 15 October.3

1.11 The committee recognises that some agencies are required to comply with other timeframes stipulated in their enabling legislation, such as 'as soon as practicable

2 Department of Prime Minister and Cabinet, Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies, June 2012, p. 2.

3 Commonwealth Authorities and Companies Act 1997, section 9.

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after 30 June'. Nonetheless, the committee reminds all agencies that the government considers it best practice for annual reports to be tabled by 31 October each year.

General comments on reports

1.12 The committee has found, under the terms of standing order 25(20), that all of the reports described here are apparently satisfactory. In making this assessment, the committee considers aspects such as the timeliness of presentation and compliance with relevant reporting requirements.

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CHAPTER 2 Review of annual reports

2.1 This chapter examines selected annual reports in greater detail, and provides the Senate with information that may be of particular interest. The reports of the Department of Education, Employment and Workplace Relations; Fair Work Australia; Fair Work Ombudsman; Comcare; and the Australian Curriculum, Assessment and Reporting Authority are discussed in this chapter.

Department of Education, Employment and Workplace Relations 2.2 The Department of Education, Employment and Workplace Relations (DEEWR) is the Australian Government department responsible for supporting the Australian Government's policies and programs in the education, employment and workplace relations portfolio.

2.3 The Secretary's overview highlighted DEEWR's major activities including the National Quality Framework for Early Childhood Education and Care; major education reforms through the National Action Plan on Literacy and Numeracy (NAPLAN) and the National Secondary School Computer fund; the implementation of the Building Australia's Future Workforce Package; and the review of the Fair Work Act 2009.

2.4 The establishment of the National Quality Framework for Early Childhood Education and Care has sought to promote improvement and consistency in education and care services. To achieve this, reforms such as improved staff to child ratios, improved qualifications requirements for staff and a new rating system to assist decision making for parents have been introduced.

2.5 The National

Action Plan on Literacy and Numeracy focuses on delivering sustained improvement in literacy and numeracy outcomes for all students and has included measures such as strategic research initiatives and literacy and numeracy pilots in low socioeconomic status communities.

2.6 Under the National Secondary School Computer Fund, more than 957 000 computers were installed which exceeded the national target of 786 000. The additional computers mean that all Australian schools with students in years 9 to 12 now have a one-to-one student ratio.

2.7 Through the Building Australia's Future Workforce package, DEEWR delivered 23 of 39 measures during 2011-12 including: commencement of the Helping

Young Parents program which will support around 4000 young parents over 3.5 years; extension through to 2013 of the Priority Employment Area strategy which supports Local Employment Coordinators and jobs and Skills Expos; and further initiatives to increase workforce participation of disadvantaged people.

2.8 Other activities undertaken by DEEWR included: participation in a review by the Australian Public Service Commission, negotiation of a new enterprise agreement and accommodating budget reductions including managing 255 voluntary redundancies.

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2.9 In December 2011 DEEWR relinquished responsibility for tertiary education, skills and international education activities which was assumed by the Department of Industry, Innovation, Science, Research and Tertiary Education. Following this change DEEWR refreshed its strategic plan addressing the direction of the department.

2.10 The Committee notes that amendments to the DEEWR outcome statements in the report reflect the Administrative Arrangements Order (AOO) of 14 December 2011. These changes were not anticipated in the Portfolio Budget Statements (PBS) 2011-12, but were later effected and published along with other minor performance targets adjustments in the PBS 2012-13.

2.11 The committee considers the DEEWR 2011-12 annual report to be well presented and in compliance with reporting requirements.

Fair Work Australia 2.12 Fair Work Australia (FWA) is Australia's national workplace relations tribunal. It is an independent body with power to carry out a range of functions including, but not limited to, establishing minimum wages, making enterprise agreements, regulating industrial action, and resolving a range of collective and individual workplace disputes.

2.13 The annual report outlines key activities across the year including a comprehensive review of FWA's services with initiatives to be implemented in the following year; ongoing assistance in managing dispute resolution on enterprise level collective bargaining with 530 bargaining applications lodged during the year; and lists of significant cases that were considered during the reporting period.

2.14 The reporting period for the annual report saw an improvement in timeliness performance for FWA with half of all single enterprise agreements being finalised within 17 days of lodgement (a reduction of five days compared to the last financial year); and a 34 per cent increase in hearings and conferences conducted by members.

2.15 Justice Ian Ross AO commenced as President in March 2012 replacing Justice Geoffrey Giudice AO and Ms Bernadette O'Neill replaced Mr Tim Lee as General Manager in February 2012. In addition, two other members departed during the 2011-12 financial year: Commissioner Thatcher and Deputy President Ives.

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Fair Work Ombudsman 2.16 The Fair Work Ombudsman (FWO) is an independent statutory agency promoting harmonious, productive and cooperative workplace relations and ensuring compliance with Australia's workplace laws.

2.17 FWO's key activities for 2011-12 included: enhancement of the My Business section of the FWO website to assist small and medium businesses; creation of online Trainee Wage Calculators for 15 different industries; publication of a new fact sheet on internships, vocational placements and unpaid work to address public awareness issues; and an online Leave Calculator to enable employers and employees to calculate accumulated leave entitlements.

2.18 One of the key goals of FWO is the provision of education and advice to stakeholders. In 2011-12 FWO assistance through the Fair Work Infoline (an online 'chat' service) decreased by 16 per cent to 143 995 enquiries, although there was a 91 per cent increase in the number of callers resolving their enquiries through interactive voice response self-service information.1

Comcare

2.19 The Comcare Scheme provides an integrated safety, rehabilitation and compensation system for federal workers and their employers. The scheme is jointly overseen by Comcare and the Safety, Rehabilitation and Compensation Commission.

2.20 Significant work for Comcare over the course of 2011-12 included: the harmonisation of work, health and safety laws; focusing on prevention measures for workplace harm; offering recovery support for people affected by workplace harm and addressing challenges such as managing fiscal pressures to ensure appropriate funding of public sector workers' compensation.

Australian Curriculum, Assessment and Reporting Authority (ACARA) 2.21 The Australian Curriculum, Assessment and Reporting Authority (ACARA) was established in 2008 and is responsible for delivering a national curriculum, a national assessment program, and national data collection and performance reporting programs to improve the performance of school education.

2.22 ACARA's achievements during the reporting period included: progress in curriculum development (including the formal endorsement of achievement standards for the Foundation to Year 10 Australian Curriculum for english, history, mathematics and science); release of the third version of the My School website; and testing of approximately one million students under the NAPLAN.

Comments made in the Senate 2.23 The committee is obliged, under Senate Standing Order 25(20)(d), to consider any remarks made about these reports in the Senate. The committee is satisfied that there were no such comments to include.

1 Fair Work Ombudsman, Annual Report 2011-12, pp 21.

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Bodies not presenting annual reports to the Senate 2.24 The committee is required to report to the Senate each year on whether there are any bodies not presenting annual reports to the Senate which should. The committee is satisfied that there are no such bodies at this time.

Senato

r Gavin Marshall

Chair

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APPENDIX 1

Allocation of annual reports to the committee Education, Employment and Workplace Relations  Department of Education, Employment and Workplace Relations

Education

 Australian Curriculum, Assessment and Reporting Authority

 Australian Institute for Teaching and School Leadership Ltd [Teaching

Australia]

 Department of Education, Employment and Workplace Relations

 Indigenous Education (Targeted Assistance) Act 2000—Indigenous education

and training—National report to Parliament

 Schools Assistance (Learning Together-Achievement Through Choice and

Opportunity) Act 2004--Report on financial assistance granted to each state in respect of

 Schools Assistance Act 2008 - Report on financial assistance granted to each state in respect of

Employment and Workplace Relations

 Air Passenger Ticket Levy (Collection) Act 2001

 Coal Mining Industry (Long Service Leave Funding) Corporation

 Comcare Australia

 Defence Force Remuneration Tribunal 1

 Department of Education, Employment and Workplace Relations

 Fair Work Australia

 Fair Work Ombudsman

 Office of the Fair Work Building Industry Inspectorate

 Remuneration Tribunal

 Safe Work Australia

 Safety, Rehabilitation and Compensation Commission

 Seafarers Safety, Rehabilitation and Compensation Authority (Seacare)

1 Forwarded to the Foreign Affairs, Defence and Trade Committee also.

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10

136

APPENDIX 2

Compliance table of annual reports referred

List of annual reports referred by the Senate to the committee during the period 1 May 2011 to 31 October 2011

Education, Employment and Workplace Relations portfolio

Body/Report Enabling legislation and timeliness Letter of Transmittal

Date

Submitted to/Received by Minister

Presented out of session Tabled Timeliness

Department of Education, Employment and Workplace Relations - Report for 2011-12

Commonwealth Authorities and Companies Act 1997 3/10/2012 3/10/2012 Reps:

29/10/2012

Senate: 30/10/2012

On time

Fair Work Australia

Fair Work Australia Act 2009 25/09/2012 25/09/2012 Reps:

29/10/2012

Senate: 29/10/2012

On time

Fair Work Ombudsman

Fair Work Australia Act 2009 25/09/2012 25/09/2012 Reps:

29/10/2012

Senate: 30/10/2012

On time

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Body/Report Enabling legislation and timeliness Letter of Transmittal

Date

Submitted to/Received by Minister

Presented out of session Tabled Timeliness

Remuneration Tribunal - Report for 2011-12 Remuneration Tribunal Act 1973

25/09/2012 25/09/2012 Reps:

31/10/2012

Senate: 31/10/2012

On time

Seafarers Safety, Rehabilitation and Compensation Authority - Report for 2011-12

Seafarers Rehabilitation and Compensation Act 1992 20/09/2012 20/09/2012 Reps:

29/10/2012

Senate: 29/10/2013

On time

Australian Curriculum, Assessment and Reporting Authority - Report for 2011-12

Commonwealth Authorities and Companies Act 1997 10/09/2012 10/09/2012 Reps:

29/10/2012

Senate: 30/10/2012

On time

Safety, Rehabilitation and Compensation Commission and Comcare - Report for 2011-12

Safety, Rehabilitation and Compensation Act 1988 11/10/2012 11/10/2012 Reps:

29/10/2012

Senate: 29/10/2012

On time

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Body/Report Enabling legislation and timeliness Letter of Transmittal

Date

Submitted to/Received by Minister

Presented out of session Tabled Timeliness

Australian Institute for Teaching and School Leadership Limited - Report for 2011-12

Commonwealth Authorities and Companies Act 1997 14/09/2012 14/09/2012 Reps:

30/10/2012

Senate: 30/10/2012

On time

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14

140

APPENDIX 3

Administrative Arrangements Order for the Department of Education, Employment and Workplace Relations

[Extract from the Administrative Arrangements Order, made on 9 February 2012]

PART 6 THE DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Matters dealt with by the Department

 Schools education policy and programs including schools, vocational, higher education and Indigenous education, but excluding migrant adult education

 Schooling transitions policy and programs including career pathways

 Education and training transitions policy and programs

 Employment policy, including employment services

 Job Services Australia

 Labour market and income support policies and programs for people of

working age

 Workplace relations policy development, advocacy and implementation

 Promotion of flexible workplace relations policies and practices

 Co-ordination of labour market research

 Occupational health and safety, rehabilitation and compensation

 Equal employment opportunity

 Work and family programs

 Services to help people with disabilities obtain employment, other than supported employment

 Youth affairs and programs

 Early childhood and childcare policy and programs

 Co-ordination of early childhood development policy and responsibilities, including Indigenous early childhood development

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The Senate

Environment and Communications Legislation Committee

Annual reports (No. 1 of 2013)

March 2013

143

© Commonwealth of Australia 2013

ISBN 978-1-74229-761-3

This document was printed by the Senate Printing Unit, Parliament House, Canberra

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Membership of the Committee

Members Senator Doug Cameron (ALP, NSW) (Chair) Senator Simon Birmingham (LP, SA) (Deputy Chair) Senator Catryna Bilyk (ALP, TAS) Senator Bridget McKenzie (NATS, VIC) Senator the Hon Lisa Singh (ALP, TAS) Senator Larissa Waters (AG, QLD)

Committee Secretariat Ms Sophie Dunstone, Acting Secretary Ms Jacquie Hawkins, Research Officer

Committee Address Senate Standing Committee on Environment and Communications PO Box 6100 Parliament House Canberra ACT 2600

Tel: 02 6277 3526

Fax: 02 6277 5818

Email: ec.sen@aph.gov.au

Internet: www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=ec_ctte/index.htm

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v

Contents

Membership of the Committee iii

Report to the Senate

Introduction 1

Annual reporting requirements 1

Apparently satisfactory 2

Purpose of annual reports 2

Reports referred to the committee 2

Departments and executive and prescribed agencies 3

Statutory authorities 3

Commonwealth companies/government business enterprises 3

Reports on the operation of Acts 3

Timeliness 4

Remarks made in the Senate 5

Comment on certain annual reports 6

Department of Broadband, Communications and the Digital Economy 6

Australian Communications and Media Authority 6

Department of Climate Change and Energy Efficiency 7

Clean Energy Regulator 8

Department of Sustainability, Environment, Water, Population and Communities 9

Great Barrier Reef Marine Park Authority 10

General comments 11

Summary 12

Appendix 1, Annual reports referred to the committee 13

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Report to the Senate

Introduction 1.1 By virtue of the operations of standing order 25(20) and a Senate order of 29 September 2010,1 the Senate refers to this committee for examination and report the annual reports of departments and agencies of the following three portfolios:

• Broadband, Communications and the Digital Economy;

• Climate Change and Energy Efficiency; and

• Sustainability, Environment, Water, Population and Communities.

1.2 Standing order 25(20) requires that the committee shall:

(a) Examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory.

(b) Consider in more detail, and report to the Senate on, each annual report which is not apparently satisfactory, and on the other annual reports which it selects for more detailed consideration.

(c) Investigate and report to the Senate on any lateness in the presentation of annual reports.

(d) In considering an annual report, take into account any relevant remarks about the report made in debate in the Senate.

(e) If the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates.

(f) Report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on annual reports tabled by 30 April each year by the tenth sitting day after 30 June of that year.

(g) Draw to the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports.

(h) Report to the Senate each year whether there are any bodies which do not present annual reports to the Senate and which should present such reports.

1.3 This report deals with annual reports tabled in the Senate or presented to the President between 1 May and 31 October 2012 as required by standing order 25(20)(f).

Annual reporting requirements 1.4 On 28 June 2012 the Joint Committee of Public Accounts and Audit (JCPAA) agreed to revised Requirements for Departmental Annual Reports put forward by the

1 Journals of the Senate, No. 74, 8 February 2012, pp 2043-2044.

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Department of the Prime Minister and Cabinet (the Requirements).2 Under the Requirements, departmental and prescribed agency annual reports are to be tabled by 31 October.

1.5 Under section 48 of the Commonwealth Authorities and Companies Act 1997 (CAC Act), the Minister for Finance and Deregulation outlines the annual reporting requirements for Commonwealth authorities and companies in the Commonwealth Authorities and Companies (Report of Operations) Orders. Section 9 of the CAC Act applies to Commonwealth authorities and specifies the deadline for the presentation of an annual report to the responsible Minister. Section 36 of the CAC Act outlines the reporting obligations of Commonwealth companies.

1.6 Some statutory authorities are required to follow the departmental guidelines if their head has the powers of a secretary as defined under the Public Service Act 1999.

1.7 Requirements for the annual reports of non-statutory bodies are set out in the Government Response to recommendations of the then Senate Standing Committee on Finance and Government Operations in its report entitled, Reporting Requirements for the Annual Reports of Non-Statutory Bodies. The response was incorporated into the Senate Hansard of 8 December 1987.3

Apparently satisfactory 1.8 Standing order 25(20)(a) requires the committee to report to the Senate on whether annual reports are apparently satisfactory. In making this assessment, the committee considers such aspects as timeliness of presentation and compliance with relevant reporting requirements.

Purpose of annual reports 1.9 As stated in the Requirements, the primary purpose of annual reports of departments is accountability, in particular to the Parliament.4 They inform the Parliament, other stakeholders, education and research institutions, the media and the general public about departments' performance in providing services. They are a key reference as well as an internal management document and form part of the historical record.

Reports referred to the committee 1.10 The following annual reports have been referred to the committee:

2 Department of the Prime Minister and Cabinet, Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies, 28 June 2012, http://www.dpmc.gov.au/guidelines/docs/annual_report_requirements_2010-11.pdf (accessed 9 January 2012). The Requirements are prepared pursuant to subsections 63(2) and 70(2) of the Public Service Act 1999.

3 Senate Hansard, 8 December 1987, pp 2643-45. 4 Department of the Prime Minister and Cabinet, Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies, 28 June 2012, p. 3.

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Departments and executive and prescribed agencies

Department of Broadband, Communications and the Digital Economy, Annual Report 2011-12

Department of Climate Change and Energy Efficiency, Annual Report 2011-12

Department of Sustainability, Environment, Water, Population and Communities, Annual Report 2011-2012, including reports on the operations of the: • Natural Heritage Trust of Australia Act 1997;

• Product Stewardship Act 2011;

• Ozone Protection and Synthetic Greenhouse Gas Management Act 1989;

• Hazardous Waste (Regulation of Exports and Imports) Act 1989;

• Fuel Quality Standards Act 2000;

• Product Stewardship (Oil) Act 2000;

• Water Efficiency Labelling and Standards Act 2005;

• Environment Protection and Biodiversity Conservation Act 1999; and the

• Commonwealth Environmental Water Annual Report 2011-12.

Australian Communications and Media Authority, Annual Report 2011-12

Bureau of Meteorology, Annual Report 2011-12

Clean Energy Regulator, Annual Report 2011-12

Great Barrier Reef Marine Park Authority, Annual Report 2011-12

National Water Commission, Annual Report 2011-12

Office of the Renewable Energy Regulator, Financial Annual Report 2011-2012

Statutory authorities

Australian Broadcasting Corporation, Annual Report 2012

Special Broadcasting Service, Annual Report 2011-2012

Supervising Scientist, Annual Report 2011-2012

Commonwealth companies/government business enterprises

Australian Postal Corporation (Australia Post), Annual Report 2012

Australian Postal Corporation (Australia Post), Equal Employment Opportunity Report 2012

Low Carbon Australia, Annual Report 2011-2012

NBN Co Limited, Annual Report 2011-2012

NBN Co Limited, Statement of Corporate Intent 2012 to 2015

Reports on the operation of Acts

Australian Competition and Consumer Commission Telecommunications reports for 2010-11: Telecommunications competitive safeguards

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Changes in the prices paid for telecommunications services in Australia

Australian Communications and Media Authority: National Relay Service Performance Report 2010-11

Department of Broadband, Communications and the Digital Economy: Convergence Review, Final Report, Appendix G: Report on review of Schedule 7 of the Broadcasting Services Act 1992 Digital television transmission and reception, Report, April 2012 Digital television transmission and reception, Report, July 2012 Digital television transmission and reception, Report, October 2012 Operation of the Prohibition of Advertisements of Interactive Gambling

Services under the Interactive Gambling Act 2001, Report 2011 2011-12 Regional Telecommunications Review

Department of Climate Change and Energy Efficiency Annual Report 2010 Energy use in the Australian Government's Operations 2009-10

Department of Sustainability, Environment, Water, Population and Communities Land Sector Carbon and Biodiversity Board, Annual Report 2011-12.

1.11 Appendix 1 provides a record, by portfolio, of:

• the basis under which the organisation operates, for example department or

statutory authority;

• dates indicating the progressive stages in presentation of the annual reports,

where available; and

• the date each report was tabled in, or deemed to be presented to, the Senate.

Timeliness 1.12 Under the Requirements, annual reports of departments and executive and prescribed agencies are to be tabled by 31 October. If a department is unable to meet this deadline, an extension of time to report can be sought under the provisions of subsections 34C(4)-(7) of the Acts Interpretation Act 1901.5 These provisions provide for the departmental secretary to advise the responsible minister of the reasons for the delay. The responsible minister is to table this explanation in the Parliament on the next available sitting day.

1.13 All 2011-12 annual reports examined in this report were timely in their presentation to the Parliament.

1.14 Some reports tabled in the reporting cycle cover different reporting periods. These were the:

5 Department of the Prime Minister and Cabinet, Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies, 28 June 2012, p. 2.

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• Australian Communications and Media Authority

National Relay Service Performance Report 2010-11

• Australian Competition and Consumer Commission Telstra's compliance with the price control arrangements,

Report for 2009-10

Telecommunications reports for 2010-11: Telecommunications competitive safeguards Changes in the prices paid for telecommunications services in Australia

• Department of Climate Change and Energy Efficiency Annual Report 2010

Energy use in the Australian Government's Operations 2009-10

1.15 Some agencies missed the report tabling deadline. These will be reported on in the committee's next report and include:

• Director of National Parks, Annual Report 2011-12

• Murray-Darling Basin Authority, Annual Report 2011-12

• Sydney Harbour Federation Trust, Annual Report 2012

• Wet Tropics Management Authority, Annual Report & State of the Wet

Tropics Report 2011-2012

Remarks made in the Senate 1.16 Under standing order 25(20)(d), the committee notes that the following reports dealt with in this report were the subject of comment in the Senate:

• Department of Sustainability, Environment, Water, Population and

Communities.6

1.17 However, the committee also notes the following annual reports reviewed in this report remain on the Notice Paper for consideration under Orders of the Day relating to Government Documents:7

• NBN Co Limited

• Department of Sustainability, Environment, Water, Population and Communities

• Great Barrier Reef Marine Park Authority

• Department of Broadband, Communications and the Digital Economy and

• Australian Postal Corporation, Statement of Corporate Intent 2012-13 to

2015-16

6 Senator McKenzie, Senate Hansard, 1 November 2012, p. 8871.

7 The Senate Notice Paper, No. 136, 12 March 2013, pp 12-14.

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Comment on certain annual reports 1.18 The committee provides the following comments on the annual reports of the three portfolio departments referred to it for examination and on several reports from agencies within the portfolios.

Broadband, Communications and the Digital Economy Portfolio

Department of Broadband, Communications and the Digital Economy (DBCDE)

1.19 The report notes a number of activities undertaken during the reporting period across its three program areas:

• Broadband and Communications Infrastructure

• Telecommunications, Online and Postal services

• Broadcasting and Digital Television.

1.20 The report notes that the department continued its work in the National Broadband Network (NBN) and the digital switchover processes, reporting that five out of 15 regions have been switched across and more than 80 000 households are accessing the Viewer Access Satellite Television for remote areas.8

1.21 The department has undertaken a number of reviews, including completion of the Convergence Review and the Independent Media Inquiry conducted by Justice Finkelstein. Other reviews under way include of the Telecommunications Industry Ombudsman; the Australian Communications Consumer Action Network; and the triennial review of telecommunications services in regional, rural and remote parts of Australia. Recommendations from the various reviews will influence future work priorities and processes.9

1.22 A further review undertaken was of the department's Senior Executive Service (SES) leading to a reduction in the SES and 'senior managerial resourcing put into areas of gathering focus'10 as well as 'necessary [APS] staff reduction'11 and the introduction of a new departmental structure from 1 July 2012.12

Australian Communications and Media Authority (ACMA)

1.23 During the year ACMA provided input to a range of reviews, including the Independent Media Inquiry, the Review of the National Classification Scheme and the

8 Department of Broadband, Communications and the Digital Economy Annual Report 2011-12, pp 2-3.

9 Department of Broadband, Communications and the Digital Economy Annual Report 2011-12, pp 2-3.

10 Department of Broadband, Communications and the Digital Economy Annual Report 2011-12, p. 4.

11 Department of Broadband, Communications and the Digital Economy Annual Report 2011-12, p. 4.

12 Department of Broadband, Communications and the Digital Economy Annual Report 2011-12, pp 7-8.

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independent Convergence Review Committee. ACMA anticipates that recommendations from each of the reviews will be relevant to its role and functions.13

1.24 The public inquiry Reconnecting the Customer reported, leading to the development of a new Telecommunications Consumer Protection Code due to take effect from September 2012. The Code requires improved disclosure in advertising and point-of-sale, supported by better complaints-handling processes, improved customer service and the introduction of spend management tools.14

1.25 The report notes ACMA activities during the reporting period, including:

• review of the 400 MHz band;

• preparations for the proposed spectrum auction scheduled for April 2012;

• coordination role for the NBN implementation, including protecting

consumers in the transition to the NBN and ensuring the continued provision and quality of basic voice services;

• broadcasting and online investigations resulting from written complaints and inquiries;

• continued development of its cybersafety role and providing resources for

young people covering issues such as cyberbullying sexting and digital reputation; and

• working with the department to establish the Telecommunication's Universal Service management Agency (TUSMA).15

Climate Change and Energy Efficiency Portfolio

Department of Climate Change and Energy Efficiency (DCCEE)

1.26 The department's strategic intent 2012-2015 sets out the three pillars of Australia's climate change policy:

• mitigation:

• establish a carbon price • improve energy efficiency

• de-carbonise energy and promoting renewable energy • provide accurate and attributable greenhouse and energy data

• adaptation:

• establish an effective framework for adaptation • lead national reform

• promote high quality science and information on climate change

• international engagement

13 Australian Communications and Media Authority Annual Report 2011-12, p. 11.

14 Australian Communications and Media Authority Annual Report 2011-12, p. 12.

15 Australian Communications and Media Authority Annual Report 2011-12, pp 12-15.

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• participate in multilateral negotiations including the UNFCCC (United

National Framework Convention on Climate Change) • foster strategic partnerships.

through the organisational effectiveness of people, performance and finance.16

1.27 The secretary's review notes that the department has responsibility for the whole-of-government oversight of the Clean Energy Future package which now includes two new independent statutory authorities within the CCEE portfolio: the Clean Energy Regulator and the Climate Change Authority.17

1.28 The department has continued to develop the Carbon Farming Initiative (CFI), a carbon offsets scheme which provides new economic opportunities by enabling farmers and land managers to earn carbon credits by storing carbon or reducing greenhouse gas emissions on the land. These credits can then be sold to people and businesses wishing to offset their emissions.18 It is noted that responsibility for this function has since been taken over by the newly established Clean Energy Regulator (see below).

1.29 Also developed and delivered by the department was a new package of energy efficiency grants programs, including the Community Energy Efficiency Program, the Low Income Energy Efficiency Program and the Energy Efficiency Information Grants Program, all to promote smarter energy use in business, local government, households and communities across the country, including regional Australia.19

1.30 The secretary reports that with a number of programs concluding, such as the Home Insulation Program, the Solar Homes and Communities Plan and the Green Loans Program, and the need to operate within the department's allocated budget:

…the department's workforce will need to have reduced from around 900 staff at the beginning of April 2011 to around 600 staff by the end of June 2013. To assist with this reduction, and to ensure that staff in closing program areas are fully supported, the dedicated Job Placement Service has been operating since mid-March 2012, to help identify alternative positions within the department and in other agencies for affected staff.

1.31 The report foreshadows

…a number of significant outcomes to achieve in the 12 months ahead: a significant policy and program agenda; and a significant workforce transition. Our portfolio remains central to the government's agenda and there is important, challenging and rewarding work to be done in all three policy pillars: mitigation, adaptation and international engagement.20

16 Department of Climate Change and Energy Efficiency Annual Report 2011-12, p. 2 and fold out front cover.

17 Department of Climate Change and Energy Efficiency Annual Report 2011-12, pp 2-3.

18 Department of Climate Change and Energy Efficiency Annual Report 2011-12, p. 3.

19 Department of Climate Change and Energy Efficiency Annual Report 2011-12, p. 3.

20 Department of Climate Change and Energy Efficiency Annual Report 2011-12, p. 4.

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Clean Energy Regulator (CER)

1.32 This is the first annual report of the Clean Energy Regulator which began operations on 2 April 2012. Established under the Clean Energy Regulator Act 2011 as an independent statutory authority, it is responsible for administering legislation that will reduce carbon emissions and increase the use of renewable energy.21

1.33 The agency is comprised of staff transferred from the Department of Climate Change and Energy Efficiency along with staff from the former Office of the Renewable Energy Regulator which was amalgamated into the CER. The CER has also taken over functions previously performed by the Carbon Farming Initiative Administrator and the Greenhouse and Energy Data Officer.22

1.34 The report notes that the CER's role covers a broad range of functions to facilitate participation in and ensure the integrity of:

Australia's new carbon pricing mechanism, which came into effect on 1 July 2012

previously established mechanisms for monitoring and strengthening Australia's response to climate change, namely the National Greenhouse and Energy Reporting Scheme, the Australian National Registry of

Emissions Units, the Carbon Farming Initiative, and the Renewable Energy Target23

through educating clients, determining entitlements and liabilities, accrediting auditors, managing access to registries, and publishing information.24

1.35 The report foreshadows that the CER will be particularly focused on the implementation of the carbon pricing mechanism by building on and enhancing already existing reporting systems in preparation for its commencement.25

Sustainability, Environment, Water, Population and Communities Portfolio

1.36 Department of Sustainability, Environment, Water, Population and Communities

1.37 During the reporting period the department:

• saw the culmination of many years work with the announcement of a national

representative system of marine national parks;

• supported the next stages of development of the Murray-Darling Basin Plan;

• delivered the first round of the Biodiversity Fund projects; and

21 Clean Energy Regulator Annual Report 2011-12, p. 2.

22 Clean Energy Regulator Annual Report 2011-12, p. 11.

23 Clean Energy Regulator Annual Report 2011-12, p. 2.

24 Clean Energy Regulator Annual Report 2011-12, p. 2.

25 Clean Energy Regulator Annual Report 2011-12, p. 6.

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• prepared for the introduction of an equivalent carbon price on synthetic

greenhouse gases from 1 July 2012.26

1.38 Other activities included:

• the implementation of product stewardship legislation;

• commemoration of 100 years of exploration and science in Antarctica;

• participated in the UN Conference on Sustainable Development (Rio+20)

Conference in Brazil; and

• projects to improve the department delivery, leadership and strategic

capability in response to a Capability Review conducted by the Australian Public Service Commission.27

1.39 During the reporting year the department also underwent a restructure following the transfer of the Housing Affordability function to the Department of Families, Housing, Community Service and Indigenous Affairs, and the Housing Supply Policy function to the Department of the Treasury.28

Great Barrier Reef Marine Park Authority (GBRMPA)

1.40 Climate change, declining water quality, loss of coastal habitats and some fishing impacts are key issues affecting the Reef.

1.41 The report provides details of programs undertaken to reduce and respond to impacts of climate change such as a project to improve survival rates of the green turtle at their nesting sites on Raine Island; steps to improve the quality of water entering the Reef lagoon; and managing development activities, which can impact on the ecosystem and species.29

1.42 Members of the World Heritage Committee visited a number of locations to consider the status of the Reef's health in March 2012. The Committee:

…wants Australia to demonstrate "substantial progress" on the state of conservation of the World Heritage Area to the World Heritage Centre by February 2013, or risk having this site listed World Heritage in danger.30

1.43 During the year under review, the Authority, working with the Queensland Government, commenced a strategic assessment of the Great Barrier Reef Region which will be the:

26 Department of Sustainability, Environment, Water, Population and Communities Annual Report 2012-2012, p. 8.

27 Department of Sustainability, Environment, Water, Population and Communities Annual Report 2012-2012, pp 8-10.

28 Department of Sustainability, Environment, Water, Population and Communities Annual Report 2012-2012, p. 15.

29 Great Barrier Reef Marine Park Authority Annual Report 2011-12, pp 4-6

30 Great Barrier Reef Marine Park Authority Annual Report 2011-12, pp 6-7.

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…focus for the year ahead and will guide out management of the Reef for the next 25 years. It will help us identify the Reef's values that need protecting, threats to those values and what we need to do to address them. The strategic assessment is a way to examine cumulative impacts on values-multiple pressures from multiple activities-rather than project by project assessments.31

1.44 The report foreshadows the launch, and implementation of, the Great Barrier Reef Biodiversity Conservation Strategy 2012 for protecting at-risk plants, animals and habitats of the Reef and also the Climate Change Act Plan 2012-2017 which will build on the achievements of the first five-year action plan.32

General comments 1.45 The Auditor-General has not qualified any of the financial statements contained in the annual reports under review.

1.46 The committee again commends those agencies that have included both a general index and a compliance index in their annual reports this year. It considers the inclusion of a compliance index to be a very useful tool for accountability purposes.

1.47 The committee reiterates the concerns expressed during the past five Supplementary Budget Estimates hearings, since October 2008, that the majority of annual reports of departments and agencies were not available to senators prior to those hearings, due to the scheduled dates for supplementary estimates.

1.48 For the October 2012 round of estimates hearings, annual reports of several agencies from its portfolios were received. However, none of the annual reports for the three departments overseen by this committee was tabled prior to, and were therefore unavailable for, the hearings.

1.49 The committee notes that the Requirements state that 'a copy of the annual report is to be presented...on or before 31 October'. The Requirements continue:

If Senate Estimates is scheduled to occur prior to 31 October, it is best practice for annual reports to be tabled prior to those hearings. 33

1.50 Given that Supplementary Budget Estimates hearings are scheduled for the week 21-24 October 2013, the committee expects that annual reports will be available to senators prior to that week.

Summary 1.51 The committee finds that the annual reports referred to it have provided an appropriately comprehensive description of the activities of the reporting bodies and were of a high standard of presentation. They appear to have met the requirements of the various guidelines that apply to them.

31 Great Barrier Reef Marine Park Authority Annual Report 2011-12, p, 7.

32 Great Barrier Reef Marine Park Authority Annual Report 2011-12, p. 10.

33 Department of the Prime Minister and Cabinet, Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies, Canberra, 28 June 2012, p. 2.

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1.52 Accordingly, the committee reports its finding that the annual reports referred to it for examination and tabled in the period under examination were apparently satisfactory.

Senator Doug Cameron Chair

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APPENDIX 1

Annual reports referred to the Senate Standing Committee on Environment and Communications between 1 May and 31 October 2012

Broadband, Communications and the Digital Economy portfolio

Name Type34 Dates35 Tabled36

Australian Broadcasting Corporation Annual Report 2012 Commonwealth authority

A. 05/10/12 B. 24/09/12 C. 24/09/12

29/10/12 (rec'd 12/10/12)

Australian Competition & Consumer Commission telecommunications reports for 2010-11 Telecommunications competitive safeguards

Changes in the prices paid for telecommunications services in Australia

Report on the operation of an Act

A. 02/05/12 B. 30/05/12 C. 31/05/12

26/06/12

Australian Communications and Media Authority, Annual Report 2011-12 Prescribed agency

A. 27/09/12 B. 13/09/12 C. 13/09/12

29/10/12 (rec'd 15/10/12

Australian Communications and Media Authority National Relay Service Performance Report 2010-11

Report on the operation of an Act

A. 04/01/12 B. -

C. -

10/05/12 (rec'd 04/04/12)

Australian Postal Corporation (Australia Post) Annual Report 2012

Government business enterprise

A. 26/09/12 B. 21/09/12 C. 21/09/12

30/10/12

Australian Postal Corporation (Australia Post) Equal Employment Opportunity Report 2012 Government business

enterprise

A. -

B. 21/09/12 C. 21/09/12

30/10/12

Department of Broadband, Communications and the Digital Economy Annual Report 2011-12

Department of State A. 20/09/12 B. 07/09/12

C. 07/09/12

30/10/12

34 Commonwealth Authority includes statutory office-holders. 35 Dates shown are: A The date shown on a letter of transmittal printed with the annual report (if any) ('-' represents no letter of transmittal, 'undated' indicates no date on letter of transmittal)

B Date submitted to the Minister, as recorded in the Senate's Order of Business (if any) C Date received by the Minister, as recorded in the Senate's Order of Business (if any). 36 The date in parenthesis shows the date that the report was received out of session by the President / Deputy President / Temporary Chairman of Committees or was tabled in the House

of Representatives (HoR).

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Name Type34 Dates35 Tabled36

Department of Broadband, Communications and the Digital Economy

Convergence Review, Final Report, Appendix G: Report on review of Schedule 7 of the Broadcasting Services Act 1992

Report on Digital Television Transmission and Reception, April 2012

Report on Digital Television Transmission and Reception, July 2012

Report on Digital Television Transmission and Reception, October 2012

The operation of the Prohibition of Advertisements of Interactive Gambling Services under the Interactive Gambling Act 2001 March 2011

2011-12 Regional Telecommunications Review

Reports on the operation of an Act

A. -

B. 06/06/12 C. 07/06/12

A. -

B. 13/04/12 C. 16/04/12

A. -

B. 20/07/12 C. 20/07/12

A. -

B. 17/09/12 C. 17/09/12

A. -

B. 20/02/12 C. 20/02/12

A. 05/03/12 B. 27/04/12 C. 27/04/12

26/06/12

09/05/12

14/08/12

09/10/12

19/06/12

19/06/12

NBN Co Limited Annual Report 2011-2012

Commonwealth company/ government business enterprise

A. -

B. 26/09/12 C. 26/09/12

29/10/12 (rec'd 19/10/12)

NBN Co Limited Statement of Corporate Intent 2012-2015 Commonwealth company/

government business enterprise

A. -

B. 26/09/12 C. 26/09/12

09/10/12

Special Broadcasting Service Annual Report 2011-2012

Commonwealth authority A. 01/10/12 B. 24/09/12

C. 25/09/12

29/10/12 (rec'd 12/10/12)

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Climate Change and Energy Efficiency Portfolio

Name Type Dates Tabled

Department of Climate Change and Energy Efficiency Annual Report 2011-12 Department of State

A. 11/10/12 B. 05/10/12 C. 05/10/12

30/10/12

Department of Climate Change and Energy Efficiency Energy use in the Australian Government's Operations 2009-10

Requirement of government policy

A. -

B. -

C. -

18/06/12 (rec'd 15/06/12)

Clean Energy Regulator Annual Report 2011-12

Prescribed agency

A. 17/10/12 B. 12/10/12 C. 12/10/12

31/10/12

Low Carbon Australia Annual Report 2011-2012

Commonwealth company A. 03/10/12 B. 03/10/12

C. 15/10/12

31/10/12

Office of the Renewable Energy Regulator Financial Annual Report 2011-2012 Prescribed agency

A. 22/10/12 B. 05/10/12 C. 05/10/12

31/10/12

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Sustainability, Environment, Water, Population and Communities Portfolio

Name Type Dates Tabled

Department of Sustainability, Environment, Water, Population and Communities Annual Report 2011-2012

Department of State A. 09/10/12 B. 12/10/12

C. 12/10/12

31/10/12

Bureau of Meteorology Annual Report 2011-12

Prescribed agency

A. 20/09/12 B. 09/10/12 C. 09/10/12

31/10/12

Great Barrier Reef Marine Park Authority Annual Report 2011-12 Prescribed Agency

A. 28/09/12 B. 28/09/12 C. 28/09/12

31/10/12

Land Sector Carbon and Biodiversity Board Annual Report 2011-12 Report on the operation of an

Act

A. 18/09/12 B. 20/08/12 C. 20/08/12

10/10/12

National Water Commission Annual Report 2011-12

Prescribed agency

A. 26/09/12 B. 26/09/12 C. 09/10/12

30/10/12

Supervising Scientist Annual Report 2011-2012

Report on the operation of an Act

A. 16/10/12 B. 12/09/12 C. 12/09/12

29/10/12 (rec'd 24/10/12)

164

The Senate

Finance and Public Administration

Legislation Committee

Annual reports (No. 1 of 2013)

March 2013

165

ii

© Commonwealth of Australia 2013

ISBN 978-1-74229-762-0

Senate Finance and Pu

blic Administration Committee Secretariat:

Ms Christine McDonald (Secretary)

Dr Jon Bell (Principal Research Officer)

Ms Margaret Cahill (Research Officer)

Ms Marina Katic (Administrative Officer)

The Senate PO Box 6100 Parliament House Canberra ACT 2600 Ph: 02 6277 3530 Fax: 02 6277 5809 E-mail: fpa.sen@aph.gov.au Internet: www.aph.gov.au/senate_fpa

Printed by the Senate Printing Unit, Parliament House, Canberra.

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Membership of the Committee

Members

Senator Helen Polley (Chair) ALP, Tasmania

Senator Scott Ryan (Deputy Chair) LP, Victoria

Senator Richard Di Natale AG, Victoria

Senator the Hon John Faulkner ALP, New South Wales

Senator Arthur Sinodinos LP, New South Wales

Senator the Hon Ursula Stephens ALP, New South Wales

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TABLE OF CONTENTS

Membership of the Committee ........................................................................ iii

Chapter 1.............................................................................................................. 1

Introduction ............................................................................................................ 1

Terms of reference .................................................................................................. 1

Allocated portfolios ................................................................................................ 2

Method of assessment ............................................................................................. 2

Reports examined ................................................................................................... 4

Reports not examined ............................................................................................. 5

'Apparently satisfactory' ......................................................................................... 5

Non-reporting bodies ............................................................................................. 6

Timeliness ............................................................................................................... 6

Senate debate .......................................................................................................... 7

Presentation of annual reports ................................................................................ 8

Chapter 2............................................................................................................ 11

Selected reports of departments and agencies ...................................................... 11

Appendix

1 ......................................................................................................... 23

Dates relating to the presentation of reports between

1 May to 31 October 2012 ...................................................................................... 23

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Chapter 1

Introduction

1.1 This is the Senate Finance and Public Administration Legislation Committee's (the committee) first report on annual reports for 2013. It provides an overview of the committee's examination of annual reports for the 2011-12 financial year presented to the Parliam

ent between 1 May and 31 October 2012. Copies of this and other committee reports can be obtained from the Senate Table Office, the committee secretariat or online at: www.aph.gov.au/senate_fpa.

Terms of reference

1.2 Under Senate Standing Order 25(20) the annual reports of certain departments and agencies stand referred to committees for examination and assessment. Each committee is required to:

(a) examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory;

(b) consider in more detail, and report to the Senate on each annual report which is not apparently satisfactory, and on the other annual reports which it selects for more detailed consideration;

(c) investigate and report to the Senate on any lateness in the presentation of annual reports;

(d) in considering an annual report take into account any relevant remarks about the report made in debate in the Senate;

(e) if the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates;

(f) report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on annual reports tabled by 30 April each year by the tenth sitting day after 30 June of that year;

(g) draw to the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports; and

(h) report to the Senate each year whether there are any bodies which do not present annual reports to the Senate and which should present such reports.

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Allocated portfolios

1.3 The Senate allocated departments and agencies to committees on 8 February 2012. In accordance with that resolution, the committee has responsibility for the oversight of the following:

 Parliament;

 Prime Minister and Cabinet portfolio; and

 Finance and Deregulation portfolio.

1.4 The committee notes that the first Parliamentary Budget Officer, Mr Phil Bowen PSM FCPA, was appointed on 23 July 2012 in accordance with the Parliamentary Service Act 1999. The Parliamentary Budget Office is one of four Parliamentary Departments which support the Parliament. As the date of the office's establishment is after the end of the 2011-12 financial year, an annual report was not prepared. The committee looks forward to receiving the Parliamentary Budget Office's first annual report for the 2012-13 financial year later this year.

Method of assessment

1.5 Annual reports provide one of the key mechanisms, together with the Estimates process, for scrutiny of the operations of Government. As stated in the Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies 'the primary purpose of annual reports of departments is accountability, in particular to the parliament'.

1.6 Senate Standing Order 25(20) requires that the committee examine reports referred to it to determine whether they are timely and 'apparently satisfactory'. The committee must consider whether the reports comply with the relevant legislation and guidelines for the preparation of annual reports in forming its assessment. The principal legislation which applies to departments, statutory agencies and authorities, and Commonwealth companies are:

 Public Service Act 1999;

 Parliamentary Service Act 1999;

 Financial Management and Accountability Act 1997 (FMA Act); and

 Commonwealth Authorities and Companies Act 1997 (CAC Act).

1.7 Statutory authorities also report under their respective enabling legislation.

1.8 The committee also assesses whether reports comply with the Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies (the PM&C Requirements), issued by the Department of the Prime Minister and Cabinet with the approval of the Joint Committee of Public Accounts and Audit under subsections 63(2) and 70(2) of the Public Service Act 1999. This is the authoritative source outlining the requirements for preparing and presenting annual reports for

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bodies prescribed under the FMA Act. The PM&C Requirements are reviewed annually and the latest version was issued on 28 June 2012 and will apply to annual reports for the financial year 2011-12.

1.9 Significant amendments to the most recent PM&C Requirements relate to:

 Consultancy reporting - recognising the functionality provided by the AusTender database, the requirement to provide details of consultancy contracts let in the reporting year has been omitted;

 Carer

recognition - a new requirement has been added for public service care agencies to report on compliance with the Carer Recognition Act 2010;

 Work health and safety - minor revisions to the existing requirement reflecting the provisions of the Work Health and Safety Act 2011; and

 Freedom of information - simplification of reporting following accommodation of major reforms to freedom of information reporting in the 2010-11 Requirements.1

1.10 Commonwealth authorities and companies reporting under the CAC Act are required to comply with the Commonwealth Authorities (Annual Reporting) Orders 2011 and the Commonwealth Companies (Annual Reporting) Orders 2011, respectively. The annual reports for the 2011-12 financial year will be the first annual reports prepared under the new orders (with the exception to clauses dealing with related entity transactions, which will apply to annual reports for each financial year ending on or after 30 June 2013.)

1.11 The Finance Minister has a role in the oversight of Commonwealth authorities that are also classified as a government business enterprise (GBE) as set out in the CAC Act. The annual reports of GBEs must provide an assessment of the entity's financial condition, dividends and community service obligations over the financial year.

1.12 Annual reports of non-statutory bodies are prepared in accordance with the guidelines set out in the Government Response to recommendations of the then Senate Standing Committee on Finance and Government Operations, in its report entitled Reporting Requirements for the Annual Reports of Non-Statutory Bodies. The Government response was incorporated into the Senate Hansard of 8 December 1987.2

1.13 The committee determines whether the report of an agency satisfactorily meets reporting requirements by assessing it against the PM&C Requirements, in particular, the checklist at Attachment F in the requirements; its respective enabling legislation; and where necessary, the Corporations Act 2001.

1 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 28 June 2012, p. i.

2 Senate Hansard, 8 December 1987, pp 2643-2645.

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Reports examined

1.14 During the period of 1 May to 31 October 2012, 28 reports were tabled in the Senate or presented 'out of session' to the President of the Senate, and referred to the committee for examination. The reports are categorised as follows:

Departments of the Parliament

 Department of Parliamentary Services—Report for 2011-12; and

 Department of the Senate—Report for 2011-12.

Departments of State

 Department of Finance and Deregulation—Report for 2011-12; and

 Department of the Prime Minister and Cabinet—Report for 2011-12.

Statutory agencies/authorities

 Albury-Wodonga Development Corporation—Report 2011-12;

 ASC Pty Ltd—Report for 2011-12;

 Australian Electoral Commission—Report for 2011-12;

 Australian National Audit Office—Report for 2011-12;

 Australian Public Service Commission—Report of the Australian Public Service Commissioner for 2011-12;

 Australian River Co. Limited—Report for the period 1 December 2010 to 30 November 2011;

 Commonwealth Ombudsman—Report for 2011-12;

 Commonwealth Superannuation Corporation (CSC)—Reports for 2011-12

including financial statements for the CSS, PSS and PSSap;

 ComSuper - Report for 2011-12;

 Future Fund Board of Guardians and Future Fund Management Agency—

Report for 2011-12;

 Inspector-General of Intelligence and Security—Report for 2011-12;

 Medibank Private Limited—Report for 2011-12;

 National Australia Day Council—Report for 2011-12;

 National Mental Health Commission—Report for the period 1 January to 30

June 2012;

 NBN Co. Limited—Report for 2011-12;

 Office of the Official Secretary to the Governor-General—Report for 2011- 12; and

 Parliamentary Service Commissioner—Report for 2011-12.

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Reports not examined

1.15 The committee is not obliged to report on Acts, statements of corporate intent, surveys, policy papers, budget documents, corporate plans or errata. The following documents were referred to the committee but not examined in this report:

 Department of the Prime Minister and Cabinet—Australia in the Asian

Century - White Paper, dated October 2012;

 Department of Finance and Deregulation—Campaign advertising by

Australian government departments and agencies - Report for 2011-12;

 Final Budget Outcome 2011-12—Report by the Treasurer and the Minister for Finance and Deregulation;

 Medibank Private Limited—Statement of Corporate Intent 2012-2013;

 Medibank Private Limited—Statement of Corporate Intent 2011-2014;

 Mid-year economic and fiscal outlook—2012-13 Statement by the Treasurer and the Minister for Finance and Deregulation; and

 NBN Co. Limited—Statement of corporate intent 2012-2015.

'Apparently satisfactory'

1.16 Under Standing Order 25(20)(a), the committee is required to examine the annual reports of departments and agencies and report to the Senate on whether they are apparently satisfactory. In its examination of the annual reports referred, the committee found them to be generally of a high standard and largely adhering to the relevant guidelines. The committee considers all reports examined to be 'apparently satisfactory'.

1.17 Chapter 2 of this report presents a discussion of four agencies' reports which the committee has selected for detailed examination. The committee has not examined the 2011-12 annual report of the Department of Parliamentary Services (DPS) in this report. During the committee's inquiry into the performance of DPS conducted during 2011 and 2012, DPS annual reports were examined in detail. The committee pointed to major deficiencies in the reports, including non-compliance with the guidelines and lack of transparent performance information.3 The committee noted that the new secretary of DPS, Ms Carol Mills, has recognised that improvements in DPS annual reporting are required. The committee will undertake a detailed examination of the 2012-13 DPS Annual Report when it is received.

3 Senate Finance and Public Affairs Legislation Committee, Inquiry into the performance of the Department of Parliamentary Services, November 2012, http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=fapa_ctte /completed_inquiries/2010-13/dept_parliamentary_services/report/index.htm

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Non-reporting bodies

1.18 Standing Order 25(20)(h) requires that the committee inquire into, and report on, any bodies which do not present annual reports to the Senate but should present such reports.

1.19 On this occasion, the committee makes no recommendation for any organisations not presenting an annual report to do so.

Timeliness

1.20 All annual reports are required to be tabled in Parliament by 31 October each year unless another date is specified in an agency's legislation, charter and/or terms of reference. The PM&C Requirements state that 'it remains the Government's policy that all annual reports should be tabled by 31 October'. The committee considers timeliness in annual reporting an important element in accountability and continues to encourage FMA Act bodies to follow this policy.

1.21 Organisations reporting under the CAC Act are required to provide an annual report to the responsible minister by the fifteenth day of the fourth month after the end of the financial year. For the standard financial year, this is 15 October.

1.22 Appendix 1 lists the annual reports tabled (or presented) in the Senate and the House of Representatives between 1 May to 31 October 2012, and referred to the committee, with relevant tabling dates.

1.23 All annual reports of departments and agencies considered in this report met the tabling deadline of 31 October 2012. The committee particularly commends those agencies which presented their report before the supplementary budget estimates hearings on 15 and 16 October 2012. Agencies are reminded that the PM&C Requirements advise that:

If Senate Supplementary Budget Estimates hearings are scheduled to occur prior to 31 October, it is best practice for annual report to be tabled prior to those hearings.4

1.24 The committee further notes that the new Secretary of the Department of Parliamentary Services, Ms Carol Mills, made an explanation to the committee for the failure to table the report prior to the supplementary budget estimates hearing at the hearing on 15 October 2012:

…I would also like to make two comments about our reporting. I want to apologise that I have not been in a position to table our annual report in advance of this meeting. I know it has been practice and it was certainly something that I was cognisant of. I feel as part of the changes that I am trying to make to the organisation that the annual report as drafted did not

4 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 28 June 2012, p. 2.

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meet some of the expectations that I think are important for us in providing you with as much information and clarity as possible about the organisation's delivery of services. As a consequence, we were not able to make that deadline, but we will certainly make the tabling deadline of the end of October.5

Senate debate

1.25 In accordance with Standing Order 25(20)(d) the committee is required to take into account any relevant remarks about the reports made in debate in the Senate. The committee noted two speeches in the Senate which referred to 2011-12 annual reports referred to the committee.

1.26 Senator Faulkner noted statistics presented in the Commonwealth Ombudsman's Annual Report for 2011-12. In particular, it was noted that complaints had increased from 38,919 to 40,009, while the number of complaints that related to correctness, propriety or timeliness of agency decisions or actions was down from 72 per cent to 70 per cent. After recent declines, it was also highlighted that complaints about Centrelink had increased in 2011-12. Senator Faulkner commended the agency for the critical work it performs:

There is much work that the Commonwealth Ombudsman does. It is not just a complaints hotline. The Ombudsman serves as an important purpose of following up on individual citizen's cases as well as, conducting investigations, producing reports to assist agencies ensure transparency and making submissions to parliamentary inquiries. I think the work of the Commonwealth Ombudsman is critically important. I commend its work and I commend the annual report of the Commonwealth Ombudsman to the Senate.6

1.27 Senator Mason raised concerns with the clarity of information provided in the Australian Public Service Commissioner's annual reports in regard to public service absenteeism as a matter of public interest in the Senate:

I even had difficulty in assessing the performance of public sector agencies and the public sector as a whole because of the opacity of the information provided in the commission's annual report and, more importantly, the State of the service reports. I will be watching to ensure that there is sufficient clarity in future information provided in annual reports and the State of the service reports so that parliament and the public can hold agencies and the commission accountable for their performance.7

5 Committee Hansard, 15 October 2012, p. 35.

6 Senate Hansard, 31 October 2012, p. 8709.

7 Senate Hansard, 31 October 2012, p. 8616.

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Presentation of annual reports

1.28 Annual reports are a significant mechanism for informing the Parliament about the operation of departments and agencies and assisting with the examination of the performance of those entities. The PM&C Requirements emphasise annual reporting in the accountability of the public sector to the Parliament and state that annual reports should 'provide sufficient information and analysis for the Parliament to make a fully informed judgement on departmental performance'.

1.29 The committee notes that there has been some recent comments on annual reports with Dr Ian Watt AO, Secretary, Department of Prime Minister and Cabinet, stating that annual reports are 'an important way in which we, the APS, are accountable, through Ministers, to Parliament and to the public'. Dr Watt went on to state that he was committed to shorter annual reports and noted that the PM&C Annual Report 2011-12 has been considerably reduced in length, discounting the accountability reporting and financial statements, compared to the Annual Report for 2010-11.8

1.30 In an earlier speech, Dr Watt also indicated that there were some common 'gripes' across the Australian Public Service about annual reports, including that they were rather long, reflecting the prescriptions laid down for reports, and over which the Departmental Secretary or the CEO has no control. He added, 'in fact, to the extent that some material is inserted at the behest of the Senate, the Government itself has no control over what needs to be included in annual reports'. While some material has been culled from annual reports, Dr Watt commented that 'they never seem to get any shorter'. Dr Watt concluded his speech by stating:

So those of you who work on annual reports should remember that you have an important role in informing the Parliament and informing the public: not just in October each year, but as a historical record.9

1.31 At the October 2012 supplementary estimates the committee also discussed the length and number of government publications, including annual reports, with Mr David Tune PSM, Secretary, Department of Finance and Deregulation (Finance). Mr Tune commented that consultations had been undertaken with the Joint Committee of Public Accounts and Audit (JCPAA) 'to take out some issues that are reported to parliament that are also reported in this document [the annual report] and are also online around procurement, in particular, through AusTender'. Mr Tune went on to comment that if information on all contracts were removed, for example 'you are

8 Dr Ian Watt, Secretary, Department of Prime Minister and Cabinet, Reflections on my First Year as Secretary of the Department of the Prime Minister and Cabinet and Thoughts on the Future, Address to the IPAA, 5 October 2012.

9 Dr Ian Watt, Secretary, Department of Prime Minister and Cabinet, IPAA Annual Report Awards - Keynote Address, 5 June 2012.

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probably saving 60 or 70 pages per agency'. The aim would be 'less publications, shorter publications and more publications online.'10

1.32 The committee has noted these comments. In relation to the length of annual reports and what is required to be included, the guidelines are formulated by the Department of the Prime Minister and Cabinet and approved by the JCPAA. As noted by Mr Tune, regular consultations take place with the JCPAA and changes are made to the material required to be included in annual reports. For example, from 2011-12, listing of individual consultancy contracts over $10,000 are no longer required: agencies are now only required to provide a summary of consultancy contracts and to refer readers to AusTender. The list of consultancies covered 12 pages in Finance's 2010-11 Annual Report.

1.33 Other than the matters required under the guidelines, agencies are open to include any other matter they choose. The committee notes that there are a range of agencies which now include significant amounts of information in annual reports which are of only slight use to the Parliament or the public when assessing performance. Of note is the frequent inclusion of staff profiles, the use of case studies or vignettes and photographs.

1.34 While

photographs add interest to, or enhance design and layout they should only be used to aid in the presentation of significant information. However, the committee has found that some annual reports contain photographs which are less than relevant and add to the length of annual reports, for example, what could be classified as social snapshots. The committee points to the reports of Finance and ComSuper where photographs and 'interest pieces' are used in moderation or not at all. In addition, the committee notes that the PM&C Annual Report 2011-12 is more restrained in

its use of photographs than the 2010-11 Annual Report which included photographs of PM&C staff social events and staff participating in a classified waste bag race for the 'Caretaker Cup'.

1.35 The committee also notes the recent trend to include case studies, feature articles and staff profiles in annual reports. While the inclusion of these pieces adds interest, and often personalises the report, they can take up considerable space. For example, PM&C's report included 17 'feature' articles, many a full page in length and some of which do not go to performance matters. The committee acknowledges that annual reports serve a range of functions and the inclusion of case studies may be appropriate. For example, the case studies included in the Annual Report of the Commonwealth Ombudsman provide an effective mechanism to explain the work of the office and the reasons for the Ombudsman's decisions. However, the primary purpose of annual reports is accountability to the Parliament.

10 Mr David Tune Secretary, Department of Finance and Deregulation, Supplementary Estimates 2012-13, Committee Hansard, 16 October 2012, p. 82.

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1.36 The committee also notes the trend to highly designed annual reports. Although this may contribute to readability, there needs to be balance so that there is no risk of reports becoming overly lengthy because of overgenerous layout and design. There are a number of reports with formatting which results in minimal information being provided per page and very elaborate chapter introductions which take up considerable space, for example the annual report of the Commonwealth Ombudsman.

1.37 The committee notes that agency annual reports should comply with guidelines devised by the Joint Publications Committee Printing standards for documents presented to Parliament. The Printing Standards state that any document presented to the Parliament may be included in the Parliamentary Paper Series and adherence to the standards ensures that a tabled document conforms to the series' standards, with minimal additional cost to the agency. The Standards address production quality and value for money, colour and illustration, format, paper, covers and binding, tip-ins and inserts, and corrections. In particular, advice on the use of colour and illustrations encourages restraint. The Printing Standards also differentiate between classes of documents and the acceptable corresponding presentation quality for those classes.11

1.38 With most annual reports running close to 200 pages, and some well over 300 pages, the committee's preferred approach to the content of annual reports is for minimal use of extraneous information such as photographs and staff profiles. If agency reports are aimed at other audiences or serve another purpose, it may be appropriate to provide a separate publication or provide information on agency websites. This would ensure that excessive space is not used for these matters in annual reports and the focus of annual reports remains on accountability to senators, members of the House of Representatives and the public.

11 Senate Standing Committee on Publications, Printing standards for documents presented to Parliam ent, http://www.aph.gov.au/Parliamentary_Business/Chamber_documents/Tabled_Papers/Advice_t o_government_agencies

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Chapter 2

Selected reports of departments and agencies 2.1 The committee has selected the reports of the following departments and agencies for detailed examination on this occasion:

 Department of Finance and Deregulation;

 Department of the Prime Minister and Cabinet;

 Australian Electoral Commission; and

 Future Fund Management Agency.

Department of Finance and Deregulation

2.2 The Secretary's review provides a comprehensive summary of the major achievements and challenges of the Department of Finance and Deregulation (Finance) for 2011-12. Items of particular note were:

 the delivery of the 2012-13 budget in accordance with the government's fiscal

policy objective of a return to surplus in 2012-13 and the forward years;

 development of new savings proposals for consideration by government in collaboration with other departments and agencies and continued work on improving the efficiency of government operations;

 continued work on the Commonwealth Financial Accountability Review,

including the release of seven further issues papers to Commonwealth agencies and informed development of the discussion paper Is less more? Towards better Commonwealth performance; and

 outposting of officers from the Office of Best Practice Regulation to assist agencies in preparing regulation impact statements and post-implementation reviews.1

2.3 The Secretary noted the challenging environment that the department has operated in during 2011-12:

During the past 12 months the Department of Finance and Deregulation (Finance) has faced significant challenges against a backdrop of economically demanding cyclical and structural change, both here and overseas. Events in Europe and the international environment, marked by uncertainty and rapid change, have posed major challenges for government and public administration.2

2.4 Finance incorporated sustainability reporting in the 2011-12 annual report. The report explains that sustainability reporting will bring to the forefront economic, social and environmental impacts of the way the department conducts its internal

1 Department of Finance and Deregulation Annual Report 2011-12, pp 2-9.

2 Department of Finance and Deregulation Annual Report 2011-12, p. 2.

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operations to ensure that sustainability is an integral element of decision-making processes. Finance is one of a number of Australian government agencies which is piloting a sustainability reporting framework in annual reports for the 2011-12 reporting period.3

Financial reporting

2.5 The department reported an operating surplus of $42.2 million for the 2011-12 financial year. This result was $11.0 million more than the revised estimate published in the 2012-13 Portfolio Budget Statements and was attributed to a number of year-end valuation adjustments and higher revenue than expected.4 This compares to an operating deficit of $29.7 million 2010-11. The report's discussion of financial performance for the year was informative and provides satisfactory explanations for variations to estimates and comparisons to the previous year. The use of tables representing trend information over several years was a useful inclusion.5

2.6 Finance received an unqualified audit on the 2011-12 financial statements from the Australian National Audit Office.

Performance reporting

2.7 Performance reporting on Finance's three outcomes is clearly presented and provides a good assessment of how the department has progressed in achieving its outcomes. This section of the report provides a 'clear read' between the performance information set out in the Portfolio Budget Statements (PBS) and the results presented in the annual report. Finance uses an appropriate balance of both qualitative and quantitative measures, including targets, for key performance indicators (KPIs) which provides a suitable basis for making an assessment of the effectiveness of programs in achieving objectives.

2.8 The presentation of performance results is in tabular format, making the information readily accessible and aiding the reader. This is consistent with the formatting guidance provided in the PM&C Requirements.6

2.9 The committee notes that Finance achieved the majority of KPIs across the department's outcomes and the report generally included relevant commentary to provide further explanation where necessary to demonstrate how the result was arrived at. However, the committee notes that the eighteen KPIs which were achieved for Outcome 3 did not present any supporting commentary or evidence in the table to demonstrate how the assessment was made, it was simply described as 'achieved'.7 The committee points to Finance's 2009-10 annual report where the equivalent performance table for Outcome 3 provided supporting comments on the methodology

3 Department of Finance and Deregulation Annual Report 2011-12, p. 9.

4 Department of Finance and Deregulation Annual Report 2011-12, p. 8.

5 Department of Finance and Deregulation Annual Report 2011-12, pp 140-147.

6 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 28 June 2012, p. 6.

7 Department of Finance and Deregulation Annual Report 2011-12, pp 95-96.

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for assessment for most of the KPIs presented. The committee suggests that Finance consider following this approach in future reports.8

2.10 For KPIs which are not achieved, the inclusion of a brief explanation on the reasons for failure and the strategies to improve performance is a helpful inclusion. The report generally provided some explanatory comment for KPIs which were not achieved. One KPI under Outcome 1 which was not achieved was the subject of questions at the committee's recent additional estimates hearing where the committee sought further explanation not provided in the report.

2.11 This KPI concerned the provision of monthly general government sector financial reports within 21 days following the month end. The report indicated that Finance took on average 35 days to provide the statements to the minister but did not elaborate on the reasons why the target was not achieved.9 At estimates hearings, Finance gave a detailed explanation as to why the target was not achieved:

Mr Gibson:…we have a fixed process that we go through each month, according to a pre-set timetable, that aims to get them completed within the time frame. To go back to your earlier question, one of the factors that heavily increases that measure is the July and August monthly financial statements, where we prepare them a little later than average because we are also, at the same time, trying to complete the annual financial statement. We have special dispensation with IMF and the Bureau of Statistics to work to that sort of timetable. 10

Mr Helgeby:…In fact, it is almost a tale in two parts of the year. Through to December we have been well over, and largely July August are the worst in terms of time frames taken. But if I take last year, for example, January, February, March, April, May, they ran at 27 days, 23, 26, 32 and 33 days. So they are below the 35 figure. 11

2.12 When asked how the department could improve performance to meet this KPI, the Secretary informed the committee that he was not optimistic about achieving it in the future:

The KPI is set by an international standard of some kind, as I understand it.

For us at least it is almost an impossible thing. But we have to report against it, so we are up against it, I am sorry.12

8 Department of Finance and Deregulation Annual Report 2010-11, pp 90-96.

9 Department of Finance and Deregulation Annual Report 2011-12, p. 42.

10 Mr Peter Gibson, Assistant Secretary, Financial Reporting and Accounting Branch, Department of Finance and Deregulation, Proof Committee Hansard, p. 29.

11 Mr Stein Helgeby, Deputy Secretary, Governance and Resource Management Group, Department of Finance and Deregulation, Proof Committee Hansard, 12 February 2013, p. 39.

12 Mr David Tune PSM, Secretary, Department of Finance and Deregulation, Proof Committee Hansard, 12 February 2013, p. 39.

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2.13 The committee considers that a more detailed explanation in the annual report would have been beneficial.

Conclusion

2.14 The committee commends the department for the high standard of this year's annual report which closely complies with the PM&C Requirements and considers it to be 'apparently satisfactory'.

Department of the Prime Minister and Cabinet

2.15 The Secretary's review highlighted a range of activities of the Department of the Prime Minister and Cabinet (PM&C) for 2011-12 in responding to the challenges and competing priorities of the Government agenda, including:

 supporting the implementation of the Government's national security and

global engagement priorities;

 provision of advice and support on machinery of government and public

sector governance across the APS;

 provision of advice on the Government's legislation program, parliamentary

matters, ministerial arrangements and legal and constitutional matters; and

 collaboration with agencies across the APS on a range of issues of national significance, such as the 2012-13 Budget, Cyber White Paper, the Australia in the Asian Century White Paper, and the National Disability Insurance Scheme Taskforce.13

2.16 The Secretary also noted the results of the capability review of the department which came out of a recommendation of the Ahead of the Game: Blueprint for the Reform of Australian Government Administration. The Blueprint recommended that all departments undertake a capability review and PM&C was the first department to undergo a formal, independent review by a team from the Australian Public Service Commission.14 While the review praised PM&C for its 'many strengths' and made a number of positive comments, it also identified ways which PM&C could improve its practices through:

 senior leadership communicating their expectations of PM&C officers more

clearly and frequently;

 greater clarity of purpose and all PM&C officers becoming better at knowing what the Review called the 'PM&C Craft';

 taking a more strategic approach to recruitment and development of staff; and

 better organisation of corporate systems. 15

13 Department of the Prime Minister and Cabinet Annual Report 2011-12, p. 9.

14 Department of the Prime Minister and Cabinet Annual Report 2011-12, p. 10.

15 Department of the Prime Minister and Cabinet Annual Report 2011-12, p. 10.

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2.17 The Secretary reported that the department is focussing on implementing strategies to address these findings. The committee appreciates the Secretary's openness in highlighting not only the positive outcomes of the review, but also areas which were identified for improvement. The committee considers annual reports to be an important vehicle for presenting not only achievements and successes, but also for addressing issues where performance can be improved. The committee looks forward to further updates on progress in addressing the review's findings in future reports.

Portfolio and departmental restructure

2.18 The report outlined the significant changes to the Prime Minister and Cabinet Portfolio during 2011-12 as a result of machinery of government changes. A number of agencies and responsibilities were transferred out of the portfolio, including:

 Office of the Australian Information Commissioner;

 The privacy and freedom of information policy function;

 Australian Institute of Family Studies;

 National security science and innovation function; and

 Department of Regional Australia, Regional Development and Local

Government and related entity the National Capital Authority to a new portfolio, the Regional Australia, Local Government, Arts and Sports Portfolio, which would also have responsibility for cultural affairs, sport and recreation, the National Archives of Australia, and Old Parliament House.

2.19 The portfolio has gained two additional functions: cyber security policy and the National Mental Health Commission. The inclusion of a diagram to represent these portfolio changes assisted the reader by making the information readily accessible.16

2.20 PM&C also underwent a restructure during 2011-12 which included a new reporting structure within the department. As at 30 June 2012, the department has three groups: Domestic Policy Group, National Security and International Policy Group, and Governance Group. The Secretary in his review explained that 'the restructure enabled us to better align our policy functions with the Prime Minister's priorities while ensuring we maintained our focus on delivering our core responsibilities'.17

Financial performance

2.21 PM&C's funding increased by $32.3 million in 2011-12 to $207.9 million. This was attributed to the delivery of the Commonwealth Heads of Government Meeting (CHOGM) in 2011 and an increase in the recovery of pass through costs to other agencies.18

16 Department of the Prime Minister and Cabinet Annual Report 2011-12, pp 2-4.

17 Department of the Prime Minister and Cabinet Annual Report 2011-12, p. 9.

18 Department of the Prime Minister and Cabinet Annual Report 201112, p. 94.

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2.22 A deficit of $10.5 million was reported for the 2011-12 financial year. This compares to a $5.5 million surplus for the previous year. The report explained that the deficit included $8.2 million of non-appropriated depreciation and amortisation expense and a $2.6 million approved operating loss relating to timing of costs associated with the successful delivery of CHOGM in 2011.19

2.23 The discussion on financial performance also noted that equity decreased significantly in 2011-12, from $189.4 million in 2010-11 to $27.3 million. This was due primarily to the net assets that were relinquished under the machinery of government changes during the year and the deficit incurred.20

2.24 The department received an unqualified audit on the 2011-12 financial statements from the Australian National Audit Office.

Performance reporting

2.25 PM&C continues to predominantly use qualitative KPIs to measure performance. The measure of 'high level of satisfaction' is again used for a number of KPIs with the corresponding result indicating that the feedback received reported that the relevant individual or group was/were satisfied. The committee commented on this in its previous report, encouraging the department to move to more quantitative measures where appropriate.21 The performance reports distinguish between 'feedback' and 'informal feedback', but details on how feedback was sought by, or provided to, the department to assess performance against these qualitative KPIs did not appear to have been included. The committee would find the inclusion of a methodology for measuring the qualitative KPIs helpful.

2.26 Where a quantitative KPI measure with a target is used in the PBS, the target measure should be included in the annual when presenting the result. For example, the performance report on the KPI on the 'Number of individuals assisted toward volunteering: Volunteer management' reported a result of 'around 260,000 individuals were assisted towards volunteering in 2011-12'. The PBS indicates that a target of 190,000 was set for this particular item, but the target was not referred to in the performance report in the annual report.22 It is unfortunate that this impressive result, which far exceeded the target, was not presented against the target in the annual report.

2.27 The presentation of performance results is in shaded text boxes which break up the KPIs throughout the section according to the division they relate to, rather than the order presented in the PBS.

2.28 The committee notes the high level of achievement of the KPIs in contributing to the achievement of the departmental outcome and acknowledges the department's

19 Department of the Prime Minister and Cabinet Annual Report 2011-12, p. 95.

20 Department of the Prime Minister and Cabinet Annual Report 2011-12, p. 95.

21 Senate Finance and Public Administration Committee, Annual Reports (No. 1 of 2012), pp 16-17.

22 Department of the Prime Minister and Cabinet Annual Report 2011-12, p. 21.

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work in 2011-12, particularly during extensive portfolio and departmental restructures.

Conclusion

2.29 The 2011-12 annual report provides an informative account of the year under review and closely complies with the PM&C Requirements. Accordingly, the committee considers the annual report to be 'apparently satisfactory'

Australian Electoral Commission

2.30 The Electoral Commissioner's review provides an informative overview of the work of the Australian Electoral Commission (AEC) for 2011-12. The Commissioner noted that preparing for the next election had been a focus of the year. The Commissioner remarked that 'in 2011-12 the implications of a hung parliament meant we needed to be ready to deliver an election at any time'.23 Accordingly, the agency brought forward a range of election-critical activities.

2.31 During the year, the AEC focussed on increasing the level of enrolment. The AEC estim ates that the number of people not on the electoral roll is approximately 1.5

million, up from about 1.4 million from the previous year. 2012 was designated as the Year of Enrolment by the AEC and involved a wide-ranging program of initiatives to prompt people to enrol or update their enrolment. These included a comprehensive national mail-out and an online advertising campaign for people aged 18-24. Early indications are that these strategies are achieving some successes.24 The committee looks forward to further updates in the next report.

2.32 Other activities within the Commission during the year included:

 engaging with young Indigenous Australians through the National Indigenous

Youth Parliament in Canberra in May 2012;

 redevelopment of the Schools and Community Visits Program;

 implementation of legislative reform recommended by the Joint Standing Committee on Electoral Matters;

 an Election-Ready Assurance Review and a simulated election exercise as preparation for the forthcoming election; and

 an independent review of baseline funding for the Commission, which

resulted in a $10 million supplementation to the 2012-13 budget.25

2.33 The report provides easy access to key information. For example, the report helpfully included page references to the discussion within the body of report for each

23 Australian Electoral Commission Annual Report 2011-12, p. 2.

24 Australian Electoral Commission Annual Report 2011-12, p. 2.

25 Australian Electoral Commission Annual Report 2011-12, pp 3-4.

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of the 2011-12 highlights listed at the front pages.26 Also, key performance results were listed at the front of the report.27

2.34 It is also noted that this year's annual report included QR codes throughout. These codes can be scanned by smartphones to view videos which relate to particular sections of the report. This is a highly innovative approach to providing more detail on activities of the organisation without taking up space in the report.

Performance reporting

2.35 The report on performance was detailed and provided results against all KPIs listed in the PBS. The KPIs were a balance of quantitative and qualitative measures. Results were presented in tabular format which made them readily accessible and included performance results for the previous one or two years for comparative purposes. This year's report did not present the KPIs by program as set out in the PBS, but rather by activity under the broad headings of 'Engaging Australians' and 'Our partnerships'.

2.36 The majority of KPIs were achieved and for those which were not, the target was close to being met. The supporting discussion of performance was informative and addressed the reasons why some KPIs were not met. The report on performance also provided a range of useful statistics and graphs on aspects of enrolment, elections and educational activities.

Financial reporting

2.37 The AEC recorded an operating deficit of $9.2 million for 2011-12, and compares to an operating deficit of $16.6 million for the previous year. This was attributed to:

 the increase in long service leave provisions as a result of the decrease in the treasury bond rate;

 the focus on roll stimulation, including the conduct of the Count Me In campaign; and

 the maintenance of our election-ready status, which includes the commencement of a simulated election.28

Conclusion

2.38 The AEC's 2011-12 annual report includes all mandatory requirements for annual reporting and the committee considers the report to be 'apparently satisfactory'.

Future Fund

2.39 The Chairman’s letter of transmittal indicates that the annual report of the Future Fund Board of Guardians and the Future Fund Management Agency is

26 Australian Electoral Commission Annual Report 2011-12, p. 5.

27 Australian Electoral Commission Annual Report 2011-12, pp 5-6.

28 Australian Electoral Commission Annual Report 2011-12, p. 108.

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prepared in accordance with section 81 of the Future Fund Act 2006, and the PM&C Requirements.29

2.40 The Board of Guardians, supported by the agency, has responsibility for investing the assets of the Future Fund and the three National-building Funds. The Future Fund does not receive any annual appropriations and its outputs are funded through the Future Fund Act as payments from the Future Fund Special Account.30 The report notes that:

All costs for investment activity and the operations of the Board and Agency are met from the assets of the Funds rather than from [appropriations] through Parliament. The Board monitors the annual operating budget of the Agency to ensure the appropriate use of resources consistent with the organisation’s objective.31

2.41 The agency has one outcome: Make provision for the Commonwealth's unfunded superannuation liabilities and payments for the creation and development of infrastructure, by managing the operational activities of the Future Fund and the Nation-Building Funds, in line with the Government's investment mandates. This outcome is supported by two outputs: Program 1.1 Management of the investment of the Future Fund and Program 1.2 Management of the investment of the Building Australia Fund, Education Investment Fund and Health and Hospitals Fund.

2.42 The KPIs for the agency's programs specify the provision of assistance and advice to the Board in pursuit of achieving the Investment Mandate target returns. For program 1.2 the Investment Mandate target return is at least 4.5 to 5.5 per cent above the Consumer Price Index over the long term (interpreted as rolling 10 year periods) with acceptable but not excessive risk. For program 1.2 the Investment Mandate target return for each fund of the Australian three month bank bill swap rate plus 0.3 per cent per annum, calculated on a rolling 12 month basis while minimising the probability of capital loss over a 12 month horizon.32

2.43 The report provided reasonable detail of performance against each program's KPIs. The Future Fund performance report advised that the return on the Future Fund portfolio over the 2011-12 year was 2.1 per cent, and since May 2006 the return has averaged 4.7 per cent per annum net of costs. It was further noted that over the same period the CPI has averaged 2.7 per cent. Over the period 1 July 2007 to 30 June 2012, the return (after all operating costs) averaged 4.4 per cent per annum.33 The report noted that:

These returns remain below the benchmark return established in the Investment Mandate. However, in the context of the turbulence that has

29 Future Fund Annual Report 2011-12, p. 1.

30 Future Fund Annual Report 2011-12, p. 133.

31 Future Fund Annual Report 2011-12, p. 133.

32 Portfolio Budget Statements 2011-12, Finance and Deregulation Portfolio, pp 154-157.

33 Future Fund Annual Report 2011-12, p. 33.

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characterised markets since the establishment of the Fund, performance has been respectable and the portfolio remains prudently positioned in line with its long-term mandate.34

2.44 In addressing the level of returns on the Future Fund, the Chairman noted in his report that:

This highlights the extremely challenging investment environment that has characterised the Fund’s early years.

It is also important to recognise that the investment Mandate Directions require that the Board should take acceptable but not excessive levels of risk. Accordingly the portfolio has been positioned in such a way as to be capable of generating strong returns in positive markets while moderating the impact on market fails.

The portfolio has performed well given the extent of the uncertainty and market volatility that has prevailed over the last five years and the Board remains focused on its task of achieving the target returns over rolling 10 year periods.35

2.45 The performance result for Program 1.2 was reported as exceeding the benchmarked return of 5 per cent for each fund the 2011-12 financial year. The Building Australia Fund and Education Investment Fund both generated a return of 5.3 per cent, and the Health and Hospitals Fund generated a return of 5.2 per cent.36

2.46 A matter noted by the committee was the large increase in performance pay from the previous financial year, from $5,400,528 in 2010-11 (paid to 80 employees) to $7,273,706 (paid to 86 employees) in 2011-12. The maximum amount of performance pay in 2011-12 was $536,760.37 The Managing Director provided more detail to the committee in response to questions at estimates concerning this increase in performance pay from the previous year and expectation about the rate of future increases:

…We would not expect it to increase at that rate. There are two dynamics going on there. One is that the fund has been growing. Its team in size now has plateaued but the number of members of the team has gone up about 10 per cent in the last 12 months. So you will naturally get an increase in total compensation and part of that will be performance based.

But very early on, the fund thought very carefully about the way remuneration should work for any of our staff members, and that includes the variable remuneration that staff receive, the amount that you are alluding to. That variable performance is measured on three broad factors. First of all, the way the individual has performed personally over the 12-

34 Future Fund Annual Report 2011-12, p. 33.

35 Future Fund Annual Report 2011-12, p. 6.

36 Future Fund Annual Report 2011-12, p. 36.

37 Future Fund Annual Report 2011-12, p. 51.

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month period. That is a relatively small part of the total performance for our senior investment people, for example.

The second part, though, relates to the performance of the fund—in other words they do not get compensated if the fund is not performing. The way we measure that is over a three-year period. This is because we want our staff to take a medium- to long-term view of investing and, therefore, measuring them over one-year periods would be inappropriate. We looked at it some time ago; our remuneration committee is assessing it again to ensure that it is best practice. But it is very clear that a three-year horizon at least broadens out our approach to investment taking and the focus of the individual staff in terms of their remuneration.

If you make the remuneration too short—say, for a one-year performance number—you could get behaviours or outcomes that are, say, risk taking. So you want to align your remuneration directly with the style of investing that we have, which is long-term in nature. Secondly, you only want to remunerate if the fund is doing well, and that is how that is structured.38

2.47 The agency's financial statements received an unqualified audit report from the Australian National Audit Office.

2.48 The report presents a fair account of performance and operations for the year, which complies with the relevant reporting requirements. The committee considers the report to be ‘apparently satisfactory’.

Senator Helen Polley Chair

38 Future Fund Annual Report 2011-12, p. 49.

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Appendix 1

Dates relating to the presentation of reports between 1 May to 31 October 2012 Reporting Body Submitted to

Minister

Received by Minister Tabled in the Senate or

presented out of sitting (*)

Tabled in the House of Representatives

PARLIAMENT

Department of the Senate - Report for 2011-12 - - 11/10/12 -

Parliamentary Service Commissioner - Report for 2011-12 - - 29/10/12 29/10/12

Department of Parliamentary Services - Report for 2011-12 - - 30/10/12 30/10/12

PRIME MINISTER AND CABINET PORTFOLIO

Australian National Audit Office - Report for 2011-12 - - 20/9/12 20/9/12

Inspector-General of Intelligence and Security - Report for 2011-12 10/9/12 10/9/12 10/10/12 10/10/12

Office of the Official Secretary to the Governor-General - Report for 2011-12 3/10/12 3/10/12 25/10/12* 29/10/12

Department of the Prime Minister and Cabinet - Report for 2011-12 4/10/12 9/10/12 30/10/12 11/10/12

Department of the Prime Minister and Cabinet - Australia in the Asian Century - White Paper, dated October 2012

25/10/12 25/10/12 30/10/12 29/10/12

National Australia Day Council - Report for 2011-12 5/10/12 5/10/12 30/10/12 30/10/12

National Mental Health Commission - Report for the period 1 January to 30 June 2012

5/10/12 5/10/12 30/10/12 11/10/12

Australian Public Service Commission - Report of the Australian Public Service Commissioner for 2011-12

27/9/12 9/10/12 31/10/12 31/10/12

Commonwealth Ombudsman - Report for 2011-12 29/10/12 29/10/12 31/10/12 31/10/12

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FINANCE AND DEREGULATION PORTFOLIO

Medibank Private Limited - Statement of Corporate Intent 2011-2014 19/12/11 20/12/11 9/5/12 9/5/12

Australian River Co. Limited - Report for the period 1 December 2010 to 30 November 2011

6/3/12 8/3/12 19/6/12 10/5/12

Department of Finance and Deregulation - Campaign advertising by Australian government departments and agencies - Report for 2011-12

12/9/12 12/9/12 28/9/12* 9/10/12

Final Budget Outcome 2011-12 - Report by the Treasurer and the Minister for Finance and Deregulation

23/9/12 23/9/12 28/9/12* 9/10/12

Medibank Private Limited - Report for 2011-12 10/9/12 10/9/12 27/9/12* 9/10/12

Medibank Private Limited - Statement of Corporate Intent 2012-2013 10/9/12 10/9/12 27/9/12* 9/10/12

NBN Co. Limited - Statement of corporate intent 2012-2015 26/9/12 26/9/12 9/10/12 9/10/12

ComSuper - Report for 2011-12 25/9/12 25/9/12 23/10/12* 29/10/12

Department of Finance and Deregulation - Report 2011-12 12/9/12 12/9/12 12/10/12* 29/10/12

Australian Electoral Commission - Report for 2011-12 24/9/12 24/9/12 12/10/12* 29/10/12

NBN Co. Limited - Report for 2011-12 26/9/12 26/9/12 19/10/12* 29/10/12

Mid-year economic and fiscal outlook - 2012-13 Statement by the Treasurer and the Minister for Finance and Deregulation

22/10/12 22/10/12 30/10/12 29/10/12

Albury-Wodonga Development Corporation - Report 2011-12

26/9/12 11/10/12 31/10/12 31/10/12

ASC Pty Ltd - Report for 2011-12 8/10/12 9/10/12 31/10/12 31/10/12

Commonwealth Superannuation Corporation (CSC) - Reports for 2011-12 including financial statements for the CSS, PSS and PSSap

24/9/12 24/9/12 31/10/12 31/10/12

Future Fund Board of Guardians and Future Fund Management Agency - Report for 2011-12

23/10/12 23/10/12 31/10/12 31/10/12

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The Senate

Foreign Affairs, Defence and Trade

Legislation Committee

Annual reports (No. 1 of 2013)

March 2013

195

© Commonwealth of Australia ISBN 978-1-74229-763-7

Printed by the Senate Printing Unit, Parliament House, Canberra.

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Membership of the Committee Core Members

Senator the Hon Ursula Stephens, ALP, NSW (Chair) Senator Alan Eggleston, LP, WA (Deputy Chair) Senator Mark Bishop, ALP, WA Senator David Fawcett, LP, SA Senator Scott Ludlam, AG, WA Senator Anne McEwen, ALP, SA

Secretariat

Dr Kathleen Dermody, Secretary Mr Owen Griffith, Principal Research Officer Miss Jedidiah Reardon, Senior Research Officer Ms Penny Bear, Research Officer Ms Jo-Anne Holmes, Administrative Officer

Senate Foreign Affairs, Defence and Trade Committee Department of the Senate PO Box 6100 Parliament House Canberra ACT 2600 Australia

Phone: + 61 2 6277 3535 Fax: + 61 2 6277 5818 Email: fadt.sen@aph.gov.au Internet: http://www.aph.gov.au/senate_fadt

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iv

Table of Contents

Membership of the Committee ........................................................................... iii

Preface

Terms of reference .................................................................................................. 1

Role of annual reports ............................................................................................ 2

Assessment of annual reports ................................................................................. 2

Annual reports considered ...................................................................................... 3

General comments on the annual reports ............................................................... 4

Chapter 1

Annual reports of departments

Department of Defence ........................................................................................... 7

Department of Foreign Affairs and Trade ............................................................ 12

Department of Veterans' Affairs ........................................................................... 15

Chapter 2

Annual reports of non-statutory authorities and government companies

Defence portfolio ................................................................................................. 19

Defence Materiel Organisation............................................................................. 19

Australian War Memorial ..................................................................................... 21

ASC Pty Ltd ......................................................................................................... 22

CSC Annual report to Parliament 2011-12—MilitarySuper, and DFRB Scheme, DFRDB Scheme and DFSPB ..................................................... 25

Foreign Affairs and Trade portfolio ................................................................. 26

Australian Agency for International Development .............................................. 26

Australian Centre for International Agricultural Research .................................. 28

Appendix 1

Compliance table of the annual reports referred to the committee for scrutiny for the period 2011-2012 ...................................................................... 31

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Preface

Terms of reference

1. The committee is responsible for examining annual reports of departments and agencies within two portfolios: Defence (including the Department of Veterans' Affairs), and Foreign Affairs and Trade.

2. Under Standing Order 25(20), the committee is required to report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on reports tabled by 30 April each year by the tenth sitting day after 30 June of that year.

3. This Report on Annual Reports also examines annual reports that were tabled after 31 October 2012. The standing order states:

Annual reports of departments and agencies shall stand referred to the committees in accordance with an allocation of departments and agencies in a resolution of the Senate. Each committee shall:

a) Examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory;

b) Consider in more detail, and report to the Senate on, each annual report which is not apparently satisfactory, and on the other annual reports which it selects for more detailed consideration;

c) Investigate and report to the Senate on any lateness in the presentation of annual reports;

d) In considering an annual report, take into account any relevant remarks about the report made in debate in the Senate;

e) If the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates;

f) Report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on annual reports tabled by 30 April each year by the tenth sitting day after 30 June of that year;

g) Draw to the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports; and

h) Report to the Senate each year whether there are any bodies which do not present annual reports to the Senate and which should present such reports.

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Role of annual reports

4. Annual reports place a great deal of information about government departments and agencies on the public record. Accordingly, the tabling of annual reports continues to be an important element of accountability to Parliament and more broadly to the Australian people. The information provided in annual reports assists Parliament in the effective examination of the performance of departments and agencies and the administration of government programs. Indeed, as noted in the Requirements for annual reports:

Annual reports serve to inform the Parliament (through the responsible Minister), other stakeholders, educational and research institutions, the media and the general public about the performance of departments in relation to services provided. Annual reports are a key reference document and a document for internal management. They form part of the historical record.

Annual reports and Portfolio Budget Statements (PB Statements) are the principal formal accountability mechanisms between government and departments and from departments through (or on behalf of) government to the Parliament.1

Assessment of annual reports

5. The committee examines annual reports to determine whether they are timely and 'apparently satisfactory' and whether they comply with the relevant requirements for the preparation of annual reports of departments and authorities.2 The requirements are set down in the following instruments:

• for portfolio departments: Public Service Act 1999, subsections 63(2) and 70(2), and the Requirements for annual reports for departments, executive agencies and FMA Act bodies, Department of Prime Minister and Cabinet, 28 June 2012;

• for Commonwealth authorities and companies: the Commonwealth Authorities and Companies Act 1997(CAC Act); in particular, the Commonwealth Authorities and Companies (Report of Operations) Orders 2002; and

• for non-statutory bodies: the guidelines are contained in the government

response to the report of the Senate Standing Committee on Finance and Government Operations on Non-statutory Bodies, Senate Hansard, 8 December 1987, vol s124, pp. 2643-45 (requirements were modified in 1987).

1 Requirements for annual reports for departments, executive agencies and FMA Act bodies, Department of the Prime Minister and Cabinet, 28 June 2012, p. 3. www.dpmc.gov.au/guidelines/index.cfm

2 Refer to Appendix 1 for a table of the reports referred to the committee for scrutiny.

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Annual reports considered

6. The annual reports of the following organisations have been examined by the committee:

Defence portfolio

Department of Defence

AAF Company

ASC Pty Ltd

Army and Air Force Canteen Services

Australian Strategic Policy Institute

Commonwealth Superannuation Corporation—Defence Forces Retirement Benefits Scheme (DFRB Scheme), the Defence Force Retirement and Death Benefits Scheme (DFRDB Scheme) and the Defence Force (Superannuation) (Productivity Benefits) Scheme (DFSPB).

Commonwealth Superannuation Corporation—Military Superannuation and Benefits Scheme (MilitarySuper)

Defence Housing Australia

Defence Materiel Organisation

Royal Australian Air Force Veterans' Residences Trust Fund

Royal Australian Air Force Welfare Recreational Company

Royal Australian Navy Central Canteens Board

Services Trust Funds

Foreign Affairs portfolio

Department of Foreign Affairs and Trade

Australian Agency for International Development

Australian Centre for International Agricultural Research

Australian Safeguards and Non-Proliferation Office

Trade portfolio

Australian Trade Commission

Export Finance and Insurance Corporation

Veterans' Affairs

Department of Veterans' Affairs, Repatriation Commission and Military Rehabilitation and Compensation Commission

Australian War Memorial

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Repatriation Medical Authority

Veterans' Review Board

General comments on the annual reports

Timeliness in tabling reports

7. Under Senate Standing Order 25(20)(c), the committee must report to the Senate any lateness in the presentation of annual reports.

8. In accordance with the Requirements for Annual Reports published in June 2012, agencies are required to present:

A copy of the annual report...to each House of Parliament on or before 31 October in the year in which the report is given. If Senate

Supplementary Budget Estimates hearings are scheduled to occur prior to 31 October, it is best practice for annual reports to be tabled prior to those hearings (in 2012, Supplementary Budget Estimates hearings commence on 15 October).3

9. A number of annual reports were tabled late. On 3 October 2012, the Chair of the Royal Australian Navy Central Canteens Board wrote to the Minister for Defence Science and Personnel, the Hon Warren Snowdon MP, indicating that the company

was awaiting the release of the Australian National Audit Office's (ANAO) audit report. As a result, the company did not expect to meet the reporting requirements under section 36 of the Commonwealth Authorities and Companies Act 1997. The Chair requested an extension until 30 November 2012 for the tabling of the Annual Report for 2011-12.4 The report was tabled in the Senate on 20 November 2012, and on 26 November 2012 in the House of Representatives.

10. On 4 October 2012, the Chair of AAF Company wrote to the Minister for Defence Science and Personnel seeking an extension until 23 November 2012. The Chair explained that due to the late completion of the ANAO's annual audit, the company may not be able to comply with its reporting obligations.5 The report was tabled in the House of Representatives on 26 November 2012, and on 27 November 2012 in the Senate.

11. The Chair of the RAAF Welfare Recreational Company, likewise wrote to the Hon Warren Snowdon MP, indicating that the company was awaiting the release of

3 Requirements for annual reports for departments, executive agencies and FMA Act bodies, Department of Prime Minister and Cabinet, 28 June 2012 , Part 1, section 4.

4 CW Thomas AM CSC to the Hon Warren Snowdon MP, 3 October 2012.

5 Brigadier GJ Reynolds AM to the Hon Warren Snowdon MP, 4 October 2012.

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ANAO's audit report.6 The report was tabled in the Senate on 20 November 2012, and on 26 November 2012 in the House of Representatives.

12. A table detailing the dates relating to the timeliness of presentation is at Appendix 1. It should be noted that, apart from those referred to above, the following annual reports were presented after 31 October 2012: the Commonwealth Superannuation Corporation—MilitarySuper and the Commonwealth Superannuation Corporation—DFRB Scheme, DFRDB Scheme and the DFSPB reports were both presented out of sitting on 8 November 2012 and tabled in parliament on 19 November 2012; the Royal Australian Air Force Veterans' Residences Trust Fund report was tabled in the Senate on 20 November 2012, and on 26 November 2012 in the House of Representatives; and Services Trust Funds report was tabled on 1 November 2012 in the House of Representatives and 20 November 2012 in the Senate.

Comments made in the Senate

13. As required under the terms of Senate Standing Order 25(20)(d), the committee notes that the annual reports of the following agencies were the subject of comment in the Senate:

• Australian War Memorial 7

• Export Finance and Insurance Corporation 8

• AusAID

9

Matters of significance

14. In accordance with Senate Standing Order 25, the committee is to note any significant matters relating to the operations and performance of the bodies presenting their annual reports. The committee found no matters of significance relating to the operations and performance of the bodies presenting their reports.

Bodies not presenting annual reports to the Senate

15. The committee is required to report to the Senate each year on whether there are any bodies that do not present annual reports to the Senate and which should present such reports. The committee is satisfied that there are no bodies, within these portfolios that do not meet their reporting requirements to the Senate.

6 Air Commodore R.P.W. Rodgers CSM AOL to the Hon Warren Snowdon MP, 9 October 2012.

7 Senator Ronaldson, Senate Hansard, 1 November 2012, p. 8861; Senator Ronaldson, Senate Hansard, 28 February 2013, p. 82.

8 Senator Rhiannon, Senate Hansard, 30 October 2012, p. 8476.

9 Senator Faulkner, Senate Hansard, 1 November 2012, p. 8862.

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Standard of reports

16. The committee found all reports to be generally of a high standard. They effectively described the function, activities and financial positions of the various departments and agencies. The committee therefore finds all of the annual reports to be 'apparently satisfactory'.

Note on references

17. References to the committee Hansard are to the proof Hansard. Page numbers may vary between the proof and the official Hansard transcript.

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Chapter 1

Annual reports of departments Department of Defence 1.1 The Department of Defence annual report 2011-12 was tabled in the House of Representatives and in the Senate on 30 October 2012.

Matters relating to the operations and performance of the department

Defence's financial statements

1.2 The committee is required to note any significant matters relating to the operations and performance of the bodies presenting their annual reports. The committee draws attention to the department's financial statements.

1.3 It is mandatory under section 57 of the Financial Management and Accountability Act 1997 for the annual report to include a copy of the audited financial statements and the Auditor-General's report thereon.

Australian National Audit Office audit

1.4 The Australian National Audit Office (ANAO) report for the Department of Defence stated:

During the final phase of the 2011-12 audit, Defence resolved seven moderate audit issues identified in prior years that had been outstanding for a number of years. The resolved issues relate to the reporting and management of General Service Inventory (GSI) and Repairable Items (RIs), and the verification and reporting of particular categories of SME [Specialist Military Equipment] assets known as Non‐MILIS [Military Integrated Logistics Information System] Non‐Platform and DMO service delivery.

Four moderate audit issues and a legislative compliance matter were identified during the 2011-12 final audit phase. The moderate audit issues relate to asset reporting and revaluation processes, accounting for special public monies and privileged user access to the financial management information system (ROMAN). The legislative compliance issue relates to potential breaches of section 83 of the Constitution…

At the conclusion of the 2011-12 audit, ten moderate issues and a legislative compliance matter remained outstanding. In addition to the four new moderate audit issues referred to above, six moderate audit issues relating to Defence’s inventory and asset management and the supporting IT systems remained outstanding. 1

1.5 The areas where moderate issues remain outstanding in the 2011-12 audit were:

1 Australian National Audit Office, ANAO Audit Report No.16 2012-13: Audits of the financial statements of Australian Government Entities for the period ended 30 June 2012, p. 136.

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• Inventory and assets management;

• Military information logistics information system (MILIS); and

• Business continuity management. 2

1.6 Four new moderate audit issues were identified in the following areas during the 2011-12 audit:

• Internal control and financial reporting;

• General assets management; and

• Financial management information system (ROMAN) [Resource and Output

Management and Accounting Network].3

Financial reporting framework

1.7 The committee's reviews of the 2009-10 and the 2010-11 annual reports referred to the outstanding matter of management and oversight of service bureau arrangements between Defence and the Defence Materiel Organisation (DMO).

1.8 The ANAO noted in its Audit Report No.16 2012-13 that Defence had satisfactorily addressed these issues:

The business and operational arrangements between Defence and DMO includes requirements for DMO to manage and process financial transactions and business processes on behalf of Defence. This issue related to weaknesses in Defence’s monitoring and oversight of these financial transactions and business processes. During the 2011-12 final audit phase, the ANAO confirmed Defence had satisfactorily addressed these issues.4

Strategic Reform Program

1.9 The committee has previously noted the significance of the roll-out of the Strategic Reform Program (SRP). Now in its third year, Defence reported that the SRP 'continues to make substantial progress'.5 The Secretary and Chief of the Defence Force (CDF) stated in their overview that:

Defence met the first two years of cost reductions targets without any adverse impact on capability or safety. The Secretary and the Chief Financial Officer conducted a comprehensive stocktake of the Defence budgeting system, taking into account all budget processes, estimation methods and underlying budget assumptions. This included the way in which Defence’s capital equipment budgets are formulated and managed, including the ongoing utility of contingency, slippage and most importantly

2 Australian National Audit Office, ANAO Audit Report No.16 2012-13: Audit of the financial statements of Australian Government Entities for the period ended 30 June 2012, pp. 138-139.

3 Australian National Audit Office, ANAO Audit Report No.16 2012-13: Audit of the financial statements of Australian Government Entities for the period ended 30 June 2012, pp. 139-141. 4 Australian National Audit Office, ANAO Audit Report No.16 2012-13: Audit of the financial statements of Australian Government Entities for the period ended 30 June 2012, p. 137. 5 Defence Annual Report 2011-2012, Department of Defence, p. 3.

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over-programming. During the course of the 2011-12 financial year, Defence also implemented a number of critical project management and accountability reforms to enhance the delivery of Defence capability projects, strengthen Australian Defence industry and improve accountability. Defence continues to bring into service the projects identified in the Defence Capability Plan and the Defence White Paper 2009.6

Operations

1.10 The Secretary and CDF's overview noted that Defence had conducted 16 operations in 2011-12 ranging from combat deployments overseas to border protection and disaster relief within Australia and the surrounding region.7

1.11 The Defence annual report outlined Defence's recent activities under Operation SLIPPER, the Australian Defence Force's (ADF) contribution to the North Atlantic Treaty Organisation-led International Security Assistance Force (ISAF) in Afghanistan. Operation SLIPPER represented the most significant operation for the ADF with around 1550 personnel based within Afghanistan and another 830 deployed across the broader Middle East Area of Operations. In 2011-12, the ADF continued mentoring the Afghan National Army's 4th Brigade to enable it to take on responsibility for security in Uruzgan Province. According to the annual report, the key components of the ADF's contribution included the troops in the Mentoring Task Force (recently replace by the 3 RAR Task Group) and Special Operations Task Group; Air Force C-130, P-3 and C-17 Globemaster III aircraft; and logistics, communication and movements personnel within the Middle East. In addition, the Royal Australian Navy Major Fleet Unit contributes to counter-terrorism, maritime security and anti-piracy in the region.8

1.12 The Secretary and CDF's overview noted that July 2011 marked the formal start of the process of transition of security responsibility from ISAF to the Afghan National Security Forces (ANSF).9 The Secretary and CDF stated that the process of transition was 'now well-advanced and on track for completion by the end of 2014'.10

1.13 The report acknowledged the deaths of five Australian soldiers on operations in Afghanistan in 2011-12.11

1.14 Other overseas operations in 2011-12, included deployments of ADF soldiers to Sudan, Iraq, South China Sea/Indian Ocean, East Timor, Solomon Islands, Middle

6 Defence Annual Report 2011-2012, Department of Defence, pp. 3-4; further details are provided in Appendix 1 of the Annual Report, pp. 238-241.

7 Defence Annual Report 2011-2012, Department of Defence, p. 3.

8 Defence Annual Report 2011-2012, Department of Defence, p. 120.

9 Defence Annual Report 2011-2012, Department of Defence, p. 3.

10 Defence Annual Report 2011-2012, Department of Defence, p. 5.

11 Defence Annual Report 2011-2012, Department of Defence, p. 6.

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East, and South West Pacific.12 The Secretary and CDF's overview noted that planning is underway to cease operations in East Timor, following the success of the July 2012 elections in East Timor; and in the Solomon Islands as the Royal Solomon Islands Police Force are able to manage their own security.13

1.15 Domestic operations included disaster relief efforts in Queensland, New South Wales and Victoria; and border protection.14

Defence White Paper

1.16 The Secretary and CDF's overview noted significant announcements during 2011-12 including bringing the next White Paper forward to 2013, and publication of a new Defence Capability Plan. Issues raised in the ADF Posture Review, released this financial year, will be taken up in the White Paper process. The ADF Posture Review examined:

…possible basing options in the north and northwest of Australia, the possibility of arrangements that enhance access to commercial ports and the potential for greater wharf capacity and support facilities at HMAS Stirling to support major surface combatant capability and operations.15

Inquiry into allegations of inappropriate vetting practices in the Defence Security Authority and related matters

1.17 On Wednesday, 8 February 2012, the Minister for Defence, the Hon Stephen Smith MP, presented to parliament the report of the Inspector-General of Intelligence and Security on Inquiry into allegations of inappropriate vetting practices in the Defence Security Authority and related matters. In his speech to parliament, the Minister stated:

The government will ensure that the Department of Defence fully addresses the issues identified by the Inspector-General of Intelligence and Security and that all recommendations are implemented in a comprehensive manner. Assurance of Defence's security-vetting efforts will be provided by annual audits of compliance with security-vetting policy conducted by the Defence chief audit executive for at least the next three years. The first audit will be completed by 30 June this year and its results will be published in the Defence annual report. This will provide ongoing public reporting and assurance of Defence's security-vetting practices.16

1.18 While the committee welcomes the inclusion of the results of the annual audit of compliance with security-vetting policy in the Defence annual report, the

12 Defence Annual Report 2011-2012, Department of Defence, p. 5.

13 Defence Annual Report 2011-2012, Department of Defence, p. 3.

14 Defence Annual Report 2011-2012, Department of Defence, p. 5.

15 Defence Annual Report 2011-2012, Department of Defence, p. 4.

16 The Hon Stephen Smith, Minister for Defence, House of Representatives Hansard, 8 February 2012, p. 323.

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committee notes the audit results do not appear to have been included in this year's report.

Rizzo Review recommendations

1.19 Defence's progress on implementing the recommendations of the Rizzo Review was discussed at the Additional estimates 2012-13 hearing on 13 February 2013. During the discussion on the availability of information to parliament, the CDF stated:

I think the Defence annual report is one vehicle in which a report on progress of the Rizzo Review could be quite easily be included… I think the Defence annual report would be a good place to place it.17

1.20 The committee endorses the inclusion of a report on the progress of implementation of the Rizzo Review recommendations in the Defence annual report.

Summary

1.21 The committee finds the annual report of the Department of Defence to be 'apparently satisfactory' in complying with the relevant requirements for the preparation of annual reports. The committee notes, however, that the annual report does not provide detailed assessments of Defence capabilities. The committee notes that the Joint Standing Committee on Foreign Affairs, Defence and Trade is conducting a Review of the Defence Annual Report 2011-2012, which includes 'Ongoing and Future Capability Requirements' in its terms of reference.

17 General David Hurley AC, DSC, Chief of Defence Force, Committee Hansard, 13 February 2013, p. 42.

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Department of Foreign Affairs and Trade 1.22 The Department of Foreign Affairs and Trade (DFAT) annual report 2011-2012 was tabled in the Senate on 29 October 2012.18

Review by Departmental Secretary

1.23 The Secretary of the Department, Mr Dennis Richardson AO, used his Secretary's Review to provide 'a better sense of the department itself and of the people who pursue the national interest in this part of the government', as well as highlighting the challenges ahead. 19

The Department

1.24 The Secretary wished to highlight that DFAT is both a policy and a functional department. The Secretary noted that 40 per cent of the department's total staff provide functional services such as: passport and consular services; overseas property management; providing and maintaining the government’s global classified communications system; and providing common services for departments and agencies represented at Australian Missions abroad.20

Overseas representation

1.25 The Secretary noted the significant changes in the balance of policy and non-policy officers abroad since 1996:

In 1996 there were 680 A-based officers posted abroad, of whom 370 (54 per cent) were policy officers. Despite the fact that, as of 30 June 2012, the number of officers posted abroad had reduced to 594, the number of policy officers on posting had actually increased by 27 to 397 (67 per cent). So the department has already undergone the sort of rebalancing which the Foreign Office in the UK has undertaken with its downsizing over the past couple of years and which the New Zealand Foreign Service is currently undergoing.21

1.26 The Secretary also noted that changes in the location of the department's staff abroad reflect global and regional changes:

Relative to Australia’s size and our global interests and regional priorities, the department’s resources are thinly spread, although the spread does reflect those interests and priorities. For instance, about 52 per cent of the department’s staff abroad are in Asia/Pacific, 16 per cent are in Europe, 11 per cent are in the Americas, 15 per cent are in the Middle East and Africa and six per cent are engaged in multilateral work e.g. UN, WTO, IAEA etc.22

18 Tabled in the chamber having been presented out of session on 26 October 2012.

19 Department of Foreign Affairs and Trade, Annual Report 2011-2012, p. 3.

20 Department of Foreign Affairs and Trade, Annual Report 2011-2012, pp. 3-4.

21 Department of Foreign Affairs and Trade, Annual Report 2011-2012, p. 5.

22 Department of Foreign Affairs and Trade, Annual Report 2011-2012, p. 5.

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The Policy Context

1.27 The department's work is shaped by changing economic and strategic priorities in the global context. The Secretary stated:

The department’s work is being progressed within a global and regional environment being reshaped by changing economic and strategic relativities. And nowhere is this more important than in respect of the key Trans-Pacific relationships involving the United States, China, Japan and India. It is the interplay between these relationships, especially between the US and China, which will fundamentally shape the politico strategic environment in which we, as a country, live. Indeed, at the time graduates now joining the department retire, the dynamic will still be being played out. It is the dynamic which will dominate our world for longer than the Cold War dominated the second half of the 20th Century.

We are also seeing big changes in the institutions the world uses to organise itself. Organisations like the UN and the IMF are under structural pressure. And the WTO is struggling with trade liberalisation. Newer forums like the G20 and proto-groups like the BRICS reflect the changing order. But nothing is yet fixed and the system is in flux.

Closer to home our interests in South East Asia and the South Pacific are enduring and always require close and consistent engagement.23

The challenge

1.28 The Secretary states, that as well as the challenges flowing from the changing policy context within which the department is working, there are four big challenges which stand out. The four challenges are as follows:

• our own capacity as a nation to seize the opportunity of the forums to which

we now belong and to develop integrated strategies in the pursuit of our national interests;

• securing a global and regional environment in which the private sector can

prosper;

• continuing to manage our near neighbourhood relations with deftness and

sensitivity, consistent with our national interests; and

• managing with limited resources in the tight fiscal environment. 24

External Security

1.29 The annual report provided information on the significant developments in external scrutiny of the department and the department's response.

1.30 In 2011-12, the Auditor-General tabled in parliament, five reports by the ANAO relating to the department's operations:

23 Department of Foreign Affairs and Trade, Annual Report 2011-2012, p. 5.

24 Department of Foreign Affairs and Trade, Annual Report 2011-2012, p. 5-6.

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• Report No.17: Audits of the Financial Statements of Australian Government

Entities for the period ended 30 June 2011;

• Report No. 29: Administration of the Australia Network;

• Report No. 31: Establishment and use of procurement panels;

• Report No. 33: Management of e-Passports; and

• Report No. 51: The Interim Phase of the Audit of Financial Statements of

Major General Government Sector Agencies for the year ending 30 June 2012.25

Summary

1.31 The committee finds that the DFAT annual report adequately complies with all reporting requirements for a department.

25 Department of Foreign Affairs and Trade, Annual Report 2011-2012, p. 186-187.

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Department of Veterans' Affairs 1.32 The Department of Veterans' Affairs (DVA) is the primary service delivery agency that develops and implements programs to assist the veteran and defence force communities. It provides administrative support to the Repatriation Commission and the Military Rehabilitation and Compensation Commission. The Repatriation Commission administers the Veterans' Entitlements Act 1986, and is responsible for granting pensions, allowances and other benefits, providing treatment and other services. The Military and Rehabilitation and Compensation Commission is responsible for the administration of benefits and arrangements under the Military Rehabilitation and Compensation Act 2004.

1.33 DVA's annual report 2011-2012 was presented to the parliament on 31 October 2012. The report also included separate reports of both the Repatriation Commission and the Military Rehabilitation and Compensation Commission. They described how each commission interrelates with DVA, its membership and main activities for the reporting period. The reports do not include performance reporting, which is covered in DVA's report.

Overview

1.34 In the Secretary's Year in Review, Mr Ian Campbell stated that funding allocated to DVA in the May 2012 Budget was broadly consistent with 2010-11, with $12.3 billion available for the portfolio. He noted, however, that like many other agencies, the department has faced a difficult operating environment, with the efficiency dividend increased from 1.5 per cent to 4 per cent.26 The Secretary stated:

Highlights for the year, which all have significant benefits for the veteran and Australian Defence Force (ADF) communities, include the implementation of the On Base Advisory Service (OBAS), MyAccount online service, recommendations from the response to the parliamentary inquiry into the F-111 and the continued implementation of the Coordinated Veterans’ Care (CVC) Program.

At the same time, DVA has undertaken an internal restructure to better align priorities, programs and service delivery capabilities with the changes we have witnessed in the veteran and Defence Force communities. Extensive work has been carried out on the continued development of new service models, strengthening links with the Department of Defence (Defence), enhancing IT capabilities and the use of new communication technologies.27

26 Repatriation Commission, Military Rehabilitation and Compensation Commission, Department of Veterans' Affairs, Annual Reports 2011-2012, p. 2.

27 Repatriation Commission, Military Rehabilitation and Compensation Commission, Department of Veterans' Affairs, Annual Reports 2011-2012, p. 2.

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Departmental restructure

1.35 In March 2012, the Secretary implemented a new departmental structure, which will allow DVA to have greater flexibility and capacity to respond to the new environment. The Secretary explained:

In the latter part of last century, the ADF entered into a period of intense deployment, the like of which we have not seen since the 1960s and 1970s. This has seen significant numbers of soldiers, sailors and airmen and women deployed, numbers that are now equivalent to those deployed in the 12 years of the Vietnam conflict. For a number of reasons, including age, gender and simply different service experiences, veterans from these deployments have very different perspectives and service delivery expectations from those veterans from earlier conflicts.

The challenge DVA faces is ensuring that services and programs are adapted and tailored to meet the needs of all veterans, whether or not they have been with the Department for a while, they are accessing our services for the first time today or they will access our services in the future. This includes providing a high level of support for those with warlike/non-warlike service, those with peacetime service, and their dependants.28

Anzac Centenary

1.36 The Secretary noted that one of the major commemorative focal points during the last 12 months has been the preparations for the Anzac Centenary Program, which will run from 2014 to 2018. The Secretary stated:

In responding to the report of the National Commission on the Commemoration of the Anzac Centenary, and in consultation with the Anzac Centenary Advisory Board, on 24 April 2012, the Prime Minister and the Minister Assisting the Prime Minister on the Centenary of Anzac announced that the government will provide $83.5 million over seven years to implement the Anzac Centenary Program.29

Data-matching program

1.37 The Department of Veterans' Affairs Data-matching Program Report on Progress 2011-2012 is included in the annual report at Appendix D. This report focuses on the operation of the program within DVA during the financial year. Under subsections 12(2B) and 12(2C) of the Data-matching Program (Assistance and Tax) Act 1990, DVA is required to table in parliament a standard report every year and a comprehensive report every three years. A comprehensive report was last submitted by DVA in 2010 and will next be submitted in 2013.30

28 Repatriation Commission, Military Rehabilitation and Compensation Commission, Department of Veterans' Affairs, Annual Reports 2011-2012, p. 4.

29 Repatriation Commission, Military Rehabilitation and Compensation Commission, Department of Veterans' Affairs, Annual Reports 2011-2012, p. 5.

30 Repatriation Commission, Military Rehabilitation and Compensation Commission, Department of Veterans' Affairs, Annual Reports 2011-2012, p. 404.

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Report on Progress

1.38 The report on data-matching shows the prosecution statistics; the discrepancy statistics; the departmental expenses for the 2011-12 reporting year; the projected savings statistics; the total savings for the 2011-12 financial year; and cumulative savings from the data matching program.

List of requirements

1.39 The Requirements for annual reports for departments, executive agencies and FMA Act bodies states:

The List of Requirements must be included as an appendix to the annual report. If an item specified in the checklist is not applicable to an agency, it should be reported as not applicable rather than omitted from the list. Agencies should include a column indicating the location of the information in the annual report. 31

1.40 The committee notes that compliance index included in the DVA annual report appears to be incomplete.

Summary

1.41 The committee finds that the DVA annual report complies adequately with all reporting requirements for a department.

31 Requirements for annual reports for departments, executive agencies and FMA Act bodies, Department of the Prime Minister and Cabinet, 28 June 2012, p. 32. www.dpmc.gov.au/guidelines/index.cfm

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Chapter 2

Annual reports of non-statutory authorities and government companies Defence portfolio

Defence Materiel Organisation

2.1 The annual report of the Defence Materiel Organisation (DMO) is contained in Defence's annual report. It was tabled in the House of Representatives and in the Senate on 30 October 2012.

2.2 The DMO is a prescribed agency under the Financial Management and Accountability Act 1997. This means that although the DMO remains inextricably linked to Defence, it is required to account directly to the Minister for Defence on its financial management. The annual report noted:

As a prescribed agency, the DMO utilises a purchaser-provider model, underpinned by service agreements, to deliver commercial,

engineering/logistics and project management services in an accountable, outcome-focused and business-like manner.1

Review by the Chief Executive Officer

2.3 Mr Warren King, Chief Executive Officer, DMO, drew attention to the achievements gained through the formal Projects of Concern process. In 2011-2012, a further three projects were removed from the list, leaving six projects on the watch-list. He reported that project schedule delays continued to be the greatest issue for both DMO and industry. Mr King noted that this represents 'billions of dollars of investment that might have been lost, through project cancellation, if those troubled projects had not been recovered.2

2.4 In his review of the year, Mr King stated that one the main areas of focus for DMO in 2011-12 was:

…to strengthen our accountability processes so that our customers and the Government better understand the status of our projects and success can be more accurately measured. This has been achieved through an increased focus on our internal Gate Reviews, the Project of Concern process and how we communicate with our ministers. This has helped us to respond more rapidly to our soldiers’ demands and has seen us deploy force insertion teams to key areas to improve equipment on the ground. These

1 Defence Annual Report 2011-2012, Defence Materiel Organisation, p. 150.

2 Defence Annual Report 2011-2012, Defence Materiel Organisation, p. 147.

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efforts have been recognised and I welcome the evidence tendered and comments made at parliamentary committee hearings on the ‘significant, qualitative and identifiable improvements’ that we have made.3

List of requirements

2.5 The committee notes that the Requirements for annual reports for departments, executive agencies and FMA Act bodies states:

The List of Requirements must be included as an appendix to the annual report. If an item specified in the checklist is not applicable to an agency, it should be reported as not applicable rather than omitted from the list. Agencies should include a column indicating the location of the information in the annual report.4

2.6 The committee notes that unlike previous years when Defence and DMO annual reports have been produced as two separate volumes, this year the reports have been combined in a single volume. This has meant that the list of requirements has also been combined. The committee notes that combining the Defence and DMO lists creates ambiguity as the entries for Defence and DMO have not been clearly distinguished.

External Scrutiny

2.7 The Requirements for annual reports for departments, executive agencies and FMA Act bodies also states:

The annual report must provide information on the most significant developments in external scrutiny of the department and the department’s response, including particulars of:

(a) judicial decisions and decisions of administrative tribunals that have had, or may have, a significant impact on the operations of the department; and

(b) reports on the operations of the department by the Auditor General (other than the report on financial statements), a Parliamentary committee or the Commonwealth Ombudsman.5

2.8 The committee observes that the DMO annual report does not appear to provide information on external scrutiny. As noted above, the Defence and DMO annual reports have now been combined in the same volume. DMO's completion of

3 Defence Annual Report 2011-2012, Defence Materiel Organisation, p. 148.

4 Requirements for annual reports for departments, executive agencies and FMA Act bodies, Department of the Prime Minister and Cabinet, 28 June 2012, p. 32. www.dpmc.gov.au/guidelines/index.cfm

5 Requirements for annual reports for departments, executive agencies and FMA Act bodies, Department of the Prime Minister and Cabinet, 28 June 2012, p. 9. www.dpmc.gov.au/guidelines/index.cfm

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the mandatory reporting requirement is unclear. External scrutiny is only covered in the Department of Defence section of the annual report and it is unclear if this is intended to also cover external scrutiny of the DMO.6

Summary

2.9 The committee finds that the DMO annual report adequately complies with the relevant requirements for the preparation of annual reports. The committee, however, would like to see DMO provide an explanation for the decision to incorporate its report in Defence's annual report. As noted above, in previous years the Defence and DMO annual reports have been produced as two separate volumes.

Australian War Memorial

2.10 The Australian War Memorial was established as a statutory authority under the Australian War Memorial Act 1980. The performance of the Memorial and the accountability of its council and management are subject to the Commonwealth Authorities and Companies Act 1997. The Memorial is also subject to other legislation that bears on its operation, and is accountable to the government through the Minister for Veterans' Affairs. The Council of the Australian War Memorial is responsible for the conduct and control of the activities of the Memorial. Its numerous functions and responsibilities include:

• establishing the Memorial's strategic direction and vision;

• approving the Memorial's goals and key objectives;

• approving the annual budget and monitoring expenditure and reporting; and

• ensuring that the Memorial has adequate financial resources to meet known

and planned future resources.7

2.11 The Australian War Memorial's annual report 2011-2012 was tabled in the House of Representatives and in the Senate on 10 October 2012. Among the Memorial's most significant events during the reporting period was a visit by Prime Minister Julia Gillard to the Australian War Memorial on 16 April 2012 and her announcement of $27 million in capital injection for First World War galleries.8 The report also noted the announcement in the 2012-13 Budget of the Government's increased general funding to the Memorial by $5.3 million, which will further assist with preparation for the Centenary of Anzac.9

2.12 On behalf of the Council, Rear Admiral Ken Doolan AO RAN (Ret’d), Chairman, acknowledged and recognised the long service of the retired Council

6 Defence Annual Report 2011-2012, Department of Defence, p. 135.

7 Australian War Memorial Annual Report 2011-2012, p. 4.

8 Australian War Memorial Annual Report 2011-2012, p. 1.

9 Australian War Memorial Annual Report 2011-2012, p. 1.

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Chairman, General Peter Cosgrove AC MC (Ret’d) and of Council member Mr Les Carlyon. Rear Admiral Doolan also congratulated and welcomed new Council members, Dr Allan Hawke AC, Mr Peter FitzSimons AM, and Major General Paul Stevens AO (Ret’d). Rear Admiral Doolan sincerely and warmly thanked Major General Steve Gower AO AO(Mil) (Ret'd), who completed his term as Director on 31 August 2012 after 16 dedicated years in the position. Rear Admiral Doolan stated:

His extraordinary stewardship and legacy will be long remembered and admired. The Memorial has been most fortunate to have benefitted from the dedication, initiative and resourcefulness of a man of such rare talent.10

2.13 On 23 August 2012, the Minister for Veterans’ Affairs announced the appointment of the Hon Dr Brendan Nelson as the new Director. Rear Admiral Doolan observed that the council 'looks forward to working with Dr Nelson as we head toward the very exciting, yet challenging, Centenary of ANZAC'.11

Summary

2.14 The committee finds that the Australian War Memorial's annual report to be 'apparently satisfactory' in complying with the relevant requirements for the preparation of annual reports.

ASC Pty Ltd

2.15 The ASC report for 2011-2012 was tabled in the House of Representatives and in the Senate on 31 October 2012. ASC is a proprietary company limited by shares registered under the Corporations Act 2001 and is subject to the CAC Act. On 11 June 2004, ASC was proclaimed as a Government Business Enterprise under the CAC Act.

Chairman's report

2.16 The Chairman, Vice Admiral Chris Ritchie AO RANR, noted that 2011-2012 financial year was 'one of significant achievement for the company and one that foreshadows promise for the years ahead'.12 He recorded that a key outcome has been the finalisation and contract signature of the In Service Support Contract (ISSC), a new performance-based contract for the maintenance of the Collins Class submarines in partnership with DMO.13

2.17 Vice Admiral Ritchie announced that this report would be his last as Chairman of ASC. He stated:

10 Australian War Memorial Annual Report 2011-2012, p. 2.

11 Australian War Memorial Annual Report 2011-2012, p. 2.

12 ASC Pty Ltd Annual Report 2012, p. 6.

13 ASC Pty Ltd Annual Report 2012, p. 6.

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I believe that the company is at an important and exciting time in its development, with significant changes in the management of the Collins Class maintenance program being put in pace and work on the AWD project gaining pace. Preparations are also well advanced to meet the challenges of the future submarine program.14

Collins Class submarine project

2.18 ASC carries out maintenance, upgrades and engineering activities for the Collins Class submarines. In 2011-2012, ASC commenced the transition from operating under a through life support agreement with DMO to the In Service Support Contract (ISSC). A number of transitional activities have been undertaken as part of this change. As a result, ASC will effectively become the provider for all Collins Class submarine maintenance requirements by the end of the transition period in 2013-14. Under the ISSC, the upkeep cycle will be reassessed and a progressive move to a two-year full-cycle docking will be undertaken.15

2.19 In July 2011, the government announced a review into the optimal commercial framework for the sustainment of the Collins Class submarine—the Coles Review. ASC has provided, and continues to provide, significant input to the Coles Review, resulting in a number of actions being taken to further improve availability and reduce cost.16

2.20 According to the report, during 2011-2012 maintenance activities on the submarines included:

• one full cycle docking, with second full cycle docking 48 per cent complete in South Australia (ASC North). Planning has also commenced for an additional full cycle docking due to start in 2012-2013;

• in Western Australia (ASC West), the successful completion of the

intermediate docking of HMAS Dechaineux marked the shortest duration of intermediate docking yet; and

• an unscheduled emergency docking to rectify damage to an Emergency

Propulsion Unit.17

Hobart Class Destroyer project

2.21 ASC is the shipbuilder for the Hobart Class Air Warfare Destroyer (AWD) project. The report noted that the ASC is responsible for the construction of three AWDs at the company's Osborne shipyard in South Australia (ASC South).18

14 ASC Pty Ltd Annual Report 2012, p. 7.

15 ASC Pty Ltd Annual Report 2012, p. 10. 16 ASC Pty Ltd Annual Report 2012, p. 10. 17 ASC Pty Ltd Annual Report 2012, p. 10.

18 ASC Pty Ltd Annual Report 2011, p. 11.

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2.22 ASC reported that during the 2010-2011 period the pace of construction increased rapidly at the three shipyards across Australia including Forgacs (NSW), BAE Systems (VIC) and ASC (SA). During this period the construction workforce grew by more than 300 people in order to facilitate the increased construction work. The report identified the following milestones:

• progress from construction of individual ship blocks to the block

consolidation phase;

• completion of a temporary blast and paint facility to double ASC's capacity.—

at the end of the period eight blocks were successfully blasted and painted;

• delivery of all Ship 1 blocks from BAE Systems—the ASC team restored the blocks to the required level of completion and quality;

• installation of modular accommodation cabins into two blocks for Ship 1; and

• commencement of installation of electrical equipment and cabling. 19

Deep Blue Tech

2.23 Deep Blue Tech (DBT)—a wholly owned subsidiary of ASC—was established in 2007 as part of ASC's preparation for possible involvement in Australia's SEA 1000 Future Submarine project. During 2010-2011, DBT's goal was

to build on earlier concepts and experience to conduct the A3 Future Submarine project. It continued to conduct research and develop capability to prepare for the next phase of the project.20

2.24 The report explained that in 2011-2012, the company had seen an increase in financial support. DPT's goal is 'to have the best submarine design expertise in Australia and have it ready for Government to use, should it desire'.21 During the reporting period, the DBT increased its staff numbers, expanding from approximately 30 permanent staff to 60. Following discussion in 2011-2012, a cooperation agreement was signed with the Defence Science and Technology Organisation.22

Summary

2.25 The committee finds that the ASC annual report to be 'apparently satisfactory' in complying with the relevant reporting requirements for a non-statutory company.

19 ASC Pty Ltd Annual Report 2012, p. 11.

20 ASC Pty Ltd Annual Report 2012, p. 12. 21 ASC Pty Ltd Annual Report 2012, p. 12.

22 ASC Pty Ltd Annual Report 2012, pp. 11- 12.

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CSC Annual report to Parliament 2011-12—MilitarySuper, and DFRB Scheme, DFRDB Scheme and DFSPB

2.26 From 1 July 2011, Commonwealth Superannuation Corporation (CSC) became responsible for the investment and management of the military and public sector superannuation schemes. The Chairman's report for both reports stated:

2011/12 was CSC’s first year as trustee of the Australian Government’s regulated Schemes for Australian Defence Force personnel and public sector employees. The implementation of the merger of the trustees of the military and public sector Schemes in accordance with the legislation passed by Parliament in June 2011 has been completed. A new Board was established to replace the previous DFRDB [Defence Force Retirement and Death Benefits] Authority, MSB [Military Superannuation and Benefits] Board and ARIA [Australian Reward Investment Alliance].23

2.27 As such, the CSC presented two separate reports detailing the performance of CSC functions and the administration of the Military Superannuation and Benefits Scheme (MilitarySuper); and the administration of the Defence Forces Retirement Benefits Scheme (DFRB Scheme), the Defence Force Retirement and Death Benefits Scheme (DFRDB Scheme) and the Defence Force (Superannuation) (Productivity Benefits) Scheme (DFSPB). Both annual reports were tabled in the Senate on 19 October 2012 and in the House of Representatives on 26 November 2012.24

2.28 The committee finds that the CSC annual reports for MilitarySuper, and DFRB Scheme, DFRDB Scheme and DFSPB adequately comply with reporting requirements for a Commonwealth authority. However, the committee notes the timeliness of the presentation of the reports.

23 CSC Annual report to Parliament 2011-12—MilitarySuper, p. 2; and CSC Annual report to Parliament 2011-12—DFRB Scheme, DFRDB Scheme and DFSPB, p. 2.

24 Tabled in the chamber having been presented out of session on 8 November 2012.

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Foreign Affairs and Trade portfolio

Australian Agency for International Development

2.29 The annual report of the Australian Agency for International Development (AusAID) for the financial year 2011-2012 was tabled in the House of Representatives and in the Senate on 29 October 2012.25 AusAID is the Australian government agency responsible for managing Australia’s overseas aid program. AusAID is an executive agency within the Foreign Affairs and Trade portfolio and reports to the Minister for Foreign Affairs.

Director General's review

2.30 The Director General of AusAID, Mr Peter Baxter, stated:

2011-12 was a year of major change for AusAID and the Australian aid program. On 6 July 2011 the Government released its new aid policy, An effective aid program for Australia: making a real difference—delivering real results. The year that followed was dominated by the delivery of a series of major reforms and milestones connected to the policy’s implementation.26

An effective aid program for Australia

2.31 Mr Peter Baxter reports that the new aid policy An effective aid program for Australia:

…provides a framework to 2015-16, defining where Australia will provide aid, what we will focus on, and how we will deliver our assistance. More fundamentally, the new policy sets out a series of steps to improve the effectiveness of the aid program. The policy was released at the same time as, and responded to the findings of, the Independent Review of Aid Effectiveness—the first independent review of the Australian aid program in 15 years.27

2.32 Mr Baxter reported that as of 30 June 2012, AusAID implemented 31 of 38 recommendations made by the Independent Review of Aid Effectiveness. He also listed AusAID's implementation milestones which had been reached during the reporting period. Some of these achievements included:

• developing a Transparency Charter;

25 Tabled in the chamber having been presented out of session on 12 October 2012. An Addendum was presented out of session on 15 October 2012, as a table was missing on page 267 due to a printing error.

26 AusAID Annual Report 2011-2012, p. 2.

27 AusAID Annual Report 2011-2012, p. 2.

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• conducting the first ever Australian Multilateral Assessment, released in

March 2012;

• developing and releasing eight new thematic strategies covering health, education, gender, food security, governance, infrastructure, water and sanitation, and humanitarian action;

• developing a Civil Society Engagement Framework, released in June;

• strengthening AusAID linkages with the private sector, the engine of economic growth and job creation, through a new Business Engagement Steering Committee that includes representatives from the Business Council of Australia, the Australian Chamber of Commerce and Industry and the Australian Industry Group;

• revising the agency’s policy and guidance on program strategy development, and on performance management and evaluation;

• completing a major organisational restructure which has positioned the agency to deliver an expanded and more effective aid program; and

• launching the Comprehensive Aid Policy Framework, which was released by

the Minister for Foreign Affairs, Senator the Hon Bob Carr, in May with the 2012-13 Budget.28

The year ahead

2.33 Mr Baxter identified some of the key tasks for AusAID in the year ahead, which include:

• effectively managing the increased aid budget to Afghanistan and working

closely with other agencies to manage Australia's transition out of Uruzgan Province;

• moving to a new program of assistance under the Partnership for

Development between Australia and the Solomon Islands;

• Myanmar’s transition to democracy, which gives Australia new opportunities

to make a greater impact in reducing poverty and building capacity in what is one of the world’s poorest countries; and

• the need to further build AusAID's workplace culture and human resource

capacity to ensure it has the right mix of skills and knowledge to deliver a larger and more effective aid program.

Australian National Audit Office audit

2.34 The Australian National Audit Office (ANAO) report for the AusAID stated:

The notes to AusAID’s 2010-11 financial statements referred to potential breaches of section 83 of the Constitution for payments made from special

28 AusAID Annual Report 2011-2012, p. 2-4.

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appropriations and special accounts, particularly in circumstances where the payments do not accord with conditions included in the relevant legislation.

During 2011-12, AusAID undertook a review to determine the risk of payments being made in breach of section 83 from the special appropriations and special accounts for which it is administratively

responsible.

The risk assessment and subsequent analysis conducted up to 30 June 2012 identified 13 breaches of section 83 totalling $29 000 in relation to various payments made by ComSuper on behalf of AusAID under the Papua New Guinea (Staffing Assistance) Act 1973 (PNG Super Act). The breaches were confirmed in legal advice received by AusAID from the Australian

Government Solicitor.29

Summary

2.35 The committee finds that the AusAID annual report adequately complies with all reporting requirements for an executive agency.

Australian Centre for International Agricultural Research

2.36 Australian Centre for International Agricultural Research's (ACIAR) governing legislation is the Australian Centre for International Agricultural Research Act 1982. The ACIAR annual report 2011-2012 was tabled in both the House of Representatives and in the Senate on 31 October 2012.

Commission Chair's and Chief Executive Officer's Review

2.37 The Commission Chair and Chief Executive Officer stated that:

ACIAR’s last external review (the Nairn Review) was 14 years ago. Given the magnitude of the changes in ACIAR’s operating environment, the Minister for Foreign Affairs, Senator Bob Carr, has commissioned an external review to examine the appropriateness, effectiveness and efficiency of ACIAR’s efforts, and to make recommendations for improvements. The review is not prompted by perceived problems, but intended to make a strong agency even better. It will be undertaken by Mr Bill Farmer (Chair), Professor Ron Duncan, Dr Wendy Jarvie and Mr Terry Enright.

In line with the broader aid program, ACIAR has grown in size over recent years, with an annual appropriation of approximately $100 million in 2012-13. The Australian Government has committed to increasing support for ACIAR. While this decision was based on the agency’s ‘impressive results, confirmed by independent evaluations’, the Government, Parliament and taxpayers need to be confident that current and further

29 Australian National Audit Office, ANAO Audit Report No.16 2012-13: Audit of the financial statements of Australian Government Entities for the period ended 30 June 2012, p. 200.

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29

investments are targeted appropriately, effective in helping to overcome poverty, and used efficiently.30

Australian National Audit Office audit

2.38 The ANAO report for the ACIAR stated:

The 2010-11 auditor’s report on the financial statements of the Australian Centre for International Agricultural Research (ACIAR) referred to the notes to the financial statements that included a reference to a risk of a breach of section 83 of the Constitution in relation to payments from special accounts and special appropriations. ACIAR undertook to investigate this issue in 2011-12. A review undertaken by ACIAR in 2011-12 concluded that the risk of a section 83 breach was low and no breaches or potential breaches of section 83 were identified. As the ANAO agreed with this

assessment, no reference to this matter was made in the auditor’s report on the 2011-12 financial statements.31

Summary

2.39 The committee finds that the ACIAR annual report adequately complies with all reporting requirements.

Other reports

2.40 Other portfolio authorities, agencies and/or companies which had their annual reports examined by the committee, but were not otherwise commented upon in this edition, include:

Defence portfolio

• AAF Company (tabled 27 November 2012)

• Army and Air Force Canteen Services (tabled 30 October 2012)

• Australian Strategic Policy Institute (tabled 29 October 2012)

• Defence Housing Australia (tabled 29 October 2012)

• Royal Australian Air Force Welfare Recreational Company (tabled 29 October 2012)

• Royal Australian Air Force Veterans' Residences Trust Fund (tabled 20 November 2012)

• Royal Australian Navy Central Canteens Board (tabled 20 November 2012)

• Services Trust Funds (tabled 1 November 2012)

30 Australian Centre for International Agricultural Research Annual Report 2011-12, p. 11.

31 Australian National Audit Office, ANAO Audit Report No.16 2012-13: Audit of the financial statements of Australian Government Entities for the period ended 30 June 2012, p. 204.

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30

Foreign Affairs portfolio

• Australian Safeguards and Non-Proliferation Office (tabled 10 October 2012)

Trade portfolio

• Australian Trade Commission (tabled 29 October 2012)

• Export Finance and Insurance Corporation (tabled 29 October 2012, received

out of session 25 October 2012)

Veterans' Affairs

• Repatriation Medical Authority (tabled 31 October 2012)

• Veterans' Review Board (tabled 30 October 2012)

2.41 The committee considers that all the annual reports of the above-mentioned

organisations fully met their respective reporting requirements.

Senator the Hon Ursula Stephens

Chair

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Appendix 1

Compliance table of the annual reports referred to the committee for scrutiny for the period 2011-2012 Scrutiny of reports tabled by 31 October 2012

Department/agency

Enabling legislation

and

timeliness

Date on letter of transmittal

@ Date report submitted to minister (if known) % Date report received by minister (if known)

* Date report presented to President

# Date tabled in the Senate

^ Date tabled in H/Representatives

Defence Portfolio

Department of Defence

Incorporating the report of…

Defence Materiel Organisation (DMO) and;

Reports on the administration and operation of the Defence Home Loans Schemes

Australian Constitution and Administrative Arrangements Order. The Department may engage members of the Australian Defence Force under the Defence Act 1903, the Naval Defence Act 1910 and the Air Force Act 1923.

Financial Management and Accountability Act 1997 (FMA Act) To be tabled by 31 October.

Prescribed agency FMA Act. To be tabled by 31 October.

Defence Force (Home Loans Assistance) Act 1990 and Defence Home Ownership Assistance Scheme Act 2008. No statutory reporting requirement

29 Sept 2012 @3 Oct 2012

%3 Oct 2012

#30 Oct 2012

^30 Oct 2012

231

32

Scrutiny of reports tabled by 31 October 2012

Department/agency

Enabling legislation

and

timeliness

Date on letter of transmittal

@ Date report submitted to minister (if known) % Date report received by minister (if known)

* Date report presented to President

# Date tabled in the Senate

^ Date tabled in H/Representatives

Defence Portfolio

Department of Veterans' Affairs

Incorporating the reports of …

Repatriation Commission and

Military Rehabilitation and Compensation Commission

Australian Constitution and Administrative Arrangements Order

FMA Act To be tabled by 31 October.

Veterans' Entitlement Act 1986, s215. Minister to table within 15 days of receiving report.

Military Rehabilitation and Compensation Act 2004, s385 and Safety, Rehabilitation and Compensation Act 1988, s161.

[As soon as possible after 30 June]

16 Oct 2012 @16 Oct 2012

%17 Oct 2012

#31 Oct 2012

^31 Oct 2012

232

33

Scrutiny of reports tabled by 31 October 2012

Department/agency

Enabling legislation

and

timeliness

Date on letter of transmittal

@ Date report submitted to minister (if known) % Date report received by minister (if known)

* Date report presented to President

# Date tabled in the Senate

^ Date tabled in H/Representatives

Defence Portfolio

AAF Company

Commonwealth company, limited by guarantee Commonwealth Authorities and Companies Act 1997 (CAC Act) To be tabled by 31 October.

19 Oct 2012 @24 Oct 2012

%13 Nov 2012

#27 Nov 2012

^26 Nov 2012

ASC Pty Ltd

ASC Pty Ltd is a proprietary company limited by shares registered under the Corporations Act and is subject to the CAC Act

To be tabled by 31 October.

*Forwarded to the Finance and Public Administration Legislation Committee

27 Sept 2012 @8 Oct 2012

%9 Oct 2012

#31 Oct 2012

^31 Oct 2012

233

34

Scrutiny of reports tabled by 31 October 2012

Department/agency

Enabling legislation

and

timeliness

Date on letter of transmittal

@ Date report submitted to minister (if known) % Date report received by minister (if known)

* Date report presented to President

# Date tabled in the Senate

^ Date tabled in H/Representatives

Defence Portfolio

Army and Air Force Canteen Service (Frontline Defence Services)

Established by regulations under the Defence Act 1903

Commonwealth authority CAC Act To be tabled by 31 October.

20 Sept 2012 @25 Sept 2012

%28 Sept 2012

#30 Oct 2012

^29 Oct 2012

Australian Strategic Policy Institute Limited

Commonwealth company, limited by guarantee CAC Act To be tabled by 31 October.

28 Sept 2012 @18 Oct 2012

%18 Oct 2012

#30 Oct 2012

^29 Oct 2012

Australian War Memorial

Australian War Memorial Act 1980, s4

Commonwealth authority CAC Act To be tabled by 31 October.

9 Aug 2012 @24 Aug 2012

%25 Aug 2012

#10 Oct 2012

^10 Oct 2012

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35

Scrutiny of reports tabled by 31 October 2012

Department/agency

Enabling legislation

and

timeliness

Date on letter of transmittal

@ Date report submitted to minister (if known) % Date report received by minister (if known)

* Date report presented to President

# Date tabled in the Senate

^ Date tabled in H/Representatives

Commonwealth Superannuation Corporation— Defence Forces Retirement Benefits Scheme (DFRB Scheme), the Defence Force Retirement and Death Benefits Scheme (DFRDB Scheme) and the Defence Force (Superannuation) (Productivity Benefits) Scheme (DFSPB).

Defence Forces Retirement Benefits Act 1948 and the Defence Force Retirement and Death Benefits Act 1973.

Governance of Australian Government Superannuation Schemes Act 2011 Minister to table within 15 days of receiving report.

Commonwealth authority CAC Act To be tabled by 31 October.

12 Oct 2012 @ 15 Oct 2012

% 15 Oct 2012

*8 Nov 2012

#19 Nov 2012

^26 Nov 2012

Commonwealth Superannuation Corporation— Military Superannuation and Benefits Scheme (MilitarySuper)

Military Superannuation and Benefits Act 1991

Governance of Australian Government Superannuation Schemes Act 2011 Minister to table within 15 days of receiving report.

Commonwealth authority CAC Act To be tabled by 31 October.

12 Oct 2012 @ 15 Oct 2012 % 15 Oct 2012

*8 Nov 2012

#19 Nov 2012

^26 Nov 2012

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36

Scrutiny of reports tabled by 31 October 2012

Department/agency

Enabling legislation

and

timeliness

Date on letter of transmittal

@ Date report submitted to minister (if known) % Date report received by minister (if known)

* Date report presented to President

# Date tabled in the Senate

^ Date tabled in H/Representatives

Defence Housing Australia

Defence Housing Authority Act 1987, s4 Statutory Agency

Commonwealth authority CAC Act To be tabled by 31 October.

15 Oct 2012 @6 Aug 2012

%7 Aug 2012

#30 Oct 2012

^29 Oct 2012

Repatriation Medical Authority (RMA)

Veterans' Entitlement Act 1986, s196B No statutory reporting requirement

4 Oct 2012 @12 Oct 2012

%12 Oct 2012

#31 Oct 2012

^31 Oct 2012

Royal Australian Air Force Welfare Recreational Company

Commonwealth company, limited by guarantee CAC Act To be tabled by 31 October.

10 Oct 2012 @9 Oct 2012

%25 Oct 2012

#20 Nov2012

^26 Nov 2012

Royal Australian Air Force Veterans’ Residences Trust Fund

Royal Australian Air Force Veterans’ Residences Act 1953, s3

Commonwealth company, limited by guarantee CAC Act To be tabled by 31 October.

1 Oct 2012 @5 Oct 2012

%25 Oct 2012

#20 Nov 2012

^26 Nov 2012

Royal Australian Navy Central Canteens Board (RANCCB)

Established by regulations under the Defence Act 1910.

Commonwealth authority CAC Act To be tabled by 31 October.

5 Oct 2012 @3 Oct 2012

%25 Oct 2012

#20 Nov 2012

^26 Nov 2012

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37

Scrutiny of reports tabled by 31 October 2012

Department/agency

Enabling legislation

and

timeliness

Date on letter of transmittal

@ Date report submitted to minister (if known) % Date report received by minister (if known)

* Date report presented to President

# Date tabled in the Senate

^ Date tabled in H/Representatives

Services Trust Funds—Royal Australian Navy Relief Trust Fund, Australian Military Forces Relief Trust Fund; and Royal Australian Air Force Welfare Trust Fund)

Services Trust Funds Act 1947

Commonwealth authorities CAC Act To be tabled by 31 October.

5 Sept 2012

17 Aug 2012

22 Aug 2012

respectively

@5 Oct 2012

%25 Oct 2012

#20 Nov 2012

^1 Nov 2012

Veterans' Review Board Veterans' Entitlement Act 1986, s215(4).

Report to be submitted to the Minister as soon as practicable after 30 June. Minister to table within 15 sitting days of receiving report.

10 Sept 2012 @2 Oct 2012

%2 Oct 2012

#30 Oct 2012

^30 Oct 2012

237

38

Scrutiny of reports tabled by 31 October 2012

Department/agency

Enabling legislation

and

timeliness

Date on letter of transmittal

@ Date report submitted to minister (if known) % Date report received by minister (if known)

* Date report presented to President

# Date tabled in the Senate

^ Date tabled in H/Representatives

Foreign Affairs and Trade Portfolio

Department of Foreign Affairs and Trade

Australian Constitution and Administrative Arrangements Order

FMA Act To be tabled by 31 October.

15 Oct 2012 @11 Sept 2012

%12 Sept 2012

*26 Oct 2012

#29 Oct 2012

^29 Oct 2012

Australian Agency for International Development (AusAID)

Financial Management and Accountability Regulations 1997 Executive Agency

Prescribed Agency FMA Act To be tabled by 31 October.

5 Sept 2012 @11 Sept 2012

%12 Sept 2012

*12 Oct 2012

(*addendum 15 Oct 2012)

#29 Oct 2012

^29 Oct 2012

Australian Centre for International Agriculture Research (ACIAR)

Australian Centre for International Agriculture Research Act 1982, s4 Statutory Agency.

Prescribed Agency FMA Act To be tabled by 31 October.

Oct 2012 (letter not dated)

@12 Oct 2012

%12 Oct 2012

#31 Oct 2012

^31 Oct 2012

238

39

Scrutiny of reports tabled by 31 October 2012

Department/agency

Enabling legislation

and

timeliness

Date on letter of transmittal

@ Date report submitted to minister (if known) % Date report received by minister (if known)

* Date report presented to President

# Date tabled in the Senate

^ Date tabled in H/Representatives

Australian Safeguards and Non-Proliferation Office

Nuclear Non- Proliferation (Safeguards) Act 1987, s51; Chemical Weapons (Prohibition) Act 1994, s96; Comprehensive Nuclear-Test-Ban Treaty Act 1998, s71. Minister to table within 15 sitting days of receiving report.

Prescribed Agency FMA Act To be tabled by 31 October.

24 Sept 2012 @26 Oct 2012

%9 Oct 2012

#10 Oct 2012

^10 Oct 2012

Australian Trade Commission (Austrade)

Australian Trade Commission Act 1985, s92. Minister to table within 15 sitting days of receiving report.

Prescribed Agency FMA Act To be tabled by 31 October.

3 Sept 2012 @4 Sept 2012

%14 Sept 2012

#30 Oct 2012

^29 Oct 2012

Export Finance and Insurance Corporation (EFIC)

Export Finance and Insurance Corporation Act 1991, s 6

Commonwealth authority CAC Act To be tabled by 31 October.

- @27 Sept 2012

%15 Oct 2012

*25 Oct 2012

#29 Oct 2012

^29 Oct 2012

239

240

The Senate

Legal and Constitutional Affairs

Legislation Committee

Annual reports (No. 1 of 2013)

March 2013

241

© Commonwealth of Australia

ISBN: 978-1-74229-764-4

This document was produced by the Senate Legal and Constitutional Affairs Committee secretariat and printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra.

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iii

MEMBERS OF THE COMMITTEE

Members

Senator Patricia Crossin, Chair, ALP, NT

Senator Gary Humphries, Deputy Chair, LP, ACT

Senator Sue Boyce, LP, QLD

Senator Mark Furner, ALP, QLD

Senator Louise Pratt, ALP, WA

Senator Penny Wright, AG, SA

Secretariat

Ms Julie Dennett Committee Secretary

Ms Leonie Lam Research Officer

Suite S1.61 Telephone: (02) 6277 3560

Parliament House Fax: (02) 6277 5794

CANBERRA ACT 2600 Email: legcon.sen@aph.gov.au

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TABLE OF CONTENTS

MEMBERS OF THE COMMITTEE ............................................................. iii

PREFACE ..........................................................................................................vii

Terms of reference ................................................................................................ vii

Role of annual reports ......................................................................................... viii

Annual reporting requirements ............................................................................ viii

'Apparently satisfactory' ........................................................................................ ix

Timeliness .............................................................................................................. ix

Requirement for non-reporting bodies to report .................................................... xi

CHAPTER 1 ........................................................................................................ 1

ANNUAL REPORTS OF DEPARTMENTS ......................................................... 1

Attorney-General's Department .............................................................................. 1

Department of Immigration and Citizenship .......................................................... 3

CHAPTER 2 ........................................................................................................ 9

ANNUAL REPORTS OF STATUTORY BODIES .............................................. 9

Attorney-General's Portfolio .................................................................................. 9

Immigration and Citizenship Portfolio ................................................................. 10

Consideration of annual reports............................................................................ 10

Administrative Appeals Tribunal ......................................................................... 10

CrimTrac Agency ................................................................................................. 11

Migration Review Tribunal (MRT) and Refugee Review Tribunal (RRT) ......... 12

CHAPTER 3 ...................................................................................................... 15

REPORTS ON THE OPERATION OF ACTS AND PROGRAMS ................. 15

Report to the Attorney-General on the results of inspections of records under section 55 of the Surveillance Devices Act 2004 ................................................. 15

Refugee Review Tribunal reviews not completed within 90 days ....................... 16

APPENDIX 1 ..................................................................................................... 19

Reports tabled during the period 1 May and 31 October 2012 and referred to the committee .......................................................................................................... 19

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vii

PREFACE

Terms of reference

On 29 September 2010, a resolution of the Senate allocated the following portfolios to the Senate Standing Committee on Legal and Constitutional Affairs:

• Attorney-General's portfolio; and

• Immigration and Citizenship portfolio.

This report was prepared pursuant to Standing Order 25(20) relating to the consideration of annual reports by committees. The Standing Order states:

Annual reports of departments and agencies shall stand referred to the committees in accordance with an allocation of departments and agencies in a resolution of the Senate. Each committee shall:

(a) Examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory;

(b) Consider in more detail, and report to the Senate on, each annual report which is not apparently satisfactory, and on the other annual reports which it selects for more detailed consideration;

(c) Investigate and report to the Senate on any lateness in the

presentation of annual reports;

(d) In considering an annual report, take into account any relevant remarks about the report made in debate in the Senate;

(e) If the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates;

(f) Report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on annual reports tabled by 30 April each year by the tenth sitting day after 30 June of that year;

(g) Draw to the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports; and

(h) Report to the Senate each year whether there are any bodies which do not present annual reports to the Senate and which should present such reports.

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Role of annual reports

Annual reports place a great deal of information about government departments and agencies on the public record. Accordingly, the tabling of annual reports is an important element of accountability to Parliament, as the information provided in annual reports assists in the effective examination of the performance of departments and agencies, and the administration of government programs.

Annual reporting requirements

Standing Order 25(20)(f) requires that committees report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on annual reports tabled by 30 April each year by the tenth sitting day after 30 June of that year.

Pursuant to subsections 63(2) and 70(2) of the Public Service Act 1999, departments of state and executive agencies must prepare annual reports in accordance with the Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies (Requirements for Annual Reports). As a matter of policy, the Requirements for Annual Reports also apply to prescribed agencies under section 5 of the Financial Management and Accountability Act 1997 (FMA Act).1

The 2010-11 annual reports are prepared in accordance with the Requirements for Annual Reports issued on 28 June 2012. Amendments to the latest issue of the Requirements for Annual Reports are:

• Consultancy reporting - recognising the functionality provided by the AusTender database, the requirement to provide details of consultancy contracts let in the reporting year has been omitted.

• Carer recognition - a new requirement has been added for public service care agencies to report on compliance with the Carer Recognition Act 2010.

• Freedom of Information - simplification of reporting following accommodation of major reforms to freedom of information reporting in the 2010-11 Requirements.2

Orders made by the Minister under section 48 of the Commonwealth Authorities and Companies Act 1997 (CAC Act) set out guidelines for the annual reports of Commonwealth authorities. The content of annual reports of Commonwealth companies is based on the reporting requirements under the Corporations Act 2001, in accordance with section 36 of the CAC Act.

1 Department of the Prime Minister and Cabinet, Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies (Requirements for Annual Reports), 28 June 2012, Part 1, subsection 3(1).

2 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 28 June 2012, p. i.

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Statutory authorities must also report in accordance with their establishing legislation.

Guidelines for the annual reports of non-statutory bodies are set out in the Government Response to recommendations of the then Senate Standing Committee on Finance and Government Operations, in its report entitled Reporting Requirements for the Annual Reports of Non-Statutory Bodies. The Government Response was incorporated into the Senate Hansard of 8 December 1987.3

'Apparently satisfactory'

Under the terms of Standing Order 25(20)(a), the committee is required to report to the Senate whether reports are 'apparently satisfactory'. In making this assessment, the committee considers such aspects as compliance with relevant reporting guidelines.

The reports examined by the committee in this report were found to be of a satisfactory standard, adequately describing the functions, activities, performance and financial positions of the departments and agencies. However, the committee notes some reports could be improved with a closer adherence to the Requirements for the Annual Reports.4 The committee finds all submitted annual reports to be 'apparently satisfactory'.

Timeliness

Under Standing Order 25(20)(c), the committee must also report to the Senate on any lateness in the presentation of annual reports.

In accordance with the Requirements for Annual Reports, agencies are required to present:

A copy of the annual report...to each House of the Parliament on or before 31 October in the year in which the report is given. If Senate Estimates is scheduled to occur prior to 31 October, it is best practice for annual reports to be tabled prior to those hearings.

Where an agency's own legislation provides a timeframe for its annual report, for example "within six months" or "as soon as practicable after 30 June in each year", that timeframe applies.5

3 Official Senate Hansard, 8 December 1987, pp 2643-2645.

4 For example, the committee is disappointed to note that the Australian Human Rights Commission's annual report lacked a list of requirements, including a mandatory compliance index and a 'clear read' between the PBS and the report, despite concerns expressed by the committee in its Annual Reports (No. 2 of 2012) report, tabled on 12 September 2012: see pp 3-5.

5 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 28 June 2012, Part 1, section 4.

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If a department or agency is unable to meet this deadline, the secretary or agency head is to advise the responsible Minister of the reasons for the delay and the expected tabling date. The responsible Minister is to table this explanation in the Parliament.6

Subsection 9(1) of the CAC Act requires the director of a Commonwealth authority to: (a) prepare an annual report in accordance with Schedule 1 for each financial year; and

(b) give it to the responsible Minister by the deadline for the financial year for presentation to the Parliament.

(2) The deadline is: (a) the 15th day of the 4th month after the end of the financial year; or (b) the end of such further period granted under subsection 34C(5) of the Acts Interpretation Act 1901.

Under section 36 of the CAC Act:

(1) A Commonwealth company must give the responsible Minister: (a) a copy of the company's financial report, directors' report and auditor's report that the company is required by the Corporations Act 2001 to have for the financial year (or would be required by that Act to have if the company were a public company); and (b) any additional report under subsection (2); and (c) in the case of a wholly-owned Commonwealth company— any additional information or report required by the Finance Minister's Orders.

(1A) The Commonwealth company must give the reports and information by: (a) if the company is required by the Corporations Act 2001 to hold an annual general meeting—the earlier of the following:

(i) 21 days before the next annual general meeting after the end of the financial year; (ii) 4 months after the end of the financial year; and (b) in any other case—4 months after the end of the financial year; or the end of such further period granted under subsection 34C(5) of the Acts Interpretation Act 1901.

In the absence of any specific provision, the Acts Interpretation Act 1901 requires bodies to present annual reports to ministers within 6 months after the end of the period reported upon (subsection 34C(2)), and ministers must table reports within 15 sitting days after receipt.

6 Department of the Prime Minister and Cabinet, Guidelines for the Presentation of Documents to the Parliament (including Government Documents, Government Responses to Committee Reports, Ministerial Statements, Annual Reports and other instruments), Canberra, 28 June 2012, p. 5. Provisions for seeking an extension to the reporting period can be found in subsections 34C(4) to (7) of the Acts Interpretation Act 1901.

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A table listing the annual reports of departments and agencies tabled in the Senate (or presented out of session to the President of the Senate) between 1 May 2012 and 31 October 2012, and which have been referred to the committee for examination, can be found at Appendix 1.7 Also included in this table, is the date each report was tabled in the House of Representatives.

The annual reports of bodies examined in this report met the reporting deadline of 31 October 2012. The committee commends the Department of Immigration and Citizenship, the Australian Federal Police, the Australian Law Reform Commission, the Australian Security Intelligence Organisation, the Australian Transaction Reports and Analysis Centre, the CrimTrac Agency, the Office of the Australian Information Commissioner, the Migration Agents Registration Authority, and the Migration Review Tribunal and the Refugee Review Tribunal for making their annual reports

available for examination prior to the supplementary estimates hearings on 15 and 16 October 2012.

A number of agencies just missed the deadline in the Senate, tabling their reports in the Senate in November 2012. Accordingly, the reports of the following agencies will be examined in the committee's second report for 2013:

• Administrative Review Council;

• High Court of Australia; and

• National Native Title Tribunal.

In accordance with best practice, as outlined in the Requirements for Annual Reports, the committee encourages bodies to table annual reports before the supplementary budget estimates hearings in October each year.8 The committee is disappointed to note there were fewer annual reports available prior to the committee's supplementary budget estimates hearings on 15 and 16 October 2012 compared to those previously examined. The committee commends the Australian Security Intelligence Organisation for making its annual report accessible for examination prior to the Supplementary Estimates hearings on 16 October 2012.9

Requirement for non-reporting bodies to report

In accordance with Standing Order 25(20)(h), the committee is required to report on bodies which do not present an annual report to the Senate and which should present such a report.

7 This table also includes the reports on the operation of acts or programs which have been referred to the committee.

8 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 28 June 2012, Part 1, section 4.

9 See Appendix 1 for those bodies which tabled or presented their reports prior to 15 and 16 October 2012.

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On this occasion, the committee makes no recommendation for any organisation not presenting an annual report to do so.

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CHAPTER 1

ANNUAL REPORTS OF DEPARTMENTS 1.1 The annual reports of the following departments for the financial year 2011-12, were referred to the committee for examination and report:

• Attorney-General's Department

• Department of Immigration and Citizenship

Attorney-General's Department

Tabling of report

1.2 The 2011-12 annual report was tabled in the Senate on 31 October 2012, and was not available to Senators for the Supplementary Budget Estimates 2012-13 hearings. The committee notes that this is in contrast to the department's timely tabling of its report prior to the October estimates hearings in the previous year.

Performance reporting

1.3 The report's performance information addresses the key performance indicators (KPIs) as listed in the Portfolio Budget Statement for 2011-12. The committee notes that all KPIs for the department were assessed as being achieved, substantially achieved, or partially achieved, with a brief supporting comment following each result.1

1.4 The report presents a 'clear read' from the Portfolio Budget Statements to the annual report in relation to reporting on performance. The committee notes that the KPIs for the 2011-12 annual report continued to be similar in format to the 2010-11 annual report, which does not have a quantitative measure for performance or targets. This is in contrast to the department's previous inclusion of quantitative measures for some KPIs and identified targets in the annual report.2

1.5 As previously noted by the committee, the development of quantitative KPIs for departmental programs involving policy development and advice may be challenging and use of qualitative KPIs may be a more appropriate reporting tool. Nevertheless, the inclusion of quantitative KPIs for some program areas may be more instructive in regards to whether a program objective has being achieved.3

1 Attorney-General's Department Annual Report 2011-12, pp 104, 112-113, 116, 120-121, 146-147, 157-160 and 162.

2 Refer to Annual Reports (No.1 of 2012), Senate Legal and Constitutional Affairs Legislation Committee, p. 2 and Attorney-General's Department Annual Report 2010-11, pp 70 and 71. For a comparison, see previous Attorney-General's Department Annual Report 2008-09, Part 2 - Performance reports, pp 25-179.

3 Annual Reports 2010-11 (No.1 of 2012), Senate Legal and Constitutional Affairs Legislation Committee, p. 2.

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1.6 In the Department of Finance and Deregulation's Performance Information and Indicators it is recommended that KPIs within the outcomes and programs reporting framework, 'should measure the effectiveness and efficiency of the program and clearly measure the program's success, particularly against the intended result of the relevant outcome statement.'4

1.7 Further, the Australian National Audit Office's (ANAO) Development and implementation of key performance indicators to support the outcomes and programs framework recommends agencies, where suitable, to develop KPIs that have an appropriate emphasis on quantitative and measureable indicators, including targets.5 This would demonstrate the effectiveness of a program in achieving its objectives in support of the relevant outcome. The ANAO report found that:

The tendency for entities to rely on qualitative KPIs reduces their ability to measure the results of program activities over time. A mix of effectiveness KPIs, that place greater emphasis on quantitative KPIs and targets, would provide a more measureable basis for performance assessment. Targets, in

particular, should be used more often to express quantifiable performance levels to be attained at a future date. By enabling a more direct assessment of performance, the greater use of targets would assist to clarify and simplify the process of performance monitoring.6

Social inclusion outcomes

1.8 Among the list of mandatory reporting requirements for agencies whose activities impact on social inclusion outcomes, is information about relevant programs and progress in relation to social inclusion strategic change indicators.7 The department's contribution to the whole-of-government social inclusion agenda of 'giv[ing] every Australian the help they need to access the support and opportunities our society has to offer'8 is from a law and justice perspective, for which the department has responsibility.

1.9 Among some of the department's contributions to the whole-of-government social inclusion agenda, are: providing legal assistance to address disadvantage via the funding of legal aid commissions, community legal centres, Aboriginal and Torres Strait Islander legal services and Indigenous family violence prevention legal services,

4 Department of Finance and Deregulation, Performance Information and Indicators, October 2010, p. 8.

5 Australian National Audit Office, Audit Report No. 5 2011-12, Performance Audit, Development and implementation of key performance indicators to support the outcomes and programs framework, Recommendation No. 1, p. 28.

6 Australian National Audit Office, Audit Report No. 5 2011-12, Performance Audit, Development and implementation of key performance indicators to support the outcomes and programs framework, p. 53. See also, Senate Legal and Constitutional Affairs Legislation Committee, Annual Reports (No.1 of 2012), pp 2 and 3.

7 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 28 June 2012, p. 7.

8 Attorney-General's Department Annual Report 2011-12, p. 225.

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and legal financial assistance schemes;9 protecting and promoting human rights; and improving access to justice across a range of areas, such as family law, rights for people with a disability and Indigenous-specific programs to advance social inclusion.10

Reconciliation Action Plan (RAP)

1.10 In 2011, the department signed the Attorney-General's Portfolio Indigenous Statement of Commitment, which brings together existing individual statements from portfolio agencies into one unified statement supporting reconciliation.11

1.11 The department has established a Reconciliation Committee, which is responsible for implementing and maintaining the department's RAP. Some practical initiatives to arise from the department's RAP include: providing opportunities to indigenous staff; engaging with staff to develop and promote cultural awareness; involvement in the Attorney-General's Portfolio Reconciliation Network; participation in events of significance to Indigenous people - such as National Reconciliation Week, NAIDOC Week, Sorry Day and Mabo Day; and the co-hosting of an event during National Reconciliation Week to reaffirm the department's commitment to the Portfolio's Statement of Commitment.12

Conclusion

1.12 The report closely complies with the Requirements for Annual Reports and includes most 'suggested' items in addition to mandatory requirements.13 The committee considers the report to be 'apparently satisfactory'.

Department of Immigration and Citizenship

Tabling of report

1.13 The department presented the annual report for 2011-12 out of session on 12 October 2011. This made it available to the committee for examination during the Supplementary Budget Estimates hearings on 15 and 16 October 2012.

Secretary's review

1.14 Among the Acting Secretary's highlights for 2011-12, was the department's achievement of passing the milestone of 4.5 million migrants and refugees becoming Australian citizens.14 There were 114,685 people who were approved as Australian citizens either by conferral, descent or resumption. Of the 71,662 clients who sat the

9 Attorney-General's Department Annual Report 2011-12, p. 225.

10 Attorney-General's Department Annual Report 2011-12, pp 226-229.

11 Attorney-General's Department Annual Report 2011-12, p. 179.

12 Attorney-General's Department Annual Report 2011-12, pp 176 and 179.

13 Despite incorrectly referencing an earlier version of the Requirements for annual reports for departments, executive agencies and FMA Act bodies (July 2011) for the preparation of the 2011-12 annual report, the list of requirements in the report conforms with the later 28 June 2012 requirements, p. viii. 14 Department of Immigration and Citizenship Annual Report 2011-12, p. 6.

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Australian citizenship test, 98.7 per cent passed. In the Australian citizenship course, which is an alternate testing pathway towards citizenship, 285 applicants successfully completed the course.15

Office of the Migration Agents Registration Authority

1.15 The department presented the Office of the Migration Agents Registration Authority's (MARA) results against deliverables and key performance indicators. The committee notes that the MARA met or exceeded its targets in four of the five key performance indicators (KPIs).

1.16 For example, in relation to the percentage of complete registration applicants finalised within service standards, the MARA exceeded its KPI target of 95 per cent with a 98.9 per cent result. The MARA also exceeded its KPI target of greater than 65 per cent for the percentage of registered migration agents who participated in continuing professional development activities and found them useful, achieving a greater than 82 per cent result. The only key performance indicator the MARA failed to meet was the percentage of complaints finalised within service standards, achieving a 70 per cent result as opposed to its KPI target of 100 per cent.16

Social inclusions outcomes

1.17 The report provides a brief statement supporting the government's social inclusion agenda and highlights some examples of the department's input to advancing this agenda. Areas covered include: assisting new arrivals, including refugees, to settle into the community through a comprehensive suite of settlement support services, including learning English and linking people to essential services such as health, housing and community and family programs.17

1.18 The department's contribution to the government's broader social inclusion agenda can also be found in various programs and services: a diversity and social cohesion program; a humanitarian settlement program, which supports an anti-homelessness strategy; services provided by the non-government sector; and support of government agencies to fulfil their access and equity obligations to clients, including culturally and linguistically diverse clients with different needs.18

Reconciliation Action Plan

1.19 The department's Reconciliation Action Plan 2010-2012 was launched in March 2011. The then Secretary's foreword states that the department's vision for reconciliation is to 'work in partnership with Australia's Indigenous Aboriginal and Torres Strait Islander peoples to develop business practices that overcome their

15 Department of Immigration and Citizenship Annual Report 2011-12, p. 7.

16 Department of Immigration and Citizenship Annual Report 2011-12, p. 109.

17 Department of Immigration and Citizenship Annual Report 2011-12, p. 340.

18 Department of Immigration and Citizenship Annual Report 2011-12, p. 340.

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disadvantage and foster the same social and economic opportunities for them as other Australians'.19

1.20 The department's goal is to:

…develop mutually beneficial relationships with Indigenous Australians through building a culturally diverse workforce, raising awareness of and informing new Australians of the unique history and culture of Indigenous people in this country.20

1.21 Under the National Partnership Agreement on Indigenous Economic Participation, the department is committed to raising the number of its Indigenous employees, from the current 0.9 per cent to 2.7 per cent by 2015.21 In 2011-12, the indigenous employment team was able to recruit 24 additional employees using the Australian Public Service Commission's pathways program.22

1.22 To further support reconciliation during the reporting period, the Aboriginal and Torres Strait Islander Cultural Awareness eLearning training package was developed to build staff awareness about Australia's indigenous peoples.23 This initiative was created following extensive consultation with the department's Indigenous Employees Network and Reconciliation Ambassador Network, with input from Reconciliation Australia, the Australian National University and the Torres Strait Regional Authority.24

1.23 Other initiatives the department undertook included: the addition of the department's Welcome to Country and Acknowledgement of Country Protocols at meetings and events, including at citizenship ceremonies; an information kit for supervisors of Aboriginal and Torres Strait Islander employees; the appointment of a Reconciliation Champion at the SES level, as well as 27 Reconciliation Ambassadors

across Australia, who play an important role in organising activities to celebrate significant Indigenous events.25

Performance reporting

1.24 The department's performance information in relation to deliverables and KPIs is clearly presented and provides a 'clear read' between the report and the Portfolio Budget Statements 2010-11. The inclusion of information in a tabular format to present quantitative KPI information as well as indicators/targets and actual results, adds to the report's accessibility. Similarly, the committee found the addition of trend information, detailed statistics and supporting discussion accompanying various

19 Department of Immigration and Citizenship Reconciliation Action Plan 2010-2012, p. 1.

20 Department of Immigration and Citizenship Reconciliation Action Plan 2010-2012, p. 1.

21 Department of Immigration and Citizenship Reconciliation Action Plan 2010-2012, p. 1.

22 Department of Immigration and Citizenship Annual Report 2011-12, p. 321.

23 Department of Immigration and Citizenship Annual Report 2011-12, pp 321 and 325.

24 Department of Immigration and Citizenship Annual Report 2011-12, pp 321 and 325.

25 Department of Immigration and Citizenship Annual Report 2011-12, p. 321.

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migration programs and visa categories helpful and instructive in providing valuable context.26

1.25 The committee notes that the performance result for the processing of onshore protection applications decided within 90 days, in accordance with section 65A of the Migration Act 195827 (Migration Act) has improved slightly for 2011-12 compared to the result for previous reporting period. The actual result of 64.8 per cent is up from the 60.7 per cent for 2010-11. Nonetheless, this result is below the result for the reporting periods 2009-10 (71.8 per cent) and 2008-09 (77 per cent), and is well below the target result of 100 per cent.28

1.26 The committee notes that in accordance with section 91Y of the Migration Act, monitoring of performance and reporting on processing within 90 days relates to protection visa decision-making only. A similar provision does not exist for refugee status assessments of people who arrive at an excised offshore place.29

1.27 For the period 2011-12, 84 per cent of protection visa decisions which took more than 90 days were caused by departmental-related delays, such as the complexity of some cases which required additional investigation, and resource-related issues. This is a large rise from 73 per cent caused by departmental-related delays in the previous 2010-11 period. Other reasons for delays in processing onshore protection visa applications were 'client-related' and 'external agency/third party'-related.30

1.28 It was reported that in 2011-12, there were 14,415 protection visa applications and refugee status determination requests from people seeking asylum in Australia. This is an increase of 25 per cent on the previous year. Of these protection visas granted, 7,038 visas were granted to irregular maritime arrivals (IMAs) and non-IMAs, an increase of 46 per cent compared with 2010-11. The majority of this increase was due to the grant of protection visas to IMAs, which increased by 75 per cent, while the number of protection visas granted to non-IMAs were slightly higher than 2010-11, by 8 per cent.31

26 Department of Immigration and Citizenship Annual Report 2011-12, Chapter 3 - Report on performance, pp 33-280.

27 Department of Immigration and Citizenship, Protection visa processing taking more than 90 days for the reporting period 1 March 2012 to June 2012, tabled in the Senate on 19 September 2012: see letter of transmittal to Minister on the first page.

28 Department of Immigration and Citizenship Annual Report 2011-12, p. 120. Also Department of Immigration and Citizenship Annual Report 2010-11, p. 106.

29 Department of Immigration and Citizenship Annual Report 2011-12, p. 134.

30 Department of Immigration and Citizenship Annual Report 2011-12, p. 134.

31 Department of Immigration and Citizenship Annual Report 2011-12, p. 131.

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Conclusion

1.29 The report is a comprehensive document which appears to give full coverage of operations during the year and which closely follows the Requirements for Annual Reports. The committee considers the report to be 'apparently satisfactory'.

259

260

CHAPTER 2

ANNUAL REPORTS OF STATUTORY BODIES 2.1 The annual reports of the following statutory bodies for the financial year 2011-12 were referred to the committee for examination and report during the period 1 May to 31 October 2012:

Attorney-General's Portfolio • Administrative Appeals Tribunal

• Australian Commission for Law Enforcement Integrity 1

• Australian Crime Commission 2

• Australian Customs and Border Protection Service

• Australian Federal Police 3

• Australian Government Solicitor

• Australian Human Rights Commission

• Australian Institute of Criminology

• Australian Law Reform Commission

• Australian Security Intelligence Organisation

• Australian Transaction Reports and Analysis Centre

• Classification Board and Classification Review Board

• Commonwealth Director of Public Prosecutions

• CrimTrac Agency

• Family Law Council

• Family Court of Australia

• Federal Court of Australia

• Federal Magistrates Court of Australia

• Insolvency and Trustee Service Australia

• Office of the Australian Information Commissioner

• Office of the Commonwealth Ombudsman 4

1 Also stands referred to the Parliamentary Joint Committee on the Australian Commission for Law Enforcement Integrity, under the Law Enforcement Integrity Commissioner Act 2006.

2 Also stands referred to the Parliamentary Joint Committee on Law Enforcement under the Australian Crime Commission Act 2002.

3 Also stands referred to the Parliamentary Joint Committee on Law Enforcement under the Australian Federal Police Act 1979.

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• Office of Parliamentary Counsel

Immigration and Citizenship Portfolio • Migration Review Tribunal and Refugee Review Tribunal

• Office of the Migration Agents Registration Authority (Sub-program 1.1.3)

Consideration of annual reports 2.2 The committee has determined to consider, but not report on, the annual reports of the Australian Commission for Law Enforcement Integrity and the Australian Crime Commission, as the Parliamentary Joint Committee on the Australian Commission for Law Enforcement Integrity and the Parliamentary Joint Committee on Law Enforcement have specific responsibility for overseeing these agencies.

2.3 Similarly, the Committee has determined to consider, but not report on, the annual reports of the Australian Federal Police and the Office of the Commonwealth Ombudsman, as the Parliamentary Joint Committee on Law Enforcement and the Senate Finance and Public Administration Legislation Committee have specific responsibility for overseeing these agencies.

2.4 On this occasion, the committee has decided to examine in more detail the reports of the Administrative Appeals Tribunal, the CrimTrac Agency, and the Migration Review Tribunal and the Refugee Review Tribunal.

Administrative Appeals Tribunal 2.5 The annual report of the Administrative Appeals Tribunal (AAT) was tabled in the Senate on 31 October 2012.

2.6 The AAT has one outcome and is a one program agency. Its outcome is:

Access to a fair, just, economical, informal and quick review mechanism for applicants through reviews of government administrative decisions, including dispute resolution processes and independent formal hearings.5

2.7 Its primary deliverable is completed reviews of decisions, and there are two parts to achieving it:

• applications finalised without a hearing, and

• applications finalised with a hearing. 6

2.8 The AAT reported an operating surplus of $1.505 million in 2011-12 before unfunded depreciation costs, which is attributed to once-off savings in property costs,

4 Also forwarded to the Finance and Public Administration Legislation Committee.

5 Administrative Appeals Tribunal 2011-12 Annual Report, p. 26. Also in Attorney-General's Portfolio, Portfolio Budget Statements 2011-12, Administrative Appeals Tribunal, p. 59.

6 Administrative Appeals Tribunal 2011-12 Annual Report, p. 26.

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reduced usage of part-time members during the year and a number of vacant positions.7

2.9 The AAT's performance information in relation to program deliverables and performance outcomes corresponds closely to those provided in the Portfolio Budget Statements. Performance results are measured against projected standards, with both qualitative and quantitative information presented in a tabular format. For example, for 'Program 1.1.1 - Applications finalised without a hearing', the AAT's actual performance of 91 per cent exceeded the projected standard of 85 per cent of matters having first conference within 13 weeks. However, in relation to quantity, the actual result of 4,011 fell short of the projected standard of 5,218. Likewise the price per completed application was higher at $4,190 than was the projected standard of $3,190.8

2.10 The inclusion of the Tribunal's service charter in the annual report provides accountability and transparency in reporting. The number and types of complaints made about the Tribunal are usefully broken down into relevant issues, as well as in relation to whether the Tribunal responded (in writing) within the target of 20 working days. 9 Such information is a valuable measurement of performance.

2.11 The committee is pleased to note the report closely follows the list of Requirements for Annual Reports and considers the report of the AAT to be 'apparently satisfactory'.

CrimTrac Agency 2.12 The annual report of the CrimTrac Agency (CrimTrac) was presented out of session on 12 October 2012.

2.13 The committee is pleased with the report's conformity with the list of Requirements for Annual Reports, and with the inclusion of some suggested information, such as policy and practices on the establishment and maintenance of appropriate ethical standards,10 workforce planning, staff turnover and retention,11 names of the senior executive and their responsibilities,12 and senior management committees and their roles.13

2.14 The agency's reported a surplus of $4.747 million for 2011-12 compared to a surplus of $6.480 million for the previous period.14

7 Administrative Appeals Tribunal Annual Report 2011-12, p. 50.

8 Administrative Appeals Tribunal Annual Report 2011-12, p. 27.

9 Administrative Appeals Tribunal Annual Report 2011-12, pp 32 and 33.

10 CrimTrac Annual Report 2011-12, p. 55. 11 CrimTrac Annual Report 2011-12, pp 64-68. 12 CrimTrac Annual Report 2011-12, pp 8 and 9. 13 CrimTrac Annual Report 2011-12, pp 12-18. 14 CrimTrac Annual Report 2011-12, p. 48.

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2.15 Information in the agency's performance outcomes correlates to that contained in the 2011-12 Portfolio Budget Statements. The inclusion of snapshots to illustrate the variety of CrimTrac's work is very helpful in illustrating the complex environment

in which CrimTrac operates.

2.16 The committee notes, however, that actual performance information measured against KPIs does not seem to contain targets. The inclusion of targets is desirable not only for benchmarking of actual results but for enhancing accountability and transparency in reporting. For example, in relation to the National Police Checking Service (NPCS), although information on the quality and quantity of performance are available ('such as 95 per cent of routine checks are processed within ten working days' and 'all enquiries for accreditation are processed according to guidelines in a timely manner') there is no information on targets to judge whether performances have met their objectives.15

2.17 The report has generally complied with the list of Requirements for Annual Reports. The committee considers that the annual report of CrimTrac is 'apparently satisfactory'.

Migration Review Tribunal (MRT) and Refugee Review Tribunal (RRT) 2.18 The Migration Review Tribunal-Refugee Review Tribunal's (MRT-RRT) annual report was presented out of session on 12 October 2012. The committee notes its presentation out of session was two days (falling on a weekend) before the October estimates hearings, which meant the report was not made readily accessible for examination prior to the hearings.

2.19 The Principal Member's overview for 2011-12 provided some contextual background for the environment in which the MRT-RRT operates. For example, the Principal Member revealed that the MRT-RRTs' decision-making for 2011-12 increased by 18 per cent from the previous 2010-11 period and combined application lodgements rose by 30 per cent. The active caseload has significantly increased by 55 per cent as at 30 June 2012 and it was highlighted that the increase in caseload and outputs of the MRT-RRT has been part of a consistent trend in recent years. For 2011-12 the MRT-RRT made 10,815 decisions and active caseload reached 18,364 cases.16 This significant increase in applications, combined with the unavailability of some experienced members, meant that the proportion of RRT cases decided within 90 days fell noticeably short of the previous 2010-11 figure of 71 per cent, to 32 per cent for 2011-12.17

2.20 The committee is pleased to note that the MRT-RRT's performance in 2011-12 exceeded its program deliverable measures and key performance indicators set in its 2011-12 Portfolio Budget Statements. In 2011-12, the MRT-RRT exceeded its deliverable measure of 8,300 cases, with 10,815 cases being decided. In relation to the

15 CrimTrac Annual Report 2011-12, pp 43 and 44. 16 Migration Review Tribunal - Refugee Review Tribunal Annual Report 2011-12, p. 2.

17 Migration Review Tribunal - Refugee Review Tribunal Annual Report 2011-12, p. 2.

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key performance indicator target of less than 5 per cent of tribunal decisions set aside by judicial review, the MRT-RRT achieved 0.2 per cent of MRT and 0.8 per cent of RRT decisions made in 2011-12 that have been set aside by judicial review.18

2.21 The report's inclusion of statistical and trend information presented in graphs, charts and tables means information is easy to locate and readily accessible. The close adherence to the compliance index, as well as the inclusion of suggested information, such as significant changes in the nature of principal functions or services,19 names of the senior executive and their responsibilities,20 corporate and operational planning and associated performance reporting and review,21 work health and safety performance22 and workforce planning.23

2.22 Finally, the integration of a range of real life case studies is a very effective way of presenting complex information. By fleshing out the complexities within each case study, the MRT-RRT provides valuable insight into the work undertaken by the tribunals.

2.23 The MRT-RRT annual report is well presented, with easy to locate information and provides a 'clear read' with the Portfolio Budget Statements. The committee considers the report to be 'apparently satisfactory'.

18 Migration Review Tribunal - Refugee Review Tribunal Annual Report 2011-12, p. 17.

19 Migration Review Tribunal - Refugee Review Tribunal Annual Report 2011-12, p. 43.

20 Migration Review Tribunal - Refugee Review Tribunal Annual Report 2011-12, p. 54.

21 Migration Review Tribunal - Refugee Review Tribunal Annual Report 2011-12, pp 55 and 56.

22 Migration Review Tribunal - Refugee Review Tribunal Annual Report 2011-12, pp 64 and 65.

23 Migration Review Tribunal - Refugee Review Tribunal Annual Report 2011-12, pp 61 and 62.

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CHAPTER 3

REPORTS ON THE OPERATION OF ACTS AND PROGRAMS 3.1 Standing Order 25(20) does not provide for the consideration of reports on the implementation or operation of acts or programs. The committee is not therefore required to include them in its report on the examination of annual reports. However, as on previous occasions, the committee has chosen to examine the following reports:

• Report to the Attorney-General on the results of inspections of records under section 55 of the Surveillance Devices Act 2004 (inspections finalised between 1 July - 31 December 2011);

• Report pursuant to section 440A of the Migration Act on the conduct of Refugee Review Tribunal reviews not completed within 90 days for the period 1 November 2011 to 29 February 2012 (published by the Refugee Review Tribunal); and

• Report pursuant to section 440A of the Migration Act on the conduct of Refugee Review Tribunal reviews not completed within 90 days for the period 1 March 2012 to 30 June 2012 (published by the Refugee Review Tribunal).

Report to the Attorney-General on the results of inspections of records under section 55 of the Surveillance Devices Act 2004 3.2 Subsection 55(1) of the Surveillance Devices Act 2004 (SD Act) requires the Commonwealth Ombudsman (Ombudsman) to inspect the records of each law enforcement agency to determine the extent of their compliance with the SD Act. Under subsection 6(1) of the SD Act, 'law enforcement agency' covers the Australian Crime Commission (ACC), the Australian Federal Police (AFP), the Australian Commission for Law Enforcement Integrity (ACLEI), state and territory police forces, as well as other specified state and territory law enforcement agencies.1 The report reviewed by the committee covers the period between 1 July to 31 December 2011, and examines the ACC, the AFP and the Victoria Police Special Projects Unit.

3.3 The Ombudsman's inspections found these agencies complied with the SD Act and had a strong compliance culture, with a high standard of record keeping. The AFP and the ACC were found to have significantly improved their standard of record-keeping to demonstrate compliance with warrants; this compared well to the Ombudsman's previous report to the Attorney-General.2

1 Report to the Attorney-General on the results of inspections of records under s 55 of the Surveillance Devices Act 2004, p. 1.

2 Report to the Attorney-General on the results of inspections of records under s 55 of the Surveillance Devices Act 2004, pp 2 and 3.

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3.4 In relation to inspection of the ACC, conducted from 31 January to 2 February 2011, the Ombudsman's assessment of a 45 per cent sample (25 warrants and authorisations) were assessed to have complied with the SD Act. In contrast to the Ombudsman's previous inspection, the ACC was able to provide sufficient information to show compliance with subparagraph18(2)(c)(i)3 for 100 per cent of the 'person warrants' under inspection. This is a significant improvement from the ACC's 26 per cent of 'person warrants' that did not comply with the SD Act in the previous reporting period.4

3.5 Similarly, there were improvements found in the inspection results of the AFP, conducted from 4 to 8 April 2011. Compared to the previous report, whereby the Ombudsman could not provide compliance assessment against

subparagraph 18(2)(c)(i) for 44 per cent of the AFP's 'person warrants' due to insufficient record-keeping, for this reporting period, 95 per cent of the 'person warrants' were found to be in compliance. Further, the AFP advised that, since inspection, it has revised its guidelines to provide staff with clear guidance on the use and retrieval of surveillance devices and the SD Act's reporting requirements. 5

3.6 The inspection of the Victoria Police Special Projects Unit's surveillance device records took place on 9 August 2011, with the examination of one surveillance device warrant (and associated records) that expired during the period 1 July 2010 to 30 June 2011. The Ombudsman's inspection assessed the Victoria Police Special Project Unit as compliant with the SD Act and commended its positive attitude to compliance.6

Refugee Review Tribunal reviews not completed within 90 days 3.7 Section 440A of the Migration Act 1958 (Migration Act) requires the Refugee Review Tribunal (RRT) to report on reviews not completed within 90 days. The RRT is required to report every four months. The reports reviewed by the committee cover the period 1 July 2011 to 30 June 2012.

3 Report to the Attorney-General on the results of inspections of records under s 55 of the Surveillance Devices Act 2004, p. 3. Subparagraph 18(2)(c)(i) of the SD Act provides that a 'person warrant' authorises the installation, use and maintenance of devices on premises where the person is reasonably believed to be or likely to be. Where surveillance devices have been installed on premises under a 'person warrant', there is an expectation that there would be information relating to the use of these devices linking the premises to the person named in the warrant.

4 Report to the Attorney-General on the results of inspections of records under s 55 of the Surveillance Devices Act 2004, p. 4.

5 Report to the Attorney-General on the results of inspections of records under s 55 of the Surveillance Devices Act 2004, p. 5. The inspection examined surveillance device warrants and authorisations (and associated records) that expired during the period 1 July to 31 December 2010.

6 Report to the Attorney-General on the results of inspections of records under s 55 of the Surveillance Devices Act 2004, p. 7.

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3.8 The table below sets out the number of RRT reviews not completed within 90 days compared to those that were completed for the previous three reporting periods; and the RRT number for cases outside of 90 days not decided at the end of the reporting period.7

1 July 2011 to

31 October 2011 1 November 2011 to

29 February 2012

1 March 2012 to 30 June 2012

Reviews completed outside of 90 days 386 (47% of 816)

619

(74% of 840)

847

(74% of 1,147)

Reviews completed within 90 days (or Tribunal had no

jurisdiction)

430

(53% of 816)

221

(26% of 840)

300

(26% of 1,147)

Total 816 840 1,147

Cases outside 90 days and not

decided at end of

reporting period

509

(38% of 1,328 of active cases as at 31.10.11)

752

(50% of 1,499 of active cases as at 29.02.12)

642

(43% of 1,501 of active cases as at 30.06.12)

3.9 The MRT-RRT has a KPI target of 70% of RRT cases decided within 90 calendar days.8

3.10 The committee notes the percentage of reviews completed within 90 days remained the same at 26 per cent for the most recent period, and is down from 53 per cent for July to October 2011.

3.11 Reasons attributed to reviews taking longer than 90 days were: tribunal responsibility; compliance with statutory procedural requirements; applicant or adviser related; and third party responsibility.

7 Report pursuant to section 440A of the Migration Act on the conduct of Refugee Review Tribunal reviews not completed within 90 days for the period 1 March 2012 to 30 June 2012, p. 1; Report pursuant to section 440A of the Migration Act on the conduct of Refugee Review Tribunal reviews not completed within 90 days for the period 1 November 2011 to 29 February 2012, p. 1; Report pursuant to section 440A of the Migration Act on the conduct of Refugee Review Tribunal reviews not completed within 90 days for the period 1 July 2011 to 31 October 2011, p. 1.

8 Migration Review Tribunal - Refugee Review Tribunal Annual Report 2011-12, p. 17.

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3.12 The results for the number of RRT cases outside 90 days, and which have not been decided at the end of the reporting period, fell from 50 per cent for the previous period to 43 per cent for the most recent period, but were an improvement from 38 per cent for July to October 2011.

3.13 Reasons attributed to the delays included: an increase in RRT lodgements; and reduced availability of members who had been working for the Independent Protection Assessment Office.9

Senator Trish Crossin Chair

9 Report pursuant to section 440A of the Migration Act on the conduct of Refugee Review Tribunal reviews not completed within 90 days for the period 1 March 2012 to 30 June 2012, p. 1; Report pursuant to section 440A of the Migration Act on the conduct of Refugee Review Tribunal reviews not completed within 90 days for the period 1 November 2011 to 29 February 2012, p. 1; Report pursuant to section 440A of the Migration Act on the conduct of Refugee Review Tribunal reviews not completed within 90 days for the period 1 July 2011 to 31 October 2011, p. 1.

270

APPENDIX 1

Reports tabled during the period 1 May and 31 October 2012 and referred to the committee

Department/authority/

Operation of an act or program

Date

submitted to Minister/Date received by Minister

Date tabled in Senate (received in Senate out

of session)

Date tabled in the House of Reps

Attorney-General's Portfolio

Department/authority - Report for 2011-12

Administrative Review Council - Report No.50 - Federal judicial review in Australia, dated September 2012

12.9.12/ 12.9.12

9.10.12 21.9.12

Administrative Appeals Tribunal 28.9.12/

28.9.12

31.10.12

Attorney-General's Department 11.10.12/

11.10.12

31.10.12

Australian Commission for Law Enforcement Integrity - Report of the Integrity

Commissioner1

29.10.12 (25.10.12)

Australian Crime Commission2 22.9.12/

24.9.12

30.10.12 11.10.12

Australian Customs and Border Protection Service

29.10.12 (23.10.12)

Australian Federal Police3

29.10.12 (12.10.12)

1 Also stands referred to the Joint Committee on the Australian Commission for Law Enforcement Integrity, under the Law Enforcement Integrity Commissioner Act 2006.

2 Also stands referred to the Joint Committee on the Law Enforcement, under the Australian Crime Commission Act 2002.

3 Also stands referred to the Parliamentary Joint Committee on Law Enforcement under the Australian Federal Police Act 1979.

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Australian Government Solicitor

29.10.12 (24.10.12)

Australian Government Solicitor - Statement of corporate intent 2012 to 2013 6.7.12/ 6.7.12

11.9.12 10.9.12

Australian Human Rights Commission 12.10.12/ 12.10.12 30.10.12 29.10.12

Australian Human Rights Commission - Review into the treatment of women in the Australian Defence Force - Phase 2 - Report, dated 8 August 2012

14.8.12/ 14.8.12

11.9.12 22.8.12

Australian Human Rights Commission - Reports -

- No.49 - Cherkupalli v Commonwealth of Australia (Department of Immigration and Citizenship)

- No.50 - Campbell v Black & White Cabs Pty Ltd and Tighe

- No.51 - Brown v Commonwealth of

Australia (Department of Immigration and Citizenship)

5.4.12/ 10.4.12

19.6.12

Australian Human Rights Commission - Reports -

- No.52 - Mr SD v Commonwealth of

Australia (Department of Immigration and Citizenship)

- No.53 - Miss Judy Tuifangaloka

v Commonwealth of Australia (Department of Immigration and Citizenship)

20.6.12/ 20.6.12

12.9.12

Australian Human Rights Commission - Report -

- No.54 - Pak family v Commonwealth of Australia (Department of Immigration and Citizenship)

25.7.12/ 25.7.12

12.9.12

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Australian Human Rights Commission - Report No.55-BZ and AD v Commonwealth of Australia (Department of Immigration and Citizenship)

29.10.12 (17.10.12)

Australian Human Rights Commission - Report - An age of uncertainty - Inquiry into the treatment of individuals suspected of people smuggling offences who say that they are children, dated July 2012

14.8.12 (27.7.12)

Australian Information Commissioner - Personally Controlled Electronic Health Records 2011-12 under section 107 of the Personally Controlled Electronic Health Records Act 2012

24.9.12/ 24.9.12

30.10.12 29.10.12

Australian Institute of Criminology 28.9.12/

28.9.12

30.10.12 11.10.12

Australian Law Reform Commission - Report 119

29.10.12 (15.10.12)

Australian Security Intelligence Organisation 19.9.12/ 19.9.12

Corrigenda 12.11.12/ 12.11.12

10.10.12

Corrigenda tabled 28.11.12

Corrigenda tabled 28.11.12

Australian Transaction Reports and Analysis Centre

29.10.12 (12.10.12)

Classification Board and Classification Review Board 14.9.12/ 14.9.12

30.10.12 11.10.12

Commonwealth Director of Public

Prosecutions

28.9.12/ 28.9.12

30.10.12 29.10.12

CrimTrac Agency

29.10.12 (12.10.12)

Family Law Council

29.10.12 (17.10.12)

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Family Court of Australia

29.10.12 (24.10.12)

Federal Court of Australia

29.10.12 (24.10.12)

Federal Magistrates Court of Australia

29.10.12 (17.10.12)

Insolvency and Trustee Service Australia - Report for 2011-12, including reports on the operation of the Bankruptcy Act 1966 and Personal Property Securities 2009

10.10.12/ 10.10.12

31.10.12

Australian Information Commissioner

29.10.12 (12.10.12)

Australian Information Commissioner - Compliance and enforcement activities under the Healthcare Identifiers Act 2010

24.9.12/ 24.9.12

30.10.12 29.10.12

Commonwealth Ombudsman4 29.10.12/

29.10.12

31.10.12

Office of Parliamentary Counsel 3.10.12/

3.10.12

31.10.12

Operation of an act/program

Crimes Act 1914 - Australian Commission for Law Enforcement Integrity - Reports 2011-12 -

Authorisations for the acquisition and use of assumed identities

Witness identity protection certificates

25.7.12/ 26.7.12

11.9.12 10.9.12

Crimes Act 1914 -

Authorisations for the acquisition and use of assumed identities - Australian Customs and Border Protection Service - Report for 2011-12

20.8.12/ 21.8.12

9.10.12 21.9.12

4 Also forwarded to the Finance and Public Administration Legislation Committee.

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Crimes Act 1914

Authorisations for the acquisition and use of assumed identities - Australian Federal Police - Report for 2011-12

29.10.12 (12.10.12)

Crimes Act 1914-

Controlled operations -Report for 2011-12

24.10.12/ 24.10.12

30.10.12

Crimes Act 1914 - Reports for 2011-12 on the Ombudsman's activities in monitoring controlled operations conducted by the Australian Crime Commission and the Australian Federal Police

17.9.12/ 17.9.12

10.10.12

Customs Act 1901 - Conduct of Customs Officers [Managed deliveries] - Report for 2011-12

3.10.12/ 3.10.12

9.10.12

Freedom of Information Act 1982 - Review of the operation of the Freedom of Information Act 1982 insofar as it applied to documents held by NBN Co. Limited - Section 100A of the National Broadband Network Companies Act 2011

15.8.12/ 15.8.12

21.8.12 16.8.12

Surveillance Devices Act 2004 -

Commonwealth Ombudsman's reports on inspections of surveillance device records for the period 1 January to 30 June 2012 - Australian Crime Commission and Australian Federal Police for the period of 1 January to 30 June 2011 - New South Wales Police for the period 1 July 2009 to 30 June 2011

21.9.12/ 21.9.12

10.10.12

Surveillance Devices Act 2004 -

Commonwealth Ombudsman's reports on inspections of surveillance device records for the period 1 July to 31 December 2010 - Australian Crime Commission and Australian Federal Police, and Victoria Police Special Projects Unit for the period

1 July 2010 to 30 June 2011

24.4.12/ 26.4.12

19.6.12 29.5.12

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Witness Protection Act 1994 - Report for 2011-12 on the operation of the National Witness Protection Program

29.10.12 (12.10.12)

Immigration and Citizenship Portfolio

Department/authority - Report for 2011-12

Department of Immigration and Citizenship

29.10.12 (12.10.12)

Department of Immigration and Citizenship - Report - Implementation of the

recommendations of the independent review of the incidents at the Christmas Island Immigration Detention Centre and Villawood Immigration Detention Centre, dated

September 2012

No

legislative requirement to table the report.

6.9.12/ 6.9.12

9.10.12 21.9.12

Migration Agents Registration Authority

29.10.12 (12.10.12)

Migration Review Tribunal and Refugee Review Tribunal

29.10.12 (12.10.12)

Migration Act 1958

Migration Act 1958 - Section 486O - Assessment of detention of arrangements - Personal identifiers 683/12, 790/12, 791/12,

806/12, 809/12, 856/12, 948/12 and 979/12 -

- Commonwealth Ombudsman's reports

- Government response to the

Ombudsman's reports, dated

29 October 2012

12.10.12/ 12.10.12 31.10.12

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Migration Act 1958 - Section 486O - Assessment of detention arrangements - Personal identifiers 757/12, 767/12, 774/12,

804/12, 807/12, 814/12, 824/12, 847/12, 853/12, 862/12, 869/12, 872 to 873/12, 879 to 899/12, 901 to 928/12, 930 to 943/12, 945 to 946/12, 950 to 959/12, 970 to 971/12 and 982/12 -

- Commonwealth Ombudsman's reports

- Government response to Ombudsman's reports, dated 11 September 2012

30.8.12/ 31.8.12

19.9.12

Migration Act 1958 -

Reports for the period 1 March to

30 June 2012

- Section 91Y - Protection visa

processing taking more than 90 days

- Section 440A - Conduct of Refugee Review Tribunal reviews not

completed within 90 days

15.8.12/ 15.8.12

19.9.12

Migration Act 1958 - Section 486O - Assessment of detention of arrangements - Personal identifiers 662/11, 675/12, 677/12,

690/12, 709/12, 711/12, 715/12, 723/12, 730/12, 733/12, 735/12, 739/12, 756/12, 759/12, 761/12, 765 to 766/12, 772/12, 775 to 776/12, 778 to 780/12, 782/12, 785/12, 787 to 789/12, 794/12, 797/12, 800 to 803/12, 805/12, 808/12, 811 to 812/12, 819 to 821/12, 833 to 834/12, 844/12, 846/12, 857/12 and 863/12 -

- Commonwealth Ombudsman's reports

- Government response to Ombudsman's reports

15.8.12/ 15.8.12

22.8.12

277

Page 26

Migration Act 1958 - Section 486O - Assessment of detention arrangements - Personal identifiers 707/12, 710/12, 713/12,

714/12, 717/12, 718/12, 721/12, 722/12, 724-28/12, 732/12, 734/12, 736-38/12, 742/12, 747-49/12, 751/12, 752/12, 755/12, 758/12,

760/12, 763/12, 764/12, 768-71/12, 773/12, 777/12, 781/12, 784/12, 786/12 and 829/12 -

- Commonwealth Ombudsman's reports

- Government response to Ombudsman's reports

8.6.12/ 8.6.12

20.6.12

Migration Act 1958 -

Reports for the period 1 November 2011 to 29 February 2012 -

- Section 91Y - Protection visa

processing taking more than 90 days for the reporting period

1 November 2011 to 29 February 2012

- Section 440A - Conduct of Refugee Review Tribunal reviews not

completed within 90 days for the period 1 November 2011 to 29 February 2012

12.4.12/ 13.4.12

20.6.12

Migration Act 1958 - Section 486O - Assessment of detention of arrangements - Personal identifiers 674/12, 676/12, 678/12 to

680/12, 682/12, 684/12 to 686/12, 691/12 to 69812, 700/12 to 702/12, 704/12, 705/12, 708/12, 712/12, 716/12, 719/12, 720/12, 729/12, 731/12, 743/12, 744/12, 753/12, 754/12, 762/12 -

- Commonwealth Ombudsman's reports

- Government response to Ombudsman's reports

30.4.12/ 1.5.12

9.5.12

278

The Senate

Rural and Regional Affairs

and Transport

Legislation Committee

Annual reports (No. 1 of 2013)

March 2013

279

ii

 Commonwealth of Australia 2013

ISBN 978-1-74229-765-1

This document was produced from camera-ready copy prepared by the Senate Rural and Regional Affairs and Transport Legislation Committee, and printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra.

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Membership of the Committee Members

Senator Glenn Sterle ALP, Western Australia Chair

Senator the Hon. Bill Heffernan LP, New South Wales Deputy Chair

Senator Alex Gallacher ALP, South Australia

Senator Fiona Nash NATS, New South Wales

Senator Lin Thorp ALP, Tasmania

Senator Rachel Siewert AG, Western Australia

Participating Members

Senator Abetz Senator Back Senator Bernardi Senator Bilyk Senator Birmingham Senator Bishop Senator Boswell Senator Boyce Senator Brandis Senator Brown Senator Bushby Senator Cameron Senator Cash Senator Colbeck

Senator Cormann Senator Crossin Senator Di Natale Senator Edwards Senator Eggleston Senator Evans Senator Faulkner Senator Fawcett Senator Fierravanti-Wells Senator Fifield Senator Furner Senator Hanson-Young Senator Humphries

Senator Johnston Senator Joyce Senator Kroger Senator Ludlam Senator Macdonald Senator McEwen Senator McKenzie Senator Marshall Senator Mason Senator Milne Senator Moore Senator Parry Senator Payne Senator Polley Senator Pratt

Senator Rhiannon Senator Ronaldson Senator Ruston Senator Ryan Senator Scullion Senator Singh Senator Smith Senator Stephens Senator Thistlethwaite Senator Waters Senator Whish-Wilson Senator Williams Senator Wright Senator Xenophon

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Committee Secretariat

Mr Stephen Palethorpe, Secretary Ms Kirsty Cattanach, Research Officer Ms Lauren Carnevale, Administration Officer

PO Box 6100 Parliament House Canberra ACT 2600

phone: (02) 6277 3511 fax: (02) 6277 5811 e-mail: rrat.sen@aph.gov.au internet:www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=rrat_ ctte/annual/index.htm

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Table of Contents

Membership of the Committee ........................................................................ iii

Table of Contents ................................................................................................ v

Membership of the Committee ........................................................................ iii

List of Abbreviations ........................................................................................vii

Chapter 1.............................................................................................................. 1

Overview .................................................................................................................... 1

Terms of Reference ................................................................................................ 1

Purpose of annual reports ....................................................................................... 2

Requirements .......................................................................................................... 2

Reports referred to the committee .......................................................................... 3

Reports not examined ............................................................................................. 4

Timeliness ............................................................................................................... 5

Comments on reports .............................................................................................. 5

Chapter 2.............................................................................................................. 7

Annual reports of departments ............................................................................... 7

Department of Agriculture, Fisheries and Forestry ................................................ 7

Department of Infrastructure and Transport ......................................................... 11

Department of Regional Australia, Local Government, Arts and Sport .............. 14

Chapter 3............................................................................................................ 19

Annual reports of agencies .................................................................................... 19

Agriculture, Fisheries and Forestry portfolio ....................................................... 19

Commonwealth authorities ................................................................................... 19

Other agencies ...................................................................................................... 19

Infrastructure and Transport portfolio .................................................................. 20

Commonwealth authorities ................................................................................... 20

Statutory corporations .......................................................................................... 21

Commonwealth companies .................................................................................. 22

Prescribed agencies .............................................................................................. 22

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Regional Australia portfolio ................................................................................. 23

Commonwealth authorities ................................................................................... 23

Commonwealth companies .................................................................................. 25

Prescribed agencies .............................................................................................. 26

Appendix 1 ......................................................................................................... 29

Annual reports referred during the period 1 May 2012 to 31 October 2012 ... 29

Agriculture, Fisheries and Forestry portfolio ....................................................... 29

Infrastructure and Transport portfolio .................................................................. 30

Regional Australia, Local Government, Arts and Sport portfolio ....................... 31

Appendix 2 ......................................................................................................... 33

List of annual reports tabled after 31 October 2012 ........................................... 33

Agriculture, Fisheries and Forestry portfolio ....................................................... 33

Infrastructure and Transport portfolio .................................................................. 35

Regional Australia, Local Government, Arts and Sport portfolio ....................... 36

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List of Abbreviations

AAO Administrative Arrangements Order

ABARES Australian Bureau of Agricultural and Resource Economics and Sciences

AMSA Australian Maritime Safety Authority

ANAO Australian National Audit Office

ARTC Australian Rail Track Corporation Ltd

ASC Australian Sports Commission

ASADA Australian Sports Anti-Doping Authority

ATSB Australian Transport Safety Bureau

BSPVES Bass Strait Passenger Vehicle Equalisation Scheme

CAC Act Commonwealth Authorities and Companies Act 1997

CAC Orders Commonwealth Authorities (Annual Reporting) Orders 2011; Commonwealth Companies (Annual Reporting) Orders 2011

CASA Civil Aviation Safety Authority

COAG Council of Australian Governments

DAFF Department of Agriculture, Fisheries and Forestry

DHS Department of Human Services

EPBC Act Environment Protection and Biodiversity Conservation Act 1999

FFA Football Federation Australia

FMA Act Financial Management and Accountability Act 1997

FOI Act Freedom of Information Act 1982

Infrastructure Department of Infrastructure and Transport

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KPIs Key Performance Indicators

MSIC Maritime Security Identification Card

NCA National Capital Authority

NFSA National Film and Sound Archive

NGA National Gallery of Australia

NICS National Infrastructure Construction Schedule

NLA National Library of Australia

NMA National Museum of Australia

NTC National Transport Commission

WH&S Act Work Health & Safety Act 2011

OTS Office of Transport Security

PAES Portfolio Additional Estimates Statements

PBS Portfolio Budget Statements

RALGAS Regional Australia, Local Government, Arts and Sport

Requirements for Annual Reports Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies

TFES Tasmanian Freight Equalisation Scheme

The Standards Printing standards for documents presented to Parliament

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Chapter 1

Overview

1.1 The committee is responsible for examining the annual reports of departments and agencies within three portfolios:

• Agriculture, Fisheries and Forestry;

• Infrastructure and Transport; and

• Regional Australia, Local Government, Arts and Sport.

Terms of Reference

1.2 Under Senate Standing Order 25(20), annual reports of departments and agencies shall stand referred to the legislation committees in accordance with an allocation of departments and agencies in a resolution of the Senate. Each committee shall:

(a) Examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory.

(b) Consider in more detail, and report to the Senate on, each annual report which is not apparently satisfactory, and on other annual reports which it selects for more detailed consideration.

(c) Investigate and report to the Senate on any lateness in the presentation of annual reports.

(d) In considering an annual report, take into account any relevant remarks about the report made in debate in the Senate.

(e) If the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates.

(f) Report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on annual reports tabled by 30 April each year by the tenth sitting day after 30 June of that year.

(g) Draw to the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports.

(h) Report to the Senate each year whether there are any bodies which do not present annual reports to the Senate and which should present such reports.

Purpose of annual reports

1.3 The tabling and scrutiny of annual reports by Senate committees, under Standing Order 25(20), is an important element in the process of the government's

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accountability to Parliament. The information provided in annual reports is placed on the public record and assists Parliament in its examination of the performance of departments and agencies and the administration of government programs.

Requirements

1.4 Annual reports are examined by the committee to determine whether they are timely and 'apparently satisfactory'. In forming its assessment, the committee considers whether the reports comply with the relevant legislation and guidelines for the preparation of annual reports:

• for departments of state and executive agencies these are: the Public Service Act 1999, subsections 63(2) and 70(2), and the Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies (Requirements for Annual Reports), Department of the Prime Minister and Cabinet (PM&C), approved by the Joint Committee of Public Accounts and Audit and updated by PM&C on 28 June 2012;

• for Commonwealth authorities and companies: the Commonwealth

Authorities and Companies Act 1997 (the CAC Act), sections 9, 36 and 48, the Commonwealth Authorities (Annual Reporting) Orders 2011, the Commonwealth Companies (Annual Reporting) Orders 2011 (CAC Orders) and the requirements of the Corporations Act 2001; and

• for non-statutory bodies: the requirements are contained in the Government response to the report of the Senate Standing Committee on Finance and Government Operations on Non-statutory bodies, Senate Hansard, 8 December 1987, pp 2643-45.

1.5 The committee notes that Annual reports for Commonwealth authorities and companies for the 2011-12 financial year have been be prepared in accordance with the respective CAC Orders.

1.6 The committee reminds departments, executive and prescribed agencies to review the Printing standards for documents presented to Parliament (the standards). The standards do not encourage the use of full colour printing and suggest that this should be restricted to those reports of companies and authorities in active competition with the private sector, documents that are used for communication or marketing purposes with an audience beyond the Parliament.1 The committee also reminds departments, executive and prescribed agencies that the use of colour that 'bleeds' to the edge of the page is not permitted under the standards.2

1 Parliamentary Paper Series, Advice to government agencies, www.aph.gov.au/Parliamentary_Business/Chamber_documents/Tabled_Papers/Advice_to_gov ernment_agencies (accessed 17 January 2013).

2 Parliamentary Paper Series, Advice to government agencies, www.aph.gov.au/Parliamentary_Business/Chamber_documents/Tabled_Papers/Advice_to_gov ernment_agencies (accessed 17 January 2013).

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Reports referred to the committee

1.7 Standing Order 25(20)(f) requires the committee to report on annual reports tabled by 31 October each year by the tenth sitting day of the following year. This year, that date is 14 March 2013. The committee is also required to report on annual reports tabled by 30 April each year by the tenth sitting day after 30 June of that year, this year, that date is 12 September 2013.

1.8 On 8 February 2012, the Senate amended the continuing order relating to the allocation of departments and agencies to committees. The change of allocations resulted in the Rural Affairs and Transport Committee changing its name to the Rural and Regional Affairs and Transport Committee. The change also resulted in the recently established Regional Australia, Local Government, Arts and Sport portfolio moving from the Finance and Public Administration Committee's responsibilities to the Rural and Regional Affairs and Transport Committee's responsibilities. The committee now has responsibility for the oversight of the following portfolios:

• Agriculture, Fisheries and Forestry;

• Infrastructure and Transport; and

• Regional Australia, Local Government, Arts and Sport. 3

1.9 This report considers annual reports which were tabled in the Senate or presented to the President of the Senate between 1 May 2012 and 31 October 2012. The committee notes that the Report on Annual Reports (No.1) considers reports tabled each year between 1 May and 31 October.

1.10 The committee examined four annual reports of agencies within the Agriculture, Fisheries and Forestry portfolio, seven annual reports of agencies within the Infrastructure and Transport portfolio, and fourteen annual report of agencies within the Regional Australia, Local Government, Arts and Sport portfolio as follows:

Agriculture, Fisheries and Forestry Portfolio

• Department of Agriculture, Fisheries and Forestry—Report for 2011-12;

• Wine Australia—Report for 2011-12;

• Australian Landcare Council—Report for 2011-12;

• National Rural Advisory Council—Report for 2011-12;

Infrastructure and Transport Portfolio

• Department of Infrastructure and Transport—Report for 2011-12;

• Airservices Australia—Report for 2011-12;

• Civil Aviation Safety Authority—Report for 2011-12;

3 Journals of the Senate No. 74, 8 February 2012, pp 2043-44.

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• Australian Maritime Safety Authority—Report for 2011-12;

• National Transport Commission—Report for 2011-12;

• Australian Rail Track Corporation—Report for 2011-12;

• Australian Transport Safety Bureau—Report for 2011-12;

Regional Australia, Local Government, Arts and Sport Portfolio

• Department of Regional Australia, Local Government, Arts and Sport—

Report for 2011-12;

• Australia Council for the Arts—Report for 2011-12;

• Australian Film, Television and Radio School—Report for 2011-12;

• Australian National Maritime Museum—Report for 2011-12;

• Australian Sports Commissions—Report for 2011-12;

• National Gallery of Australia—Report for 2011-12;

• National Library of Australia—Report for 2011-12;

• National Museum of Australia—Report for 2011-12;

• National Film and Sound Archive—Report for 2011-12;

• Screen Australia—Report for 2011-12;

• Australian River Co Limited—Report for 2010-11;

• Bundanoon Trust Limited—Report for 2011-12;

• Australian Sports Anti-Doping Authority—Report for 2011-12;

• National Archives of Australia and National Archives of Australia

Advisory Council—Report for 2011-12; and

• Old Parliament House (Museum for Australian Democracy)—Report for

2011-12.

1.11 A complete list of reports referred to the committee during the period 1 May to 31 October 2012 (including those not examined) appears at Appendix 1. Reports referred to the committee since 1 November 2012 appear at Appendix 2.

Reports not examined

1.12 The committee is not obliged to report on Acts, statements of corporate intent, surveys, corporate plans or errata. The following five documents were referred to the committee but have not been examined:

• Australian Meat and Live-stock Industry Act 1997—Report for 2010-11 in

relation to compliance with the statutory agreement between the Commonwealth of Australia and Australian Livestock Export Corporation Limited (Livecorp);

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• Australian Meat and Live-stock Industry Act 1997—Live-stock mortalities

during exports by sea—Report for the period 1 January to 30 June 2012;

• Sydney Airport Demand Management Act 1997—Quarterly report on the maximum movement limit for Sydney Airport for the period 1 January to 30 March 2012; and

• Sydney Airport Demand Management Act 1997—Quarterly report on the

maximum movement limit for Sydney Airport for the period 1 April to 30 June 2012.

• Local Government (Financial Assistance) Act 1995—Report for 2008-09

Local Government National Report.

Timeliness

1.13 Standing Order 25(20)(c) requires the committee to report to the Senate on the late presentation of annual reports.

1.14 As stated in the Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies (Requirements for Annual Reports), annual reports must be tabled in Parliament by 31 October each year, except where an agency's own legislation specifies a timeframe for its annual report.4 Those agencies reporting under the CAC Act are required to provide their annual reports to the Minister by the 15th day of the fourth month after the end of the financial year.5 Where the financial year ends on 30 June, this deadline translates to 15 October.

Comments on reports

Changes to legislative requirements for Departments, Executive Agencies and FMA Act Bodies

1.15 With the passage of the Carer Recognition Act 2010, the reporting requirements for public service care agencies have changed. Agencies must report their compliance with the obligations outlined in the Carer Recognition Act 2010.

1.16 The reporting requirement for agencies to provide details of each relevant consultancy is no longer required as the information appears on the AusTender website.6

1.17 With the commencement of the Information Publication Scheme (IPS) in 2011 and removal of the requirement for Freedom of Information Act 1982 reporting

4 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 28 June 2012, p. 2.

5 Commonwealth Authorities and Companies Act 1997, s. 9.

6 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 28 June 2012, pp 12-14.

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in individual Commonwealth agency annual reports.7 An explicit statement to where an agency's IPS information can be found must be made in each agency's annual report.8

List of requirements/Compliance index

1.18 The committee is concerned to note that a number of annual reports have either failed to provide or have provided incomplete compliance indexes. A 'List of Requirements' is a mandatory inclusion specified in the Requirements for Annual Reports.9 This list greatly facilitates the committee's task of ensuring adherence to reporting requirements, as well as assisting agencies to clearly and publicly demonstrate that all legislative obligations have been met.

1.19 The committee considers that as a matter of best practice, CAC Act bodies should provide equivalent information in the form of a compliance index based on requirements in the CAC Act and their own governing legislation.

1.20 The committee is particularly pleased with the compliance indexes contained in reports of Wine Australia and the Australian Maritime Safety Authority. Each compliance index was helpfully separated by legislative reporting requirements, which aided the committee's task of ensuring compliance to the reporting requirements.

Report on performance

1.21 The committee considers that most annual reports have provided a clear and thorough report on performance. Annual reports that contained the information presented in tables 'achieved', 'partially achieved' or 'not achieved' were especially effective in demonstrating performance in relation to requirements. The Requirements of Annual Reports specifies that the review must include:

a statement noting if the department has historically met each Key Performance Indicator (KPI). For those KPIs that have not been achieved, a brief explanation is to be included.10

1.22 In particular the committee considers that the Department of Infrastructure and Transport has fulfilled this reporting requirement to a high standard.

7 Individual CAC authorities and companies are required under s.12 of the Commonwealth Authorities (Annual Reporting) Orders 2011, and s. 10 of the Commonwealth Companies (Annual Reporting) Orders 2011 are still required to report against the Freedom of Information Act (1982).

8 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 28 June 2012, pp 16 and 33-34.

9 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 28 June 2012, p. 40.

10 Department of the Prime Minister and Cabinet, Requirements for Annual Reports, 28 June 2012, p. 7.

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Chapter 2

Annual reports of departments 2.1 The 2011-12 annual reports of the Department of Agriculture, Fisheries and Forestry (DAFF), the Department of Infrastructure and Transport (Infrastructure) and the Department of Regional Australia, Local Government, Arts and Sport (Regional Australia) each contain the following information:

• the secretary's yearly review highlighting the achievements of the department;

• a departmental overview outlining the department's operations and organisational structure;

• report on performance as measured against deliverables and key performance indicators (KPIs) specified in the Portfolio Budget Statements (PBS);

• an overview of the department's management and accountability arrangements, including corporate governance practices, people management, external scrutiny, reporting requirements under the Environmental Protection and Biodiversity Conservation Act 1999 (EPBC Act) and the Freedom of Information Act 1982 (FOI Act), reviews, judicial decisions and external service providers;

• appendices detailing agency resource and outcome resource statements, workforce statistics, work health and safety information, grant programs, advertising and market research, grant programs, purchaser-provider arrangements and correction of errors in 2010-11 annual report; and

• financial statements.

Department of Agriculture, Fisheries and Forestry 2.2 The DAFF Annual Report 2011-12 was prepared in accordance with section 63 of the Public Service Act 1999. The report was received by the Senate on 5 October 2012 and tabled on 9 October 2012.

2.3 The report is presented in accordance with the list of requirements specified in the Department of the Prime Minister and Cabinet's Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies (Requirements for Annual Reports).

2.4 DAFF's Annual Report 2011-12 contains the following additional information to that specified in paragraph 2.1:

• the Australia Bureau of Agriculture Resource Economics and Sciences (ABARES) publicly released reports/conference papers, the status of import risk analyses, market access, and the report on operation of the Natural Resources Management (Financial Assistance) Act 1992; and

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• the National Residue Survey annual report. 1

2.5 The committee notes a minor error; the page reference for the Information Publication Scheme statement was not included in the compliance index. Although this omission did not hinder the committee's ability to review the report, the committee reminds DAFF that it is a mandatory requirement to be included in compliance index as detailed in the Requirements for Annual Report.2

Departmental overview

2.6 The committee notes the following items of significance for DAFF during 2011-12:

• the Intergovernmental Agreement on Biosecurity was signed by the Prime Minister and all state and territory first ministers, excluding Tasmania;

• progress was advanced on agricultural and veterinary chemicals regulatory reform;

• the Western Australian pilot of drought reform measures were completed;

• the National Food Plan green paper was released for public comment to ensure a more coordinated approach is taken to food-related policy;

• the biosecurity detector dog program celebrated twenty years of operations; and

• a new Strategic Statement for DAFF was launched.

2.7 The committee notes that DAFF recorded an operating deficit of $46 million due to falling bond rates on the department's employee long service leave provisions and additional regulatory service costs.3

Report on performance

2.8 DAFF has measured its performance against the deliverables and KPIs specified in the 2011-12 PBS. A helpful overview of DAFF's performance framework is provided at the beginning of the report on performance. The committee is pleased to note, following comments in its previous report, that DAFF has included its 'Summary of performance' section in its report for 2011-12. The committee finds this to be a useful tool, as it clearly establishes whether or not performance targets were met.

2.9 The committee notes that DAFF fully met 104 of its 114 KPIs in 2011-12.4 The committee finds DAFF's reporting on performance to be comprehensive and

1 Department of Agriculture, Fisheries and Forestry, Annual Report 2011-12, pp 272-275.

2 Department of Prime Minister and Cabinet, Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies, 28 June 2012, p. 42.

3 Department of Agriculture, Fisheries and Forestry, Annual Report 2011-12, p. 11.

4 Department of Agriculture, Fisheries and Forestry, Annual Report 2011-12, p. 5.

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informative, providing assessments of actual performance in relation to targets where appropriate as well as a 'performance history' underneath each KPI, stating if it is a new KPI for 2011-12, or if the target has been met in the past.5

2.10 The committee notes the following items:

• The Carbon Farming Initiative program created a carbon offsetting market for farmers and landholders who can earn carbon credits by voluntarily reducing greenhouse gas emissions or sequestering carbon on their land.6

• The development and implementation of a new policy and regulatory framework for the export of live animals. The new framework regulates exporters to ensure animals are treated according to internationally recognised animal welfare standards through the Exporter Supply Chain Assurance System. The government provided funding to eligible applicants, such as Australian livestock exporters, to subsidise infrastructure upgrades and training, in order to meet the standards of the World Organisation for Animal Health.7

• A new transitional Farm Family Payment commenced replacing the Exceptional Circumstances Drought Assistance payment. The new Farm Family payment provides assistance to all farming families experiencing financial difficulty as they manage the impact of climate variations and market fluctuations.8

• Funding continued during 2011-12 for the Rural Financial Counselling Service, which provided services to more than 7,500 clients suffering financial hardship. Rural financial counsellors provided assistance to primary producers in Queensland, New South Wales and Victoria in response to the 2011 floods.9

• Landcare received $36.8 million in funding to continue raising awareness of sustainable land management practices, restoring wildlife habitats, improving farmlands and delivering environmental outcomes at the local, regional and state level.10

• Import conditions for the following items were revised to take into account changes in disease status around the world:

• cherries, table grapes and citrus from the United States;

5 Department of Agriculture, Fisheries and Forestry, Annual Report 2011-12, pp 59-61, 74, 82-83, 93, 99-100, 103, 107, 110-111, 115-116, 136-139, 144, 147-148, 158, 174-175, and 186.

6 Department of Agriculture, Fisheries and Forestry, Annual Report 2011-12, pp 44, 55-57.

7 Department of Agriculture, Fisheries and Forestry, Annual Report 2011-12, pp 128-129

8 Department of Agriculture, Fisheries and Forestry, Annual Report 2011-12, pp 34 and 51.

9 Department of Agriculture, Fisheries and Forestry, Annual Report 2011-12, p. 146.

10 Department of Agriculture, Fisheries and Forestry, Annual Report 2011-12, pp 66, 68 and 70.

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• mangoes from the Philippines;

• tomato seed imports; and

• aquarium fish. 11

Management and accountability

2.11 DAFF has a comprehensive and informative external scrutiny section, which details inquiries by parliamentary committees, reports by the

Auditor-General, freedom of information, tribunal and court decisions, act of grace payments and complaints to the Commonwealth Ombudsman. The report on biosecurity investigations from the Office of the Commonwealth Ombudsman is discussed below.

2.12 The Office of the Commonwealth Ombudsman published its report into DAFF's biosecurity investigations in April 2012.12 The report arose out of a recommendation from an earlier Rural and Regional Affairs and Transport Legislation Committee report into DAFF's administration of the citrus canker outbreak in Emerald, Queensland, which occurred during 2004.13

2.13 The Commonwealth Ombudsman conducted five reviews over three years and found DAFF had: acted professionally; followed internal and external guidelines and policies during investigations; and that applications for, and execution of, warrants complied with legislation. Areas where improvements could be made were noted and the report made six recommendations, which are summarised below.

2.14 The recommendations were to:

• consistently use case management tools that are proportionate to the complexity of the investigation;

• improve record keeping, including documenting reasons for decisions, activities and events throughout an investigation;

• revise a national instructional manual;

• use interview plans; and

• engage the use of an independent or external auditor to assess how plant material samples have been handled.14

11 Department of Agriculture, Fisheries and Forestry, Annual Report 2011-12, pp 164.

12 Commonwealth Ombudsman, Department of Agriculture, Fisheries and Forestry Investigations and enforcement activities of DAFF Biosecurity,12 April 2012, p. 1.

13 Senate Rural and Regional Affairs and Transport Legislation Committee, The administration by the Department of Agriculture, Fisheries and Forestry of the citrus canker outbreak, June 2006, p. vii.

14 Commonwealth Ombudsman, Department of Agriculture, Fisheries and Forestry Investigations and enforcement activities of DAFF Biosecurity, pp 13-16.

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2.15 DAFF agreed with the findings of the Office of the Commonwealth Ombudsman and is working toward, implementing all recommendations, including an annual audit schedule of investigation activities.15

Conclusion

2.16 The committee considers that DAFF's Annual Report 2011-12 complies with the reporting requirements of a Commonwealth department and is 'apparently satisfactory'.

Department of Infrastructure and Transport 2.17 The Department of Infrastructure and Transport (Infrastructure) Annual Report 2011-12 was prepared in accordance with section 63 of the Public Service Act 1999 and other relevant legislation. The report was tabled in the Senate on 31 October 2012.

2.18 The report is presented in accordance with the list of requirements specified in the Requirements for Annual Reports.

2.19 Infrastructure has again provided a comprehensive review of its performance for 2011-12. Its report is clearly presented and includes a detailed and easy to follow list of requirements.

2.20 The Infrastructure Annual Report for 2011-12 contains the following additional information to that specified in paragraph 2.1:

• report on Infrastructure Australia, in its capacity as a statutory body, with performance reporting as measured against the deliverables and KPIs specified in the PBS.

Departmental overview

2.21 The committee notes the following items of significance for Infrastructure during 2011-12:

• administered $7.8 billion in direct and indirect grants for construction and maintenance of land transport infrastructure;

• the release of the second annual State of Australian Cities Report;

• the creation of the National Infrastructure Construction Schedule website;

• the final report on the joint study on aviation capacity for the Sydney region was provided to the Minister for Infrastructure and Transport and the New South Wales Premier;

• the Council of Australian Governments (COAG) signed the National Partnership Agreements, which will implement a single law to regulate all rail safety, heavy vehicle and commercial shipping operations;

15 Department of Agriculture, Fisheries and Forestry, Annual Report 2011-12, p. 217.

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• implementation began on the National Road Safety Strategy 2011-2020, which is aiming for a 30 per cent reduction in road-crash deaths and serious injury by 2020; and

• the Stronger Shipping for a Stronger Economy legislative package was passed by Parliament.

2.22 The committee notes that Infrastructure reported a deficit of $12.3 million for 2011-12; the deficit is due to Infrastructure no longer receiving depreciation and amortisation expenses. The report states that if the funding had been appropriated, Infrastructure would have recorded a surplus of $2.4 million.16

Report on performance

2.23 Infrastructure has measured its performance against the deliverables and KPIs specified in the 2011-12 PBS. Infrastructure has again provided a clear and easy to read table for each KPI that clearly states whether or not it was achieved, as well as a results key under each table, clearly explaining the terms used in the table. The committee notes that a majority of KPIs were achieved.17

2.24 The committee notes the following items:

• Under the Liveable Cities and Managed Motorways Program an additional $1.02 billion in funding was provided to the duplication of the Pacific Highway.18

• The creation and launch of the National Infrastructure Construction Schedule (NICS) website. The NICS is a communication tool which allows interested stakeholders to track the progress of all existing and upcoming infrastructure projects worth over $50 million at the local, state and Federal level. The site also contains information about tender opportunities within a project for contracts estimated to be worth more than $25 million. Since the launch of the NICS in May 2012 there has been 675 000 visits to the site.19

• A total of 152 Black Spot projects were completed in 2011-12 and 139 projects were underway. The third study into the evaluation of the Black Spot Program was released in May 2012. The report covered 2578 Australian Government-funded Black Spot projects that had been approved between 1996-97 and 2002-03. The evaluation found that the projects were reducing fatal and casualty crashes by 30 per cent.20

16 Department of Infrastructure and Transport, Annual Report 2011-12, p. 6.

17 Department of Infrastructure and Transport, Annual Report 2011-12, pp 23-28, 46-52, 61-65, 75-78, 84-87, and 108-109.

18 Department of Infrastructure and Transport, Annual Report 2011-12, p. 21.

19 Department of Infrastructure and Transport, Annual Report 2011-12, p. 21. For more information on the NICS see www.nics.gov.au/

20 Department of Infrastructure and Transport, Annual Report 2011-12, pp 21, 34 and 41.

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• Overtime the Navigation Act 1912 came to include a mix of modern and out-dated concepts, in June 2009 the Minister for Infrastructure and Transport, the Hon. Anthony Albanese MP announced that the Navigation Act 1912 would be re-written. The Navigation Bill 2012 was introduced into Parliament in May 2012, and reflects contemporary maritime industry practice and clearly outlines the regulatory responsibilities of domestic and international seafarers, and vessel owners and operators. The Navigation Bill received Royal Assent on 13 September 2012 and is now known as the Navigation Act 2012.21

• The Tasmanian Freight Equalisation Scheme (TFES) received $93.2 million in assistance and the Bass Strait Passenger Vehicle Equalisation Scheme (BSPVES) received $34.6 million. Both figures are marginally below the 2010-11 figures of $98.5 million and $36.5 million respectively. Modelling shows that an estimated 15 000 new visitors travelled by sea due to the BSPVES in 2011-12. The TFES is a demand-driven scheme and the number of claims paid was lower in 2011-12 (9860) compared to 10 162 claims in 2010-11.22

• The Stronger Shipping for a Stronger Economy package was announced in September 2011 to revive the Australian shipping industry. The package comprised of a new regulatory framework for coastal shipping, significant tax reforms and a new Australian International Shipping Register. Five related Bills were introduced into Parliament on 22 March 2012, which were passed and came into effect on 1 July 2012.23

Management and accountability

2.25 Three major Australian National Audit Office (ANAO) reports relating to Infrastructure's activities and four cross-portfolio audits involving Infrastructure were tabled in 2011-12. The main report, of particular interest is discussed below.

2.26 The ANAO Report No.13 of 2011-12 assessed the management of the TFES. The administration of the TFES is shared between Infrastructure and the Department of Human Services (DHS) through a Memorandum of Understanding. Infrastructure is responsible for policy formulation and advice, as well as the overall management of the program. DHS is responsible for the day-to-day administration of the TFES, which is delivered through Centrelink. 24

2.27 The ANAO indicated that the amount of assistance paid varies greatly, for instance in 2010-11, the largest annual amount of assistance paid to a single claimant

21 Department of Infrastructure and Transport, Annual Report 2011-12, pp 4, 60, 63, 66, 68 and 73.

22 Department of Infrastructure and Transport, Annual Report 2011-12, p. 70.

23 Department of Infrastructure and Transport, Annual Report 2011-12, p. 69.

24 Australian National Audit Office, Tasmanian Freight Equalisation Scheme, Audit Report No. 13 of 2011-12, p. 16.

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was $15.2 million, the smallest annual amount was 54 cents, and the average claim paid was $3.4 million.25

2.28 The ANAO found that the TFES is a well-established program and contributes a total of $100 million in assistance to a range of businesses and individuals within the . Between 2004-05 and 2010-11, the number of TFES claims increased by 58 per cent and the number of claimants by 19 per cent.

2.29 The ANAO stated that the program's eligibility criteria and payment calculations are complex, as payments for freight assistance depend on the type of goods, whether the goods are refrigerated or in a loose or packaged form, the origin and the destination of the relevant goods. Given the complexity of the scheme the ANAO provided examples of claimants who were overpaid for a number of years and claimants who were underpaid.26

2.30 The ANAO provided three recommendations that would strengthen the scheme. The recommendations aim to improve the accuracy of information used to calculate payments, strengthen quality assurance activities, and develop more effective integrity testing arrangements for the Staff Online system.27 DHS considered the report while Infrastructure has commenced implementation of the recommendations.

Conclusion

2.31 The committee considers that Infrastructure's Annual Report 2011-12 complies with the reporting requirements of a Commonwealth department and is 'apparently satisfactory'.

Department of Regional Australia, Local Government, Arts and Sport 2.32 The Committee notes that this its first opportunity to review the Department of Regional Australia, Local Government, Arts and Sport's annual report since the Senate amended the allocation of departments and agencies to Senate Committees on 8 February 2012.28 Previously, the department's reports have been reviewed by the Senate Finance and Public Administration Legislation Committee.

2.33 The Department of Regional Australia, Local Government, Arts and Sport (Regional Australia) Annual Report 2011-12 was prepared in accordance with section 63 of the Public Service Act 1999 and other relevant legislation. The report was tabled in the Senate on 30 October 2012.

25 Australian National Audit Office, Tasmanian Freight Equalisation Scheme, Audit Report No. 13 of 2011-12, p. 18.

26 Australian National Audit Office, Tasmanian Freight Equalisation Scheme, Audit Report No. 13 of 2011-12, pp 17 and 91.

27 Australian National Audit Office, Tasmanian Freight Equalisation Scheme, Audit Report No. 13 of 2011-12, pp 23-28.

28 Journals of the Senate, 8 February 2012, p. 2043.

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2.34 The report is presented in accordance with the list of requirements specified in the Requirements for Annual Reports.

2.35 The Regional Australia Annual Report 2011-12 contains the following additional information to that specified in paragraph 2.1:

• the Protection of Moveable Cultural Heritage Act 1986 Report.

2.36 The committee notes a minor error in the compliance index; a 'not applicable' was reported against exempt contracts, which is referred to in the body of the report.29 This did not hinder the committee's ability to review the report.

Departmental overview

2.37 The committee notes the following items of significance for Regional Australia during 2011-12:

• the Regional Development Australia Fund commenced work with the first two rounds providing $350 million in funding for 81 projects;

• the Norfolk Island Economic Development Plan was released in March 2012. The plan identifies reforms required for Norfolk Island to develop an economic base and capability to ensure a sustainable future;

• payments were administered through the Financial Assistance Grants program to local governments worth over $2.7 billion;

• the Office for Sport finalised an agreement between Federal, state and territory governments to address match-fixing and corruption in sport;

• significant progress was made on the major sporting events to be hosted in Australia including the Asian Football Conference in 2015, the 2015 Cricket World Cup and the 2018 Commonwealth Games;

• the Better Regions Program provided $171.8 million in funding for 106 social and community infrastructure projects; and

• the National Bike Paths project provided $40 million for over 600 kilometres of new and upgraded bike paths.

2.38 The committee notes Regional Australia recorded a small of surplus of $58 000 for 2011-12.

Report on performance

2.39 Regional Australia has measured its performance against the deliverables and KPIs specified in the 2011-12 PBS. Regional Australia has provided a clear and easy to read table that identifies whether or not the KPI has been achieved. Each outcome is drawn together with a projected outlook for the future, which consolidates the review

29 Department of Regional Australia, Local Government, Arts and Sport, Annual Report 2011-12, pp 116 and 271.

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of performance and balances the lack of trend information available for a recently established department. The committee notes that a majority of KPIs were achieved.30

2.40 The committee notes the following items:

• The East Kimberly Development Package comprises of 29 projects worth $195.2 million. Of the 29 projects, 20 were completed in 2011-12. The program will conclude in the 2012-13 financial year.31

• The Local Government Infrastructure Review, commissioned by the department, was released in June 2012. The review identifies how councils can prioritise and fund local infrastructure needs, improve access to finance, and use best-practice models and principles for prioritising and financing local infrastructure.32

• Legislation was passed in Parliament to extend the Administrative Appeals Tribunal and introduce a local Ombudsman to Norfolk Island. The legislation provides Norfolk Island residents with the ability to lodge complaints on decisions by Norfolk Island's government agencies, which are considered to be unjust, unlawful, discriminatory or unfair.33

• The Hawke Review of the National Capital Authority (NCA) was released in October 2011 and the Australian Government's response was released in May 2012. The report provided advice on achieving the right balance for planning responsibilities between the Australian Government and the Australian Capital Territory Government. In response to the review, the NCA received $11.9 million over four years as part of the 2012-13 Budget to ensure its financial sustainability.34

• The Review of the Australia Council announced in December 2011 has assisted in the development of the National Cultural Policy. The review made 18 recommendations for revitalising support for the Australian arts sector.35

• Regional Australia administered the Regional Arts Fund and provided $3.037 million in funding to peak regional arts organisation in each state

30 Department of Regional Australia, Local Government, Arts and Sport, Annual Report 2011-12, pp 35-37, 45, 48, 54-55, 67-68, 81-83, and 97-98.

31 Department of Regional Australia, Local Government, Arts and Sport, Annual Report 2011-12, p. 43.

32 Department of Regional Australia, Local Government, Arts and Sport, Annual Report 2011-12, p. 57. For more information on the review see www.regional.gov.au/local/lgifr/index.aspx.

33 Department of Regional Australia, Local Government, Arts and Sport, Annual Report 2011-12, p. 69.

34 Department of Regional Australia, Local Government, Arts and Sport, Annual Report 2011-12, p. 75.

35 Department of Regional Australia, Local Government, Arts and Sport, Annual Report 2011-12, p. 83.

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and art ministers in the territories. The program supports sustainable cultural development in regional and remote Australia.36

• The Hon Warwick Smith AM undertook a strategic review into the sustainability of football in Australia. The review found that football in Australia has strong growth rates, achieves results at the elite level with high-levels of female participation. The review found challenges remain for football in Australia and states that "financial stability must be the singular and immediate priority for football's governing body, Football Federation Australia (FFA)".37 The FFA accepted all recommendations and implementation has commenced.

Management and accountability

2.41 Regional Australia has provided an informative and detailed management and accountability section. There are three performance audits currently in progress. One ANAO performance audit report directly related to Regional Australia was tabled in Parliament, The Establishment, Implementation and Administration of the Bike Paths Component of the Local Jobs Fund, is discussed below. 38

2.42 The ANAO Report No.27 of 2011-12 assessed the efficiency and effectiveness of the establishment, implementation and administration of the bike paths component of the Local Jobs Stream of the Jobs Fund. Of the $300 million allocated to the Local Jobs Stream, $40 million was set aside to meet the Australian Government's commitment to the Australian Greens.39

2.43 Administration of the bike paths component of the Local Jobs Stream was shared between the Department of Education, Employment and Workplace Relations, and the then Department of Infrastructure, Transport, Regional Development and Local Government. This function was transferred to the Department of Regional Australia, Regional Development and Local Government in 2010, which later become Regional Australia after a machinery of government change in December 2011.40

2.44 A total of 255 applications were received seeking funding under the bike paths component, worth nearly $105 million. The average amount of funding sought was $428 561, with the requests for grants ranging from $10 500 to $3.82 million. By

36 Department of Regional Australia, Local Government, Arts and Sport, Annual Report 2011-12, p. 87.

37 Department of Regional Australia, Local Government, Arts and Sport, Annual Report 2011-12, p. 98. For more information on the review see www.regional.gov.au/sport/resources/football_review/index.aspx.

38 Department of Regional Australia, Local Government, Arts and Sport, Annual Report 2011-12, p. 113.

39 Australian National Audit Office, The Establishment, Implementation and Administration of the Bike Paths Component of the Local Jobs Fund, Report No.27 of 2011-12, p. 13.

40 Australian National Audit Office, The Establishment, Implementation and Administration of the Bike Paths Component of the Local Jobs Fund, Report No.27 of 2011-12, p. 15.

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the budgeted program end date of 30 June 2010, only 83 of the 167 contracted projects had been completed. 41 The remaining projects were finalised in 2011-12.42

2.45 The ANAO stated that the implementation of the bike paths component was inconsistent with key aspects of the enhanced grants administration framework. For instance, the department did not provide its Minister with recommendations as to which applications should be approved and those that should be rejected.43

2.46 The ANAO provided three recommendations to strengthen future community infrastructure grant programs. The recommendations were to:

• adopt application processes and assessment criteria that support the selection of projects that are likely to best contribute to the objectives of the National Cycling Strategy;

• consider value for money and 'fit for purpose' in Regional Australia's implementation of infrastructure construction funding programs; and

• improve risk assessment practices to effectively manage risk and promote equitable treatment of applicants.44

2.47 Regional Australia agreed with the recommendations made in the Audit Report.45

Conclusion

2.48 The committee considers that Regional Australia's Annual Report 2011-12 complies with the reporting requirements of a Commonwealth department and is 'apparently satisfactory'.

41 Australian National Audit Office, The Establishment, Implementation and Administration of the Bike Paths Component of the Local Jobs Fund, Report No.27 of 2011-12, p. 17.

42 Department of Regional Australia, Local Government, Arts and Sport, Annual Report 2011-12, p. 43.

43 Australian National Audit Office, The Establishment, Implementation and Administration of the Bike Paths Component of the Local Jobs Fund, Report No.27 of 2011-12, p. 18.

44 Australian National Audit Office, The Establishment, Implementation and Administration of the Bike Paths Component of the Local Jobs Fund, Report No.27 of 2011-12, p. 22.

45 Department of Regional Australia, Local Government, Arts and Sport, Annual Report 2011-12, p. 113.

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Chapter 3

Annual reports of agencies

3.1 The committee considered all of the following reports to be 'apparently satisfactory'.

Agriculture, Fisheries and Forestry portfolio

Commonwealth authorities

Wine Australia

3.2 The committee is pleased to note that Wine Australia has again certified its compliance with the Commonwealth Fraud Control Guidelines in the prescribed manner.

3.3 The committee commends Wine Australia on its compliance index. The index clearly outlines its reporting requirements under the Commonwealth Authorities and Companies Act 1997, Commonwealth Authorities (Annual Reporting) Orders 2011 (CAC Orders) and the Wine Australia Corporation Act 1980.

Other agencies

Australian Landcare Council

3.4 The Australian Landcare Council Annual Report 2011-12 has been prepared according to the requirements set out in the Natural Resources Management (Financial Assistance) Act 1992.

3.5 The committee notes the finalisation of the Community Call for Action, which according to the report, was prepared on behalf of the Landcare community and is a companion document and implementation guide for the Australian Framework for Landcare. The Community Call for Action was formally handed over to the Landcare community at the Australian Government Landcare Conference held in September 2012.1

National Rural Advisory Council

3.6 The National Rural Advisory Council Annual Report 2011-12 has been prepared in accordance with the requirements outlined in section 20 of the Rural Adjustment Act 1992.

1 Australian Landcare Council, Annual Report 2011-12, p. 1.

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3.7 The committee is pleased to note that the remaining three exceptional circumstances declared areas expired in March and April 2012. The report states that Australia is drought free for the first time in more than a decade.2

Infrastructure and Transport portfolio

Commonwealth authorities

Airservices Australia

3.8 Airservices Australia has provided a comprehensive and well-structured annual report. Airservices Australia's reporting under the Environmental Protection and Biodiversity Conservation Act 1999 (EPBC Act), and the Work Health and Safety Act 2011 (WHS Act) have been fulfilled to a high standard. The information is comprehensive and well-laid out.3

3.9 The review of operations not only provides a description of activities, but also provides an assessment of performance. The layout is clear, with helpful tables that enhance readability.

3.10 However, the committee notes that despite comments made in its previous reports, Airservices Australia has not included another column in its performance reporting tables, to mark whether the activity was found to be 'achieved', 'partially achieved' or 'not achieved'.4

3.11 The committee notes that the report on corporate governance statements were provided in the report, however, not listed in the compliance index.5 The committee reminds Airservices Australia of section 21 of the Commonwealth Authorities (Annual Reporting) Orders 2011. The omission did not hinder the committee's ability to review the report.

Civil Aviation Safety Authority (CASA)

3.12 The committee is pleased to note that CASA has again provided a clear and well-structured report with comprehensive reporting under the EPBC and WHS Acts.6

3.13 The compliance index is helpfully separated by legislative reporting requirements; however, the inclusion of page numbers in the compliance index would greatly assist the committee when assessing CASA's compliance with the reporting

2 National Rural Advisory Council, Annual Report 2011-12, p. 4.

3 Airservices Australia, Annual Report 2011-12, pp36-37, 106-107, and 109-114.

4 Airservices Australia, Annual Report 2011-12, pp 22-26.

5 Airservices Australia, Annual Report 2011-12, pp 14-15, 97-105.

6 CASA, Annual Report 2011-12, pp 104, 106, and 85-87.

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requirements.7 Overall, the omission was not problematic for the committee to assess the report against the relevant requirements.

3.14 CASA's report on performance is comprehensive, well-structured and includes case studies and summaries. CASA has used a tick symbol to represent the status of result, with a key provided at the beginning of the report on performance. The committee notes however that, following comments in its previous report, CASA has not included a statement providing further information for the results listed with one or two ticks, that is, 'delayed/may not meet the target' or 'some delay/issues being managed'.8 In the committee's opinion, CASA's report on performance would benefit from including this additional information.

Australian Maritime Safety Authority (AMSA)

3.15 The committee is pleased to note that, following comments in its previous reports, AMSA has further improved its compliance index. The layout of the index is clear, with separate headings for different legislative reporting requirements.9

3.16 AMSA's report on performance is presented in a clear and easy to understand format, with a helpful summary of highlights provided at the beginning of each chapter. The committee notes however that despite comments in its previous reports, an additional column has not been included to mark targets as 'achieved', 'partially achieved' or 'not achieved'.10

Statutory corporations

National Transport Commission (NTC)

3.17 The NTC is not a Commonwealth authority for the purposes of the CAC Act, however, the NTC's enabling legislation states that certain sections of the CAC Act apply to it, including section 9, relating to annual reporting requirements. Under schedule 1 of the CAC Act, an agency's annual report must include a report of operations prepared in accordance with the CAC Orders.

3.18 The committee notes that the NTC's annual report is easy to understand, with case studies and summaries provided. The report contains a clear and detailed account of the NTC's performance, including productivity and safety outcomes.11

3.19 The committee notes that the NTC celebrated its 21st anniversary in 2012. The report states that within the context of its 21st anniversary the current review of the

7 CASA, Annual Report 2011-12, p. 176.

8 CASA, Annual Report 2011-12, pp 32-58.

9 AMSA, Annual Report 2011-12, pp 182-183.

10 AMSA, Annual Report 2011-12, pp 19-58.

11 National Transport Commission, Annual Report 2011-12, pp 9-39.

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NTC and other bodies is timely as it provides government with an opportunity to consider a long-term national productivity reform agenda.12

Commonwealth companies

Australian Rail Track Corporation (ARTC)

3.20 The committee again notes that the ARTC has included a compliance index in its annual report. The committee finds this very helpful when assessing ARTC's compliance with the reporting requirements.13

3.21 The committee notes that the ARTC has provided an easy to understand report. ARTC's report contains a comprehensive and informative corporate responsibility section, including information about its people, culture, safety management system, community involvement, environmental performance and corporate governance section, which reflects the Australian Stock Exchange's Principals of Good Corporate Governance.14

Prescribed agencies

Australian Transport Safety Bureau (ATSB)

3.22 The ATSB Annual Report 2011-12 was prepared in accordance with the Requirements for Annual Reports. The committee commends the ATSB for tabling its annual report on time.

3.23 The committee notes that the ATSB's annual report is easy to understand, comprehensive and well-structured. The ATSB has provided detailed reporting in its transport safety statistics and safety awareness section.15 The committee notes however, following comments in its previous report, the ATSB has not included an additional column in its report on performance section to allow targets to be marked as 'achieved', 'partially achieved', or 'not achieved'.16

12 National Transport Commission, Annual Report 2011-12, p. 3.

13 ARTC, Annual Report 2011-12, p. 116.

14 ARTC, Annual Report 2011-12, pp 32-45.

15 Australian Transport Safety Bureau, Annual Report 2011-12, pp 42-51 and 52-70.

16 Australian Transport Safety Bureau, Annual Report 2011-12, pp 21-34.

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Regional Australia portfolio

Commonwealth authorities

Australia Council for the Arts

3.24 The committee notes that the report on performance is detailed and easy to comprehend with relevant figures provided to show trend data for the past three years.17

3.25 The Australia Council for the Arts has not included an index in its annual report. The committee finds an index very helpful when searching for specific information not contained in the compliance index and would encourage the Australia Council for the Arts to include an index in its next report.

Australian Film, Television and Radio School

3.26 The Australian Film, Television and Radio School did not include a compliance index in its annual report. The committee reminds the Australian Film, Television and Radio School that it is a mandatory requirement to include a compliance index as detailed in section 21 of the CAC Orders. This omission did not pose problems for the committee in assessing the report against the requirements.

3.27 The committee notes that the Australian Film, Television and Radio School celebrated its 40th anniversary during 2011-12.18

Australian National Maritime Museum

3.28 The Australian National Maritime Museum has provided a detailed account of its performance for 2011-12. It is the committee's opinion that the performance section would benefit from adding another column to allow targets to be marked as 'achieved',

'partially achieved', or 'not achieved'.19

3.29 The committee notes the following items of significance for the Australian National Maritime Museum:

• celebration of its 20 th anniversary; and

• the 2011-12 Australian circumnavigation of the museum's replica of Captain James Cook's HM Bark Endeavour.20

17 Australia Council for the Arts, Annual Report 2011-12, p 37-45.

18 Australian Film, Television and Radio School, Annual Report 2011-12, p. 4.

19 Australian National Maritime Museum, Annual Report 2011-12, pp 34 and 48.

20 Australian National Maritime Museum, Annual Report 2011-12, pp 3 and 42.

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Australian Sports Commission

3.30 The Australian Sports Commission (ASC) has provided a detailed and well-structured report, which includes features and case studies. A helpful performance highlight summary for each outcome is provided at the beginning of the report. The report's performance section would benefit from including an additional column in its performance reporting tables to allow KPIs and deliverables to be marked as 'achieved', 'partially achieved' or 'not achieved'.21

3.31 The ASC has also provided an informative and detailed management and accountability section. The report states that during 2011-12, the ASC implemented specific environmental initiatives to address its water and energy usage targets. The ASC achieved accreditation from the Australian Capital Territory Government for its recycling initiatives.22

National Gallery of Australia (NGA)

3.32 The NGA has provided a detailed report; however, the committee recommends a larger font size be used in future as this would improve the overall readability of the report. Nevertheless, the committee did not find this problematic in assessing the report against the requirements.

3.33 The committee finds NGA's environmental and work, health and safety reporting to be of a high standard.23 However, the performance reporting section could be enhanced if tables were used to report whether KPIs were 'achieved', 'partially achieved' or 'not achieved'.24

National Library of Australia (NLA)

3.34 The committee finds the NLA Annual Report 2011-12 to be comprehensive and well-structured. The compliance index is divided between its reporting requirements set out in the Commonwealth Authorities (Annual Reporting) Orders 2011 and the relevant elements of the Requirements for Annual Reports.25 The committee reminds the NLA to date the letter of transmittal to the minister.

3.35 The committee notes that the NLA has fulfilled its performance reporting section to a high standard, as it provides a detailed assessment of its performance against its strategies, including using tables, graphs and charts to present relevant information.26

21 Australian Sports Commission, Annual Report 2011-12, pp 16-17 and 33-34.

22 Australian Sports Commission, Annual Report 2011-12, p. 69.

23 National Gallery of Australia, Annual Report 2011-12, pp 58-61.

24 National Gallery of Australia, Annual Report 2011-12, p. 31.

25 National Library of Australia, Annual Report 2011-12, p. 159.

26 National Library of Australia, Annual Report 2011-12, pp 53-71.

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National Museum of Australia (NMA)

3.36 The committee notes that the NMA has provided a clear and comprehensive report on performance section providing assessments of actual performance in relation to its targets.27

3.37 The committee notes the NMA introduced its museum iPad game. The game enables school students to make connections between objects in the museum's galleries. The games can be set up to respond to themes within the Australian curriculum.28

National Film and Sound Archive (NFSA)

3.38 The NFSA Annual Report 2011-12 is comprehensive and well-structured report. The committee commends the NFSA on the overall structure and presentation of its report.

3.39 The committee finds the NFSA's reporting on performance to be comprehensive and informative. The 'snapshot - our performance' section is clearly laid out and provides comprehensive results at 30 June 2011 and at 30 June 2012.29

Screen Australia

3.40 Screen Australia's annual report is a wide-ranging and well-structured report with a selection of photos from Australian television and movie productions. The committee notes Screen Australia's report on performance section as it contains actual performance assessments for each KPI.30

3.41 However, the committee notes that Screen Australia did not include a compliance index in its Annual Report 2011-12. The committee reminds Screen Australia that it is a mandatory requirement to include a compliance index as detailed in section 21 of the CAC Orders. This omission was not problematic for the committee to assess the report against the requirements.

Commonwealth companies

Australian River Co Limited

3.42 The committee notes that the Australian River Co Limited Annual Report 2010-11 has also been referred to the Senate Finance and Public Administration Legislation Committee for review, as the Department of Finance and Deregulation

27 National Museum of Australia, Annual Report 2011-12, pp 14-19.

28 National Museum of Australia, Annual Report 2011-12, p. 41.

29 National Film and Sound Archive, Annual Report 2011-12, pp 39-42.

30 Screen Australia, Annual Report 2011-12, pp 100-103.

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provides policy advice and oversight of government business enterprises and other associated entities to the Finance Minister on behalf of the government.

3.43 The committee observes that a number of items appear to be missing from Australian River Co Limited's annual report. It appears that Australian River Co Limited has not included an organisational and program structure, report on performance, corporate governance statement, the responsible minister, judicial decisions, review by outside bodies and a compliance index.

3.44 The committee reiterates the statements made by the Senate Finance and Public Administration Legislation Committee in its Annual reports (No.2 of 2009) and Annual Reports (No.1 of 2008) regarding the lack of detailed information contained in Australian River Co Limited's reports.31 Furthermore, it's the committee's opinion that Australian River Co Limited's failure to provide detailed information ignores the primary purpose of annual reports, which is accountability to Parliament.

Bundanon Trust Limited

3.45 The committee observed that a number of mandatory items appear to be missing from the Bundanon Trust Limited 2011-12 Annual Report. It appears that a program outline, performance indicators in its performance reporting section, freedom of information reporting, work health and safety, fraud control, judicial decisions, reviews by outside bodies and a letter of transmittal were not included in the report. The committee expects all mandatory requirements to be included and would encourage Bundanon Trust Limited to review the CAC Orders, before preparing its next report.

Prescribed agencies

Australian Sports Anti-Doping Authority (ASADA)

3.46 The ASADA Annual Report 2011-12 was prepared in accordance with the requirements specified in the Requirements for Annual Reports. The report also contains an overview of the Australian Sports Drug Medical Advisory Committee. The committee notes that ASADA's report is comprehensive, informative and well-structured.

3.47 ASADA has measured its performance against the deliverables and KPIs specified in the 2011-12 PBS. The committee finds ASADA's report on performance to be of a high standard, assessments of actual performance against the KPIs have been provided and each KPIs has been marked either 'achieved' or 'partially achieved'.32

31 Senate Finance and Public Administration Committee, Annual reports (No. of 2008), March 2008, pp 19-24; and Senate Finance and Public Administration Committee, Annual reports (No. of 2 of 2009), March 2009, p. 9.

32 Australian Sports Anti-Doping Authority, Annual Report 2011-12, pp 26-50.

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27

National Archives of Australia and National Archives of Australia Advisory Council (National Archives)

3.48 The National Archives Annual Report 2011-12 was prepared in accordance with the Requirements for Annual Reports. The committee notes that the National Archives has prepared its annual report against the theme of 'Archives making news'. The report states that each section focuses on a key event or initiative from 2011-12 and is accompanied by a quote from the media and a short paragraph providing contextual information.33

3.49 The committee commends the National Archives on its comprehensive and well-structured report on performance. Each performance chapter has a table summary, which outline the KPIs, the actual performance result for 2011-12, page references and trend data for the last four financial years.34 The committee finds this to be immensely useful when assessing whether or not performance targets have been met.

Old Parliament House (Museum for Australian Democracy)

3.50 Old Parliament House Annual Report 2011-12 was prepared in accordance with section 70 of the Public Service Act 1999 and the Requirements for Annual Reports.

3.51 The committee finds the report to be clear and informative. The committee notes that the Old Parliament House has fulfilled its report on performance to a high standard, as actual assessments of performance have been provided for each KPI. For those KPIs that were partially achieved, statements have been provided explaining why they were not fully achieved.35

Senator Glenn Sterle

Chair

33 National Archives of Australia and National Archives of Australia Advisory Council, Annual Report 2011-12, p. i.

34 National Archives of Australia and National Archives of Australia Advisory Council, Annual Report 2011-12, pp 16, 26, and 35.

35 Old Parliament House (Museum of Australian Democracy), Annual Report 2011-12, pp 14-15, and 25-26.

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314

Appendix 1

Annual reports referred during the period 1 May 2012 to 31 October 2012 Agriculture, Fisheries and Forestry portfolio

Legislation Letter of

transmittal date

Date Sent to Minister

Date

received by Minister

Tabling date*

Departments of State

Department of Agriculture, Fisheries and Forestry— Report for 2011-12

Public Service Act 1999

FMA Act 1997

25/09/12 20/09/12 20/09/12 09/10/12

(received 05/10/12*)

Commonwealth authorities

Wine Australia Corporation—Report for 2011-12

CAC Act 1997

Wine Australia Corporation Act 1980

01/10/12 10/10/12 17/10/12 29/10/12

(received 24/10/12*)

Other

Australian Landcare Council—Report from 2011-12

Natural Resources Management (Financial Assistance) Act 1992

September 2012 09/10/12 09/10/12 29/10/12

(received 24/10/12*)

National Rural Advisory Council—Report for 2011-12

Section 20 of the Rural Adjustment Act 1992 16/09/12 19/09/12 19/09/12 09/10/12

* An asterisk denotes reports presented to the President out-of-session.

315

30

Infrastructure and Transport portfolio

Legislation Letter of

transmittal date

Date Sent to Minister

Date

received by Minister

Tabling date*

Department of State

Department of Infrastructure and Transport—Report for 2011-12

Public Service Act 1999

FMA Act 1997

11/10/12 12/10/12 12/10/12 31/10/12

Commonwealth authorities

Airservices Australia— Report for 2011-12 CAC Act 1997 Airservices Act 1995

12/09/12 12/09/12 12/09/12 30/10/12

Australian Maritime Safety Authority—Report for 2011-12

CAC Act 1997

Australian Maritime Safety Authority Act 1990

20/09/12 08/10/12 08/10/12 30/10/12

Civil Aviation Safety Authority—Report for 2011-12

Civil Aviation Act 1988

CAC Act 1997

15/10/12 27/09/12 27/09/12 31/10/12

National Transport Commission—Report for 2011-12

CAC Act 1997

National Transport Commission Act 2003

05/10/12 12/10/12 12/10/12 30/10/12

Commonwealth companies

Australian Rail Track Corporation Ltd—Report for 2011-12

Corporations Act 2001

CAC Act 1997 (section 36)

n/a 10/10/12 10/10/12 30/10/12

Prescribed agencies

Australian Transport Safety Bureau—Report for 2011-12 Transport Safety Investigation Act 2003

FMA Act 1997

03/10/12 19/10/12 22/10/12 30/10/12

* An asterisk denotes reports presented to the President out-of-session.

n/a denotes letters of transmittal that were not dated.

316

31

Regional Australia, Local Government, Arts and Sport portfolio

Legislation Letter of

transmittal date

Date Sent to Minister

Date

received by Minister

Tabling date*

Department of State

Department of Regional Australia, Local Government, Arts and Sport

Public Service Act 1999

FMA Act 1997

11/10/12 24/10/12 24/10/12 30/10/12

Commonwealth authorities

Australia Council for the Arts—Report for 2011-12 CAC Act 1997 Australia Council Act

1975

01/09/12 12/10/12 16/10/12 29/10/12

(received 19/10/12*)

Australian Film, Television and Radio School—Report for 2011-12

CAC Act 1997

Australian Film, Television and Radio School Act 1973

n/a 12/10/12 16/10/12 29/10/12

(received 24/10/12*)

Australian National Maritime Museum—Report for 2011-12

CAC Act 1997

Australian National Maritime Museum Act 1990

n/a 12/10/12 16/10/12 31/10/12

Australian Sports Commission—Report for 2011-12

CAC Act 1997

Australian Sports Commission Act 1989

04/10/12 04/10/12 04/10/12 31/10/12

National Film and Sound Archive—Report for 2011-12

CAC Act 1997

National Film and Sound Archive of Australia Act 2008

30/10/12 12/10/12 16/10/12 31/10/12

National Gallery of Australia—Report for 2011-12

CAC Act 1997

National Gallery Act 1975

30/09/12 12/10/12 16/10/12 29/10/12

(received 22/10/12*)

National Library of Australia—Report for 2011-12

CAC Act 1997

National Library Act 1960

n/a 12/10/12 16/10/12 31/10/12

National Museum of Australia—Report for 2011-12

CAC Act 1997

National Museum of Australia 1980

August 2012 12/10/12 16/10/12 30/10/12

317

32

Legislation Letter of

transmittal date

Date Sent to Minister

Date

received by Minister

Tabling date*

Screen Australia—Report for 2011-12 CAC Act 1997 Screen Australia Act

2008

n/a 12/10/12 16/10/12 29/10/12

(received 24/10/12*)

Commonwealth companies

Australian River Co. Limited—Report for the period 1 December 2010 to 30 November 2011

Corporations Act 2001

CAC Act 1997 (section 36)

10/05/12 6/03/12 8/03/12 19/06/12

Bundanon Trust Limited— Report for 2011-12 Corporations Act 2001 CAC Act 1997 (section

36)

n/a 12/10/12 16/10/12 31/10/12

Prescribed agencies

Australian Sports Anti-Doping Authority—Report for 2011-12

FMA Act 1997

Australian Sports Anti-Doping Authority Act 2006

02/10/12 17/09/12 17/09/12 31/10/12

National Archives of Australia and National Archives of Australia Advisory Council—Report for 2011-12

FMA Act 1997

Public Service Act 1999 (section 70)

12/09/12 12/10/12 16/10/12 31/10/12

Old Parliament House (Museum of Australian Democracy)—Report for 2011-12

FMA Act 1997

Public Service Act 1999 (section 70)

11/10/12 12/10/12 16/10/12 30/10/12

* An asterisk denotes reports presented to the President out-of-session.

n/a denotes letters of transmittal that were not dated.

318

Appendix 2

List of annual reports tabled after 31 October 2012 Agriculture, Fisheries and Forestry portfolio

Legislation Letter of

transmittal date

Date Sent to Minister

Date

received by Minister

Tabling date*

Commonwealth authorities

Cotton Research and Development Corporation— Report for 2011-12

PIERD Act 1989

CAC Act 1997

04/10/12 31/10/12 31/10/12 05/02/13

Fisheries Research and Development Corporation— Report for 2011-12

PIERD Act 1989

CAC Act 1997

29/08/12 08/11/12 08/11/12 05/02/13

Grains Research and Development Corporation— Report for 2011-12

PIERD Act 1989

CAC Act 1997

15/10/12 31/10/12 31/10/12 05/02/13

(received 30/11/12*)

Grape and Wine Research and Development Corporation—Report for 2011-12

PIERD Act 1989

CAC Act 1997

22/08/12 29/10/12 29/10/12 05/02/13

Sugar Research and Development Corporation— Report for 2011-12

PIERD Act 1989

CAC Act 1997

30/09/12 04/12/12 04/12/12 05/02/13

Rural Industries Research and Development Corporation—Report for 2011-12

PIERD Act 1989

CAC Act 1997

30/09/12 31/10/12 31/10/12 27/11/12

Prescribed agencies

Australian Pesticides and Veterinary Medicines Authority—Report for 2011-12

Agricultural and Veterinary Chemicals (Administration) Act 1992

FMA Act 1997

14/09/12 29/10/12 29/10/12 27/11/12

319

34

Legislation Letter of

transmittal date

Date Sent to Minister

Date

received by Minister

Tabling date*

Wheat Exports Australia— Report for 2010-11 Wheat Export Marketing Act 2008

FMA Act 1997

24/09/12 24/09/12 16/10/12 05/02/13

Other

Torres Strait Protected Zone Joint Authority—Report for 2009-10

Torres Strait Fisheries Act 1984 n/a 07/01/13 22/01/13 05/02/13

(received 29/01/13*)

Dairy Australia Limited— Report for 2011-12 Dairy Produce Act 1986

Corporations Act 2001

n/a 13/11/12 13/11/12 27/11/12

Report to the Parliament on Live-stock Mortalities During Exports by Sea for the Reporting Period 1 July 2012 to 31 December 2012

Australian Meat and Live-stock Industry Act 1997

n/a 31/01/13 31/01/13 12/03/13

(received 07/03/13*)

* An asterisk denotes reports presented to the President out-of-session.

n/a denotes letter of transmittal that were not dated.

320

35

Infrastructure and Transport portfolio

Legislation Letter of

transmittal date

Date Sent to Minister

Date

received by Minister

Tabling date*

Other

Sydney Airport Demand Management Act 1997— quarterly report on the maximum movement limit for the period 1 July to 30 September 2012.

Sydney Airport Demand Management Act 1997

n/a 26/10/12 31/10/12 27/11/12

Sydney Airport Demand Management Act 1997— quarterly report on the maximum movement limit for the period 1 October to 31 December 2012.

Sydney Airport Demand Management Act 1997

n/a 25/01/13 25/01/13 06/02/13

* An asterisk denotes reports presented to the President out-of-session.

n/a denotes letter of transmittal that were not dated.

321

36

Regional Australia, Local Government, Arts and Sport portfolio

Legislation Letter of

transmittal date

Date Sent to Minister

Date

received by Minister

Tabling date*

Other

Local Government National Report 2009-10 Local Government (Financial Assistance)

Act 1995

n/a 08/02/13 08/02/13 25/02/13

(received 18/02/13*)

* An asterisk denotes reports presented to the President out-of-session.

n/a denotes letter of transmittal that were not dated.

322