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Australian Law Reform Commission—Report for 2019-20


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ANNUAL REPORT 2019-2020

Requests and enquiries regarding this report should be addressed to:

General Counsel Australian Law Reform Commission PO Box 12953 George Street Post Shop QLD 4003

Telephone: (07) 3248 1224 Email: info@alrc.gov.au Web: alrc.gov.au Twitter: @AusLawReform LinkedIn: linkedin.com/company/alrc

This report is also online at alrc.gov.au/about/annual-reports/

ISSN 0312-6994

© Commonwealth of Australia 2020

This work is copyright. You may download, display, print and reproduce this material in whole or part, subject to acknowledgement of the source, for your personal, non-commercial use or use within your organisation. Requests for further authorisation should be directed to the Australian Law Reform Commission.

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The Hon Christian Porter MP Attorney-General Parliament House Canberra ACT 2600

2 October 2020

Dear Attorney-General

On behalf of the members of the Australian Law Reform Commission, I am pleased to present the Commission’s Annual Report for the period 1 July 2019 to 30 June 2020.

This Report has been prepared in accordance with section 46 of the Public Governance, Performance and Accountability Act 2013 (Cth) (PGPA Act). The annual performance statement in Part 2 of this report is prepared in accordance with paragraph 39(1)(a) of the PGPA Act, and accurately presents the Commission’s performance for the 2019-20 financial year in accordance with subsection 39(2) of the PGPA Act.

The report includes the Commission’s audited financial statements prepared in accordance with the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (Cth) (PGPA Financial Reporting Rule).

As required by section 10 of the Public Governance, Performance and Accountability Rule 2014 (Cth) (PGPA Rule), I certify that the ALRC has prepared fraud risk assessments and a fraud control plan; that the ALRC has appropriate fraud prevention, detection, investigation and reporting mechanisms that meet its specific needs; and that I have taken all reasonable measures to appropriately deal with fraud. There have been no instances of fraud identified during the period.

Yours sincerely

Justice S C Derrington

The Hon Justice S C Derrington President

Australian Law Reform Commission Level 4, Harry Gibbs Commonwealth Law Courts Building 119 North Quay Brisbane QLD 4000

Postal Address: PO Box 12953 George Street Post Shop QLD 4003

Tel (07) 3248 1224 Web alrc.gov.au Email info@alrc.gov.au

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CONTENTS 2019-20 SNAPSHOT vi

PRESIDENT’S FOREWORD 1

YEAR IN REVIEW 5

Role and functions of the ALRC 6

Law reform inquiries in 2019-20 6

Inquiry publications 7

Review of Australia’s Corporate Criminal Responsibility Regime 8 Review of the Framework of Religious Exemptions in Anti-Discrimination Legislation 13

Future of Law Reform Project 16

REPORT ON PERFORMANCE 21

Annual performance statement 22

Introductory statement 22

Our outcome 22

Environment 22

Performance criteria for 2019-20 23

Result against performance criteria 24

Analysis of performance 26

Implementation of reports and impact of work 32

Summary and analysis of financial performance 34

Financial outcomes 34

Entity resource statement 34

Compliance 34

MANAGEMENT AND ACCOUNTABILITY 35

Corporate governance 36

Ministerial powers 36

Accountable Authority 36

Members of the Commission 36

Remuneration 37

Key management personnel 37

Policies 38

Corporate planning 38

Financial management and audit 38

Fraud control and risk management 38

Ethics 39

Conflict of interest 40

Related party disclosures 40

Indemnity 40

Audit Committee 41

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External scrutiny and controls 42

Parliamentary scrutiny 42

Human resource management 43

Staffing 43

Indigenous employment 43

Staff retention and turnover 43

Employment conditions 43

Performance rewards and bonuses 44

Staff development 45

Study leave 45

Law student engagement 45

Other reporting requirements 46

Procurement and purchasing 46

Consultancies 47

Advertising and market research 47

Disability strategy 47

Freedom of information 47

Legal services expenditure 47

Work health and safety 48

Environmental performance 48

FINANCIAL STATEMENTS 51

Independent Auditor’s Report 52

Financial Statements 54

Entity resource statement and expenses for outcomes 2019-20 77 Entity Resource Statement 2019-20 77

Expenses for Outcome 1 78

GLOSSARY AND INDEXES 79

Glossary 80

List of requirements 82

Index 89

126Consultations 29Presentations

261Citations

1,232,654 UNIQUE VISITORS 8.7% increase

2,789,677 PAGE VIEWS 4.2% increase

4REPORTS

2533Subscribers

2019-20 SNAPSHOT

59Submissions

5,561 200.27% growth since Jan 2020

14,004 3.8% growth since June 2019

8Public Seminars & Webinars

PRESIDENT’S FOREWORD

2 ALRC Annual Report 2019-2020

PRESIDENT’S FOREWORD On behalf of the Australian Law Reform Commission (ALRC), I present the Annual Report for 2019-20.

The ALRC is an independent statutory agency for law reform, which is respected by Government and the community as a centre of excellence. It sits within the Attorney-General’s portfolio and supports the Attorney-General and the Australian Government by providing evidence-based research to inform government decisions about the development, reform and harmonisation of Australian laws and related processes.

When I presented our last Annual Report, few could have foreseen the tremendous challenges that this year would bring for the country and the world. Despite those challenges, it has been a productive year for the ALRC: completing one law reform inquiry, carrying out preliminary work on another and reporting on a ground-breaking consultative project to develop a proposed five-year programme of law reform for consideration by the Government. Building on the ALRC’s long track record of public outreach, it has also been a year of significant public engagement through well-attended public seminars and an active social media presence.

The ALRC delivered its final report on corporate criminal responsibility to the Attorney-General in April 2020, and its final report on the Future of Law Reform project in December 2019. Its review of the framework of religious exemptions in anti-discrimination legislation was put on hold by the Attorney-General in March 2020, with a new reporting deadline contingent on passage of the Government’s Religious Discrimination Bill by Parliament.

I wish to extend my thanks to the Hon Justice Robert Bromwich for his substantial contribution as part-time Commissioner for the corporate criminal responsibility inquiry. Justice Bromwich brought a wealth of understanding and experience to the Inquiry that was invaluable in completing the review.

I also acknowledge the very important contribution of standing part-time Commissioner the Hon Justice John Middleton to each of the ALRC’s inquiries in 2019-20 and again thank him for his ongoing assistance and wise counsel.

Many thanks must go to the members of our Advisory Committees, whose thoughtful contributions provide additional guidance as we explore the issues raised by each inquiry, and to the many organisations and individuals who contribute as stakeholders to our inquiries through consultations and submissions. Strong engagement of stakeholders is a defining and enduring feature of ALRC inquiries, and is key to the high quality of ALRC reports and to developing robust and achievable recommendations.

We welcomed a number of new staff members in 2019-20, further strengthening our legal team and communications capabilities. The ALRC’s staff have been very ably led by our General Counsel, Matthew Corrigan, who I thank for his dedication and assured leadership. I wish also to record my thanks to our Executive Assistant, Claudine Kelly, and our excellent legal team and communications and events co-ordinator, without whom the work of the ALRC could not be accomplished.

The Future of Law Reform project, and subsequent public seminars on priority areas identified by it, underscore that there continue to be substantial matters of national significance where law reform will be both productive and welcomed by stakeholders. As this report goes to print we are in the early stages of a new inquiry into one of the priority areas identified by the process, following the announcement in September 2020 of a three-year reference from the

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Attorney-General to review the legislative framework for corporations and financial services regulation. We are also beginning work on a year-long inquiry announced in September 2020 into the laws relating to impartiality and bias as they apply to the federal judiciary. We look forward to continuing this important work in the coming year.

The Hon Justice S C Derrington

YEAR IN REVIEW

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YEAR IN REVIEW

ROLE AND FUNCTIONS OF THE ALRC

The ALRC undertakes research and provides recommendations to reform the law on topics selected by the Attorney-General of Australia.

The ALRC is an independent Australian Government agency that operates under the Australian Law Reform Commission Act 1996 (Cth) (ALRC Act) as well as the Public Governance, Performance and Accountability Act 2013 (Cth) (PGPA Act) and the Public Service Act 1999 (Cth).

The ALRC is responsible to Parliament through the Attorney-General, the Minister responsible for the ALRC.

At the conclusion of each inquiry, the ALRC provides a report to the Attorney-General that includes evidence-based recommendations for reform. The ALRC makes recommendations that:

„ bring the law into line with current conditions and needs;

„ remove defects in the law;

„ simplify the law;

„ adopt new or more effective methods for administering the law and dispensing justice;

„ promote uniformity between states and territories; and

„ provide improved access to justice.

The ALRC is structured around inquiry teams that are led by the President or a Commissioner, supported by legal officers of various seniority.

LAW REFORM INQUIRIES IN 2019-20

In the 2019-20 financial year, the ALRC’s work spanned two law reform inquiries. One of these inquiries (Corporate Criminal Responsibility) was completed during this period (April 2020). The other inquiry (Religious Exemptions in Anti-Discrimination Legislation) is currently on hold in accordance with amendments to the Terms of Reference and the reporting deadline issued by the Attorney-General in August 2019 and March 2020 respectively.

In addition to these inquiries, the ALRC completed a consultative project to identify priorities for law reform.

Summaries of the inquiries and consultative project are provided below.

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Inquiry publications

Table 1: Inquiry publications completed 2019-20

Area Publication title Date of completion

Corporate Criminal Responsibility Corporate Criminal Responsibility (Discussion Paper 87)

15 November 2019

Corporate Criminal Responsibility Ensuring appropriate and effective regulation of corporations: A

recalibration of Australian corporate regulation (ALRC paper)

18 November 2019

Corporate Criminal Responsibility When should officers be liable for corporate crime? (ALRC paper)

19 November 2019

Corporate Criminal Responsibility Corporate Attribution: Principled Simplicity (ALRC paper)

27 November 2019

Future of Law Reform

The Future of Law Reform: A Suggested Program of Work 2020-25 (Project Report)

2 December 2019

Corporate Criminal Responsibility Strengthening Sentencing Processes and Outcomes for Corporations (ALRC

paper)

18 December 2019

Corporate Criminal Responsibility The Banking Executive Accountability Regime: an alternative model of

individual liability for corporate fault (ALRC paper)

19 December 2019

Corporate Criminal Responsibility Individual Liability for Corporate Misconduct—An Update (ALRC paper)

4 March 2020

Corporate Criminal Responsibility Corporate Criminal Responsibility—Final Report (Report 136)

29 April 2020

8 ALRC Annual Report 2019-2020

Review of Australia’s Corporate Criminal Responsibility Regime

Figures

Recommendations made: 20

Referred: 10 April 2019

Date due: 30 April 2020

Date delivered: 29 April 2020

Tabled in Parliament: 31 August 2020

Consultations held: 101 (78 in the reporting period)

Comments on Terms of Reference received: 14 (none in the reporting period)

Submissions received: 49 (all in the reporting period)

Seminars and webinars: 6 (all in the reporting period)

The Final Report for the ALRC’s review of Corporate Criminal Responsibility (Report 136), was delivered to the Attorney-General on 29 April 2020, and tabled in Parliament on 31 August 2020. The Report made 20 recommendations for reform.

Background

On 10 April 2019, the Attorney-General asked the ALRC to inquire into Australia’s corporate criminal responsibility regime and specifically, the corporate criminal responsibility provisions contained in Part 2.5 of the schedule to the Criminal Code Act 1995 (Cth) (the Criminal Code). The Terms of Reference asked the ALRC to consider ‘whether, and if so what, reforms are necessary or desirable to improve Australia’s corporate criminal liability regime’. In particular, the ALRC was asked to review:

„ the policy rationale for Part 2.5 of the Criminal Code;

„ the efficacy of Part 2.5 of the Criminal Code as a mechanism for attributing corporate criminal liability;

„ the availability of other mechanisms for attributing corporate criminal responsibility and their relative effectiveness, including mechanisms which could be used to hold individuals (eg senior corporate office holders) liable for corporate misconduct;

„ the appropriateness and effectiveness of criminal procedure laws and rules as they apply to corporations; and

„ options for reforming Part 2.5 of the Criminal Code or other relevant legislation to strengthen and simplify the Commonwealth corporate criminal responsibility regime.

The review was the first comprehensive review of Australia’s corporate criminal responsibility regime following the enactment of the Criminal Code, and came at a time of renewed focus on protecting Australian consumers from egregious conduct by corporations and increasing regulation in the area of corporate wrongdoing. It also followed the release of the Final Report

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of the Australian Securities and Investments Commission (ASIC) Enforcement Taskforce in December 2017, and the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in February 2019.

Consultation

Following the release of the Terms of Reference, the ALRC invited interested stakeholders to provide comments on the scope of the Inquiry and any issues relevant to the Terms of Reference. The ALRC received 14 responses to its invitation for comments. From May to October 2019, the ALRC held 55 initial consultations with academics, government agencies, lawyers, and industry bodies across Australia. Of these, 32 consultations occurred during the reporting period.

The ALRC released its Discussion Paper on 15 November 2019. Following this it received 49 submissions and conducted a second round of 46 consultations.

In December 2019 (after the release of the Discussion Paper but prior to the closing date for submissions), the ALRC held an interactive discussion in Sydney entitled ‘Interrogating the English Approach to Prosecuting Economic Crime’. The keynote speakers were the Rt Hon the Lord Garnier QC, who as UK Solicitor-General was the architect of the Bribery Act 2010 (UK), and Mukul Chawla QC, a prominent British white-collar crime lawyer. In February and March 2020, the ALRC held further seminars in Perth, Melbourne, Sydney and Brisbane, attended by more than 290 people, to discuss the most contentious issues raised in the Discussion Paper in light of submissions received and consultations with regulatory bodies and stakeholders. Attendees from the judiciary, bar, law firms, regulators, law enforcement, industry, government, and civil society had the opportunity to ask questions of the panel.

On 4 March 2020, the ALRC released an update paper on individual liability for corporate misconduct, in light of a Government proposal for new legislation relevant to the area of individual responsibility of directors and senior corporate officers.

10 ALRC Annual Report 2019-2020

Findings

The ALRC found that Commonwealth criminal law as it applies to corporations is impenetrably complex and in need of significant reform. There is an overregulation by the criminal law of low-level contraventions and a failure to effectively use the criminal law for serious contraventions. As a result, there is no principled regulation in any meaningful sense — diluting the efficacy of corporate criminal responsibility and undermining the rule of law .

Despite the emphasis on civil enforcement in corporate regulation, criminal offences applicable to corporations have proliferated. However, the ALRC established that prosecutions of corporations, relative to individuals, are extremely rare, even in heavily regulated sectors where corporations are most active. In addition, corporations are most often prosecuted for relatively minor regulatory offences, and smaller corporations are more likely to be prosecuted than larger corporations. Prosecutors withdraw a significantly higher number of charges against corporations than they withdraw against individuals. This suggests that existing laws present real difficulties for prosecuting corporations. The ALRC report identified four major problems with the current state of the law:

„ there is no principled basis underpinning the provisions that apply the criminal law to corporations;

„ the law does not facilitate fair, consistent prosecution of corporations;

„ the consequences of corporate misconduct are inadequate; and

„ there is insufficient data relating to corporate crime.

Regulators’ frequent reliance on civil penalty provisions as an alternative to criminal prosecution may lead to a mindset that the penalties imposed are little more than a cost of doing business. Existing penalty and sentencing options for corporations are inadequate and often disproportionately affect shareholders, employees and third parties who were not connected with the corporation at the time of the offending. In addition, other accountability mechanisms such as personal liability of individual directors and senior corporate office holders, although relatively well-accepted, do not appear to operate effectively in relation to very large, complex organisations.

Recommendations

On 29 April 2020 the ALRC delivered Corporate Criminal Responsibility—Final Report (Report 136) to the Attorney-General. The report contained 20 recommendations that would result in simpler, clearer laws that reduce the regulatory compliance burden on corporations while better protecting individuals from serious criminal misconduct by ensuring that the criminal law, regulators and law enforcement are focused on the most egregious criminal conduct. The recommendations cover eight key areas:

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Corporate Criminal Responsibility - the Data

Chapter 3 Recommendation 1

Principled Criminalisation

Chapter 5 Recommendations 2 | 3 | 4

Corporate Attribution

Chapter 6 Recommendations 5 | 6 | 7

Offences Specific to Corporations

Chapter 7 Recommendation 8

Sentencing Corporations

Chapter 8 Recommendations

9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17

Individual Liability for Corporate Conduct

Chapter 9 Recommendation 18

Transnational Business

Chapter 10 Recommendation 19

Further Reforms

Chapter 11 - DPAs Recommendation 20

12 ALRC Annual Report 2019-2020

The recommendations included:

„ that corporate conduct should be regulated primarily by civil regulatory provisions and that a criminal offence should be created in respect of a corporation only when certain conditions are met (Recommendation 2);

„ that the provisions governing attribution of conduct to a corporation contained in Part 2.5 of the Criminal Code should be amended, and alternative methods of attribution contained in other Commonwealth laws should be repealed unless such an alternative method was necessary in the particular instance (Recommendations 5, 6 and 7); and

„ that new offences should be introduced to criminalise contraventions of prescribed civil penalty provisions that constitute a system of conduct or pattern of behaviour by a corporation (Recommendation 8).

The ALRC made a further suite of recommendations concerning sentencing of corporations, including providing the courts with powers to make orders requiring corporations to publicise or disclose certain information, take corrective action within the organisation, facilitate redress and undertake activities for the benefit of the community, and to allow courts to consider victim impact statements made by groups of victims or a corporation that has suffered economic loss in such cases (Recommendations 9 to 17). Other recommendations concerned the collection of data on corporate crime, a further wide-ranging review of individual accountability mechanisms for corporate misconduct, the introduction of failure to prevent offences in relation to other Commonwealth offences arising in the context of transnational business and amendments to the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019.

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Review of the Framework of Religious Exemptions in Anti-Discrimination Legislation

Figures

Referred: 10 April 2019

Date due: 12 months from the date the Religious Discrimination Bill is passed by Parliament

Documents received:

290 documents from 61 educational bodies across Australia (176 documents from 36 educational bodies in this reporting period)

Consultations held: 44 (27 in this reporting period)

Comments on Terms of Reference received:

13 (none in this reporting period)

Non-Terms of Reference submissions:

4 (3 in this reporting period)

Background

Original Terms of Reference

On 10 April 2019, the Attorney-General asked the ALRC to inquire into the framework of religious exemptions in Commonwealth, State and Territory anti-discrimination legislation. This Inquiry was referred to the ALRC as part of the Government’s response to the Review of Religious Freedom conducted by the Expert Panel led by the Hon Philip Ruddock. The final report of the ALRC Inquiry was originally due by 10 April 2020.

The ALRC was asked to inquire into, and report on, what reforms to relevant anti-discrimination laws, the Fair Work Act 2009 (Cth) and any other Australian law should be made in order to:

„ limit or remove altogether (if practicable) religious exemptions to prohibitions on discrimination, while also guaranteeing the right of religious institutions to reasonably conduct their affairs in a way consistent with their religious ethos; and

„ remove any legal impediments to the expression of a view of marriage as it was defined in the Marriage Act 1961 (Cth) before it was amended by the Marriage Amendment (Definition and Religious Freedoms) Act 2017 (Cth).

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The ALRC commenced the Inquiry process and invited interested stakeholders to comment on the scope of the Inquiry and any issues relevant to the original Terms of Reference. On 1 May 2019, the ALRC published a brief background paper on the Inquiry webpage. From May to June 2019, the ALRC conducted preliminary consultations with a range of stakeholders, including representatives from academia, religious institutions, schools and human rights organisations, with the aim of releasing a Discussion Paper in September 2019.

First amendment to the Terms of Reference

On 29 August 2019, the Attorney-General amended the original Terms of Reference, requiring the ALRC to take into account the intended passage of the Religious Discrimination Bill,1 with the ALRC’s final report to be provided to the Attorney-General by 12 December 2020. The amended Terms of Reference ask the ALRC to confine its Inquiry to issues not resolved by that bill, and to confine any recommendations to legislation other than the Religious Discrimination Bill.

Concurrent with the amendment to the ALRC’s Terms of Reference, the Government released a first exposure draft of proposed legislation on religious freedom (the ‘Religious Freedom Bills’), including the Religious Discrimination Bill, and invited submissions between 29 August and 2 October 2019.2 On 10 December 2019, the Government released second exposure drafts of the Religious Freedom Bills and invited submissions between 10 December 2019 and 31 January 2020.3 The Religious Freedom Bills have not yet been introduced into Parliament.

Second amendment to the Terms of Reference

On 2 March 2020, the Attorney-General amended the ALRC’s reporting deadline from 12 December 2020 to be ‘12 months from the date the Religious Discrimination Bill is passed by Parliament’. This extension will enable the ALRC to take into account the public consultation processes accompanying the Religious Freedom Bills, and any amendments to the Religious Discrimination Bill resulting from those consultation processes, as envisaged in the first amendment to the ALRC’s Terms of Reference.

Consultation

Up until the first amendment to the ALRC’s Terms of Reference at the end of August 2019, the ALRC continued its consultation process with stakeholders, including academics, public interest advocacy groups and educational institutions.

As part of that consultation process, the ALRC requested and received 290 documents from 61 educational bodies across Australia (176 of those documents from 36 educational bodies were received during the 2019-20 reporting period). Those documents assist in demonstrating the approaches schools take in relation to discrimination laws and the available religious exemptions. The documents include codes of conduct, statements of faith, enrolment agreements and recruitment policies.

1 The Religious Discrimination Bill is one of the Exposure Draft ‘Religious Freedom Bills’ released by the Attorney-General on 29 August 2019. The term Religious Freedom Bills refers to a package of legislation which includes the following: Religious Discrimination Bill 2019, Religious Discrimination (Consequential Amendments) Bill 2019 and Human Rights Legislation Amendment (Freedom of Religion) Bill 2019. For further information, see the Attorney-General’s Department website: www.ag.gov.au/rights-and-protections/human-rights-and-anti-discrimination/freedom-religion.

2 Ibid and see www.ag.gov.au/rights-and-protections/consultations/religious-freedom-bills-first-exposure-drafts .

3 See www.ag.gov.au/rights-and-protections/consultations/religious-freedom-bills-second-exposure-drafts.

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Discussion paper and final report

The ALRC is actively monitoring the consultation process and potential amendments relating to the Religious Freedom Bills. The progress of this legislation will determine the scope and timeframe of the discussion paper and final report of the ALRC Inquiry.

In the meantime, the ALRC has continued to conduct background research, such as examining the interaction between Commonwealth, State and Territory anti-discrimination laws and the Fair Work Act 2009 (Cth), and analysing relevant provisions found in other jurisdictions and international law.

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Future of Law Reform Project

Figures

Survey responses and submissions: 408 (7 in reporting period)

Consultations: 30 (21 in reporting period)

Seminars and webinars held: 6 (2 in reporting period)

Background

In 2019, the ALRC initiated a national consultation about priorities for law reform over the coming three to five years (Future of Law Reform project). While it is the responsibility of the Attorney-General to determine which matters are to be examined by the ALRC, the ALRC may make suggestions. The conversation gave Australians a say in what areas of law should be the focus of a law reform inquiry by the ALRC and formed part of the ALRC’s longstanding commitment to broad public participation in law reform. This process culminated in the publication in December 2019 of a suggested five-year program of work by the ALRC.

The objectives of the Future of Law Reform project included efficiency, proactivity and inclusiveness. An agreed program of work for a period of years in advance is likely to enhance the efficiency of the ALRC’s work. In addition, a more proactive approach to the identification of law reform issues facilitates a more systematic review of Australia’s laws. Finally, opening up conversations about future inquiry topics to the general public acknowledges the fact that, in the words of the ALRC’s inaugural Chairman the Hon Michael Kirby AC CMG, law reform is ‘too important to be left to the experts’.

The project provided a number of additional benefits, including: an opportunity for the public to express views on the appropriate role of the ALRC; gaining a sense of the public’s priorities and concerns regarding Australian law; reinvigorated debate about constitutional reform; a fresh approach to the ALRC’s engagement with stakeholders; and the identification of future opportunities for collaboration.

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Consultation

The ALRC prepared two brief background papers on potential areas for reform to ‘kick start’ the conversation and these were published in May 2019.

Through an online survey open from 15 May until 30 June 2019, individuals and organisations were invited to provide comments on seven suggested topics for reform and make their own suggestions about areas of law they believed were in need of reform. The seven suggested topics for reform in the survey were the Australian Constitution; banking, superannuation and financial services; environmental law; Commonwealth anti-corruption measures; immigration law; taxation; and defamation.

The survey received just over 400 responses. Approximately half of the respondents commented on the merit (or otherwise) of the seven example topics which had been proposed by the ALRC. In addition, approximately 200 new ideas were received regarding other potential topics.

In May and June 2019, the ALRC held four seminars on the future of law reform in conjunction with the Law Schools at the University of New South Wales (UNSW), Australian National University (ANU) and University of Melbourne. Each seminar had a broad focus on a different area of law, with discussion led by a panel with expertise in the relevant area. At the conclusion of each seminar, participants were invited to vote for their top three priority topics for a law reform inquiry via an online platform.

The ALRC also corresponded with state and territory law reform bodies, inquiring as to any potential law reform issues relating to Commonwealth law that had been raised with them by the public, or that they had come across in recent inquiries.

The ALRC then applied specific selection criteria to prioritise the topics raised by these processes. A shortlist of potential topics was developed for further investigation and testing with stakeholders. The shortlisted topics were posted on the ALRC website, and additional public events were held to discuss how the shortlisted topic areas might be further refined:

„ Online webinar, 12 August 2019, CCH Wolters Kluwer; and

„ Perth, 26 August 2019, Law Society of Western Australia (with live streaming available to remote participants).

Throughout the process, the ALRC held 30 consultations with individuals from academia, business organisations, non-governmental organisations, the Australian Human Rights Commission, state law reform bodies, the legal profession and Commonwealth government departments. In particular, a number of government departments were consulted about shortlisted topics relevant to their work to gauge the level of governmental commitment to reform in those areas, and to help identify any potential barriers to implementation of any future inquiry report recommendations.

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Report

On 2 December 2019 the ALRC submitted the final report ( The Future of Law Reform: A Suggested Program of Work 2020-25) to the Attorney-General. The report outlined a suggested five-year program of work comprising five suggested references:

„ Automated decision making and administrative law: to consider whether reforms are necessary to ensure that automated decisions made by government agencies are fair, transparent, accountable, and timely. The ALRC suggested a 24 month timeframe.

„ Principle-based regulation of financial services: to consider whether reforms to the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission Act 2001 (Cth), and any other Commonwealth law should be made in order to simplify and rationalise the regulation of financial services, consistent with recommendations 7.3 and 7.4 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The ALRC suggested a timeframe of 36 months, with potential for interim reports on discrete aspects.

„ Defamation: to consider whether reforms to the Model Defamation Provisions and any other Commonwealth laws should be made in order to modernise, rationalise, and enhance the law of defamation and its practical application. The ALRC suggested a 24 month timeframe.

„ Press freedom and public sector whistleblowers: to consider whether reforms to Commonwealth laws should be made in order to appropriately protect public interest journalistic activity, and to protect whistleblowers in the public service. The ALRC suggested a 24 month timeframe.

„ Legal structures for social enterprises: to consider whether reforms should be made to the Corporations Act 2001 (Cth), the Australian Charities and Not-for-profits Commission Act 2012 (Cth), and any other Commonwealth laws to provide for an appropriate corporate structure for social enterprises. The ALRC suggested a 12 month timeframe.

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The report also described eight additional law reform topics that the ALRC considered to be of significance, but which were not included in the suggested program of work for a variety of reasons. It invited the Government to consider these topics as potential alternatives to those identified above. These were:

„ the establishment of a standing body to oversee ongoing reform of the Australian Constitution;

„ coherent, effective, aligned, streamlined, and clear laws for environmental protection;

„ simplifying and enhancing the operation of migration legislation;

„ drafting statutes to enhance the coherence, readability, and useability of the law, especially in light of the anticipated transition to digital legislation;

„ the rights of creditors of an insolvent trustee, particularly when trust assets may be insufficient to meet creditors’ claims;

„ uniformity or complementarity between state and territory surrogacy laws;

„ regulation of debt management services, ‘buy now pay later’ services, or services targeting people at risk of financial hardship; and

„ human tissue laws that can accommodate emerging technologies, are nationally consistent, and do not operate as barriers to organ and tissue donation.

In the first six months of 2020, the ALRC organised a series of public seminars with expert speakers to gain further feedback on the suggestions contained in the Future of Law Reform report. Due to restrictions and risks relating to the COVID-19 pandemic, these events were re-organised as online webinars scheduled to be held after the reporting period. The ALRC also held targeted consultations with interested experts to discuss how future inquiries on the suggested topics might best be framed.

Subsequent to the report and after the reporting period, the Attorney-General issued terms of reference for a review into the legislative framework for corporations and financial services regulation. The insights gained from Future of Law Reform project not only provided a catalyst for topic selection, but also established a valuable model to identify future inquiry priorities.

REPORT ON PERFORMANCE

22 ALRC Annual Report 2019-2020

REPORT ON PERFORMANCE

ANNUAL PERFORMANCE STATEMENT

Introductory statement

The ALRC annual performance statement is prepared for paragraph 39(1)(a) of the PGPA Act for the 2019-20 financial year and, in the opinion of the President as the Accountable Authority, complies with subsection 39(2) of the PGPA Act.

Our outcome

The intended outcome of the ALRC’s activities is:

Informed government decisions about the development, reform and harmonisation of Australian laws and related processes through research, analysis, reports and community consultation and education (Outcome 1).

The ALRC has one program to achieve its outcome — conducting inquiries into aspects of Australian law and related processes for the purpose of law reform (Program 1). It is through the inquiry process that the ALRC undertakes rigorous research and analysis that underpin recommendations for law reform.

Environment

The ALRC strives to be a law reform agency at the leading edge of internationally-recognised best practice.

The ALRC is reliant on Government for referrals and, accordingly, the extent to which the ALRC can meet its performance targets is influenced from year to year by the number of inquiries referred to the ALRC, the prescribed timeframes for these inquiries and the resources made available to conduct them.

In light of this, the ALRC will continue to work closely with the Attorney-General’s Department to ensure appropriate lead time for planning and managing resources when new inquiries are referred to the ALRC.

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Performance criteria for 2019-20

The ALRC measures its success through the following key performance indicators (KPIs):

„ the number of consultation papers and the number of reports to government;

„ the percentage of inquiries completed on time in accordance with the terms of reference set by the Attorney-General;

„ the number of citations or references to ALRC consultation documents, reports and recommendations in Parliamentary debates and committee reports, in court citations and decisions, and in academic publications and other publications;

„ the number of submissions received;

„ the number of consultations held;

„ the breadth of community engagement in the work of the ALRC through the number of subscribers to the ALRC’s E-news, visitors to the website and followers on Twitter; and

„ the number of publications, presentations, and speaking engagements of ALRC staff.

The ALRC Performance Criteria are sourced from the ALRC Corporate Plan 2019-23.

24 ALRC Annual Report 2019-2020

Result against performance criteria

Table 2: KPI performance 2019-20

Performance measure 2019-20 target

2019-20 actual

Number of reports 4 4

ƒ Annual Report 2018/2019 (September 2019)

ƒ Corporate Criminal Responsibility (Discussion Paper 87, November 2019)

ƒ The Future of Law Reform: A Suggested Program of Work 2020-25 (December 2019)

ƒ Corporate Criminal Responsibility (ALRC Report 136, April 2020)

Timeliness of reports 100% 100%

Citations or references 50 261

ƒ 59 - court and tribunal decisions

ƒ 167 - academic publications

ƒ 35 - Parliamentary debates and committee reports

Submissions received 160 59

ƒ 49 - In response to Corporate Criminal Responsibility (Discussion Paper 87)

ƒ 3 - Religious Exemptions

ƒ 7 - Future of Law Reform

Consultations held 45 126

ƒ 78 - Corporate Crime

ƒ 27 - Religious Exemptions

ƒ 21 - Future of Law Reform

Presentations, articles and speaking engagements 25 29

Broader Community Engagement

E-news subscribers 1350 2533 ƒ 1892 - ALRC Brief

ƒ 277 - Religious Exemptions

ƒ 364 - Corporate Crime

Visitors to website

>260,000

ƒ Visits: 1,802,429

ƒ Page views: 2,789,677

ƒ Unique visitors: 1,232,654

Twitter followers 14,000 14,004

25

The performance criteria were changed in the ALRC’s 2019-23 Corporate Plan (August 2019) to better reflect the ALRC’s inquiry process.

For full transparency the following are the ALRC’s performance criteria and targets for 2019-20 in the Attorney-General’s 2019-20 Portfolio Budget Statements at pages 114-5.

Table 3: Performance criteria and targets from Attorney-General’s Portfolio Budget Statements 2019-20

Performance Measure

2019-20 target

2019-20 actual

Number of consultation papers and reports. 4 4

Percentage of inquiries completed on time in accordance with the terms of reference set by the Attorney-General. 100% 100%

Number of citations or references to ALRC consultation documents, reports and recommendations in parliamentary debates and committee reports, in court citations and decisions, and in academic publications and other publications.

150 261

Number of submissions received for each inquiry. 250 494

Number of consultations held for each inquiry. 100 785

Breadth of community engagement in the work of the ALRC through the:

number of subscribers to the ALRC’s E-news, 250 2533

visitors to the website; and >250,000 1,232,6546

followers on Twitter. >12,000 14,004

Number of publications, presentations and speaking engagements of ALRC staff . 30 29

4 Ongoing inquiries with consultation periods during the reporting period.

5 Ongoing inquiries with consultation periods during the reporting period.

6 Unique visitors.

26 ALRC Annual Report 2019-2020

Analysis of performance

Number of reports

The core output of the ALRC comprises consultation papers and reports to government with recommendations for law reform.

The ALRC produced four reports in 2019-20:

„ Annual Report 2018/2019 (September 2019);

„ The Future of Law Reform: A Suggested Program of Work 2020-25 (December 2019);

„ Corporate Criminal Responsibility (Discussion Paper 87, November 2019); and

„ Corporate Criminal Responsibility (ALRC Report 136, April 2020).

Timeliness of reports

The timeliness of reports is an indicator of the effectiveness of the ALRC in meeting the terms of reference for inquiries established by the Attorney-General, which include a reporting date.

During 2019-20 the ALRC delivered the final report for its Corporate Criminal Responsibility Inquiry on 29 April 2020, in advance of the reporting date. The report was tabled in Parliament on 31 August 2020.

The reporting deadline for the ALRC’s review into the Framework of Religious Exemptions in Anti-Discrimination Legislation was amended by the Attorney-General on 2 March 2020 to be 12 months from the date the Religious Discrimination Bill is passed by Parliament.

Court citations

Past ALRC reports are a source of accurate and informative material on the law that is the subject of each inquiry.

The ALRC has identified 59 mentions of ALRC reports in the judgments of Australian courts and tribunals during 2019-20. This included nine citations by the High Court of Australia and 22 citations by the Federal Court of Australia. Frequently cited reports include:

„ Evidence (Interim) (ALRC Report 26, 1985), Evidence (ALRC Report 38, 1987) and Uniform Evidence Law (ALRC Report 102, 2006);

„ Integrity, Fairness and Efficiency—An Inquiry into Class Action Proceedings and Third-Party Litigation Funders (ALRC Report 134, 2018); and

„ Grouped Proceedings in the Federal Court (ALRC Report 46, 1988).

Encouragingly, both older and newer reports by the ALRC have been considered substantive evidence-based reports worthy of citation in the superior courts of Australia.

27

Mentions in Parliament

The number of mentions of ALRC reports in Parliament provides an indication of Parliament’s engagement with the ALRC’s work and the esteem in which it is held.

The ALRC has identified 35 references to ALRC reports and recommendations in second reading speeches and other Parliamentary proceedings during 2019-20. Examples include references to:

„ Family Law for the Future—An Inquiry into the Family Law System (ALRC Report 135, 2019) in relation to the Family Law (Self-Assessment) Bill 2019, the Family Law Amendment (A Step Towards the a Safer Family Law System) Bill 2019, and by the Senate Select Joint Committee on Australia’s Family Law System; and

„ Elder Abuse—A National Legal Response (ALRC Report 131, 2017) in relation to the Aged Care Quality and Safety Commission Amendment (Worker Screening Database) Bill 2019.

References in academic publications

The work of the ALRC has long been a resource for academics studying law as well as social policy. The ALRC strives for its published reports to be authoritative and accurate. In 2019-20, the ALRC was cited in at least 167 academic publications, including journal articles, research papers and textbooks.

Frequently cited reports include:

„ Pathways to Justice—Inquiry into the Incarceration Rate of Aboriginal and Torres Strait Island Peoples (ALRC Report 133, 2017);

„ Family Violence: A National Legal Response (ALRC Report 114, 2010); and

„ Equality, Capacity and Disability in Commonwealth Laws (ALRC Report 124, 2014).

Submissions

The number of submissions received by the ALRC is a measure of public engagement with its work and the extent to which the consultation papers have stimulated debate and discussion. However, the number of submissions received for any inquiry is also influenced by its subject matter — particular inquiries are likely to generate a greater, broader degree of public interest and participation than others.

The ALRC received 59 submissions in 2019-20. Forty-nine of these submissions related to the Corporate Criminal Responsibility Inquiry, which was the only formal Inquiry completed during this reporting period.

Only three submissions were received in relation to the Inquiry on the Framework of Religious Exemptions in Anti-Discrimination Legislation. This reflects the fact that the Inquiry was put on hold by an amendment to the Terms of Reference before a discussion paper was released and submissions were called for.

In addition, consultation for the Future of Law Reform project formally ended on 30 June 2019, prior to the current reporting period. The small number of submissions received during this reporting period (seven) were late submissions, while the vast majority of responses (approximately 400) were received prior to 1 July 2019.

28 ALRC Annual Report 2019-2020

Table 4: Submissions received 2019-20

Consultation paper

Submission closing date

Submissions received during reporting period

Corporate Criminal Responsibility (Discussion Paper 87) 31 January 2020 49

Review of the Framework of Religious Exemptions in Anti-Discrimination Legislation On hold 3

Online survey responses to the Future of Law Reform project received after 30 June 2019 30 June 2019 7

Total submissions received 59

Consultations

For each inquiry the ALRC seeks to consult with people who have expertise and experience in the laws under review, as well as people likely to be affected by the laws in question. The number of consultations held is one indicator of the breadth of the evidence base that underpins the ALRC’s recommendations and of community engagement with the law reform process implemented by the ALRC. In 2019-20, the ALRC conducted 126 consultations with stakeholders and experts across Australia and overseas. Again, the number of consultations held for the Inquiry into the Framework of Religious Exemptions in Anti-Discrimination Legislation reflects the fact that this Inquiry is currently on hold.

Table 5: Consultations held 2019-20

Inquiry

Number of consultations held during reporting period

Corporate Criminal Responsibility 78

Review of the Framework of Religious Exemptions in Anti-Discrimination Legislation 27

Future of Law Reform 21

Total consultations 126

29

Presentations, articles and speaking engagements

Presenting at public conferences, seminars and Parliamentary inquiries, and contributing articles to journals and publications ensures that the work of the ALRC is publicly debated and discussed. In total there were 29 presentations, articles, and speaking engagements by ALRC Commissioners and staff in 2019-20.

Highlights of ALRC presentations and speaking engagements in 2019-20 included:

„ Keynote address by ALRC President, Justice S C Derrington, to launch the University of New South Wales Law Journal Issue 43(2) ‘Law Reform: Projects, Processes, and Pitfalls’ via video conferencing on 29 June 2020;

„ Keynote address by ALRC President, Justice S C Derrington, at the Australian Bar Association Conference on Family Law Reform in Brisbane on 6 March 2020;

„ ‘Faith, hope and charity - religion as a public benefit in modern Australia’, speech presented by ALRC President, Justice S C Derrington at the Charity Law Association of Australia and New Zealand Annual Public Lecture at Melbourne Law School on 28 November 2019; and

„ ‘The Future of Law Reform - the shortlist’, presentation by ALRC General Counsel Matt Corrigan, Micheil Paton and Tess Van Geelen at the Future of Law Reform Seminar, hosted by the Law Society of Western Australia in Perth on 26 August 2019.

E-news subscribers

The ALRC maintains a general mailing list — the ALRC Brief — to provide regular updates on the ALRC’s work, as well as inquiry-specific mailing lists. Subscriptions to the E-news reflect sustained engagement with a specific inquiry or the ALRC’s work generally.

Table 6: E-news subscribers

Audience

Number of subscribers at 30 June 2020

ALRC Brief 1892

Religious Exemptions in Anti-Discrimination Legislation E-News 277

Corporate Crime E-News 364

Total subscribers 2533

30 ALRC Annual Report 2019-2020

ALRC website

The ALRC website is a pivotal communication tool for the ALRC and a law reform resource for the wider public. The ALRC strives to continually build value into the website, both in terms of providing useful and accessible content for stakeholders and researchers, and utilising its functionality as an online consultation tool. The ALRC launched its new website in September 2019. The new website makes it easier for stakeholders and other members of the public to find relevant information, and allows the ALRC to accept submissions directly through the website, reducing manual processing.

Key website metrics from Google Analytics for 2019-20 include:

„ visits = 1,802,429;

„ page views = 2,789,677; and

„ unique visitors = 1,232,654.

These metrics represent, compared to the 2018-19 reporting period:

„ 9.6% increase in visits;

„ 4.2% increase in page views; and

„ 8.7% increase in unique visitors.

Figure 1: Comparison of website traffic: July-June in 2018-19 and 2019-20

3,000,000 -

2,500,000 -

2,000,000 -

1,500,000 -

1,000,000 -

500,000 -

0 -

2018-19

2019-20

Page views Visits Unique visitors

31

ALRC website statistics indicate that it is not just through implementation of its recommendations that the ALRC makes a significant contribution to the discussion of laws and legal frameworks in Australia.

In 2019-20, the top four ALRC reports accessed through the website were as follows:

„ Recognition of Customary Laws (ALRC Report 31, 1986);

„ Pathways to Justice-Inquiry into the Incarceration Rate of Aboriginal and Torres Strait Islander Peoples (ALRC Report 133, 2017);

„ Essentially Yours: The Protection of Human Genetic Information in Australia (ALRC Report 96, 2003); and

„ Family Violence and Commonwealth Laws—Improving Legal Frameworks (ALRC Report 117, 2011).

The continued inclusion in this list of the Recognition of Aboriginal Customary Laws Report from 1986 illustrates the enduring value of the ideas, discussion and research contained in this landmark report.

Twitter followers

The ALRC uses Twitter to provide updates on its inquiries and publicise opportunities to engage with its work. The number of people following the ALRC’s Twitter account tracks broader engagement with law reform and the subject matter of ALRC inquiries. On 30 June 2020, the ALRC’s Twitter account had 14,004 followers, a 3.8% increase from 30 June 2019.

During 2020 the ALRC also increased engagement on the social media platform LinkedIn. This platform provides a targeted audience of professionals, particularly in the legal sphere, who are predominantly located in Australia. On 30 June 2020, the ALRC LinkedIn account had 5,561 followers, a 200% growth since January 2020.

32 ALRC Annual Report 2019-2020

IMPLEMENTATION OF REPORTS AND IMPACT OF WORK

The ALRC has no direct role in implementing its recommendations. There is no statutory requirement for the Australian Government to respond formally to ALRC reports. However, the ALRC monitors major developments in relation to issues covered in its past reports. It is not uncommon for implementation to occur some years after the completion of a report.

During 2019-20 the Australian Government took steps to further implement Elder Abuse—A National Legal Response (ALRC Report 131, 2017). Having developed a National Plan to Respond to the Abuse of Older Australians (Elder Abuse) 2019-2023 in the previous reporting period (substantially implementing Recs 3-1 to 3-4), in this reporting period the Government commenced a national prevalence study of elder abuse (implementing Rec 3-5), introduced further amendments to the Quality of Care Principles 2014 (through the Quality of Care Amendment (Reviewing Restraints Principles) Principles 2019 (Cth)) to further regulate the use of restrictive practices (Recs 4-10 to 4-11), and announced the establishment of a Serious Incident Response Scheme for residential aged care to begin in July 2021 (which will partly implement Recs 4-1 to 4-3 and 4-5 to 4-6). Funding has also been allocated to conduct a prevalence and feasibility study to inform future Government decisions on the potential introduction of a Serious Incident Response Scheme in home and community aged care (which would fully implement Recs 4-1 to 4-6). The Government also conducted a consultation on developing an ‘Aged Care Worker Regulation Scheme’ (which would implement Rec 4-9), and this closed on 29 June 2020.

The Commonwealth and state and territory governments have also been engaged in steps to implement Recs 5-1 to 5-3 of the Elder Abuse report concerning enduring documents. On 29 November 2019, the Council of Attorneys-General (CAG) agreed to pursue a staged approach to enduring power of attorney reform for financial decisions, first focusing on law reforms to support the establishment of a mandatory national register of enduring power of attorney instruments, followed by further consideration of reforms to enhance safeguarding provisions and enhance access to justice arrangements. At their meeting on 27 July 2020, participants agreed in-principle to the proposed broad policy design for a national register of enduring documents, and tasked the Commonwealth to present a final proposal on the possible implementation and costing of the scheme, including resolution of outstanding issues, before the end of 2020. The Commonwealth Attorney-General’s Department also funded production of a guide on financial enduring powers of attorney, published by the Office of the Public Advocate of Victoria and the Australian Guardianship and Administration Council in October 2019.

The Commonwealth and state and territory governments also took steps to implement a number of recommendations from Pathways to Justice—Inquiry into the Incarceration Rate of Aboriginal and Torres Strait Islander Peoples (ALRC Report 133, 2018). Through the Police Force Regulations Amendment 2019 (WA), which commenced on 2 October 2019, the Western Australian government introduced a custody notification scheme (implementing Rec 14-3). This requires Western Australian police to phone the Aboriginal Legal Service of Western Australia Custody Notification Service every time an Aboriginal person (child or adult) is detained in a police facility in the state. The Western Australian government also passed the Fines,

33

Penalties and Infringement Notices Amendment Act 2020 (WA) in June 2020, which abolished imprisonment for fine default (implementing Rec 12-1). During the reporting period, the Northern Territory government put a draft Aboriginal Justice Agreement out for consultation (Rec 16-2), with the consultation period ending on 31 July 2020. Also during 2019-20, the Commonwealth and state and territory governments, the Local Government Organisation and the Coalition of Aboriginal and Torres Strait Islander Peak Organisations worked together to agree a new National Agreement on Closing the Gap (finally agreed in July 2020). This sets, for the first time, targets to reduce the rate of incarceration of Aboriginal and Torres Strait Islander people, and to reduce violence and abuse against Aboriginal and Torres Strait Islander women and children, substantially implementing Rec 16-1.

A bill to amend the Native Title Act 1993 (Cth) in line with a number of recommendations made by the ALRC in Connection to Country: Review of the Native Title Act 1993 (ALRC Report 126, 2015) was introduced by the Government in October 2019. The Native Title Legislation Amendment Bill 2019 (Cth), which is currently before the House of Representatives, would specifically implement Recs 10-5 to 10-9 of the report, concerning authorisation of native title applicants by claim groups.

In 2019-20 the Government also

introduced a Bill that would (among other things) implement Rec 51 of Family Law for the Future—An Inquiry into the Family Law System (ALRC Report 135, 2019), concerning the requisite knowledge, skills, experience and aptitude of future federal judicial officers exercising family law jurisdiction. The Federal Circuit and Family Court of Australia Bill 2019 (Cth) is currently before the Senate Legal and Constitutional Affairs Legislation Committee. A private member’s bill — the Family Law Amendment (A Step Towards a Safer Family Law System) Bill 2020 (Cth) — was also introduced by Graham Perrett MP specifically to implement Recs 7 and 8 of the Report (removal of the presumption of equal shared parental responsibility), and this remains before the House of Representatives.

Even in the absence of implementation of specific recommendations, the ALRC’s reports continue to have an impact on policy development, sometimes many years after they have been tabled. For example, the Australian Competition and Consumer Commission’s Digital Platforms Inquiry Final Report, published 26 July 2019, supported implementation of a recommendation that the ALRC made in 2008 to introduce a statutory cause of action for serious invasions of privacy (For Your Information: Australian Privacy Law and Practice, ALRC Report 108, 2008), and the Australian Human Rights Commission again endorsed the recommendation in its Discussion Paper on Human Rights and Technology, published in December 2019. Similarly, the Explanatory Memorandum for the Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019 (Cth), which is currently before the House of Representatives, states that the principles contained in Secrecy Laws and Open Government in Australia (ALRC Report 112, 2010) were specifically taken into account when developing the secrecy offence in the Bill.

34 ALRC Annual Report 2019-2020

SUMMARY AND ANALYSIS OF FINANCIAL PERFORMANCE

Financial outcomes

Operating outcome

The 2019-20 financial statements show an operating surplus of $0.318m.

Operating revenue

The ALRC’s operating revenue of $2.62m comprised of revenue from government of $2.61m; own source revenue $0.014m; other revenue (audit remuneration) of $0.001m.

Operating expenses

Total operating expenses of $2.341m were $0.427m less than in 2018-19.

The ALRC’s depreciation and amortisation expense increased by $0.166m.

Equity

The ALRC’s total equity is $0.512m. This includes contributed equity of $0.319m.

Total assets

The ALRC’s total assets increased by $1.38m.

Total liabilities

The ALRC’s total liabilities increased by $1.04m.

Entity resource statement

The ALRC’s Entity Resource Statement and Expenses for Outcomes 2019-20, which summarises the total resources available to the ALRC and the total payments made by the ALRC during 2019-20, can be found in the Financial Statements.

Compliance

The ALRC has not had any significant non-compliance with financial requirements and has therefore not made any report to its Minister, the Attorney-General.

MANAGEMENT AND ACCOUNTABILITY

36 ALRC Annual Report 2019-2020

MANAGEMENT AND ACCOUNTABILITY

CORPORATE GOVERNANCE

ALRC accountability and governance requirements are met through its Accountable Authority Instructions. These provide the framework to ensure that the ALRC meets its obligations and responsibilities with regard to governance, reporting and accountability of Commonwealth entities and for the use and management of public resources, in line with the requirements of the PGPA Act.

Ministerial powers

The Minister responsible for the ALRC is the Attorney-General of Australia.

The ALRC is a statutory agency under the PGPA Act and an employer subject to the Public Service Act 1999 (Cth).

The ALRC is constituted under the ALRC Act. Section 20 of the ALRC Act states that the Attorney-General may refer matters to the ALRC for review.

Accountable Authority

The Hon Justice S C Derrington, President of the ALRC, was the Accountable Authority of the ALRC during 2019-20.

Members of the Commission

Table 7 lists members of the ALRC during 2019-20 and their terms of appointment. On 30 June 2020, there were two members of the ALRC — one full-time member and one part-time member.

Table 7: Members 2019-20

Commissioner Term of appointment

Full-time Commissioner

The Hon Justice S C Derrington

Appointed as President 10 January 2018-9 January 2023

Part-time Commissioners

Standing Part-time Commissioner

The Hon Justice John Middleton Reappointed 28 November 2019-25 December 2022

Part-time Commissioner for Corporate Criminal Responsibility Inquiry

The Hon Justice Robert Bromwich 10 April 2019-30 April 2020

37

Remuneration

The Commonwealth Remuneration Tribunal determines the remuneration for all ALRC Commissioners.

Key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Commission. The Commission has determined the key management personnel to be the President. Key management personnel remuneration is reported in the table below.

Table 8: Remuneration of key management personnel 2019-20

Name Position

title

Short-term benefits Post- employment benefits

Other long-term benefits

Total remuneration Base salary Bonuses Other benefits and allowances Superannuation contributions Long service leave Other long-term benefits

Justice S C Derrington President $508,118 $508,118

The ALRC does not have any staff falling within the categories required to be reported under subsection 17CB(4) (senior executives) of the PGPA rule. Information regarding staff falling within the categories required to be reported under subsection 17CC(4) (other highly paid staff) of the PGPA Rule is provided in Table 9.

Table 9: Information about remuneration for other highly paid staff

Remuneration Band Number of Highly Paid staff

Short-term benefits Post-

employment benefits

Other long-term benefits

Termination benefit Total remuneration Base salary Bonuses Other benefits and allowances Superannuation contributions Long service leaveOther long-term benefits

$245,001- $270,000 1 $212,116 $3,951 $26,551 $5,420 $248,038

38 ALRC Annual Report 2019-2020

Policies

The Accountable Authority Instructions and the ALRC Policy Manual contain current ALRC policies, guidelines and procedures on a range of administrative matters. ALRC policies are reviewed and revised as required. All new and revised policies are approved by the President. In 2019-20, the Accountable Authority Instructions and Financial Procedures Policy were reviewed and updated.

Policies that concern interaction with members of the public are published on the ALRC website. New staff members are advised of ALRC policies as part of the induction process and all staff have access to ALRC policies via the staff server.

Corporate planning

The ALRC Corporate Plan 2020-24 was published on 15 September 2020 and is available on the ALRC website.

Financial management and audit

The audit of the 2019-20 financial statements was performed by the Australian National Audit Office (ANAO). The Auditor’s opinion was that the financial statements of the ALRC were prepared in accordance with all relevant legislation and Finance Minister’s Orders, and give a true and fair view of the ALRC’s financial position and performance. The ANAO conducted an interim audit of the ALRC 2019-20 financial accounts and provided an interim report to the Audit Committee in July 2020. Material issues identified have been addressed.

Fraud control and risk management

The ALRC has a commitment to fraud control and to promoting efficient, effective and ethical use of Commonwealth resources.

The ALRC’s Accountable Authority certifies that the ALRC has a Risk Management and Fraud Control Policy (RMFCP). The new Risk Management and Fraud Control Policy was approved by the Audit Committee in July 2020, replacing the previous Fraud Control Plan and Statement for 2019-23 and Enterprise Risk Management Plan.

The objective of the ALRC risk management framework is to ensure that risk management (including the identification, deterrence, detection, investigation and reporting of fraud) is regularly monitored and embedded in all business activities at ALRC, at both a strategic and operational level.

Risk Assessments including fraud risk assessments are undertaken every two years and are an integral part of the ALRC risk management framework. Identified risks, contributing factors, and controls and mitigating practices, are included in the ALRC’s Strategic Risk Register and the Operational and Fraud Risk Register.

The ALRC Audit Committee is responsible for ongoing monitoring and review of the risk management framework, including the actions agreed to in the RMFCP. The President is the Fraud Control Officer and is responsible for ensuring that the appropriate processes are in place to manage the risk of fraud.

39

During 2019-20, the ALRC has taken all reasonable measures to minimise the incidence of fraud and has raised awareness of fraud control among employees to foster an environment that encourages employee involvement in the strategies to prevent fraud.

The ALRC has assessed that it has a low to negligible residual fraud risk profile, with an effective control environment. In accordance with Part 4 of the RMFCP, the ALRC collects any information relating to fraudulent matters and reports it to the Australian Institute of Criminology annually. No fraudulent activity was detected in 2019-20.

The ALRC has also continued to assess and manage its operational risks through:

„ appropriate levels of insurance, including cover for public liability, directors’ liability, and property loss or damage, with nature and levels of cover reviewed annually;

„ a positive approach to work health and safety, based on preventative strategies, flexible return to work arrangements and early response to injury;

„ provision of training to staff to ensure that they understand their responsibilities and have the skills necessary to fulfil their responsibilities;

„ transparent reporting of financial management and operational matters, both internally and externally; and

„ updating its Business Continuity Plan 2019- 20.

Ethics

The ALRC fosters a culture of integrity, honesty and fairness in the workplace and actively seeks to comply with all relevant laws, regulations, codes and government standards.

Employees of the ALRC are Australian public servants and must follow the APS Values and APS Code of Conduct, which articulate the culture and operating ethos of the ALRC and provide the framework within which employment powers will be exercised by the President. ALRC employees are expected to comply with ALRC policies, and with any lawful direction given by the President and/or their supervisor.

Any suspected or actual breaches of the APS Code of Conduct will be dealt with in accordance with the ALRC’s Procedures for Determining Breaches of the Code of Conduct, established in accordance with section 15(3) of the Public Service Act 1999 (Cth). During 2019-20, there were no suspected or actual breaches of the APS Code of Conduct.

The ALRC has a Public Interest Disclosure Policy in accordance with the Public Interest Disclosure Act 2013 (Cth). This Policy is available on the ALRC website and staff server. During 2019-20, there were no public interest disclosures.

40 ALRC Annual Report 2019-2020

Conflict of interest

The ALRC Conflict of Interest Policy is designed to protect the ALRC’s reputation and integrity; to ensure that employees understand what a conflict of interest is, and how to recognise and avoid a conflict of interest; and to outline the ALRC process for disclosing an actual or potential conflict of interest. This policy applies to Commissioners, employees, contractors and consultants engaged or employed by the ALRC.

Section 29 of the PGPA Act requires members to disclose any material personal interest in a matter under consideration by the Commission. Section 13(7) of the Public Service Act 1999 (Cth), which contains the APS Code of Conduct, requires that an APS employee must disclose and take reasonable steps to avoid any conflict of interest (real or perceived) in connection with APS employment. In addition, section 10 of the Act requires that the Australian Public Service performs its functions in an impartial and professional manner.

ALRC employees are required to disclose a potential or actual conflict of interest in advance. Failing to disclose appropriately may be regarded as misconduct. The President maintains a Conflict of Interest Register that records any reported conflict of interest within the ALRC, for the purpose of monitoring and managing the conflict.

During 2019-20, there were no conflict of interest disclosures.

Full-time Commissioners (members) of the ALRC make annual declarations of private interests, which are provided to the Attorney-General in August of each year.

Related party disclosures

Australian Accounting Standards Board (AASB) 124 sets out the related party disclosures required by reporting entities including those producing General Government Sector financial statements.

The ALRC is committed to complying with applicable Accounting Standards and associated disclosures in the annual financial statements in compliance with AASB 124 and has developed a policy and reporting procedure that meets both the requirements of the AASB and the Department of Finance. This policy requires that ALRC financial statements contain the disclosures necessary to draw attention to the possibility that its financial position and profit or loss may have been affected by the existence of related party relationships and by transactions and outstanding balances, including commitments.

Indemnity

The ALRC carries directors’ liability insurance for all Commissioners of the ALRC and members of the Audit Committee.

Nature of liability

The ALRC insures against damages arising as a consequence of a wrongful act of a director, including an error by omission or commission; a misstatement or misleading statement; or negligent breach of duty.

The ALRC has not indemnified or agreed to indemnify any current or former officer against a liability other than by coverage under the directors’ liability insurance.

41

AUDIT COMMITTEE

The ALRC Audit Committee is established in compliance with section 45 of the PGPA Act and section 17 of the PGPA Rule. The objective of the Audit Committee is to provide independent assurance and assistance to the President on the ALRC risk, control and compliance framework, and its financial and performance reporting responsibilities.

The charter setting out the functions of the Audit Committee is available at: www.alrc.gov.au/about/corporate-information/.

The ALRC President authorises the Audit Committee, within its responsibilities, to:

„ obtain any information it requires from any employee or external party (subject to any legal obligation to protect information);

„ discuss any matters with the external auditor, or other external parties (subject to confidentiality considerations);

„ request the attendance of any employee, including the President, at Audit Committee meetings; and

„ obtain legal or other professional advice, as considered necessary to meet its responsibilities, with the prior approval of the President.

The Department of Finance has encouraged Commonwealth entities to source at least some external members of their audit committee from outside the public sector, in order to strengthen the independence of audit committee and broaden its members’ skills (A Guide for Non-Corporate Commonwealth Entities on the Role of Audit Committees, December 2018). In February 2020, section 17 of the PGPA Rule concerning Audit Committees was amended. From 1 July 2021 this will require that a majority of the members come from outside the public sector.

During 2019-20, the Audit Committee was made up of three members, appointed by the President. As at 30 June 2020 the ALRC Audit Committee was comprised as follows:

„ Chair and External Member: Jennifer Clark

Ms Clark has an extensive background in business, finance and governance through a career as an Investment Banker and as a Non-Executive Director. She has been the chair or member of over 20 audit, risk and finance committees in the Commonwealth and private sectors over the past 30 years. Ms Clark is a Fellow of the Australian Institute of Company Directors and has substantial experience in financial and performance reporting, audit and risk management.

„ External Member: Kathryn Hunter

Ms Hunter is a Fellow of the Institute of Chartered Accountants in England and Wales with a background in audit before holding senior finance positions over the last 10+ years across both public and private sectors. Currently employed as the Chief Financial Officer at a Commonwealth agency, Ms Hunter has significant experience in financial reporting, audit and risk management.

„ External Member: Cherie Enders

Ms Enders’ early career included senior management roles in banking, insurance and funds management organisations before she moved into a large local government authority as a general manager of corporate and commercial operations. Ms Enders is now the Chief Operating Officer for a Commonwealth statutory authority for the regulation of maritime safety. Throughout her career, her work has largely focussed on developing organisations through capability improvement, process redesign and

42 ALRC Annual Report 2019-2020

cultural growth. Ms Enders holds qualifications in psychology, financial and business management and HR/organisation development. Ms Enders is a current member of the Australian Institute of Company Directors.

The ALRC Audit Forward Plan sets a meeting schedule and outlines the activities of the Audit Committee over the next financial year. The Audit Committee met in July and September 2019 and March 2020. Jennifer Clark and Cherie Enders took up their appointments in September 2019 at the Audit Committee’s first meeting for the 2019-20 year. They replaced outgoing Chair and External Member Darrell Yesberg, Chief Financial Officer of the Australian Human Rights Commission and External Member Helen O’Loughlin, Senior Executive Leader, People and Development, ASIC.

The details of remuneration and meeting attendance for each member of the Audit Committee during the reporting period are as follows:

Table 10: ALRC Audit Committee membership 2019-20

Name Remuneration

Period of membership

Attendance at meetings during membership period

Jennifer Clark $15,000 plus GST Sep 19-current 100%

Kathryn Hunter - Jul 19-current 100%

Cherie Enders - Sep 19-current 100%

Darrell Yesberg - Jul 19 100%

A representative of the ANAO is also invited to attend meetings of the Audit Committee and in 2019-20 attended each Audit Committee meeting.

EXTERNAL SCRUTINY AND CONTROLS

There have been no significant developments affecting the ALRC’s external scrutiny in 2019-20.

Parliamentary scrutiny

Representatives of the ALRC may appear at Senate Estimates Committee Hearings to answer questions about ALRC operations.

The ALRC was called to Senate Estimates on 22 October 2019.

43

HUMAN RESOURCE MANAGEMENT

Staffing

The ALRC has one office in Brisbane. On 30 June 2020, the ALRC employed 13 APS staff with a full-time equivalent staffing level of 11.8 FTE. In addition, the ALRC had one staff member on leave without pay. These figures do not include Commissioners. All staff are based in Brisbane, with the exception of one staff member who is based in Sydney. The ALRC does not have any non-APS staff members.

Table 11: Staffing profile as at 30 June 2020

APS/ALRC classification

Men Women Full-time Part-time Total

EL2/PLO ($139,118-$202,813) 2 2 2

EL1/SLO ($103,517-$135,067)

1 1 1

APS 5-6/LO ($77,828-$98,587)

1 7 6 2 8

APS 3-4 ($61,437-$75,560)

2 2 2

Total 3 10 10 3 13

Indigenous employment

During the 2019-20 financial year, there were no employees who identified as Indigenous.

Staff retention and turnover

During 2019-20, no staff members resigned from the ALRC.

Employment conditions

Non-SES employees engaged directly by the ALRC are covered by the ALRC Enterprise Agreement 2016-19, which was extended for three years by agreement in October 2019, subject to a determination under subsection 24(1) of the Public Service Act 1999 (Cth) as to remuneration. The Enterprise Agreement sets out terms and conditions of employment. One employee is currently working with individual flexibility arrangements . The only non-salary benefits provided during the period were paid as a health and well-being allowance.

44 ALRC Annual Report 2019-2020

Performance rewards and bonuses

The ALRC Enterprise Agreement makes provision for performance appraisal and allows for performance to be rewarded through a mixture of movement up the salary scale and one-off performance bonuses for those at the top of their pay point salary band, as summarised in Table 12.

Table 12: Performance rewards

Performance rating Outcome

Exceeding performance expectations 2 pay point increase

Meets all performance expectations 1 pay point increase

Meets most performance expectations Remain on current pay point

Does not meet performance expectations

Remain on current pay point or go down one or more pay points in accordance with procedures in Clause 20, ‘Managing Underperformance’

An employee who is at the maximum salary point for a classification will be eligible for a bonus of up to 2% of his or her annual salary, based on a performance appraisal. If rated as exceeding performance expectations, the bonus will be 2%. If rated as meeting all performance expectations, the bonus will be 1%. If rated as meeting most, or not meeting performance expectations, there will be no bonus awarded.

During 2019-20, one employee was awarded a performance bonus, amounting to a total bonus payment for the year of $4,009.34.

Table 13: Performance bonuses 2019-20

Classification Number of employees Total paid Average Range

EL2 1 $4,009.34 $4,009.34 $4,009.34

Further details of total remuneration expenditure in 2019-20 are provided in the financial statements.

45

Staff development

The ALRC identifies and responds to the professional development needs of its employees as identified during the performance appraisal process to ensure that they are able to meet the ALRC’s objectives. The ALRC also considers requests for education and training as they arise. The ALRC budgets for professional development at a whole-of-organisation level as well as for individual employees. In addition, the ALRC considers attendance at relevant conferences and professional seminars to contribute to the professional development of staff.

Study leave

Study leave is available for all ongoing employees (full-time and part-time). Study assistance provided by the ALRC is in the form of granting up to five days unpaid leave per academic year (part-time staff will be granted a pro rata amount) to facilitate an employee’s study. Six employees applied for study leave during 2019-20.

Law student engagement

The ALRC offers students at a number of universities the opportunity to gain practical skills by contributing to ALRC research and report writing.

In the previous reporting period the ALRC established clinical education programs with the Faculty of Law at three universities: Monash University, the University of Sydney and the University of Queensland. The program at Monash commenced in 2018-19, and the programs with the University of Sydney and University of Queensland commenced in the second semester of 2019. Participants in these programs contribute to current ALRC inquiries by completing a range of research tasks under the joint supervision of their university and an ALRC Legal Officer. Participants receive course credit for their work with the ALRC.

These university partnerships replaced the direct internship program previously offered by the ALRC.

During 2019-20, five students from the Faculty of Law at Monash University, 28 students from the University of Sydney Law School and nine students from the School of Law at the University of Queensland participated in the ALRC clinical education program.

Additionally, the ALRC hosted an intern supported under the Aurora Project for six weeks. The Aurora Project aims to improve educational outcomes for Indigenous Australians by facilitating internships at a range of organisations. One more placement was planned under the Aurora Project for the first half of 2020 but was deferred due to restrictions imposed as a result of the COVID-19 pandemic.

46 ALRC Annual Report 2019-2020

OTHER REPORTING REQUIREMENTS

Procurement and purchasing

Purchasing within the ALRC is guided by its Procurement and Purchasing Policy, which is consistent with the Commonwealth Procurement Rules and the PGPA Act. As an agency expending public money, the ALRC must be accountable for its resources and expenditure.

The ALRC Procurement and Purchasing Policy sets ‘value for money’ as the core principle in procurement decisions and also ensures that ALRC procurement encourages competition and the proper use of resources. ‘Value for money’ in a procurement process requires a comparative analysis of all relevant costs and benefits of each proposal throughout the whole procurement cycle (whole-of-life costing) and making decisions in an accountable and transparent manner. ‘Value for money’ also involves adopting processes that reflect the scale and risk profile of a particular procurement and that simple procurements should be undertaken using simple processes.

Risk management is built into ALRC procurement processes and the extent of risk management required will vary from following routine procurement processes, to a significant undertaking involving the highest level of planning, analysis and documentation.

Where the Government has established a coordinated Whole-of-Government procurement contract for a particular property or service, the ALRC will use the Government contract established for that property or service, unless an exemption has been provided. The ALRC currently uses a coordinated procurement contract for travel, purchasing major office machines, desktop computers, Microsoft software and office supplies.

Contracting

The ALRC had no contracts in excess of $10,000 that were exempted by the Accountable Authority from being published on AusTender because it would disclose exempt matters under the Freedom of Information Act 1982 (Cth) (FOI Act).

All ALRC contracts of $100,000 or more provide for the Auditor-General to have access to the contractor’s premises.

Procurement initiatives to support small business

The ALRC supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance’s website.

Due to the nature of the operations of the ALRC and its small size, the ALRC’s procurement is small in scale and under the $200,000 threshold. Much of the ALRC’s procurement is either through Whole-of-Government panels or from SMEs. The ALRC’s Procurement and Purchasing Policy facilitates the involvement of SMEs in procurement by:

„ adopting a risk assessment framework for procurement that is commensurate with the scale and scope of the procurement;

„ communicating in clear simple language and presenting information in an accessible format; and

„ utilising electronic systems to facilitate on-time payments where possible.

47

Indigenous procurement

During 2019-20, the ALRC entered into a contract for construction works with Rork Projects Pty Ltd, an Indigenous co-owned and managed company (reported as CN3695209 on the AusTender website).

Consultancies

Annual Reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.

From time to time, the ALRC may engage consultants. Prior to engaging consultants, the ALRC takes into account the skills and resources required for the task, the skills available internally, and the cost-effectiveness of engaging external expertise.

During 2019-20, no new consultancy contracts were entered into. In addition, no ongoing consultancy contracts were active during the period.

Advertising and market research

As required under s 311A of the Commonwealth Electoral Act 1918 (Cth), the ALRC reports that, during 2019-20, it did not undertake any advertising campaigns nor conduct any market research with advertising agencies, market research organisations, polling organisations, direct mail organisations, or media advertising organisations.

Disability strategy

The ALRC is committed to the inclusion of people with disability in its inquiry work. The ALRC encourages consultation with people with disability by presenting our publications in a range of different formats and, at the end of our inquiries, providing community information sheets that outline the key recommendations made in its reports that may impact on people with disability, where relevant.

Disability reporting is published in the Australian Public Service Commission’s State of the Service Report and the APS Statistical Bulletin. These reports are available at apsc.gov.au.

Freedom of information

Agencies subject to the FOI Act are required to publish information to the public as part of the Information Publication Scheme. This requirement is in Part II of the FOI Act and has replaced the former requirement to publish a section 8 statement in an Annual Report. The ALRC’s Information Publication Scheme is published on the ALRC website at https://www.alrc.gov.au/ about/access-information/information-publication-scheme/.

During 2019-20, the ALRC did not receive any FOI requests.

Legal services expenditure

As per the Legal Services Directions 2017 (Cth), the ALRC reports that during 2019-20 the ALRC was compliant with these Directions. The ALRC spent $1,203.44 (GST inc) on legal expenditure for 2019-20.

48 ALRC Annual Report 2019-2020

Work health and safety

The ALRC is committed to providing and maintaining the highest degree of work health and safety for all employees and other persons who engage with the ALRC’s work by aiming to prevent all injury and illness potentially caused by working conditions. The ALRC recognises its responsibility to provide a healthy and safe workplace for employees and to provide them with easily accessible information on work health and safety matters.

The ALRC Health and Safety Management Arrangements and Work Health and Safety Policy (WH&S Policy) provide the framework for ensuring the health, safety and welfare of all its employees. The ALRC has a commitment to consult with employees and their representatives on health and safety issues and to work together to ensure a safe work environment.

Under the ALRC’s Home-Based Work Policy, all staff are required to complete a Work From Home Occupational Health and Safety Checklist prior to working from a home-based office. Between March and May 2020, nearly all staff worked from home due to the COVID-19 pandemic. During this period, staff needs with respect to office equipment were assessed and staff were allowed to take all necessary office equipment home from the office, including vari-desks.

There were no accidents or any dangerous occurrences during 2019-20 that required giving of notice under the WH&S Act.

All employees undertake emergency procedures training at least once per year. Fire Warden training is also undertaken on a regular basis as part of our tenancy requirements.

As a workplace health initiative under its Enterprise Agreement, the ALRC provides free and voluntary influenza vaccinations to staff each year. In 2019-20, four employees took advantage of a free vaccination.

The ALRC also offers a reimbursement of up to $150 per annum for activities that contribute to employees’ health and well-being. In addition, all employees have access to a free and confidential counselling service that provides up to three free sessions of counselling per year.

Environmental performance

The ALRC maintains efficient and effective environmental office practices that comply with relevant government policy and environmental legislation.

In line with the principles of ecologically sustainable development, and in line with s 516A of the Environment Protection and Biodiversity Conservation Act 1999 (Cth), the ALRC makes the following report for 2019-20.

Energy efficiency

The ALRC is located in the Commonwealth Law Courts Building at Level 4, 119 North Quay, Brisbane. Automated lighting controls are used in the public and foyer areas of the Commonwealth Law Courts. An LED lighting system is used in the ALRC office area. ALRC employees are requested to switch off office lighting when people are out of the office. Employees are also requested to turn off computers, printers and photocopiers over weekends to minimise energy use. A National Australian Built Environment Rating System (NABERS) Energy rating is not available for the Commonwealth Law Courts building.

49

Waste and recycling

The ALRC supports recycling programs including for paper, co-mingled material and electronic equipment as part of our office tenancy. ALRC employees are encouraged to sort waste appropriately in order to maximise recycling and minimise ALRC disposal of waste to landfill.

Water

The ALRC office is located at the Brisbane Commonwealth Law Courts and it is not possible to rate the ALRC water usage separately. A NABERS Water Rating is not available for the Commonwealth Law Courts building.

Air travel

ALRC employees are encouraged to undertake air travel only where there is a demonstrated business need and other communication methods, such as videoconferencing, are not available or not appropriate in the circumstances. During 2019-20 the ALRC purchased a videoconference camera and microphone system to enhance its videoconferencing capacity.

The ALRC’s air travel is most commonly to undertake consultations for inquiry purposes and to ensure that people from around Australia are able to meet with the ALRC about the areas of law that are under review.

Vehicles

The ALRC does not have a vehicle fleet. ALRC employees use public transport and share vehicles as far as possible.

Printing

The ALRC has committed to reducing the amount of print copies of documents produced. Consultation papers are now only published online, unless there are special circumstances that require a hard copy to be produced.

All employees are encouraged to consider ways to minimise printing and are encouraged to print double-sided for documents that are for internal purposes. The general-use office copy paper is 100% recycled, carbon neutral and Forest Stewardship Council rated.

As part of the government’s digital transition policy, the ALRC has moved away from the creation and storage of paper records and in turn has reduced both the usage of paper and the amount of printing done by the organisation.

FINANCIAL STATEMENTS

52 ALRC Annual Report 2019-2020

INDEPENDENT AUDITOR’S REPORT

[To be included]

GPO Box 707 CANBERRA ACT 2601 38 Sydney Avenue FORREST ACT 2603 Phone (02) 6203 7300 Fax (02) 6203 7777

INDEPENDENT AUDITOR’S REPORT

To the Attorney-General

Opinion

In my opinion, the financial statements of the Australian Law Reform Commission (the Entity) for the year ended 30 June 2020:

(a) comply with Australian Accounting Standards - Reduced Disclosure Requirements and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015; and

(b) present fairly the financial position of the Entity as at 30 June 2020 and its financial performance and cash flows for the year then ended.

The financial statements of the Entity, which I have audited, comprise the following as at 30 June 2020 and for the year then ended:

• Statement by the Accountable Authority and Chief Financial Officer; • Statement of Comprehensive Income; • Statement of Financial Position; • Statement of Changes in Equity; • Cash Flow Statement; and • Notes to the financial statements, comprising a summary of significant accounting policies and other

explanatory information.

Basis for opinion

I conducted my audit in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Entity in accordance with the relevant ethical requirements for financial statement audits conducted by the Auditor-General and his delegates. These include the relevant independence requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) to the extent that they are not in conflict with the Auditor-General Act 1997. I have also fulfilled my other responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Accountable Authority’s responsibility for the financial statements

As the Accountable Authority of the Entity, the Chief Executive Officer is responsible under the Public Governance, Performance and Accountability Act 2013 (the Act) for the preparation and fair presentation of annual financial statements that comply with Australian Accounting Standards - Reduced Disclosure Requirements and the rules made under the Act. The Chief Executive Officer is also responsible for such internal control as the Chief Executive Officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Chief Executive Officer is responsible for assessing the ability of the Entity to continue as a going concern, taking into account whether the Entity’s operations will cease as a result of an administrative restructure or for any other reason. The Chief Executive Officer is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the assessment indicates that it is not appropriate.

53

Independent Auditor’s Report - 2

[To be included]

Auditor’s responsibilities for the audit of the financial statements

My objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian National Audit Office Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

As part of an audit in accordance with the Australian National Audit Office Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:

• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control; • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Accountable Authority; • conclude on the appropriateness of the Accountable Authority’s use of the going concern basis of accounting

and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Entity to cease to continue as a going concern; and • evaluate the overall presentation, structure and content of the financial statements, including the

disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

I communicate with the Accountable Authority regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

Australian National Audit Office

Jodi George

Executive Director

Delegate of the Auditor-General

Canberra

2 October 2020

54 ALRC Annual Report 2019-2020

FINANCIAL STATEMENTS

[To be included]

Australian Law Reform Commission

Financial Statements 2019-20

55

Financial Statements - 2

[To be included]

Contents Certification Statement by the Chief Executive Officer and Chief Financial Officer

Primary financial statements

Statement of comprehensive income

Statement of financial position

Statement of changes in equity

Cash flow statement

Overview

Notes to the financial statements

1. Financial Performance

1.1 Expenses

1.2 Own-source revenue and gains

2. Financial Position

2.1 Financial assets

2.2 Non-financial assets

2.3 Payables

2.4 Interest bearing liabilities

3. Funding

3.1 Appropriations

3.2 Special accounts

4. People and Relationships

4.1 Employee provisions

4.2 Key management personnel remuneration

4.3 Related party disclosures

5. Managing Uncertainties

5.1 Financial instruments

5.2 Fair value measurement

6. Other Information 6.1 Aggregate assets and liabilities

56 ALRC Annual Report 2019-2020

Financial Statements - 3

[To be included]

57

Financial Statements - 4

[To be included]

AUSTRALIAN LAW REFORM COMMISSION STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2020

2020 2019

Original Budget

Notes $ $ $

NET COST OF SERVICES

EXPENSES

Employee benefits 1.1A 1,739,184 1,934,864 1,924,000

Suppliers 1.1B 401,755 813,973 721,000

Finance costs 1.1C 29,208 - -

Write-down and impairment of other assets 1.1D - 14,217 -

Depreciation and amortisation 2.2A 170,503 4,691 20,000

Total expenses 2,340,650 2,767,745 2,665,000

OWN-SOURCE INCOME

Own-source revenue

Revenue from contracts with customers 1.2A 14,119 301,768 1,000

Interest 1.2B 1,202 - -

Other gains 1.2C 36,000 36,000 37,000

Total own-source revenue 51,321 337,768 38,000

Total own-source income 51,321 337,768 38,000

Net cost of services 2,289,329 2,429,977 2,627,000

Revenue from Government 1.2C 2,607,000 2,595,000 2,607,000

Surplus/(deficit) attributable to the Australian Government 317,671 165,023 (20,000)

Total comprehensive income 317,671 165,023 (20,000)

Budget Variance Commentary

Statement of Comprehensive Income

Explanations of major variances are provided below:

The above statement should be read in conjunction with the accompanying notes.

Employee benefits decreased against the budgeted amount primarily due to delays in filling vacancies.

Supplier’s expenses decreased against the budgeted amounts because of the adoption of AASB 16 Leases on 1 July 2019. This had the effect of reducing the Commission's operating lease expenditure significantly in 2019-20. Additionally, the Commission was referred less inquiries.

Finance costs increased against the budgeted amounts due to the adoption of AASB 16 Leases on 1 July 2019 and represents the interest component of the lease paid in 2019-20.

Depreciation expenses increased primarily against the budgeted amount due to the adoption of AASB 16 Leases by the Commission on 1 July 2019.

Revenue from contracts with customers has decreased in 2019-20 compared to the prior year actuals. The variance is primarily due to the Commission not receiving additional grants for specific inquiries.

58 ALRC Annual Report 2019-2020

Financial Statements - 5

[To be included]

AUSTRALIAN LAW REFORM COMMISSION STATEMENT OF FINANCIAL POSITION as at 30 June 2020

2020 2019

Original Budget

Notes $ $ $

ASSETS

Financial assets

Cash and cash equivalents 2.1A 968,118 935,950 1,433,000

Trade and other receivables 2.1B 21,457 9,499 6,000

Total financial assets 989,575 945,449 1,439,000

Non-financial assets

Property, plant and equipment 2.2A 1,361,438 44,688 40,000

Intangibles - software 2.2A 18,679 - -

Other non-financial assets - - 34,000

Total non-financial assets 1,380,117 44,688 74,000

Total assets 2,369,692 990,137 1,513,000

LIABILITIES

Payables

Suppliers 2.3A 20,979 95,855 18,000

Other payables 2.3B 211,692 550,244 125,000

Total payables 232,671 646,099 143,000

Interest bearing liabilities Leases 2.4A 1,345,952 - -

Total interest bearing liabilities 1,345,952 - -

Provisions Employee provisions 4.1A 279,204 172,099 145,000

Total provisions 279,204 172,099 145,000

Total liabilities 1,857,827 818,198 288,000

Net assets 511,865 171,939 1,225,000

EQUITY

Contributed equity 319,000 303,000 1,018,000

Reserves 135,058 135,058 136,000

Accumulated surplus/(deficit) 57,807 (266,119) 71,000

Total equity 511,865 171,939 1,225,000

The above statement should be read in conjunction with the accompanying notes.

Budget Variance Commentary

Statement of Financial Position Explanations of major variances are provided below:

The variance in cash and cash equivalents is due to the return of funding for the review of the Family Law System being unknown at the time the budget was being established.

The variance in property, plant and equipment is due to the adoption of AASB 16 Leases on 1 July 2019.

The variance in intangibles - software is due to the recognition of the Commission’s redeveloped website.

The variance for other non-financial assets was due to a timing issue of GST payments.

The variance in interest bearing liabilities is due to the adoption of AASB 16 Leases on 1 July 2019.

The increase in employee provisions primarily reflects the impact of staff taking less leave due to COVID-19.

59

Financial Statements - 6

[To be included]

AUSTRALIAN LAW REFORM COMMISSION STATEMENT OF CHANGES IN EQUITY as at 30 June 2020

2020 2019

Original Budget

$ $ $

CONTRIBUTED EQUITY

Opening balance Balance carried forward from previous period 303,000 287,000 1,002,000

Adjusted opening balance 303,000 287,000 1,002,000

Transactions with owners

Contributions by owners Departmental Capital Budget 16,000 16,000 16,000

Total transactions with owners 16,000 16,000 16,000

Closing balance as 30 June 319,000 303,000 1,018,000

RETAINED EARNINGS

Opening balance

Balance carried forward from previous period (266,119) (431,140) 91,000

Adjustment on initial application of AASB 16 6,256 - -

Adjusted opening balance (259,863) (431,140) 91,000

Comprehensive income Surplus/(Deficit) for the period 317,671 165,023 (20,000)

Total comprehensive income 317,671 165,023 (20,000)

Closing balance as 30 June 57,807 (266,119) 71,000

ASSET REVALUATION RESERVE

Opening balance Balance carried forward from previous period 135,058 135,058 136,000

Adjusted opening balance 135,058 135,058 136,000

Comprehensive income

- - -

Total comprehensive income - - -

Closing balance as 30 June 135,058 135,058 136,000

TOTAL EQUITY

Opening balance

Balance carried forward from previous period 178,195 (9,082) 1,229,000

Adjusted opening balance 178,195 (9,082) 1,229,000

Comprehensive income

Surplus/(Deficit) for the period 317,671 165,023 (20,000)

- - -

Total comprehensive income 317,671 165,023 (20,000)

Transactions with owners

Contributions by owners

Departmental Capital Budget 16,000 16,000 16,000

Total transactions with owners 16,000 16,000 16,000

Closing balance as 30 June 511,865 171,939 1,225,000

The above statement should be read in conjunction with the accompanying notes.

Other comprehensive income

Other comprehensive income

60 ALRC Annual Report 2019-2020

Financial Statements - 7

[To be included]

Accounting Policy

Equity injections

Budget Variance Commentary

Statement of Changes in Equity Explanations of major variances are provided below:

Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

The variance in contributed equity between budget and actual is due to the variances discussed in other notes. The Commission is still considered a going concern and only the Government can wind it up.

61

Financial Statements - 8

[To be included]

AUSTRALIAN LAW REFORM COMMISSION CASH FLOW STATEMENT for the period ended 30 June 2020

2020 2019

Original Budget

Notes $ $ $

OPERATING ACTIVITIES

Cash received

Sale of goods and rendering of services 15,539 301,885 1,000

Appropriations 2,607,000 2,595,000 2,607,000

Net GST received 45,706 49,385 -

Total cash received 2,668,245 2,946,270 2,608,000

Cash used

Employees 1,618,608 2,412,460 1,924,000

Suppliers 850,535 1,027,519 684,000

Interest payments on lease liabilities 29,208 - -

Total cash used 2,498,351 3,439,979 2,608,000

Net cash from operating activities 169,894 (493,709) -

INVESTING ACTIVITIES

Cash used

Purchase of property, plant and equipment 11,821 19,008 16,000

Purchase of intangibles 22,415 - -

Total cash used 34,236 19,008 16,000

Net cash used by investing activities (34,236) (19,008) (16,000)

FINANCING ACTIVITIES

Cash received

Contributed equity 16,000 16,000 16,000

Total cash received 16,000 16,000 16,000

Cash used

Principal payments of lease liabilities 119,490 - -

Total cash used 119,490 - -

Net cash from financing activities (103,490) 16,000 16,000

Net increase/(decrease) in cash held 32,168 (496,717) -

Cash and cash equivalents at the beginning of the reporting period 935,950 1,432,667 1,433,000

Cash and cash equivalents at the end of the reporting period 968,118 935,950 1,433,000

The above statement should be read in conjunction with the accompanying notes.

Budget Variance Commentary

Cash Flow Statement Explanations of major variances are provided below:

The variance in supplier payments is due to the return of funding for the review of the Family Law System being unknown at the time the budget was being established.

The variance in interest payments on lease liabilities variance reflects the adoption of AASB 16 Leases on 1 July 2019 and represents the interest component of the lease paid in 2019-20.

The variance in principal payments of lease liabilities is due to the adoption of AASB 16 Leases on 1 July 2019 which reclassified lease payments from operating activities to financing activities.

62 ALRC Annual Report 2019-2020

Financial Statements - 9

[To be included]

Overview

Objectives of the Australian Law Reform Commission

Standard/Interpretation

AASB 15 Revenue from Contracts with Customers /AASB 2016-8 Amendments to Australian Accounting Standards - Australian Implementation Guidance for Not‐for‐Profit Entities and AASB 1058 Income of Not‐For‐Profit Entities

AASB 16 Leases

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars.

Adoption of New Australian Accounting Standard Requirements No accounting standard has been adopted earlier than the application date as stated in the standard.

The Australian Law Reform Commission (the Commission) is an Australian Government controlled entity. It is a not-for-profit entity. The Commission supports the Attorney-General and the Australian Government to maintain and improve Australia's system of law and justice by contributing to the process of law reform.

The Commission is structured to meet one outcome: informed government decisions about the development, reform and harmonisation of Australian laws and related processes through research, analysis, reports and community consultation and education.

The continued existence of the Commission in its present form and with its present programs is dependent on Government policy and on continuing funding by Parliament for the Commission's administration and programs.

Commission activities contributing towards this outcome are classified as Departmental Activities. Departmental Activities involve the use of assets, liabilities, income and expenses controlled or incurred by the Commission in its own right.

Section 45 of the Australian Law Reform Commission Act 1996 (the ALRC Act), requires that money appropriated by the Parliament be transferred to the Law Reform Special Account (refer to note 3.2).

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013 .

The financial statements have been prepared in accordance with:

a) Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and

b) Australian Accounting Standards and Interpretations—Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

Basis of preparation of the financial statements

New Australian Accounting Standards

Nature of change in accounting policy, transitional provisions, and adjustment to financial statements

AASB 15, AASB 2016-8 and AASB 1058 became effective 1 July 2019.

AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including AASB 118 Revenue , AASB 111 Construction Contracts and Interpretation 13 Customer Loyalty Programmes . The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

AASB 1058 is relevant in circumstances where AASB 15 does not apply. AASB 1058 replaces most of the not-for-profit (NFP) provisions of AASB 1004 Contributions and applies to transactions where the consideration to acquire an asset is significantly less than fair value principally to enable the entity to further its objectives, and where volunteer services are received.

The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements.

AASB 16 became effective on 1 July 2019.

This new standard has replaced AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease, Interpretation 115 Operating Leases—Incentives and Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

AASB 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, together with options to exclude leases where the lease term is 12 months or less, or where the underlying asset is of low value. AASB 16 substantially carries forward the lessor accounting in AASB 117, with the distinction between operating leases and finance leases being retained. The details of the changes in accounting policies, transitional provisions and adjustments are disclosed below and in the relevant notes to the financial statements.

Application of AASB 15 Revenue from Contracts with Customers / AASB 1058 Income of Not‐For‐Profit Entities

The Commission adopted AASB 15 and AASB 1058 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2019 is not restated, that is, it is presented as previously reported under the various applicable AASBs and related interpretations.

Under the new income recognition model the Commission shall first determine whether an enforceable agreement exists and whether the promises to transfer goods or services to the customer are ‘sufficiently specific’. If an enforceable agreement exists and the promises are ‘sufficiently specific’ (to a transaction or part of a transaction), the Commission applies the general AASB 15 principles to determine the appropriate revenue recognition. If these criteria are not met, the Commission shall consider whether AASB 1058 applies.

In relation to AASB 15, the Commission elected to apply the new standard to all new and uncompleted contracts from the date of initial application. The Commission is required to aggregate the effect of all of the contract modifications that occur before the date of initial application.

In terms of AASB 1058, the Commission is required to recognise volunteer services at fair value if those services would have been purchased if not provided voluntarily, and the fair value of those services can be measured reliably.

No significant changes have arisen in the Commission's recognition of departmental revenue under the requirements of AASB 15.

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Financial Statements - 10

[To be included]

Impact on transition

Departmental

1 July 2019 $

Right-of-use assets - property, plant and equipment 1,471,696

Lease liabilities 1,471,696

Straight-line provision 6,256

Retained earnings (6,256)

1 July 2019 $

Minimum operating lease commitment at 30 June 2019 690,901

Less: short-term leases not recognised under AASB 16 -

Less: low value leases not recognised under AASB 16 -

932,702

Undiscounted lease payments 1,623,603

(151,907)

Lease liabilities recognised at 1 July 2019 1,471,696

Departmental

The Commission is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

There have been no subsequent events that have the potential to significantly affect the ongoing structure and the financial activities of the Commission.

Application of AASB 16 Leases

The Commission adopted AASB 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2019 is not restated, that is, it is presented as previously reported under AASB 117 and related interpretations.

The Commission elected to apply the practical expedient to not reassess whether a contract is, or contains a lease at the date of initial application. Contracts entered into before the transition date that were not identified as leases under AASB 117 were not reassessed. The definition of a lease under AASB 16 was applied only to contracts entered into or changed on or after 1 July 2019.

AASB 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard. The Commission applied the following practical expedients when applying AASB 16 to leases previously classified as operating leases under AASB 117: • Apply a single discount rate to a portfolio of leases with reasonably similar characteristics; • Exclude initial direct costs from the measurement of right-of-use assets at the date of initial application forleases where the right-of-use asset was determined as if AASB 16 had been applied since the commencement date; • Reliance on previous assessments on whether leases are onerous as opposed to preparing an impairment review under AASB 136 Impairment of assets as at the date of initial application; and • Applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term remaining as of the date of initial application.

Taxation

Events after the reporting period

As a lessee, the Commission previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership. Under AASB 16, the Commission recognises right-of-use assets and lease liabilities for most leases. However, the Commission has elected not to recognise right-of-use assets and lease liabilities for some leases of low value assets based on the value of the underlying asset when new or for short-term leases with a lease term of 12 months or less.

On adoption of AASB 16, the Commission recognised right-of-use assets and lease liabilities in relation to leases of office space, heavy equipment and automobiles, which had previously been classified as operating leases.

The lease liabilities were measured at the present value of the remaining lease payments, discounted using the Commission’s incremental borrowing rate as at 1 July 2019. The Commission’s incremental borrowing rate is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted-average rate applied was 0.17%.

The right-of-use asserts were measured as follows:

a) Office space: measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments; and

b) All other leases: the carrying value that would have resulted from AASB 16 being applied from the commencement date of the leases, subject to the practical expedients noted above.

On transition to AASB 16, the Commission recognised additional right-of-use assets and additional lease liabilities, recognising the difference in retained earnings. The impact on transition is summarised below:

The following table reconciles the Departmental minimum lease commitments disclosed in the Commission's 30 June 2019 annual financial statements to the amount of lease liabilities recognised on 1 July 2019:

Less: effect of discounting using the incremental borrowing rate as at the date of initial application

Plus: effect of extension options reasonable certain to be exercised

64 ALRC Annual Report 2019-2020

Financial Statements - 11

[To be included] 1.1 Expenses

2020 2019

$ $

1.1A: Employee benefits

Wages and salaries 1,454,334 1,594,370

Superannuation

Defined benefit plans 16,229 17,708

Defined contribution plans 126,133 137,999

Leave and other entitlements 142,488 118,005

Separation and redundancies - 66,782

Total employee benefits 1,739,184 1,934,864

Accounting Policy

1.1B: Suppliers

Goods and services supplied or rendered

Committees 3,458 74,262

Library 11,582 29,446

Professional services 72,223 91,087

Printing and office requisites 32,317 28,973

Freight and removals - 21,402

Telephone and postage 19,082 27,933

Incidentals 19,267 21,676

Minor assets 59,285 54,348

Staff training 6,072 6,835

Maintenance 37,024 15,798

Accommodation 149 17,333

Advertising 194 449

Travel 74,718 157,278

IT services 64,981 68,489

Total goods and services supplied or rendered 400,352 615,309

Goods supplied 73,529 71,409

Services rendered 326,823 543,900

Total goods and services supplied or rendered 400,352 615,309

Other suppliers

Operating lease rentals - 193,571

Workers compensation expenses 1,403 5,093

Total other suppliers 1,403 198,664

Total suppliers 401,755 813,973

Accounting Policy

1.1C: Finance costs Interest on lease liabilities 29,208 -

Accounting Policy

1.1D: Write-down and impairment of other assets Impairment of property, plant and equipment - 14,217

The Commission has elected not to recognise right-of-use assets and lease liabilities for short-term leases of assets that have a lease term of 12 months or less and leases of low-value assets (less than $10,000). The Commission recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Accounting policies for employee related expenses is contained in Note 4.1 - People and Relationships

Note 1: Financial Performance This section analyses the financial performance of Australian Law Reform Commission for the year ended 30 June 2020.

The Commission has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.

The Commission has no short-term lease commitments at 30 June 2020.

The above lease disclosures should be read in conjunction with the accompanying notes 1.1D, 1.1H, 1.2E, 1.2I, 3.2 and 3.4B.

Short‐‐term leases and leases of low‐‐value assets

All borrowing costs are expensed as incurred.

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Financial Statements - 12

[To be included]

1.2 Own-source revenue and gains

2020 2019

$ $

1.2A: Revenue from contracts with customers 14,119 301,768

Accounting Policy

1.2B: Interest 1 1,202 -

1.2C: Other gains Resources received free of charge - ANAO 36,000 36,000

Accounting Policy

Resources received free of charge

1.2D: Revenue from Government

Appropriations Departmental appropriations 2,607,000 2,595,000

Accounting Policy

Revenue from Government

1 Interest revenue reflects an amount received from the Reserve Bank of Australia and an amount from the the Australian Taxation Office for a delay in processing monthly BAS refunds.

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the entity gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.

Revenue from the sale of goods and rendering of services is recognised when the goods and services have been provided.

Resources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.

66 ALRC Annual Report 2019-2020

Financial Statements - 13

[To be included]

2.1 Financial assets

2020 2019

$ $

2.1A: Cash and cash equivalents

Cash on hand or on deposit 62,929 129,238

Cash in special accounts 905,189 806,712

Total cash and cash equivalents 968,118 935,950

Accounting Policy

2.1B: Trade and other receivables

Goods and services receivables Goods and services 776 329

Total goods and services receivables 776 329

Other receivables Statutory receivables (GST) 20,681 9,170

Total other receivables 20,681 9,170

Total trade and other receivables (gross) 21,457 9,499

Total trade and other receivables (net) 21,457 9,499

Accounting Policy

Receivables

Note 2: Financial Position

This section analyses the Australian Law Reform Commission's assets used to conduct its operations and the operating liabilities incurred as a result. Employee related information is disclosed in the People and Relationships section

Trade and other receivables that have fixed or determinable payments and that are not quoted in an active market are classified as receivables. Receivables are measured at amortised cost using the effective interest method less impairment. Trade and other receivables are assessed for impairment at the end of each reporting period. At year end none are overdue. Credit terms for goods and services were within 30 days (2019: 30 days).

The closing balance of Cash in special accounts does not include amounts held in trust.

Cash is recognised at its nominal amount. Cash and cash equivalents includes: a) cash on hand; b) demand deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value; and c) cash in special accounts.

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Financial Statements - 14

[To be included]

Land and buildings

Plant and equipment

Intangibles - Software Total

$ $ $ $

As at 1 July 2019

Gross book value - 117,566 - 117,566

Accumulated depreciation - (72,878) - (72,878)

Total as at 1 July 2019 - 44,688 - 44,688

Recognition of right of use asset on initial application of AASB 16 1,471,696 - - 1,471,696

Adjusted total as at 1 July 2019 1,471,696 44,688 - 1,516,384

Additions

Purchase - 11,821 22,415 34,236

Depreciation (7,665) - (7,665)

Depreciation on right-of-use assets (159,102) - (159,102)

Amortisation - - (3,736) (3,736)

Total as at 30 June 2020 1,312,594 48,844 18,679 1,380,117

Total as at 30 June 2020 represented by Gross book value 1,471,696 129,387 22,415 1,623,498

Accumulated depreciation and impairment (159,102) (80,543) (3,736) (243,381)

Total as at 30 June 2020 1,312,594 48,844 18,679 1,380,117

Carrying amount of right-of-use assets 1,312,594 - - 1,312,594

Revaluations of non-financial assets

No indicators of impairment were found for plant and equipment.

Accounting Policy

Asset Recognition Threshold

Lease Right of Use (ROU) Assets

Revaluations

Depreciation

Depreciation rates applying at present are 3-10 years.

Intangibles

2.2 Non-financial assets

All revaluations were conducted in accordance with the revaluation policy stated below.

2.2A: Reconciliation of the opening and closing balances of property, plant and equipment and intangibles

Plant and equipment are not expected to be disposed of within the next 12 months.

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.

Purchases of plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $1,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

Following initial recognition at cost, plant and equipment (excluding ROU assets) are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount.

Depreciable plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the entity using, in all cases, the straight-line method of depreciation.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Leased ROU assets are capitalised at the commencement date of the lease and comprise of the initial lease liability amount, initial direct costs incurred when entering into the lease less any lease incentives received. These assets are accounted for by Commonwealth lessees as separate asset classes to corresponding assets owned outright, but included in the same column as where the corresponding underlying assets would be presented if they were owned.

On initial adoption of AASB 16 the Commission has adjusted the ROU assets at the date of initial application by the amount of any provision for onerous leases recognised immediately before the date of initial application. Following initial application, an impairment review is undertaken for any right of use lease asset that shows indicators of impairment and an impairment loss is recognised against any right of use lease asset that is impaired. Lease ROU assets continue to be measured at cost after initial recognition in Commonwealth agency, GGS and Whole of Government financial statements.

The depreciation rates for ROU assets are based on the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term.

The Commission’s intangibles comprise internally developed software and purchased software for internal use which cost more than $20,000. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the Commission’s intangibles are 3 to 5 years .

All software assets were assessed for indications of impairment at 30 June 2020.

68 ALRC Annual Report 2019-2020

Financial Statements - 15

[To be included]

2.3 Payables

2020 2019

$ $

2.3A: Suppliers Trade creditors and accruals - not more than 12 months 20,979 89,599

Operating lease rentals - 6,256

Total suppliers 20,979 95,855

Settlement is usually made net 30 days.

2.3B: Other payables

Wages and salaries 23,957 10,486

Unearned income 187,735 539,758

Total other payables 211,692 550,244

Accounting Policy

Refer to Note 1.1B.

2.4 Interest bearing liabilities

2.4A: Leases Lease liabilities 1,345,952 -

Accounting Policy

Total cash outflow for leases for the year ended 30 June 2020 was $154,952.

Refer Overview section for accounting policy on leases.

The Commission has applied AASB 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under AASB 117.

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Financial Statements - 16

[To be included] Note 3: Funding 3.1 Appropriations

3.1A: Annual appropriations ('recoverable GST exclusive')

Annual appropriations for 2020

Annual

appropriation 1

Adjustments to appropriation 2

Total

appropriation

Appropriation applied in 2020 (current and prior years) Variance

3

$ $ $ $ $

DEPARTMENTAL

Ordinary annual services 2,607,000 - 2,607,000 2,607,000 -

Capital budget 4

16,000 - 16,000 16,000 -

Total departmental 2,623,000 - 2,623,000 2,623,000 -

1. In 2019-20 no amount of appropriation has been withheld (Section 51 of the PGPA Act) and quarantined for administrative purposes.

3. In 2019-20, there was no variance.

Annual appropriations for 2019

Annual

appropriation 1

Adjustments to appropriation 2

Total

appropriation

Appropriation applied in 2019 (current and prior years) Variance

3

$ $ $ $ $

DEPARTMENTAL

Ordinary annual services 2,595,000 - 2,595,000 2,595,000 -

Capital budget 4

16,000 - 16,000 16,000 -

Total departmental 2,611,000 - 2,611,000 2,611,000 -

3. In 2018-19, there was no variance.

3.1B: Unspent annual appropriations ('recoverable GST exclusive')

2020 2019

$ $

Departmental 2018-19 Appropriation Act 1 - -

2019-20 Appropriation Act 1 - -

Total departmental - -

4. Departmental Capital Budgets are appropriated through Appropriation Act (No. 1). They form part of ordinary annual services, and are not separately identified in the Appropriation Act.

2. No amount was received from the PGPA Act Section 74 receipts.

4. Departmental Capital Budgets are appropriated through Appropriation Act (No. 1). They form part of ordinary annual services, and are not separately identified in the Appropriation Act.

This section identifies the Australian Law Reform Commission's funding structure.

2. No amount was received from the PGPA Act Section 74 receipts.

1. In 2018-19 no amount of appropriation has been withheld (Section 51 of the PGPA Act) and quarantined for administrative purposes.

70 ALRC Annual Report 2019-2020

Financial Statements - 17

[To be included]

3.2 Special accounts

2020 2019

$ $

Balance brought forward from previous period 935,950 1,432,667

Increases Appropriation credited to special account 2,623,000 2,611,000

Other receipts - 301,885

Total increases 2,623,000 2,912,885

Available for payments 3,558,950 4,345,552

Decreases

Departmental

Payments made to suppliers (948,267) (997,142)

Payments made to employees (1,618,608) (2,412,460)

Total decreases (2,566,875) (3,409,602)

Total balance carried to the next period 992,075 935,950

Balance represented by:

Cash held in Commission bank accounts 62,929 129,238

Cash held in the Official Public Account 905,189 806,712

Total balance carried to the next period 968,118 935,950

1. Appropriation: Public Governance, Performance and Accountability Act 2013 section 80; Establishing Instrument: Australian Law Reform Commission Act 1996 , section 45.

2. The purpose of the Special Account is: (a) to pay the costs, expenses and other obligations incurred by the Commonwealth in the performance of the Commission's functions; (b) to pay any remuneration and allowances payable to a person under the Australian Law Reform Commission Act 1996 ; (c) to pay the expenses of administering the Account; (d) to pay any amount that is required or permitted to be repaid; and (e) to reduce the balance of the Account (and, therefore, the available appropriation for the Account) without making a real or notional payment.

Law Reform Special Account (Departmental)

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Financial Statements - 18

[To be included]

4.1 Employee provisions

2020 2019

$ $

4.1A: Employee provisions Leave 279,204 172,099

Total employee provisions 279,204 172,099

220,588 83,032

58,616 89,067

Total employee provisions 279,204 172,099

Accounting Policy

Leave

Separation

Superannuation

The PSS is a defined benefit scheme for the Australian Government. The PSSap is a defined contribution scheme.

Accounting judgements and estimates

Employee provisions expected to be settled No more than 12 months More than 12 months

The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Provision is made for separation and redundancy benefit payments. The Commission recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

The Commission's staff are members of the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap), or other superannuation funds held outside the Australian Government.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

The employee benefits provisions have been estimated in accordance with AASB 119 Employee Benefits and reflect the expected value of those benefits.

The liability for superannuation recognised as at 30 June 2020 represents outstanding contributions for the final fortnight of the year.

Note 4: People and Relationships This section describes a range of employment and post employment benefits provided to our people and our relationships with other key people.

Liabilities for ‘short-term' employee benefits and termination benefits expected within twelve months of the end of reporting period are measured at their nominal amounts.

The liability for employee benefits includes provision for annual leave and long service leave.

The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the Commission’s employer superannuation contribution rates, to the extent that the leave is likely to be taken during service rather than paid out on termination.

The Commission makes employer contributions to the employees' defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The Commission accounts for the contributions as if they were contributions to defined contribution plans.

72 ALRC Annual Report 2019-2020

Financial Statements - 19

[To be included]

4.2 Key management personnel remuneration 1

2020 2019

$ $

Short-term employee benefits

Salary 508,118 537,413

Other 2 - -

Total short-term employee benefits 508,118 537,413

Post-employment benefits - superannuation - 8,418

Other long-term employee benefits Annual leave - 41,468

Total other long-term employee benefits - 41,468

Total key management personnel remuneration expenses 508,118 587,299

The total number of key management personnel that are included in the above table are 1 (2019: 2). 3

4.3 Related party disclosures

Related party relationships:

Transactions with related parties:

1

The above key management personnel remuneration excludes the remuneration and other benefits of the Attorney-General whose remuneration and other benefits are set by the Remuneration Tribunal and are not paid by this Commission.

The Commission is an Australian Government controlled entity. Related parties to the Commission are key management personnel, Commissioners and other Australian Government entities.

2

Other includes motor vehicles and reportable fringe benefits.

3 The key management personnel remuneration included all substantive key management personnel and extended acting arrangements for the full year. In November 2018, the full-time Commissioner ceased and the position has not been filled since that date.

Given the breadth of government activities, related parties may transact with the government sector in the same capacity as ordinary citizens.

Transactions with related parties of the Commission have occurred within normal customer or supplier relationship on terms and conditions no more favourable than those which it is reasonable to expect the Commission would have entered into on an arm's-length basis. These transactions have not been separately disclosed.

Giving consideration to relationships with related entities, and transactions entered into during the reporting period by the Commission, it has been determined that there are no related party transactions to be separately disclosed.

Key Management Personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Commission, directly or indirectly, including any director (whether executive or otherwise) of the Commission. The Commission has determined the Key Management Personnel to be the Attorney-General and Chief Executive Officer.

Key Management Personnel remuneration is reported in the table below.

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Financial Statements - 20

[To be included]

5.1 Financial instruments

2020 2019

$ $

5.1A: Categories of financial instruments

Financial assets at amortised cost

Cash and cash equivalents 968,118 935,950

Trade receivables 776 329

Total financial assets at amortised cost 968,894 936,279

Total financial assets 968,894 936,279

Financial liabilities Financial liabilities measured at amortised cost Trade creditors 20,979 89,599

Other payables 211,692 550,244

Total financial liabilities measured at amortised cost 232,671 639,843

Total financial liabilities 232,671 639,843

Note 5: Managing Uncertainties

This section analyses how the Australian Law Reform Commission manages financial risks within its operating environment.

No financial assets have been reclassified in 2019-20 (2019: nil).

There have been no net gains or losses on financial assets in 2019-20 (2019: nil). There have been no net gains or losses on financial liabilities in 2019-20 (2019: nil).

74 ALRC Annual Report 2019-2020

Financial Statements - 21

[To be included]

Accounting Policy

Financial assets

Financial assets at amortised cost

Effective interest method

Financial assets at fair value through other comprehensive income (FVOCI)

Impairment of financial assets

Financial liabilities

Financial liabilities at amortised cost

With the implementation of AASB 9 Financial Instruments for the first time in 2019, the entity classifies its financial assets in the following categories: a) financial assets at fair value through profit or loss; b) financial assets at fair value through other comprehensive income; and c) financial assets measured at amortised cost. The classification depends on both the entity's business model for managing the financial assets and contractual cash flow characteristics at the time of initial recognition. Financial assets are recognised when the entity becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon trade date.

Comparatives have not been restated on initial application

Financial assets included in this category need to meet two criteria: 1. the financial asset is held in order to collect the contractual cash flows; and 2. the cash flows are solely payments of principal and interest (SPPI) on the principal outstanding amount.

Amortised cost is determined using the effective interest method.

Income is recognised on an effective interest rate basis for financial assets that are recognised at amortised cost.

Financial assets measured at fair value through other comprehensive income are held with the objective of both collecting contractual cash flows and selling the financial assets and the cash flows meet the SPPI test.

Any gains or losses as a result of fair value measurement or the recognition of an impairment loss allowance is recognised in other comprehensive income.

Financial assets are assessed for impairment at the end of each reporting period based on Expected Credit Losses, using the general approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12‐month expected credit losses if risk has not increased.

The simplified approach for trade, contract and lease receivables is used. This approach always measures the loss allowance as the amount equal to the lifetime expected credit losses.

A write-off constitutes a derecognition event where the write-off directly reduces the gross carrying amount of the financial asset.

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.

Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis.

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

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Financial Statements - 22

[To be included]

5.2 Fair value measurement

Accounting Policy

5.2A: Fair value measurement

2020 2019

$ $

Non-financial assets Plant and equipment 48,844 44,688

Total 48,844 44,688

No non-financial assets were measured at fair value on a non-recurring basis as at 30 June 2020 (2019: nil).

There were no transfers between levels during the year.

The Commission tests the procedures of the valuation model as an asset materiality review at least once every 12 months (with a formal revaluation undertaken once every three years). If a particular asset class experiences significant and volatile changes in fair value (i.e. where indicators suggest that the value of the class has changed materially since the previous reporting period), that class is subject to specific valuation in the reporting period, where practicable, regardless of the timing of the last specific valuation.

Fair value measurements at the end of the reporting period

The Commission's assets are held for operational purposes and not held for the purpose of deriving a profit. The current use of all non-financial assets is considered their highest and best use.

The remaining assets and liabilities reported by the Commission are not measured at fair value in the Statement of Financial Position.

76 ALRC Annual Report 2019-2020

Financial Statements - 23

[To be included] 6.1 Aggregate assets and liabilities

2020 2019

$ $

No more than 12 months 989,575 945,449

More than 12 months 1,380,117 44,688

Total assets 2,369,692 990,137

Liabilities expected to settled in:

No more than 12 months 612,859 729,131

More than 12 months 1,244,968 89,067

Total liabilities 1,857,827 818,198

Note 6: Other information

6.1A: Aggregate assets and liabilities

Assets expected to be recovered in:

77

ENTITY RESOURCE STATEMENT AND EXPENSES FOR OUTCOMES 2019-20

Entity Resource Statement 2019-20

Actual available appropriation for 2019-20 $’000

Payments made 2019-20 $’000

Balance remaining 2019-20

(a) (b) (a) - (b)

Special Accounts

Opening balance 936

Appropriation receipts1 2,623

Other receipts -

Payments made 2,567

Total Special Account 3,559 2,567 992

Total net resourcing and payments for ALRC2 3,559 2,567

1 Appropriation Act (No.1) 2019-20, and includes an amount of $16,000 in 2019-20 for the Departmental Capital Budget. For accounting purposes this amount has been designated as ‘contributions by owners’.

2 This may also include prior year departmental appropriations and section 74 Retained Revenue Receipts.

78 ALRC Annual Report 2019-2020

Expenses for Outcome 1

Outcome 1:

Informed government decisions about the development, reform and harmonisation of Australian laws and related processes through research, analysis, reports and community consultation and education.

Budget*

2019-20 $’000

Actual expenses

2019-20 $’000

Variation

2019-20 $’000

(a) (b) (a) - (b)

Program 1: Conducting inquiries into aspects of Australian laws and related processes for the purposes of law reform.

Departmental expenses

Departmental appropriation13

Special Accounts 2,607 2,282 325

Expenses not requiring appropriation in the Budget year 58 59 (1)

Total for Program 1 2,665 2,341 324

Outcome 1 Totals by appropriation type

Departmental expenses

Departmental Appropriation1

Special Accounts 2,607 2,282 325

Expenses not requiring appropriation in the Budget year 58 59 (1)

Total expenses for Outcome 1 2,665 2,341 324

2018-19 2019-20

Average Staffing Level 11 11

* Full year budget, including any subsequent adjustment made to the 2019-20 Budget.

1 Departmental Appropriation combines Ordinary annual services (Appropriation Act No.1) and Retained Revenue Receipts under section 74 of the PGPA Act.

GLOSSARY AND INDEXES

80 ALRC Annual Report 2019-2020

GLOSSARY

AASB Australian Accounting Standards Board

AC Companion of the Order of Australia

ALRC Australian Law Reform Commission

ALRC Act Australian Law Reform Commission Act 1996 (Cth)

ANAO Australian National Audit Office

ANU Australian National University

APS Australian Public Service

ASIC Australian Securities and Investments Commission

CAG Council of Attorneys-General

CMG Companion of the Order of St Michael and St George

Criminal Code Schedule to the Criminal Code Act 1995 (Cth)

CPR Commonwealth Procurement Rules

Cth Commonwealth of Australia

DP Discussion Paper

EL Executive Level

FOI Freedom of Information

FOI Act Freedom of Information Act 1982 (Cth)

FTE Full-Time Equivalent

KPI Key Performance Indicator

LO Legal Officer

MP Member of Parliament

NABERS National Australian Built Environment Rating System

PDF Portable Document Format

81

PGPA Act Public Governance, Performance and Accountability Act 2013 (Cth)

PGPA Financial Reporting Rule Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (Cth)

PGPA Rule Public Governance, Performance and Accountability Rule 2014 (Cth)

PLO Principal Legal Officer

RMFCP Risk Management and Fraud Control Policy

QC Queen’s Counsel

SES Senior Executive Service

SLO Senior Legal Officer

SME Small and Medium Enterprises

UNSW University of New South Wales

WH&S Work Health and Safety

82 ALRC Annual Report 2019-2020

LIST OF REQUIREMENTS

This is a guide to the report’s compliance with the requirements for Annual Reports as required by s 17AJ(d) of the PGPA Rule.

Part of Report Description Page No.

Letter of Transmittal

A copy of the letter of transmittal signed and dated by accountable authority on date final text approved, with statement that the report has been prepared in accordance with section 46 of the Act and any enabling legislation that specifies additional requirements in relation to the annual report.

iii

Aids to Access

Table of contents. iv

Alphabetical index. 89-91

Glossary of abbreviations and acronyms. 81-81

List of requirements. 82-88

Details of contact officer. ii

Entity’s website address. ii

Electronic address of report. ii

Review by Accountable Authority

A review by the accountable authority of the entity. 2-3

Overview of the Entity

A description of the role and functions of the entity. 6

A description of the organisational structure of the entity. 6

A description of the outcomes and programmes administered by the entity. 22

A description of the purposes of the entity as included in corporate plan. 6

Name of the accountable authority or each member of the accountable authority. 36

Position title of the accountable authority or each member of the accountable authority. 36

Period as the accountable authority or member of the accountable authority within the reporting period. 36

An outline of the structure of the portfolio of the entity. Not applicable

83

Part of Report Description Page No.

Where the outcomes and programmes administered by the entity differ from any Portfolio Budget Statement, Portfolio Additional Estimates Statement or other portfolio estimates statement that was prepared for the entity for the period, include details of variation and reasons for change.

Not

applicable

Report of the Performance of the Entity

Annual Performance Statements

Annual performance statement in accordance with paragraph 39(1)(b) of the Act and section 16F of the Rule.

22-31

Report on Financial Performance

A discussion and analysis of the entity’s financial performance. 34

A table summarising the total resources and total payments of the entity. 77-78

If there may be significant changes in the financial results during or after the previous or current reporting period, information on those changes, including: the cause of any operating loss of the entity; how the entity has responded to the loss and the actions that have been taken in relation to the loss; and any matter or circumstances that it can reasonably be anticipated will have a significant impact on the entity’s future operation or financial results.

Not

applicable

Management and Accountability

Corporate Governance

Information on compliance with section 10 (fraud systems). 38-39

A certification by accountable authority that fraud risk assessments and fraud control plans have been prepared.

iii

A certification by accountable authority that appropriate mechanisms for preventing, detecting incidents of, investigating or otherwise dealing with, and recording or reporting fraud that meet the specific needs of the entity are in place.

iii

A certification by accountable authority that all reasonable measures have been taken to deal appropriately with fraud relating to the entity.

iii

An outline of structures and processes in place for the entity to implement principles and objectives of corporate governance.

36-40

84 ALRC Annual Report 2019-2020

Part of Report Description Page No.

A statement of significant issues reported to Minister under paragraph 19(1)(e) of the Act that relates to non-compliance with Finance law and action taken to remedy non-compliance.

Not

applicable

Audit Committee

A direct electronic address of the charter determining the functions of the entity’s audit committee. 41

The name of each member of the entity’s audit committee. 41

The qualifications, knowledge, skills or experience of each member of the entity’s audit committee. 41

Information about the attendance of each member of the entity’s audit committee at committee meetings. 42

The remuneration of each member of the entity’s audit committee. 42

External Scrutiny

Information on the most significant developments in external scrutiny and the entity’s response to the scrutiny.

42

Information on judicial decisions and decisions of administrative tribunals and by the Australian Information Commissioner that may have a significant effect on the operations of the entity.

Not

applicable

Information on any reports on operations of the entity by the Auditor-General (other than report under section 43 of the Act), a Parliamentary Committee, or the Commonwealth Ombudsman.

Not

applicable

Information on any capability reviews on the entity that were released during the period. Not applicable

Management of Human Resources

An assessment of the entity’s effectiveness in managing and developing employees to achieve entity objectives.

45

Statistics on the entity’s employees on an ongoing and non-ongoing basis, including the following:

(a) statistics on full-time employees;

(b) statistics on part-time employees;

(c) statistics on gender;

(d) statistics on staff location.

43

85

Part of Report Description Page No.

Statistics on the entity’s APS employees on an ongoing and non-ongoing basis, including the following:

Statistics on staffing classification level;

Statistics on full-time employees;

Statistics on part-time employees;

Statistics on gender;

Statistics on staff location;

Statistics on employees who identify as Indigenous.

43

Information on any enterprise agreements, individual flexibility arrangements, Australian workplace agreements, common law contracts and determinations under subsection 24(1) of the Public Service Act 1999.

43

Information on the number of SES and non-SES employees covered by agreements etc identified in paragraph 17AG(4)(c).

43

The salary ranges available for APS employees by classification level. 43

A description of non-salary benefits provided to employees. 43

Information on the number of employees at each classification level who received performance pay. 44

Information on aggregate amounts of performance pay at each classification level. 44

Information on the average amount of performance payment, and range of such payments, at each classification level.

44

Information on aggregate amount of performance payments. 44

Assets Management

An assessment of effectiveness of assets management where asset management is a significant part of the entity’s activities.

Not

applicable

Purchasing

An assessment of entity performance against the Commonwealth Procurement Rules. 46

86 ALRC Annual Report 2019-2020

Part of Report Description Page No.

Consultants

A summary statement detailing the number of new contracts engaging consultants entered into during the period; the total actual expenditure on all new consultancy contracts entered into during the period (inclusive of GST); the number of ongoing consultancy contracts that were entered into during a previous reporting period; and the total actual expenditure in the reporting year on the ongoing consultancy contracts (inclusive of GST).

Not

applicable

A statement that “During [reporting period], [specified number] new consultancy contracts were entered into involving total actual expenditure of $[specified million]. In addition, [specified number] ongoing consultancy contracts were active during the period, involving total actual expenditure of $[specified million]”.

47

A summary of the policies and procedures for selecting and engaging consultants and the main categories of purposes for which consultants were selected and engaged.

47

A statement that “Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.”

47

Australian National Audit Office Access Clauses

If an entity entered into a contract with a value of more than $100 000 (inclusive of GST) and the contract did not provide the Auditor-General with access to the contractor’s premises, the report must include the name of the contractor, purpose and value of the contract, and the reason why a clause allowing access was not included in the contract.

Not

applicable

Exempt Contracts

If an entity entered into a contract or there is a standing offer with a value greater than $10 000 (inclusive of GST) which has been exempt from being published in AusTender because it would disclose exempt matters under the FOI Act, the annual report must include a statement that the contract or standing offer has been exempted, and the value of the contract or standing offer, to the extent that doing so does not disclose the exempt matters.

Not

applicable

87

Part of Report Description Page No.

Small Business

A statement that “[Name of entity] supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance’s website.”

46

An outline of the ways in which the procurement practices of the entity support small and medium enterprises.

46

If the entity is considered by the Department administered by the Finance Minister as material in nature—a statement that “[Name of entity] recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website.”

Not

applicable

Financial Statements

Inclusion of the annual financial statements in accordance with subsection 43(4) of the Act. 51

Executive Remuneration

Information about executive remuneration in accordance with Subdivision C of Division 3A of Part 2-3 of the Rule.

37

Other Mandatory Information

If the entity conducted advertising campaigns, a statement that “During [reporting period], [name of entity] conducted the following advertising campaigns: [name of advertising campaigns undertaken]. Further information on those advertising campaigns is available at [address of entity’s website] and in the reports on Australian Government advertising prepared by the Department of Finance. Those reports are available on the Department of Finance’s website.”

Not

applicable

If the entity did not conduct advertising campaigns, a statement to that effect. 47

A statement that “Information on grants awarded to [name of entity] during [reporting period] is available at [address of entity’s website].”

Not

applicable

Outline of mechanisms of disability reporting, including reference to website for further information. 47

88 ALRC Annual Report 2019-2020

Part of Report Description Page No.

Website reference to where the entity’s Information Publication Scheme statement pursuant to Part II of FOI Act can be found.

47

Correction of material errors in previous annual report. Not applicable

Information required by other legislation. 47-49

89

INDEX

A

Accountable Authority 36, 38, 46 Instructions 36, 38 address and contact details ii advertising and market research 47 air travel 49 ALRC Act. See Australian Law Reform

Commission Act 1996 ANAO. See Australian National Audit Office annual performance statement.

See performance statement articles. See presentations, articles and speaking engagements (by ALRC

staff)

Attorney-General 6, 8, 10, 13, 14, 16, 18, 23, 25, 26, 34, 36, 40 Attorney-General’s Department 14, 22, 32 audit

Audit Committee 38, 40, 41, 42 Auditor-General 46 financial management 38 Independent Auditor’s Report 52, 53 Australian Human Rights Commission 33 Australian Law Reform Commission Act

1996 6, 36

Australian National Audit Office 38 Australian Public Service Values and Code of Conduct 39, 40

B

Bromwich, the Hon Justice Robert 36

C

citations of ALRC reports. See reports Clark, Jennifer 41, 42 Commissioners, ALRC 36, 37, 40 Conflict of Interest Policy 40 consultancies 47 consultations 23, 24, 25, 28, 49

Corporate Criminal Responsibility Inquiry 8, 9 Future of Law Reform project 16, 17, 19 Religious Exemptions in Anti-

Discrimination Legislation, Review of the Framework of 13, 14, 15 contracts. See procurement

Corporate Criminal Responsibility Inquiry 6, 7, 12, 24, 26, 27, 28, 29 corporate governance 42 Corporate Plan 23, 25, 38 court and tribunal decisions

citations of ALRC reports 23, 24, 25, 26 COVID-19 19, 45, 48

D

Derrington, the Hon Justice S C 3, 29, 36, 37. See also President, ALRC disability strategy 47 Discussion Paper

Corporate Criminal Responsibility Inquiry 7, 9, 24, 26, 28 Review of the Framework of Religious Exemptions in Anti-Discrimination

Legislation 14, 15, 27

E

employment conditions. See staff enabling legislation. See Australian Law Reform Commission Act 1996 Enders, Cherie 41, 42 energy efficiency 48 E-news subscribers 23, 24, 25, 29 Enterprise Agreement 43, 44, 48 entity resource statement and expenses for

outcomes 34, 77 environmental performance 49 Environment Protection and Biodiversity

Conservation Act 1999 48 ethics 39 external scrutiny 42

F

financial management 38 financial performance entity resource statement and expenses for outcomes 34, 77

financial statements 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75

summary and analysis 34 FOI Act. See Freedom of Information Act 1982

90 ALRC Annual Report 2019-2020

fraud control iii, 38, 39 freedom of information 47. See also Freedom of Information Act 1982

Freedom of Information Act 1982 46, 47 functions of the ALRC 6 Future of Law Reform project 6, 7, 19, 24, 26, 27, 28, 29

H

Health and Safety Management Arrangements 48 human resources. See staff Hunter, Kathryn 41, 42

I

implementation of ALRC reports 33 indemnity. See liability insurance Information Publication Scheme 47 inquiries 19 internships 45

K

key management personnel 37 key performance indicators 23, 24, 25

L

legal services expenditure 47 liability insurance 40

M

Middleton, the Hon Justice John 36 Minister responsible 6, 36. See also Attorney-General

O

occupational health and safety. See work health and safety organisational structure 6 outcome statement 22

P

parliamentary committees mentions of ALRC reports in debates and Committee reports 23, 24, 25 scrutiny of ALRC 42 Senate Estimates Committee Hearings 42

performance criteria. See key performance indicators

performance statement 33 analysis of performance 33 PGPA Act. See Public Governance, Performance and Accountability Act

2013

policies 38 presentations, articles and speaking engagements (by ALRC staff) 23, 24, 25, 29

President, ALRC 2, 3, 6, 29, 36, 37, 38, 39, 40, 41 President’s Foreword 3 printing 49 private interests declarations 40 procurement 46

Indigenous procurement 47 Small and Medium Enterprise participation 46 publications 7. See also reports Public Governance, Performance and

Accountability Act 2013 iii, 6, 36, 40, 41, 46, 77 Public Governance, Performance and Accountability Rule 2014 iii Public Interest Disclosure Policy 39 Public Service Act 1999 6, 36, 39, 40, 43 purchasing. See procurement

R

recycling 49 related party disclosures 40 Religious Exemptions in Anti-Discrimination Legislation, Review of the

Framework of 6, 15, 24, 26, 27, 28, 29 remuneration 34, 37, 42, 43, 44 reports citations of ALRC reports 23, 24, 25, 27 implementation of ALRC reports 33 most frequently viewed ALRC reports 31 number of reports and consultation papers 23, 24, 25, 26 risk management Audit Committee role 41 fraud control and risk management 39 in procurement 46 role and functions of ALRC 6

S

salaries. See remuneration staff development and training 45

91

health and well-being allowance 43, 48 Indigenous employment 43 individual flexibility arrangements 43 non-salary benefits 43 performance rewards and bonuses 44 retention and turnover 43 statistics 43 study leave 45 submissions 23, 24, 25, 28

Corporate Criminal Responsibility Inquiry 8, 9 Future of Law Reform Project 16, 17 Religious Exemptions in Anti-

Discrimination Legislation, Review of the Framework of 13

T

travel 46, 49 Twitter ii, 23, 24, 25, 31

V

vehicles 49

W

water usage 49 website, ALRC ii, 17, 23, 24, 25, 38, 47 work health and safety 39, 48, 81