15 December 2022

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Philip Hamilton
Politics and Public Administration

To deliver a service or execute a function, governments may decide that a suitable entity already exists, or that a new entity may need to be created. There may be various reasons for establishing a specialist entity rather than administering the program through an existing department or agency. Options include, but are not limited to, establishing a new department, a committee, a company, or a statutory agency (established by or under an Act of Parliament, with a name that may include ‘commission’ or ‘corporation’). In making these choices, key issues to be considered could include:

• Should the entity have a degree of independence from Government? This is often appropriate for regulatory or service delivery functions.
• Is there a role for a committee or board? For advisory roles, some form of committee may be sufficient. On the other hand, a board that has governance or oversight responsibilities needs a different set of skills, and organisational arrangements.
• Does the role require consultation or collaboration with State or Territory functions or entities?

The Department of Finance (Finance) provides guidance on some of these issues, and classifies Commonwealth entities into 13 categories.[1] Intended as a convenient ‘cheat-sheet’ based on Finance guidance, Table 1 outlines the 13 categories and provides examples of each category.[2] A Finance webpage provides a more detailed discussion of the key characteristics of each category.[3]

Information about specific entities, and about how many entities are in each category, is available from:

• the Australian Government Organisations Register, including the AGOR Dashboard and the register of new or ceased bodies, and
• the Public Governance, Performance and Accountability Act Flipchart and List (Primary/Principal bodies only)

Variance, evolution, and switching categories

Within each category, there can be considerable variance between entities due to differing policy and legislative drafting approaches over time, and evolution in the arrangements for entities and statutory offices. Entities may also change categories.

For example, the National Collecting Institutions Legislation Amendment Act 2021 reduced the degree of variance between six like entities in category 1.2 Corporate Commonwealth Entities (CCEs).[4] The Act standardised provisions across six national collecting institutions’ enabling Acts, relating to: ministerial approvals, directions and delegations; length of tenure on governing bodies; financial thresholds; planning and reporting; and other provisions.[5]

However, uniformity is not always considered appropriate. For example, when the National Housing Finance and Investment Corporation (NHFIC) was established in 2018 it resembled the already-extant Export Finance Australia (EFA) and the Northern Australia Infrastructure Facility (NAIF), to the extent that they provide financial assistance, are governed by boards, and are in category 1.2 Corporate Commonwealth Entities (CCEs). The NHFIC differs, however, in that the NHFIC Act requires a Commonwealth officer to attend board meetings as an observer.[6] The Parliamentary Library’s Bills Digest for the National Housing Finance and Investment Corporation Bill 2018 and National Housing Finance and Investment Corporation (Consequential Amendments and Transitional Provisions) Bill 2018 noted that the practice of having an observer attend board meetings was likely to have been in place informally in a number of portfolios.[7] However, the NHFIC was likely to be the first time an observer role had been formalised in Commonwealth legislation.[8]

Category 2.2 Statutory office holders, offices and committees provides an example of evolution. When Centrelink and Medicare integrated into the Department of Human Services (DHS) in 2011, the Revised Explanatory Memorandum to the implementing Bill stated:

the intention … is to prevent one person holding more than one of the positions of Chief Executive Medicare [CEM], Chief Executive Centrelink [CEC] and Child Support Registrar [CSR] at the same time (p. 57).

In 2020, the Services Australia Governance Amendment Act 2020 reversed this policy to require the CEO of Services Australia to be simultaneously CEM, CEC and CSR. The Minister’s Second Reading speech contended that ‘having the [Services Australia] CEO fill those [three] key statutory offices will sharpen the service delivery focus of Services Australia and simplify lines of accountability’.[9]

As an example of evolution in category 1.1 Non-corporate Commonwealth Entities (NCEs), DHS was renamed Services Australia in May 2019. It was abolished and replaced when an Executive Agency, also named Services Australia, was established on 1 February 2020.

Infrastructure Australia (IA) is an example of an entity switching from category 1.1 Non-corporate Commonwealth Entities (NCEs) to category 1.2 Corporate Commonwealth Entities (CCEs). Established in July 2008 under the Infrastructure Australia Act 2008 (link to the original IA Act), from 2008 to 2014 IA was an NCE and legally part of the Department of Infrastructure and Regional Development. The amended IA Act came into effect on 1 September 2014, and IA moved to category 1.2 Corporate Commonwealth Entities (CCEs). Intended changes announced by the Minister in response to a recent review are likely to see IA evolve while remaining in category 1.2.[10]

Other categories of bodies

Although demonstrating a range of complexity, the above examples also illustrate that arrangements for Primary/Principal and some Secondary entities are relatively well-documented, relying as they do to a large extent on authorities under legislation.

Arrangements in other categories can be either less well-known or less well-documented, with implications for transparency and accountability. This line of inquiry was explored by Professor Cheryl Saunders in a Senate lecture series presentation on interjurisdictional bodies.[11]

It is not always necessary to establish a new entity (or abolish an existing one) to achieve the policy goals of the Commonwealth. Ultimately, a government’s choice of entity to deliver a service or execute a function will depend on a range of factors, including the policy and political demands of the day. The Commonwealth Governance Structures Policy hosted by the Department of Finance provides guidance on the decision-making process. Based on Finance guidance, Table 1 outlines available options.

Table 1: Department of Finance classification of Commonwealth entities into thirteen categories, with examples

Source: This table has been compiled by the Parliamentary Library using information from the following sources: Australian Government Organisations Register; Public Governance, Performance and Accountability Rule 2014; Department of Finance (DoF), Australian Government Organisations Register - Types of Bodies, (Canberra: DoF, 20 July 2018); ‘Types of Australian Government Bodies’, DoF, 11 February 2021; ‘PGPA glossary’, DoF.

[1].   The Australian Government Organisations Register (AGOR), a database of entities operated by Finance, acknowledges some challenges with the categories: ‘Australian Government bodies are diverse, which means classification is not always straightforward. The following table provides guidance on the main types of Australian Government bodies. Bodies may possess some but not all of the features listed. Where a government body could be classified under more than one body type, the most relevant classification has been chosen.’ Notwithstanding this caveat, the classification system is a useful guide to the options available when establishing a new agency. Note that AGOR uses 12 categories, whereas a more recent Finance webpage has 13 categories.

[2].   Focusing on corporate structures, Table 1 does not address resource management and accountability arrangements (most of which arise from the Public Governance, Performance and Accountability Act 2013), or staffing arrangements (which, for many but not all entities, arise from the Public Service Act 1999).

[3].   ‘Types of Australian Government Bodies’, DoF, 11 February 2021.

[4].   The six were: the Australian National Maritime Museum (ANMM); the National Film and Sound Archive of Australia (NFSA); the National Gallery of Australia (NGA); the National Library of Australia (NLA); the National Museum of Australia (NMA); and the National Portrait Gallery of Australia (NPGA).

[5].   P Hamilton, National Collecting Institutions Legislation Amendment Bill 2020, Bills digest, 50, 2020–21, Parliamentary Library, Canberra, 2021, p. 3.

[6].   P Hamilton, ‘Commonwealth officer as observer at NHFIC board meetings’, Flagpost, 13 December 2018.

[7].   P Pyburne, National Housing Finance and Investment Corporation Bill 2018 [and] National Housing Finance and Investment Corporation (Consequential Amendments and Transitional Provisions) Bill 2018, Bills digest, 132, 2017-18, 25 June 2018, p. 21. A statutory review of the NHFIC in 2021 suggested that the Observer ‘should not be an ongoing role and it will be desirable to return to a standard governance model at the earliest opportunity’, but the Review did not make a specific recommendation on this point. Australian Government, Statutory review of the operation of the National Housing Finance and Investment Corporation Act 2018, The Treasury, August 2021, p. 60.

[8].   Ibid.

[9].   P Hamilton, ‘Services Australia Governance Amendment Bill 2020’, Flagpost, 16 June 2020.

[10]. C King (Minister for Infrastructure, Transport, Regional Development and Local Government), Renewing Infrastructure Australia, media release, 8 December 2022.

[11]. C Saunders, ‘Accountability for cross-jurisdictional bodies’, Senate lecture series, Department of the Senate, 20 May 2022.

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