Chapter 2 - Annual reports of Commonwealth departments

Chapter 2Annual reports of Commonwealth departments

2.1The 2022­–23 annual reports of the following Commonwealth departments were referred to the committee for examination and report:

Department of Health and Aged Care (DoHAC);

Department of Social Services (DSS); and

Services Australia.

2.2The committee considers that the annual reports of these departments are of an apparently satisfactory standard.

Department of Health and Aged Care

Secretary’s review

2.3The Secretary, Mr Blair Comley PSM reported on DoHAC’s key areas of work for 2022–23, which included:

the commencement of the COVID-19 vaccination booster program;

the dispensing of over 890 000 Pharmaceutical Benefits Scheme prescriptions for Lagevrio (molnupiravir) and Paxlovid (nirmatrelvir and ritonavir), including over 67 000 prescriptions to residents of aged care facilities;

the procurement of more than 133 million units of personal protective equipment worth $98.8 million and more than 102 million rapid antigen tests worth $196.9 million;

continued research on COVID-19 through the Medical Research Future Fund;

continued ongoing collaboration with all state and territory governments to implement the 2020–25 National Health Reform Agreement;

the establishment of the Strengthening Medicare Taskforce to provide advice on priority investments in primary care;

‘Strengthening First Nations Health’ by investing $164.3 million towards new and enhanced healthcare infrastructure across Australia for First Nations populations;

the investment of $238.5 million to address inequalities and improve outcomes for First Nations people over four years (from 2023–24 to 2026–27);

progressing the establishment of an Australian Centre for Disease Control to improve national leadership and coordination of public health emergencies; and

the introduction of new tobacco control reforms to modernise Australia’s tobacco legislation.[1]

Chief Medical Officer’s report

2.4The Chief Medical Officer, Professor Paul Kelly, reported on DoHAC’s clinical priorities, including:

the publication of the 12-month National COVID-19 Health Management Plan to support Australia’s ongoing public health response to COVID-19 through:

the continuation of the vaccine program as a key means of defence;

community awareness and engagement;

effective and fast testing;

a well-resourced National Medical Stockpile; and

ensuring no one is left behind.

the establishment of the National Community Protection Framework for a COVID Safe Australia to aid the transition away from managing COVID-19 as an emergency response and to respond to new variants of the virus;

the continued assessment of Australia’s epidemiological situation by investigating the long-term effects of the pandemic on population health, including ‘Long COVID’;

the commencement of Australia’s first National Health and Climate Strategy to address the impact of climate change on the health and wellbeing of Australians;

the establishment of the Human immunodeficiency virus (HIV) Taskforce renewing Australia’s efforts to end the HIV epidemic and achieve the virtual elimination of HIV in Australia by 2030, in alignment with international efforts;

supporting influenza immunisation through the administration of over 8.4 million doses;

continued engagement with stakeholders to address the risks of silicosis in Australia;

partnering with state and territory governments, peak bodies and health organisations and the community to address monkeypox by establishing a National Mpox Taskforce, a vaccination program and targeted communication activities; and

collaborating with the Department of Agriculture, Fisheries and Forestry to provide a coordinated response to the Japanese Encephalitis Virus.[2]

Performance reporting

2.5As outlined in its recent corporate plan, DoHAC’s purpose is as follows:

With our partners, support the Government to lead and shape Australia’s health and aged care system and sporting outcomes through evidence-based policy, well targeted programs, and best practice regulation.[3]

2.6During 2022–23, the committee notes that DoHAC sought to improve the ‘clarity, reliability, and objectivity’ of their performance reporting by:

reviewing its performance framework to ensure key activities and corresponding performance measures were relevant, up-to-date and aligned with government priorities;

streamlining and aligning its performance information across the Portfolio Budget Statements, corporate plan, and Annual Performance Statements;

analysing its performance measures to balance the mix of quantitative and qualitative measures of outputs, efficiency and effectiveness; and

seeking independent external assurance of performance information to ensure an unbiased review of performance measures and the associated planned performance for adherence to the Public Governance, Performance and Accountability Rule (PGPA Rule).[4]

2.7Under its four outcomes, DoHAC stated that a total of 27 planned performance targets were either met or substantially met in 2022–23. A summary of these results is as follows:

Table 2.12022–23 departmental results overview

Outcome

Results met

Results substantially met

Results not met

Data not available

Outcome 1: Health Policy, Access and Support

8

2

5

3

Outcome 2: Individual Health Benefits

7

2

Outcome 3: Ageing and Aged Care

2

4

Outcome 4: Sport and Recreation

2

Total

19

8

5

3

Source: DoHAC, 2022–23 Annual Report, p. 26.

2.8In both the 2020–21 and 2021–22 DoHAC annual reports, the committee identified that data supporting figures for Program 1.4: Health Workforce predated the relevant reporting period, specifically points a–f. In its 2022–23 annual report, the committee notes that DoHAC incorporated more recent data as references for the same points within Program 1.4 and appreciates the department updating its data sources.[5]

2.9The committee commends DoHAC for continuing to meet or substantially meet all targets under Outcome 3: Ageing and Aged Care.[6] The committee notes the importance of aged care reform to the department to help older people access government-funded aged services and support.[7]

2.10Additionally, the committee appreciates that where data is not available for certain performance results, DoHAC provides detailed footnotes to explain why they are not made available. For instance, in Program 1.5: Preventative Health and Chronic Disease Support, data related to progressive decreases of the population drinking alcohol in ways that put them at risk of disease or injury or adults who consume illicit drugs are part of a survey which is under development and will be released in future reporting.[8]

Financial performance

2.11During 2022–23, revenue from government increased by 4.6 per cent to $1.066.6 million compared to $1.019.4 million in 2021–22.

2.12DoHAC administered expenses on behalf of the Commonwealth of $93.1 billion, which was an increase of 1.6 per cent compared to expenses in 2021–22 of $91.6 billion. Major items influencing the department’s increased expenditure are as follows:

personal benefits expense relating to the Medicare Benefits Scheme, Pharmaceutical Benefits Scheme, health insurance rebates and home care packages;

subsidies expense relating to residential aged care and places for senior Australians;

grants expense relating to the COVID-19 public health response, including in primary care and aged care; and

supplier expense relating to inventory consumption and use of an additional contract service to assist with the COVID-19 response.[9]

2.13Additionally, DoHAC’s administered income was $53.3 billion compared to $50.5 billion in the prior reporting year.[10] Major items include:

special accounts revenue which consists of revenue appropriated to facilitate payments for the Medicare Guarantee Fund and the Medical Research Future Fund; and

recoveries, including $4.7 billion recovered under cost sharing arrangements with pharmaceutical companies and $0.7 billion recovered from aged care activities.[11]

2.14DoHAC recorded a consolidated comprehensive loss of $33 million; however, when unfunded depreciation is removed, the department recorded an operating surplus of $13 million.[12]

2.15DoHAC’s operating expenses increased by 4.7 per cent to $1.350.1 million compared to $1.289.7 million in the previous year.[13] Employee expenses had increased by $55.2 million to $734.5 million which is reflective of the growth in the average staffing level as the department continued to invest in aged care and mental health reform, support the COVID-19 response and convert contractors to Australian Public Service staff in line with the October 2022–23 Budget decision to reduce reliance on consultants.[14]

2.16DoHAC’s total assets increased by $132.3 million to $1.343.8 million compared to $1.211.5 million in 2021–22.[15] Contrastingly, the department’s total liabilities also increased by $29.5 million to $958.3 million which was attributed to increases in least liabilities and employee provisions.[16]

Consultants and exempt contracts

2.17During 2022–23, 325 new reportable consultancy contracts were awarded, involving expenditure of $56.9 million (GST inclusive).[17] Additionally, 166 reportable ongoing consultancy contracts were active during the period, amounting to $27 million (GST inclusive) in total expenditure.[18]

2.181 760 new reportable non-consultancy contracts were entered into, costing a total of $1.1 billion (GST inclusive).[19] Further, 2 632 reportable ongoing non-consultancy contracts were active during the period, involving total expenditure of $1.4 billion (GST inclusive).[20]

2.19In its previous Report on Annual Reports No. 1 of 2023, the committee commended DoHAC for including an additional column in their consultancy and non-consultancy expenditure tables detailing what proportion of the overall expenditure a particular share is. The committee also noted that it suggested that DoHAC include an extra row, as recommended by the Department of Finance, which details the ‘total expenditure of the largest shares combined and the proportion of the overall expenditure that total is’.[21]

2.20However, the committee notes that DoHAC did not include this addition and further encourages the department to ensure the recommendation, as prescribed by the Department of Finance, is reflected in its next annual report.

2.21In 2022–23, DoHAC stated that 81 contracts were exempt from reporting on AusTender as these details would disclose exempt matters under the Freedom of Information Act 1982.[22] This is an increase from 2021–22 where 76 contracts were exempt.[23]

External scrutiny

2.22The committee notes that the Australian National Audit Office (ANAO) tabled three reports pertaining to DoHAC in 2022–23. These reports are titled as follows:

Australia’s COVID-19 Vaccine Rollout – published 17 August 2022;

Expansion of Telehealth Services – published 19 January 2023;and

Administration of the Community health and Hospitals Program – published 5 June 2023.[24]

2.23The department agreed to all recommendations within ANAO’s three reports and stated that implementation activities have either commenced or have already been completed.[25]

Final comments

2.24The committee commends DoHAC on its detailed annual report for 2022–23 and considers it to be apparently satisfactory.

Department of Social Services

Secretary’s review

2.25The Secretary, Mr Ray Griggs AO CSC reported on DSS’ key areas of work for 2022–23, which included:

the release of the National Plan to End Violence Against Women and Children 2022–2032;

the delivery of 154 new safe places as part of the Safe Places Emergency Accommodation Program for women and children experiencing family and domestic violence;

the commencement of preparations for the Safe Places Inclusion Round to increase access to appropriate emergency accommodation for First Nations women and children, women and children from culturally and linguistically diverse backgrounds and women and children with disability;

the launch of the Safe and Supported Aboriginal and Torres Strait Islander First Action Plan 2023–2026 and the Safe and Supported First Action Plan 2023–2026 (First Action Plans);

supporting people affected by forced adoption to attend events marking the 10th anniversary of the National Apology for Forced Adoptions;

a national campaign to increase the recognition of carers;

enhancements to the National Redress Scheme (the Scheme) and its concomitant legislation following the release of the government’s Final Response to the Second Year Review of the Scheme;

continued engagement with Disability Representative Organisations and the broader disability community to improve social and economic participation for people with disability, including specific initiatives under Australia’s Disability Strategy 2021–2031;

the delivery of approximately $1.6 billion through the National Housing and Homelessness Agreement to support state and territory governments to improve housing and homelessness outcomes;

the implementation of the Paid Parental Leave Amendment (Improvement for Families and Gender Equality) Act 2023 which provides increased accessibility to the payment, including more flexibility in how families take leave;

increasing the fortnightly base rate for various working age and student payments by $40;

the administration of 15 438 new grants worth $4.9 billion over the life of the agreements; and

the inception of the Robodebt Royal Commission Taskforce following the Royal Commission into the Robodebt Scheme.[26]

Performance reporting

2.26As outlined in its recent corporate plan, DSS’ purpose is ‘to continue to support the economic and social wellbeing of individuals and families’.[27]

2.27DSS stated that its 2022–23 corporate plan contained performance measure placeholders for Income Management and Women’s Safety since legislation was pending for the closure of the Cashless Debit Card program and the National Plan to End Violence Against Women and Children 2022–2032 was yet to be released.[28] The committee notes that in its 2022–23 annual report, DSS introduced additional performance measures for these activities which have been reported on.

2.28Since the release of the 2022–23 Portfolio Budget Statement, there have been further changes to DSS’ performance measures, which are illustrated in the below table:

Table 2.2Key changes for 2022–23 performance measures

2.1.2 – Women’s Safety

1800RESPECT: From March 2023, the methodology used to calculate performance was changed to align with Telstra Health’s systems and with best practice measures for this type of service.

Our Watch: has changed from reporting on the Evaluation to the total number of published content in the financial year.

ANROWS: The target for the number of reports developed has changed from 14 to 11; this is because the number of completed research reports varies year to year, with project length times subject to change in scope, insufficient sample size, etc.

Stop it at the Start: has been updated to include qualitative evidence of publication of the maintenance burst digital advertisements.

Safe Places: The target has been updated to increase the number of Safe Places delivered from 91 as at June 2022 to 231 as at 30 June 2023.

Escaping Violence Payment: has been included as a new initiative.

2.1.4 – Income Management

On 3 June 2022, the Australian Government announced the abolition of the Cashless Debit Card (CDC) – therefore the Key Activity has been renamed from Cashless Debit Card to Income Management and the measures have been updated to reflect this change.

2.1.5 – National Redress Scheme

A performance measure for advance payments was introduced this year: that at least 80 per cent of advance payments were to be made within 7 days of the acceptance documentation being received by the Scheme. The reduced timeframe for this target compared to the redress outcome payments reflects the importance the Scheme places on this payment for vulnerable applicants. Measures 2.1.5-1A and 2.1.5-1B have also been updated to accurately reflect ≥ instead of >.

3.1.2 – Support for Carers

The inclusion of effectiveness measures about wellbeing outcomes for client carers now replace the previous output measure ‘annual increase in people accessing Carer Gateway’ (3.1.2-1). These new measures are considered a more meaningful representation of performance.

3.2.2 – Development of NDIS Market

Removal of ‘up to 30 June’ from both targets and replaced with ‘in each financial year’. This is because the measure assesses each year’s result and does not have an end date.

3.2.3 – NDIS Participant Plans

Younger People in Residential Aged Care: Following the October 2022–23 Portfolio Budget Statement a target has been included for ‘No people aged under 65 years living in residential aged care by the end of 2025 apart from in exceptional circumstances’.

4.2.1 – National Rental Affordability Scheme

Updated 4.2.1-1 Performance Measure and target description to better reflect the department’s measurement of timeliness for this activity.

Cross Outcome – Program Support

The department has included a performance measure for providing timely advice and support to Portfolio Ministers and Assistant Ministers across all four outcomes.

Source: DSS, 2022–23 Annual Report, pp. 22–23.

2.29The committee notes that in its 2021–22 annual report, DSS undertook a review of the extent to which its performance measures aligned with key activities and outcomes as part of their performance maturation objectives.[29] DSS used feedback from the Performance Statement Pilot Program led by ANAO to improve governance and assurance for current and future reporting years, and worked with third-party data holders to improve the department’s understanding of data quality and limitations.[30]

2.30In its 2021–22 annual report, DSS stated that these changes included:

changes to data sourcing and methodology to ensure sources of information and methodologies that are reliable and verifiable;

better alignment of targets with their underpinning methodologies;

moving to output reporting as a better reflection of performance and where reliable data can be sourced; and

expanded use of caveats to provide the reader with an understanding of data limitations and additional context around the scope of a measure.[31]

2.31The committee notes that it was unclear if DSS provided an update on the application of the previous year’s performance maturation objectives in its 2022–23 annual report. The committee would appreciate that in instances where such objectives have been identified to improve governance and assurance, that DSS clearly detail how its performance maturation objectives have influenced departmental outcomes in future reporting.

2.32For 2022–23, DSS stated that out of the total 38 performance targets it met 27, partially met one and did not meet nine.[32] Similar to its 2021–22 annual report, DSS used four outcomes to measure its performance, and a summary of these results is as follows:

Table 2.32022–23 departmental results overview

Outcome

Results met

Results partially met

Results not met

Ongoing

Outcome 1: Social Security

8

2

Outcome 2: Families and Communities

9

3

Outcome 3: Disability and Carers

6

1

3

1

Outcome 4: Housing

4

Cross Program

1

Total

27

1

9

1

Source: DSS, 2022–23 Annual Report, p. 21.

2.33The committee commends DSS for its thorough explanation contained in its summary and achievements section for each outcome. The committee also appreciates DSS for providing additional information as to why certain targets were not met. For instance, the department outlined that environmental factors such as cost of living pressures, labour mobility and natural disasters had affected some performance results.[33]

2.34The committee looks forward to DSS including discussions on how its performance maturation measures improved the department’s corroboration of quality data and to clearly demonstrate how these improved methodologies have affected the interpretation of performance results in future annual reports.

National Redress Scheme

2.35In its fifth year of operation, DSS stated that the National Redress Scheme (the Scheme) has continued to deliver on key recommendations stemming from the Royal Commission into Institutional Responses to Child Sexual Abuse.[34]

2.36Key statistics during the period 1 July 2022 to 30 June 2023 included:

10 723 people applied to the Scheme for redress;

3 742 determinations were made, and of these:

3 542 were eligible for redress;

200 were deemed ineligible;

3 258 people accepted an offer of redress;

203 people declined an offer of redress;

1 559 institutions were found responsible for abuse;

3 862 applications were finalised, including 3 416 redress payment ranging from less than $10 000 to $150 000, with an average payment of $93 171;

The total value of redress monetary payments was $318, 273, 066;

2 633 people accepted the offer of counselling and psychological care services as part of their redress outcome:

310 people accessed a total of 3 631 hours of counselling and psychological care services nationally, with an average of 11.7 hours provided per person;

2 054 people accepted the offer of a direct personal response (DPR) from an institution;

203 people completed their DPR with or in respect of 283 institutions;

253 people made contact with 364 institutions to begin the process to receive their DPR; and

64 per cent of applications named more than one institution in their application and 15 per cent of applications named four or more institutions.[35]

2.37On 4 May 2023, the government released its Final Response to the Second Year Review of the National Redress Scheme (Final Response).[36] DSS noted that the Final Response flagged a range of enhancements to the Scheme that require amendments to the Scheme’s legislation, including:

providing the option of having a finalised application reassessed where a relevant institution subsequently joins the Scheme or a government agrees to be the Funder of Last Resort;

removing the restriction on people applying from gaol;

better targeting the special assessment process for people with serious criminal convictions;

combining elements of a redress payment, making it clear that the impact of the abuse is recognised;

allowing people to provide additional information with a review request and introducing a ‘no worse off’ provision so that reviewed offers are not reduced by a differing interpretation of their application; and

enabling former child migrants who are not Australian citizens or permanent residents apply.[37]

2.38DSS stated that the above legislative changes must be agreed by all state and territory governments as partners in the Scheme, and then subsequently passed by the Parliament of Australia or approved by the Minister for Social Services.[38]

Financial performance

2.39In 2022–23, DSS reported a departmental deficit of $7.1 million and administered $150 billion of expenses on behalf of the government.[39]

2.40DSS noted that personal benefits expenses increased from 2021–22 by $2.7 billion to $125.8 billion, which was attributed to a rise in payments resulting from an increase in indexation rate to match inflation.[40] DSS also highlighted that payments to the National Disability Insurance Agency (NDIA) increased to $25.1 billion from $19.4 billion in 2021–22 due to increases in participant plan payments.[41]

2.41With regard to DSS’ administered major budget variances for 2023, the department explained that total administered expenses were $2.787 billion lower than the Budget as a result of the following:

personal benefit expenses were $3.609 billion lower than the Budget reflecting the continuation of the underlying economic recovery since the COVID-19 lockdown period;

a decrease in grants expenses of $430.529 million due primarily to movement of funds to future years in subsequent Budgets and funds re-prioritised for new government measures;

the above is offset byhigher than budgeted payments to the NDIA of $1.124 billion relating to higher than budgeted number of National Disability Insurance Scheme participants and average package costs.

administered income was $0.050 billion lower than the Budget mainly as a result of:

fewer than anticipated National Redress Scheme applications finalised;

administered assets were $0.286 billion higher than the Budget mainly as a result of:

an increase in fair value of the net assets in the NDIA;

an increase in the value of personal benefits receivable is primarily driven by a strong labour market. A large number of families have come off Family Tax Benefit (FTB) payments as a result of the strong labour market resulting in higher receivables;

administered liabilities were $0.210 billion higher than the Budget as a result of:

a higher than estimated provision for FTB payments due to indexation of entitlements, partially offset by a decline in instalment population; and

an increased in processing time for personal benefits claims received.[42]

Consultants and exempt contracts

2.42During 2022–23, 36 new reportable consultancy contracts were awarded, involving expenditure of $2.5 million.[43] Additionally, 73 reportable ongoing contracts were active during the period, amounting to $9.5 million in total expenditure.[44]

2.43333 new reportable non-consultancy contracts were entered into, costing a total of $45.2 million (GST inclusive).[45] Further, 398 reportable ongoing non-consultancy contracts were active during the period, involving total expenditure of $209.4 million (GST inclusive).[46]

External scrutiny

2.44The committee notes that ANAO tabled two performance audit reports pertaining to DSS in 2022–23. These reports are titled as follows:

Procurement of 1800RESPECT – published 8 March 2023; and

Management of the Try, Test and Learn Fund Transition Projects – published 26 June 2023.

2.45Although the results of both performance audit reports were deemed largely effective by ANAO, some deficiencies were identified in the latter of the two reports.[47] The committee encourages DSS to provide a summary of the Auditor-General’s recommendations (if any), including a comment outlining whether the department has agreed to them in its future annual reports.

2.46Alternatively, if opportunities for improvement have been detailed within the audit report in the absence of ANAO’s recommendations, the committee would also appreciate the department making a short comment on the status of these improvements, namely, if implementation activities have commenced or have already been complete.

Final comments

2.47The committee commends DSS on its detailed annual report for 2022–23 and considers it to be apparently satisfactory.

Services Australia

Chief Executive Officer’s review

2.48The Chief Executive Officer of Services Australia for the 2022–23 period, Ms Rebecca Skinner PSM, made the following comment in her review of Services Australia in 2022–23:

It’s been a year of service excellence, soul searching, and simplifying online customer journeys. We’ve looked deep into service practices of the past, and delivered a new era for myGov – while focusing on helping the customer right in front of us. Our vision is to ‘make government services simple so people can get on with their lives’. We’re making progress on this commitment every day.[48]

2.49Ms Skinner also reported on Services Australia’s key areas of work for 2022–23, which included:

successfully transitioning over 25 million myGov accounts to a new platform, adding to myGov’s features and useability;

launching the new myGov app to deliver a connected whole-of-government service for customers;

continued improvements to customer service systems, including work on Health Delivery Modernisation, aged care reforms and Veteran Centric Reform;

Services Australia’s mobile servicing teams visiting 479 communities and supporting around 9 490 people affected by natural disasters and emergency events;

continued investment in Services Australia’s capability by:

Enabling staff to undertake various agency-wide training programs such as the Empowering Excellence program, Indigenous Cultural Learning, Building Multicultural Awareness, Child Safety and the introduction of a Family and Domestic Violence training program;

assisting government agencies with service delivery, capability and expertise, as well as personnel for the Department of Foreign Affairs and Trade to process passport applications and the Australian Electoral Commission for Australia’s recent Referendum on an Aboriginal and Torres Strait Islander Voice to Parliament; and

working through the Commissioner’s report for the 2022–23 Royal Commission into Robodebt and determining next steps for Services Australia’s response.[49]

Performance reporting

2.50As outlined in Services Australia’s 2022–23 corporate plan, the agency’s purpose is to ‘support Australians by efficiently delivering high-quality accessible services and payments on behalf of government’.[50] In its 2022–23 annual report, Services Australia’s performance statements detail how the agency has delivered against its purpose.[51]

2.51Since the release of the 2022–23 Portfolio Budget Statement, there have been further changes to Services Australia’s key activities, which are illustrated in the below table:

Table 2.4Key activities and strategic performance measures for 2022–23

Previous key activities (as published in the Social Services 2022–23 Portfolio Budget Statements and the 2022–23 Services Australia corporate plan)

Key activity 1: Organisational Health

Modernising Services Australia to become a world-leading customer focused government organisation where customer feedback is used at the core of both strategic and operational decision making to drive continual service delivery improvements

Key activity 2: Service Delivery Modernisation

Deliver improved services, focused on providing customers with a seamless experience that includes high-quality, simplified and efficient access to the services and support customers need

Key activity 3: Technology Foundation

Improve technology and systems through transformation projects and investment in core technology enabling a more efficient digital experience for customers

Revised key activities

Key activity 1: Build staff and organisational capability to deliver an enhanced customer experience

We have an adaptive workforce, leadership and corporate culture tailored to respond to customer feedback

Key activity 2: Deliver quality government services and payments to Australians

We provide customers with easy and efficient access to services, support and payments for a seamless experience

Key activity 3: Deliver digital and technological capability

We invest in our technology and systems to sustain and strengthen the digital experience for customers

Strategic performance measures (SPM)

SPM 1: Customer satisfaction

SPM 2: Customer trust

SPM 3: Administrative correctness of payments SPM 4: Customers served within 15 minutes

SPM 5: Work processed within timeliness standards

SPM 6: Availability of digital channels

SPM 7: Tasks managed by customers in digital channels

Source: Services Australia, Annual Report 2022–23, p. 20.

2.52Services Australia continued to measure its performance across seven strategic performance measures (SPM) which reflect the agency’s three major programs:

(a)social security and welfare;

(b)health; and

(c)child support.[52]

2.53A summary of these results is as follows:

Table 2.5

Strategic performance measure (SPM)

Target 2022–23

Result 2022–23

Performance outcome 2022–23

SPM 1: Customer satisfaction

≥85 out of 100

80.2 out of 100

Substantially achieved

SPM 2: Customer trust

≥70 out of 100

78.1 out of 100

Achieved

SPM 3: Administrative correctness of payments

≥98 per cent

98.8 per cent

Achieved

SPM 4: Customers served within 15 minutes

≥70 per cent

60.8 per cent

Partially achieved

SPM 5: Work processed within timeliness standards

≥90 per cent

68.7 per cent

Partially achieved

SPM 6: Availability of digital channels

≥98.5 per cent

99.8 per cent

Achieved

SPM 7: Tasks managed by customers in digital channels

≥81 per cent

91.5 per cent

Achieved

Source: Services Australia, Annual Report 2022–23, p. 21.

2.54Developed and implemented since its 2021–22 annual report, Services Australia has continued to measure performance achievements through its four ‘tolerance levels’, the purpose of which is to assess the agency’s performance outcomes for 2022–23:

Achieved: 100 per cent of the performance target has been achieved;

Substantially achieved: 90–99.9 per cent of the performance target has been achieved;

Partially achieved: 75–89.9 per cent of the performance target has been achieved; and

Not achieved: <75 per cent of the performance target has been achieved.[53]

2.55The committee notes that the target for SPM 4: customers served within 15 minutes decreased from ≥80 per cent in 2021–22 to ≥70 per cent in 2022–23. Services Australia explained that this decrease was due to the increased incidence of natural disasters and other emergency events in 2022–23.[54] As such, the target was reset to a more realistic target capable of showing year-on-year improvement.[55]

2.56However, the committee suggests that where targets have been deliberately altered, that Services Australia include a footnote to its accompanying explanation, as shown on page 33, to assist readability. The committee also encourages Services Australia to provide clarity around its methodologies as it is often difficult for the reader to verify the credibility of performance outcomes.

2.57The committee also notes that the result for SPM 5: work processed within timeliness standards dropped from 84.4 per cent to 68.7 per cent in 2022–23. Services Australia underlined that this performance outcome was influenced by responses to successive large scale emergency events that yielded high volumes of claims lodged in the beginning of 2022, continuing into the 2022–23 financial year.[56]

Financial performance

2.58In 2022–23, Services Australia made Social Services and Welfare, and Health payments totalling approximately $217.7 billion.[57] The government supplemented Services Australia’s budget, amounting to $5.3 billion in operating and capital funding costs to ensure the agency could make these payments and provide other customer services.[58] Services Australia also stated that it received around $0.3 billion in own-source revenue for the provision of shared services and delivery of information and communications technology projects.[59]

2.59Services Australia’s total funding of $5.2 billion was distributed across the following priority areas:

Table 2.6Agency funding 2022–23

Staff

55.3 per cent

Consultants and contractors

8.4 per cent

Other

8.3 per cent

Software capital

7.2 per cent

Property and leases

7.2 per cent

IT maintenance

7.1 per cent

Communications

4.0 per cent

Property and equipment capital

2.5 per cent

Source: Services Australia, Annual Report 2022–23, p. 142.

2.60Services Australia reported an operating deficit of $194.1 million, which includes principal lease payments under the Australian Accounting Standards Board Accounting Standard 16 and excludes non-cash items in relation to depreciation and amortisation.[60]

2.61Services Australia also provided explanations for three major budget variances between its original budget estimates, as published in the October 2022–23 Portfolio Budget Statement, and the actual financial performance and position for the year ended 30 June 2023:[61]

Table 2.7Budget variance explanation and affected statements and line items

Budget variance explanation

Affected statements and line items

As part of the agency’s annual review of software assets, the agency identified indicators for impairment for software assets which resulted in a write-down of the asset value. Future write-downs and impairment of assets cannot be quantified at the time of preparing the Budget estimates

Statement of Comprehensive Income

write-down and impairment of other assets

Statement of Financial Position

software

The agency increased expenditure on internally developed software capital projects and reprioritised from the acquisition of property, plant and equipment, compared to that which was anticipated in the Budget. The increase in capital expenditure was partially offset by a movement of $60 million in capital funding from 2022–23 to 2023–24 in the 2023–24 Budget

Statement of Financial Position:

plant and equipment (including right-of-use)

Cash flow statement

purchase of property, plant and equipment

purchase of software

financing cash received

From a budget reporting perspective, the receipt of section 74 revenue and the repatriation of these cash flows are shown as net amount. However, from a financial reporting perspective these are shown on a gross basis

Cash flow statement

Other cash received (operating activities)

Section 74 receipt transferred to the Official Public Account (operating activities)

Source: Services Australia, Annual Report 2022–23, p. 155.

2.62The committee appreciates Services Australia’s explanations for its major budget variances and detailed financial overviews and assessments.

Consultants and exempt contracts

2.63During 2022–23, three new reportable consultancy contracts were awarded, involving total expenditure of $186 399 (GST inclusive).[62] Additionally, seven reportable ongoing contracts were active during the period, amounting to $8,964,621 (GST inclusive) in total expenditure.[63]

2.641 508 new reportable non-consultancy contracts were entered into, costing a total of $1.91 billion (GST inclusive).[64] Further, 1 901 reportable ongoing non-consultancy contracts were active during the period, involving total expenditure of $1.387 billion (GST inclusive).[65]

External scrutiny

2.65The committee noted that ANAO tabled two audit reports pertaining to Services Australia in 2022–23. These reports are titled as follows:

Debt Management and Recovery in Services Australia – published 31 May 2023; and

Procurement of Office Furniture – published 14 June 2023.

2.66Services Australia agreed to all recommendations within ANAO’s two reports.

2.67The agency also supported ANAO audits undertaken with other agencies, including:

the Expansion of Telehealth Services Performance;

Australia’s COVID-19 Vaccine Rollout;

procurement of 1800RESPECT; and

effectiveness of the NDIA’s Management of Assistance with Daily Life Supports.[66]

2.68Services Australia stated that it also participated for the first time in the ANAO Annual Performance Statement audit, which commenced in February 2023.[67]

Final comments

2.69The committee considers that Services Australia has produced a detailed and comprehensive annual report which meets the relevant reporting requirements and finds the report to be apparently satisfactory.

2.70However, the committee wishes to draw Services Australia’s attention to Schedule 2, Section 17AJ(g) of the PGPA Rule which requires an electronic address of its annual report. The committee notes that Services Australia provided a reference to page ii but does not contain a direct link to access the report. The committee also echoes similar sentiments expressed in its previous Report on Annual Reports No. 1 of 2023 concerning Section 17AH(1)(b). This requires a website reference to where the entity’s Information Publication Scheme statement pursuant to Part II of FOI Act can be found.[68] The committee notes that Services Australia has still not provided a website reference to this material, and therefore strongly encourages the agency to ensure that a direct website link is included in its future reports.

Footnotes

[1]The Department of Health and Aged Care (DoHAC), Annual Report 2022–23, pp. 4–8.

[2]DoHAC, Annual Report 2022–23, pp. 10–13.

[3]DoHAC, Corporate Plan 2022–23, p. 6.

[4]DoHAC, Annual Report 2022–23, p. 113.

[5]DoHAC, Annual Report 2022–23, p. 44.

[6]DoHAC, Annual Report 2022–23, p. 83.

[7]Commonwealth of Australia, Health Portfolio Budget Statements 2022–23: Budget Related Paper No. 1.9, p. 18.

[8]DoHAC, Annual Report 2022–23, p. 48.

[9]DoHAC, Annual Report 2022–23, p. 163.

[10]DoHAC, Annual Report 2022–23, p. 162.

[11]DoHAC, Annual Report 2022–23, p. 162.

[12]DoHAC, Annual Report 2022–23, p. 162.

[13]DoHAC, Annual Report 2022–23, p. 162.

[14]DoHAC, Annual Report 2022–23, p. 162.

[15]DoHAC, Annual Report 2022–23, p. 162.

[16]DoHAC, Annual Report 2022–23, p. 162.

[17]DoHAC, Annual Report 2022–23, p. 142.

[18]DoHAC, Annual Report 2022–23, p. 142.

[19]DoHAC, Annual Report 2022–23, p. 143.

[20]DoHAC, Annual Report 2022–23, p. 143.

[21]The Department of Finance, A guide for non-Corporate Commonwealth entities: Consultancy and Non-Consultancy Contract Expenditure Reporting, p. 7.

[22]DoHAC, Annual Report 2022–23, p. 143.

[23]DoHAC, Annual Report 2022–23, p. 143.

[24]DoHAC, Annual Report 2022–23, pp. 157–158.

[25]DoHAC, Annual Report 2022–23, p. 156.

[26]The Department of Social Services (DSS), Annual Report 2022–23, pp. 1–2.

[27]DSS, Corporate Plan 2022–23, p. 6.

[28]DSS, Annual Report 2022–23, p. 22.

[29]DSS, Annual Report 2021–22, p. 18.

[30]DSS, Annual Report 2021–22, p. 18.

[31]DSS, Annual Report 2021–22, p. 18.

[32]DSS, Annual Report 2022–23, p. 20.

[33]DSS, Annual Report 2022–23, p. 20.

[34]DSS, Annual Report 2022–23, p. 115.

[35]DSS, Annual Report 2022–23, pp. 115–116.

[36]National Redress Scheme website, The Australian Government response to the Final Report of the Second Year Review of the National Redress Scheme, www.nationalredress.gov.au/document/1626(accessed 19 February 2024).

[37]DSS, Annual Report 2022–23, p. 118.

[38]DSS, Annual Report 2022–23, p. 118.

[39]DSS, Annual Report 2022–23, p. 150.

[40]DSS, Annual Report 2022–23, p. 150.

[41]DSS, Annual Report 2022–23, p. 150.

[42]DSS, Annual Report 2022–23, p. 226.

[43]DSS, Annual Report 2022–23, p. 226.

[44]DSS, Annual Report 2022–23, p. 151.

[45]DSS, Annual Report 2022–23, p. 153.

[46]DSS, Annual Report 2022–23, p. 153.

[47]Australian National Audit Office, Management of the Try, Test and Learn Fund Transition Projects, www.anao.gov.au/work/performance-audit/management-the-try-test-and-learn-fund-transition-projects (accessed 20 February 2024).

[48]Services Australia, Annual Report 2022–23, p. ix.

[49]Services Australia, Annual Report 2022–23, pp. x–xi.

[50]Services Australia, Corporate Plan 2022–23, p. 3.

[51]Services Australia, Annual Report 2022–23, p. 20.

[52]Services Australia, Annual Report 2022–23, p. 20.

[53]Services Australia, Annual Report 2022–23, p. 22.

[54]Services Australia, Annual Report 2022–23, p. 33.

[55]Services Australia, Annual Report 2022–23, p. 33.

[56]Services Australia, Annual Report 2022–23, p. 36.

[57]Services Australia, Annual Report 2022–23, p. 142.

[58]Services Australia, Annual Report 2022–23, p. 142.

[59]Services Australia, Annual Report 2022–23, p. 142.

[60]Services Australia, Annual Report 2022–23, p. 142.

[61]Services Australia, Annual Report 2022–23, p. 155.

[62]Services Australia, Annual Report 2022–23, p. 195.

[63]Services Australia, Annual Report 2022–23, p. 195.

[64]Services Australia, Annual Report 2022–23, p. 196.

[65]Services Australia, Annual Report 2022–23, p. 196.

[66]Services Australia, Annual Report 2022–23, p. 118.

[67]Services Australia, Annual Report 2022–23, p. 118.

[68]Senate Community Affairs Legislation Committee, Annual Reports (No. 1 of 2023), p. 22.