2.1
The committee was referred the 2020–21 annual reports of the following Commonwealth departments for examination and report:
Department of Health (DoH); and
Department of Social Services (DSS), including Services Australia.
2.2
The committee considers that the annual reports of these Commonwealth departments are apparently satisfactory.
Department of Health
Secretary’s review
2.3
The Secretary, Dr Brendan Murphy, reported on the DoH’s key areas of work for 2020–21, which included:
celebration of 100 years of continuous operation and service to Australia by DoH, following its establishment in 1921 in response to the Spanish flu epidemic;
the response to COVID-19, including:
the Australian Health Emergency Response Plan for Novel Coronavirus – COVID-19;
the COVID‑19 Vaccine and Treatment Strategy and measures put in place to lead and coordinate the vaccine rollout;
extension of temporary Medicare Benefits Schedule (MBS) telehealth items to help reduce the risk of COVID-19 transmission and protect patients and healthcare providers;
support for quarantine arrangements managed by state and territory governments;
establishment of the National Incident Centre; and
health workforce reform activities in response to COVID-19;
delivery of health services under Australia’s Long Term National Health Plan, including health and aged care investment totalling $115.5 billion;
financial support for public health and hospital services through the
2020–25 Addendum to the National Health Reform Agreement between the federal government and state and territory governments;
support for mental health services, including a range of new and expanded services, following significant impacts on mental health during the COVID‑19 pandemic;
the Government’s response to the Final Report of the Royal Commission into Aged Care Quality and Safety;
maturity of the Medical Research Future Fund, which is expected to deliver $650 million in new grants for medical research from 2022–23 onwards; and
ongoing work to develop a Primary Health Care 10 Year Plan and to implement and deliver reforms to Australia’s aged care system.
Chief Medical Officer’s Report
2.4
The Chief Medical Officer, Professor Paul Kelly, reported on clinical priorities including:
managing the public health response to the COVID-19 pandemic through:
activation of the National Incident Centre;
chairing the Australian Health Protection Principal Committee;
provision of assistance domestically and internationally through Australian Medical Assistance Teams; and
provision of personal protective equipment and other medical supplies through the National Medical Stockpile;
leading the Government’s response to per- and poly-fluoroalkyl substances (known as ‘PFAS’) contamination;
supporting influenza immunisation, including by providing around 9.4 million vaccine doses through the National Immunisation Program;
supporting research to improve Australia’s preparedness and responsiveness to human health threats from changing environmental conditions and extreme weather events related to climate change;
implementation of recommendations made by the National Dust Disease Taskforce;
engagement with nursing and midwifery stakeholders to support the COVID-19 response; and
minimising the spread of antimicrobial resistance, including priority areas for continued action under Australia’s National Antimicrobial Resistance Strategy – 2020 and beyond.
Performance reporting
2.5
The DoH's purpose as outlined in its corporate plan is:
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.
2.6
In 2020–21, the DoH continued to use six outcomes to measure and report its performance. The department met the 30 out of 49 performance targets, as follows:
Outcome 1: Health system policy, design and innovation—five targets were met and one target was substantially met;
Outcome 2: Health access and support services—two targets were met, five were substantially met and two targets were not met. Data was not available for four remaining targets;
Outcome 3: Sport and recreation—one target was met and data was not available for one other target;
Outcome 4: Individual health benefits—12 targets were met and two targets were substantially met;
Outcome 5: Regulation, safety and protection—six targets were met and two targets were substantially met; and
Outcome 6: Ageing and aged care—four targets were met and two targets were substantially met.
2.7
As in 2019–20, the DoH’s targets under Outcome 2, Program 2.2: Aboriginal and Torres Strait Islander Health were not met or substantially met. These targets relate to the National Aboriginal and Torres Strait Islander Health Plan and reducing the chronic disease-related mortality rate for Aboriginal and Torres Strait Islander people.
2.8
Since 2019–20, the DoH has added a third program target under Outcome 2, Program 2.2 relating to increasing the percentage of Aboriginal and Torres Strait Islander women who have at least one health check in the first trimester of pregnancy. The committee notes the DoH’s advice that this program is on track to meet its targets, but that data was not yet available at the time of publishing the annual report.
2.9
The committee observes that the DoH published the National Aboriginal and Torres Strait Islander Health Plan 2021–2031 on 15 December 2021, following a significant program of consultation with Aboriginal and Torres Strait Islander people.
2.10
The committee notes that data supporting reporting on the 2020–21 results for Program 2.3: Health Workforce appears to predate the relevant reporting period. For example, figures representing the 2020–21 result for ‘Full time equivalent (FTE) vocationally registered Primary Care General Practitioners (GPs) per 100,000 population in Australia’ are drawn from ‘Medical Benefits Schedule claims data 2013–14 to 2018–19 (date of processing)’. No dataset referred to in this section of the report was compiled more recently than 2019.
2.11
On the face of the information provided in the DoH annual report, it is unclear how data from prior to 2020–21 has been extrapolated to support reporting for this period. The DoH may wish to consider providing further information in future annual reports to clarify how these datasets support reporting on outcomes during the current reporting period.
Financial reporting
2.12
The 2020–21 Budget delivered $115.5 billion in overall investment for the health portfolio. The DoH recorded a net cash operating surplus of $11.2 million in 2020–21.
2.13
In 2020–21, the DoH’s total administered expenses were $82.9 billion. Of this, $53.9 billion related to the Medicare Benefits Schedule, Pharmaceutical Benefits Scheme, private health insurance rebates and home care packages for senior Australians. Subsidies and grants expenditure respectively accounted for $14.1 billion and $10.8 billion in administered expenses.
2.14
The DoH’s operating expenses increased in the reporting period. Employee related expenses increased by 14 per cent to $1 057.2 million due to increased activity related to the Government’s responses to the COVID-19 pandemic and the Royal Commission into Aged Care Quality and Safety. Increased supplier expenses (up by $64.2 million to $369.4 million) were also attributed to the Government’s response to COVID-19 pandemic and the Royal Commission into Aged Care Quality and Safety, as well as the Digital Workspace Program.
Consultants and exempt contracts
2.15
The DoH has reported significant consultancy and non‑consultancy expenditure.
2.16
Compared against the previous financial year, the number of new contracts awarded by DoH decreased from 525 in 2019–20 to 262 in
2020–21. However, the value of contracts awarded in 2020–21 increased to $31.2 million compared to $28.6 million in 2019–20. The total value of reportable consultancy contracts decreased from $66.1 million in 2019–20 to $51.0 million in 2020–21.
2.17
DoH entered into 2631 new reportable non-consultancy contracts during the reporting period, involving a total expenditure of $1.1 billion. These are in addition to a further 1477 reportable non consultancy contracts active during the reporting period, with a total expenditure of $1.0 billion. The top five organisations receiving a share of reportable non-consultancy contract expenditure during 2020–21 received around 50.16 per cent of all expenditure under this heading.
2.18
The committee notes that DoH’s reporting of reportable consultancy and non‑consultancy expenditure is in accordance with guidance provided by the Department of Finance. However, the committee suggests that interpretation of consultancy and non-consultancy expenditure could be improved by incorporating additional information in future reports, as per the best practice approaches identified by the Department of Finance:
When reporting the largest share of the total expenditure for consultancy or non-consultancy contracts, entities may include:
an additional column indicating what proportion of the overall expenditure that particular share is, and
an additional row indicating the total expenditure of the largest shares combined and the proportion of the overall expenditure that total is.
2.19
In 2020–21, 86 contracts over $10 000 were exempt from publication on AusTender on the basis that publishing contract details would disclose exempt matters under the Freedom of Information Act 1982. This represents a decrease from 2019–20, when 95 contracts were exempt from reporting.
2.20
The committee commends the DoH on its annual report which provides a detailed overview of its activities and performance in 2020–21.
Department of Social Services
Secretary's review
2.21
The Secretary, Mr Ray Griggs AO CSC, noted the ongoing impacts of the global COVID-19 pandemic in the 2020–21 year on the work of DSS and stated that:
[DSS] worked collaboratively with other government agencies to develop and implement a rapid and dynamic response to the COVID-19 pandemic. The social security system was adapted to provide expanded access to income support payments. Since the start of the pandemic, we have worked with Services Australia to deliver more than $20 billion to income support recipients through the Coronavirus Supplement and four Economic Support Payments that provided around $12 billion of additional assistance to Australian households. These temporary measures were adjusted throughout the year in response to the recovering economy.
2.22
Mr Griggs also noted the following work of DSS in the reporting period:
under the Community Support Package, distribution of additional funding for the Emergency Relief, Food Relief, Commonwealth Financial Counselling and No Interest Loans to support vulnerable people impacted by COVID‑19;
implementation of a $150 million 'Domestic Violence Support Package' over 2019–20 and 2020–21 which included funding to states and territories for frontline delivery service under a 'National Partnership;
contribution to Target 9 (overcrowded housing), Target 12 (out-of-home care) and Target 13 (family violence) of the Closing the Gap Commonwealth Implementation Plan;
introduction of the 'Disability Gateway' (launched in January 2021) to connect people with disability to appropriate information and relevant services in their area;
development of the 'Younger People in Residential Aged Care Strategy 2020–25 in partnership with the National Disability Insurance Agency;
introduction of flexible parental leave pay arrangements in July 2020 to provide greater choice to mothers and fathers in how they utilise their payment;
supported the transition of Income Management participants in the Cape York region to the Cashless Debit Card;
released the 'Decade of Data: Findings from the first 10 years of Footprints in Time' report which examined the developmental pathways of Aboriginal and Torres Strait Islander children; and
supported the work of Ms Robyn Kruk AO to deliver the Second Anniversary Review of the National Redress Scheme, released in June 2021.
Performance reporting
2.23
As outlined in its corporate plan, DSS' purpose is:
…to improve the economic and social wellbeing of individuals and families in Australian communities which we achieve through the implementation of a diverse range of government policies, programs, services and payments.
2.24
The committee notes this differs slightly to the reported purpose in the 2019–20 reporting period.
2.25
In 2020–21, DSS used four outcomes to measure its performance. Of the 55 performance measures, DSS reported that it met 42 performance measures, partially met three and did not meet 10. As outlined in the annual report, the annual performance statement was 'prepared at a time of significant challenge in Australia' and that the COVID-19 response and natural disaster recovery impacted on DSS' capacity to meet performance targets.
2.26
The committee notes the following key results against each outcome:
Outcome 1: Social Security—12 of the 13 performance measure targets were met;
Outcome 2: Families and Communities—13 targets were met, one target was partially met and three targets were not achieved;
Outcome 3: Disability and Carers—13 targets were met or are ongoing, two targets were partially met and five targets were not met; and
Outcome 4: Housing—all targets were achieved in this outcome.
2.27
The committee commends DSS for its thorough explanation of performance targets and the inclusion of analysis and discussion where targets were partially met or not met.
National Redress Scheme
2.28
As noted in the committee's report, Annual reports (No 1 of 2021), in February 2020, operations for the National Redress Scheme (the Scheme) moved from Services Australia to become part of the Redress Group within DSS. The Scheme is now in its third year of operation and there is a legislated requirement for a description of the key operations and performance of the Scheme to be reported.
2.29
Key statistics for the operation of the Scheme in the 2020–2021 year include:
3773 people applied to the Scheme for redress;
3240 determinations were made and of these:
3174 people were determined as eligible; and
66 applications were deemed ineligible;
3225 people accepted an offer of redress;
13 people declined an offer of redress;
1209 institutions were found responsible for abuse;
3283 applications were finalised (an average of 273 per month), including redress payments ranging from $10 000 to $150 000 (average payment of $85 048);
total value of redress monetary payments $285 005 565;
2334 people accepted the offer of counselling and psychological care services as part of their redress outcome;
1922 people accepted the offer of a direct personal response from an institution; and
73 per cent of applications name more than one institution and 27 per cent of applications name four or more institutions.
2.30
In March 2021, Ms Robyn Kruk AO delivered a final report of the Second Anniversary Review of the Scheme to the Australian Government. The report made 38 recommendations and on 23 June 2021 the Australian Government published its interim response to the review.
2.31
The review includes recommendations that require the agreement of state and territory governments. The Australian Government is prioritising action on 25 out of the 38 recommendations.
Financial performance
2.32
In 2020–21, DSS administered $162.1 billion of expenses on behalf of the Government and reported a departmental surplus of $8.5 million.
2.33
DSS noted that in the reporting period the following payments increased:
personal benefits expenses increased by $15.6 billion from the 2019–20 to $144.9 billion in 2020–21 due to increased social security payments because of the COVID-19 pandemic; and
payments to the National Disability Insurance Agency increased from $8.3 billion in 2019–20 to $13.9 billion in 2020–21 due to higher average costs per participant and higher participant numbers.
2.34
DSS' total administered expenses were $3.873 billion lower than the original budget estimates and this variance was attributed to the following:
personal benefit expenses were $5.274 billion less than original budget due to:
lower than expected demand for unemployment benefits; and
lower than estimated recipient numbers and lower average payment rates in Income Support for Seniors;
National Disability Insurance Scheme expenses were $1.404 billion higher as a result of an increase in participant numbers and higher costs per participant than forecast;
administered income was $39 million lower due to National Redress Scheme Revenue, which was offset by changes in fair value gains on loans;
administered assets were $1.291 billion higher due to increases in personal benefit receivables which included the resumption of debt recovery activities from March 2021; and
administered liabilities were $673 million lower because of:
lower than estimated JobSeeker payments; and
lower than estimated provision of the Family Tax Benefit.
2.35
The committee welcomes the inclusion of the discussion about DSS' financial management in the section on 'Managing our finances' in the annual report as suggested in the committee's previous report on annual reports.
2.36
The committee appreciates DSS' detailed and comprehensive annual report and considers that it meets the relevant reporting requirements.
Services Australia
Chief Executive Officer's review
2.37
The Chief Executive Officer (CEO) of Services Australia, Ms Rebecca Skinner PSM, made the following comment in her review of Services Australia for the 2020–21 year:
2020–21 has been a significant year in our history of supporting the people of Australia. It has been a year in which we exceeded service delivery records, helped Australians through the COVID-19 pandemic, floods, fires, storms and a cyclone, and still made great progress on our goal to become a world-leading government service delivery organisation by 2025.
2.38
Ms Skinner noted several aspects of Services Australia's work in this reporting period, including:
administration of $230.1 billion in payments (on behalf of DSS, DoH, the Department of Education, Skills and Employment, and other agencies);
the provision of an additional $5.6 billion in departmental operating and capital funding to administer the above payments and provide customer services;
supporting the COVID-19 response and recovery, including the provision of $6.1 billion in Economic Support Payments and $14.9 billion in Coronavirus Supplement payments, and partnering with the Department of Health to expand the Australian Immunisation Register and enabling the direct customer access to their Immunisation History Statements and COVID-19 Digital Certificates;
deployment of 'Mobile Service' teams and centres to flood affected regions;
development and implementation of technological changes to improve corporate systems and customer services such as the Single Staff Interface, voice biometrics, trialling of a virtual service centre, and the implementation of a new consolidated aged care provider portal; and
improvements to customer service methods, including the implementation of Single Touch Payroll, reduced payment processing times, reviews of customer surveys, updating service centres, and developing a Service Delivery Workforce Model to support improvements to recruitment, training and career sustainment strategies for Services Australia's frontline workers.
Performance reporting
2.39
As outlined in Services Australia's corporate plan, the agency's purpose is to 'support Australians by efficiently delivering high-quality accessible services and payments on behalf of government'.
2.40
The committee notes that this slightly differs to the previous statement of purpose in the 2019–20 year which was 'delivering high-quality government services and payments to Australia'.
2.41
Services Australia's performance is measured against a single outcome:
Support individuals, families and communities to achieve greater self‑sufficiency; through the delivery of policy advice and high quality accessible social, health and child support services and other payments; and support providers and businesses through convenient and efficient service delivery.
2.42
This outcome is delivered under three programs:
Program 1.1: Services to the Community—Social Security and Welfare;
Program 1.2: Services to the Community—Health; and
Program 1.3: Child Support.
2.43
In 2020–21, Services Australia met 26 of 27 performance measure targets compared to 22 of 30 in the previous year.
2.44
Services Australia noted that it failed to achieve Performance Measure 1 'Customer satisfaction: achievement of customer satisfaction standards' in Program 1.1. The agency has a customer satisfaction target of ≥ 85 out of 100. In 2020–21, Services Australia achieved a result of 82.6 out of 100. This is a 3.1 per cent increase from the previous year in which the agency's result was 79.5 out of 100. In the 2018–19 year, the result was 76.7 out of 100.
2.45
The agency attributes the following reasons for not meeting this target:
telephony service targets have been on a downward trend since November 2020, with the main driver being time to receive service; and
online application channels (the lowest performing measure at 75.4).
2.46
Service Australia has noted that although the target was not achieved, it has continued to improve over a three-year period and is committed to improving customer experience, including through the development of measures such as a digital plan to enhance ease of access for customers.
2.47
The committee commends Services Australia for its clear reporting on its performance measures and detailed description of why one target was not met and its plans to meet this target going forward.
2.48
As noted in the committee's previous report, Services Australia introduced three new performance targets and listed them as 'no target' as the agency sought to establish baselines. These targets related to customer trust measures. These targets were removed from Services Australia's enterprise performance reporting for 2020–21 to allow more time to develop a multi‑driver model for implementation in the 2021–22 year.
2.49
The annual report also notes that the while the agency's outcome statement and program structure remained unchanged in 2020–21, the agency will transition to a new outcome statement and key activity structure for performance reporting which aims to better reflect the agency's functions in 2021–22.
2.50
The committee welcomes the inclusion of reporting on performance measures from previous years in the annual report, as requested in previous reports on annual reports.
Financial performance
2.51
In 2020–21, Services Australia made social services and welfare, and health payments of approximately $230.1 billion. The agency received a supplementary payment from the Government of around $5.6 billion in departmental operating and capital funding to support these payments and the provision of customer services. Services Australia also reported an operating surplus of $160.3 million.
2.52
Services Australia notes several significant budget variances for the 2020–21 year. The following explanations were provided for significant budget variances:
class action settlement of $112 million—estimate of the settlement was initially included as part of supplier expenses in the preparation of the budget, for financial statement preparation the total amount was included in other expenses;
assets under construction—rollout occurred earlier than predicted in the budget, leading to an increase in the quantum of depreciation expense and a decrease in the carrying value of property, plant and equipment;
information technology projects—several projects progressed during the financial year which resulted in accelerated expenditure; and
budget reporting—receipt of section 74 revenue and repatriation of these cash flows are shown as a net amount, however, from a financial reporting perspective it is shown on a gross basis.
2.53
Services Australia further attributed variance in its administered budget to the 'special account' and indicated that during the reporting period a large increase in cash received occurred due to an increase in the number and value of cases.
2.54
The committee appreciates the explanation for the variances provided, however, it encourages Services Australia to provide the total or approximate amount of the variance to assist with user readability and understanding of the financial reporting.
General comments
2.55
The committee considers that Services Australia has produced a detailed and comprehensive annual report which meets the required reporting standards and finds that it is apparently satisfactory.
2.56
However, the committee suggests one area for improvement. The committee draws Services Australia's attention to the requirement under Schedule 2, section 17AG(4)(c)(iii) of the Public Governance, Performance and Accountability Rule 2014, which requires a 'description of non‑salary benefits provided to employees'. The committee notes that the annual report includes a reference to the employee's enterprise agreement and provides some information on non-salary benefits provided to senior executive staff and other highly remunerated staff, however, there is limited information provided on the non‑salary benefits available to other employees. The committee encourages Services Australia to include a description of non-salary benefits for all employees in its future reports.