2.1
The 2021–2022 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
2.2
The committee considers that the annual reports of these departments are of an apparently satisfactory standard.
Department of Health and Aged Care
Secretary’s review
2.3
The Secretary, Professor Brendan Murphy AC, reported on the DoHAC’s key areas of work for 2021–22, which included:
continuing to work with state and territory governments to implement reforms under the 2020–25 National Health Reform Agreement (NHRA) and to deliver high quality health care;
providing an ongoing national response to the COVID-19 pandemic through the provision of vaccines and investment in treatment options;
focusing on primary health care reform through the release of the Primary Health Care 10 Year Plan, supporting the establishment of the Strengthening Medicare Taskforce, and increasing investment in telehealth services;
establishing the Medicare Benefits Schedules (MBS) Continuous Review in response to the MBS Review Taskforce Final Report;
addressing the mental health needs of Australians by finalising a National Mental Health and Suicide Prevention Agreement, as well as opening new headspace services and Head to Health adult mental health centres;
acting upon the Final Report of the Royal Commission into Aged Care Quality and Safety and assisting aged care providers during COVID-19 outbreaks; and
releasing the National Aboriginal and Torres Strait Island Health Workforce Strategic Framework and Implementation Plan 2021–2031 (Workforce Plan).
Chief Medical Officer’s Report
2.4
The Chief Medical Officer, Professor Paul Kelly, reported on clinical priorities including:
coordinating Australia’s ongoing public health response to COVID-19 through:
chairing the Australian Health Protection Principal Committee;
responding to outbreaks of COVID-19 through the National Incident Centre;
utilising the National Medical Stockpile to provide personal protective equipment;
providing culturally appropriate advice to the DoHAC through the Aboriginal and Torres Strait Island Advisory Group; and
focusing on the design of the Australian Centre for Disease Control.
supporting influenza immunisation, with over 10 million vaccines being administered through the National Immunisation Program;
responding to the declaration of Japanese encephalitis virus as a Communicable Disease Incident of National Significance;
activating the National Incident Centre to coordinate a national response to the monkeypox outbreak;
working with state and territory governments to address the health impacts of climate change;
continuing to address the recommendations from the National Dust Disease Taskforce’s final report; and
working to address the harms associated with using vapourised nicotine/e‑cigarettes.
Performance reporting
2.5
As outlined in its corporate plan, the DoHAC stipulated its purpose 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.
2.6
In 2021–22, the DoHAC completed an outcome restructure in response to refreshed performance reporting requirements under the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) and associated Resource Management Guides in March 2020. The DoHAC now uses four outcomes to measure against and report on its performance, as opposed to the six that it used previously. The committee notes that these new outcomes also include a range of new programs and targets. Under the four new outcomes, the department met 19 out of 33 performance targets:
Outcome 1: Health Policy, Access and Support
Out of the total 16 targets: five targets were met, three targets were substantially met, and three targets did not have data available to report for the 2021–22 financial year.
Outcome 2: Individual Health Benefits
Out of the total nine targets: five were met, three were substantially met, and one did not have data available.
Outcome 3: Ageing and Aged Care
Out of the total six targets: three targets were met and three targets were substantially met.
Outcome 4: Sport and Recreation
Out of the total two targets: one target was met and one target did not have data available.
2.7
The committee commends the DoHAC on meeting its first target under Outcome 1, Program 1.3 Aboriginal and Torres Strait Island Health, noting that this target was not met in 2020–21 and 2019–2020. This target relates to the implementation of the National Aboriginal and Torres Strait Islander Health Plan 2021–2031 (Health Plan), and the National Aboriginal and Torres Strait Islander Health Workforce Strategic Framework and Implementation Plan 2021–2031 (Workforce Plan).
2.8
The committee notes that data was not yet available for the new target under Program 1.3, which is related to increasing the proportion of Aboriginal and Torres Strait Islander babies with a healthy birthweight to 91 per cent by 2031. The committee observes the DoHAC’s advice that the target will not be achieved unless significant changes are made to address the driving factors of unhealthy birthweights. The committee looks forward to reviewing this data once it is made available.
2.9
As in the 2020–2021 DoHAC Annual Report, data supporting 2021–22 figures for Program 1.4 Health Workforce predate the relevant reporting period, specifically points a–f. The committee suggests that the DoHAC provides information in future annual reports on how these figures are calculated to aid transparency, as it is currently unclear how the DoHAC extrapolated the referenced data to support the presented figures.
2.10
The committee commends the DoHAC for meeting or substantially meeting all targets under Outcome 3 Ageing and Aged Care. The committee notes the importance of aged care reform to the department, signified by its name change from the Department of Health to the Department of Health and Aged Care on 1 July 2022 and its ongoing response to the recommendations of the Final Report of the Royal Commission into Aged Care Quality and Safety.
Financial performance
2.11
The 2021–22 Budget delivered $121.4 billion in overall investment for the health and aged care portfolio. The DoHAC recorded a net cash operating surplus of $17.6 million during the reporting period.
2.12
In 2021–22, the DoHAC’s total administered expenses were $91.6 billion, an increase of 10.4 per cent compared to 2020–21. Of this total, $59.4 billion related to personal benefits expenses, including the Medicare Benefits Scheme and the Pharmaceutical Benefits Scheme, private health insurance rebates, home care packages for senior Australians, and the costs associated with administering COVID-19 vaccines. Additionally, subsidies expenditure accounted for $14.9 billion in administered expenses, grants expenditure accounted for $11.9 billion and supplier expenses accounted for $4 billion.
2.13
Departmental operating expenses increased from $1057.2 million in 2020–21 to $1289.7 million in 2021–22. Employee related expenses increased to $679.3 million (a growth of $120.1 million). This increase was a result of higher average staffing levels to support the DoHAC’s ongoing COVID-19 response, aged care programs and mental health initiatives.
2.14
Supplier related spending also increased in 2021–22 to $482.6 million (a growth of $113.2 million), spurred by greater IT costs associated with the government’s response to COVID-19, aged care initiatives, and the Therapeutic Goods Administration Desktop Transformation Program.
Consultants and exempt contracts
2.15
The DoHAC has reported an increase in consultancy and non-consultancy expenditure during the reporting period.
2.16
312 new reportable consultancy contracts were awarded, costing a total of $49.3 million (up from 262 new contracts in 2020–21 valued at $31.2 million). 70 ongoing reportable consultancy contracts, costing $19.3 million, were active during the 2021–22 reporting period.
2.17
3010 new reportable non-consultancy contracts were awarded during the reporting period, costing a total of $1.83 billion (up from 2631 valued at $1.1 billion in 2020–21). This is in addition to the 413 active and ongoing reportable non-consultancy contracts valued at $482.6 million during
2021–22.
2.18
The committee notes that the DoHAC has included an additional column in their consultancy and non-consultancy expenditure tables that indicates what proportion of the overall expenditure a particular share is, as previously suggested by the committee and recommended as best practice by the Department of Finance. However, the committee again suggests that the DoHAC include an additional 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.
2.19
During the 2021–22 reporting period, 76 contracts were exempt from reporting via AusTender, as publishing the details of these contracts would disclose exempt matters under the Freedom of Information Act 1982. This is a decrease from 2020–21, where 86 contracts were exempt, and 2019–20, where 95 were exempt.
External scrutiny
2.20
The committee notes that the Australian National Audit Office (ANAO) tabled four reports that pertained to the DoHAC in 2021–22. These reports are titled as follows:
Department of Health’s Management of Financial Assistance under the Medical Research Future Fund (MRFF);
Improving Immunisation Coverage;
Management of International Travel Restrictions during COVID-19; and
Human Biosecurity for International Air Travellers during COVID-19.
2.21
The DoHAC agreed to all recommendations within the four reports and is currently actioning, or has completed action, related to implementation. These matters are also correctly referenced in the DoHAC’s compliance index.
Final comments
2.22
The committee commends the DoHAC on its detailed annual report for
2021–22 and considers it to be apparently satisfactory.
Department of Social Services
Secretary’s review
2.23
The Secretary, Mr Ray Griggs AO CSC, noted the Department of Social Services’ (DSS) priorities and commitments two years on from the start of the pandemic:
After 2 challenging years due to the COVID-19 pandemic, our commitment to improve the wellbeing of individuals and families in Australian communities is stronger than ever. In 2021–22, we worked to improve the protection of our most vulnerable citizens: women and children escaping family domestic violence, people with disabilities, and Aboriginal and Torres Strait Islander peoples and communities.
2.24
Mr Griggs also reported on DSS’ key areas of work for 2021–22, which included:
delivering a virtual National Summit on Women’s Safety with over 380 participants, focusing on the development of the National Action Plan to End Violence Against Women and Children;
the implementation of the $72 million Safe Place Emergency Accommodation program to deliver safe places for women and children leaving family and domestic violence;
launching the Safe and Supported: National Framework for Protecting Australia’s Children 2021–2031;
continued implementation of the recommendations from the Second Year Review of the National Redress Scheme;
launching the $250 million Australia’s Disability Strategy 2021–2031;
the commencement of the Disability Gateway;
expanding the compliance and enforcement powers of the National Disability Insurance Scheme (NDIS) Quality and Safeguards Commissioner;
improvements to timeframes and engagement principles for National Disability Insurance Agency (NDIA) decision-makers;
co-designing the Closing the Gap Disability Sector Strengthening Plan with the First Peoples Disability Network;
administration of 11 239 new grants via the Community Grants Hub;
delivering $1.5 billion in one-off $250 Cost of Living Payments assisting approximately six million payment recipients and concession card holders with cost-of-living pressures;
working with Services Australia to deliver $123.2 billion in income support payments;
working with the National Recovery and Resilience Agency to deliver assistance for Australians affected by the pandemic and 2022 flood events; and
oversight of work to implement changes to the Home Equity Access Scheme.
Performance reporting
2.25
As outlined in its 2021–22 corporate plan, DSS’ purpose is:
…to continue to support the economic and social wellbeing of individuals and families in Australian communities, which we achieve through the implementation of a range of government policies, programs, services and payments.
2.26
DSS stated it undertook a review of the extent to which its performance measures aligned with key activities and outcomes. This was part of the department’s broader performance maturation objectives.
2.27
Further, DSS used feedback from the Performance Statements Pilot Program led by the ANAO to improve governance and assurance for current and future reporting years. This included working with third-party data holders to improve the department’s understanding of data quality and limitations.
2.28
Over 2021–22, changes to measures fell into four key areas:
changes to data sourcing and methodology to ensure sources of information and methodologies are reliable and verifiable;
better alignment of targets with their underpinning methodologies;
a move 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.
2.29
In 2021–22, DSS used four outcomes to measure its performance and outlined the following key results:
Outcome 1: Social Security
Out of the total 10 performance measure targets: eight were met, one was partially met and one was not met.
Outcome 2: Families and Communities
Out of the total 15 performance measure targets: nine were met, three were not met and three were not reported or are unclear.
Outcome 3: Disability and Carers
Out of the total 19 performance measure targets: 14 were met or are ongoing and five were not met.
All four targets were met.
2.30
Of the total 49 performance targets that were set, the department reported they met 35, partially met one and did not meet 10. Additionally, DSS mentioned there were three performance targets which were not reported or were reported as unclear.
2.31
The committee commends DSS for the inclusion of its performance maturation outlook and thorough explanation of performance targets. However, further discussion and analysis that explains why targets were partially met or not met is recommended for future iterations of performance reporting.
National Redress Scheme
2.32
The National Redress Scheme (the Scheme) is now in its fourth year of operation, in which there is a legislative requirement under the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 and section 75 of the National Redress Scheme for Institutional Child Sexual Abuse Rules 2018 to report in the Scheme’s key operations and performance.
2.33
Key statistics for the operation of the Scheme during the 2021–22 reporting period include:
5987 people applied to the Scheme for redress;
3133 determinations were made and, of these:
3043 people were determined as eligible for redress; and
90 applications were deemed ineligible;
2713 people accepted an offer of redress;
36 people declined an offer of redress;
1331 institutions were found responsible for abuse;
2970 applications were finalised, including 2675 redress payments ranging from less than $10 000 to $150 000, with an average payment of $90 809;
the total value of redress monetary payments was $242.9 million;
2219 people accepted the offer of counselling and psychological care services as part of their redress outcome:
279 people accessed a total of 2666 hours of counselling and psychological care services nationally, with an average of around 9.5 hours provided per person;
1870 people accepted the offer of a direct personal response from an institution:
187 people completed their direct personal response with or in respect of 250 institutions and 290 people made contact with 415 institutions to begin the process to receive their direct personal response; and
86 per cent of applications name more than one institution in their application and 39 per cent of applications name four or more institutions.
2.34
Since 1 July 2021, DSS continued to implement a range of changes addressing recommendations from the independent second anniversary review of the National Redress Scheme. The department highlighted that following close collaboration with state and territory governments and other stakeholders, two legislative packages passed through Parliament in 2021. Amongst other measures, these:
established a $10 000 advance payment for applicants who are elderly or terminally ill — this has provided immediate recognition to 826 survivors to 30 June 2022, while their redress application is considered;
removed the requirement for a statutory declaration in the application form, streamlining the application process for survivors;
enabled redress payments to be made in instalments to give survivors choice and control over how they receive their payment; and
expanded Funder of Last Resort arrangements to provide more survivors with access to redress in circumstances where the responsible institution is defunct or does not have the financial capacity to join the Scheme.
2.35
DSS also noted its progression with other improvements that did not require legislative change, including:
increasing trauma-informed engagement with applicants early and throughout the application process;
developing a Service Charter and a Trauma Informed Framework;
enhancing the quality and consistency of decision making on redress applications by appointing a panel of chief independent decision makers. The Scheme has also introduced a de-identified application and outcome database to assist independent decision makers; and
a range of other internal improvements to the Scheme’s recruitment processes, workforce, and business planning, training, ICT and data use, and wellbeing mechanisms.
Financial performance
2.36
In 2021–22, the department administered $145.8 billion of expenses on behalf of the government and reported a departmental surplus of $4.0 million.
2.37
DSS outlined that in the reporting period, payments to the NDIA increased to $19.4 billion from $13.9 billion in 2020–21 due to an increase in participant plan expenditure and growth in participant numbers.
2.38
The department also reported that personal benefits expenses decreased from 2020–21 by $21.8 billion to $123.1 billion, due to the cessation of the Economic Support Payment and the Coronavirus Supplement, combined with the economic recovery from the pandemic.
2.39
DSS’ total administered expenses were $1.391 billion lower than the departmental budget and this variance was attributed to the following:
Personal benefits expenses were $4.154 billion lower than the budget as a result of:
the continuation of the underlying economic recovery;
lower than expected demand for unemployment benefits (primarily the JobSeeker payment); and
lower spending through the Family Tax benefit.
NDIS expenses were $2.763 billion higher than the budget as a result of higher than projected expenditure by participants on supports and greater growth in participant numbers than expected.
Administered income was $0.116 billion lower than the budget as a result of:
lower than expected recoveries from responsible institutions under the National Redress Scheme; and
lower personal benefit recoveries due to debt pauses during COVID-19 lockdowns.
Administered assets were $0.491 billion higher than the budget as a result of an increase in fair value of the net assets of the NDIA.
Administered liabilities were $0.885 billion lower than the budget as a result of:
lower than expected payables in social security payments; and
lower than estimated Provision for Family Tax Benefit.
General comments
2.40
The committee appreciates DSS’ detailed and comprehensive annual report. It considers that it meets the relevant reporting requirements and finds that it is apparently satisfactory.
2.41
However, the committee suggests some areas for improvement. The committee draws DSS’ attention to Schedule 2 of the PGPA Rule, which requires information on the number of employees at each classification level who received performance pay. The committee notes that the compliance index of the report contains an incorrect page reference for this requirement.
2.42
Additionally, committee draws DSS’ attention to general typographical errors contained throughout the report, such as spelling and consistency in correctly naming other government departments following the Machinery of Government changes. The committee encourages DSS to ensure a more thorough quality assurance process is applied across the entirety of the report.
Australian National Audit Office reporting
2.43
The committee notes that the ANAO’s Interim Report on Key Financial Controls of Major Entities – 9 June 2022 stated in regard to DSS:
ANAO analysis identified that reporting of some grant activities did not comply with mandatory reporting to GrantConnect required by the Commonwealth Grant Rules and Guidelines 2017 and the Resource Management Guides 421. The ANAO analysis further identified data quality issues, in particular for grant activities started prior to 2021–22.
2.44
The committee encourages that DSS continue to monitor and evaluate the Community Grants Hub business process to address issues with data integrity and mitigate business risks to the department.
Services Australia
Chief Executive Officer’s Review
2.45
The Chief Executive Officer of Services Australia, Ms Rebecca Skinner PSM, made the following comment in her review of Services Australia:
2021-22 has been another big year for Services Australia. This year, we again exceeded service delivery records, responded to significant and distinct surges in demand and delivered high-quality payments and services to our customers. At the same time, we made significant progress towards our goal of becoming a world-leading government services delivery agency by 2025.
2.46
Ms Skinner also reported on key areas of work for 2021–22, which included:
the implementation of a new streamlined digital claim process and the processing of 4.9 million COVID-related claims in four months;
the provision of Pandemic Leave Disaster Payments, with 2.7 million claims received and $1.9 billion in payments over the financial year administered;
supporting customers to download and install the Express Plus Medicare app and link Medicare to MyGov accounts, allowing customers to access over 107 million Immunisation History Statements, around 131 million digital certificates and over 6 million International COVID-19 Vaccination Certificates;
the administration of $2.1 billion in disaster recovery payments to people directly impacted by recent natural disasters;
the deployment of mobile servicing teams to communities affected by floods or storms;
the introduction of 69 Aged Care Specialist Officers in service centres across Australia;
the expansion of the video chat pilot to improve accessibility for customers accessing face-to-face services without leaving their homes;
the formation of the Services Delivery Faculty to centralise Services Australia’s approach to developing the skills and capabilities of their existing service delivery workforce; and
support for the whole-of-government response to the humanitarian evacuations from Afghanistan and the conflict in Ukraine.
Performance reporting
2.47
As outlined in Services Australia’s 2021–22 corporate plan, the agency’s purpose is:
To support Australians by efficiently delivering high-quality, accessible services and payments on behalf of government.
2.48
Services Australia’s performance is measured against an updated single outcome:
…deliver high-quality, accessible services and payments to individuals, families, businesses and partner agencies on behalf of Government; with a focus on contemporary service delivery and customer experience.
2.49
In 2021–22, this was 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.
2.50
In 2021–22, Services Australia stated that it transitioned from the previous 27 key performance indicators to a suite of seven strategic performance measures to aid transparency.
2.51
Of the new seven strategic performance measures, Services Australia achieved three, substantially achieved two and partially achieved one. The agency explained that no target was set for its strategic performance measure two, ‘Customer Trust’, as it elected to use 2021–22 to baseline performance to establish a target for 2022–23.
2.52
Services Australia noted that it fell short of achieving its target to serve customers within 15 minutes:
The agency recognises that it was an ambitious stretch for us to achieve this year due to record numbers of calls answered and face-to-face contacts — the agency answered over 37.1 million calls and served around 9.3 million customers in service centres. The agency will reassess this target in 2022-23 against current projected demand to ensure the target is ambitious but realistic and capable of chowing year-on-year improvement.
2.53
In 2021–22, Services Australia continued to implement its digital plan by carrying out a series of digital system upgrades to enhance the online experience of customers. For example:
the Report Employment Income function processed over 39.4 million reports electronically, with an information communications technology accuracy rate of more than 99 per cent;
Single Touch Payroll integration enabled customers to confirm pre-filled earnings income details from participating employers, reducing customer transcription errors and improving the correctness of payments; and
additional functionality enhancements were delivered to Medicare online accounts and the Express Plus Medicare mobile apps that enhanced customer access to their Immunisation History Statements and domestic and international travel digital COVID-19 Vaccination Certificates.
2.54
The committee commends Services Australia for implementing its new outcome statement and strategic performance measures as discussed in the committee’s previous report on annual reports.
2.55
The committee also reiterates its appreciation for Services Australia’s clear reporting and detailed descriptions, particularly on its new seven strategic performance measures, and for incorporating the 27 previous legacy performance indicators from past years to aid transparency.
Financial performance
2.56
In 2021–22, Services Australia made social services and welfare and health payments totalling approximately $224.9 billion. The agency received a supplementary payment from the government of around $5.9 billion in operating and capital funding to support these payments and the provision of customer services. Services Australia also reported an operating surplus of $196.3 million.
2.57
Services Australia noted several significant budget variances for the 2021–22 year. The following budget variance explanations were provided:
During the financial year, the agency was provided with additional funding and spent $770 million for expenses incurred in relation to the administration of emergency response activities associated with extreme weather events and the pandemic.
In June 2021, the Federal Court of Australia approved the Income Compliance class action settlement — as at 30 June 2022, the provision of $112 million had not been accessed and will likely be settled in 2022–23.
A change in lease extensions for the leasehold improvement asset class resulted in an increase in the asset revaluation reserve.
From a budget reporting perspective, the receipt of section 74 revenue and the repatriation of these cash flows are shown as a net amount; however, from a financial reporting perspective these are shown on a gross basis.
2.58
Services Australia further attributed variance in its administered budget to the ‘Special Account’ and indicated that during the 2021–22 reporting period, there was a large increase in cash received as a result of an increase in the number and value of cases.
2.59
The committee appreciates the explanations for the variances and the inclusion of the total or approximate amount of the variances, as recommended by the committee’s previous report on annual reports.
General comments
2.60
The 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.
2.61
However, the committee also suggests two areas for improvement. The committee draws Services Australia’s attention to the requirement under Schedule 2 of the PGPA Rule, which requires entities to provide a description of non-salary benefits provided to employees. The committee notes that the annual report references staffing statistics and provides some information on non-salary benefits to senior executive and other highly remunerated staff. However, there is limited information provided on the non‑salary benefits available to other employees. The committee continues to encourage Services Australia to include a description of non-salary benefits to all employees in its future reports, as was recommended by the committee in its previous report on annual reports.
2.62
The committee also draws Services Australia’s attention to an additional requirement under Schedule 2 of the PGPA Rule, which requires a website reference to where the entity’s Information Publication Scheme statement pursuant to Part II of FOI Act can be found. The committee notes that Services Australia did not provide a website reference to this material but instead suggests the reader to ‘see Services Australia website’. The committee recommends the agency provide a direct website link where the entity’s Information Publication Scheme can be found in its future reports.