Chapter 2

Chapter 2

Individual 2010–2011 Annual Reports

Reports under the Industry, Innovation, Science, Research and Tertiary Education portfolio

Australian Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS)

Reporting requirements

2.1        The committee considers that AIATSIS has met its reporting requirements under section 63 of the Public Service Act 1999 and section 9 of the Commonwealth Authorities and Companies Act 1997 (CAC Act).

2.2        The committee notes that AIATSIS did not provide a full date on the Letter of Transmittal.

Recommendation 1

2.3        The committee recommends that the Australian Institute of Aboriginal and Torres Strait Islander Studies record a full and proper date, stipulating the day, month and year on the Letter of Transmittal.

Operational Matters

2.4        The committee notes AIATSIS's concerns over a lack of funding and the serious implications this has had for their operations.

2.5        AIATSIS is to be commended for a very interesting annual report. It contained vivid descriptions of preservation projects, such as the archival of the history of two Canberra families,[1] and NAIDOC on the Peninsula.[2]

2.6        Other highlights of the year include the publication of a 148 year old encyclopaedia in 2010.[3] Published by Aboriginal Studies Press, Australia: William Blandowski's illustrated encyclopaedia of Aboriginal Australia, previously only existed as a sole surviving complete copy, written in German, buried in the State Library of Berlin.[4]

2.7        AIATSIS is also continuing its preservation and archival activities and has acquired a high-performance file storage system and upgraded facilities to assist in its activities.[5]

Australian Institute of Marine Science (AIMS)

Reporting Requirements

2.8        The committee considers that AIMS has met its reporting requirements under section 63 of the Public Service Act 1999 and section 9 of the CAC Act.

2.9        However, the committee questions the payment of a large bonus to a senior executive, totalling $96,016. The annual report states that 'the maximum bonus that an individual can receive was 32 per cent of his [sic] base salary',[6] however, the percentage of this particular bonus amounts to 36.6 per cent of the base salary of $262, 268, and far exceeds bonuses paid by other agencies of the same status.

Operational Matters

2.10      A major milestone was reached on 30 June 2011, with the end of the
2007–2011 Research Plan and the beginning of the new 2011–2015 Research Plan.

2.11      2011 also marks the end of Dr Ian Poiner's tenure, who has been the CEO of AIMS for the past seven years.

2.12      AIMS reports that it is facing major challenges due to a shortfall in base funding as a result of significant cost inflation, which is not being matched by indexation of their appropriation revenue. There has also been a general reduction in funding provided to co-invested research programs.[7]

2.13      Some of AIMS's achievements throughout the year include:

2.14      Negotiations are also currently underway between management and staff regarding the 2012–2015 AIMS Enterprise Agreement.[12]

Australian Nuclear Science and Technology Organisation (ANSTO)

Reporting requirements

2.15      The committee considers that ANSTO has met its reporting requirements under section 63 of the Public Service Act 1999 and section 9 of the CAC Act.

Operational Matters

2.16      ANSTO is the custodian of nuclear knowledge and expertise in Australia and operates OPAL, Australia's only research reactor.

2.17      The annual report outlines changes to the board of ANSTO, including the appointment of a new Chairman, Professor Paul Greenfield AO who takes over from Dr Zygmunt (Ziggy) Switkowski.

2.18      According to the annual report, following the March 2011 earthquake and tsunami in Japan, ANSTO supported the government by providing technical information and advice to the Interdepartmental Emergency Task Force, chaired by the Department of Foreign Affairs and Trade.[13]

2.19      Nuclear technology is being used in early research to shed light on early cultural connectivity across Eurasia by investigating sites in northwest China. ANSTO is applying isotopic methods and atomic mass-spectrometry with radiocarbon dating to archaeological remains from Bronze Age sites to better understand cereal cultivation, animal husbandry and metal-work technology.[14]

Australian Research Council (ARC)

Reporting requirements

2.20      The committee considers that ARC has met its reporting requirements under section 63 of the Public Service Act 1999, the Financial Management and Accountability Act 1997 (FMA Act) and the Australian Research Council Act 2001 (ARC Act).

Operational matters

2.21      The committee notes the observations of the ANAO Audit Report, which stipulates that the ARC has recently become aware:

...there is an increased risk of non-compliance with section 83 of the Constitution where payments made from special appropriations and special accounts in circumstances where the payments do not accord with conditions included in the [ARC Act].[15]

2.22      The report also noted that the ARC has advised that these circumstances will be investigated.

2.23      In 2010–2011 the first national stocktake of the quality of research at Australian universities was completed, under the Excellence in Research for Australia (ERA) initiative. The findings are informing research policy and will be incorporated into the funding formula for the Sustainable Research Excellence in Universities program.[16]

2.24      In February 2011, the commencement of operations of the Australian Research Integrity Committee (ARIC) was announced. It is jointly administered by the ARC and the National Health and Medical Research Council (NHMRC) and will play an important role in reviewing the internal processes for research misconduct at institutions.[17]

The Commonwealth Scientific and Industrial Research Organisation (CSIRO)

Reporting requirements

2.25      The committee considers that the CSIRO has met its reporting requirements under section 63 of the Public Service Act 1999, section 9 of the CAC Act and the Science and Research Industry Act 1949.

Operational Matters

2.26      According to the annual report, Boeing named CSIRO its Global Research and Development 'Supplier of the Year' in May 2011. The award recognises a 22 year relationship that has seen CSIRO and Boeing jointly invest in projects such as world-leading technological innovations in aircraft repainting methods, sustainable aviation fuels and aircraft assembly processes.[18]

Department of Innovation, Industry, Science and Research (DIISR); includes IP Australia

Reporting requirements

2.27      The committee considers that DIISR has met its reporting requirements under section 63 of the Public Service Act 1999 and the FMA Act.

Operational Matters

2.28      The committee notes the observations of the ANAO Audit Report, which stipulates that both DIISR and IP Australia have recently become aware:

...there is an increased risk of non-compliance with section 83 of the Constitution where payments made from special appropriations and special accounts in circumstances where the payments do not accord with conditions included in the relevant legislation.[19]

2.10    The report also noted that DIISR and IP Australia has advised that these circumstances will be investigated.

2.29      According to the annual report Questacon was awarded the 2010 Canberra and Capital Region Tourism Award in the Tourist Attraction Category in December 2010.[20]

2.30      Professor Penny Sackett stepped down as Chief Scientist on 4 March 2011. Her successor, Professor Ian Chubb AC was appointed as the Chief Scientist on 19 April 2011 and commenced his three-year term on 23 May 2011.[21]

2.31      Other highlights include the extension of the Small Business Support Line (SBSL), which provides a single point of contact for small businesses to access information and referral services. The SBSL has received over 31,000 calls since it was launched in September 2009.[22]

2.32      The department announced the first round of funding for the Collaborative Research Network (CRN) program, which encourages smaller, less research-intensive, and regional higher education institutions to develop their research capacity by collaborating with other institutions in areas of common interests.[23]

2.33      Highlights for IP Australia include the launch of the Dream Shield Project in November 2011, which features success stories and tips for Aboriginal inventors, designers and business owners,[24] and the completion of the Advisory Council on Intellectual Property's (ACIP) report on Patentable Subject Matter.[25]

Reports under the Resources, Energy and Tourism portfolio

Australian Solar Institute (ASI)

Reporting requirements

2.34      The committee considers that ASI has mostly met its reporting requirements under section 63 of the Public Service Act 1999 and section 9 of the CAC Act.

2.35      The committee notes that the annual report of the ASI did not contain a Compliance Index and did not include a section detailing Freedom of Information (FOI) requests as outlined in the Prime Minister and Cabinet's (PM&C) Requirements for Departmental Annual Reports[26] and approved by the Joint Committee of Public Accounts and Audit (JCPAA).

Recommendation 2

2.36      The committee recommends that the Australian Solar Institute include a Compliance Index in their 2011-2012 annual report and a list of Freedom of Information requests, as outlined in the Prime Minister and Cabinet's Requirements for Departmental Annual Reports.

Operational matters

2.37      The one year anniversary of the ASI was marked on 10 August 2010.

2.38      In November 2010, the US-Australia Solar Energy Collaboration was announced by the Prime Minister, Julia Gillard and U.S. Secretary of State, Hillary Clinton. This collaboration aims to accelerate the reduction in costs for solar energy technologies.[27]

2.39      A memorandum of understanding was signed in March 2011 between ASI and the Deutches Zentrum für Luft–und Raumfahrt (DLR), a leading European Research body located in Germany, to develop concentrated solar power (CSP) technologies.[28]

Department of Resources, Energy and Tourism (DRET)

Reporting requirements

2.40      The committee considers that DRET and Geoscience Australia have met its reporting requirements under section 63 of the Public Service Act 1999 and the FMA Act. The committee commends DRET on an outstanding report.

2.1        DRET's annual report also includes the annual report of Geoscience Australia, a prescribed agency within the portfolio.

Operational matters

2.41      Since the publication of the 2010–11 Portfolio Budget Statements DRET assumed responsibility for the Smart Grid, Smart Cities program from the Department of Climate Change and Energy Efficiency.

2.42      DRET implemented three significant changes to their operations during the year:

2.43      Other highlights of DRET's year include the launch of the National Carbon Capture and Storage Council; the development of Carbon Capture and Storage Flagships program; the announcement of two solar flagship projects in Queensland and New South Wales; the launch of the Renewable Energy Venture Capital Fund; strengthening of the bilateral engagement with China through the memorandum of understanding on resource cooperation, the Australia-China Joint Coordination Group on Clean Coal Technology; and a new memorandum of understanding on strengthening tourism cooperation with China, Australia's leading tourism market by value. In June 2011 DRET hosted the Australia-China Tourism Summit in Cairns.

2.44      A highlight for Geoscience Australia was the completion of the five-year Energy Security Program, to promote investment in the energy and resource sectors.

National Offshore Petroleum Safety Authority (NOPSA)[29]

Reporting Requirements

2.45      The committee considers that NOPSA has met its reporting requirements under the FMA Act and the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

2.46      NOPSA's report also contains the annual report of the NOPSA Advisory Board, which provides advice and recommendations to the Chief Executive Officer (CEO) of NOPSA on operational policies and strategies.

Operational matters

2.47      The ANAO report has stated that NOPSA has recently become aware that:

...there is an increased risk of a breach of section 83 of the Constitution where payments made from special appropriations and special accounts in circumstances where the payments do not accord with conditions included in the relevant legislation.

2.48      The report also noted that NOPSA has advised that these circumstances will be investigated.

2.49      With the release of the Government's Final Response to the Report of the Montara Commission of Inquiry, 102 recommendations were made, giving rise to a number of legislative amendments affecting the offshore oil and gas industry.

2.50      NOPSA also took on the responsibility for the regulation of wells and well-related activities under the Offshore Petroleum and Greenhouse Gas Storage (Resource Management and Administration) Regulations 2011 on 29 April 2011.

2.51      The committee commends NOPSA for including their Key Performance Indicators, information relating to occupational health and safety issues and FOI statistics.

Reports under the Treasury portfolio

Auditing and Assurance Standards Board (AUASB)

Reporting requirements

2.52      The committee considers that AUASB has met its reporting requirements under section 63 of the Public Service Act 1999, the ASIC Act and the FMA Act.

2.53      The committee notes the absence of a Compliance Index.

2.54      This annual report may also be subject to review by the Parliamentary Joint Committee on Corporations and Financial Services (PJC).

Operational matters

2.55      The AUASB continues to liaise with the Department of Climate Change and Energy Efficiency regarding the development of audit requirements for reports prepared under the Clean Energy Scheme and National Greenhouse and Energy Reporting Act 2007 (NGER Act).[30]

2.56      The Chairman and Executive Director attended the National Standard Setters Meeting in Toronto, where delegates from 16 countries met to discuss international audit and assurance standard setting issues.[31]

2.57      The AUASB released the ASA 2011–1 Amendments to Australian Auditing Standards in June 2011.[32]

Australian Accounting Standards Board (AASB)

Reporting requirements

2.58      The committee considers that AASB has met its reporting requirements under section 63 of the Public Service Act 1999, the ASIC Act and the FMA Act.

2.59      The committee notes the absence of a Compliance Index.

2.60      This annual report may also be subject to review by the Parliamentary Joint Committee on Corporations and Financial Services (PJC).

Operational matters

2.61      Highlights of AASB's financial year include the issuance of 11 new and amending standards; 17 exposure drafts and discussion papers; 14 formal submissions to the International Accounting Standards Board (IASB) and International Public Sector Accounting Standards Board (IPSASB); and the organisation of several public roundtable discussions, which were presented to outside groups on more than 20 occasions.[33]

Australian Bureau of Statistics (ABS)

Reporting requirements

2.62      The committee considers that the ABS has met its reporting requirements under section 63 of the Public Service Act 1999 and the FMA Act. The committee commends the ABS on an outstanding report.

Operational matters

2.63      At the time of reporting, the ABS was preparing for the 16th Census of Population and Housing (Census) held on Tuesday 9 August 2011.[34]

2.64      The ABS adopted a new strategic direction of transforming the management of key statistical information in Australia to improve the usability, value and timeliness of official statistics.[35]

2.65      The ABS hosted the NatStats 2010 Conference in Sydney from 15–17 September 2010. The theme was 'Measuring what counts: economic development, wellbeing and progress in 21st century Australia'.[36]

2.66      A review in to the Consumer Price Index (CPI) was also completed with the conclusion that the primary purpose of the CPI will remain as a measure of household inflation. From September 2011, changes will, however, be made to the measurement of financial services and seasonally adjusted estimates of the CPI will also be produced.[37]

Australian Reinsurance Pool Corporation (ARPC)

Reporting requirements

2.67      The committee considers that ARPC has met its reporting requirements under section 63 of the Public Service Act 1999 and section 9 of the CAC Act.

Operational matters

2.68      Mr David Matcham joined the Corporation at the end of the first quarter as the new CEO.[38]

2.69      ARPC's operating result for the financial year was $61.386 million and reflects a 15.4 per cent increase over the previous year.[39]

2.70      The gross written premium for the financial year was $112.555 million, which represents a 7.3 per cent increase on last year.[40]

Australian Securities and Investments Commission

Reporting requirements

2.71      The committee considers that ASIC has mostly met its reporting requirements under section 63 of the Public Service Act 1999, the Australian Securities and Investments Commission Act 2001 (ASIC Act) and the FMA Act.

2.72      The committee notes that ASIC did not provide details of ecologically sustainable development and environmental performance[41] as per the JCPAA and PM&C guidelines.[42]

2.73      The committee also notes that ASIC did not provide a Compliance Index.

Recommendation 3

2.74      The committee recommends that in their next annual report, ASIC detail their compliance under Section 516A of the Environment Protection and Biodiversity Conservation Act 1999, as outlined in the Requirements for Annual Reports, published by the Department of Prime Minister and Cabinet and approved by the Joint Parliamentary Committee on Public Accounts and Audit in July 2011.

Operational Matters

2.75      Mr Tony D’Aloisio, Chairman of ASIC, left in May 2011. Mr Greg Medcraft has been appointed as the new Chairman.[43]

2.76      Highlights of ASIC’s year include the donation of $85,786 to 27 not-for-profit organisations by employees, directly from their salary or pay.[44]

2.77      ASIC also concluded negotiations for a new three-year enterprise agreement. Staff will receive 9 per cent in salary increases over the life of the three-year agreement, beginning with 3 per cent from July 2011, and then 3 per cent in July 2012 and July 2013.[45]

Commonwealth Grants Commission (CGC)

Reporting requirements

2.78      The committee considers that the CGC has met its reporting requirements under section 63 of the Public Service Act 1999 and the Commonwealth Grants Commission Act 2003.

Operational matters

2.79      In 2010-2011, the 'commission's outcome was fiscal equalisation'.[46] Outputs relating to this outcome were:

2.80      The commission has also provided responses to questions asked about its methods by the review panel and its secretariat, in an effort to be more transparent. These responses are available on the CGC website at the following URL: http://www.cgc.gov.au/gst_distribution_review/presentation_on_the_work_of_the_commission.[48]

Companies Auditors and Liquidators Disciplinary Board (CALDB)

Reporting requirements

2.81      The committee considers that CALDB has met its reporting requirements under section 63 of the Public Service Act 1999 and the ASIC Act.

2.82      This annual report may also be subject to review by the Parliamentary Joint Committee on Corporations and Financial Services (PJC).

Operational matters

2.83      During the reporting year, the Chairman of the Board, Donald Magarey retired and Howard Insall SC was appointed for a period of three years.[49]

2.84      At the commencement of the reporting period, no extant matters were to be heard. In the final quarter of the reporting year, two conduct matters and one administrative matter were referred to the Board.[50]

2.85      The committee notes that CALDB appears to be significantly underutilised by ASIC and APRA and matters referred to the Board have dramatically declined.[51]

Table 2: Breakdown of number of cases before CALDB

Table 2: Breakdown of number of cases before CALDB
Source: CALDB, Annual Report 2010–2011, p. 14

Financial Reporting Council (FRC)

Reporting requirements

2.86      The committee considers that the FRC has met its reporting requirements under section 63 of the Public Service Act 1999, the ASIC Act and the FMA Act.

2.87      This annual report may also be subject to review by the Parliamentary Joint Committee on Corporations and Financial Services (PJC).

Operational matters

2.88      A new Chair, Ms Lynne Wood, has been appointed to the FRC in March 2011.

2.89      Members agreed on a new three year strategic plan. The Strategic Plan 2011-2014 was agreed to at the Council's meeting on 18 April 2011.[52]

2.90      As part of this strategic plan, the Council has identified a number of key projects which will form the focus of the FRC's activities. As a result, members will be working with the wider financial reporting community and will seek to improve the Council's relevance and position in Australia and overseas.[53]

Financial Reporting Panel (FRP)

Reporting requirements

2.91      The committee considers that the FRP has met its reporting requirements under section 63 of the Public Service Act 1999, the ASIC Act and the FMA Act.

2.92      This annual report may also be subject to review by the Parliamentary Joint Committee on Corporations and Financial Services (PJC).

Operational matters

2.93      The annual report does not contain a breakdown of monies spent per matter referred to the Panel. The committee also notes that the Panel overspent for 2010-2011, ending the financial year with a $64,381 deficit.

2.94      The committee notes that the government has decided to disband the Panel and would like to thank its members for their contributions to financial services regulation.

Inspector-General of Taxation (IGT)

Reporting requirements

2.95      The committee considers that the IGT has met its reporting requirements under section 63 of the Public Service Act 1999, the Inspector-General of Taxation Act 2003 and the FMA Act.

Operational matters

2.96      At the time of reporting the office had completed five out of their seven inquiries and the final two were nearing completion.[54]

2.97      Four reports have been publicly released by the Assistant Treasurer. These are as follows:[55]

National Competition Council (NCC)

Reporting requirements

2.98      The committee considers that the NCC has met its reporting requirements under section 63 of the Public Service Act 1999 and the FMA Act. However, the committee notes that the NCC does not stipulate their reporting obligations under the FMA Act in the Letter of Transmittal, or in the ‘Annual reporting requirements and aids to access’ section of the annual report.[56]

Operational matters

2.99      An important development during the year for the Council was the Full Court of the Federal Court of Australia’s judgement on various review proceedings relating to the Tribunal’s decisions on the declaration of the Hamersley and Robe River Railways operated by Rio Tinto (Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal).[57]

2.100         The contested issue related to subsection 44G(2), criterion (b) of the Competition and Consumer Act 2010 (CCA) that addresses whether it is uneconomical for anyone to develop another facility to provide the service for which declaration is sought. The Tribunal held that it was uneconomical.[58]

2.101         The NCC emphasised in their report that the Full Court’s decision, delivered on 4 May 2011, contrasts with and overturns the approach taken to relevant matters by the NCC decision-making Ministers and the Tribunal and they believe this will have significant impact on decision making under state and territory access regimes.[59]

Productivity Commission (PC)

Reporting requirements

2.102         The committee considers that the PC has met its reporting requirements under section 63 of the Public Service Act 1999, section 10 of the Productivity Commission Act 1998 and the FMA Act.

2.103         The committee commends the Productivity Commission for including their Senate Estimates appearances in the External Analysis section of the annual report.[60]

Operational matters

2.104         The Commission had seven public inquiries and nine commissioned research studies underway at some time during the reporting period. In addition to completing nine references from the previous year, it received seven new projects.[61]

2.105         Three new inquiries commenced in 2010–2011:

2.106         The Australian Government Competitive Neutrality Complaints Office (AGCNCO), a separate unit within the Commission, received six formal complaints during the reporting period. The AGCNCO administers the Australian Government's competitive neutrality complaints mechanism.[63]

Reserve Bank of Australia (RBA)

Reporting requirements

2.107         The committee considers that the RBA has met its reporting requirements under section 63 of the Public Service Act 1999 and the CAC Act.

2.108         However, the committee notes that the Reserve Bank did not include a Compliance Index.

2.109         The committee notes that the RBA did not provide details of ecologically sustainable development and environmental performance[64] as per the JCPAA and PM&C guidelines.

Recommendation 4

2.110         The committee recommends that in their next annual report, the RBA detail their compliance under Section 516A of the Environment Protection and Biodiversity Conservation Act 1999, as outlined in the Requirements for Annual Reports, published by the Department of Prime Minister and Cabinet and approved by the Joint Parliamentary Committee on Public Accounts and Audit in July 2011.

Operational matters

2.111         The annual report states that the 2010–2011 financial year was less unusual when compared with the previous two or three years due to more stability in Australia's monetary policies.[65]

2.112         Due to the high Australian dollar, the Reserve Bank reports a $4.9 billion overall valuation loss on its assets, which was absorbed by the Reserve Bank Reserve Fund (RBRF).[66]

2.113         Highlights of the RBA's year include increasing international engagement, particularly in groups seeking to implement international regulatory reform. These groups include the Financial Stability Board, the G20 and various committees at the Bank for International Settlements.[67]

Superannuation Complaints Tribunal

Reporting requirements

2.114         The committee considers that the Superannuation Complaints Tribunal has met its reporting requirements under section 63 of the Public Service Act 1999 and section 67 of the Superannuation (Resolution of Complaints) Act 1993.

Operational matters

2.115         The Tribunal implemented the recommendations of an independent 2009 review into the Tribunal's operations.[68]

2.116         Other milestones for the year include:

Takeovers Panel

Reporting requirements

2.117         The committee considers that the Takeovers Panel has met its reporting requirements under the ASIC Act.

Operational matters

2.118         A new President was appointed to the Board in September 2010, Ms Kathleen Farrell, replacing her predecessor Mr Simon McKeon.[70]

2.119         The Panel has had a busy year with 28 applications, many of which have been time consuming, involving issues relating to association. Two of the matters were subject to judicial review.[71]

Senator Mark Bishop
Chair

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