Chapter 2
Individual 2010–2011 Annual Reports
Reports under the Industry, Innovation, Science, Research and Tertiary
Education portfolio
Australian National University
– annual report 2011
Reporting requirements
1.2
For the reasons outlined in Chapter 1, this is the first time that the
committee is covering an annual report by the ANU. The committee considers that
the ANU has met its reporting requirements under the Acts.
1.3
The committee suggests that a compliance index be added to ANU’s annual
report for easier reference and scrutiny.
Operational matters
1.4
In its annual report the ANU recorded a number of significant
achievements including: the development of a new
strategic plan - ANU by 2020; and a new partnership with the government
in public policy, delivering a number of training courses for members of the
public service. Most notably, ANU astronomer, Professor Schmidt, was awarded
the Nobel Prize in Physics.
1.5
The ANU also conducted a major staff survey, which showed positive
results and staff satisfaction above the national average, and opened new
accommodation facilities. It also established the position of Pro
Vice-Chancellor for the first time in its history.
IIF Investments Pty Limited –
annual report 2010–11
Reporting requirements
1.6
The committee considers that the company has met the overall
requirements under the Corporations Act 2001 and the CAC Act.
1.7
The annual report does not contain a compliance index, which was also
the case with the report for 2009–10, as previously noted. A compliance index
would be a useful addition given that the company is required to comply with
two separate acts, and would make the report easier to navigate.
1.8
The report states that the company had paid a premium to indemnify all
directors, former directors and the secretary of the IIF companies, but it is
not clear whether the six directors listed are all the directors that the
company has had. As well as the amounts and premiums, the report should include
names of the officers indemnified and the nature of liability.
Operational matters
1.9
Following the voluntary deregistration of IIF Foundation Pty Ltd by ASIC
in June 2011, IIF Investments Pty Ltd is the only remaining IIF Company, fully
owned by the government. The company is tasked with promoting the development
of an Australian venture capital market for early stage, technology-based
companies commercialising research and development.
1.10
It invests in five Innovation Investment Funds and four Pre-Seed Funds
set up as unit trusts, as well as in CVC REEF Limited which is licensed under
the REEF program – their performance is covered in Innovation Australia’s
annual report. The government provides funding to the company on the basis of
interest-free, limited recourse loans, with repayments required to the extent
that the company received distributions from its investments. It does not have
any employees and is supported with operational support services by DIISRTE.
1.11
To date four of the five original companies have been voluntarily
deregistered – three in June 2010, and one in June 2011. The annual report
states that it is unlikely that the remaining company will be wound up due to
possible unintended consequences that such an action could have, including tax
liability implications.
Innovation Australia – annual
report 2010–11
Reporting requirements
1.12
The committee considers that Innovation Australia has met its reporting
requirements under the Act.
1.13
The committee notes that there is no date on the letter of transmittal,
which was also the case in the annual report examined for 2009–10. The letter
should be dated in full, on the day the signatory approves the final text of
the report for printing.
Operational matters
1.14
Collaboration between businesses, universities and publicly funded
research agencies has been a focus for Innovation Australia during this year.
It hosted the Powering Productivity through Innovation showcase in
Melbourne in 2011. It also established the Innovation Performance sub-committee
to examine linkages between innovation and productivity.
1.15
Innovation Australia's Re-tooling for Climate Change program
funded 21 new projects, including water capture, recycling and filtration
projects, and the application of energy efficient technologies. This year saw
the closure of the Green Car Innovation Fund, and the Commercialising Emerging
Technologies program.
Reports under the Resources, Energy and Tourism portfolio
Australian Centre for Renewable
Energy (ACRE) Board – annual report 2010–11
Reporting requirements
1.16
The committee considers that the ACRE Board has largely met its
reporting requirements under the ACRE Act. However, it would be useful to
include more information relating to the Board’s accountability, as well as a
statement on any written directions received from the Minister, as specified
under subsection 25(2) of the Act.
1.17
The committee notes that the letter of transmittal lacks a full date.
1.18
A correction to the 2009–10 annual report is mentioned on page 20.
Operational matters
1.19
The ACRE Board is an independent advisory body. Its key function is to
develop and manage new programs and strategies for renewable energy sectors,
and to collaborate with state and territory governments to develop strategies
for stimulating investment in renewable energy technologies. It hosted two
state and territory meetings in 2010–11, held 14 Board meetings and
participated in over 20 domestic and international events.
1.20
The annual report lists a range of achievements including: the release
of ACRE's Strategic Directions; the development of a Geothermal Directions
paper; contributing to the formation of the Emerging Renewables Program; and
advising the government to merge ACRE's available funding with new funding for
renewable energy technologies and programs in 2011.
1.21
One of the measures that came with the announcement of the government's
Clean Energy Future package was the establishment of ARENA, consolidating $3.2
billion in support for renewable energy technology which was administered by
ACRE, the Australian Solar Institute and DRET. The ACRE Board committed to
assist with the transition of its programs and initiatives to ARENA.
Tourism Australia – annual report
2010–11
Reporting requirements
1.22
The committee considers that Tourism Australia has broadly met its
reporting requirements under the Acts. The committee commends it for including
a compliance index in the report.
1.23
The committee suggests that a more explicit reference be added to
disability reporting mechanisms, noting where this information can be found.
Due to the nature of its operations, the committee also suggests that Tourism
Australia add a statement referring to the funding of its marketing and
advertising campaigns.
Operational matters
1.24
Tourism Australia’s campaign called There’s Nothing Like Australia was
launched at the Australian Tourism Exchange in Adelaide in May 2010, and
another such event was held in Sydney in 2011. Tourism Australia participated
in 31 international trade shows and travel markets. It worked with Parks
Australia to manage the flagship Australia’s National Landscapes program, and
participated in the Resilience Working Group as part of the National Long-Term
Tourism Strategy. It invested in branded content, with the key projects being
four short films called Making Tracks and two short films called Trip in a
Minute, created from a partnership with YouTube. Tourism Australia prepared for
the first Australian Tourism Directions Conference held in November 2010 in
Canberra.
1.25
In 2010–11 tourism still faced challenges due to the global economic
situation and a high dollar, with declines in visits from traditional
strongholds such as the UK and the USA. However, it recorded growth in arrivals
from key Asian markets, especially China. Overall, there was an increase of 3%
in international visitors at year end, and a 4% increase in domestic overnight
trips. Tourism Australia has a long term strategy, 2020 Tourism Industry
Potential, with the goal to increase the value of overnight expenditure, and in
June 2011 it launched its China 2020 Strategic Plan. It has also set up the
Aviation Development Fund.
1.26
This was Mr Geoff Dixon’s first year as Chairman of the Tourism
Australia Board. The committee thanks Tourism Australia for its appearance at
estimates.
Reports under the Treasury portfolio
Department of the Treasury – annual
report 2010–11
Reporting requirements
1.27
The committee considers that the Treasury has met its reporting
requirements under the Acts and commends it for a well-structured report.
1.28
Although the report was not tabled in the Senate until 1 November, it
was tabled in the House of Representatives on 31 October and therefore technically
meets the requirement for timeliness.
Operational matters
1.29
Achievements in this financial year include the release of the
Pre-Election Economic and Fiscal Outlook report, assisting the government in
delivering the MYEFO and the Budget. The Treasury contributed to the
development of the Clean Energy Future package; prepared the Strong Growth,
Low Pollution: Modelling a Carbon Price report; assisted in the delivering
the package of measures in response to the natural disasters in the region; and
worked on the G20 and the Financial Stability Board. It established a secretariat
to support the GST Distribution Review, and worked to assist the planned
Parliamentary Budget Office in its operations. It advised on, and implemented
legislation for, the first stage of not-for-profit sector reforms and the
Stronger Super reforms; implemented reforms for the Competitive and Sustainable
Banking package; and provided secretariat services and policy advice to the
Policy Transition Group responsible for the design of the Minerals Resource
Rent Tax and the extension to the Petroleum Resource Rent Tax, as well as
released draft legislation and explanatory materials for the MRRT for public
consultation. It was also focused on the delivery of its Standard Business
Reporting initiative. It assisted with the transfer of responsibility for the
supervision of domestic licensed financial markets from the Australian
Securities Exchange to ASIC and the granting of a licence to a new market
operator.
1.30
The Treasury received an unqualified audit report on its financial
statements. The Treasury noted that several payments were made in error to
states and territories and were subsequently recovered.
1.31
In this year, the Treasury completed 9 internal audits and reviews,
relating to goods and services tax processes, fringe benefits tax processes,
network user access management, risk management, business continuity
arrangements, credit card arrangements, and compliance with the Information
Publication Scheme.
1.32
The committee would like to express its appreciation to the Treasury for
appearing before this committee alone 13 times in this financial year,
including estimates, as well as other parliamentary committees.
Australian Competition and Consumer
Commission and the Australian Energy Regulator – annual report 2010–11
Reporting requirements
1.33
The committee considers that the ACCC and AER have met their reporting
requirements under the Acts.
1.34
The annual report includes a correction to the 2009–10 report.
Operational matters
1.35
In 2010-11 the Trade Practices Act 1974 became the Competition and
Consumer Act 2010 incorporating the Australian Consumer Law. It is a set of
legislation enacted across the country. From April 2010 it gave the ACCC
additional powers: to obtain redress on behalf of consumers; to issue
infringement, public warning and substantiation notices; and to seek civil
pecuniary penalties. The ACCC used all of these in this financial year. It
issued 48 infringement notices, received penalties of almost $300,000 and saw
penalties of $4.7 million imposed for a range of serious breaches, most notably
for product safety labelling standards and misleading conduct in the marketing
of mobile premium services. Following the new provisions, the ACCC held
seminars and issued guidelines to make businesses aware of their new
obligations, and released consumer education material. In addition, the ACCC
has been reviewing standard contract terms in industries with high levels of
consumer complaints. The ACCC also provided advice to the government on the
National Broadband Network. International collaboration includes investigation
of cartel activity in air cargo and the marketing of fine paper products, and
chairing a new OECD Product Safety Working Party.
1.36
The ACCC received an unqualified audit report on its 2010-11 financial
statements. It had an operating loss of $9.3 million, compared to a surplus of
$1.4 million in the previous year.
1.37
This was the ACCC’s last year under the chairmanship of Mr Graeme
Samuel. The committee would like to thank the ACCC for its appearance at
estimates, and evidence it provided to committee inquiries into competition in
the banking sector, the impacts of supermarket price decisions on the dairy
industry, and the proposed Metcash-Franklins acquisition.
1.38
AER is part of the ACCC and regulates the national energy market. In
2010-11 it released determinations for the electricity distribution networks in
Victoria and gas distribution networks in Queensland and South Australia, and
undertook preparations to assume additional responsibilities in 2012 under the
new National Energy Retail Law.
Australian Office of Financial
Management – annual report 2010–11
Reporting requirements
1.39
The committee considers that the AOFM has met its reporting requirements
under the Acts.
1.40
The committee suggests that future compliance indices contain a nil
return entry where the information is not applicable to AOFM, and follow the
order prescribed by the PM&C guidelines.
Operational matters
1.41
In managing the government’s debt portfolio, the AOFM seeks to minimise
debt servicing costs over the medium-term at an acceptable level of risk, and
to facilitate the issuance of debt and manage the refinancing risk. In this
year, the AOFM modified the mix of long and short bond issuance in response to
market conditions. Four new Treasury Bond lines were launched, with future
maturity dates falling on either 21 January, 21 April, 21 July or 21 October,
to coincide with large Commonwealth revenue collections. The residential
mortgage-backed securities program was extended in December 2010 as part of the
Competitive and Sustainable Banking System package. The AOFM received
directions to invest an additional $4 billion in RMBS. The volume of
transactions supported by the AOFM rose significantly this financial year, as
did the volume of those not supported. This year, the larger than expected budget
financing task was partly managed by increased issuance of Treasury Notes. The
AOFM recorded an operating surplus on agency activities.
1.42
Mr Neil Hyden retired as CEO in November 2010, and Mr Rob Nicholl was
appointed in this role.
Australian Prudential Regulation
Authority – annual report 2011
Reporting requirements
1.43
The committee considers that APRA has met its requirements under the
Acts.
1.44
APRA's report was not tabled until 4 November 2011.
Operational matters
1.45
APRA is the prudential regulator of the financial services industry. It
also acts as a national statistical agency for the financial sector, and is
largely funded by the industries that it supervises.
1.46
In its annual report, APRA outlines its supervisory role against the
background of the GFC and the current instability in Europe. In its report,
APRA describes its supervisory approach as formed by the global reform elements
that came out of the G-20 Seoul Summit in November 2010. The strategic review
was completed in April 2011 and set the foundation for progressive improvement
of APRA’s supervisory framework over the next few years. This year, APRA
increased its engagement with boards on matters such as risk appetite,
remuneration and credit standards in housing lending. APRA conducted a stakeholder
survey with overall positive results. It hosted some 100 international
delegations from regulatory agencies, central banks, industry bodies and
private sector, as well as workshops on liquidity management and risk-based
supervision of pension funds. It maintained its involvement in global reform
initiatives, and continues its participation in the Basel Committee on Banking
Supervision. It released proposals for implementing the
Basel III capital reforms in Australia.
1.47
The committee expresses its appreciation to APRA for its appearances
before, and submissions to, parliamentary committees.
Australian Statistics Advisory
Council – annual report 2010–11
Reporting requirements
1.48
The committee considers that ASAC has met its reporting requirements
under the Act.
Operational matters
1.49
ASAC provides advice to the Minister and the Australian Statistician in
relation to the collection and dissemination of official statistics provided
for public purposes. It supports the activities of the Australian Bureau of
Statistics from which it receives secretariat services. Its operational costs
are met from within the ABS budget.
1.50
The Council met twice in this financial year and had a number of changes
to its membership. It was involved in the 2010 NatStats Conference in Sydney
and will continue to review the progress of the ABS in relation to the
recommendations made at this event. The Council agreed to promote e-Census, and
looked at the 2011 Census of Population and Housing, which marked the centenary
of national censuses. It encouraged ABS’s involvement in new collaborative
international statistical projects, and in working with the COAG Reform
Council. ASAC planned a high-level workshop held in August 2011 in conjunction
with the Reform Council with the aim of examining opportunities to improve the
national statistical system.
Commissioner of Taxation (ATO) –
annual report 2010–11
Reporting requirements
1.51
The committee considers that the ATO has met its reporting requirements
under the Acts. The report includes information on the operations of the
Australian Valuation Office. The committee commends the ATO for a
well-structured report.
1.52
The committee suggests that the ATO add a reference to the Information
Publication Scheme (IPS) under the section relating to the Freedom of Information.
1.53
The report includes corrections to annual reports from previous years.
Operational matters
1.54
The report relates to the administration of the wide range of laws
entrusted to the ATO, including revenue laws, the Australian Business Register,
and aspects of superannuation. Highlights include the implementation of new
laws such as the flood levy, and helping to reunite 1.2 million people with
their superannuation. The ATO’s input to law design included work on the
minerals resource rent tax, extended petroleum resource rent tax, and phoenix
legislative measures. The ATO finalised arrangements for the provision of
centralised computing services, reviewed the operations of its committees, and
enhanced its risk framework approach. It developed a new online presentation
called 100 people, using data to better inform the community. The ATO
delivered Tax Time 2010, the first peak processing period using the new income
tax return processing system, and released new online tools to help people
determine their tax requirements.
1.55
Revenue collections were 4.5% below the federal budget forecast, largely
due to economic conditions. According to independent surveys, there was an
overall dip in community satisfaction and a lower level of confidence in the
ATO’s administration of superannuation. In response, the ATO conducted a review
of its service delivery. The ATO met its performance commitment benchmarks to
the community on 22 of 27 service standards.
1.56
The majority of the ATO’s employees voted against the new enterprise
agreement proposal. In addition, the ATO had 29 substantiated whistle-blowing
reports and a number of investigations of fraud or misconduct by staff.
1.57
The ATO received recognition at the AusCERT conference for its focus on
fraud and unusual cyber-crime. It also sponsored National Youth Week 2011 and
continued its workplace giving program.
1.58
During this financial year, the ATO celebrated its centenary. The
committee congratulates it, and also expresses appreciation for its appearance
before its three inquiries and at estimates.
1.59
The Australian Valuation Office is the ATO’s only commercial business
line, providing independent and fee-competitive valuation services to
government organisations, the majority of which are of land and buildings.
Corporations and Markets Advisory
Committee – annual report 2010–11
Reporting requirements
1.60
The committee considers that CAMAC has met its reporting requirements
under the Acts, and commends it for a clearly presented report.
1.61
This annual report may also be subject to review by the Parliamentary
Joint Committee on Corporations and Financial Services (PJC) in its report on Annual
reports, pursuant to Part 14, subsection 243(b) of the Australian
Securities and Investments Commission Act 2001 (the ASIC Act) by which this
committee was established.
Operational matters
1.62
CAMAC undertakes reviews, resulting in the presentation and publication
of reports, and responds to the Minister’s requests for advice in relation to
corporations and financial services law, administration and practice. It receives
administrative support from ASIC.
1.63
In 2011, CAMAC published two policy documents, responding to requests
for advice from the government: a report on executive remuneration, following
on from the Productivity Commission’s report; and a wide-ranging discussion
paper on managed investment schemes. It also began work on reports on managed
investment schemes and the definition of derivatives.
1.64
During the year CAMAC introduced a system of sub-committees for each of
its current terms of reference.
Foreign Investment Review Board –
annual report 2010–11
Reporting requirements
1.65
The FIRB annual reports are not statutorily mandated, but provide
information on the operation of Australia’s foreign investment review
arrangements.
Operational matters
1.66
FIRB has exclusively advisory functions. It receives secretariat
services from the Treasury. Its annual report outlines the activities of the
Board, provides a summary of foreign investment proposals, and an overview of
the main provisions of the Foreign Acquisitions and Takeovers Act 1975.
1.67
In its report, the Board describes the most significant case brought
before it in recent years – the proposed takeover of the Australian Securities
Exchange by the Singapore Stock Exchange. This is the only occasion since 2001
that a business proposal was found by the Treasurer to be contrary to the
national interest. The Board undertook analysis of the proposal and its
potential ramifications, while consulting with ASIC, APRA and the RBA and,
after taking all considerations into account, recommended to the Treasurer that
the proposal not be approved.
Royal Australian Mint – annual
report 2010–11
Reporting requirements
1.68
The committee considers that the Mint has met its reporting requirements
under the Acts.
Operational matters
1.69
In addition to its regular activities as the sole producer of the
Australian circulating coin, the Mint commenced circulating coin production for
other countries. The Mint is a tourist attraction, which is the reason why it
hired new visitor guides this year. It produces and sells collector coins,
medals, awards, tokens, and jewellery which it also sells in its shop on the
premises. This year it designed several commemorative coins, among which are
those marking the centenary of International Women’s Day, and the Royal
wedding.
1.70
The Mint hosted the Mint Directors Conference in Canberra in 2010, and
created a new International Business Development Section. It initiated a
project to improve the efficiency of the supply chain from order receipt to
coin utilisation. Its focus was the implementation of improved OHS systems, and
a review of the Performance Development Scheme.
Snowy Hydro Limited – consolidated
financial report for the reporting period 4 July 2010 to 2 July 2011
Reporting requirements
1.71
Snowy Hydro Ltd is a statutory corporation. As a company limited by
shares, it is not subject to the PM&C requirements for annual reports. Its
annual report, however, does comply with the provisions of the Corporations
Act 2001. It is required to table its annual reports under the Snowy
Hydro Corporatisation Act 1997.
Operational matters
1.72
The report outlines the financial performance of Snowy Hydro Ltd over
the year, and that of its active controlled entities; Red Energy Pty Ltd,
Valley Power Pty Ltd, and various inactive subsidiaries. The consolidated
entity owns, manages and maintains the Snowy Mountains Hydro-electric Scheme,
and owns and operates power stations in Victoria, the Latrobe Valley and at
Laverton North. The report mentions the potential impact of the carbon price on
its operations, based on the government announcement from July 2011. It is
detailed in Note 32 of the financial statements.
Tax Practitioners Board – annual
report 2010–11
Reporting requirements
1.73
The committee considers that the Tax Practitioners Board has met all
requirements under the Act and commends it for a well-presented report which
also includes a compliance index.
1.74
The Board’s resources are provided by the ATO and its financial
operations reported as part of the ATO’s financial statements.
Operational matters
1.75
The Tax Practitioners Board is an independent statutory body responsible
for the registration and regulation of tax practitioners and BAS agents, and
for ensuring compliance with the Tax Agent Services Act 2009, including
the Code of Professional Conduct. It replaced state-based Tax Agents’ Boards
from 1 March 2010. This was its first full operating year, in which it
finalised a Strategic Plan for 2011–13. In 2010 the Assistant Treasurer
announced that financial planners who provide tax services would be regulated
through ASIC and the Board in the future.
1.76
In 2010–11 the Board dealt with the initial influx of new applications
for registration, as well as complaints about agents. It conducted 11
investigations in relation to potential breaches of the TASA. It implemented a
national registration system and introduced online registration. It worked to
define education eligibility criteria for applicants, issued information papers
and guidelines in consultation with stakeholders on courses that would satisfy
the educational requirements for registration, and offered a qualification
advice service in the interim. In 2010 it released an explanatory paper on
registration criteria, Fit and proper person. It made it a requirement
that all registered tax practitioners have professional indemnity (PI)
insurance cover from July 2011.
1.77
In its report, the Board said that it aimed to complete its continued
professional education (CPE) policy in 2012. It identified legislative issues
within the TASA which need to be addressed, relating to consumer protection,
coverage and the Board’s powers. It also consulted the Commonwealth Ombudsman
in implementing a complaint management strategy for its operations.
Senator Mark Bishop
Chair
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