Chapter 1
Overview
Introduction
1.1
This is the Senate Economics Legislation Committee's (the committee) first
report on annual reports in 2013. It provides an overview of the committee's examination
of annual reports for the 2011–12 financial year tabled on or before
31 October 2012, and includes an overview of one annual report for which a
formal extension was granted.
Terms of reference
1.2
Annual reports of departments and agencies are referred to Senate committees
under Senate Standing Order 25(20). The Senate Economics Legislation Committee
is responsible for the scrutiny of departments and agencies in the following
portfolios:
- Industry, Innovation, Science, Research and Tertiary Education;
- Resources, Energy and Tourism; and
-
Treasury.[1]
1.3
The structures and outcomes for each of these portfolios are summarised
in Appendices 5, 6 and 7, respectively.
1.4
Standing order 25(20)[2]
requires the committee to:
(a) examine each annual report
referred to it and report to the Senate whether the report is apparently
satisfactory;
(b) consider in more detail, and
report to the Senate on, each annual report which is not apparently
satisfactory, and on the other annual reports which it selects for more
detailed consideration;
(c) investigate and report to the
Senate on any lateness in the presentation of annual reports;
(d)
in considering an annual report,
take into account any relevant remarks about the report made in debate in the
Senate;
(e) if the committee so determines,
consider annual reports of departments and budget-related agencies in
conjunction with examination of estimates;
(f) report on annual reports tabled by
31 October each year by the tenth sitting day of the following year, and on
annual reports tabled by 30 April each year by the tenth sitting day after
30 June of that year;
(g) draw to the attention of the
Senate any significant matters relating to the operations and performance of
the bodies furnishing the annual reports; and
(h) report to the Senate each year
whether there are any bodies which do not present annual reports to the Senate
and which should present such reports.
Purpose and requirements of annual reports
1.5
Annual reports provide information on the success (or otherwise) of
departments and agencies in meeting their targets and therefore assist in
ensuring the public accountability of government departments and agencies.
Their tabling in the Parliament, and scrutiny by Senate committees, allows
Parliament to make informed judgments on the executive's performance in administering
government programs.
1.6
The requirements are set down in the following instruments:
- Departments of State and Executive Agencies present their annual
reports pursuant to sections 63(2) and 70(2) of the Public Service Act 1999,[3]
and the Department of the Prime Minister and Cabinet's (PM&C) Requirements
for Annual Reports for Departments, Executive Agencies and FMA Act Bodies,
revised 28 June 2012.
- Commonwealth authorities and companies present their annual
reports pursuant to their own enabling legislation and/or sections 9, 36 and 48
of the Commonwealth Authorities and Companies Act 1997 (CAC Act).
- For non-statutory bodies, the requirements are contained in the
Government response to the report of the Senate Standing Committee on Finance
and Public Administration on Non-statutory bodies, Senate Hansard, 8
December 1987, pp 2643–45.
1.7
The legislation governing the annual reports of various agencies and the
tabling information is shown in Appendices 1, 2 and 3.
1.8
The enabling legislation of some agencies may require that agency to
report on matters other than those included in the guidelines, or impose
different reporting requirements. The committee's view is that such agencies,
while bound by their enabling legislation, should also comply with the PM&C
guidelines, to the extent that the requirements do not conflict.
Changes to reporting requirements
1.9
This report examines the requirements released by the Department of the Prime
Minister and Cabinet, and approved by the Joint Committee of Public Accounts
and Audit. Requirements for Annual Reports for 2011–12 include significant
amendments relating to:
- consultancy reporting;
- carer recognition (applicable to public service care agencies);
- work health and safety; and
- freedom of information.[4]
1.10
Attention also needs to be given to other information to be included by
legislation, including advertising and market research and ecologically
sustainable development and environmental performance.
1.11
The specific requirement for disability reporting in individual annual
reports has been discontinued given that it occurs through other mechanisms. To
preserve the level of parliamentary scrutiny of disability issues, each report must
now include an explicit and transparent reference to other reporting
mechanisms, noting where agency level information can be found. A suggested
form of words to satisfy the requirement is set out in the PM&C Requirements
for Annual Reports released in June 2012, p. 26.
Reports referred to the committee
1.12
Under Standing Order 25(20)(f), the committee is required to report on
the annual reports of departments and agencies tabled in the Senate by 31
October each year by the tenth sitting day of the following year. This year
that date is 14 March 2013.[5]
1.13
This report examines the annual reports 2011–12 of the following 36 bodies:
Departments of State
-
Department of Industry, Innovation, Science, Research and
Tertiary Education [includes IP Australia, a prescribed non-statutory agency];
- Department of Resources, Energy and Tourism [includes Geoscience
Australia];
- Department of the Treasury;
Prescribed agencies under the FMA
Act
- Auditing and Assurance Standards Board (independent statutory
agency);
- Australian Accounting Standards Board (independent statutory
agency);
- Australian Bureau of Statistics (statutory agency);
- Australian Competition and Consumer Commission [includes the
Australian Energy Regulator] (independent statutory authority);
- Australian Office of Financial Management (non-statutory agency);
- Australian Research Council (statutory agency);
- Australian Securities and Investments Commission (statutory
agency);
- Australian Skills Quality Authority (independent statutory
agency);
- Australian Taxation Office (statutory agency);
- Commonwealth Grants Commission (statutory agency);
- Corporations and Markets Advisory Committee (statutory agency);
- Inspector-General of Taxation (statutory agency);
- National Competition Council (statutory agency);
- National Offshore Petroleum Safety and Environmental Management
Authority (statutory agency);
- Productivity Commission (statutory agency);
- Royal Australian Mint (non-statutory agency);
- Tertiary Education Quality and Standards Agency (statutory
agency);
Statutory bodies/authorities
not under the FMA Act
- Australian Statistics Advisory Council;
- Companies Auditors and Liquidators Disciplinary Board
(independent statutory body);
- Financial Reporting Council (statutory body);
- Financial Reporting Panel (independent statutory authority);
- Skills Australia (independent statutory body);
- Superannuation Complaints Tribunal;
- Tax Practitioners Board (independent statutory authority);
Non-statutory bodies
Commonwealth authorities (under the
CAC Act)
- Australian Institute of Aboriginal and Torres Strait Islander
Studies (statutory authority);
- Australian Institute of Marine Science (statutory authority);
- Australian Reinsurance Pool Corporation;
- Australian Nuclear Science and Technology Organisation;
- Commonwealth Scientific and Industrial Research Organisation
[includes Science and Industry Endowment Fund];
- Reserve Bank of Australia;
- Tourism Australia; and
Commonwealth companies (under the
CAC Act)
- Australian Solar Institute Limited (limited by guarantee).
1.14
Comments on these individual reports are contained in Chapter 2, where
reports are listed in alphabetical order under each portfolio.
1.15
Some of the aforementioned reports which are within the Treasury
portfolio may also be subject to scrutiny by the Parliamentary Joint Committee
on Corporations and Financial Services (PJC), established by Part 14 of the Australian
Securities and Investments Commission Act 2001. Section 243 specifies the
committee's duties, which include:
(b) to examine each annual report that is prepared by a body
established by this Act and of which a copy has been laid before a House, and
to report to both Houses on matters that appear in, or arise out of, that
annual report and to which, in the Parliamentary Committee's opinion, the Parliament's
attention should be directed...
1.16
In fulfilment of the committee's duties under subsection 243(b),
the PJC may report on the following 10 bodies:
- Auditing and Assurance Standards Board;
- Australian Accounting Standards Board;
- Australian Securities and Investments Commission;
- Companies Auditors and Liquidators Disciplinary Board;
- Corporations and Markets Advisory Committee;
- Financial Reporting Council;
-
Financial Reporting Panel;
-
Office of the Australian Accounting Standards Board;
- Office of the Auditing and Assurance Standards Board; and
- Takeovers Panel.
Additional reports referred to the committee
1.17
In addition to the aforementioned reports, the following reports were
also referred to the committee in the reporting period. The committee notes
that these reports are referred for information only, and the committee is not
required to report on them by the terms of the Standing Order:
-
Productivity Commission – Inquiry Report No. 57 – Economic
Regulation of Airport Services, 14 December 2011;
- Australian Government response to the Productivity Commission
Inquiry into the Economic Regulation of Airport Services;
- Productivity Commission – Inquiry Report No. 60 – Default
Superannuation Funds in Modern Awards, 5 October 2012;
- Australian Research Council – Strategic Plan 2012–13 to 2014–15;
- Reserve Bank of Australia – Payments System Board Annual Report
2012;
- Reserve Bank of Australia – Equity & Diversity Annual Report
2012;
- The Treasury – Final Budget Outcome 2011–12;
- The Treasury – Tax Expenditure Statement 2012;
- The Treasury – Mid-Year Economic and Fiscal Outlook 2012–13; and
- Department of Finance and Deregulation – Consolidated Financial
Statements for the year ended 30 June 2012.
Organisational and operational changes
1.18
In response to the changes in the machinery of government on 12 December
2011, this report also contains analysis of annual reports tabled under the
Tertiary Education and Skills portfolio, now the third outcome for the
Department of Industry, Innovation, Science, Research and Tertiary Education
(formerly the Department of Innovation, Industry, Science and Research). These include
Skills Australia, Australian Skills Quality Authority, and Tertiary Education
Quality and Standards Agency, all of which were formerly under the Education,
Employment and Workplace Relations portfolio otherwise administered by DEEWR
and scrutinised by the Senate Education, Employment and Workplace Relations Legislation
Committee.
1.19
The committee notes that this report contains examination of inaugural
annual reports of the Australian Skills Quality Authority established on 24
March 2011, and the Tertiary Education Quality and Standards Agency which
commenced operation on
31 July 2011.
1.20
Skills Australia presented its last annual report under this name, as it
transitioned to the Australian Workforce and Productivity Agency on 1 July 2012.
1.21
The Australian Renewable Energy Agency (ARENA) is a new agency under the
Resources, Energy and Tourism portfolio, established on 1 July 2012 as an
independent statutory authority under the Australian Renewable Energy Agency
Act 2011. It incorporates projects and measures previously managed by the
Australian Solar Institute, the Australian Centre for Renewable Energy Board,
and the Department of Resources, Energy and Tourism, as part of the Clean
Energy Future Package announced by the Prime Minister on 8 July 2011. This
report therefore looks at the final annual report by the Australian Solar
Institute, while the last annual report by the Australian Centre for Renewable
Energy Board will be examined in Annual reports (No. 2) 2013.
1.22
On 15 September 2011, the Parliament passed a package of amendments to
the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and
associated Acts implementing reforms to the regulation of upstream petroleum in
Commonwealth offshore areas. The reforms included creating the National
Offshore Petroleum Titles Administrator (NOPTA) within the Department of
Resources, Energy and Tourism, and expanding the National Offshore Petroleum
Safety Authority (NOPSA) into the National Offshore Petroleum Safety and
Environmental Management Authority (NOPSEMA). NOPSEMA acquired responsibilities
for work health and safety, integrity of facilities and wells, and
environmental management in Commonwealth offshore areas. Both NOPTA and NOPSEMA
commenced operations on 1 January 2012.
1.23
The government confirmed the closure of the Financial Reporting Panel,
an independent statutory authority under the Treasury portfolio, due to lower
than expected referral rates. On 21 June 2012 legislation to effect the closure
was introduced into Parliament. On 23 August 2012, the Corporations Legislation
Amendment (Financial Reporting Panel) Bill 2012 was passed in the Senate. The
legislation disbanded the Financial Reporting Panel by repealing its functions
and powers effective as of 1 October 2012. This report therefore examines the
Panel's final annual report.
Timeliness
1.24
Standing Order 25(20)(c) requires the committee to report to the Senate
on the late presentation of annual reports. The committee commends the
departments and agencies discussed in this report for their timeliness.
Departments and FMA Act entities
1.25
Subsection 4(1) of Part 1 of the PM&C Requirements for Annual
Reports states that annual reports of departments and agencies under the
FMA Act framework are to be presented to each House of Parliament on or before
31 October in the year the report is given. Furthermore, if Senate Supplementary
Estimates hearings are scheduled to occur prior to 31 October, it is best
practice for annual reports to be tabled prior to those hearings. In 2012,
hearings for the committee's portfolios commenced on 17 October.
CAC Act entities
1.26
Section 9 of the CAC Act stipulates that the deadline for furnishing the
minister with the annual reports of Commonwealth authorities is the 15th
day of the 4th month after the end of the financial year; that is,
15 October.
1.27
Section 36 of the CAC Act stipulates that Commonwealth companies must
give their annual reports to the responsible minister by the earlier of the
following:
- four months after the end of the financial year, or
- 21 days before the next annual general meeting of the company
after the end of the financial year.
Other entities
1.28
Entities reporting in accordance with their own legislation are often
required to prepare for the relevant minister their annual report 'as soon as
is practicable' after a particular date. The committee draws attention to
subsections 34C(2) and 34C(3) of the Acts Interpretation Act 1901, which
stipulate that where no date for providing a report to a minister is specified,
the report should be presented no more than six months after the reporting
period, and the minister must provide the report to the Parliament within 15
sitting days after they receive it.
Government policy for all annual
reports
1.29
While the legislative requirements for the tabling of annual reports
vary between different types of agencies,[6]
the Government's policy is 'that all annual reports should be tabled by 31
October'.[7]
Requests for an extension
1.30
The committee notes that this report includes the examination of one
annual report which was tabled after the 31 October deadline. This is the
Australian Skills Quality Authority annual report 2011–12, for which an
extension was requested. On 9 November 2012 Senator the Hon. Chris Evans, the
then Minister for Tertiary Education, Skills, Science and Research, granted a
request for an extension to 30 November 2012 for the tabling of the Australian
Skills Quality Authority annual report. The details of the extension were
tabled in Parliament in accordance with paragraph 34C(7)(b) of the Acts
Interpretation Act 1901.
1.31
Annual reports tabled in the Senate after 31 October and before the
tabling of this report are listed in Table 1. These and other reports received
after 31 October 2012 will be discussed in the committee's Annual reports
(No. 2 of 2013).
Table 1: Reports
tabled in the Senate after 31 October
|
Agency
|
Sent to Minister
|
Received by Minister
|
Tabled/presented* in Senate
|
|
Australian Centre for
Renewable Energy (ACRE) Board
|
6 Dec
|
7 Dec
|
11 Dec*
|
|
Australian Prudential
Regulation Authority
|
26 Oct
|
26 Oct
|
19 Nov
(9 Nov*)
|
|
IIF Investments Pty Ltd
Foreign Investments Review
Board
|
31 Oct
17 Jan
|
31 Oct
17 Jan
|
28 Nov
25 Feb
(22 Feb*)
|
Remarks made in the Senate
1.32
Senate Standing Order 25(20)(d) directs the committee to take into
account remarks made in the Senate when considering annual reports.
1.33
Two annual reports considered in this report were the subject of debate
in the Senate chamber:
- On 10 October 2012, Senator Bridget McKenzie made some comments
on the Australian Research Council's annual report 2011–12. In her speech
Senator McKenzie noted the ARC's mission and key objectives, and made further comments
on the government's role in supporting science research.[8]
- On 27 February 2013, Senator Mitch Fifield made a reference to
the Reserve Bank of Australia's (RBA) annual report in Senate Questions without
notice. Senator Fifield referred to the foreword to the RBA’s annual report in
relation to the dividends paid to the government and the replenishment of the
Reserve Bank Reserve Fund.[9]
Other comments on reports
1.34
Taking into account the reporting guidelines specified by the legislation
under which departments and agencies present their annual reports, the
committee considers that the reports it has examined are generally apparently
satisfactory.
1.35
Despite this, the committee considers that some aspects of agency annual
reports could be improved. One of the things that the committee examines is
whether annual reports contain discussion of external scrutiny and
parliamentary accountability.
External scrutiny and
accountability
1.36
It is required that annual reports:
... must provide information on the most significant
developments in external scrutiny of the department and the department's
response, including particulars of:
(a) judicial decisions and decisions of administrative
tribunals that have had, or may have, a significant impact on the operations of
the department; and
(b) reports on the operations of the department by the
Auditor-General (other than the report on financial statements), a
Parliamentary committee or the Commonwealth Ombudsman.[10]
1.37
Annual reports should be a primary reference document for
parliamentarians and others looking for information about external scrutiny of
government agencies. As noted, the primary purpose of annual reports is
accountability to the Parliament – it is therefore important that details about
external scrutiny are included in a clear manner in annual reports. Details on
parliamentary scrutiny should be included in annual reports, including
appearances at Senate estimates hearings (which are the subject of bi-annual
reports to the Senate) and any evidence or submissions made to parliamentary
inquiries. The reports should also note that they are subject to scrutiny by
this and any other committee.
Compliance indices or lists of
requirements
1.38
The inclusion of a compliance index or a list of requirements in annual
reports is mandatory for all departments and agencies under the FMA Act and CAC
Act. The index preferably should include a nil return entry where the agency
has nothing to report under an item. A compliance index is a useful feature of
reports and considerably assists the committee's task of assessing reports. It
also assists agencies by clearly showing that their compliance obligations have
been met. It can be particularly useful for agencies with reporting
requirements under various Acts.
1.39
The committee commends the great majority of agencies for their
inclusion of compliance indices in their 2011–12 annual reports.
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