Chapter 2

Annual reports of departments and other bodies

Department of Employment and Workplace Relations

2.1        As required under the Department of Prime Minister and Cabinet's annual reporting guidelines, DEWR's annual report provides information on corporate governance, internal and external scrutiny, management of human resources, purchasing, assets management, consultancies, advertising and market research activities, discretionary grants, freedom of information, occupational health and safety, Commonwealth Disability Strategy and ecologically sustainable development and environmental performance.

2.2        The Department of Employment and Workplace Relations (DEWR) Annual Report for 2006–07 was presented to the President, pursuant to Standing Order 166, and transmitted to the committee on 12 February 2008. The committee notes the Senate's receipt of this report on 20 December 2007.

Departmental Overview

2.3        The Secretary's review notes that the department's work in 2006–07 was largely taken up by the implementation of the government's workplace relations agenda and the Welfare to Work program, concluding a three-year cycle for formulating and delivering these policies.  The cycle began with policy development in 2004–05, delivery of legislation programs in 2005–06 and implementation in  2006–07. In addition to the workload arising from these policies, the department was also able to meet the government's time frame for delivery of draft legislation to the Parliament for the 'A Stronger Safety Net' Bill 2007, and the Independent Contractors Bill 2006.

2.4        The committee notes the department's continued work on the government's change to the Community Development Employment Project (CDEP) for Indigenous people. The department was actively engaged in the government's Northern Territory emergency response with respect to CDEP and the provision of employment services in remote communities.

2.5        For the 2006–07 reporting year, the department recorded a technical deficit of $9.7 million as a result of Centrelink activities funded in 2005–06 but not delivered until 2006–07. The Secretary observes that the department would have otherwise recorded a surplus.

2.6        The report notes that there was a change to DEWR's management board with the creation of a new position of General Counsel responsible for overseeing the department's corporate legal and fraud investigation capabilities.

Report on Performance

2.7        In DEWR's Annual Report 2006–07, performance is measured against the outcomes, outputs and performance targets set out in the Portfolio Budget Statements and Portfolio Additional Estimates Statements of 2006–07. The department provides a useful overview of the highlights from each outcome, listing the key priorities for the reporting year.

2.8        The report notes the changes made to Outcome 2 to reflect the introduction of changes to the workplace relations arrangements. The changes broadened the role of the Office of the Employment Advocate. As a result, a number of functions that were previously the responsibility of the Workplace Relations Services Group were transferred to the Office of the Employment Advocate. The department reorganised outputs and functions within Outcome 2 on 7 May 2007, and reported against these new outputs for the entire financial year. [1]

Human Resources

2.9        The number of graduates employed by DEWR continued to rise. The department's Graduate Program expanded to include 224 participants in 2006–07 compared with 126 the previous year. The report notes that the program is a vital element of the department's recruitment strategy, satisfying a large portion of DEWR's staffing requirements. The average retention rate for the preceding three years has been around 59 per cent.[2]

Reports by the Auditor-General

2.10      During 2006–07 the Australian National Audit Office (ANAO) tabled two reports relating to the administration of departmental programs.  The first was an assessment of DEWR's management of the Job Seeker Account (JSKA). According to the audit, the overall approach taken by DEWR in administering the Job Seeker Account is sound. However, the ANAO identified three areas where the department could strengthen its administration of the account so as to:

• better identify, assess and monitor the specific risks relating to the JSKA (including potential for fraud) presented by particular Job Network Member organisations and sties;
  
  
• place greater resilience on existing controls around the processes and procedures undertaken by Job Network Members that take effect prior to reimbursement of JSKA claims; and
  
  
• implement and report on DEWR's evaluation strategy.[3]

2.11      Of the two recommendations made in the audit report, the committee notes DEWR disagreement with the following ANAO recommendation:

The ANAO recommends that DEWR consider placing greater resilience on existing controls within Job Network Members that take effect prior to claims for reimbursement from the JSKA. Assurance that these controls are in place and having effect would be increased through selective testing of Job Network Members' controls. Such testing would include, but not be limited to, an assessment of the consistency of providers' fraud control arrangements with the Commonwealth Fraud Control Guidelines.[4]

2.12      In response, DEWR states:

DEWR's established national contract management framework, and associated monitoring, risk and fraud management, and programme assurance, provide sound assurance of Job Network practice and payments.[5]

2.13      The second report conducted by the ANAO was a follow-up audit on the Work for the Dole scheme. Overall, the ANAO found DEWR's handling of the program to be appropriate, and made no recommendations.

Services to ministers and Parliament

2.14      During 2006–07, Ministers received 12 159 pieces of correspondence; a noticeable reduction from 22 003 in 2005–06. This is most obvious in Outcome 2- Workplace Relations and is attributed to a reduction in campaign ministerials. These are letters which are received from a number of correspondents on the same issue, which are then forwarded to the Minister. There were 7 802 pieces of such material in the reporting year, compared with 16 688 in 2005–06.[6]

Conclusion

2.15      The committee considers DEWR's 2006–07 annual report to be well presented and complies with the reporting requirements of a Commonwealth department. The use of a combination of narrative-style case studies and more comprehensive policy analysis results in an easy to read, informative report.

 

Australian Fair Pay Secretariat

2.16      In the Australian Fair Pay Secretariat annual report, the Director details a number of significant issues and developments over the 2006–07 period, including the first general wage review conducted in early 2006, and completed on 26 October 2006. During the reporting period the Commission also reviewed disability wages and commenced a review of minimum wages in the real estate sector.

2.17      The committee notes that 100 per cent of employees of the Fair Pay Commission secretariat had taken up offers of AWAs as at 30 June 2007.

2.18      Money spent on advertising and market research services increased substantially, with expenditure totalling $211 767. This compares with $71 612 for the first reporting year of the Commission. Although the Commission was not in operation for the full 2005–06 financial year, such an increase is noteworthy.

2.19      The committee considers that the Australian Fair Pay Secretariat's report is apparently satisfactory in meeting the reporting requirements under the Financial Management and Accountability Act 1997.

 

Office of the Employment Advocate

2.20      The Office of the Employment Advocate (OEA) annual report for 2006–07 is the eleventh and final report of the office. The passing of the Workplace Relations Amendment 'A Stronger Safety Net' Bill saw the position of Employment Advocate abolished on 1 July 2007 and replaced with the Workplace Authority Director. The report notes that in the ten years to June 2007, nearly 1.3 million AWAs were approved by, or lodged with, the OEA.[7]

2.21      For 2006–07, the OEA budget stood at $36.2 million, and total expenses amounted to $45.6 million, resulting in the office being 25.9 per cent over budget. According to the annual report; this is attributed to the transfer of around 257 staff and their functions from DEWR Output 2.2.3 on 8 May 2007 with the corresponding budget not being transferred.[8]       

2.22      The committee observes with interest the trend analysis of AWAs by industry provided in the OEA annual report. In the ten years that AWAs have been in operation, the highest growth in their use has been in the hospitality and retail industry. At the time of reporting, the retail industry accounted for 17 per cent of all AWAs, compared with 12 per cent over the first five years of AWAs being in operation. On the other hand, the proportion of AWAs issued to the communication services, government administration and defence industry sectors has declined over the same period. The three years preceding the OEA annual report saw their respective share of AWAs halve to around five per cent. The finance and insurance industry has also seen a steady decline in the use workplace agreements.[9]

2.23      The committee notes that during the 2006–07 financial year, the OEA entered into nine new consultancy contracts, with a total expenditure of $421 376, compared with $174 247 for the preceding financial year. The largest consultancy service used by the OEA attracted a fee of $106 150 and was for an information campaign proposal.[10]

2.24      The committee considers that the Office of the Employment Advocate's report is apparently satisfactory in meeting the reporting requirements under the Financial Management and Accountability Act 1997.

 

Office of the Australian Building and Construction Commissioner

2.25         This report of the ABCC presents details of its second financial year in operation. The Commissioner's review emphasises the influence of the ABCC on the building and construction industry, noting that industrial disputes have fallen to all time low levels- 4 200 per cent lower in 2007 compared to 2001 when the Cole Royal Commission commenced its inquiry. The Commissioner notes the culture of the building and construction industry is changing:

Many in the industry are now accepting of the Government's reforms and the role of the ABCC. Increasingly, compliance with the law and the Code is seen as being good for business. One particular encouraging trend over the past year has been the preparedness for many contractors to engage with the ABCC in the early planning stages of a project.[11]                   

2.26      The committee notes that during the 2006–07 period, the ABCC was involved in 216 investigations into suspected contraventions of workplace laws, some of which were carried over from the Building Industry Taskforce. In addition, a further 367 reports were subject to preliminary investigation. At the end of the financial year, 111 investigations were finalised and 112 were continuing. Trade unions were the subject of 73 per cent of ABCC investigations for 2006–07, as compared with 61 per cent the previous year. The majority of contraventions investigated related to reports or allegations of industrial action and coercion brought on by complaints from employers.[12]

2.27      During the reporting period, the ABCC commenced a continuing site visit program with the intention of identifying and correcting inconsistent practices in the application of the Code on building projects. The ABCC undertook a total of 209 National Code site visits throughout 2006–07, 81 of which occurred in Victoria. [13] Also of note is that of the 18 site inspections held for the year, 16 took place in Victoria.[14]  

2.28      The annual report noted that a key measure of performance of the ABCC is the timeliness and quality of advice and assistance it provides to its clients. This advice is made available through website fact sheets, email alerts and industry forums.

2.29      Overall the report is well presented and informative. The use of visual representations of key data makes for an easy to read and informative report. The committee considers the ABCC's annual report to be apparently satisfactory in meeting the reporting requirements under the Financial Management and Accountability Act 1997.

 

Comcare

2.30      The overview of Comcare's annual report notes the major amendments made to both the Occupational Health and Safety Act 1991 (OHS Act) and Safety, Rehabilitation and Compensation Act 1988 (SRC Act) during the reporting period. These two changes proved significant to the operations of Comcare, with the amendments leading to an immediate increase in the size of the OHS jurisdiction by extending coverage of the OHS Act to all self-insured licensees under the SRC Act and which exempted employers and employees under the OHS Act from state and territory OHS-related laws.

2.31      The committee notes the establishment of an additional office in Perth, and an increase in the number of investigators in all regional offices. This expansion is a response to the increased OHS jurisdiction which has resulted in 20 per cent more employees being covered by Comcare.[15]

2.32      During the reporting year, Comcare was engaged in a number of legal proceedings, most notable of which was the case against the Australian Defence Force (ADF) in relation to a heat-stress related fatality. Comcare sought a Declaration that during the period of 5–11 November 2004, s.16(1) of the OHS Act was contravened because the ADF:

Failed to take all reasonable practicable steps to protect the health and safety of its employees, resulting in the death of Trooper Angus from acute heat stress.[16]

2.33      In handing down his verdict, Justice Madgwick commented on the inadequacy of the level of penalties available under Commonwealth OHS law. Comcare has expressed in its annual report that it will continue to consult the Department of Employment and Workplace Relations in regard to penalties.

2.34      The committee notes two findings of Administrative Deficiency were recorded by the Commonwealth Ombudsman in relation to delays in Comcare dealing with an injured employee. In response, Comcare has stated that improvements to operating procedures have been implemented to minimise such reoccurrence.[17]

2.35      As required under s.516A of the Environmental Protection and Biodiversity Conservation Act 1999, Comcare has reported that no activities have been identified as having detrimental effects on the natural environment.

2.36      Overall the committee considers the Comcare annual report to be apparently satisfactory in meeting the reporting requirements under the Commonwealth Authorities and Companies Act 1997. The Comcare report however does not contain a compliance index as was suggested in the committee's Annual Reports (No. 1 of 2007). The committee encourages use of such an index to improve the readability of future annual reports.

 

Comments made in the Senate

2.37      The committee is obliged, under Senate Standing Order 25(20)(d), to consider any remarks made about these reports in the Senate. The committee is satisfied that there were no comments to consider for these reports.

 

Bodies not presenting annual reports to the Senate

2.38      The committee is required to report to the Senate each year on whether there are any bodies not presenting annual reports to the Senate which should. The committee is satisfied that there are no such bodies.

 

Senator Gavin Marshall
Chair

Navigation: Previous Page | Contents | Next Page