Chapter 2

Review of annual reports

Department of Education, Employment and Workplace Relations

2.1        The Department of Education, Employment and Workplace Relations (DEEWR) Annual Report for 2008–09 was presented to the President, pursuant to Standing Order 166, and was tabled on 27 October 2009.

2.2        As required under the Department of Prime Minister and Cabinet's annual reporting guidelines, DEEWR'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, the Commonwealth Disability Strategy and ecologically sustainable development and environmental performance.

Departmental overview

2.3        The effect of the global recession on the work of the department was discussed in the Secretary's overview. The Secretary noted:

The year commenced with policies and strategies designed to grapple with a skills shortage but by September the uncertainty caused by the collapse of international financial markets demanded swift action from the government to respond to a crisis threatening Australian jobs. DEEWR had a central role in implementing government responses to keep Australia working throughout the downturn.[1]

2.4        As part of the government's $42 billion Nation Building – Economic Stimulus Plan, it was announced on 3 February 2009 that DEEWR would implement the Building the Education Revolution program. The committee notes that by the end of the financial year a total of 20 696 infrastructure projects valued at $11.27 billion had been approved, with the Secretary commenting that the roll-out of the program was 'an excellent demonstration of the department's responsiveness'.[2] Although the Building the Education Revolution program formed a large part of the Stimulus Plan, DEEWR also implemented other aspects of the stimulus package. The Jobs and Training Compact was introduced with the aim of responding to the economic downturn by investing in skills in order to meet long-term needs.

2.5        In August 2008, the department was restructured to align the organisational structure with the government's participation, productivity and social inclusion agenda, and to enhance its strategic policy capability. As a result of the restructure, DEEWR now reports against five outcomes. However, as the Annual Report 2008–09 is based on the 2008–09 Portfolio Budget Statements (PBS), the department's performance is reported against the nine outcomes that existed prior to this change.

2.6        The overview of the annual report also provides information on a number of achievements made in different policy areas by the department. Some developments for the 2008–09 financial year are listed below: 

Workplace Relations:

• The passage of the Fair Work Act (2009) through Parliament on 19 March 2009 represented a major milestone for DEEWR, with the department assisting the government's consultation process.
• The passing of the legislation also resulted in the creation of Fair Work Australia, comprising two bodies: a tribunal, Fair Work Australia, and the Office of the Fair Work Ombudsman.
• DEEWR continued to take steps towards a national approach to occupational health and safety, work which will continue into 2009–10.

Higher Education:

• The department provided secretariat support for the review of the Australian higher education sector, led by Emeritus Professor Denise Bradley AC.  

Education Revolution:

• For the reporting period, DEEWR continued to progress aspects of the government's Education Revolution, including the Digital Education Revolution. As at June 2009, 1864 schools were assisted with the purchase of over 176 000 computers.
• According to the annual report, new Council of Australian Governments (COAG) agreements created significant workload for the department. During the financial year, DEEWR worked with states and territories on a range of COAG initiatives in the areas of education, early childhood development, skills and workforce development.
• DEEWR also worked with state and territory governments in order to establish Trade Training Centres. The aim of the centres is to increase the proportion of students achieving Year 12 or equivalent qualifications and to help address skill shortages in traditional trades and emerging industries. In 2008–09, a total of 432 schools were funded to build new or refurbish existing trade or vocational education training facilities.
• The Australian Curriculum, Assessment and Reporting Authority (ACARA) was established during the reporting period. ACARA absorbed the functions of the National Curriculum Board and undertook consultation with the education sector to develop a national curriculum in the key learning areas of English, mathematics, science and history.

Early Childhood:

• During the financial year, DEEWR worked with state and territory governments to develop the National Early Childhood Development Strategy. In addition, the department continued to work on the Early Years Learning Framework and a National Quality Framework for Early Childhood Education and Care.
• DEEWR also established a Child Care Industry Taskforce that assisted in the management of the administration process of ABC Learning centres.

'Closing the Gap':

• During the reporting period, DEEWR undertook a review of its organisational capacity to deliver objectives relating to closing the gap on Indigenous disadvantage. Indigenous policy branches were placed in each of the department's main business clusters, and a small group was established with the purpose of acting in a whole-of-portfolio leadership capacity to deliver the objectives.

Social inclusion and participation:

• DEEWR commenced the first stage of the Family-centred Employment Project, a community engagement exercise that began in early 2009 in three locations. Findings from the first stage assisted the second part of the exercise—the development of different approaches to service delivery for disadvantaged families.

Report on performance

2.7        The DEEWR Annual Report 2008–09 analyses the performance of the department by outcome. Key achievements of each section are listed, as well as the key priorities of the financial year and an outlook for the year ahead.

2.8        A major challenge for the department during the reporting period was the collapse of the ABC Learning centres. ABC Learning went into voluntary administration and receivership on 6 November 2008. DEEWR assisted government in responding to the insolvency 'in such a way as to minimise the impact on parents, children and employees at the ABC centres'.[3]

2.9        During the reporting period, changes were made to the schools funding framework. Since 1 January 2009, Commonwealth contribution to government school funding has been allocated through the National Education Association (NEA), with the aim of 'giving state and territory governments the flexibility to allocate Commonwealth funding to areas which they believe will produce the best outcomes for their students'.[4] Previously, Commonwealth funding was provided to states and territories and non-government schools and systems under the Schools Assistance (Learning Together–Achievement through Choice and Opportunity) Act 2004. Funding for non-government schools is now provided under the Schools Assistance Act 2008 which came into effect on 1 January 2009.

2.10      The National Asian Languages and Studies in Schools Program (NALSSP) commenced on 1 January 2009 in support of the government goal of ensuring at least 12 per cent of Year 12 students will graduate with a fluency in Mandarin, Japanese, Indonesian or Korean by 2020. According to the Annual Report 2008–09, community support for the program is strong, with more than 680 schools submitting applications for grants under Round One of Becoming Asia Literate: Grants to Schools. Furthermore, 117 expressions of interest were received for Round One of the Strategic Collaboration and Partnership Fund.[5]

2.11      A number of effectiveness indicators for Outcome 4 relate to student participation in VET, apprenticeships and employment outcomes. From 2006 to 2008, the number of VET students undertaking higher level qualifications (Certificate IV, diploma or advanced diploma) increased by 4 per cent, although the 2008 participation levels are 8 per cent lower than what they were in 2002. However, the number of VET students obtaining Certificate III qualifications increased by 36 per cent between 2002 and 2008. The committee notes that the number of Indigenous students successfully completing apprenticeships has increased consistently since 2002. According to the Annual Report 2008–09, the number of apprenticeships completed in 2008 was 69 per cent above the 2002 levels. Moreover, the gap between Indigenous and other apprentices completing Certificate III qualifications has halved since 2002–2004, from 21–22 percentage points to 11 percentage points.[6] The committee also notes that the number of apprenticeship commencements during the financial year was 11 902 more than what was estimated.[7]

2.12      In determining the effectiveness of the government's international education agenda, DEEWR examines trends in areas such as the level of national income and employment generated by the international education sector. The Annual Report 2008–09 quotes a 2009 Access Economics report which estimated that the international education sector generated over 122 000 full-time employment positions in Australia in 2007–08. This figure is significantly higher than previous estimates; Curtin University estimated that international education generated more than 46 000 jobs in 2003. The committee notes that, for the 2008 calendar year, international student enrolments in Australia stood at 543 898—a 20.7 per cent increase on enrolments in 2007.[8]

2.13      During the reporting period, a number of reforms were made to the employment services industry. A new national employment service, Job Services Australia, commenced on 1 July 2009 after DEEWR conducted a consultation process in 2008. According to DEEWR, a key feature of Job Services Australia is the provision of services in line with the job seeker's assessed level of disadvantage. DEEWR established a Transition Reference Group to assist with the transition to Job Services Australia. Another reform was the creation of the Jobs Fund, a government initiative aimed at creating jobs and promoting skill development through projects 'that build community infrastructure and social capital in local communities'. The fund is a discretionary grants program that began on 1 July 2009, and will include three streams: Local Jobs, Get Communities Working and Infrastructure Employment Projects. The Jobs Fund will be complete on 30 June 2011.[9]

Management and accountability

2.14      The committee notes that, compared with 2007–08, DEEWR experienced significant increases in parliamentary workflow during the reporting period. The number of Senate Estimates questions on notice responded to by DEEWR increased by 194 per cent and the number of answers to parliamentary questions on notice tabled by the department increased by 1125 per cent. Although the 2007 federal election would have impacted on the workflow of DEEWR during 2007–08, such an increase is still noteworthy.[10]

2.15      The committee commends DEEWR for the comprehensive environmental analysis in its Annual Report 2008–09. The report lists the contribution made by each departmental outcome to ecologically sustainable development, and explores the measures taken to minimise the department's impact on the environment. DEEWR has developed a range of targets and action plans to reduce its impact in areas such as energy, water, air travel, paper usage, vehicle fleet and waste management.[11]

Human resources

2.16      DEEWR conducted its first staff survey in early 2009, with 76 per cent of staff responding to the electronic survey. Results of the survey indicated that employee engagement is high, with the department ranking above the benchmark average in all question categories.[12]

External scrutiny and reports by the Auditor-General

2.17      During 2008–09, the Australian National Audit Office (ANAO) tabled five reports relating to the operations of DEEWR.[13] One report—The Business Partnership Agreement between the Department of Education, Employment and Workplace Relations (DEEWR) and Centrelink­—examined the purchaser-provider arrangements DEEWR has with Centrelink. DEEWR administers employment services in accordance with the Social Security Act 1991 and government policy through a business partnership agreement (BPA) with Centrelink. The report found that the partnership between DEEWR and Centrelink could be strengthened, and that DEEWR and Centrelink could make improvements to key administrative areas under the BPA. In response, DEEWR stated:

For the most part, DEEWR agrees with the ANAO and in collaboration with Centrelink has already made progress in implementing its recommendations. DEEWR notes that while the service delivery under the BPA was occurring effectively before this performance audit, the Department is always ready to address potential improvements to business practices to ensure that services continue to be delivered to the highest possible standards.[14]

2.18      DEEWR also commented on the timeliness of the report, stating that its recommendations would inform the development of a new BPA between DEEWR and Centrelink, which was scheduled to occur on 1 July 2009.[15]

Conclusion

2.19      The committee considers DEEWR's 2008–09 annual report to be well presented and in compliance with the reporting requirements of a Commonwealth department. In Annual Reports (No 1. Of 2009), the committee recommended the use of a compliance index in departmental annual reports in order to assist in demonstrating compliance with reporting requirements. The committee commends DEEWR for its use of a compliance index in the Annual Report 2008–09.

Comcare

2.20      The Director's review that opens the annual report commented on the success of the Comcare scheme in achieving a low rate of injury during the previous five years. The committee notes that the number of claims received and accepted has reduced by 23 per cent since 2002–2003, a reduction that according to the Director's review places Comcare in good stead to meet the National Occupational Health and Safety (OHS) Strategy target of a 40 per cent reduction in serious injury and disease claims by 30 June 2012. The committee notes that the expansion of the Comcare scheme has resulted in the number of Comcare investigators trebling since 2004–05.[16]  

2.21      Although Comcare's approach to safety regulation emphasises prevention, Comcare has a wide range of enforcement powers under federal law to deal with OHS breaches. Enforcement actions are listed in the annual report, and in the reporting period Comcare pursued a number of civil court proceedings. A focus for Comcare during the reporting period was OHS issues in remote workplaces. Compliance assistance teams who visited these workplaces reported workplace culture to be an area of interest. According to the annual report, participants in the program reported that the increasing number of unskilled workers in remote workplaces presented challenges in promoting a safe working culture. Further concern was voiced over the existence of 'unsafe work practices and poor behaviours, such as drug and alcohol misuse'.[17] Several key learning outcomes were developed from the site visits, with Comcare indicating that future workplace presentations may target the workplace safety culture framework.[18]

2.22      Comcare's Annual Report 2008–09 includes a number of changes to the way in which performance for the reporting period is scrutinised. Rather than reporting against performance indicators, the Annual Report 2008–09 utilises output level indicators from the Portfolio Budget Statements. Comcare explained that this style of reporting 'ensures increased transparency and allows the reader to see clear links between the performance targets set out in the PBS and Comcare's performance outcomes and achievements'.[19] The Comcare Annual Report 2008–09 clearly reports against outputs as listed in the PBS in an easier to read table style, as suggested by the annual reporting guidelines issued by the Department of the Prime Minister Cabinet.[20] Furthermore, where variances exist between the performance targets and actual performance results, an explanation is given as to why this has occurred. Such an addition assists the reader with interpreting agency performance, while also increasing the overall readability of the report.

2.23      A cross-agency ANAO audit report on green office procurement and sustainable office management found that Comcare had taken a number of actions to improve environmental performance. The audit found that Comcare had significantly improved it reporting of environmental performance in its annual reports, an improvement also noted by the committee in its Annual Reports (No. 1 of 2009).[21] Environmental analysis in Comcare's Annual Report 2008–09 was comprehensive, and also incorporated ANAO suggestions as to how environmental and sustainability performance could be strengthened.

2.24      Overall the committee finds the Comcare report to be apparently satisfactory in meeting the reporting requirements under the Commonwealth Authorities and Companies Act 1997. Furthermore, the committee commends Comcare for including a compliance index in the annual report—an addition the committee encouraged in previous Annual Reports.

Australian Industrial Relations Commission & Australian Industrial Registry

2.25      The 2008–09 annual reports of the Australian Industrial Relations Commission (AIRC) and the Australian Industrial Registry (AIR) will be the last   full-year annual reports from these agencies. The transfer of functions of the AIRC and AIR to Fair Work Australia will mean that the annual reports for 2009–10 will be the final annual reports, covering the period between 1 July 2009 and 31 December 2009.

2.26      The AIRC Annual Report 2008–09 reported that the level of industrial action for 2008–09 remained relatively low, consistent with recent years. Issues relating to termination of employment constituted a significant portion of the AIRC workload for the reporting period. The number of applications for a remedy in relation to termination of employment increased by more than 30 per cent, with the total number of applications the highest since 2000–01. The AIRC suggested that, due to the global economic crisis, it is likely that employers have responded to market conditions by reducing labour costs. Moreover, the AIRC commented that 'it is likely that the rising unemployment rate is providing an additional incentive to challenge a termination of employment which is perceived to be unfair'. [22]  Of all applications lodged, 41 per cent allege the termination was harsh, unjust or unfair; 21 per cent argue the termination of employment was unlawful; and 33 per cent allege the termination was both unfair and unlawful. The committee notes that the majority of termination applications were filed in Victoria.[23]

2.27      The AIRC continued the award modernisation process during the reporting period, which was to be completed by December 2009 when the AIRC would cease operation. The modernisation process was divided into four stages, each allocated a specific number of industries and occupations. During 2008–09, the AIRC completed the first two stages of the process. The first stage, known as the Priority Stage, consisted of 11 industries and occupations including mining, manufacturing, retail and hospitality. A full bench of the commission assigned to the award modernisation process decided to make 17 priority modern awards in this category. Stage 2 of the process comprised 11 industry groups including health and welfare services, building and private transport. Of this category, the full bench made 27 modern awards and varied two of the modern awards.[24]   

2.28      The AIRC Information Line played a significant role in the client service function of the AIR. During the reporting period, the quantity and complexity of inquiries to the AIRC Information Line increased significantly. According to the AIR Annual Report 2008–09, calls to the hotline came from clients seeking more specialised assistance, information, advice and referral options. As a result, AIR staff were required to have a greater understanding of the Workplace Relations Act, as well as the roles and functions of external agencies. A total of 42 400 inquiries were made through the information line, 90 per cent of which were from New South Wales, Victoria and Queensland. More than 80 per cent of inquiries related to termination of employment claims.[25]

2.29      At the end of the 2008–09 financial year, staffing levels were 27 per cent higher than at the same time in 2007–08.  According to the Annual Report 2008–09, 25 staff were brought onboard as unfair dismissal conciliators and support staff in preparation for Fair Work Australia functions.[26] Expenditure on consultancies more than doubled in 2008–09, with the AIR spending a total of $616 020 during the reporting period, compared with $241 792 for the previous financial year. A contract for website design and development for Fair Work Australia constituted more than half of the total expenditure.[27]

2.30      The committee finds the annual reports of the AIRC and the AIR to be apparently satisfactory in meeting reporting requirements. The reports are well presented and informative, including detailed accounts of significant cases that took place during the reporting period.

Seafarers Safety, Rehabilitation and Compensation Authority (Seacare)

2.31      The Seacare Authority is a statutory body established under the Seafarers Rehabilitation and Compensation Act 1992. The Seacare Authority oversees the operation of the Seafarers Act and the Occupational Health and Safety (Maritime Industry) Act 1993. Both these acts provide workers' compensation, rehabilitation and occupational health and safety regimes for certain seafarers involved in the maritime industry. Comcare provides Seacare with secretariat support and other assistance, as Seacare does not have its own staff. The Seacare function is separately listed an output in Comcare's Portfolio Budget Statements. In 2008–09, the Seacare output was output 5–Provides support to the Seafarers Safety Rehabilitation and Compensation Authority. A number of annual reporting requirements relating to the Seacare function, such as corporate governance and management of human resources, are detailed in the Comcare annual report.

2.32      The Seafarers Act establishes a compensation and rehabilitation scheme for seafarers injured in the course of their employment on ships engaged in interstate, intra-territorial and international trade or commerce. During the 2008–09 financial year, there were three work-related fatalities in the scheme, despite the Seacare scheme recording no work-related fatalities for the previous fourteen years. Two of the fatalities are under the jurisdiction of the Occupational Health and Safety (Maritime Industry) Act 1993 and are subject to investigation by the Australian Maritime Safety Authority (AMSA), while the third is under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and is subject to investigation by the National Offshore Petroleum Safety Authority (NOPSA).   The Seacare Chairperson remarked that any fatality in the scheme is unacceptable, and that Seacare 'will be looking at the findings from the respective investigations to see if there are any lessons that can be disseminated to the jurisdiction'.[28] An increase in injury incidence rates was also recorded for the 2008–09 financial year. The Seacare scheme reported an injury incidence rate of 30.9 compared to 28.9 in 2007–08. This is the first increase in three years. As a result, the Chairperson indicated that the scheme is now outside the rate needed to meet the National OHS Strategy 2002–12 target of a 40 per cent reduction in injury incidence over ten years.[29]

2.33      The committee notes that the reporting of consultancy contracts could be improved by adopting a template recommended in the annual reporting guidelines issued by the Department of the Prime Minister Cabinet. Although Seacare provide a description of each consultancy contract issued during the reporting period, the readability of this could be improved. While the cost of each consultancy is listed, the total expenditure for the year is not immediately clear. Furthermore, it is unclear how many (if any) consultancy contracts are continuations from the previous financial year. The Department of the Prime Minister and Cabinet recommend that in order to maintain consistency amongst annual reports, all agencies should include a statement similar to:

During 2008–09, XX new consultancy contracts were entered into involving total actual expenditure of $A million. In addition, YY ongoing consultancy contacts were active during the 2008­–09 year, involving total actual expenditure of $B million.[30]

2.34      Including such information in future reports will ensure that consultancy reporting adheres to reporting requirements. The committee suggests that future consultancy reporting be similar to that of Comcare, in order to maintain consistency. Overall, the committee considers the Seacare Annual Report 2008–09 to be well presented, informative, and apparently satisfactory in meeting the reporting requirements of a statutory agency under the FMA Act.

Comments made in the Senate

2.35      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

2.36      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

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