Review of selected reports

2.1        The committee provides the following comments on the annual reports of the two portfolio departments referred to it as well as reports from two agencies within each portfolio as follows:

• Department of the Environment and Energy;
• Bureau of Meteorology;
• Great Barrier Reef Marine Park Authority;
• Department of Communications and the Arts;
• Australia Post; and
• National Gallery of Australia.

Environment and Energy portfolio

Department of the Environment and Energy

2.2        The Department of the Environment and Energy Annual Report 2016–17 was presented to the President of the Senate on 30 October 2017 and tabled in the Senate on 13 November 2017. This is the first annual report presented by the new Secretary, Mr Finn Pratt AO PSM.

2.3        The Secretary's message provides an overview of the department's activities and achievements for the 2016–17 reporting period. In the Secretary's message, Mr Pratt acknowledged the contribution of Dr Gordon de Brouwer PSM, who retired as Secretary in September 2017.[14] Some of the other reported highlights included:

• working with state and territory governments to implement the National Energy Productivity Plan;
• delivering the Australia State of the Environment 2016 report;
• supporting  the Independent Review into the future Security of the National Electricity Market (Finkel Review); and
• the expansion of cultural capability programs under the department's Reconciliation Action Plan 2016–19.[15] 

Performance reporting

2.4        The department's annual performance statements are clearly presented and provide a comprehensive account of how the purposes and activities contained in the Corporate Plan align with the programs and outcomes in the Portfolio Budget Statements (PBS). Each of the department's performance criteria is presented with a succinct summary of the results against the targets, and is marked 'achieved', 'in progress', 'partially achieved', 'not achieved' or 'data/information is unavailable or incomplete'. The department has again included detailed analysis of its performance against each purpose contained in the Corporate Plan. This is particularly useful as it provided context for the department's results.

2.5        As required by paragraph 17AH(1)(e) of the PGPA Rule, the department reported three corrections to material errors in its annual report for 2015–16.[16] These corrections do not appear to alter the department's results against its key performance indicators for the 2015–16 reporting period.

2.6        The annual report also includes reports on the operation of the following Acts:

• Environment Protection and Biodiversity Conservation Act 1999;
• Environment Protection (Alligator Rivers Region) Act 1978;
• Fuel Quality Standards Act 2000;
• Greenhouse and Energy Minimum Standards Act 2012;
• Hazardous Waste (Regulation of Exports and Imports) Act 1989;
• Natural Heritage Trust of Australia Act 1997;
• Ozone Protection and Synthetic Greenhouse Gas Management Act 1989;
• Product Stewardship Act 2011;
• Product Stewardship (Oil) Act 2000; and
• Water Act 2007.[17]

2.7        The committee notes that the department achieved a majority of its performance criteria in 2016–17 and considers its annual report to be 'apparently satisfactory'.

Financial reporting

2.8        The annual report provides a detailed summary of departmental and administered finances. The committee notes that the department recorded an operating deficit of $45.21 million.[18] The department noted that:

The total comprehensive loss (deficit net asset revaluation) was $18.25 million. This is an approved operating loss and includes non-cash expenses such as depreciation, amortisation and provision for restoration obligations in the Australian Antarctic regions.[19]

Bureau of Meteorology

2.9        The Bureau of Meteorology (BOM) Annual Report 2016–17 was tabled in the House of Representatives on 24 October 2017 and tabled in the Senate on 13 November 2017.

2.10      The review by the Chief Executive Officer and Director of Meteorology, Dr Andrew Johnson, provided a concise overview of some of the BOM's activities and achievements in 2016–17, including:

• the provision of timely and accurate forecasts and guidance to mitigate the effects of severe weather events;
• the ongoing success of the BOM Weather app;
• the successful installation and operation of the BOM's new supercomputer 'Australis';
• new information and communications technology (ICT) arrangements to improve the security and resilience of the agency's systems; and
• the release of a new Reconciliation Action Plan (2016–2019).[20]

2.11      Dr Johnson also highlighted some of the BOM's responses to significant weather events during the reporting period, including severe tropical cyclone Debbie and the unprecedented thunderstorm asthma event that resulted in nine deaths and affected thousands of people across the Melbourne area in November 2016.[21]

Performance reporting

2.12      The annual performance statements are clearly presented and provide a comprehensive assessment of how the BOM has progressed in meeting its outcome as measured by the key performance indicators (KPIs) and deliverables as outlined in the 2016–17 Corporate Plan. The flow of information gives the reader a broad understanding of the results achieved under each of its KPIs and is comparable to the PBS.

2.13      The BOM have provided additional supporting notes and discussion alongside its performance information. For example, the BOM have included a helpful summary of the steps taken by the organisation to mitigate cyber security threats to its ICT infrastructure. In particular, the agency's Supercomputer Hardening and Resilience Programme (SHARP) and the development of a 'whole-of-Bureau approach' to secure critical business functions through its Robust Program.[22]

2.14      The annual report also includes useful trend information in relation to topics such as weather forecasts and warnings, as well as the use of the agency's website services. This information is presented in a variety of formats, including graphs and tables, and was useful for comparative purposes. The report also included an informative summary of national weather events that occurred during the reporting period.[23]

2.15      The committee notes that while the BOM have included statistics in relation to the number of ongoing and non-ongoing Indigenous employees as required by paragraph 17AG(4)(b) of the PGPA Rule 2014, this information could not be located at the page reference given in the list of requirements.[24] The committee recommends that future annual reports include correct page references in the list of requirements to ensure that relevant performance information can be readily located.

2.16       The committee considers that the BOM has met its reporting obligations and considers its annual report to be 'apparently satisfactory'.

Financial reporting

2.17      The BOM recorded an operating deficit of $72.227 million for the 2016–17 financial year.[25] The annual report states:

The Bureau expects to show operating deficits in the current and future periods as its depreciation and amortisation expenditure is shown in its operating statements, while its departmental capital budget for asset replacement is treated as an equity contribution and is shown in its balance sheet.[26]

Great Barrier Reef Marine Park Authority

2.18      The Great Barrier Reef Marine Park Authority (GBRMPA) Annual Report 2016–17 was presented to the President of the Senate on 27 October 2017 and tabled in the Senate on 13 November 2017.

2.19      In the Chairman's review, Dr Russell Reichelt outlined some of the key activities that were undertaken by GBRMPA in 2016–17, including:

• hosting the two day Great Barrier Reef Summit—Managing for Resilience in May 2017;
• the commencement of planning to remediate the damage caused to Douglas Shoal following the grounding of the Shen Neng 1;
• use of a second culling vessel as part of the crown-of-thorns starfish control program; and
• improving the permission system for the granting of permits to commercial operators using the Great Barrier Reef Marine Park.[27]

2.20      In addition, Dr Reichelt detailed some of the challenges facing the Great Barrier Reef during the reporting period, including the impacts of coral bleaching and climate change.  Dr Reichelt also noted that:

The cumulative impact of multiple disturbances affected most of the Great Barrier Reef Marine Park and redefined our operating environment. It has highlighted the urgent need to look at what measures — in addition to the suite of actions already underway — can be undertaken to further build the Reef’s resilience in the face of pressures coming largely from outside the Marine Park.[28]

Performance reporting

2.21      GBRMPA's annual performance statements provide an informative assessment of the agency's results against its performance outcomes, measures and targets for the three main program areas that support its four objectives as detailed in the 2016–17 Corporate Plan. The report provides a detailed summary of GBRMPA's activities conducted under each of the programs and includes relevant page references to assist the reader to locate more detailed information in both the PBS and Corporate Plan.

2.22      The committee is pleased to note, following comments in its Annual reports (No. 2 of 2017), that GBRMPA's performance statement provides a 'clear read' between the results achieved against its planned performance criteria as set out in both its Corporate Plan and PBS for the 2016–17 reporting period. The committee welcomes the improved clarity in the reporting of this information.

2.23      The committee considers that GBRMPA has met its reporting obligations as a non-corporate Commonwealth entity under the PGPA Rule and its annual report is 'apparently satisfactory'.

Financial reporting

2.24      The annual report states that GBRMPA recorded a surplus of $2.6 million for the reporting period. This compares to the operating deficit of $2.562 million that was recorded in 2015–16.[29] GBRMPA stated that the result was:

...due to grants received from Government where suppliers were not able to be contracted during 2016–17, higher than expected special appropriation and discounting of the Douglas Shoal provision in accordance with accounting standards.[30]

Communications and the Arts portfolio

Department of Communications and the Arts

2.25      The Department of Communications and the Arts Annual Report 2016–17 was tabled in the House of Representatives on 19 October 2017 and tabled in the Senate on 13 November 2017.

2.26      The committee notes that this is the first annual report presented by the new Secretary, Mr Mike Mrdak AO, who replaced Dr Heather Smith PSM as Secretary on 18 September 2017. In the Secretary's review, Mr Mrdak acknowledged Dr Smith's previous leadership and contribution to the department.[31]

2.27      The Secretary's review also provided a summary of some the department's activities and achievements in 2016–17, including:

• the announcement of the Government's media, broadcasting and content reforms in May 2017;
• progress on reforms to modernise and simplify Australia's spectrum management framework;
• the passage of the Copyright Amendment (Disability Access and Other Measures) Bill 2017;
• the continued implementation of the Mobile Black Spot Program; and
• the return of sixteen Australian Indigenous ancestral remains from overseas collecting institutions.[32]

Performance reporting

2.28      The department's performance statements are concise and well-presented and measure the department's performance against the five strategic priorities outlined in the Corporate Plan. The department's performance outcomes are presented in a table format alongside the relevant performance criteria. The table is easy to read and includes references to the relevant page numbers, which assists the reader to easily access and compare the detailed performance information under each priority. The criteria, targets and results are also discussed for each priority.

2.29      The annual report also provides detailed analysis of the various programs and initiatives undertaken by the department as part of the portfolio. For example, the report provided more detailed information in relation to the department's Netflix classification pilot. This involved the department collaborating with Netflix to develop and monitor a new classification tool to streamline the process of classifying content on Netflix, as well as to make it easier for programmes to become available to Australian audiences. The annual report notes that Australia is the first in the world to test such a tool, and as of 30 June 2017, it had generated 1014 classification decisions.[33]

2.30      The committee notes that the department achieved a majority of its priorities in 2016–17 and considers its annual report to be 'apparently satisfactory'.

Financial reporting

2.31      The committee notes that the department reported an operating deficit of $0.3 million in 2016–17.[34]

Australian Postal Corporation

2.32      The Australian Postal Corporation (Australia Post) Annual Report 2016–17 was tabled in House of Representatives on 19 October 2017 and tabled in the Senate on 13 November 2017.

2.33      In his message as retiring Managing Director & Group Chief Executive Officer (CEO), Mr Ahmed Fahour provided a summary of Australia Post's achievements in 2016–17. Some of the key highlights included:

• recording a before tax profit of $126.1 million;
• investing in the Dubai-based logistics company Aramex and the creation of Aramex Global Solutions Joint Venture;
• completion of the new enterprise agreement covering around 30,000 Australia Post employees; and
• the continued growth of MyPost as an online platform.[35]

2.34      This is the first time that Australia Post has included its Remuneration Report as part of its annual report. The Remuneration Report discloses Australia Post's remuneration strategy, as well as the key components of remuneration and bonuses paid to its Managing Director and CEO, senior executives and Board members.[36] The committee welcomes the addition of this information and looks forward to its continued incorporation in future annual reports.

2.35      Mr John Stanhope AM, in the message from the Chairman, outlined two important changes to Australia Post's remuneration practices and policies following recent community discussion regarding executive remuneration at Australia Post. This included a request from the Australian Government for the Commonwealth Remuneration Tribunal to determine the appropriate level of pay for Australia Post's next Managing Director and Group CEO, and the decision of the Australia Post Board to no longer offer senior executives a Long Term Incentive (LTI) as part of their remuneration package.[37]

2.36      Mr Stanhope further noted in relation to the Board's decision that:

The decision not to continue with an LTI scheme is an acknowledgment of the community's concern and expectation about future total executive remuneration.[38]

Performance reporting

2.37      Australia Post has provided a succinct summary of its results against the community service and commercial objectives as set out under the Australian Postal Corporation Act 1989. The key performance indicators are presented in a clear table format and provide Australia Post's results achieved against the targets set for each indicator. The committee notes that in 2016–17, Australia Post met or exceeded all of its community service obligations.

2.38      The committee has previously commented on the level of performance information contained in Australia Post's annual reports. In particular, the committee noted the reduced performance information in the 2015–16 annual report on the Net Promoter Score (NPS) and the omission of information in relation to Australia Post's Retail Customer Experience Program (Retail CX).[39]

2.39      The 2016–17 annual report provides more detailed information regarding the NPS and indicates a 1.4 point increase in its NPS in 2017 (the highest result in five years), although the annual report notes that this records the movement in the NPS rather than the actual NPS result for 2016–17. The annual report also explains that Australia Post no longer reports Retail CX data and that 'retail customer feedback is now collected via the strategic NPS process'.[40] While it is pleasing that an improved result in the NPS has been recorded for 2016–17, the committee considers that the value of this information would have been enhanced if a baseline or scale for the NPS had been provided.

2.40      The committee is pleased to note that Australia Post has taken on board comments made in the committee's review of the 2015–2016 annual report and has included further information on customer complaints, customer experience and the MyPost platform. The annual report indicates that its Customer Contact Centre (CCC) dealt with 1.1 million complaints during 2016–17, representing an increase of 15.8 per cent on the previous reporting period.[41] However, the committee notes that significantly more information regarding customer complaints, including a breakdown of complaints between the letter service and parcel service, was provided as part of the Budget Estimates 2017–18.[42] This information was particularly useful in analysing Australia Post's performance and its inclusion in the annual report would have enhanced the discussion of Australia Post's efforts to improve customer services and its complaints processes.[43]

2.41      In addition, the committee notes that more detailed information on how Australia Post is improving the way its customers can provide feedback was provided by Australia Post in response to written questions taken on notice as part of the committee’s examination of Supplementary Budget Estimates.[44]

Financial reporting

2.42      The annual report stated that in 2016–17 Australia Post recorded an after tax profit of $95.4 million.[45] Australia Post stated that:

The profit was built on continued strong performance in our parcels business, boosted by 5.6 per cent domestic volume growth and a 41.2 per cent surge in international inbound volumes.[46]

National Gallery of Australia

2.43      The National Gallery of Australia (NGA) Annual Report 2016–17 was submitted and received by the minister on 27 September 2017, and tabled in the Senate on 17 October 2017.

2.44      The NGA is a corporate Commonwealth entity established by the National Gallery Act 1975 as an Australian Government statutory authority. The function of the NGA is to develop and maintain a national collection of works of art. It exhibits, or makes available for exhibition by others, works of art from the national collection or works of art that are in its possession.[47]

2.45      The NGA's principal outcome is to increase 'understanding, knowledge and enjoyment of the visual arts by providing access to, and information about, works of art locally, nationally and internationally'.[48] The achievement of this outcome is broadly measured under three performance criteria:

• develop and maintain an outstanding national collection;
• educate and inspire audiences through exceptional experiences; and
• provide sound corporate and strategic support.[49]

2.46      The Director's report provided a detailed overview of the activities and achievements of the NGA in 2016–17, including:

• the finalisation of a strategic review of the NGA's structure and operations to identify efficiencies;
• presenting 14 exhibitions throughout the reporting period including Versailles: Treasures from the Palace and the third National Indigenous Art Triennial;
• continuing to review works in the Asian collection following the independent report by the Hon Susan Crennan AC QC into work undertaken by the Asian Art Provenance Project; and
• the lending of important works from the collection to international exhibitions at the Royal Academy and National Gallery in London in September 2016 and Berlin in November 2017.[50]

Performance reporting

2.47      The NGA has provided a comprehensive analysis of the results achieved against the performance targets detailed in its 2016–17 PBS. This includes a helpful table detailing whether targets were met or not met during the reporting period. This format assisted with the committee's review of the NGA's performance and allowed for easy comparison with the PBS and Corporate Plan. The committee notes that the NGA achieved nine of its 22 targets as outlined under its three performance criteria.

2.48      The annual report included a number of useful diagrams and charts, including a helpful breakdown of the number of art works that were loaned or included in exhibitions to state, territory and international institutions.[51] The annual report also featured a number of informative case studies that complemented the NGA's discussion of its performance over the reporting period.

2.49      The NGA notes in the annual report that it conducted a strategic review of its structure and operations during 2016–17. The purpose of the review was to identify ongoing efficiencies and assist the NGA to meet its fiscal obligations. The annual report states that:

As a result of extensive consultation across the organisation, key work areas were restructured to maximise the efficiency of NGA operations, realise savings and improve business processes and commercial opportunities. As a result of the review, the staff establishment was reduced by 26.5 positions, achieving required savings of $2.2 million.[52]

2.50      The committee considers that the NGA has met its reporting obligations as a corporate Commonwealth entity under the PGPA Rule and its annual report is 'apparently satisfactory'.

Financial reporting

2.51      The NGA reported a consolidated deficit on continuing operations of $18.657 million for the year ending 30 June 2017.[53]

Senator Jonathon Duniam
Chair

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