1.1
This is the first report on annual reports for 2021 of the Senate Environment and Communications Legislation Committee (the committee). It provides an overview of selected annual reports of agencies within the committee’s allocated portfolios tabled in the Senate between 1 May and 31 October 2020.
1.2
Annual reports inform the Parliament, stakeholders and other interested parties of the operations and performance of public sector departments, agencies and companies. They are a primary accountability mechanism. Additionally, annual reports are important reference documents and form part of the historical record of the Commonwealth.
Terms of reference
1.3
Under standing orders, the annual reports of certain departments and agencies are referred to the committee for examination and assessment. The committee is required 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 the attention of the Senate to 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.
Allocated portfolios
1.4
In accordance with the resolution of the Senate on 4 July 2019 and amended on 13 February 2020, the committee is responsible for the examination of the expenditure and outcomes of the following portfolios:
Agriculture, Water and the Environment portfolio, excluding Agriculture and Water;
Infrastructure, Transport, Regional Development and Communications portfolio, excluding Infrastructure, Transport and Regional Development;
Industry, Science, Energy and Resources portfolio, excluding Industry, Science, and Resources.
Reports examined
1.5
This report examines the following reports, tabled in the Senate or presented out-of-session to the President of the Senate and referred to the committee between 1 May 2020 and 31 October 2020:
Non-corporate Commonwealth entities
Department of Agriculture, Water and the Environment—Annual Report 2019-20;
Department of Infrastructure, Transport, Regional Development and Communications—Annual Report 2019-20;
Department of Industry, Science, Energy and Resources—Annual Report 2019-20;
Australian Communications and Media Authority and the Office of the eSafety Commissioner—Annual Reports 2019-20;
Bureau of Meteorology—Annual Report 2019-20;
Clean Energy Regulator—Annual Report 2019-2020;
Climate Change Authority—Annual Report 2019-2020; and
Great Barrier Reef Marine Park Authority—Annual Report 2019-20.
Corporate Commonwealth entities
Australia Council for the Arts—Annual Report 2019-20;
Australian Broadcasting Corporation—Annual Report 2020;
Australian Film, Television and Radio School—Annual Report 2019-20;
Australian Postal Corporation—Annual Report 2020;
Australian Renewable Energy Agency—Annual Report 2019-20;
Clean Energy Finance Corporation—Annual Report 2019-20;
National Gallery of Australia—Annual Report 2019-20;
National Library of Australia—Annual Report 2019-20;
National Museum of Australia—Annual Report 19-20;
National Portrait Gallery of Australia—Annual Report 2019/20;
Screen Australia—Annual Report 2019-20;
Special Broadcasting Service—Annual Report 2020; and
Sydney Harbour Federation Trust—Annual Report 2019-2020.
Commonwealth companies
Australia Business Arts Foundation Limited (Creative Partnerships Australia)—Annual Report 2019-20;
Bundanon Trust—Annual Report 2019-2020;
NBN Co Limited—Annual Report 2020; and
Snowy Hydro Limited—Annual report for the year ended 30 June 2020.
Statutory officer holders or bodies
Classification Board and Classification Review Board—Annual Reports 2019-20; and
Public Lending Right Committee—Annual Report 2019-20.
Non-statutory bodies
Independent Scientific Committee on Wind Turbines—2019 Annual Report; and
Office of the National Wind Farm Commissioner—Annual Report year ending 31 December 2019.
1.6
The committee also notes the receipt of the following agency’s annual reports after 31 October 2020 which will be examined and considered in the committee’s Annual Reports (No. 2 of 2021):
Australian National Maritime Museum;
Director of National Parks;
National Film and Sound Archive of Australia; and
National Environment Protection Council.
Reports not examined
1.7
Where a report is referred to two standing committees, the committee defers examination of those reports to the committee which has primary oversight of the portfolio where the department or agency sits.
1.8
The committee is not obliged to report on Acts, statements of corporate intent, surveys, policy papers, budget documents, corporate plans or errata. The following documents were referred to the committee between 1 May and
31 October 2020, but are not examined in this report:
Australian Competition & Consumer Commission and the Australian Energy Regulator—Report on modelling of the Regional Broadband Scheme levy initial base component—October 2020;
Clean Energy Regulator—Renewable Energy Target—2019 Renewable Energy Administrative Report; and
Climate Change Authority—Review of the Emissions Reduction Fund—October 2020.
Annual reporting requirements
1.9
A performance reporting framework is established for all Commonwealth entities and companies by the Public Governance, Performance and Accountability Act 2013 (PGPA Act). The performance framework of the PGPA Act requires all Commonwealth entities to measure and assess their performance according to the requirements prescribed by the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule).
1.10
The performance framework includes the requirement for Commonwealth entities to prepare a corporate plan and annual performance statements. The PGPA Rule contains the minimum requirements that must be included.
1.11
The PGPA Act requires all Commonwealth entities to prepare an annual performance statement and include those statements in their annual reports. Entities use the annual performance statements to report on the results achieved against the targets, goals and measures established at the beginning of a reporting year in corporate plans and in any portfolio budget statement, portfolio additional estimates statement or other portfolio estimates statement that was prepared for the reporting period.
1.12
Below is a summary of the legislative authority and requirements for the different types of bodies under which annual reports are prepared:
Non-corporate Commonwealth entities: PGPA Act, section 46, and the PGPA Rule, subdivision 3A(A); for portfolio departments, the Parliamentary Service Act 1999, section 65; and for statutory bodies, relevant enabling legislation.
Corporate Commonwealth entities: PGPA Act, section 46, and the PGPA Rule, subdivision 3A(B); and for statutory bodies, relevant enabling legislation.
Commonwealth companies: PGPA Act, section 97, which also refers to requirements under the Corporations Act 2001 and the PGPA Rule, part 3-3; and for statutory bodies, relevant enabling legislation.
Statutory office holders and statutory bodies: statutory office holders or bodies are engaged or employed under an Act, which may prescribe annual reporting requirements pursuant to the office or body.
Non-statutory bodies: the annual reporting requirements are contained in the government response to the Senate Standing Committee on Finance and Public Administration's Report on non-statutory bodies.
Changes to the PGPA Rule
1.13
The Public Governance, Performance and Accountability Rule 2014 (2020 Measures No.2) Rules 2020 came into effect on 22 May 2020 and amended the PGPA Rule by repealing section 17A and introducing several new sections to clarify reporting arrangements for annual financial statements, annual performance statements and annual reports under different scenarios that may arise following cessation of entities and the transfer of functions.
1.14
On 27 February 2020, the Public Governance, Performance and Accountability Amendment (2020 Measures No. 1) Rules 2020 was registered. Coming into effect from 28 February 2020, relating to managing exposure to liability for Commonwealth entities, an accountable authority has the right to access an entity’s books in relation to a person who ceases to be the accountable authority or a member of the accountable authority of a corporate Commonwealth entity. The granting of indemnities and exemptions by corporate Commonwealth entities applies in relation to a liability incurred also comes into effect. Additional changes come into effect from
1 July 2020, including:
Changes in relation to membership of an audit committee for a Commonwealth entity whereby all audit committee members of a
non-corporate Commonwealth entity must be persons who are not officials of the entity, and a majority of the members must be persons who are not officials of any Commonwealth entity. For a corporate Commonwealth entity, all of the audit committee members must not be employees of the entity;
New enhanced audit committee disclosure requirements applicable to Commonwealth entities and Commonwealth companies; and
New requirements for corporate plans for Commonwealth entities and companies.
1.15
On 3 June 2020, the Public Governance, Performance and Accountability Amendment (Consultancy and Non-Consultancy Contract Expenditure Reporting) Rules 2020 was registered on the Federal Register of Legislation. This amendment implements recommendation 38 of the Independent Review into the operation of the Public Governance, Performance and Accountability Act 2013 and Rule (Independent Review) which recommended enhanced disclosure of consultancy and non-consultancy contracts in non-corporate Commonwealth entities’ annual reports. The amendment requires
non-corporate Commonwealth entities to disclose in annual reports the number of, and expenditure on, consultancy and non-consultancy contracts and additional information about those organisations receiving that expenditure. Due to the disruptions caused by the COVID-19 pandemic, the Joint Committee of Public Accounts and Audit and the Finance Minister agreed for these new disclosure requirements to apply for the 2020-21 reporting period. However, if entities were in a position to do so, they were encouraged to make these disclosures in their 2019-20 annual reports.
Timeliness
1.16
As part of its review of annual reports, the committee is required to investigate and report on any lateness in the presentation of annual reports. In assessing the timeliness of the presentation of annual reports, the committee assesses the presentation against the requirements of the PGPA Act, the PGPA Rule and other legislative requirements.
Presentation to ministers
1.17
The PGPA Act requires the provision of an annual report of a Commonwealth entity, including corporate and non-corporate entities, to the responsible minister by the 15th day of the fourth month after the end of the reporting period for the entity. For most agencies, this translates to 15 October each year. This part of the PGPA Act does not, however, provide a timeframe for the minister to present the report to the Parliament.
1.18
The arrangements for Commonwealth companies differ to some degree. The PGPA Act sets out the requirements for the provision of annual reports of Commonwealth companies to the responsible minister. In general, this amounts to four months after the end of the reporting period for each company.
Tabling in Parliament
1.19
The PGPA Rule states that annual reports for corporate Commonwealth entities, non-corporate Commonwealth entities and Commonwealth companies must comply with the Department of the Prime Minister and Cabinet’s Guidelines for the Presentation of Documents to the Parliament. In addition, the Department of Finance's resource management guides for corporate and non-corporate Commonwealth entities advise:
Normally annual reports are tabled on or before 31 October and it is expected annual reports are tabled prior to the October Estimates hearings. This ensures annual reports are available for scrutiny by the relevant Senate standing committee.
1.20
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 the end of the particular period to which the report relates. The committee draws attention to the Acts Interpretation Act 1901 which stipulates 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 days after the minister receives it.
1.21
Where a deadline for presenting an annual report cannot be met, a Commonwealth entity or company can seek an extension of time to report under the Acts Interpretation Act 1901, by advising the responsible minister of the reasons why the entity cannot comply with the deadline. The responsible minister is required to table this application and a statement specifying whether the extension was granted and the reasons for the extension in both houses of the Parliament.
1.22
The PGPA Act requires an independent review to be conducted as soon as practicable after the end of three years after the majority of the Act commenced. The final report of the Independent Review was tabled in September 2018 and supported improving the timeliness and scrutiny of annual reports to ensure proper accountability.
1.23
The Independent Review was raised in the committee’s Annual reports (No. 1 and No. 2 of 2019), whereby the committee supported the Independent Review’s recommendations and sought to continue to monitor the implementation of the recommendations over the next reporting period.
1.24
The Government response to the report of the Independent Review, tabled on 5 April 2019, accepted in principle 48 out of 52 recommendations that were directed to the Government.
1.25
In an answer to a question on notice, the Department of Finance reported that, as at 19 December 2019, 20 recommendations had been implemented or actioned with the other recommendations underway.
Timeliness of reports examined
1.26
In its Annual reports (No. 1 of 2020) tabled on 26 February 2020, the committee noted that the majority of agencies met the recommended timeframe for tabling annual reports prior to the commencement of the committee's supplementary estimates hearings on 21 October 2019, with eight not meeting the recommended timeframe.
1.27
The committee was disappointed that the timeliness of the presentation of annual reports deteriorated this year. This is despite the clear guidance contained in the Department of the Prime Minster and Cabinet’s Guidelines for the Presentation of Documents to the Parliament and the Department of Finance’s resource management guides, and the committee's specific comments in its 2020 report. Of the Commonwealth entities within the environment, energy, and communications and the arts sub‑portfolios, no entities tabled their annual reports prior to estimates which commenced on 19 October 2020, 16 entities tabled their annual reports on the first day of estimates, and 12 entities did not meet the recommended timeframe.
1.28
The following agencies tabled annual reports in the House of Representatives and/or the Senate on the date the committee's budget estimates hearings commenced on 19 October 2020:
Department of Agriculture, Water and the Environment;
Department of Industry, Science, Energy and Resources;
Australia Business Arts Foundation Limited (Creative Partnerships Australia);
Australia Council for the Arts;
Australian Communications and Media Authority and the Office of the eSafety Commissioner;
Australian Postal Corporation;
Australian Renewable Energy Agency;
Clean Energy Finance Corporation;
Great Barrier Reef Marine Park Authority;
Sydney Harbour Federation Trust;
National Gallery of Australia;
National Library of Australia; and
National Museum of Australia.
1.29
The following agencies did not table their annual reports in either House of Parliament by the responsible Minister until after the commencement of the committee's budget estimates hearings:
Department of Infrastructure, Transport, Regional Development and Communications;
Australian Broadcasting Corporation;
Australian Film, Television and Radio School;
Australian National Maritime Museum;
Climate Change Authority;
Director of National Parks;
National Film and Sound Archive of Australia;
National Portrait Gallery of Australia;
Special Broadcasting Service.
1.30
During budget estimates, Senator Urquhart specifically noted that the Department of Infrastructure, Transport, Regional Development, and Communications was the only department to have not tabled their annual report by the commencement of budget estimates.
1.31
Appendix 1 lists the annual reports tabled (or presented) in the House of Representatives and the Senate between 1 May and 31 October 2020 and referred to the committee, with relevant tabling dates. For the purposes of the committee's examination of timeliness, the earlier date is taken as the presentation date to the Parliament. The table also includes the dates the reports were submitted to, and received by, the relevant Minister.
1.32
Appendix 2 lists documents tabled (or presented) in the House of Representatives and the Senate between 1 May and 31 October 2020 and referred to the committee, with relevant tabling dates.
Senate debate
1.33
In accordance with standing orders, the committee is required to take into account any relevant remarks about annual reports made in debate in the Senate. The following points were raised during Senate debate:
In relation to Australia Post’s 2020 annual report, Senator Carr raised the revenue, profit, domestic parcel growth and business efficiency savings reported in Australia Post’s annual report and questioned the temporary nature of changes to Australia Post’s service delivery requirements due to the COVID-19 pandemic, stating:
The annual report makes it very clear that Australia Post is actually doing very well, with revenue of $6.9 billion and before-tax profit of $41 million, strong domestic parcel growth with revenue up 9.2 per cent and business efficiency savings already of $250 million. Profits are increasing, so why does the government want to cut services? Why is it, if the government says that these are only temporary changes, that it wants to cut jobs?
In relation to the Australian Communications and Media Authority’s (ACMA) annual report, in the second reading of the Radiocommunications Legislation Amendment (Reform and Modernisation) Bill 2020, Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator the Hon Jane Hume, noted a change to the ACMA’s reporting requirements. Under the additional information gathering powers granted to the ACMA through an amendment to the bill:
ACMA will be required to produce an annual work program, with the aim of giving more and better information to users and the market. Importantly, the annual work program will be prepared in consultation with stakeholders and ACMA will be required to report back on its performance in its annual report.
Non-reporting bodies
1.34
Standing orders require that the committee report on any bodies which do not present annual reports to the Senate but should present such reports. The committee notes that there are no relevant bodies which are required to present an annual report to the Senate which have not done so.
Apparently satisfactory
1.35
Standing orders require that the committee report to the Senate on whether the annual reports of departments and agencies in its portfolios are 'apparently satisfactory'. In making this assessment, the committee considers such aspects as timeliness of presentation and compliance with relevant reporting requirements.
1.36
The committee is disappointed to have received no annual reports prior to the commencement of estimates. The committee encourages all Commonwealth entities to follow best practice in future by tabling their annual reports prior to its estimates hearings. This will ensure that there is sufficient time for the committee to consider the content and performance information provided in annual reports prior to the commencement of its budget estimates hearings. Tabling annual reports on the first day of estimates or after the commencement of estimates does not provide senators with sufficient time to get across the detail contained within annual reports to enable them effectively conduct the scrutiny and accountability processes of estimates.
1.37
The committee reminds all agencies to ensure that they include an up-to-date and complete compliance index in their annual reports. For Commonwealth entities, this must include the table of the list of requirements as specified by the PGPA Rule and where those requirements can be found in the annual report. The committee notes that some agencies had incorrect or incomplete page references in their compliance indexes. The committee also notes that some reports referred to ‘all sections’ or indicated large page ranges for some references. The committee recommends including the table of the list of requirements as it appears in the PGPA Rule and providing accurate and specific page references which will assist with assessing compliance and improve the overall accessibility of agencies’ annual reports.
1.38
The committee has examined all annual reports referred during the reporting period and considers that they are 'apparently satisfactory'.