Chapter 1


Introduction

1.1        The Senate Finance and Public Administration Legislation Committee (the committee) is responsible for examining the annual reports of the parliamentary departments,[1] and the departments and agencies of the Prime Minister and Cabinet Portfolio and the Finance Portfolio.

1.2        This is the second report on annual reports for 2016 and provides an overview of selected annual reports presented to the Parliament between 1 November 2015 and 30 April 2016. Copies of this and other committee reports can be obtained from the Senate Table Office, the committee secretariat or online at the committee's web page.

Terms of reference

1.3        Under Senate Standing Order 25(20) the annual reports of certain departments and agencies stand referred to committees for examination and assessment. Each committee is required to:

  1. examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory;
  2. 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;
  3. investigate and report to the Senate on any lateness in the presentation of annual reports;
  4. in considering an annual report take into account any relevant remarks about the report made in debate in the Senate;
  5. if the committee so determines, consider annual reports of departments and budget–related agencies in conjunction with examination of estimates;
  6. 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;
  7. draw to the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports; and
  8. 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 the 44th Parliament, the Senate allocated departments and agencies to committees on 13 November 2013.[2] In accordance with that resolution, the committee had responsibility for the oversight of the following:

  • Parliament;
  • Prime Minister and Cabinet Portfolio (PM&C Portfolio); and
  • Finance Portfolio.

1.5        The reports examined in this report were referred to the committee in the 44th Parliament.

Role of annual reports

1.6        Annual reports place a great deal of information about government departments and agencies on the public record in relation to the performance, activities, management and financial position of the reporting body. The Requirements for Annual Reports for Departments, Executive Agencies and Other Non-corporate Commonwealth Entities of 25 June 2015 (Requirements for Annual Reports),[3] prepared by the Department of the Prime Minister and Cabinet (PM&C), note that '[t]he primary purpose of annual reports of departments is accountability, in particular to the Parliament.'[4] Annual reports assist the Parliament in the examination of the performance of departments and agencies, and the administration of government programs.

Reports examined

1.7        During the period 1 November 2015 and 30 April 2016, 18 annual reports of bodies or statutory office holders were presented to the Parliament and referred to the committee. The reports examined are categorised as follows:

Non-corporate Commonwealth entities

  • Australian Electoral Commission – Report for 2014-15
  • ComSuper – Report for 2014-15

Corporate Commonwealth entities

  • Anindilyakwa Land Council – Report for 2014-15
  • Central Land Council – Report for 2014-15
  • Indigenous Business Australia – Report for 2014-15
  • Indigenous Land Corporation – Report for 2014-15
  • Northern Land Council – Report for 2014-15
  • Tiwi Land Council – Report for 2014-15
  • Torres Strait Regional Authority – Report for 2014-15
  • Wreck Bay Aboriginal Community Council – Report for 2014-15
  • Commonwealth Superannuation Corporation – Report for 2014-15

Commonwealth companies

  • Aboriginal Hostels Limited – Report for 2014-15
  • ASC Pty Ltd – Report for 2014-15
  • Outback Stores Pty Ltd – Report for 2014-15

Statutory office holders

  • Aboriginal Land Commissioner – Report for 2014-15
  • Executive Director of Township Leasing – Report for 2014-15
  • Independent National Security Legislation Monitor – Report for 2014-15

Non-statutory body

  • Australian Political Exchange Council – Report for 2010-11, 2011-12 and 2012-13

Reports not examined

1.8        The committee is not obliged to examine reports on the operation of Acts, reports of Royal Commissions, statements of corporate intent, surveys, policy papers, budget documents, corporate plans or errata. Where a report is referred to two standing committees, the committee has deferred examination of those reports to the committee which has primary oversight of the portfolio where that agency sits. Accordingly, the following documents were also referred to the committee but not examined in this report:

  • Australian Public Service Commission – State of the Service – Report 2014-15
  • Australian National Audit Office – Report by the Independent Auditor - Review of communications processes, December 2015
  • Independent National Security Legislation Monitor Act 2010 – The impact on journalists of section 35P of the Australian Security Intelligence Organisation Act 1979 - Report by the Hon Roger Gyles AO QC, dated October 2015; and Government response, dated February 2016
  • Independent National Security Legislation Monitor Act 2010 – Control order safeguards (INSLM Report) – Special Advocates and the Counter Terrorism Legislation Amendment Bill (No. 1) 2015 – Report by the Hon Roger Gyles AO QC, dated January 2016
  • Indigenous Australians – Closing the Gap - Prime Minister's Report 2016 – Ministerial statement by the Prime Minister, dated 10 February 2016
  • Annual Red Tape Reduction – Report for 2015
  • Members of Parliament (Staff) Act 1984 – Report for 2014-15
  • Department of Finance – Campaign advertising by Australian government departments and agencies – Report 2014-15
  • Department of Finance – Consolidated financial statements in respect of the year ended 30 June 2015
  • Commonwealth Electoral Act 1918 – 2016 Redistribution into electoral divisions – Reports, together with composite maps and compact discs of supporting information – Australian Capital Territory and Western Australia
  • Mid-year economic and fiscal outlook – 2015-16 – Statement by the Treasurer and the Minister for Finance
  • Commonwealth Electoral Act 1918 – 2016 Redistribution into electoral divisions – New South Wales – Report, together with composite maps and compact disc of supporting information

Method of assessment and current annual reporting requirements

1.9        Senate Standing Order 25(20) requires that the committee examine reports referred to it to determine whether they are timely and 'apparently satisfactory'. The committee must consider whether the reports comply with the relevant legislation and guidelines for the preparation of annual reports in forming its assessment.

Public Governance, Performance and Accountability Act 2013

1.10      The Public Governance, Performance and Accountability Act 2013 (PGPA Act) came into effect on 1 July 2014, replacing the repealed Financial Management and Accountability Act 1997 (FMA Act) and the Commonwealth Authorities and Companies Act 1997 (CAC Act). As set out in previous reports of the committee, different reporting requirements had applied to the former FMA Act bodies and CAC Act bodies.

1.11      As noted in the committee's first report for 2016, major changes to the Requirements for Annual Reports, which apply to non-corporate Commonwealth entities, were anticipated for the 2014-15 annual reports following the commencement of the PGPA Act. However, these revisions were delayed[5] and the 2014-15 guidelines had only minor changes made in the interim to reflect the passage of the PGPA Act, in addition to new requirements which are set out in further detail below.

1.12      The Requirements for Annual Reports do not apply to corporate Commonwealth entities and Commonwealth companies (formerly CAC Act authorities and companies). The 2014-15 Requirements for Annual Reports note that sections 7AB and 7AC of the Public Governance Performance and Accountability (Consequential and Transitional Provisions) Rule 2015 continue the application of the Commonwealth Authorities (Annual Reporting) Orders 2011 (Authorities Reporting Orders) and the Commonwealth Companies (Annual Reporting) Orders 2011 (Companies Reporting Orders) to annual reports for those entities and therefore will apply for the 2014-15 reporting period.[6]

1.13      Therefore, noting the above changes and transitional arrangements, below is a summary of the instruments under which the 2014-15 annual reports were prepared:

  • for non-corporate Commonwealth entities: the PGPA Act, section 46; for portfolio departments and executive agencies, the Public Service Act 1999, sections 63(2) and 70(2); for parliamentary departments, the Parliamentary Service Act 1999, section 65; for statutory bodies, relevant enabling legislation; and the Requirements for Annual Reports;
  • for corporate Commonwealth entities: the PGPA Act, section 46; for statutory bodies, relevant enabling legislation; the Commonwealth Authorities (Annual Reporting) Orders 2011;
  • for Commonwealth companies: the PGPA Act, section 97, which also refers to requirements under the Corporations Act 2001; Commonwealth Companies (Annual Reporting) Orders 2011; and
  • for non-statutory bodies: the guidelines are contained in the government response to the Senate Standing Committee on Finance and Public Administration Report on Non-Statutory bodies, Senate Hansard, 8 December 1987, pp 2632-45.

PM&C Requirements for Annual Reports for 2014–15 reports

1.14      The Requirements for Annual Reports are reviewed annually and, if required, are updated to take into account any changes to reporting requirements in legislation, arising from new policy, or recommendations in parliamentary, Australian National Audit Office (ANAO), or other reports. The Requirements for Annual Reports published on 25 June 2015, noted that the significant amendments to the current version, apart from those noted above concerning enactment of the PGPA Act, relate to small business procurement and Indigenous employment.[7]

Small Business Procurement

1.15      This new mandatory reporting obligation is comprised of three elements which have been added to reflect the Government's commitment to improve small business access to Commonwealth contracts and requires:

  • the inclusion of a statement that refers readers to the statistics on Small and Medium Enterprises (SMEs) participation on the Department of Finance's website;
  • for bodies that are 'material' in nature, the inclusion of a statement which refers readers to the on-time payments performance results on Treasury's website; and
  • the inclusion of a brief statement on the ways in which the agency's procurement practices support SMEs which is consistent with paragraph 5.4 of the Commonwealth Procurement Rules.[8]
Indigenous employment

1.16      This new mandatory reporting requirement specifies that the annual report must include information on the number of ongoing and non-ongoing employees as at 30 June, for the current and preceding year who identify as Indigenous. The Requirements for Annual Reports note that this requirement follows the Australian Government's announcement of a new Indigenous employment target across the Commonwealth public sector as part of its response to the Forrest Review, Creating Parity.[9]

Timeliness

Commonwealth entities

1.17      Section 46 of the PGPA Act requires the accountable authority of a Commonwealth entity to prepare an annual report and provide it to the responsible Minister by the 15th day of the fourth month after the end of the reporting period for the entity. This section of the Act does not, however, provide for a timeframe for the Minister to present the report to the Parliament. For non-corporate Commonwealth entities, the Requirements for Annual Reports state that:

The responsible Minister must, in turn, present the report to each House of the Parliament on or before 31 October in the year in which the report is given. If the Senate Supplementary Budget Estimates hearings are scheduled to occur prior to 31 October, it is best practice for annual reports to be tabled prior to those hearings.[10]

1.18      As the Requirements for Annual Reports only apply to non-corporate Commonwealth entities, there is a lack of clarity regarding the timeframe for the presentation to the Parliament of annual reports for corporate Commonwealth entities. It would appear that Section 34C of the Acts Interpretation Act 1901 regarding periodic reports would apply to corporate Commonwealth entities, as it did for Commonwealth authorities under the former CAC Act. Section 34C(3) of the Acts Interpretation Act states that:

(3) Where an Act requires a person to furnish a periodic report to a Minister for presentation to the Parliament but does not specify a period within which the report is to be so presented, that Minister shall cause a copy of the periodic report to be laid before each House of the Parliament within 15 sitting days of that House after the day on which he or she receives the report.

Commonwealth companies

1.19      Under section 97 of the PGPA Act, Commonwealth companies are required to prepare an annual report and provide it to the responsible Minister:

  1. if the company is required by the Corporations Act 2001 to hold an annual general meeting—the earlier of the following:
    1. 21 days before the next annual general meeting after the end of the reporting period for the company;
    2. 4 months after the end of the reporting period for the company; and
  2. in any other case—4 months after the end of the reporting period for the company;
    or the end of such further period granted under subsection 34C(5) of the Acts Interpretation Act 1901.

1.20      Section 97(5) of the PGPA Act states that:

(5) If the Commonwealth company is a wholly-owned Commonwealth company, or is not required to hold an annual general meeting, the responsible Minister must table the documents in each House of the Parliament as soon as practicable after receiving them. In all other cases, the responsible Minister must table the documents in each House of the Parliament as soon as practicable after the annual general meeting of the company.

Timeliness of reports examined

1.21      The committee considers the timely presentation of annual reports to be an important element in accountability to the Parliament and continues to encourage bodies and statutory officers to endeavour to meet relevant timeframes.

1.22      Appendix 1 lists the annual reports tabled (or presented) in Parliament between 1 November 2015 and 30 April 2016, and referred to the committee, with relevant tabling dates. This table includes the date the reports were tabled in the Senate and House of Representatives, and for the purposes of this discussion on timeliness, the earlier date of tabling in either chamber is taken to be the date of presentation to the Parliament. The table also provides the dates the reports were submitted to, and received by, the Prime Minister or relevant Minister.

1.23      As noted above, the presentation of annual reports to the Parliament has two elements with regard to timeliness: the furnishing of the report to the Minister and the presentation of the report to the Parliament.

1.24      As set out in Appendix 1, most of Indigenous corporate Commonwealth entities met their prescribed reporting timeframe under section 46 of the PGPA Act by submitting their reports to the Minister by 15 October 2015 (excluding the Wreck Bay Aboriginal Community Council which submitted on 23 October 2015). However, except for the Wreck Bay Aboriginal Community Council report, the Minister failed to meet the legislative requirement to table these reports within 15 sitting days.

1.25      In response to a Senate question regarding the delay in the tabling of the Indigenous Land Corporation annual report, the Minister for Indigenous Affairs, Senator the Hon Nigel Scullion, advised the Senate:

The amount of time that passed between my reference to the ILC about some inaccuracies in the [annual] report and them returning the report to me took the vast amount of that time. As soon as I received their report I tabled it.[11]

1.26      The other corporate Commonwealth entity report examined was from the Commonwealth Superannuation Corporation which met its reporting requirements, where the report was provided to the Minister on 13 October 2015 and was subsequently tabled within 15 sitting days of receipt, on 9 November 2015.

1.27      The reports of the two non-corporate Commonwealth entities, the Australian Electoral Commission (AEC) and ComSuper, were presented slightly later than 31 October, on 2 November 2015, with the AEC also failing to meet the requirement to provide its report to the Minister by 15 October, submitting it by 21 October. It is noted that in 2015, 31 October fell on a Saturday and these reports were presented on the first available opportunity after that date. However, agencies and ministers are still expected to make appropriate arrangements to ensure presentation of reports within the required timeframes.

1.28      With regard to the reports of Commonwealth companies, the Aboriginal Hostels Limited report was provided to the Minister in a timely manner, on 15 October 2015, but not presented until 19 January 2016. The report of Outback Stores Pty Ltd was provided to the Minister on 11 December 2015, received by the Minister on 14 January 2016, but not presented until 15 April 2016. ASC Pty Ltd met the required timeframe by providing the report to the Minister on 20 October 2015 and the Minister presenting it in a timely manner on 2 November 2015.

1.29      Under the Aboriginal Land Rights (Northern Territory) Act 1976 (ALR (NT) Act) the Executive Director of Township Leasing and the Aboriginal Land Commissioner are required, as soon as practicable after 30 June each year, to prepare and give to the Minister an annual report on operations. Under this Act, the Minister is required to present the report to the Parliament within 15 sitting days of receipt.[12] It is noted that both reports were submitted to, and received by, the Minister slightly later than they have been in recent years.[13] The Aboriginal Land Commissioner's report was submitted to, and received by, the Minister on 17 November and 23 December 2015 respectively; and the Executive Director of Township Leasing's report was submitted to, and received by, the Minister on 7 December 2015 and 14 January 2016 respectively. The Minister subsequently presented both reports to the Parliament within 15 sittings days of receipt.

1.30      The Independent National Security Legislation Monitor's annual report was tabled in the Parliament on 15 March 2016, having been submitted to, and received by, the Prime Minister on 25 February and 11 March 2016 respectively.[14] It is noted that the letter of transmittal to the Prime Minister was dated 7 December 2015 and that there appears to be a delay of over two months until it was actually submitted to the Prime Minister, on 25 February 2016.

1.31      Subsection 29(2) of the Independent National Security Legislation Monitor Act 2010 which requires the annual report to be given to the Prime Minister as soon as practicable after 30 June in each financial year and, in any event, by the following 31 December, appears not to have been met on this occasion. However, the tabling of the report on 15 March 2016 met the tabling requirements prescribed by subsection 29(5) which requires the Prime Minister to present the report to each House of Parliament within 15 sitting days of that House after receipt of the report.

1.32      The report of the Australian Political Exchange Council covers the triennial period of 2010-13. This report was provided to the Minister on 12 November 2015 and tabled on 1 December 2015, over two years after the end of the time period it reports on. Even though this non-statutory body is only required by its terms of reference to arrange for 'regular' reporting to the Parliament, an interval of two years for the tabling of the report is a disappointing delay. (The Council's report is discussed in more detail in Chapter 2.)

1.33      The committee acknowledges the varying legislative reporting timeframes for different types of bodies; however, it notes that it is government policy that all annual reports should be tabled by 31 October[15] and encourages agencies and ministers to meet this date. Further, the committee greatly appreciates the early presentation of annual reports which allow sufficient time for them to be available for the Supplementary Budget Estimates hearings which is noted in the Requirements for Annual Reports as 'best practice'.[16]

Senate debate

1.34      In accordance with Standing Order 25(20)(d) the committee is required to take into account any relevant remarks about the reports made in debate in the Senate. The committee notes that none of the annual reports examined in this report have been the subject of comments or debate in the Senate.

Non–reporting bodies

1.35      Standing Order 25(20)(h) requires that the committee inquire into, and report on, any bodies which do not present annual reports to the Senate but should present such reports.

1.36      The committee makes no recommendation for any bodies not presenting an annual report to do so.

Assessment of reports

1.37      Under Standing Order 25(20)(a), the committee is required to examine the annual reports of departments and agencies and report to the Senate on whether they are 'apparently satisfactory'. In its examination of the annual reports referred, the committee found them to be of a satisfactory standard and largely adhere to relevant requirements. The committee considers the reports examined to be 'apparently satisfactory'.

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