Chapter 2 - Annual reports of statutory and non-statutory authorities and government companies
Defence portfolio
The Army
and Air Force Canteen Service
[trading as Frontline Defence Services]
2.2
The Army and Air Force Canteen Service Annual Report 2006–2007 was
presented on 17 October 2006 and tabled in the Senate on 12 February 2008.
2.3
The report is tabled in accordance with section 9 of the Commonwealth
Authorities and Companies Act 1997.
2.4
The Army and Air Force Canteen Service (AAFCANS) was established as
a statutory authority under the Army and Air Force Canteen Service Regulations
1959. It was formed to provide goods, facilities and services to, or for the
entertainment and recreation of, designated members of the 'Defence family'.
2.5
The Board adopted the trade name 'Frontline Defence Services' ('Frontline')
in 1997 as part of a major business realignment.[1]
Under the regulations, Frontline returns its profits or surplus to bases for
the provision or improvement of welfare and amenities for Defence personnel.[2]
2.6
The report stated that the 2006–2007 financial year had been a
busy and challenging one for 'Frontline', during which time it recorded revenue
of $16.5 million and a net operating deficit of $1.27 million.
In recent times, there has been a considerable amount of change
in Frontline's trading environment...generational shifts in customer
attitudes...the reduction in base populations...limited on–base accommodation... and,
the encroachment of civilian population and commercial centres around bases.
...
Despite these market limitations, the existing infrastructure of
the Frontline organisation ensures that with some modification, it remains able
to provide goods and services to its customer base more efficiently and cost
effectively than can an external contractor. However, to continue to offer the
level of service required by the regulations and one which is acceptable to
customers and stakeholders, Frontline requires a level of financial support
from its owners.[3]
2.7
In December 2006, the Commonwealth through Defence entered into
an agreement with Frontline for the provision of canteen services to Army and
Air Force installations. Commencing in July 2006, the two–year agreement sets
out the services that are to be delivered by Frontline, the required standards,
the key performance indicators to be met and the payments that the Commonwealth
will make to Frontline for the provision of these services which remain
unprofitable. In turn, Frontline agreed to re–structure its business and to
return Frontline to a profitable situation.[4]
2.8
Following the findings of the Uhrig report and the Acumen Due
Diligence and Business Review, the recommendations of the Canberra Working
Group and the ratification of the Defence Agreement, the main focus for the financial
year was to restructure the organisation to meet directed outcomes. The
objective was to ensure that Frontline would be in a position to return to
profitability and self sufficiency by 30 June 2008.
2.9
The report stated that the focus of this restructure was in four
key areas:
- a decrease in the size of the head office and a reduction in
overheads and costs;
- a review of canteen operations and their transition to an optimum
mix of directly operated, profit share or License to Trade outlets;
- preparation for the transition of tavern operations to Garrison
support contracts managed by the Defence Support Group (DSG); and
-
development of the Frontline Strategic Plan 2008–2012.[5]
2.10
The section in the report entitled 'results and review of
operations', describes the implementation and outcomes of the restructure plan.[6]
2.11
The 2006–2007 report is an informative account of the operations
and performance of Frontline Defence Services. The committee finds that this
report fulfils all requirements outlined in the guidelines for statutory
bodies.
Australian War Memorial
2.12
The Australian War Memorial Annual Report 2006–2007 was tabled in
the Senate on 19 September 2007. The Australian War Memorial (AWM) is a
statutory authority within the Veterans' Affairs portfolio and functions in
accordance with the requirements of the Australian War Memorial Act 1980
and the Commonwealth Authorities and Companies (CAC) Act
1997.[7]
2.13
The purpose of the Australian War Memorial is 'to commemorate the
sacrifice of those Australians who have died in war'.[8]
2.14
In the Chairman's report, Mr Adrian Clunies–Ross reported that the
major focus for the Australian War Memorial's Council and staff has been to
oversee the development of the Post–1945 Conflicts galleries. This project was
approved in 2004, with the first phase being the construction of the C E W Bean
building, which now accommodates staff and collection.[9]
2.15
In the design of the galleries, Council asked that special
attention be given to reinvigorating the diorama tradition; to giving the
galleries a sense of location; to using multimedia techniques to produce
engaging major experiences; and to attract the widest possible demographic, especially
children. Particular attention has been given during the entire process to
stakeholder consultation.[10]
The Annual Report noted that there have been some minor hold-ups:
While the construction work for the Post–1945 Conflicts
galleries has progressed satisfactorily, numerous latent conditions have caused
delays which have been largely overcome by competent management by memorial
staff and rescheduling of secondary and tertiary works. Council has been
impressed by the flexibility and foresight of the Director and those staff
directly involved in solving difficult engineering problems while substantially
maintaining schedules.[11]
2.16
The Chairman stated that during the year, the Memorial
implemented recommendations made in the Uhrig report (2003), relating to
corporate governance of statutory authorities and officer holders. The Chairman
further stated that 'Council considers the outcome satisfactory, particularly
as existing strong relationships have not been disturbed. [12]
2.17
The committee finds that the War Memorial's Annual Report provides
a comprehensive coverage of the organisation's activities during 2006–2007. It
is an informative and well produced document, which allows the reader to access
information easily. The committee concludes that this report complies with all
reporting requirements for statutory authorities.
Other reports
2.18
Other Defence portfolio authorities, agencies and/or companies
which had their annual reports examined by the committee, but were not
otherwise commented upon in this edition, include:
- ASC Limited
- Australian Strategic Policy Institute
- Defence Force Retirement and Death Benefits Authority
- Defence Housing Authority
- Defence Materiel Organisation
- Military Rehabilitation and Compensation Commission
- Military Superannuation and Benefits Board
- Repatriation Medical Authority
- Veterans' Review Board.
2.19
The committee considers that all the annual reports of the above–mentioned
organisations fully met their respective reporting requirements.
Foreign Affairs and Trade portfolio
Australian Agency for International
Development (AusAID)
2.20
The Australian Agency for International Development Annual Report
2006–2007 was presented on 31 October 2006, and tabled in the Senate on 12 February 2008.
2.21
AusAID administers Australia's overseas aid program. According to
the annual report, the objective of the aid program is to advance the national
interest 'by assistance to developing countries to reduce poverty and achieve
sustainable development'.[13]
2.22
AusAID advises the government on development policy and manages
Australian development cooperation programs focused on achieving broad–based
growth, stability and effective governance, particularly in our region. In this
way, AusAID contributes to the formulation and implementation of Australia's
broader foreign policy framework. It is an administratively autonomous agency
within the Foreign Affairs and Trade portfolio. The Director General reports
directly to the Minister for Foreign Affairs and the Parliamentary Secretary on
all aspects of aid policy and operations.[14]
2.23
In the Director General's review, Mr Bruce Davis stated that 2006–2007
had been another significant year for the Australian aid program, a period
characterised by growth and transformation in the program and made particularly
exciting by new and emerging opportunities. He also stated that the year was
touched by tragedy, with the crash of Garuda Flight 200 in Yogyakarta in March
2007, in which five Australians died including AusAID officer Allison Sudradjat.[15]
2.24
Allison was the head of AusAID's operations in Indonesia...
She had worked with AusAID for 18 years, playing a leading role
in responding to some of the region's worst disasters, from droughts to
tsunamis through to superbly managing Australia's $1 billion development
assistance package in Indonesia...
Allison was an extraordinarily gifted and committed humanitarian
worker...a remarkable person, someone who touched the lives of so many people,
both within AusAID and Australia, and in the developing world where she loved
to live and work.[16]
2.25
On 31 May 2007, the then Minister for Foreign Affairs, the Hon
Alexander Downer MP, announced the creation of the annual Allison Sudradjat
Awards. The awards will be presented to four of the top post graduate students
from Indonesia and two from Papua New Guinea who are recipients of Australian
Leadership Awards.[17]
They will provide gifted young people from the region with an invaluable
professional personal experience. As well as the entitlements they receive
under the leadership awards, these scholars will receive additional benefits
such as attachments with Australian Government departments, education and
research institutions.
2.26
In the section entitled 'report on performance', AusAID stated
that the 2006–2007 annual report
...employs a new performance assessment
framework, which was developed to reflect the Australian Government's White
Paper on the overseas aid program, Australian aid: promoting growth and
stability.
...2006–07 has been a year of transition for
performance measurement and management of the overseas aid program. The Office
of Development Effectiveness, established by the Australian Government in the
White Paper developed an enhanced performance assessment framework during the
year.
...
the enhanced performance assessment framework will provide
program managers with better data about performance and will supply external
stakeholders with information on the results achieved with Australian funds.
The enhanced framework was trialled in 2006–07 across seven countries, Papua
New Guinea, Indonesia, Solomon Islands, Vietnam, Philippines, Vanuatu and Fiji,
that represent some two thirds of Australia's aid allocated by country. Lessons
from these early adopters are now being used to refine the enhanced framework
before it is rolled out across the program in 2007–08.[18]
2.27
The report further states that the challenge of generating robust
performance information on the impact and effectiveness of aid should not be
underestimated. The framework will be subject to continuous review and
enhancement. The enhanced framework will better reflect the complexity of the
development process.[19]
2.28
The committee finds that AusAID's annual report provides a
comprehensive coverage of the organisation's activities during 2006–2007. As usual
the committee considers it to be of high quality: it is informative and well produced.
The committee concludes that this report complies with all reporting
requirements for non–statutory authorities.
Australian Trade Commission (Austrade)
2.29
The Australian Trade Commission Annual Report 2006–2007 was presented
on 16 October 2007 and tabled in the Senate on 12 February 2008.
2.30
The Australian Trade Commission is a statutory authority responsible
to the Minister for Trade and the Australian Government. Until 30 June 2006, Austrade operated under the Australian Trade Commission Act 1985, Commonwealth
Authorities and Companies Act 1997, and the Export Market Development
Grants Act 1997. It was governed by a Board whose members were drawn from
business and government.
2.31
On 1 July 2006, following amendments to the Australian Trade
Commission Act 1985, and the Export Market Development Grants Act 1997,
Austrade became an agency under the Financial Management and Accountability
Act 1997 and the Public Service Act 1999, and managed by a Chief
Executive Officer.[20]
2.32
The annual report states that Austrade's mission is 'to
contribute to community wealth by helping more Australians succeed in export
and international business'.[21]
2.33
As reported in his Managing Director's report last year, Mr Peter
O'Byrne outlined the changes made to Austrade's corporate governance:
This year Austrade implemented changes to its governance
arrangements, in line with the Government's response to the Uhrig review.
Austrade transitioned from a statutory authority with a board of directors to a
statutory agency with an executive management structure, reporting directly to
the Minister for Trade. These changes were completed successfully while
maintaining effective delivery of Austrade services to Australian businesses
and growing the value of our contribution to the exporter market.[22]
2.34
Mr O'Byrne also noted that Austrade achieved a continuing strong
performance in providing support to the international business effort of
Australian enterprises.
2.35
Some highlights for the year included:
- Austrade worked with 15,000 Australian companies in 2006–2007,
assisting 5417 businesses to achieve export success. This is an increase of six
percent on the number assisted in 2005–2006.
- The dollar value of export successes achieved by Austrade's
clients, with acknowledged assistance by Austrade, totalled $22.4 billion.
- Utsav Australia (Celebrate Australia) was launched
in India. This three year sustained and comprehensive promotion of Australian
capabilities and business opportunities aims to raise awareness and expand
commercial engagement for Australian companies in India.
- Austrade hosted the 20th anniversary Asian trade
Promotion Forum and the 19th APEC Working group on Trade Promotion.[23]
2.36
The committee is satisfied with Austrade's tables which describe
its performance and outcomes for the year and its descriptions of
accountability and corporate governance requirements.[24]
2.37
The committee finds that Austrade's annual report provides a
comprehensive coverage of the organisation's activities during 2006–2007. In
keeping with previous examinations, the committee considers this annual report
to be informative and produced in a manner that allows the reader easy access
to information. The committee concludes that this report complies with all
reporting requirements for statutory authorities.
Other reports
2.38
Other Foreign Affairs and Trade portfolio authorities and/or
agencies which had their annual reports examined by the committee but were
otherwise not commented upon in this edition, include:
- Australian Safeguards and Non–Proliferation Office Annual Report
2006–2007 and
- Export Finance and Insurance Corporation Annual Report 2006–2007.
2.39
The committee considers that all the annual reports of the
abovementioned organisations fully met their respective reporting requirements.
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