Introduction
1.1
Under Senate Standing Order 25(20), the annual reports of departments
and agencies under the Senate Foreign Affairs, Defence and Trade Legislation Committee's
(the Committee) allocated portfolios stand referred to the Committee for examination
and report. Under the Standing Order, in the year's first report, the committee
is required to examine those annual reports presented to the Parliament between
1 May and 31 October 2019. On this occasion, the Committee has chosen to also
include reports tabled after 31 October 2019 that were available at the
time of preparing this report.[1]
1.2
Copies of this and other Committee reports can be obtained from the
Senate Table Office or online at the Committee's webpage.
Terms of reference
1.3
Under Standing Order 25(20) the committee is required to:
-
Examine each annual report referred to it and report to the Senate
whether the report is apparently satisfactory.
-
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.
-
Investigate and report to the Senate on any lateness in the presentation
of annual reports.
-
In considering an annual report, take into account any relevant remarks
about the report made in debate in the Senate.
-
If the committee so determines, consider annual reports of departments
and budget-related agencies in conjunction with examination of estimates.
-
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.
-
Draw the attention of the Senate to any significant matters relating to
the operations and performance of the bodies furnishing the annual reports.
-
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, the Committee
has oversight of the following portfolios:
- Defence, including Veterans' Affairs; and
- Foreign Affairs and Trade.[2]
Role of annual report
1.5
Annual reports inform the Parliament, stakeholders and other interested
parties of the operations and performance of public sector departments,
agencies, companies and statutory office holders. Annual reports are a key
publication under the Commonwealth performance framework and remain 'the
primary document through which responsible Ministers report to the Parliament.'[3]
Additionally, they are an important reference document and form a critical part
of the historical record.[4]
Reports examined
1.6
During the period 1 May 2019 to 14 February 2020, 25 annual reports of
bodies were presented to the Parliament and referred to the Committee for
examination. Reports examined included those from the following categories of
bodies under the Public Governance, Performance and Accountability Act 2013
(PGPA Act), and those which are prepared by statutory offices or office holders:
Non-corporate Commonwealth entities
-
Australian Signals Directorate—Report for 2018-19
-
Department of Defence—Report for 2018-19
-
Repatriation Commission, Military Rehabilitation and Compensation
Commission and the Department of Veterans’ Affairs—Reports for 2018-19
-
Department of Foreign Affairs and Trade—Report for 2018-19
-
Australian Trade and Investment Commission – Report for 2018-19
-
Australian Centre for International Agricultural Research –
2018-19
Corporate Commonwealth entities
-
Australian War Memorial – Report for 2018-19
-
Defence Housing Australia—Report for 2018-19
-
Royal Australian Air Force Veterans’ Residences Trust—Report for
2018-19
-
Royal Australian Navy Central Canteens Board (Navy
Canteens)—Report for 2018-19
-
Services Trust Funds—Report for 2018-19, includes:
-
Royal Australian Navy Relief Trust Fund
-
Australian Military Forces Relief Trust Fund
-
Royal Australian Air Force Welfare Trust Fund
-
Army and Air Force Canteen Service (AAFCANS)—Report for 2018-19
-
Export Finance Australia—Report for 2018-19
-
Tourism Australia – Report for 2018-19
Commonwealth companies
-
Australian Strategic Policy Institute – Report for 2018-19
-
AAF Company – Report for 2018-19
-
Royal Australian Air Force (RAAF) Welfare Recreational Company—Report
for 2018-19
Statutory offices/office holders
-
Inspector-General of the Australian Defence Force – Report for
2017-18
-
Judge Advocate General – Report for 2018
-
Director of Military Prosecutions – Report for 2018
-
Repatriation Medical Authority—Report for 2018-19
-
Veterans' Review Board—Report for 2018-19
-
Australian Safeguards and Non-Proliferation Office – Report for
2018-19
Reports not examined
1.7
The Committee is not obliged to examine reports on the operation of
Acts, policy papers, budget documents, corporate plans or periodical reports
required under guidelines. Accordingly, the following documents were also
referred to the Committee but not examined:
-
Department of Defence – Special Purpose Flights – Schedule for
the period 1 July 2018 to 31 December 2018
-
Final Budget Outcome 2018-19
-
Tax Benchmarks and Variations Statement 2019
-
Consolidated Financial Statement for the year ended 30 June 2019
-
Mid-year Economic and Fiscal Outlook 2019-20
-
Report on Advances Provided Under the Annual Appropriation Acts
for the Year Ended 30 June 2019
1.8
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
reports were not examined:
-
Australian Naval Infrastructure Pty Ltd—Report for 2018-19 (Also
referred to the Finance and Public Administration Legislation Committee)
-
ASC Pty Ltd—Report for 2018-19 (Also referred to the Finance
and Public Administration Legislation Committee)
Assessment of annual reports
1.9
Senate Standing Order 25(20) requires the Committee to 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 or requirements for the preparation of annual reports in
forming its assessment.
Annual reporting requirements
Public Governance, Performance and
Accountability Act 2013
1.10
The PGPA Act is the legislative basis of the Commonwealth performance
framework which governs how the Commonwealth public sector uses and manages
public resources. It sets out the key requirements for governance, performance reporting
and accountability required of Commonwealth entities and companies. A
description of different governance structures of these bodies for the purposes
of the PGPA Act is set out below:
-
Non-corporate Commonwealth entity – legally and financially part
of the Commonwealth, including departments of state, parliamentary departments
or listed entities (a body, person, group of persons or organisation that is
prescribed by rules made under the PGPA Act).
-
Corporate Commonwealth entity – a body corporate, that is, a
separate legal personality from the Commonwealth. It can act in its own right
exercising certain legal rights such as entering into contracts and owning
properties.
-
Commonwealth company – a company established by the Commonwealth
under the Corporations Act 2001 that is wholly controlled by the Commonwealth.[5]
Annual reports
1.11
Section 46 of the PGPA Act sets out the annual reporting requirements in
relation to Commonwealth entities, which states that annual reports must comply
with any requirements prescribed by rules. Section 97 sets out the annual
reporting requirements for Commonwealth companies, including those of the Corporations
Act 2001 and any additional information prescribed by the rules.
Corporate plans and annual
performance statements
1.12
The Commonwealth performance framework also includes the requirement for
Commonwealth entities and companies to prepare and publish corporate plans each
year, pursuant to sections 35 and 95 of the PGPA Act. Under section 39 of the
PGPA Act, Commonwealth entities must prepare an annual performance statement
and include this statement in the annual report. Entities use the annual
performance statement to report on results achieved against the targets, goals
and measures established at the beginning of a reporting year in its corporate
plan, in addition to key performance indicators set out in portfolio budget/additional
estimates statements.
1.13
It is noted that Commonwealth companies are not required to prepare
annual performance statements. However, under section 27A of the Public
Governance, Performance and Accountability Rule 2014 (PGPA Rule), companies are
required to include in their annual report a report on the actual performance
results achieved against the performance information published in their
corporate plan.[6]
Public Governance, Performance and
Accountability Rule 2014
1.14
The PGPA Rule sets out the detailed mandatory requirements for the
preparation of corporate plans, annual performance statements and annual reports
for Commonwealth entities and, where relevant, Commonwealth companies.
1.15
The Department of Finance publishes resource management guides (RMGs)
for Commonwealth entities on a wide range of topics, including on the annual
reporting obligations under the PGPA Act and mandatory requirements for the
content of annual reports as prescribed by the PGPA Rule.
Changes to the PGPA Rule for 2018-19 annual reports
Executive remuneration
1.16
New executive remuneration reporting requirements came into effect for
the 2018-19 annual reports of Commonwealth entities and companies.[7]
The Public Governance, Performance and Accountability Amendment (Reporting
Executive Remuneration) Rules 2019, dated 4 April 2019, amended the PGPA Rule to
require Commonwealth entities and companies to include details of the
remuneration of each of their key management personnel and the policies and
practices that underpin remuneration in their annual reports. Commonwealth
entities are now also required to disclose details of aggregated remuneration
of their senior executives and other highly paid staff.[8]
1.17
Schedule 3 of the PGPA Rule provides templates for the presentation of
the required information about the remuneration for key management personnel
and senior executives.
Publication in the digital
reporting tool
1.18
The Public Governance, Performance and Accountability Amendment (Annual
Reporting) Rules 2019 (Amending Rule), dated 4 April 2019, amended the PGPA
Rule to require annual reports of Commonwealth entities and companies to be
published using the digital reporting tool administered by the Finance Minister
as soon as practicable after presentation to the Parliament. The Transparency
Portal at transparency.gov.au was launched by the Government on 13 March 2019 as
part of its initiative to provide for the full digitisation of the Commonwealth's
annual plans and reports. In launching the pilot of the website the Minister
for Finance outlined the planned benefits of the initiative:
People can use this single website to search for data and to
make instant comparisons of data between government bodies, using viewer-generated
tables and graphs.[9]
This is a new website where the public and the Parliament can
more easily find information about what Government is doing, and how public
money is being spent.
The website will help give the community confidence that the
public sector is adding value and achieving results.[10]
1.19
Finance's RMGs elaborated on this new requirement:
The digital reporting tool enables entities to draft content
and publish annual reports to the Transparency Portal at transparency.gov.au.
Commencing from the 2018-19 reporting period all Commonwealth entities’ and
companies’ annual reports will be published on and accessible from
transparency.gov.au following the presentation of these reports to the
Parliament.[11]
1.20
The Amending Rule also included some additional reporting requirements,
including details of the accountable authority for non-corporate Commonwealth
entities; and statistics on ongoing and non-ongoing employees across the three
types of bodies. Finance's resource management guides for the preparation of
annual reports for each type of body, numbers 135, 136 and 137, provide
templates for the presentation of this information in a standard format in
annual reports.
Statutory office holders and
statutory bodies
1.21
Statutory office holders are engaged or employed under an Act which may
prescribe annual reporting requirements pursuant to the office. It is also
noted that there may be reporting requirements in the enabling legislation for
statutory bodies (which may also be a Commonwealth entity).
Non-Statutory bodies
1.22
Non-statutory bodies (NSBs) are established by a Minister and are not
pursuant to a statute. Annual reporting requirements for NSBs are contained in
the government response to the Senate Standing Committee on Finance and Public
Administration Report on Non-Statutory Bodies, dated 8 December 1987.[12]
Summary of annual reporting
requirements
1.23
Below is a summary of the legislative authority and requirements under
which annual reports are prepared for different types of bodies:
Non-corporate Commonwealth entities
-
PGPA Act, section 46 and the PGPA Rule 2014, Division 3A(A);
-
for parliamentary 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 2014, Division 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 2014, Part 3-3; and
-
for statutory bodies: relevant enabling legislation.
Non-statutory bodies
-
annual reporting requirements 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.[13]
Statutory offices or office holders
-
any requirements in the enabling legislation.
Review of the PGPA Act
1.24
In its last report, the Committee noted the Government response to the
report of the Independent review into the operation of the Public
Governance, Performance and Accountability Act 2013 and Rule, tabled
on 5 April 2019, where the Government accepted in principle 48 out of 52
recommendations that were directed to the Government.[14]
The Committee notes that as at 19 December 2019, 20 recommendations have been
implemented or actioned.[15]
In particular, it welcomes the progress on Recommendation 31 regarding the
digital reporting platform; and Recommendations 35 and 36 regarding more
transparent reporting of executive remuneration, which applied to the 2018-19
annual reports.
Timeliness
1.25
Under Standing Order 25(20)(c), the Committee must report to the Senate
any lateness in the presentation of annual reports. The Committee notes the
different reporting timeframes for different categories of bodies.
Commonwealth entities
1.26
Section 46(2) of the PGPA Act requires the accountable authority for a
Commonwealth entity to prepare an annual report and provide it to the
responsible minister by the fifteenth day of the fourth month after the end of
the reporting period for the entity. This section of the Act does not currently
prescribe a timeframe for the Minister to present the report to the Parliament,
neither does the PGPA Rule.
1.27
The PGPA Rule states that annual reports for corporate Commonwealth
entities, non-corporate Commonwealth entities and Commonwealth companies must
comply with the 'the guidelines for presenting documents to the Parliament'.[16]
1.28
The Department of Prime Minister and Cabinet Tabling Guidelines advise
that in relation to the tabling of annual reports:
Enquiries about the preparation, content and reporting
timeframes should be directed to the Department of Finance...Relevant guidance
for Commonwealth entities and companies annual reporting requirements can be
located at https://www.finance.gov.au/resource-management/performance/.[17]
1.29
Finance's RMGs include advice about the timetable for tabling annual
reports. For Commonwealth entities, the guides advise that:
It has been practice for the responsible Minister to present
the report to each house of the Parliament on or before 31 October. If Senate
Supplementary Budget Estimates hearings are scheduled to occur before 31
October, Ministers have sought to table annual reports prior to those hearings.[18]
1.30
The Tabling Guidelines also refer to periodic advice issued by
PM&C through Tabling Circulars which supplement the Guidelines from time to
time and may include arrangements for the tabling of annual reports. Tabling
Circular No. 2 of 2019 advised agencies that in relation to the tabling
timetable for 2018-19 annual reports:
Normally Annual Reports are tabled on or before 31 October,
however this year the 2019 Supplementary Budget Estimates hearings commence on
21 October 2019. Please note it is expected Annual Reports are tabled prior
to those hearings. This ensures Annual Reports are available for scrutiny by
the relevant Senate Standing committee.[19]
Commonwealth companies
1.31
Under section 97(2) of the PGPA Act, Commonwealth companies are required
to prepare an annual report and provide it to the responsible Minister:
- if the company is required by the Corporations Act 2001 to hold an
annual general meeting—the earlier of the following:
- 21 days before the next annual general meeting after the end of the reporting
period for the company;
- 4 months after the end of the reporting period for the company; and
- 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.
1.32
In relation to the tabling of the annual report in the Parliament,
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.
1.33
The advice contained in Finance's Resource Management Guide No. 137
– Annual reports for Commonwealth companies aligns with the requirements
under section 97(5) of the PGPA Act set out above.[20]
Consistent with Commonwealth entities, Resource Guide No. 137 notes the
provision for an application for an extension of the reporting period for
Commonwealth companies:
There is scope for a company to apply in writing to their
responsible Minister for an extension where it is not reasonably possible to
meet the timeframes outlined in subsection 97(2). Subsection 34C(5) of the Acts
Interpretation Act 1901 allows a Minister to grant an extension where he or
she considers it reasonable in the circumstances.[21]
Provisions of the Acts
Interpretation Act 1901
1.34
In the absence of specific provisions, the Acts Interpretation Act
1901 (Acts Interpretation Act) requires bodies to present annual
reports to ministers within six months after the end of the period reported
upon (subsection 34C(2)), and ministers to table reports within 15 sitting days
of receipt (subsection 34C(3)).
Reporting timeframes for statutory
offices/office holders
Judge Advocate General
1.35
Under section 196A(1) of the Defence Force Discipline Act 1982
(DFD Act) the Judge Advocate General shall, as soon as practicable after each
31 December, prepare and furnish to the Minister a report relating to the
operation of the Act, the regulations, the rules of procedure; and the
operation of any other law of the Commonwealth or of the Australian Capital
Territory in so far as it relates to the discipline of the Defence Force during
the year ending on that 31 December.
1.36
Section 196A(2) of the DFD Act requires the Minister to present the
report to each House of the Parliament within 15 sitting days of that House
after the day on which the Minister receives the report.
Director of Military Prosecutions
1.37
Under Section 196B(1) of the DFD Act, the Director of Military
Prosecutions must, as soon as practicable after each 31 December, prepare and
give to the Minister, for presentation to the Parliament, a report relating to
the operations of the Director of Military Prosecutions during the year ending
on that 31 December.
1.38
The Act does not prescribe a timeframe for the Minister to present the
report to the Parliament. It appears that section 34C(3) of the Acts
Interpretation Act would apply, therefore requiring the Minister to lay
a copy of the report before each House of Parliament within 15 sitting days of
receipt of that report.
Inspector-General of the Australian
Defence Force
1.39
Section 110R(1) of the Defence Act 1903 (Defence Act) states that
as soon as practicable after the end of each financial year, the
Inspector-General of the Australian Defence Force (ADF) must prepare and give
to the Minister, for presentation to the Parliament, a report on the operations
of the Inspector-General during the financial year. This section also notes
that reference should also be made to section 34C of the Acts Interpretation Act,
which requires the Minister to lay a copy of the report before each House of
Parliament within 15 sitting days of receipt of that report.
Repatriation Medical Authority
1.40
The Repatriation Medical Authority is established under the Veterans'
Entitlement Act 1986 and there does not appear to be a statutory requirement
to table an annual report under the Act but the Authority has done so since its
inception.
1.41
In the committee's report Annual reports (No.1 and No. 2 of 2019),
it recommended that unless there was a strong public policy reasons to the
contrary, on the occasion of any amendment to the Veterans' Entitlement Act
1986, the Government consider including a clause requiring the Repatriation
Medical Authority to table an annual report.[22]
The committee welcomed the Government response to the report on 28 October 2019
agreeing to the recommendation:
The Government agrees that, at an opportune time, a clause
requiring the Repatriation Medical Authority to table an annual report be
included in a future amendment to the Veterans' Entitle Act 1986.
The Department of Veterans' Affairs will prepare this clause
for consideration in due course.[23]
Veterans' Review Board
1.42
Section 215(4) of the Veterans' Entitlements Act 1986 states that
the Principal Board Member shall, as soon as practicable after 30 June in each
year, prepare and furnish to the Minister a report on the operations of the
Board during the year that ended on that 30 June. Section 215(5) states that
the Minister shall cause a copy of a report furnished to the Minister under
subsection (4) to be laid before each House of the Parliament within 15 sitting
days of that House after the day on which the Minister receives the report.
Repatriation Commission
1.43
Section 215 of the Veterans' Entitlements Act 1986 requires the
Repatriation Commission, as soon as practicable after 30 June in each year, to
prepare and furnish to the Minister a report on the operation of the Act during
the year; with the Minister required to present report to the Parliament within
15 sitting days after receipt.
Military Rehabilitation and
Compensation Commission
1.44
Under section 385 of the Military Rehabilitation and Compensation
Commission Act 2004, the Chair of the commission must, as soon as possible
after 30 June each year, give the Minister for presentation to the
Parliament, a report of the Commission's activities for the financial year
ended on that day.
Australian Safeguards and
Non-proliferation Office
1.45
Under section 51 of the Nuclear Non-Proliferation (Safeguards) Act
1987, section 96 of the Chemical Weapons (Prohibition) Act 1994 and
section 71 of the Comprehensive Nuclear Test-Ban Treaty Act 1998, the
Director of the Australian Safeguards and Non-Proliferation Office must, as
soon as practicable after 30 June in each year, prepare a report of operations
and furnish it to Minister. The above legislative sections require the Minister
to cause a copy of the report to be laid before each House within 15 sitting
days.
Review of timeliness of reports
examined
1.46
Standing Order 25(20)(c) requires the Committee to investigate and
report to the Senate on any lateness in the presentation of annual reports. The
Committee considers the timely presentation of annual reports to the Parliament
an important element of accountability.
1.47
Appendix 1 lists the annual reports tabled between 1 May 2019 and 14 February
2020 and referred to the committee for examination. This table includes the
dates the reports were tabled in the Senate (or received by the President out
of session) and the House of Representatives. 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 Minister, if available.
1.48
As noted above, there are two elements regarding the timeframe for the
preparation and presentation of annual reports: the provision of the report to
the Minister and the presentation of the report to the Parliament. Both of
these elements were examined by the Committee in investigating any lateness in
presentation of the annual reports.
Commonwealth entities and companies
1.49
All of the 2018-19 annual reports of agencies within the Defence
Portfolio and Foreign Affairs and Trade Portfolio met the required date for the
provision of the report to the Minister. All but two annual reports were presented
to the Parliament prior to the commencement of the committee's Supplementary
Budget Estimates hearings which commenced on 23 October 2019, with most
presented a week before, on 16 October 2019. The annual report of Australian
Centre for International Agricultural Research was presented on 23 October
2019, and Tourism Australia's on 30 October 2019.
1.50
The Committee appreciates the prompt tabling of the 2018-19 annual
reports and the availability of most reports well before the commencement of
the estimates hearings in accordance with the PGPA Act and relevant guidance
documents as outlined earlier in this chapter.
Statutory office/office holders
1.51
As noted above, the annual reports of statutory office/office holders
follow less prescriptive tabling requirements. While the Minister, upon receipt
of the annual report, must present the report to the Parliament within 15
sitting days, the preparation and furnishing of the report to the Minister is
'as soon as practicable' or 'as soon as possible' after the end of the
reporting period. The tabling timeframe for reports falling into this category
were considered to have generally met the legislative requirements.
1.52
However, it was noted that the Inspector-General of the Australian
Defence Force (IGADF) Annual Report 2017-18 was received by the President of
the Senate out of sitting on 28 August 2019. The report was submitted to,
and received by the Minister, on 28 June 2019 and 28 August 2019 respectively.
As noted earlier, under the Defence Act, the IGADF is required to prepare the
annual report and provide it to the Minister 'as soon as practicable after the
end of each financial year'. On this occasion, this period was approximately a
year after the financial year it reported on. This is considerably longer than
the time period for the provision of the report to the Minister for the
previous three reports which was approximately nine months after the end of the
financial year for the 2015-16 annual report; and just over five months for the
2014-15 and 2016-17 annual reports. The Committee was pleased to note that the
Minister presented the report promptly, on the day of receipt, meeting the
legislative requirements of within 15 sitting days of receipt.
1.53
While the 2017-18 report does not specifically address the time period
for the provision of the annual report to the Minister, the Inspector-General did
note that 'the operating tempo in the Office...was higher in 2017-18 than in
previous reporting periods'[24]
which may have been a contributing factor.
Senate debate
1.54
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 at the time of
preparing this report.
Non–reporting bodies
1.55
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. The Committee makes no recommendation for any
bodies not presenting an annual report to do so.
Assessment of reports
1.56
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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