Annual reports of statutory authorities

2.1        The annual reports of the following statutory authorities in the Attorney-General's portfolio were referred to the committee for examination and report during the period 1 November 2015 to 30 April 2016:

• Australian Government Solicitor;
• Family Law Council; and
• High Court of Australia.

2.2        No annual report was referred to the committee over this time period from the Immigration and Border Protection portfolio.

2.3        The committee has decided to closely examine the annual report of the Australian Government Solicitor, as this is the last report for the authority as a government business enterprise.

Australian Government Solicitor

2.4        The Australian Government Solicitor (AGS) was a statutory authority and government business enterprise (GBE) during the 2014–15 reporting period. Its role is to provide legal services to government, assisting the Attorney-General in the role of First Law Officer, and advising Executive Government and all Commonwealth Agencies.[1] Under the Judiciary Amendment Act 2015, AGS was consolidated into the Attorney-General's Department (AGD) on 1 July 2015 and its role as a statutory authority was revoked. The AGS annual report for 2014–15 is therefore its last as a GBE.

2.5        The AGS annual report was prepared in accordance with section 46 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and, under the PGPA (Consequential and Transitional Provisions) Rule 2014, the Commonwealth Authorities (Annual Reporting) Orders 2011.[2] It was tabled in the Senate on 23 November 2015.[3]

2.6        The AGS annual report for 2014–15 began with a brief section on the consolidation of AGS into AGD, and the governance, financial and commercial, staff and client implications of the transition as of 1 July 2015.

2.7        The Chief Executive Officer's review provided a financial reflection of AGS's performance as a GBE since 1999, reporting total profits before tax of $173 million and payments to the Commonwealth, including dividends, taxation, competitive neutrality payments and loans, of $262 million. It also outlined the major areas of legal advice for AGS during 2014–15, including royal commissions, the application of the PGPA Act, immigration matters, constitutional support of the proposed mandatory data retention obligations for telecommunications service providers, and constitutional recognition of Indigenous Australians.[4]

2.8        The CEO stated that AGS 'had one of [its] best years yet' in 2014–15, continuing to be the largest provider of government legal services, with a market share of 41%, and with a client satisfaction rating of 96%.[5]

2.9        In 2014–15, AGS achieved trading revenue of $120.2 million, $3.4 million above the corporate plan target, and its total profit (including interest) was $10 million,[6] an increase of $4.3 million from 2013–14.[7] AGS also made further savings of $1.7 million in corporate overhead expenses.[8]

2.10      In the 'Scorecard of AGS performance', AGS ranked itself 'good or better performance or trends' in all five performance measures (financial performance, business efficiency, leverage/solvency, customers and stakeholders, and staff).[9] This ranking is reflected in the results in the Performance Summary for 2014–15, although in a number of instances the final performance against financial targets was negatively affected by the transition from a GBE, including total shareholder return (target 10.0%, actual 1.4%), return on equity (target 10.1%, actual 0.7%) and net profit after tax (target $3.6 million, actual $0.2 million).[10] This negative performance is attributed to a $6.6 million write-off of a deferred tax asset, and in each instance it appears that the target was met before the write-off at the end of the reporting period.[11]

2.11      In the section 'Outcomes against our corporate plan',[12] AGS provided an excellent analysis of performance in four key areas of its corporate plan (clients, practice, people, and business), including discussion of change management and shifting strategic focuses due to the consolidation with AGD, and the impact of these on the four year period (2014–18) covered by the plan. For example, detail was provided on transitioning staff to the Australian Public Service and reclassification of roles,[13] and on the benefits to clients in moving to new pricing arrangements for services provided by AGS after 1 July 2015, including a shift to cost-recovery rather than commercial pricing for 'out posted' AGS lawyers.[14]

2.12      The committee commends AGS on the level of detail provided in this annual report, particularly regarding the impact of the consolidation with AGD and the transition arrangements. The committee considers the report of the AGS to be 'apparently satisfactory'.

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