Chapter Two - Departmental Annual Reports

Department of Agriculture, Fisheries and Forestry 2003-04

2.1                 The Department of Agriculture, Fisheries and Forestry's (DAFF) 2003-04 annual report was prepared in accordance with section 63 of the Public Service Act 1999 and tabled on 17 November 2004. The Committee notes the Senate's receipt of this report on 7 October 2004, during the federal election campaign.

2.2                 The report is presented in accordance with the checklist of requirements stipulated in the Department of Prime Minister and Cabinet's Requirements for Annual Reports for Departments Executive Agencies and FMA Act Bodies, June 2004. The DAFF 2003-04 annual report contains the following information:

• The Secretary's yearly review highlighting the achievements of the Department and future outlook;
• A departmental overview outlining DAFF's operations and organisational structure;
• Report on performance as measured against output objectives;
• An overview of the Department's management and accountability arrangements, including corporate governance practices, internal and external scrutiny, purchasing and tendering; and
• Appendices detailing financial statements, FOI requests, discretionary grants, occupational health and safety procedures and advertising and market research.

2.3                 The Committee notes that all mandatory requirements for the report have been met.

Departmental overview

2.4                 The Committee notes the most significant issues for DAFF during the reporting period:

(i)           Contributing to the negotiations preceding the US and Thailand free trade agreements;

(ii)       The resolution of the Cormo Express incident and the subsequent Keniry Report recommending changes to the live export industry, following Saudi Arabia's rejection of a live sheep consignment from Australia in September 2003;

(iii)     Administration of continuing assistance to drought-affected farmers;

(iv)       The announcement of the $444 million sugar industry reform package, which extends the previous 2002 reform package; and

(v)         Participation in securing COAG agreement for the National Water Initiative in June 2003.[2]

2.5                 In his yearly review, the Departmental Secretary placed particular emphasis on the effectiveness of the 'Agriculture – Advancing Australia' (AAA) package. This was targeted primarily at improving farmers' business capacity and risk mitigation strategies, with the intention of assisting farmers to become more self-reliant, particularly during periods of exceptional circumstances. The Department alluded to the success of the program and "... the importance of the successor package [not specified] announced in early 2004".[3]

2.6                 On the legislative front, the passage of final amendments to the Dairy Produce Act 1986 concluded the statutory aspect of dairy reform. Additionally, the Wheat Marketing Amendment Act 2003 established a charge on exports to fund the Wheat Export Authority.[4]

2.7                 Other departmental highlights included the release of Biosecurity Australia's revised Import Risk Analysis (IRA) handbook outlining the IRA process. The Committee notes that no new IRAs were commenced during the year, though 26 animal and 9 plant IRAs were already progressing.[5]

Report on performance

2.8                 DAFF has reviewed its performance based on objectives established in the 2003-04 Portfolio Budget Statements (PBS). The objectives of each departmental output are assessed by measuring the Department's performance against a series of departmental indicators.

2.9                 The Department reported that the Commonwealth had provided in excess of $55 million to New South Wales, Victoria, South Australia, Queensland and Tasmania under the National Action Plan for Salinity and Water Quality. This will help planting, drainage works and water use efficiency improvements.[6]

2.10             In the Committee's examination of DAFF's previous annual report, the need to improve quarantine effectiveness at international mail exchanges, sea cargo containers and higher risk items at airports was discussed.[7] The Committee notes that in 2003-04 the quarantine intervention at mail exchanges has improved, as has the intervention of sea containers. However, increasing passenger volumes in Sydney airport and incomplete infrastructure changes in Melbourne have caused interventions to fall below targeted levels.[8] It is regrettable that DAFF did not offer any insight as to whether these problems would continue, or any potential action to improve the situation.

2.11             The Department finished the year with an operating surplus of $5.6 million, down from $15 million in the previous year. This surplus was due to underspending on delivery costs associated with the drought and sugar industry relief packages, plus an underspend on additional funding for IRAs.[9] The Committee again notes that no explanation was provided for these underspends and encourages the Department to include further explanations in future reports.

Management and accountability

2.12             As required by the Department of Prime Minister and Cabinet's annual reporting guidelines, the report provides information on corporate governance, internal and external scrutiny, human resource management, purchasing, assets management, consultancies, advertising and market research activities, discretionary grants, freedom of information, occupational health and safety, Commonwealth Disability Strategy and ecologically sustainable development and environmental performance.

2.13             DAFF makes note of two appeals to Biosecurity Australia's import risk analysis (IRA) process. In April 2004 IRA Appeal Panels were convened to hear appeals relating to the Thai mangosteen and generic pig meat IRAs.[10] All aspects of the appeals were disallowed by the panel, and policy determinations giving effect to the IRAs were consequently handed down by the Director of Animal and Plant Quarantine.[11]

2.14             Expenditure on consultancies during 2003-04 was $15.1 million, up from $13.3 million the previous year. The largest payment was $2.8 million to Universal McCann for placing Quarantine Matters! advertisements in various media. The decision to appoint that organisation was taken by the Department of Prime Minister and Cabinet.[12]

2.15             The Department was listed in a recent ANAO report on special appropriations[13] as not disclosing their use of special appropriations under section 39 of the Financial Management and Accountability Act 1997. The Committee anticipates that the audit's findings will be noted in DAFF's 2004-05 annual report, and a disclosure made. Further, the Committee expects that a formal administrative procedure will be instituted to ensure future compliance.

Comment

2.16             The Committee considers DAFF's 2003-04 annual report to be well presented and in compliance with the reporting requirements of a Commonwealth department.

Department of Transport and Regional Services 2003-04

2.17             The Department of Transport and Regional Services (DOTARS) did not table its 2003-04 annual report by the 31 October deadline. In accordance with the requirements of section 34C of the Acts Interpretation Act 1901, the Department provided a written statement to the Minister for Transport and Regional Services explaining why it would not be possible to comply with the deadline. As also required by section 34C of the Acts Interpretation Act 1901, this statement was tabled in both Houses of Parliament on 16 November 2004.

2.18             The Committee notes that the Department provided the Minister with a written statement on 2 November 2004, after the deadline had already passed. The Committee is of the view that DOTARS should have done this before the October 31 deadline.

2.19             The explanation DOTARS provided to the Minister is as follows:

The Department has experienced delays in presenting its 2003-04 Annual Report, in part due to increased workload largely associated with preparing the 2004 Incoming Government Brief.

As well, when the Federal Election was announced, a decision was taken to delay printing of the report as a courtesy to allow incoming ministers an opportunity to review and comment on the draft text. This meant we had to reschedule tasks such as indexing and printing.

We now expect to present the report to you no later than the end of November 2004. A proof version will be provided to your office shortly for information and comment.

A number of departments are tabling their annual reports for 2003-04 late due to delays associated with the Election period.[14]

2.20             DOTARS' 2003-04 Annual Report was tabled on 8 December 2004 and will be examined in the Committee's Report on Annual Reports No. 2 of 2005.

2.21             The Committee notes that the 9 October 2004 federal election was provided as an explanation for not reporting within the deadline. However, the Committee questions the validity of this argument.