Chapter 2
Annual reports of departments
2.1
The 2011-12 annual reports of the Department of Agriculture, Fisheries
and Forestry (DAFF), the Department of Infrastructure and Transport
(Infrastructure) and the Department of Regional Australia, Local Government,
Arts and Sport (Regional Australia) each contain the following information:
- the secretary's yearly review highlighting the achievements of
the department;
- a departmental overview outlining the department's operations and
organisational structure;
- report on performance as measured against deliverables and key
performance indicators (KPIs) specified in the Portfolio Budget Statements
(PBS);
- an overview of the department's management and accountability
arrangements, including corporate governance practices, people management, external
scrutiny, reporting requirements under the Environmental Protection and
Biodiversity Conservation Act 1999 (EPBC Act) and the Freedom of
Information Act 1982 (FOI Act), reviews, judicial decisions and
external service providers;
- appendices detailing agency resource and outcome resource
statements, workforce statistics, work health and safety information, grant
programs, advertising and market research, grant programs, purchaser-provider
arrangements and correction of errors in 2010-11 annual report; and
- financial statements.
Department of Agriculture, Fisheries and Forestry
2.2
The DAFF Annual Report 2011-12 was prepared in accordance with
section 63 of the Public Service Act 1999. The report was received by
the Senate on 5 October 2012 and tabled on 9 October 2012.
2.3
The report is presented in accordance with the list of requirements
specified in the Department of the Prime Minister and Cabinet's Requirements
for Annual Reports for Departments, Executive Agencies and FMA Act Bodies
(Requirements for Annual Reports).
2.4
DAFF's Annual Report 2011-12 contains the following additional information
to that specified in paragraph 2.1:
- the Australia Bureau of Agriculture Resource Economics and Sciences
(ABARES) publicly released reports/conference papers, the status of import risk
analyses, market access, and the report on operation of the Natural
Resources Management (Financial Assistance) Act 1992; and
- the National Residue Survey annual report.[1]
2.5
The committee notes a minor error; the page reference for the
Information Publication Scheme statement was not included in the compliance
index. Although this omission did not hinder the committee's ability to review
the report, the committee reminds DAFF that it is a mandatory requirement to be
included in compliance index as detailed in the Requirements for Annual Report.[2]
Departmental overview
2.6
The committee notes the following items of significance for DAFF during
2011-12:
- the Intergovernmental Agreement on Biosecurity was signed by the
Prime Minister and all state and territory first ministers, excluding Tasmania;
- progress was advanced on agricultural and veterinary chemicals
regulatory reform;
-
the Western Australian pilot of drought reform measures were
completed;
- the National Food Plan green paper was released for public comment
to ensure a more coordinated approach is taken to food-related policy;
- the biosecurity detector dog program celebrated twenty years of
operations; and
-
a new Strategic Statement for DAFF was launched.
2.7
The committee notes that DAFF recorded an operating deficit of $46 million
due to falling bond rates on the department's employee long service leave
provisions and additional regulatory service costs.[3]
Report on performance
2.8
DAFF has measured its performance against the deliverables and KPIs
specified in the 2011-12 PBS. A helpful overview of DAFF's performance
framework is provided at the beginning of the report on performance. The
committee is pleased to note, following comments in its previous report, that DAFF
has included its 'Summary of performance' section in its report for 2011-12. The
committee finds this to be a useful tool, as it clearly establishes whether or
not performance targets were met.
2.9
The committee notes that DAFF fully met 104 of its 114 KPIs in 2011-12.[4]
The committee finds DAFF's reporting on performance to be comprehensive and
informative, providing assessments of actual performance in relation to targets
where appropriate as well as a 'performance history' underneath each KPI, stating
if it is a new KPI for 2011-12, or if the target has been met in the past.[5]
2.10
The committee notes the following items:
-
The Carbon Farming Initiative program created a carbon offsetting
market for farmers and landholders who can earn carbon credits by voluntarily
reducing greenhouse gas emissions or sequestering carbon on their land.[6]
- The development and implementation of a new policy and regulatory
framework for the export of live animals. The new framework regulates exporters
to ensure animals are treated according to internationally recognised animal
welfare standards through the Exporter Supply Chain Assurance System. The
government provided funding to eligible applicants, such as Australian
livestock exporters, to subsidise infrastructure upgrades and training, in
order to meet the standards of the World Organisation for Animal Health.[7]
- A new transitional Farm Family Payment commenced replacing the
Exceptional Circumstances Drought Assistance payment. The new Farm Family
payment provides assistance to all farming families experiencing financial
difficulty as they manage the impact of climate variations and market
fluctuations.[8]
- Funding continued during 2011-12 for the Rural Financial
Counselling Service, which provided services to more than 7,500 clients
suffering financial hardship. Rural financial counsellors provided assistance
to primary producers in Queensland, New South Wales and Victoria in response to
the 2011 floods.[9]
- Landcare received $36.8 million in funding to continue
raising awareness of sustainable land management practices, restoring wildlife
habitats, improving farmlands and delivering environmental outcomes at the local,
regional and state level.[10]
- Import conditions for the following items were revised to take
into account changes in disease status around the world:
- cherries, table grapes and citrus from the United States;
-
mangoes from the Philippines;
- tomato seed imports; and
- aquarium fish.[11]
Management and accountability
2.11
DAFF has a comprehensive and informative external scrutiny section,
which details inquiries by parliamentary committees, reports by the
Auditor-General, freedom of information, tribunal and court decisions, act of
grace payments and complaints to the Commonwealth Ombudsman. The report on
biosecurity investigations from the Office of the Commonwealth Ombudsman is
discussed below.
2.12
The Office of the Commonwealth Ombudsman published its report into
DAFF's biosecurity investigations in April 2012.[12]
The report arose out of a recommendation from an earlier Rural and Regional
Affairs and Transport Legislation Committee report into DAFF's administration
of the citrus canker outbreak in Emerald, Queensland, which occurred during 2004.[13]
2.13
The Commonwealth Ombudsman conducted five reviews over three years and found
DAFF had: acted professionally; followed internal and external guidelines and
policies during investigations; and that applications for, and execution of,
warrants complied with legislation. Areas where improvements could be made were
noted and the report made six recommendations, which are summarised below.
2.14
The recommendations were to:
- consistently use case management tools that are proportionate to
the complexity of the investigation;
-
improve record keeping, including documenting reasons for
decisions, activities and events throughout an investigation;
- revise a national instructional manual;
- use interview plans; and
- engage the use of an independent or external auditor to assess how
plant material samples have been handled.[14]
2.15
DAFF agreed with the findings of the Office of the Commonwealth
Ombudsman and is working toward, implementing all recommendations, including an
annual audit schedule of investigation activities.[15]
Conclusion
2.16
The committee considers that DAFF's Annual Report 2011-12
complies with the reporting requirements of a Commonwealth department and is
'apparently satisfactory'.
Department of Infrastructure and Transport
2.17
The Department of Infrastructure and Transport (Infrastructure) Annual
Report 2011-12 was prepared in accordance with section 63 of the Public
Service Act 1999 and other relevant legislation. The report was tabled in
the Senate on 31 October 2012.
2.18
The report is presented in accordance with the list of requirements
specified in the Requirements for Annual Reports.
2.19
Infrastructure has again provided a comprehensive review of its
performance for 2011-12. Its report is clearly presented and includes a
detailed and easy to follow list of requirements.
2.20
The Infrastructure Annual Report for 2011-12 contains the following additional
information to that specified in paragraph 2.1:
- report on Infrastructure Australia, in its capacity as a
statutory body, with performance reporting as measured against the deliverables
and KPIs specified in the PBS.
Departmental overview
2.21
The committee notes the following items of significance for
Infrastructure during 2011-12:
-
administered $7.8 billion in direct and indirect grants for
construction and maintenance of land transport infrastructure;
- the release of the second annual State of Australian Cities
Report;
-
the creation of the National Infrastructure Construction Schedule
website;
- the final report on the joint study on aviation capacity for the
Sydney region was provided to the Minister for Infrastructure and Transport and
the New South Wales Premier;
- the Council of Australian Governments (COAG) signed the National
Partnership Agreements, which will implement a single law to regulate all rail
safety, heavy vehicle and commercial shipping operations;
- implementation began on the National Road Safety Strategy 2011-2020,
which is aiming for a 30 per cent reduction in road-crash deaths and
serious injury by 2020; and
-
the Stronger Shipping for a Stronger Economy legislative package
was passed by Parliament.
2.22
The committee notes that Infrastructure reported a deficit of
$12.3 million for 2011-12; the deficit is due to Infrastructure no longer
receiving depreciation and amortisation expenses. The report states that if the
funding had been appropriated, Infrastructure would have recorded a surplus of
$2.4 million.[16]
Report on performance
2.23
Infrastructure has measured its performance against the deliverables and
KPIs specified in the 2011-12 PBS. Infrastructure has again provided a clear
and easy to read table for each KPI that clearly states whether or not it was
achieved, as well as a results key under each table, clearly explaining the
terms used in the table. The committee notes that a majority of KPIs were
achieved.[17]
2.24
The committee notes the following items:
- Under the Liveable Cities and Managed Motorways Program an
additional $1.02 billion in funding was provided to the duplication of the
Pacific Highway.[18]
- The creation and launch of the National Infrastructure
Construction Schedule (NICS) website. The NICS is a communication tool which
allows interested stakeholders to track the progress of all existing and
upcoming infrastructure projects worth over $50 million at the local,
state and Federal level. The site also contains information about tender opportunities
within a project for contracts estimated to be worth more than
$25 million. Since the launch of the NICS in May 2012 there has been 675 000
visits to the site.[19]
- A total of 152 Black Spot projects were completed in 2011-12 and
139 projects were underway. The third study into the evaluation of the Black
Spot Program was released in May 2012. The report covered 2578 Australian
Government-funded Black Spot projects that had been approved between 1996-97
and 2002-03. The evaluation found that the projects were reducing fatal and
casualty crashes by 30 per cent.[20]
- Overtime the Navigation Act 1912 came to include a mix of
modern and out-dated concepts, in June 2009 the Minister for Infrastructure and
Transport, the Hon. Anthony Albanese MP announced that the
Navigation Act 1912 would be re-written. The Navigation Bill 2012 was
introduced into Parliament in May 2012, and reflects contemporary maritime
industry practice and clearly outlines the regulatory responsibilities of
domestic and international seafarers, and vessel owners and operators. The
Navigation Bill received Royal Assent on 13 September 2012 and is now
known as the Navigation Act 2012.[21]
- The Tasmanian Freight Equalisation Scheme (TFES) received
$93.2 million in assistance and the Bass Strait Passenger Vehicle
Equalisation Scheme (BSPVES) received $34.6 million. Both figures are
marginally below the 2010-11 figures of $98.5 million and $36.5 million
respectively. Modelling shows that an estimated 15 000 new visitors
travelled by sea due to the BSPVES in 2011-12. The TFES is a
demand-driven scheme and the number of claims paid was lower in
2011-12 (9860) compared to 10 162 claims in 2010-11.[22]
- The Stronger Shipping for a Stronger Economy package was
announced in September 2011 to revive the Australian shipping industry. The
package comprised of a new regulatory framework for coastal shipping,
significant tax reforms and a new Australian International Shipping Register. Five
related Bills were introduced into Parliament on 22 March 2012, which
were passed and came into effect on 1 July 2012.[23]
Management and accountability
2.25
Three major Australian National Audit Office (ANAO) reports relating to
Infrastructure's activities and four cross-portfolio audits involving
Infrastructure were tabled in 2011-12. The main report, of particular interest
is discussed below.
2.26
The ANAO Report No.13 of 2011-12 assessed the management of the TFES. The
administration of the TFES is shared between Infrastructure and the Department
of Human Services (DHS) through a Memorandum of Understanding. Infrastructure
is responsible for policy formulation and advice, as well as the overall
management of the program. DHS is responsible for the day-to-day administration
of the TFES, which is delivered through Centrelink. [24]
2.27
The ANAO indicated that the amount of assistance paid varies greatly,
for instance in 2010-11, the largest annual amount of assistance paid to a
single claimant was $15.2 million, the smallest annual amount was
54 cents, and the average claim paid was $3.4 million.[25]
2.28
The ANAO found that the TFES is a well-established program and
contributes a total of $100 million in assistance to a range of businesses
and individuals within the . Between 2004-05 and 2010-11, the number of TFES
claims increased by 58 per cent and the number of claimants by
19 per cent.
2.29
The ANAO stated that the program's eligibility criteria and payment
calculations are complex, as payments for freight assistance depend on the type
of goods, whether the goods are refrigerated or in a loose or packaged form,
the origin and the destination of the relevant goods. Given the complexity of
the scheme the ANAO provided examples of claimants who were overpaid for a
number of years and claimants who were underpaid.[26]
2.30
The ANAO provided three recommendations that would strengthen the
scheme. The recommendations aim to improve the accuracy of information used to
calculate payments, strengthen quality assurance activities, and develop more
effective integrity testing arrangements for the Staff Online system.[27]
DHS considered the report while Infrastructure has commenced implementation of the
recommendations.
Conclusion
2.31
The committee considers that Infrastructure's Annual Report 2011-12
complies with the reporting requirements of a Commonwealth department and is
'apparently satisfactory'.
Department of Regional Australia, Local Government, Arts and Sport
2.32
The Committee notes that this its first opportunity to review the
Department of Regional Australia, Local Government, Arts and Sport's annual report
since the Senate amended the allocation of departments and agencies to Senate
Committees on 8 February 2012.[28]
Previously, the department's reports have been reviewed by the Senate Finance
and Public Administration Legislation Committee.
2.33
The Department of Regional Australia, Local Government, Arts and Sport (Regional
Australia) Annual Report 2011-12 was prepared in accordance with section
63 of the Public Service Act 1999 and other relevant legislation. The
report was tabled in the Senate on 30 October 2012.
2.34
The report is presented in accordance with the list of requirements
specified in the Requirements for Annual Reports.
2.35
The Regional Australia Annual Report 2011-12 contains the
following additional information to that specified in paragraph 2.1:
- the Protection of Moveable Cultural Heritage Act 1986
Report.
2.36
The committee notes a minor error in the compliance index; a 'not
applicable' was reported against exempt contracts, which is referred to in the
body of the report.[29]
This did not hinder the committee's ability to review the report.
Departmental overview
2.37
The committee notes the following items of significance for Regional
Australia during 2011-12:
- the Regional Development Australia Fund commenced work with the first
two rounds providing $350 million in funding for 81 projects;
- the Norfolk Island Economic Development Plan was released in
March 2012. The plan identifies reforms required for Norfolk Island to
develop an economic base and capability to ensure a sustainable future;
- payments were administered through the Financial Assistance
Grants program to local governments worth over $2.7 billion;
- the Office for Sport finalised an agreement between Federal,
state and territory governments to address match-fixing and corruption in sport;
- significant progress was made on the major sporting events to be
hosted in Australia including the Asian Football Conference in 2015, the
2015 Cricket World Cup and the 2018 Commonwealth Games;
- the Better Regions Program provided $171.8 million in
funding for 106 social and community infrastructure projects; and
-
the National Bike Paths project provided $40 million for
over 600 kilometres of new and upgraded bike paths.
2.38
The committee notes Regional Australia recorded a small of surplus of
$58 000 for 2011-12.
Report on performance
2.39
Regional Australia has measured its performance against the deliverables
and KPIs specified in the 2011-12 PBS. Regional Australia has provided a clear
and easy to read table that identifies whether or not the KPI has been achieved.
Each outcome is drawn together with a projected outlook for the future, which
consolidates the review of performance and balances the lack of trend
information available for a recently established department. The committee
notes that a majority of KPIs were achieved.[30]
2.40
The committee notes the following items:
- The East Kimberly Development Package comprises of 29 projects
worth $195.2 million. Of the 29 projects, 20 were completed in 2011-12. The
program will conclude in the 2012-13 financial year.[31]
- The Local Government Infrastructure Review, commissioned by the
department, was released in June 2012. The review identifies how councils
can prioritise and fund local infrastructure needs, improve access to finance,
and use best-practice models and principles for prioritising and financing
local infrastructure.[32]
-
Legislation was passed in Parliament to extend the Administrative
Appeals Tribunal and introduce a local Ombudsman to Norfolk Island. The
legislation provides Norfolk Island residents with the ability to lodge
complaints on decisions by Norfolk Island's government agencies, which are
considered to be unjust, unlawful, discriminatory or unfair.[33]
- The Hawke Review of the National Capital Authority (NCA) was
released in October 2011 and the Australian Government's response was
released in May 2012. The report provided advice on achieving the right
balance for planning responsibilities between the Australian Government and the
Australian Capital Territory Government. In response to the review, the NCA
received $11.9 million over four years as part of the 2012-13 Budget to
ensure its financial sustainability.[34]
- The Review of the Australia Council announced in
December 2011 has assisted in the development of the National Cultural
Policy. The review made 18 recommendations for revitalising support for the
Australian arts sector.[35]
- Regional Australia administered the Regional Arts Fund and provided
$3.037 million in funding to peak regional arts organisation in each state and
art ministers in the territories. The program supports sustainable cultural
development in regional and remote Australia.[36]
- The Hon Warwick Smith AM undertook a strategic review into
the sustainability of football in Australia. The review found that football in
Australia has strong growth rates, achieves results at the elite level with
high-levels of female participation. The review found challenges remain for football
in Australia and states that "financial stability must be the singular and
immediate priority for football's governing body, Football Federation Australia
(FFA)".[37]
The FFA accepted all recommendations and implementation has commenced.
Management and accountability
2.41
Regional Australia has provided an informative and detailed management
and accountability section. There are three performance audits currently in
progress. One ANAO performance audit report directly related to Regional
Australia was tabled in Parliament, The Establishment, Implementation and
Administration of the Bike Paths Component of the Local Jobs Fund, is discussed
below. [38]
2.42
The ANAO Report No.27 of 2011-12 assessed the efficiency and
effectiveness of the establishment, implementation and administration of the
bike paths component of the Local Jobs Stream of the Jobs Fund. Of the
$300 million allocated to the Local Jobs Stream, $40 million was set
aside to meet the Australian Government's commitment to the Australian Greens.[39]
2.43
Administration of the bike paths component of the Local Jobs Stream was
shared between the Department of Education, Employment and Workplace Relations,
and the then Department of Infrastructure, Transport, Regional Development and
Local Government. This function was transferred to the Department of Regional
Australia, Regional Development and Local Government in 2010, which later become
Regional Australia after a machinery of government change in
December 2011.[40]
2.44
A total of 255 applications were received seeking funding under the bike
paths component, worth nearly $105 million. The average amount of funding
sought was $428 561, with the requests for grants ranging from $10 500
to $3.82 million. By the budgeted program end date of
30 June 2010, only 83 of the 167 contracted projects had been
completed. [41] The
remaining projects were finalised in 2011-12.[42]
2.45
The ANAO stated that the implementation of the bike paths component was
inconsistent with key aspects of the enhanced grants administration framework. For
instance, the department did not provide its Minister with recommendations as
to which applications should be approved and those that should be rejected.[43]
2.46
The ANAO provided three recommendations to strengthen future community
infrastructure grant programs. The recommendations were to:
- adopt application processes and assessment criteria that support
the selection of projects that are likely to best contribute to the objectives
of the National Cycling Strategy;
- consider value for money and 'fit for purpose' in Regional
Australia's implementation of infrastructure construction funding programs; and
-
improve risk assessment practices to effectively manage
risk and promote equitable treatment of applicants.[44]
2.47
Regional Australia agreed with the recommendations made in the Audit
Report.[45]
Conclusion
2.48
The committee considers that Regional Australia's Annual Report
2011-12 complies with the reporting requirements of a Commonwealth
department and is 'apparently satisfactory'.
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