Source: The Australian Government. Based on The Australian Government material

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2 Commonwealth of Australia 2014 ISBN This publication is available for your use under a Creative Commons Attribution 3.0 Australia licence, with the exception of the Commonwealth Coat of Arms. The full licence terms are available from Use of this Australian Government material under a Creative Commons Attribution 3.0 Australia licence requires you to attribute the work (but not in any way that suggests that the Australian Government endorses you or your use of the work). Australian Government material used 'as supplied' Provided you have not modified or transformed Australian Government material in any way including, for example, by changing the text; calculating percentage changes; graphing or charting data; or deriving new statistics from published Treasury statistics then the Australian Government prefers the following attribution: Source: The Australian Government Derivative material If you have modified or transformed Australian Government material, or derived new material from those of the Australian Government in any way, then the Australian Government prefers the following attribution: Based on The Australian Government material Use of the Coat of Arms The terms under which the Coat of Arms can be used are set out on the It s an Honour website (see Other Uses Inquiries regarding this licence and any other use of this document are welcome at: capa@finance.gov.au ii

3 CREATING A SMALLER GOVERNMENT FOOTPRINT Reductions to the number of Australian Government bodies The Government continues to deliver a comprehensive package of Smaller Government reforms, designed to cut waste and duplication, while improving the efficiency and focus of the Commonwealth public service. We are now delivering the third and most significant phase of abolitions and amalgamations of government bodies so far. The Mid-Year Economic and Fiscal Outlook (MYEFO) includes detail of decisions taken since the Budget to reduce the number of government bodies by a further 175, taking the total reduction in the number of government bodies to 251 since the last election. This third and latest tranche of reductions of Australian Government bodies includes the abolition of statutory bodies, advisory committees, councils and boards. In many cases responsibilities are consolidated into larger bodies, including departments, while cessation of other activities will contribute to budget repair. The efforts to deliver a smaller and more rational government footprint will make the public sector more agile and better able to address changing pressures and Government priorities. In the MYEFO the Government has announced: the abolition of 138 government bodies; the consolidation of 15 government bodies into existing government departments; the transfer of two bodies out of the Commonwealth; the merger of 26 bodies (for a net reduction of 20), while a further five will consolidate their back offices with shared service centres or supporting departments. We will also commence a further new scoping study looking at options for the future ownership or operation of the communications network used by the government in Canberra. These reforms build on previous work to deliver a smaller government footprint taken shortly after the 2013 election (Tranche 1) and announced in the 2014 Budget (Tranche 2), which together reduced the number of Australian Government bodies by 76. In earlier phases of the Smaller Government Reform Agenda the government announced a reduction in the number of departments, abolished a number of advisory bodies and commenced the process to divest itself of Medibank Private. So far the Government has: Successfully completed the sale of Medibank Private, raising $5.7 billion in proceeds that will be recycled into productivity enhancing, job creating infrastructure. d AusAid into the Department of Foreign, saving close to $400 million over four years. d the former Department of Regional Australia and Local Government into the Department of Infrastructure. This is saving $17.6 million over four years from the removal of duplicated corporate functions. 1

4 Passed legislation to abolish Health Workforce Australia on 22 September, saving $142.0 million over four years. Passed legislation to repeal the Albury-Wodonga Development Corporation, 41 years after its temporary establishment. Abolished the Council of Australian Governments (COAG) Reform Council from 30 June 2014, with residual monitoring functions shifting to the Productivity Commission. This will save $8.3 million over four years. d the National Competition Council Secretariat with the Australian Competition and Consumer Commission, with effect from 1 July This will save $3.6 million. over four years. The National Competition Council will continue as a separate body. Passed legislation to abolish the Australian Workforce and Productivity Agency, with functions transferred to the Department of. Introduced legislation to Parliament for the abolition of the National Water Commission, the Telecommunications Universal Service Management Agency, the Corporations and Markets Advisory, the Australian National Preventive Health Agency and for the division of the Office of the Australian Information Commissioner. Commissioned scoping studies on the future ownership options for several government owned business organisations to be considered as part of the current Budget process for the Royal Australian Mint, the ASIC Register, Australian Hearing and Defence Housing Australia. As a result of all three tranches of smaller government reforms so far, savings of $539.5 million are expected to be realised to contribute towards budget repair. Further savings from the consolidation of the Australian Government Solicitor into the Attorney-General s Department will be announced in Decisions taken since the Budget about further reductions in the number of government bodies include: Consolidation of the Australian Government Solicitor into the Attorney-General s Department. This will reduce overheads from operating a separate bureaucratic structure, while providing enhanced opportunities for the government s best legal minds to work in future across both legal advice and legal policy. A scoping study into the delivery of the Intra-Government Communications Network, to consider options for ownership, operation or management of this business operation. Introduction of shared services arrangements for some current standalone bodies to eliminate duplication of back office functions like accounts and payroll. This includes the Australian Sports Anti-Doping Authority and the National Health and Medical Research Council. Abolition of various bodies, which are part of a historic legacy but no longer necessary in their current form. Details of further decisions made about reducing the number of government bodies since the Budget are shown in Attachment A of this Ministerial Paper. While the changes announced to date amount to a significant reduction in the number of government bodies, there is not an equivalent contraction in government functions. This is because a number of the reforms involve consolidating functions into departments or larger agencies, as well as the merger of smaller bodies to link together related functions. Some of the reforms in the third tranche have been implemented prior to the MYEFO, but are either formally announced for the first time in MYEFO or, where they have been 2

5 previously announced, have been recognised as part of the Smaller Government Agenda in this economic and budget update. These measures represent a balanced and responsible approach to Government living within its means and better managing public resources. Future reforms A fourth tranche of smaller government reforms will be announced in the Budget. This will include decisions after consideration of scoping studies initiated in the Budget. To ensure Government departments and major agencies are as efficient as they can be, the Government will also commence a program of functional reviews of departments and large agencies starting in late These reviews will help ensure that the resources of major public service departments are aligned to current policy priorities and pressures. Independent experts will begin by reviewing the roles of and potential for efficiencies in the Department of Health and Department of Education. Lessons learned from these reviews will be reflected in subsequent reviews of other departments and major agencies. A new Governance Policy To prevent the creation of unnecessary bureaucratic structures and ensure Government structures are streamlined further over time, we are introducing an Australian Government Governance Policy. This policy will support better decision-making and limit the creation of new government bodies in the future. The policy includes approval processes for new bodies, including requirement to analyse cost and benefits of any proposals to establish a new public body. This policy will also provide a framework for government entities to assess their current activities, over time, to lead to further reforms and sustained efficiencies. It requires many existing Australian Government bodies to be progressively reviewed or scheduled for eventual sun-setting. An online Register of Australian Government bodies Coinciding with the release of the MYEFO on 15 December 2014, the Government has released an online Australian Government Organisations Register, which for the first time lists and classifies all Australian Government bodies. The register is a comprehensive list of all government entities that will make it easier for individuals, businesses, community groups and government officers themselves to navigate their way around government bodies. This will enable people to more easily find relevant information about the function, origin and composition of all government bodies. The establishment and maintenance of a consolidated list of all government entities will ensure that the Government and the Parliament is able to keep track of government bodies and will greatly improve public transparency about the size and functions of government. It will also assist in more easily identifying future bodies that could be reviewed or considered for abolition. The Register reveals that the Government inherited a total of 1,252 separate government bodies from the previous Government. The Government s goal is to get this total well below a 1,000 by the end of this term of Government. 3

6 NEW POLICY ARRANGEMENTS AND CONTROLS Governance Policy An Australian Government Governance Policy will take effect from 15 December and impose a new standard of discipline on the creation and direction of Australian Government bodies. It is important to get the policy settings right for a leaner and more business-like administration and to be consistent in applying the same policy principles to new as well as existing bodies. Reductions in the size of government will provide permanent structural savings from lower government overheads. In rationalising and controlling the number of Australian Government bodies, the Government aims to: a. Improve the efficiency and effectiveness of government administration by reducing the number of bodies and the extent of coordination required for cross-departmental work; b. Reduce the number of points of entry to government, so that it is easier for the public to interact with government; c. Increase the use of departments rather than stand-alone entities, which allows for flexibility through the refocusing of work when required by the government of the day without requiring amendment of enabling legislation to change an entity; d. Increase employee flexibility and public sector career mobility, while reducing the costs associated with personnel transfers between different activities of government; and e. Achieve savings through the reduction of overheads associated with separate governance arrangements and the oversight costs borne by departments. Government decisions to establish new or to review existing bodies, will be subject to a three stage gateway test to consider whether: a) The Commonwealth has the Constitutional power to undertake a particular activity; b) There is an actual advantage of delivery through a government provider as opposed to a non-government provider; and c) The function can be consolidated into an existing government body better placed to undertake the activity, or whether it really warrants a new autonomous structure. Applying this gateway test and design principles will constrain the unnecessary creation of new bodies and ensure fit for purpose governance arrangements that will enable the Government to deliver on its objectives in the most efficient and effective way possible. The gateway test and the wider policy will bring more clarity to decisions about what functions should be performed by government and which types of government bodies are appropriate to perform which functions. This new policy recognises that a perceived need for independent decision-making by public officials, in itself, is an insufficient justification for a separate taxpayer funded organisation. There are a range of government bodies with governance structures that can operate effectively from within existing government entities, while allowing decision-makers to exercise a high level of independence. These include bodies with distinct branding, advisory bodies and bodies with regulatory functions. The policy requires hosting options to be considered before there is any consideration of a new body being created. 4

7 The Governance Policy also requires an analysis of cost and benefits whenever a new body is proposed, with the level of analysis depending on the scale, materiality and risk of the proposed body. As a general principle, where the Government decides to establish a new body, an appropriate sunset or reassessment date must also be agreed at the same time. While the Governance policy will apply to proposals for the creation of new bodies, it will also provide a valuable framework for portfolios to progressively review the efficiency and effectiveness of current government bodies. The Governance Policy complements the Contestability Framework which was announced in the 2014 Budget. The Contestability Policy requires all departments to assess whether particular functions would be delivered better if they were contracted out. While the Contestability Framework is applied at the level of a discrete activity within a body, the Governance Policy will apply similar scrutiny to an entire entity (which will usually have carriage of a range of activities). Register of Government Bodies On 15 December 2014 the Government launched a searchable online register of all Australian Government bodies. The Australian Government Organisations Register will help citizens find the most relevant bodies to assist them with different issues. The Register is also important as an internal tool within the Commonwealth and for other State and Territory governments. This strengthens the ability of public officials to regularly and systematically be informed of changes to the nature and scope of other government bodies. The database will make government more transparent to taxpayers. There will be full visibility of changes to the size of government, duplication between bodies and changes in the roles of public bodies. The Register will provide information on the function, composition, origins and details of key bodies and relationships. Over time, the database can be expanded to provide further information such as links to performance information. Government departments will be required to advise the Department of Finance of any creations, abolitions or mergers of government bodies as soon as practicable and review all portfolio entries twice-yearly. Through sourcing information for the database, the Australian Government can for the first time put an authoritative and regularly updated figure on the number of public bodies reporting to it. Previous attempts to count the number of public bodies has been ad hoc and reliant on disparate and ineffective methods for counting and recognising public bodies. Manual counts were made by the then Department of Finance and Administration in 2003, 2005 and 2009 and published as a printed document. In the last such attempted count, 932 bodies and governance relationships were identified. The National Commission of Audit found that there was no authoritative figure or agreed classification of what constitutes an Australian Government body. In late 2013 the Commission surveyed all Commonwealth departmental heads, who reported over 800 bodies within their portfolios. But further research by the Commission identified an additional 100 bodies. 5

8 In the lead up to the Budget, Finance undertook further analysis based on available information and estimated that there were about 950 Australian Government bodies and relationships in existence. This estimate excluded subsidiaries. At the time of launching the Australian Government Organisations Register there are 1,192 Australian Government bodies and relationships recorded, including subsidiaries. This is down from 1,252 government bodies at the time of the 2013 election. Ongoing implementation of decisions taken to date will reduce the number by 251 since the last election. The implementation of a publicly-searchable register of government bodies demonstrates a commitment to open and transparent administration. Functional reviews In addition to reforms to reduce the number of bodies, the Government will commence a further series of in-depth reviews of departments and major agencies to identify opportunities for operational improvements and additional efficiencies. These reviews will be led by independent experts. The first two functional and efficiency reviews will consider the Departments of Education and Health for consideration in the Budget. The functional and efficiency reviews will examine how departmental resources are currently aligned to functions and to the Government s forward priorities. They will identify and assess any remaining legacy programs that may be a lower priority today, identify barriers to performance and look for opportunities to reassign resources to the delivery of current reform priorities and address contemporary pressures. The review of the Department of Education will exclude the higher education areas of the department, as these are subject to separate policy processes. Lessons gained from the initial two reviews will be reflected in subsequent reviews. Where these reviews identify improvements to a common function that can be considered across government, these will be progressed through the Contestability Program implemented by the Department of Finance. The Program is identifying possibilities for increasing efficiency, by ensuring that functions are undertaken by the organisations best able to deliver. 6

9 ATTACHMENT A Decisions to rationalise Australian Government bodies Portfolio Body Reform Decision Five Year Total $m AGD AGD Artbank Advisory National Government Advisory Group on Chemicals (NGAG) the Artbank Advisory, with Artbank to consult with external experts on a needs basis. the NGAG with the National Reference Group on Chemicals and continue under the auspices of the Australian-New Zealand Counter Terrorism CBRN sub-committee. AGD National Reference Group on Chemicals (NIRG) the NIRG with the National Government Advisory Group on Chemicals and continue under the auspices of the Australian-New Zealand Counter Terrorism CBRN sub-committee. AGD Australian Government Solicitor (AGS) Consolidate Consolidate the Australian Government Solicitor (AGS) within the Attorney-General's Department (AGD), to strengthen the flexibility within the department for officers to work across both legal advice and legal policy. Following the amalgamation, the Government will conduct a review of legal services to identify efficiencies that can be gained in government legal costs. + AGD Business Government Advisory Group on National Security (BGAG) d This body has been ceased and replaced by the Attorney-General's Consultation on National Security. AGD on Taxation Incentives for the Arts d This body has been ceased. 7

10 AGD AGD AGD Information Advisory (IAC advises the Australian Information Commissioner) Privacy Advisory (PAC) Intercountry Adoption Harmonisation Working Group Animal Welfare Australian and New Zealand Standard Diagnostic Procedures (ANZSDP) WG Australian Landcare Council Benchmarks Working Group (working group under the Intergovernmental agreement on National Biosecurity) Biosecurity Advisory Council Department of - Live Animal Export Division - Government Implementation Group (IGIG) d This body is being ceased (legislation is in the parliament). This body is being ceased (legislation is in the parliament). This body has been ceased. Functions of this group now moved to the Central Authorities for Intercountry Adoption. d This body has been ceased. Transfer Out the body. Minister to review in 2015 to rationalise laboratory-related standard setting bodies and assess which relevant technical expertise can be brought into the department rather than posited with separate bodies. the body as the function/activity is more suitably performed by an industry and community organisation convened representational forum. d This body has been ceased d This body has been ceased. the body. Forestry and Forest Products Maintain in the medium term, to implement an election commitment. Consistent with the Australian Government Governance Policy, a sunset date of less than five years will be determined. 8

11 National Rural Advisory Council National Surveillance and Diagnostics Working Group Vertebrate Pests (VPC) Laboratories for Emergency Animal Disease Diagnosis and Response (LEADDR) Working Group National Strategies Working Group (a sub-body under the Animal Health ) New Test Evaluation Working Group (a sub-body under the Animal Health ) Rabies Preparedness Working Group Subcommittee on Animal Health Laboratory Standards (SCAHLS) Food Policy Working Group High-Level Group on Drought the body into the Agricultural Advisory Council. d This body has been ceased. d VPC merged with the Invasive Plant and Animals. the body. Minister to review in 2015 to rationalise laboratory-related standard setting bodies and assess which relevant technical expertise can be brought into the department rather than posited with separate bodies the body. Minister to review in 2015 to rationalise laboratory-related standard setting bodies and assess which relevant technical expertise can be brought into the department rather than posited with separate bodies. the body. Minister to review in 2015 to rationalise laboratory-related standard setting bodies and assess which relevant technical expertise can be brought into the department rather than posited with separate bodies. the body. the body. Minister to review in 2015 to rationalise laboratory-related standard setting bodies and assess which relevant technical expertise can be brought into the department rather than posited with separate bodies. d This body has been ceased. d This body has been ceased. 9

12 National Biosecurity Stakeholder Engagement Consultative Group d This body has been ceased. Primary Industries Standing (PISC) d This body has been ceased and replaced by AGSOC. Productivity and Regulatory Reform d This body has been ceased as part of ADMIN/AGSOC reforms. Research, Development and Extension Working Group Taskforce on national uniform standards for the voluntary microchipping of horses d This body has been cease as part of ADMIN/AGSOC reforms. d This body has been ceased. Communicatio ns Telework Advisory Panel (TAP) Consolidate the body. The function will be performed as part of the department's core advisory role. Communicatio ns Protection Zone s (PZC) Consolidate the body and perform the function in-house, with external advice sought on a needs basis. Defence Australian Defence Force Financial Services Consumer Council the body, with the Department to continue the service by coordinating the provision of information. Defence Australian Defence Human Research Ethics with DVA Human Research Ethics in July Defence DMO Diversity Advisory Group Sunset in 2015 after completion of a workforce diversity plan. Subsequent diversity strategies across the portfolio are to be managed by the Department. 10

13 Defence Defence Defence Defence Forces Entertainment Board RIZZO Reform Implementation DMO CEO Roundtable Centre for Military and Health (CMVH) Consolidate the body. Function to be undertaken as part of the department s core advisory role, drawing on external advice as required. the body. Transferred Out Consistent with the Australian Government Governance Policy, set a sunset date of 2019 aligned to completion of medium term strategies. Note that future industry engagement will be considered in the White Paper and First Principles Review. The body is now run by the University of Queensland. Defence Education Principal War Gratuity Authority Standing Council on School Education and Early Childhood (SCSEEC) Joint Working Group to Provide Advice on Students with Disability (the Joint Working Group) d d The body has merged with the Australian Military Forces Relief Fund. Sunset in 2015 after work under current terms of reference completes. Cessation will require agreement of the states and territories. Education Higher Education Standards Panel (HESP) the TEQSA Advisory Council and the HESP. Education Tertiary Education Quality and Standards Agency (TEQSA) Advisory Council the TEQSA Advisory Council and the HESP. Education Advancing Quality in Higher Education Reference Group d This body has been ceased. Education Australian Youth Forum Steering d This body has been ceased. 11

14 Education Education Education Education Higher Education Research Data Advisory (HERDAC) Higher Education Research Reference Group International Education Advisory Council Strategic Crosssectoral Data (SCDC) for Early Childhood, Education and Training d This body has been ceased. d This body has been ceased. d This body has been ceased. d This body has been ceased. Some legacy work is being transferred to a departmental data strategy group. Education Y20 Planning Group d the body, as the Y20 has been completed. Education Education Employment Australian Qualifications Framework (AQF) Council Education Investment Fund (EIF) Advisory Board Fair Work Building and Construction Independent Assessor d This body has been ceased with the agreement of state and territory Ministers. d This body has been ceased. the body Employment Fair Work Building Inspectorate Advisory Board (Legislative name) the body Employment Seafarers' Safety, Rehabilitation and Compensation Authority (Seacare) The Seacare Authority's functions will be transferred to the Safety Rehabilitation and Compensation Commission

15 Employment COAG Select Council on Workplace Relations Antarctic Research Assessment (ARAC) d This body has been ceased. Consolidate The Department of the will absorb the functions of the. Australian Antarctic Names and Medals Australian Biological Resources Study (ABRS) Advisory Consolidate Consolidate the body. The Department of the to absorb the functions of the and provide advice on place names and medal recipients. the body. Function to be performed as part of the department s core advisory role Biological Diversity Advisory Consolidate the body. Function to be performed as part of the department s core advisory role. Climate Adaptation Outlook Independent Expert Group Consolidate the body. Function to be performed as part of the department s core advisory role. Domestic Offsets Integrity (DOIC) Body to be ceased and replaced with the Emissions Reduction Assurance. Expert Panel on a Declared Commercial Fishing Activity Land Sector Carbon and Biodiversity Board the two panels at the time of the sunset clauses at the end of October 2014 and mid April the body. Oil Stewardship Advisory Council the body. The Department will coordinate alternative arrangements for consultation with stakeholders Product Stewardship Advisory Group the body. The Department will coordinate alternative arrangements for consultation with stakeholders

16 World Parks Congress National Steering Antarctic Science Advisory Bureau of Meteorology Water Accounting Standards Board COAG Standing Council on and Water (SCEW) Commonwealth al Water Stakeholder Reference Panel the body when the sunset clause takes effect in December d This body has been ceased. d This body has been ceased. d This body has been ceased. d This body has been ceased. Emissions Intensive - Trade Exposed (EITE) Expert Advisory Fuel Standards Consultative Iconic Sites Taskforce Indigenous Water Advisory National Landscapes Reference National Marine Mammal Advisory National Marine Mammal Scientific d This body has been ceased. This body is being ceased (legislation is in the parliament). d This body has been ceased. d This body has been ceased. d This body has been ceased. d This body has been ceased. d This body has been ceased. 14

17 Finance Finance Authentication Governance (AGC responsible for online authentication) Chief Information Officer (CIOC) the body. the CIOF and the CIOC into a less formal 'community of practice' with Finance as the organiser, to ensure continued input into whole of government ICT policy. Finance Chief Information Officer Forum (CIOF) the CIOF and the CIOC into a less formal 'community of practice' with Finance as the organiser, to ensure continued input into whole of government ICT policy. Finance Finance Comcover Advisory Council Cross Jurisdictional Chief Information Officers' (CJCIOC) the body. the body and manage crossjurisdictional issues through a less formal 'community of practice', with the organiser alternating annually between the Commonwealth (lead taken by the newly merged CIOC/CIOF) and a State/Territory. Finance Secretaries' ICT Governance Board (SIGB) the body. Cross Government ICT matters to be considered instead by the Ministerial Taskforce on Single Service Delivery or Secretaries' Board, where appropriate. Finance Foreign and Trade Foreign and Trade Foreign and Trade Foreign and Trade Intragovernment Communications Network (ICON) Australia International Cultural Council (AICC) Australia Awards Board Australia-Malaysia Institute Australia-Thailand Institute Scoping Studies Scoping study to be completed by Finance in Abolish the body with the Minister for Foreign and the Minister for Arts to jointly agree funding and arrangements for a new streamlined advisory body within the Arts portfolio. d This body has been ceased. d d This body has been amalgamated with the Australia-Thailand Institute to form the Australia-ASEAN Institute. This body has been amalgamated with the Australia-Malaysia Institute to form the Australia-ASEAN Institute. 15

18 Foreign and Trade Tourism Quality Council of Australia d This body has been ceased. Health Australian Sports Anti-Doping Authority (ASADA) Advisory Group Consolidate the body. Advice on detection, deterence and enforcement is a core role for the agency and the department. Health Cancer Australia Back-office r Health Health Diabetes Advisory Group Drug and Alcohol Prevention and Treatment Advisory Cancer Australia to be part of a shared services rollout, sharing the Department of Health's corporate services the body. the body. Health Expert Panel - to review Elective Surgery and Emergency Access Targets under the NPA on IPHS Sunset from July Health Health and Hospitals Fund Advisory Board Consolidate the body. Uncommitted HHF funding will transfer to the Medical Research Future Fund. Health Australian Sports Anti-Doping Authority (ASADA) Back-office r ASADA to be part of a shared services rollout, sharing the Department of Health's corporate services Health Professional Services Review (PSR) Back-office r PSR to be part of a shared services rollout, sharing the Department of Health's corporate services Health General Practice Recognition Appeal (GPRAC) with and utilise data from the Australian Health Practitioner Regulation Agency for DHS determinations. Health General Practice Recognition Eligibility (GPREC) with and utilise data from the Australian Health Practitioner Regulation Agency for DHS determinations. 16

19 Health Health Human Services National Health and Medical Research Council (NHMRC) Anti-Doping Research Panel National Student Services Partnership Group Back-office r NHMRC to be part of a shared services rollout, sharing the Department of Health's corporate services d This body has been ceased. the body. Human Services Human Services Commonwealth Rehabilitation Service (CRS) Australia Department of Human Services Council on Strategy and Innovation the body. d This body has been ceased. Human Services Human Services Lesbian, Gay, Bisexual, Transgender and Intersex Working Group National Place- Based Advisory Group Advisory Council on Intellectual Property (ACIP) Business Design Reference Group (BDRG) Central Trades Innovation Australia - Commercialisation Australia Board National Precincts Board Pharmaceutical Working Group (PIWG) d This body has been ceased. d This body has been ceased. with IP Australia. External advice can be sourced by IP Australia or the department on a needs basis. the Business Design reference group (BDRG) into the Business Online Service (BOS) Management. the body. d This body has been ceased. the body. the body. 17

20 Plant Breeder's Rights Advisory body and merge with IP Australia. External advice can be sourced by the department on a needs basis. Bureau of Resources and Energy Economics (BREE) Advisory Board the body from September 2015 following expiration of the MoU with the ABARE. Australian Workforce and Productivity Agency (AWPA) CSIRO - Australia Telescope National Facility (ATNF) Steering (also referred to as: the Australia Telescope Steering ) d This body has been ceased, with advice to the Government on skills and workforce development needs provided by the Department of d This body has been ceased. Extractive Industries Transparency Initiative Multistakeholder Group (EITI MSG) Flexible Learning Advisory Group (FLAG) Innovation Australia - Clean Technology Food and Foundries Investment Innovation Australia - Clean Technology Innovation d This body has been ceased. d This body has been ceased. d This body has been ceased. d This body has been ceased. 18

21 Innovation Australia - Clean Technology Investment Innovation Australia - Innovation Grants Innovation Australia - R&D Tax Incentive Advisory d This body has been ceased. d This body has been ceased. d This body has been ceased. Innovation Australia - Venture Capital d This body has been ceased. Manufacturing Leaders Group National Advisory for Tertiary Education, Skills and Employment (NATSESE) d This body has been ceased. Consolidate d The body has ceased. Functions have been brought into the Department. National Senior Officials (NSOC) d This body has been ceased and crossjurisdictional skills issues are dealt with by officials on a needs basis. National Skills Standards Council National VET Equity Advisory Council d This body has been ceased. d This body has been ceased. Services Leaders Group (consults business, unions and the research sector) Smart Grid Smart City - Strategic Policy and Regulatory Steering d This body has been ceased. d This body has been ceased. 19

22 Study on the Eastern Australian Domestic Gas Market - Reference Group Technical Advisory for the Coal Mining Abatement Technology Support Package (CMATSP) d This body has been ceased. d This body has been ceased. Infrastructure Accessible Public Transport National Advisory (APTNAC) the Accessible Public Transport Jurisdictional (APTJC) with the Accessible Public Transport National Advisory (APTNAC). Infrastructure Infrastructure Infrastructure Infrastructure Inspector of Transport Security Inter-Jurisdictional Working Group (IJWG considers referrals from Local Government Ministers Forum) Local Government Ministers' Forum (LGMF) National Disaster Recovery Taskforce Consolidate Consolidate specialist support staff for the Inspector into the department and appoint the Inspector on a retainer basis, supported by a panel of prequalified professional expertise that can be drawn upon when the Minister initiates a review of a security incident. These reforms will remove overheads associated with a full-time office. the body. the body. the body. Infrastructure Infrastructure Urban Policy Forum (UPF) Australian Council of Local Government the body. the body. The function overlaps and duplicates functions of the separate Australian Local Government Association. 20

23 Infrastructure Reconstruction Inspectorate Consolidate the body and transfer any residual functions to Emergency Management Australia and the Attorney-General's Department. Infrastructure Accessible Public Transport National Jurisdictional (APTNJC) the Accessible Public Transport Jurisdictional (APTJC) with the Accessible Public Transport National Advisory (APTNAC). Infrastructure Infrastructure Coordinator d This body has been ceased following announcement of the new IA Board on 1 September Infrastructure Northern Australia Indigenous Experts Forum on sustainable Economic Development d This body has been ceased on 28 February 2014 with the announcement of the creation of the Northern Australia strategic partnership. Infrastructure Expert Advisory Panel on Northern Australia d This body has been ceased on 28 February 2014 with the announcement of the creation of the Northern Australia strategic partnership. Infrastructure Marine Council d This body has been ceased. Infrastructure Northern Australia Ministerial Forum Infrastructure PM&C PM&C PM&C Regional Australia Standing Council (RASC) Official Establishments Trust Australia in the Asian Century Advisory Board First Peoples Education Advisory Group (FPEAG) d This body has been ceased on 28 February 2014 with the announcement of the creation of the Northern Australia strategic partnership. d This body has been ceased. the body d This body has been ceased. d This body has been ceased. 21

24 PM&C Indigenous Development effectiveness Initiative Steering (IDEISC) d This body has been ceased. PM&C National Indigenous Drug and Alcohol (NIDAC) the body, with the Australian National Advisory Council on Alcohol and Drugs to deal with these matters. Social Services Social Services Social Services Social Services Social Services Social Services Social Services Treasury Treasury Aged Care Standards and Accreditation Agency Ltd Aged Care Planning Advisory Aged Care Reform Implementation Council Healthy Life Better Ageing Minister's Dementia Advisory Group National Children and Family Roundtable National People with Disabilities and Carer Council Australian Office of Financial Management Development Allowance Authority d This body has been ceased. Quality assurance is now dealt with by the Australian Aged Care Quality Agency. This mechanism is being ceased and a streamlined consultation process will be developed for the 2015 Aged Care Approvals Round. d This body has been ceased. d Plans to establish this body have been ceased, due to the establishment of the Aged Care Sector which provides broad stakeholder policy input and engagement. d Body ceased on 30 November These issues are dealt with through the Aged Care Sector and time-limited Dementia Advisory Forum. d This body has been ceased. d This body has been ceased. Back-office r Consolidate Consolidation of back-office functions with Treasury is underway. Formally fully consolidate the function of dealing with the legacy members of the schemes into the ATO, primarily to manage any changes to conditions during the eight remaining years of the scheme. Assign duties to the Commissioner of Taxation. 22

25 Treasury Treasury National Injury Insurance Scheme Advisory Group Australian Financial Centre Taskforce d This body has been ceased. d This body has been ceased. Anzac Centenary Public Fund Board Australian National Memorial New Zealand Advisory Panel Sunset by 1 May Sunset by 1 July Community Nursing Clinical Advisory committee Dental Advisory committee DVA Human Research Ethics ehealth Technical Advisory Group Gulf War Study Advisory Local Medical Officer Advisory Medicines Advice and Therapeutics Education Services (MATES) Practitioner Reference Group the body. its functions into the Allied Health Advisory. with the Australian Defence Human Research Ethics in July Sunset by 1 July Sunset by 1 July the Local Medical Officer Advisory into the Health Innovation - Clinical Reference Group the body on 30 June 2015 when contracts are due to expire. Future arrangements will be informed by an independent review which is presently underway. Medicines Advice and Therapeutics Education Services (MATES) Veterans Reference Group the body on 30 June 2015 when contracts are due to expire. Future arrangements will be informed by an independent review which is presently underway. Medicines Advice and Therapeutics Education Services (MATES) Writing Group the body on 30 June 2015 when contracts are due to expire. Future arrangements will be informed by an independent review which is presently underway. 23

26 Optical Advisory committee Peacekeepers Study Advisory Rehabilitation Appliances Program Reference its functions into the Allied Health Advisory. Sunset by 1 July its functions into the Allied Health Advisory. Research Working Group (oversights DVA research) Vietnam Veterans Education Centre Advisory Panel Vietnam Veterans Family Study Consultative Forum the body. Sunset by 1 July Sunset following report of the Vietnam Family Study. Allied Health Advisory (AHAC) Current and Former Members of the ADF Emerging Issues Forum National Health, Aged and Community Care Forum DVA Operational Working Party the functions of the Rehabilitation Appliances Program Reference into the Allied Health Advisory. d This body has been ceased. d This body has been ceased. d This body has been ceased. = Not quantified and no save returned to Budget. + = The savings from the merger of the Australian Government Solicitor into the Attorney- General s Department will be quantified in 2015, following a review of legal services to identify efficiencies. 24

27 ATTACHMENT B AUSTRALIAN GOVERNMENT GOVERNANCE POLICY Background The Government announced on 13 May 2014 that it would support better decision-making by releasing an Australian Government Governance Policy to prevent the future creation of wasteful government structures and ensure existing structures operate as efficiently as possible. The previous federal Government failed to put a clear policy framework around the creation, design or dissolution of government entities. The recommendations of the 2003 Review of the Corporate Governance of Statutory Authorities and Officeholders (known as the Uhrig Review) provided guidance on forming governance arrangements but in practice, in recent years, those principles were inconsistently applied and often ignored in decision making on the creation and structure of public bodies. Over the years the number of Australian Government bodies has not been managed in a coordinated fashion across the whole of the government and the design of legal structures used have been inconsistent and at times even contrary to published guidance. The Australian Government Governance Policy ensures that in future the Government has stronger control over public organisations which it has established. The policy provides improved clarity about which legal structures suit which type of functions. This policy strengthens governance requirements at the establishment phase and provides constitutional design principles that will help shape the strategic management of functions throughout the lifecycle of a government body. Controls on the structure of Government The purpose of the governance policy is to ensure that Government decisions to establish new or to review existing bodies are subject to a three stage gateway test, aimed at delivering the most efficient governance arrangements for the delivery of government goods and services. Determining the most efficient governance arrangements requires a weighted assessment. A portfolio which proposes the creation of a new public body must clearly explain how a new body can best deliver the desired service as efficiently and as effectively as possible. This assessment is initially applied through a three stage gateway test. The gateway test to follow is whether: a) The Commonwealth has the Constitutional power to undertake an activity; b) There is an advantage of delivery through a government provider as opposed to a nongovernment provider; and c) The activity can be consolidated into an existing body or really warrants a new autonomous structure. This three stage gateway test will also be useful to assess current activities/bodies. Activities and bodies that are not subject to sunsetting should be subject to periodic review to assess whether 25

28 they are achieving or failing against their original charter and whether their scope and intended purpose remains valid. Assessment methdology To assist the assessment of the most appropriate governance structure of an activity a flowchart (refer chart 1) has been created that sets out the three stage gateway test. In summary, the Flowchart requires entites to analyse the following: 1. First gateway: Can the Australian Government undertake the relevant activity? The Australian Government is bound by the authority provided in the Australian Constitution and it is important to ensure that any activity fully aligns with this. This involves consideration of the legal basis for an activity and whether there is sufficient legislative power to undertake or fund an activity. 2. Second gateway: Does the Australian Government need to conduct a particular activity? This includes consideration of whether the Australian Government is best placed to perform the activity or is obliged to deliver a particular activity, for instance as a consequence of a specific public announcement or election commitment. This test requires consideration of the delivery capability in the non-government sector and whether funding agreements or competitive service provision could be an effective alternative to delivery by Government. Where there are mature markets already dealing with the area of activity, it is important to assess whether arms-length options could achieve the outcomes more efficiently and more effectively. While the Government may retain a regulatory or standard setting role, the delivery of the service could be undertaken by the private sector. 3. Third gateway: Can the activity be pursued, in whole or in part, from within an existing Commonwealth entity or Commonwealth company? This question focuses on finding the most efficient mechanism to deliver an activity, in whole or in part. There are a range of governance structures with separate identities that can operate effectively, including with a high level of independence, from within existing government entities. These include bodies with distinct branding, advisory bodies and regulatory functions. Regulatory functions can be performed from within an existing entity, with legislation providing such independence as is necessary for the regulatory activity. Elements of an activity may be more effectively performed by different entities. 4. It is a strong preference of the Government that new activities should, where appropriate, be undertaken by public service departments. By consolidating a number of activities into departments, the Commonwealth can maintain a more modular, flexible and unified public sector. Such structures are better able to respond to emerging pressures and ensure that services are best aligned to the evolving policy priorities of the Government. It is also the preference of the Government that functions that are related should be consolidated into the minimum necessary number of bodies, to speed up timeframes and improve the experience of clients who have to interact with any administrative processes. 5. Special but limited circumstances may exist that demonstrate a particular need for an autonomous structure, even where it may not be the most efficient. Relevant arrangements include the following: The proposed body would be accountable to a non-executive source of authority (reporting either to the Parliament, or to the Judiciary), such as Parliamentary Departments or the Australian National Audit Office. 26

29 Autonomy is justified by the conferral of extraordinary powers, because it would strictly quarantine control over the use of intrusive powers and the holding of sensitive information. Examples include policing and national security bodies, such as the Australian Federal Police or the Australian Security Intelligence Organisation. Autonomy would distance a regulatory body from the risk of government interference in enforcement activities, so that such activities can neither be attributable to or prone to Ministerial intervention, such as the Australian Prudential Regulation Authority or the Australian Securities and Investments Commission Where the activity requires the creation of a new body, an analysis of costs and benefits, risks and potential alternatives to the proposed governance structure will need to be undertaken, and brought forward to Cabinet for approval. The level of analysis will be contingent on materiality and risk. 7. The Prime Minister may approve a governance proposal, for example where a public announcement has or needs to be made. 8. As a general principle, where a new body is warranted, an appropriate sunset or reassessment date must be agreed. Consistent with sunsetting requirements of section 50 of the Legislative Instruments Act 2003, bodies are not to have a sunset or reassessment date of greater than 10 years. Where a body has a finite task, like implementation of a new policy strategy, sunsetting mechanisms must be attached. Where policy problems that a new body seeks to address can be solved or moderated over the short to medium term, a sunset or reassessment date of not greater than 5 years must be applied. 9. Is legislation required? Where a new entity is found to be appropriate, it is important to consider the benefits and constraints of enabling legislation to establish an entity. Factors to consider are the level of independence, accountability and transparency required as well as the level of control that the Government will want to have over the activity in future. For example, the Government may want a higher level of control or oversight where there is a higher level or risk involved in the activity. 10. Will the entity exercise regulatory or coercive powers? By their nature these entities will need legislation to provide them with the necessary level of independence from government and power to enforce the regulatory activity. These activities should be undertaken by a noncorporate Commonwealth entity unless the entity needs to hold money on its own account or could, through the enforcement of its regulatory activities, need to sue the Commonwealth or could be sued by the Commonwealth. In these instances a corporate Commonwealth entity may be appropriate. 11. Where an entity is to have a non-statutory basis, consideration will need to be given to whether it will perform primarily non-commercial and/or core policy functions of the Australian Government. This will normally mean a non-corporate Commonwealth entity is more appropriate. 12. Finally, will it perform primarily commercial functions? This will normally mean a corporate Commonwealth entity under section 87 of the PGPA Act, or, in limited circumstances a Commonwealth company under the Corporations Act 2001 is more appropriate. 1 Autonomy for a regulatory agency will be most appropriate where an organisation has a regulatory enforcement role such as investigation or review of citizen conduct, imposition of penalties and other compliance action. By contrast, there is not a presumption in favour of autonomy where a regulatory agency lacks an enforcement focus. For instance processing activities under regulation, such as registration activity and automated collection of revenue do not, by themselves, warrant an agency being given independent status. 27