10.18 Rationalising and streamlining agencies and boards

Background

Commonwealth bodies are those Commonwealth entities that draw on public funds and any subsidiary bodies. They include departments, agencies, boards, committees and councils. Commonwealth bodies generally span four functions: policy and research; service delivery; cross-jurisdictional or cross-sectoral consultation on policy or regulation; and expert advice to government.

In 2009, the Department of Finance and Deregulation identified 932 Commonwealth bodies and governance relationships (Department of Finance and Deregulation, 2009).

In November 2013, the Government announced that it would abolish 12 non-statutory bodies, amalgamate four bodies with other non-statutory bodies to simplify activities and absorb the core functions of five bodies within the relevant department to reduce duplication.

Current structure

There are currently 194 Commonwealth bodies operating under the Financial Management and Accountability Act 1997 (FMA Act) and the Commonwealth Authorities and Companies Act 1997 (CAC Act) (Department of Finance, 2014). This includes:

  • 18 Departments of State;
  • 87 prescribed agencies;
  • four Departments of the Parliament;
  • 65 authorities under the CAC Act; and
  • 20 Commonwealth companies under the CAC Act.

This Report refers to these as ‘principal bodies’ and they are listed in Attachment 10.18.1.

In addition, there are a number of other Commonwealth bodies recognised in legislation, some of which exist within departments and agencies, as well as a large number of boards, councils and committees established on an administrative basis.

In the absence of an authoritative and up-to-date central repository of information on all Commonwealth bodies, the Commission Secretariat wrote to Commonwealth department heads requesting advice on bodies within their portfolios. Responses reported over 800 bodies, with the significant majority being either a board or committee in itself, or having one or more of its own boards or committees. In its deliberations, the Commission has identified a number of additional bodies, taking the total number of Commonwealth bodies to around 900.

Rationale for government intervention

Commonwealth bodies play an important role in discharging Commonwealth responsibilities and bringing together expertise and resources to formulate and deliver policies and programmes.

Current arrangements reflect a range of historic conventions and decisions including: the division of powers between the Commonwealth and State governments; the separation of powers between the legislature, the executive and the judiciary under the Constitution; as well as the decisions and priorities of previous governments and ministers.

There are costs associated with complex and inefficient governance structures. Simplifying the organisation of government – at the whole-of-government level, within portfolios and within individual organisations – can significantly improve the efficiency and effectiveness of government.

Trends

The number of Commonwealth bodies has remained relatively constant over the last decade. However, apart from the 2003 Review of the Corporate Governance of Statutory Authorities and Office Holders and more recent decisions to abolish or rationalise a number of non-statutory bodies, there has been little systematic streamlining, scrutiny or review of Commonwealth bodies and their associated costs.

Drivers

Key drivers for the creation of Commonwealth bodies include:

  • new government priorities – new priorities are often accompanied by new bodies, to provide profile and focus efforts;
  • a perceived need for independence – including to distance the government from the perception of regulatory intrusion;
  • a desire to bring resources, often across policy silos, together to tackle a particular issue; and
  • a predilection for wide consultation, whether on specific issues or broader long-term issues, such as those related to public health.

In some cases a new body may be an effective governance structure at the time, but can have become ineffective or less efficient as government priorities, the machinery of government or stakeholder needs change.

Issues

The Commission considers that there are too many government bodies in Australia. This leads to duplication and overlap, unnecessary complexity, a lack of accountability, the potential for uncoordinated advice and avoidable costs.

The Commission is concerned that the large number of government bodies has the potential for the proper responsibilities, in relation to policy direction and decision-making, of not only ministers, but also their departments, to be diminished (whether real or perceived). This can result in divergences between the policy intent of the government and actual outcomes.

In addition, as the number of separate entities increases, the difficulty of monitoring and overseeing those entities increases, diminishing the ability to determine whether taxpayers are receiving value-for-money.

Lines of accountability for both ministers and departments are crucial to supporting responsible government and ensuring the implementation of government policy as conceived. Accountability can be expected to be much clearer if government bodies are rationalised and streamlined.

From the Commonwealth’s perspective, the costs associated with Commonwealth bodies are significant. These include governance and reporting costs (such as those associated with developing and maintaining business plans, human resource management systems, audit and risk arrangements, disaster recovery and business continuity plans), as well as accommodation costs. For example, the Commission is advised that governance and related costs for FMA and CAC Act bodies, while differing between bodies, can be as much as $1 million per year per body.

These costs are also likely to be disproportionately high for smaller Commonwealth bodies. For example, although based on a small sample, a recent report by PricewaterhouseCoopers Australia (PwC) found that corporate service and workforce costs represented almost double the percentage of costs for smaller than larger Commonwealth bodies (PwC Australia, 2013). Around one third of the 174 bodies listed in the ‘Estimates of average staffing level (ASL) in the Australian Government general government sector’ have fewer than 100 employees (Department of Finance, 2013). Given the large number of relatively small Commonwealth bodies, governance costs associated with Commonwealth bodies are likely to be unnecessarily high.

From a stakeholder perspective, citizens, businesses and community organisations can also incur substantial costs in dealing with multiple government bodies. For example, providing duplicate or slightly differentiated information to multiple bodies is significantly more costly than providing a single data set to a single Commonwealth body.

As noted above, a desire to establish ‘independence’ is a frequent driver for the creation of new Commonwealth bodies. Often, consideration of whether this provides reasonable grounds to justify a new body does not differentiate between independence of decision making, the provision of independent advice to government or administrative independence. Independent decision-making and advice responsibilities often do not justify the costs of the many governance and reporting responsibilities associated with administrative independence.

Writing with respect to the Attorney-General’s Portfolio, the Strategic Review of Small and Medium Agencies in the Attorney-General’s Portfolio – Report to the Australian Government (Department of Finance, 2012) noted that:

While the Constitutional separation of powers is the only immutable requirement for independence, a prominent feature of the Attorney-General’s portfolio and many other Commonwealth portfolios is the proliferation of independent agencies outside the Executive arm and the portfolio Department of State. Given that there is no compelling legal necessity for this separation, it is pertinent to consider the various justifications that may exist for creating and maintaining each of these separate non-Court agencies.

The Commission concurs and considers that there is a need to improve the balance between independence and the operational autonomy that the creation of a new body can create, with the associated costs and complexity.

Prima facie, it is the Commission’s view that departments of state, which are clearly accountable to ministers, should be the primary site of policy formulation, evaluation and analysis, with corporate services provided by the portfolio department to other bodies within the portfolio wherever practicable.

The United Kingdom has undertaken a process of reform of government bodies, which is summarised in Box 10.18.1.

Box 10.18.1: Reform of government bodies in the United Kingdom

In 2010, as part of a comprehensive spending review, the Government of the United Kingdom considered over 660 non-departmental public bodies, as well as over 240 other bodies including some non-ministerial departments and public corporations. As a result of the review, the UK Government announced that it was abolishing more than 200 bodies and merging over 170 bodies into fewer than 80, ensuring an overall reduction of approximately 300 bodies. Of the bodies that remained, 120 were to be substantially reformed and almost all were to reduce their administrative costs. Altogether, around 500 of the bodies that were reviewed in 2010 were being reformed in some way (United Kingdom Government, 2012).

The Commission has established six propositions, in addition to the Principles of Good Government outlined at the beginning of the Phase One Report, to guide the rationalisation of Commonwealth bodies:

  • the Commonwealth should consider withdrawing from activities that are outside its areas of core responsibilities;
  • portfolio departments should undertake policy work, while agencies should deliver programmes and services;
  • as far as practicable, bodies should be incorporated into the portfolio department;
  • organisations and bodies should capture economies of scale where possible;
  • bodies should have clear accountability and focus, with defined roles and performance management measures; and
  • the need for independence alone does not justify the establishment of a new operational body.

In addition to reducing costs, rationalising and streamlining government bodies, particularly through consolidation into departments, provides an opportunity to rebuild the lines of accountability to both departments and ministers. This is important in supporting responsible government and ensuring the successful implementation of government policy.

Potential areas for reform

Reducing the number of Commonwealth bodies

To reduce complexity and costs and improve the efficiency and effectiveness of government, the Commission recommends streamlining and reducing the number of existing principal bodies as set out in Table 10.18.1.

Table 10.18.1: Rationalisation of principal bodies
Action to be taken

No. of bodies

Abolish 7
Merge with other bodies 35
Consolidate into the portfolio department 22
To be privatised 9
Review, with a view to merging, abolishing or transferring 26
Total number of bodies identified for attention 99

Source: National Commission of Audit.

The 99 bodies identified as warranting action represent 51 per cent of the existing principal bodies. These recommendations are described in more detail below.

The Commission recognises that further investigation or consultation may be required regarding these suggested rationalisations. However, where rationalisations and consolidations are recommended, the Commission expects impacted bodies, as far as practicable, to actively identify and pursue opportunities to streamline operations and take advantage of economies of scale.

Abolitions

The Commission has identified one agency prescribed under the FMA Act and six CAC Act bodies that should be abolished.

  • Australian Institute for Teaching and School Leadership Limited is responsible for enhancing the quality of teaching and school leadership through developing standards, recognising teacher excellence, providing professional development opportunities and supporting the teaching profession. Commonwealth involvement is not warranted as schools are primarily a responsibility of the States.
  • The Australian Reinsurance Pool Corporation was established in response to the withdrawal of terrorism insurance cover by insurance companies and administers the terrorism reinsurance scheme. With continued recovery in the insurance markets, there is scope for a gradual Commonwealth exit over the coming years.
  • The Clean Energy Finance Corporation is a legislated fund dedicated to investing in clean energy. Legislation is in the Parliament to abolish this corporation, as part of the carbon price repeal bills.
  • The Climate Change Authority provides independent advice on the operation of the carbon tax, emissions reduction targets, caps and trajectories and other climate change initiatives. Legislation is in the Parliament to abolish this authority as part of the carbon price repeal bills.
  • The Export Finance and Insurance Corporation assists Australian businesses to secure finance in order to protect export trade or overseas investments when the private market lacks capacity or willingness, filling the ‘market gap’ on a commercial basis. With its activities largely directed to a small number of large firms and questions over the extent of market failure, it is not clear that the government needs to provide concessional loans and other financial assistance to firms (see Section 10.1 of the Appendix).
  • Innovation Investment Funds Investments Pty Ltd provides direct subsidies to Australia’s venture capital industry. It co-invests with private sector investors in venture capital funds to grow early-stage companies to commercialise the outcomes of Australia's research capability. In the same way other industry-specific assistance is recommended for abolition to avoid distorting resource decisions across the economy, so should this assistance to the venture capital sector (see Section 10.1 of the Appendix).
  • Low Carbon Australia Limited is responsible for administration of the Energy Efficiency Program and the National Carbon Offset Standard Carbon Neutral Program. In May 2013, the activities of this body transferred to the Clean Energy Finance Corporation which is to be abolished as part of the carbon tax repeal bills.

Large mergers

A number of large mergers are recommended. These include a:

  • new integrated border services agency, to be known as Border Control Australia;
  • consolidated crime intelligence capability;
  • new consolidated Civilian Tribunal;
  • new National Health and Medical Research Institute
  • new Health Productivity and Performance Commission;
  • single Commonwealth Ombudsman; and
  • single Arts Council.

Consolidation of border protection services

Border protection and security is integral to national security. The seamless flow of people and cargo across Australia’s borders is also critical to the country’s success as an open, trading nation.

Protecting and securing our borders requires a range of functions across the border continuum as well as international cooperation, intelligence gathering, maritime patrols and inspections and identity checks. Three principal agencies now perform these functions - the Department of Immigration and Border Protection, Australian Customs and Border Protection Service and biosecurity operations of the Department of Agriculture.

These agencies employ around 17,000 staff and cost around $7.8 billion to run (Department of Finance, 2013; Department of Agriculture, Fisheries and Forestry, 2013). The border agencies also collect in excess of $11 billion of revenue through visa application charges, the passenger movement charge and import processing charges (Attorney-General’s Department, 2013; Department of Immigration and Citizenship, 2013).

Australia’s border control arrangements should be highly effective and efficient. Yet authority and accountability for border control is fragmented across agencies, portfolios and ministers.

Given recent trends and developments (including in technology) a more effective approach to border management will require a series of integrated activities both beyond and within the border. A continued effort to improve intelligence-led, risk-based approaches will ensure better targeting of border management to deal with material threats while the vast majority of people and cargo, which are low risk, are easily moved.

Continued growth in electronic lodgement and on-line processing to reduce transaction costs and improve information capture is essential. More efficient collaboration, integration and communication between stakeholders along with early interventions upstream will enhance Australia’s capacity to manage its borders.

The existing multiple border agency and portfolio arrangements do not provide the optimal structure to pursue these objectives.

The Commission suggests a single, integrated border agency, to be known as Border Control Australia, be considered. This would combine border control functions of the Australian Customs and Border Protection Service and the Department of Immigration and Border Protection in a single agency.

Responsibility for all policy and regulatory functions relating to immigration and customs would be retained within the Department of Immigration and Border Protection. Border Control Australia would be responsible for cargo and services at the border as well as other related functions, including processing visa applications and running the immigration detention network.

The biosecurity functions of the Department of Agriculture would be retained separately for now. This recognises the role of biosecurity is broader than enforcing quarantine law at the border, with the Commonwealth having some 2,500 ‘post-entry’ quarantine facilities and approved premises (Department of Agriculture, 2013b). It also works closely with the States, industry, business and technical experts to monitor biosecurity risks, manage incursions and ensure exports meet the quarantine standards required by export destination countries.

A consolidation of Australia’s border services has the potential to generate significant savings by removing duplication, better integrating and improving operational systems and practices, reducing staff, consolidating back office functions and rationalising property. Savings could also come from greater efficiency in visa processing, as well as through more efficient contracting and better targeting of the services provided to illegal maritime arrivals.

Consolidated crime intelligence capability

Criminal law enforcement is increasingly dependent on strong intelligence collection and analysis, including sophisticated financial intelligence and an ability to track the flow of money. Intelligence enables law enforcement agencies to target areas of greatest risk and cooperate with the private sector to identify and address vulnerabilities.

Over time, the Commonwealth has created a number of separate national criminal law enforcement and intelligence agencies to serve different needs. The Australian Federal Police is the Commonwealth’s primary criminal law enforcement body. A number of other agencies have limited criminal law enforcement powers in specific areas, such as the Australian Customs and Border Protection Service.

Various agencies are also responsible for crime intelligence and information matters, including the Australian Crime Commission, CrimTrac, the Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Australian Institute of Criminology.

While these agencies are working effectively together, the Commission considers that Crimtrac should be merged into the Australian Crime Commission to harness their collective resources. A consolidated crime intelligence agency would also better support law enforcement operations by the Australian Federal Police and other Commonwealth and State agencies.

The Commission also considers that AUSTRAC should be reviewed to determine if it should also form part of the Australian Crime Commission, while relocating the Australian Institute of Criminology to a university should be considered.

The Australian Federal Police and the Australian Crime Commission should remain separate agencies, to ensure that the latter maintains its national criminal intelligence role, with a focus on strategic risks and the continued involvement of State and Territory law enforcement partners in its governance.

In addition, the Australian Crime Commission has the ability to use special intelligence gathering and coercive powers which should remain separate from the Australian Federal Police.

Implementation of this recommendation will require consultation with the States. It is critical their interests are reflected, including through the continued representation of State police commissioners on the Australian Crime Commission board.

Consolidation of health bodies

There are 22 bodies within the Health Portfolio, along with numerous associated boards, councils and committees (see Chart 10.18.1).

Chart 10.18.1: Health Portfolio Structure

This chart shows the agencies within the Health Portfolio, diagrammatically.

Source: National Commission of Audit.

The Commission proposes three broad actions to address the number of bodies in the Health Portfolio.

  • Establish a single National Health and Medical Research Institute.
  • Establish a new Health Productivity and Performance Commission.
  • Consolidate a number of remaining bodies into the Department of Health.

The Commission recognises that many elements of Australia’s health system are underpinned by cooperation between the Commonwealth and the States. As such some of the approaches recommended below may require consultation with the States (see also Sections 9.3 and 9.4 of the Appendix Volume 1 on healthcare and the Pharmaceutical Benefits Scheme respectively).

A new National Health and Medical Research Institute

The creation of a new national health institute flagship would bring together the National Health and Medical Research Council, Cancer Australia and the research budget of the Australian National Preventative Health Agency.

The National Health and Medical Research Council is Australia’s peak body for: supporting health and medical research; developing health advice for the Australian community, health professionals and governments; and providing advice on ethical behaviour in health care and in the conduct of health and medical research. It draws upon the resources of all components of the health system, including governments, medical practitioners, nurses and allied health professionals, researchers, teaching and research institutions, public and private programme managers, service administrators, community health organisations, social health researchers and consumers.

Cancer Australia was established in 2006 to benefit all Australians affected by cancer, as well as their families and carers. Cancer Australia works to reduce the impact of cancer and improve the well-being of those diagnosed by ensuring that a firm evidence base informs cancer prevention, screening, diagnosis, treatment and supportive care.

Cancer Australia works collaboratively and liaises with a wide range of groups, including those affected by cancer, key stakeholders and service providers with an interest in cancer control. The agency also focuses on populations who experience poorer health outcomes, including Aboriginal and Torres Strait Islander peoples and people living in rural and remote Australia. As the lead national cancer control agency, Cancer Australia also makes recommendations to the Commonwealth about cancer policy and priorities.

The Australian National Preventive Health Agency was established at the beginning of 2011 to strengthen Australia’s investment and infrastructure in preventive health. It provides policy leadership and establishes partnerships with Commonwealth and State governments, community health promotion organisations, industry and primary health care providers.

Establishing a new Health and Medical Research Institute would drive alignment across all research areas and fully embed health and medical research within the health system. This would improve patient outcomes and deliver efficiencies by improving the evidence base available to clinicians and patients.

A new Health Productivity and Performance Commission

Collecting data and reporting on health outcomes is undertaken by a range of bodies at present. The Commission considers that improved data collection, analysis and information can be generated by establishing a Health Productivity and Performance Commission to inform decisions on health-related measures.

The Australian Institute of Health and Welfare (AIHW) was set up to provide reliable, regular and relevant information and statistics on Australia's health and welfare. Its aim is to improve the health and wellbeing of Australians through better health and welfare information and statistics. AIHW collects and reports information on a wide range of topics and issues, ranging from health and welfare expenditure, hospitals, disease and injury and mental health, to ageing, homelessness, disability and child protection. Its reports inform government and community discussions and policy decisions on health, housing and community services matters.

The Australian National Preventive Health Agency is described above.

The Australian Commission on Safety and Quality in Health Care was created in 2006 to lead and coordinate health care safety and quality improvements in Australia. It is funded by all governments on a cost sharing basis.

The Independent Hospital Pricing Authority was established in 2011 as part of the National Health Reform Agreement, which sets out the intention of the Commonwealth and the States to work in partnership to improve health outcomes for all Australians. The authority is charged with determining the National Efficient Price for public hospital services, allowing for the national introduction of activity based funding.

The National Health Performance Authority contributes to transparent and accountable health care services in Australia, including through the provision of independent performance monitoring and reporting, the formulation of performance indicators and conducting and evaluating research.

The National Health Funding Body provides transparent and efficient administration of Commonwealth and State funding of the Australian public hospital system and supports the obligations and responsibilities of the Administrator of the National Health Funding Pool.

The National Mental Health Commission reports, advises and collaborates to help transform systems and promote change, so that all Australians achieve the best possible mental health and wellbeing. It produces an annual Report Card on Mental Health and Suicide Prevention that informs Australians of where we are doing well and where we need to do better in mental health. The objective of the report card is to give honest and independent advice on where and how Australia can better support people with experience of mental health difficulties, their families and support people.

The Private Health Insurance Administration Council (PHIAC) is the prudential regulator of Australia’s private health insurance industry. It is a statutory corporation of the Commonwealth, established in 1989. PHIAC’s central responsibility is to protect consumers of private health insurance by ensuring an industry which is competitive, efficient and financially sound.

A new Health Productivity and Performance Commission could be established and be responsible for coordinating, reporting and driving performance across Australia’s healthcare system. This would include identifying innovative options to increase efficiency across the sector and publicly reporting health performance statistics and outcomes.

The new Commission would be formed through a merger of the relevant functions of the bodies described above. Corporate functions should be supplied by the Department of Health.

Other bodies in the Health Portfolio

The Commission also recommends five bodies be considered for consolidation into the Department of Health. These are the:

  • Australian Organ and Tissue Donation and Transplantation Authority and National Blood Authority, which could then be brought together within the Department to harness expertise.
  • General Practice Education and Training Ltd and Health Workforce Australia, which could then be brought together within the Department as a clinical training unit.
  • Professional Services Review scheme.

The Australian Organ and Tissue Donation and Transplantation Authority improves access to organ and tissue transplants, including through a nationally coordinated and consistent approach and system.

The National Blood Authority ensures access to a secure supply of safe and affordable blood products, including through national supply arrangements and coordination of best practice standards within agreed funding policies under the national blood arrangements.

The Commission recommends bringing together and consolidating within the Department the Australian Organ and Tissue Donation and Transplantation Authority and the National Blood Authority. This will bring together expertise and take advantage of economies of scale.

General Practice Education and Training Ltd provides improved quality and access to primary care across Australia, including through general practitioner vocational education and training for medical graduates.

Health Workforce Australia improves health workforce capacity, including through a national approach to workforce policy and planning across all health disciplines, which effectively integrates research, education and training.

The Commission recommends merging General Practice Education and Training Ltd and Health Workforce Australia and consolidating them into a new clinical training unit within the Department to bring together expertise and take advantage of economies of scale.

The Professional Services Review Scheme reduces risks to patients and costs to the Commonwealth of inappropriate clinical practice, including through investigating health services claimed under the Medicare and Pharmaceutical Benefits Schemes.

The Commission recommends consolidating the Scheme into the Department to provide opportunities for efficiencies and synergies.

In addition, the Private Health Insurance Ombudsman provides an independent service to help consumers with health insurance problems and enquiries. The Ombudsman deals with complaints from health fund members, health funds, private hospitals and medical practitioners.

The Commission recommends that the Ombudsman merge with other ombudsmen into a single Office of Commonwealth Ombudsmen, to deliver efficiencies, the sharing of expertise and more flexible case management approaches.

In addition, the Commission proposes that a new authority (the ‘PBS Entity’) be established in the Health Portfolio to manage the funding of new and currently listed medicines, negotiate prices for existing drugs and make decisions about de-listing drugs (see Section 9.4 of the Appendix Volume 1).

Single civilian merits review tribunal

The Commonwealth maintains four main bodies to review the merits of Commonwealth decisions: the Administrative Appeals Tribunal; the Social Security Appeals Tribunal; the Migration Review Tribunal and the Refugee Review Tribunal; and the Classification Review Board.

While these bodies have different responsibilities, funding models and structures, previous analysis points to the merits of a unified tribunal framework.

For example, the Administrative Appeals Tribunal’s submission to the Commission notes a 1995 report by the Administrative Review Council, Better Decisions: Review of Commonwealth Merits Review Tribunals (Administrative Review Council, 1995), which recommended ‘the establishment of a new tribunal... to replace the existing review tribunals’. The submission notes that the report in-principle concluded:

the preferable model is a unified tribunal framework which is able to address any need for special expertise or for arrangements to accommodate the requirements of particular types of party through: the use of well-considered and appropriate case management procedures; the appointment of appropriately qualified and experienced members by processes independent of the decision-makers subject to review; and where volume of cases or other factors warrant it, the establishment of divisions (including an appeals division if a second tier of merits review is considered appropriate).

Merging the resources of the Commonwealth’s civilian merits review tribunals can provide significant medium to long-term savings and better services. This is demonstrated by the successful establishment of amalgamated ‘super tribunals’ in State jurisdictions.

A single tribunal model would also provide the opportunity to reassess whether the cost of multiple layers of external merits review as a right is justified in a modern merits review framework, particularly given judicial review of all decisions is available in the courts.

The Commission proposes that Commonwealth civilian merits review tribunals should be amalgamated within the Administrative Appeals Tribunal.

The Commission does not propose the Veterans’ Review Board be included as it essentially operates as a division of the Department of Veterans’ Affairs and focuses on defence-related matters.

Given potential financial and cultural hurdles could impede the proposed consolidation of tribunals, amalgamation might be best undertaken incrementally.

Other consolidations

Using the propositions for government bodies as a reference, the Commission also recommends the following actions to reduce the number of government bodies.

Ombudsman offices

The Commonwealth has various ombudsman offices, including the: Commonwealth Ombudsman; Norfolk Island Ombudsman; Overseas Students Ombudsman; Immigration Ombudsman; Law Enforcement Ombudsman; Defence Force Ombudsman; Taxation Ombudsman; Postal Industry Ombudsman; Fair Work Ombudsman; and Private Health Insurance Ombudsman.

In addition, the Inspector-General of Taxation reports to government on the performance of Australian Taxation Office processes, identifying how to reduce the administrative burden for taxpayers.

A number of functions have already been consolidated into the Commonwealth Ombudsman’s office recognising the similarity of the underlying functions.

In light of this and in accordance with its propositions, the Commission considers the existing ombudsman offices and the Inspector General of Taxation should be amalgamated within the Office of the Commonwealth Ombudsman.

Arts bodies

Bringing together the Australia Council, Australian Business Arts Foundation Ltd, Screen Australia and Bundanon Trust into a single arts council will reduce administrative costs and support closer collaboration within the arts community. It will provide improved capacity for grant and procurement processes to be centrally and professionally managed. The Commission notes that the Bundanon Trust will likely need to be maintained within the new Arts Council to some degree, given the terms of a gift from the Boyd family.

The Australian Film, Television and Radio School could be transferred to a university or vocational education institution with an option for the Arts Council to fund scholarships. This is consistent with the principle that the Commonwealth should withdraw from activities outside its areas of core responsibility and which could be more efficiently and effectively undertaken by the private sector or another jurisdiction.

Other consolidationsby portfolio

The Commission also recommends the following actions to reduce the number of government bodies.

Agriculture

The Grape and Wine Research and Development Corporation commissions and manages government and industry investment in research and development to improve the productivity, profitability, competitiveness and sustainability of their industries. The Wine Australia Corporation promotes the Australian wine industry through market development, knowledge development, compliance and trade.

The Commission notes and supports the recent passage of legislation to merge the Grape and Wine Research and Development Corporation and Wine Australia Corporation from 1 July 2014.

The Australian Pesticides and Veterinary Medicines Authority regulates the use of pesticides and veterinary medicines. The National Industrial Chemicals Notification and Assessment Scheme (in the Health Portfolio) aids in the protection of the Australian people and the environment by assessing the risks of industrial chemicals and providing information to promote their safe use.

The Commission recommends merging these two bodies to leverage synergies in the assessment and regulation of chemicals. The new body, Chemicals Australia, should sit in the Industry Portfolio.

Attorney-General’s

In addition to the proposals to create a single civilian merits review tribunal and a single Arts Council, the Commission proposes a number of actions in relation to bodies in the Attorney‑General’s Portfolio.

The Australian Law Reform Commission undertakes inquiries on matters referred to it by the Attorney-General and reviews Commonwealth laws and legal processes relevant to those matters, for the purpose of systematically developing and reforming the law.

The Commission recommends consolidating the Australian Law Reform Commission into the Department, noting that it performs activities that could be undertaken in the Department and its statutory independence does not require the maintenance of a separate FMA Act body.

The Family Court and Federal Circuit Court of Australia are Australia’s superior courts in family law and assist Australians in resolving complex family disputes. In addition, the courts also deal with administrative law, bankruptcy, discrimination, migration, consumer matters, privacy and workplace relations.

The Federal Court of Australia has jurisdiction to hear and determine any civil matter arising under laws made by the Federal Parliament, as well as any matter arising under the Australian Constitution or involving its interpretation.

The Commission recommends merging the Family Court and Federal Circuit Court of Australia and the Federal Court of Australia to create a single FMA Act body. This would reduce administrative costs by providing additional opportunities to share facilities and streamline back-office functions, to achieve a more efficient administration of justice.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) is Australia’s anti-money laundering and counter-terrorism financing regulator. The financial intelligence unit provides financial information to Commonwealth and State law enforcement, security, social justice and revenue agencies and certain international counterparts. AUSTRAC should be reviewed to determine if it should also form part of the stronger crime intelligence capability.

Communications

The Australian Postal Corporation (Australia Post) is responsible for postal and parcel delivery. It also acts as an agent for financial services (such as billing and banking), travel and passport services. Shop outlets also offer office consumables, merchandise and additional services.

NBN Co is responsible for building and operating the National Broadband Network.

The Commission recommends that Australia Post and NBN Co be privatised in accordance with established practice (see Section 10.19 of the Appendix).

The Telecommunications Universal Services Management Agency (TUSMA) is responsible for entering into contracts and making grants to support the provision of public interest telecommunications services for all Australians, including standard telephone services, payphones, emergency call services and the National Relay Service.

The Commission recommends consolidating TUSMA into the Department, noting that it performs activities that could be undertaken in the Department, with overall reductions in administrative and governance costs. This would help streamline administration of the Universal Services Obligation.

Defence

The AAF Company provides discounted holiday accommodation to members of the Australian Army and other eligible members and funding for projects. The use of public funds for these purposes could be reassessed.

The Army and Air Force Canteen Service is responsible for the provision of goods, facilities and services for the entertainment and recreation of members of the Army, the Air Force and related persons.

The Australian Military Forces Relief Trust Fund provides benefits for members who have served in the Australian Army and their dependants.

The Royal Australian Air Force Veterans' Residences Trust Fund provides residences to eligible former members of the Air Force and their families.

The RAAF Welfare Recreational Company provides access to discounted recreational accommodation for Air Force members, their families and other eligible persons. It also provides financial support to, and assists in the provision of, recreational facilities and services to Air Force members.

The Royal Australian Air Force Welfare Trust Fund provides benefits to former members of the Air Force and their dependants.

The Royal Australian Navy Relief Trust Fund provides benevolent and financial assistance to members of the Royal Australian Navy.

The Royal Australian Navy Central Canteens Fund provides welfare and lifestyle related benefits and services to Royal Australian Navy members and their families.

The Commission recommends reviewing the AAF Company, Army and Air Force Canteen Service, Australian Military Forces Relief Trust Fund, Royal Australian Air Force Veterans' Residences Trust Fund, RAAF Welfare Recreational Company, Royal Australian Air Force Welfare Trust Fund, Royal Australian Navy Relief Trust Fund and Royal Australian Navy Central Canteens Fund to reassess the ongoing need to retain these activities within the Commonwealth.

Defence Housing Australia (DHA) is a government business enterprise responsible for the provision of suitable accommodation to Australian Defence Force members and their families. The Commission recommends that DHA be privatised in accordance with established practice (see Section 10.19 of the Appendix).

The Defence Materiel Organisation (DMO) is a prescribed agency responsible for equipping and sustaining the ADF. The Commission recommends consolidating DMO into the Department of Defence (See Section 9.8 of the Appendix).

Education

The Australian Curriculum, Assessment and Reporting Authority is responsible for improving the quality and consistency of school education in Australia through a national curriculum, national assessment, data collection and a performance reporting system. The Commission recommends consolidating the authority into the Department to achieve efficiencies and synergies, together with overall reductions in administrative and governance costs.

The Tertiary Education Quality Standards Agency (TEQSA) is responsible for maintaining and enhancing quality, diversity and innovation in the Australian higher education sector through nationally consistent regulation and quality assurance. The Australian Skills Quality Authority (ASQA), in the Industry Portfolio, is the national regulator for Australia’s vocational education and training sector. ASQA regulates courses and training providers to ensure nationally approved quality standards are met.

The Commission recommends merging ASQA and TEQSA to create a single Commonwealth tertiary regulator, recognising that many tertiary institutions currently deal with both bodies. This should help to streamline regulation and reduce the duplicative reporting requirements of institutions, and administrative and governance costs.

The Australian Institute of Aboriginal and Torres Strait Islander Studies is responsible for promoting, facilitating and undertaking research in Aboriginal and Torres Strait Islander studies, including culture and lifestyle. The Commission considers that there is scope for efficiencies among Indigenous bodies and recommends that the Department of the Prime Minister and Cabinet review all Indigenous bodies.

Employment

The Asbestos Safety and Eradication Agency (ASEA) coordinates the implementation of a National Strategic Plan for Asbestos Awareness and Management in Australia.

The Commission recommends consolidating ASEA into the Department, noting that it performs activities that could be undertaken by the Department, with overall reductions in administrative and governance costs.

Comcare is responsible for cost effective and fair workplace health and safety, workers compensation and rehabilitation services for Commonwealth and national self-insurers.

The Commission recommends consolidating Comcare’s policy responsibility and functions into the Department, consistent with the propositions, while claims management could be outsourced if this were to deliver savings.

The Office of the Fair Work Ombudsman is responsible for compliance, education and advice associated with the Fair Work Act 2009.

The Commission recommends that the Fair Work Ombudsman merge with other Ombudsman offices into a single Office of Commonwealth Ombudsmen, to deliver efficiencies, the sharing of expertise and more flexible case management approaches.

Safe Work Australia (SWA) is an independent statutory agency with primary responsibility for improving workplace health and safety and workers’ compensation arrangements across Australia. SWA is jointly funded by the Commonwealth and the States.

The Commission recommends that SWA be consolidated into the Department, noting that independence can still be maintained at a reduced cost. Separate accounts and funding arrangements could be established to ensure financial independence.

The Seafarers’ Safety, Rehabilitation and Compensation Authority (Seacare Authority) assists the Australian maritime industry in minimising the human and financial costs of workplace injury by providing workers’ compensation, rehabilitation and occupational health and safety regimes for certain seafarers involved in the maritime industry.

The Commission recommends consolidating the Seacare Authority’s policy responsibility and functions into the Department, consistent with the propositions and the Comcare recommendation, while claims management could be outsourced if this were to deliver savings.

The Workplace Gender Equality Agency is a statutory agency charged with promoting and improving gender equality in Australian workplaces and is responsible for administering the Workplace Gender Equality Act 2012.

The Commission recommends consolidating the Workplace Gender Equality Agency’s activities into the Department, with overall reductions in administrative and governance costs.

Environment

The Climate Change Authority is responsible for providing independent advice on the operation of the carbon tax, emissions reduction targets, caps and trajectories and other climate change initiatives.

The Commission supports abolishing the Climate Change Authority, noting that the Government has introduced legislation to abolish it as part of the carbon tax repeal bills that have been introduced into the Parliament.

The Director of National Parks is responsible for the administration and management of Commonwealth reserves and conservation zones, including Booderee, Kakadu and Uluru-Kata Tjuta National Parks.

The Commission recommends that the Director of National Parks be consolidated into the Department as a division to provide access to synergies and economies of scale, with the position of Director being retained as a statutory position. There are existing models for such an arrangement within the Department.

Low Carbon Australia Limited (LCAL) is responsible for administration of the Energy Efficiency Programme and the National Carbon Offset Standard Carbon Neutral Programme. In May 2013, the activities of LCAL transferred to the Clean Energy Finance Corporation (CEFC).

The Commission considers that LCAL should be abolished, noting that it is now integrated into the CEFC. This is consistent with the recommendation to abolish the CEFC.

The Murray-Darling Basin Authority (MDBA) is responsible for planning the integrated management of the water resources of the Murray-Darling Basin, including through the implementation and enforcement of the Basin Plan.

The Commission recommends consolidating MDBA into the Department, noting that independence can still be maintained at a reduced cost. Separate accounts and funding arrangements could be established to ensure financial independence.

The National Water Commission provides independent assurance of the Council of Australian Governments (COAG) national water reform agenda and promotes the objectives of the National Water Initiative.

The National Water Commission could be consolidated into the Department, given its small size, which will provide administration cost savings. Alternatively, its monitoring, audit and assessment functions could be transferred to the Productivity Commission.

The Sydney Harbour Federation Trust is responsible for planning and management of a number of Commonwealth sites around Sydney Harbour.

The Commission recommends transferring the trust to the New South Wales Government given the location of the land, consistent with the subsidiarity principle. If this cannot be achieved, the Department of Environment should consider internal options, such as placing it under the Director of National Parks and reviewing to ensure that the land is not underutilised.

Finance

The Albury-Wodonga Development Corporation (AWDC) manages the sale of land in the Albury-Wodonga area following the Commonwealth’s significant purchase of land in the area in the 1970s.

The Commission recommends consolidating AWDC’s activities into the Department to achieve economies of scale and reduce administration costs, noting that it has successfully sold most of its landholdings.

ASC Pty Ltd is a defence shipbuilding and maintenance organisation, with naval design and engineering resources.

The Commission recommends that ASC be privatised in accordance with established practice (see Section 10.19 of the Appendix).

Comsuper provides access to Commonwealth Government superannuation benefits and information for current and former Australian Public Servants and members of the Australian Defence Force, on behalf of the Commonwealth Superannuation Corporation.

The Commission recommends consolidating Comsuper into the Commonwealth Superannuation Corporation, which is its only client.

Medibank Private is a provider of health solutions for private health insurance members, government and corporate clients.

The Commission notes that Medibank’s potential sale has already been announced and a scoping study commenced in October 2013.

Foreign Affairs and Trade

The Australian Trade Commission (Austrade) promotes exports, investment, international education and tourism.

The Commission notes the maturity of global markets and Australia’s export sector, the small proportion of Australia’s exporters that are assisted and the lack of market failure and spillover benefits. The Commission recommends that Austrade should significantly reduce the activities of Austrade and incorporate any residual functions into a new commercial arm of the Department (see Section 10.1 of the Appendix).

The Export Finance and Insurance Corporation (EFIC) provides finance to Australian exporters when private markets are lacking.

The Commission recommends abolishing EFIC and transferring residual assets to the new commercial division of the Department, which should investigate options to on-sell or wind up EFIC's existing loan book (see Section 10.1 of the Appendix).

Tourism Australia promotes awareness of Australian travel destinations to domestic and international travellers, conducts and reports on research into travel trends and communicates to the Australian community on the contribution of the tourism industry.

The Commission recommends halving funding for Tourism Australia. Residual activities should be consolidated into the Department of Foreign Affairs and Trade (see Section 10.1 of the Appendix).

Industry

The Australian Renewable Energy Agency (ARENA) provides financial assistance for research and development to accelerate market innovation aimed at improving the competitiveness of renewable energy technologies and increasing the supply of renewable energy in Australia.

The Commission recommends consolidating ARENA into the Department to provide opportunities for efficiencies and synergies, noting that its activities could be undertaken in the Department. This could be expected to deliver overall reductions in administrative and governance costs.

As noted above the Commission recommends merging the Australian Skills Quality Agency and Tertiary Education Quality Standards Agency to create a single Commonwealth tertiary regulator.

Infrastructure and Regional Development

The Australian Rail Track Corporation (ARTC) manages the National Interstate and Hunter Valley rail networks and sells network access to train operators.

The Moorebank Intermodal Company (MIC) manages the delivery of the Moorebank Intermodal Terminal, including seeking private sector participation for the development and operation of the intermodal terminal.

The Commission recommends that ARTC be privatised, either wholly or partially, and MIC be privatised, in accordance with established practice (see Section 10.19 of the Appendix).

The National Capital Authority (NCA) manages the continuing interests of the Commonwealth in the national capital, including the range of functions required to plan, promote, enhance and maintain the national characteristics and qualities of the capital.

The Australian Capital Territory’s submission to the Commission notes that:

While the intended distinction between the NCA and the Territory planning authority appears clear, there are considerable areas of duplication in terms of planning delivery and policy roles, which are well documented in various submissions to Parliamentary Inquires and associated findings of review... In formulating its recommendations, the ACT calls upon the Commission to consider: Whether current responsibilities of the NCA overlap or intrude on ACT Government responsibilities; Whether the current planning controls, which overlay existing ACT planning controls, are appropriate to maintain in a self-governing jurisdiction; Possible steps to be taken to minimise overlap and deliver greater certainty for industry and government undertaking developments in the city (Australian Capital Territory Government, 2013)

The Commission recommends reviewing the NCA with a view to transferring some functions to the ACT Government to reduce duplication of effort, consistent with the subsidiarity principle and in recognition of the ACT as a self-governing jurisdiction. Any residual functions should be transferred to the Department of Finance to achieve reductions in administrative and governance costs.

The National Transport Commission (NTC) is an independent advisory body to Commonwealth and State governments' transport ministers. The NTC works in partnership with the road and rail transport sectors, governments, transport bodies, the Australian Local Government Association, regulators and police, to develop land transport reforms. It is jointly funded by the States.

The Commission recommends reviewing the NTC to determine if and when this body should cease operations, recognising that significant progress has been made with the establishment of the National Heavy Vehicle Regulator and Office of the National Rail Safety Regulator.

Prime Minister and Cabinet

The Office of the Commonwealth Ombudsman ensures that administrative action by Australian government bodies is fair and accountable.

The Commission recommends that the Commonwealth Ombudsman merge with other ombudsmen into a single Office of Commonwealth Ombudsmen, to deliver efficiencies, the sharing of expertise and more flexible case management approaches.

Aboriginal Hostels Limited (AHL) supports access to education, employment, health and other services for Aboriginal and Torres Strait Islander people travelling or relocating, through the operation of temporary hostel accommodation services.

The Commission recommends that the Department of the Prime Minister and Cabinet should undertake a review of AHL’s statutory model, including options to merge with other commercially focussed bodies within the portfolio.

Outback Stores Pty Ltd provides improved access to affordable, healthy food for Indigenous communities, particularly in remote areas, through providing food supply and store management and support services.

The Commission recommends that the Department of the Prime Minister and Cabinet should undertake a review of Outback Stores, including consideration of whether this should remain a responsibility of government and if so, options to merge with other commercially focussed bodies within the portfolio.

Indigenous Business Australia promotes improved wealth acquisition to support the economic independence of Aboriginal and Torres Strait Islander peoples through commercial enterprise, asset acquisition, construction and access to concessional home and business loans.

The Indigenous Land Corporation promotes enhanced socio-economic development, maintenance of cultural identity and protection of the environment by Indigenous Australians through land acquisition and management.

The Commission recommends merging Indigenous Business Australia and the Indigenous Land Corporation to achieve efficiencies, avoid duplication (these organisations already share a common chair) and improve convenience for clients.

The Northern Land Council, the Central Land Council, the Anindilyakwa Land Council and the Tiwi Land Council are the four Northern Territory Land Councils established under the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA Act). Each is an independent statutory body established to represent Aboriginal interests in a range of processes under the ALRA Act.

The Torres Strait Regional Authority promotes progress towards closing the gap for Torres Strait Islander and Aboriginal people living in the Torres Strait region through development planning, coordination, sustainable resource management, and preservation and promotion of Indigenous culture.

The Wreck Bay Aboriginal Community Council holds title to land and provides council services to the Aboriginal Community of Jervis Bay.

The Commission considers that there is scope for efficiencies among the Commonwealth’s various Indigenous bodies and recommends that the Department of the Prime Minister and Cabinet review all Indigenous bodies, including the Anindilyakwa Land Council, Central Land Council, Tiwi Land Council, Torres Strait Regional Authority and Wreck Bay Aboriginal Community Council (see Section 10.3 of the Appendix).

The recent consolidation of Indigenous programmes into a single department provides an opportunity to improve cohesion and programme delivery. However, consistent with the above proposition that portfolio departments should undertake policy work and agencies should deliver programmes and services, the Commission sees merit in moving the programme and service delivery functions into a new body, the Indigenous Affairs Agency.

Social Services

Australian Hearing Services assists hearing impaired people by assessing hearing, fitting hearing devices and providing counselling and rehabilitative programmes for eligible clients.

The Commission recommends that Australian Hearing be privatised in accordance with established practice (see Section 10.19 of the Appendix).

Treasury

The Australian Reinsurance Pool Corporation was established in response to the withdrawal of terrorism insurance cover by insurance companies and administers the terrorism reinsurance scheme, providing primary insurers with reinsurance for commercial property and associated business interruption losses arising from a declared terrorist incident.

The Commission considers that there is now scope for a gradual Commonwealth exit from the terrorism reinsurance industry and suggests that the next review of the scheme will provide an appropriate vehicle for abolishing the Corporation.

The Australian Securities and Investments Commission (ASIC) is Australia's corporate, markets and financial services regulator.

The Commission recommends that ASIC's registry functions transfer to the Australian Taxation Office, which already has registry responsibilities, to streamline business reporting requirements, while ASIC’s consumer protection functions should transfer to the Australian Competition and Consumer Commission, which already has related responsibilities. ASIC’s financial literacy functions should cease and the remainder of ASIC should be considered as part of the Government’s Financial System Inquiry.

The Corporations and Market Advisory Committee (CAMAC) undertakes research and provides discussion papers and reports to the responsible minister on the Corporations Act 2001.

The Commission considers that CAMAC’s functions could be undertaken by the Treasury. It has a small number of staff and maintenance of FMA status could impose a significant overhead.

The Inspector-General of Taxation identifies systemic issues in the administration of the tax laws and provides independent advice to government on these matters.

The Commission recommends merging the Inspector-General of Taxation into the new single Office of Commonwealth Ombudsmen, which would provide for efficiencies and the sharing of expertise.

The National Competition Council (NCC) produces independent advice to all Australian governments involved in implementing National Competition Policy. The NCC provides advice on third party access to infrastructure.

The Commission recommends merging the NCC into the Productivity Commission, noting the NCC has a small number of staff and its role is somewhat complementary to that of the Productivity Commission, in respect of carrying out research and providing advice on matters referred to it by government. The continuation of its regulatory functions on access issues will need careful handling.

The Office of the Auditing and Assurance Standards Board (AUASB) develops auditing and assurance standards and related guidance to enhance the relevance, reliability and timeliness of information provided to users of audit and assurance services.

The Office of the Australian Accounting Standards Board (AASB) develops and maintains financial reporting standards to assist all sectors of the Australian economy to prepare financial reports and enable users of these reports to make informed decisions. The Board contributes to the development of global financial reporting standards.

The Commission recommends merging the AUASB and AASB to deliver operational efficiencies in recognition of their complementary objective of producing standards under the Australian Securities and Investments Commission Act 2001, with oversight by the Financial Reporting Council.

The Royal Australian Mint produces minted coins to satisfy the Reserve Bank of Australia’s forecasts for circulating coin.

The Commission recommends that the Royal Australian Mint be privatised in accordance with established practice (see Section 10.19 of the Appendix).

A table summarising recommendations in relation to the 194 principal bodies is at Attachment 10.18.1

Improving the information on existing bodies

As noted above, there is no central repository of information on Commonwealth bodies. This reduces government’s ability to ensure that existing Commonwealth structures align with government objectives and community/stakeholder needs.

A central register is recommended to bring together information on all Commonwealth bodies.

Reducing the proliferation of new bodies

The Commission proposes that the introduction of a central register of Commonwealth bodies be accompanied by a process to reduce the number of new bodies established, which places the onus on the proposing minister to demonstrate the need for a new body to the Cabinet. This should include:

  • the case for a new body;
  • compelling advice on why the function cannot be undertaken within the department or another existing body;
  • advice on how the cost of corporate functions will be minimised, including whether they will be provided by the department or a shared service provider;
  • advice on how the new body will interface with, but not duplicate, the activities of existing bodies; and
  • a proposed termination date.

The Commission recognises that there will always be demands on governments to establish new bodies and this may be appropriate in some cases. However, adherence to this process should reduce the creation of unnecessary bodies.

This recommendation strengthens the existing guidance from the Department of Finance, which notes that:

There is a policy preference to curb unnecessary proliferation of Government bodies. Consequently, a function, activity or power should, if possible, be conferred on an existing department, or another existing Australian Government body, rather than on a new body.

If there are persuasive policy reasons to form a new body, then its purpose — and its financial, legal and staffing status — will need careful consideration. ... The aim is to ensure that the governance arrangements promote the effective implementation of policy. Poor governance structures can threaten good policy outcomes (Australian Government, 2005).

Reducing administrative and governance costs

As noted above, the administrative and governance costs of independent entities are significant. Even in relation to government committees with private sector representation, costs include secretariat support, sitting fees, travel and corporate overheads.

Integrating small bodies into portfolio departments would help to reduce corporate governance and administrative overheads and create closer links between policy and programme owners.

The Commission may examine options to reduce administrative and governance costs in Phase Two of its work.

Reducing costs for government and stakeholders by reducing the number of boards and committees

As well as the 194 principal bodies, the Commonwealth supports around 700 other bodies, including boards, committees and councils.

There is considerable scope to rationalise these bodies. The Commission has commenced a preliminary examination of some of these bodies and may recommend actions in its Phase Two Report.

As well, the Commission proposes each department reassess all bodies within its portfolio (including boards, committees and councils) with a view to reducing their number and associated overheads.

The following criteria will assist departments in this process and inform decisions on retaining or ceasing the operation of existing committees.

  1. Bodies (including boards, committees and councils) involved in a single process should be consolidated.

    There are a number of cases where more than one body is involved in a single process. For example, the Pharmaceutical Benefits Advisory Committee plays a role in funding the drugs to be listed on the Pharmaceutical Benefits Scheme and the Pharmaceutical Benefits Pricing Authority determines the price of those drugs. Savings, both financial and with respect of timeliness, to government and stakeholders can be achieved by bringing these together, particularly if sequential decisions can be made more efficiently as a result.
  2. Subcommittees should be integrated into the lead committee, where possible.

    A number of boards and committees have associated subcommittees, which may further contribute to complexity and costs. Where these are not efficiently assisting with the lead committee’s work, they should be integrated into the lead committee or board. Where there are ongoing governance functions (such as Audit Committees), consideration should be given to whether these functions could be more efficiently undertaken by integrating them into the portfolio department’s governance framework. The Commission notes that the new Public Governance, Performance and Accountability Act 2013, which comes into effect on 1 July 2014, makes provision for this aggregation of governance arrangements.
  3. Governance committees for boards, committees and councils should be part of the relevant department’s governance frameworks.
  4. Bodies should be abolished if:
    1. functions are no longer required;
    2. functions could be more effectively or efficiently undertaken by the private or not-for-profit sector;
    3. functions are outside the Commonwealth’s core areas of responsibility; or
    4. the body exists solely to appoint members to another body.

A number of boards and committees appear to continue to exist almost solely because they are established in legislation. Where this is the case, consideration should be given to amending the relevant legislation and abolishing the board or committee.

Further reductions in coordination costs for government and stakeholders could be achieved by logically clustering similar bodies, including their associated boards and committees. For example, research and development bodies as well as workforce development bodies are currently spread out over a number of portfolios.

Improving the information on existing boards and committees

The Commonwealth Government website www.ausgovboards.gov.au seeks to bring together information on Commonwealth Government boards and committees. However, it is clear – based on information provided directly to the Commission by departments – that this data is incomplete. Mandating listing of all boards and committees on a central register of Commonwealth bodies will improve transparency and reduce coordination and search costs for stakeholders. It will also enable links to be drawn more readily between bodies, which will assist with logical clustering and further reduce coordination costs.

References

Administrative Review Council 1995, Better Decisions: Review of Commonwealth Merits Review Tribunals, Canberra.

Attorney-General’s Department 2013, Portfolio Budget Statement 2013-14, Canberra.

Australian Capital Territory Government 2013, Submission to the National Commission of Audit 2013, Canberra.

Australian Government 2003, Review of the Corporate Governance of Statutory Authorities and Office Holders (Uhrig Review), Canberra.

Australian Government 2005, Governance Arrangements for Australian Government Bodies, Canberra.

Australian Government 2013, Budget Papers 2013-14, Australian Government, Canberra.

Department of Agriculture , Fisheries and Forestry 2013, Portfolio Budget Statement 2013-14, Canberra.

Department of Agriculture 2013, Submission to the National Commission of Audit 2013, unpublished, Canberra.

Department of Finance 2013, Budget 2013-14 - Updated for Machinery of Government Changes, Canberra.

Department of Finance 2014, Flipchart of FMA Act Agencies and CAC Act Bodies, Canberra.

Department of Finance and Deregulation 2009, List of Australian Government Bodies and Governance Relationships, Canberra.

Department of Finance and Deregulation 2012, Strategic Review of Small and Medium Agencies in the Attorney-General’s Portfolio – Report to the Australian Government, Canberra.

Department of Immigration and Citizenship 2013, Portfolio Budget Statement 2013-14, Canberra.

PricewaterhouseCoopers Australia 2013, Understanding Productivity – Federal Government Benchmarking of Corporate Services 2013, Canberra.

United Kingdom Government 2012, Public Bodies 2012, London.