4 - Other Matters

4.1 Rationalisation of remaining agencies, boards and committees

The Commission’s Phase One Report highlighted the large number of Commonwealth government bodies and the potential for this to contribute to duplication and overlap, unnecessary complexity, inefficiencies and a lack of accountability within government. In light of this, the Commission recommended that each department reassess all bodies within its portfolio with a view to reducing their number and associated overheads.

In the Phase One Report the Commission focussed on 194 principal Commonwealth bodies that operate under the Financial Management and Accountability Act 1997 and the Commonwealth Authorities and Companies Act 1997, and recommended action of some form in relation to 99 of these bodies.

As part of further deliberations, the Commission has recommended action on three more principal bodies, bringing the total recommended actions for principal bodies to 102.

The lack of a central register of government bodies has made it difficult for the Commission to compile an accurate and complete list.

Nevertheless, in addition to the 194 principal bodies, the Commission has identified 696 non‑principal bodies that exist at the Commonwealth level (including councils, boards and committees) based on information provided by departments and through other research undertaken.

In examining the potential for rationalisation of these non-principal bodies, the Commission was guided by the Principles of Good Government, along with the propositions that:

  • the Commonwealth should consider withdrawing from activities 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 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.

Non-principal bodies

The 696 non-principal bodies identified by the Commission have been assessed against the criteria outlined above.

Of these, the Commission recommends that 482 non-principal bodies be considered for abolition, amalgamation, transformation or assessment. The recommended actions are summarised, alongside the recommended actions for principal bodies from the Phase One Report, in Table 4.1 below.

The 482 non-principal bodies identified as warranting attention represent 69 per cent of the total number of identified non-principal Commonwealth bodies. Details of the recommended actions are outlined in Annex B to this report and in the detailed volume of appendices.

Table 4.1: Bodies identified for rationalisation or other action
Action to be taken

Principal bodies

Non-principal bodies

Abolish 7 35
Merge with other bodies 35 6
Consolidate into the portfolio department 23 57
To be privatised 9 1
Review, with a view to merging, abolishing or transferring 28 383
Total bodies identified for attention 102 482
Total bodies 194 696

Source: National Commission of Audit.

Key themes for rationalisation of non-principal bodies

The Commission’s analysis of the 696 non-principal bodies has highlighted three themes that may explain why so many bodies exist. These themes are that many exist to support the 194 principal bodies; arise from Council of Australian Governments arrangements and processes; or advise government.

Some 93 non-principal bodies exist to provide support to the 194 principal bodies. For example the National Archives of Australia is supported by the National Archives of Australia Advisory Council. Similarly the Office of the Australian Information Commissioner is supported by two separate advisory committees – the Information Advisory Committee and the Privacy Advisory Committee.

The Commission’s Phase One Report contained a detailed discussion on roles and responsibilities between the Commonwealth and the States as well as the complex and often unwieldy arrangements associated with Council of Australian Governments processes.

The extent of the supporting apparatus for this is evident in that the Commission has identified 238 non-principal bodies which support and facilitate inter-jurisdictional matters, including those supporting the Council of Australian Governments or other areas of shared Commonwealth and State interest.

Of these, 109 are related to Council of Australian Governments arrangements. Further, it is likely that this figure is an understatement, as the Commission considers a number of portfolios have not fully disclosed the full extent of their involvement with Council of Australian Governments processes.

In its Phase One Report, the Commission emphasised the extent of duplication and overlap between the Commonwealth and the States and has recommended that a thorough reassessment of roles and responsibilities across levels of government be undertaken as a matter of urgency.

The need for many of the bodies associated with Council of Australian Government processes should be reassessed as part of the Commission’s proposals for reforming the Federation.

The Commission has identified 314 non-principal bodies which operate in an advisory capacity. It is of course appropriate for the government to seek the views of stakeholders and obtain advice from experts outside of government. However, harnessing expertise and advice should be core business for departments which does not necessitate dedicated bodies.

The existence of an advisory body adds an additional layer of participation and administrative overhead, which needs to be balanced against the efficiency and effectiveness of obtaining this advice and guidance. The Uhrig Review of Corporate Governance of Statutory Authorities and Office Holders found the accountability of governing boards can be diminished when additional layers of participation are introduced without decision-making responsibility.

Collectively government advisory bodies consume substantial resources in the form of secretariat support, sitting fees, travel and corporate overheads.

The Commission considers substantial opportunities exist to rationalise the number of advisory bodies, including councils, advisory boards, reference groups and committees. Where the need for an advisory function remains, consolidation of this function into the portfolio department is preferred.

In addition to these key themes, within particular portfolios there are groupings of non‑principal bodies that could be rationalised, outlined below.

Table 4.2 summarises the recommended actions for rationalisation of Commonwealth bodies (both principal and non-principal) by portfolio. As was the case for its Phase One recommendations, the Commission recognises further investigations and consultations may be required regarding these recommendations. Many will also be contingent on the Government adopting other recommendations of the Commission.

Table 4.2: Commonwealth bodies by portfolio
Portfolio

Principal bodies

Non-principal bodies

 

Total

For action

Total

For action

Agriculture 9 3 104 74
Attorney-General's 31 14 48 34
Communications 7 3 20 3
Defence 12 10 43 31
Education 7 4 27 24
Employment 10 6 9 5
Environment 11 6 58 31
Finance 9 4 3 1
Foreign Affairs 6 3 27 26
Health 22 16 66 41
Human Services 2 1 9 9
Immigration 3 3 8 2
Industry 10 3 67 40
Infrastructure and Regional Development 9 5 91 81
Parliamentary Services 4 0 0 0
Prime Minister and Cabinet 18 12 23 17
Social Services 4 0 16 10
Treasury 18 9 31 13
Veterans' Affairs 2 0 46 40
Total bodies 194 102 696 482

Source: National Commission of Audit.

Agriculture

The Commission notes that Council of Australian Governments arrangements have led to the proliferation of 50 bodies within the Agriculture portfolio.

There are around 70 advisory bodies within this portfolio and the Commission considers their efficiency and effectiveness should be reviewed. They include the Agriculture Finance Forum, Aquaculture Committee, Australian Fisheries Management Forum, Beef Industry Advisory Committee, Forest and Wood Products Council and the Shark-Plan Representative Group.

Other bodies that should be consolidated in the Department include the Australian Landcare Council, Biosecurity Advisory Council, National Rural Advisory Council and Statutory Fishing Rights Allocation Review Panel.

The Commission considers the six selection committees established to appoint members to the boards of the corporations within the agriculture portfolio should be consolidated within the Department.

Following the recommendations in the first report to merge the Australian Pesticides and Veterinary Medicines Authority and National Industrial Chemical Notification and Assessment Scheme, the Commission recommends abolishing the Authority’s advisory board and four associated committees.

Defence

The Commission supports the Government’s commitment to undertake a first-principles review of Defence’s departmental structure and major processes. Opportunities for further rationalisation of 25 Defence non-principal bodies should be considered in this context.

The Defence Science and Technology Organisation should be assessed for its outsourcing potential.

Foreign Affairs

There are 20 bodies in the Foreign Affairs and Trade Portfolio that provide advice to government on promoting bilateral relations, such as the Australia-China Council, Australia‑Japan Foundation and Australia-Indonesia Institute.

Some of these bodies are established by an Order-in-Council and also oversee components of the International Relations Grants Program. Secretariat support is provided by the Department of Foreign Affairs and Trade.

The Commission recommends a review of these bodies with a view to streamlining their functions. For example, it may be appropriate for the relevant policy divisions within the Department of Foreign Affairs and Trade to be responsible for these grants.

Health

Further to the Commission’s Phase One recommendation to rationalise entities in the Health portfolio, including by amalgamating many into a new Health Productivity and Performance Commission, action is recommended for another 40 non-principal bodies within the portfolio. Approximately half of these actions are due to consequential impacts of Phase One recommendations.

Following on from the Commission’s recommendation to streamline approvals for new drugs through the Therapeutic Goods Administration, the ongoing need for eight therapeutic goods advisory committees should be reviewed.

Subsequent to the Commission’s recommendation to open up the pharmacy sector to competition, the ongoing need for four related bodies should be assessed, including the Australian Community Pharmacy Authority and the Pharmaceutical Benefits Remuneration Tribunal.

In Phase One the Commission recommended changes to the current governance and funding arrangements for the Pharmaceutical Benefits Scheme. This will have an impact on three related bodies: the Life Saving Drugs Programme Reference Group, Pharmaceutical Benefits Pricing Authority and the Pharmaceutical Benefits Advisory Committee.

There are also around nine advisory bodies in the portfolio that merit review.

Industry

Of the Industry portfolio’s 67 non-principal bodies around three quarters are advisory.

While the Commission acknowledges the need for technical expertise there are opportunities to reduce the number of advisory bodies in the portfolio. Some 16 should be reviewed with a view to being abolished.

In light of the Phase One recommendations regarding industry assistance and research and development, the ongoing need for Innovation Australia and its eight underlying committees and groups should also be reviewed.

The Commission has also examined the role of the Office of Spatial Policy and considers it should be abolished, with residual activities moved to the Department of Communications. Also, the Australian Industry Participation Authority could be abolished as part of the Government’s deregulation agenda.

Infrastructure and Regional Development

There are 55 Regional Development Australia committees within the Department of Infrastructure and Regional Development. Regional Development Committees are funded by State, Territory and local governments in some jurisdictions.

The Commonwealth appropriates approximately $20 million for these committees, an average $360,000 each. These committees develop regional plans, help to identify solutions that address the region’s needs and hold regional forums.

For example, in 2012-13 Regional Development Australia Barossa engaged in activities such as: improving digital literacy for business, establishing a digital cluster for start up creatives, roundtables to discuss the potential of live music in the region, a region cycle route mapping project and assisting people with their resumes and job applications.

Consistent with the subsidiarity principle and the Commission’s Principles of Good Government, the Commonwealth is not best placed to meet the needs of specific regions. Accordingly, the Commission recommends that the Commonwealth withdraw its involvement in these committees and transfer responsibility to State and local governments recognising that they are better placed to address region-specific issues.

Actions for other portfolios

Commonwealth rehabilitation services are provided through CRS Australia. The Commission recommends that CRS Australia should cease functions at the end of its current contract in mid-2015 given there is now an established market for the provision of rehabilitation services. Some of CRS Australia's allied health professionals could be transitioned to the National Disability Insurance Agency.

The Commission considers that the Education Investment Fund Advisory Board and Health and Hospitals Fund Advisory Board could be abolished following the consideration of whether to maintain the Nation-building Funds in their current form, as discussed in Chapter Two.

An international market exists for the design and manufacture of printed currency. There is merit in considering privatisation of Note Printing Australia Pty Ltd, as has also been recommended by the Commission for the Royal Australian Mint. Elsewhere in the Treasury portfolio, the Commission considers that the Australian Charities and Not-for-Profits Commission and its advisory board could be abolished, as these functions could be undertaken by the Australian Taxation Office.

The Commission recommends the Defence Services Homes Insurance Scheme and its advisory board be abolished. There is an established and competitive insurance market. There is no compelling rationale for continued government involvement in this area. Further, noting the number of advisory bodies within the Veterans’ Affairs portfolio, there is merit in identifying whether opportunities exist to share the resources of other Commonwealth departments, such as the Department of Health, Department of Human Services and Department of Defence.

Further actions for principal bodies

Subsequent to the recommendation in the Phase One Report, the Commission has identified actions for four principal bodies – the Australian Public Service Commission, the Australian Government Solicitor, Comcare and Airservices Australia.

A future role for the Australian Public Service Commission is discussed in Chapter Three. The Commission recommends the office of the Public Service Commissioner be relocated to the Department of Employment. Some existing functions of the Australian Public Service Commission should also be amalgamated into that Department.

The Australian Government Solicitor houses much of the Commonwealth’s expertise in areas of tied legal work, such as the Constitution, Cabinet, national security and public international law. Under the Attorney-General’s Legal Services Directions, only the Australian Government Solicitor and other tied providers are permitted to advise the government on these matters.

The Attorney-General’s Department is responsible for the provision of legal advice to the Attorney-General, as Australia’s first law officer, and to the government as a whole.

Recognising that the division of these responsibilities is less than ideal, the Commission considers the Department’s role in the provision of coordinated and strategic advice could be substantially strengthened if the Australian Government Solicitor’s functions most closely related to the core executive activities of government were consolidated into the Attorney-General’s Department – namely those functions provided by the Office of General Counsel.

This would enhance the Department’s capacity to fully deliver its important strategic role, and would better serve the Attorney-General and the government of the day.

The Commission notes the remainder of the Australian Government Solicitor primarily competes with the private sector in the contestable government legal services market. Consistent with the Principles of Good Government outlined in the Phase One Report, the Commission sees no compelling rationale for this. A review should occur, which establishes options to wind-up the remainder of entity, including the possible sale of the Australian Government Solicitor’s client book.

In its Phase One Report, the Commission recommended that Comcare, which manages workers compensation for Commonwealth Public Sector agencies be relocated into the Department of Employment. Further to this recommendation, consideration should be given to Comcare’s claims management operations being outsourced and private sector underwriting of Comcare’s workers’ compensation insurance scheme.

Airservices Australia retains an essential role in air traffic control and aeronautical safety. In its Phase One Report the Commission noted the potential to outsource some of its activities. Further to this, the Commission considers that an independent review be undertaken of the organisation with a particular focus on the scope of its activities as well as its planned capital expenditure programme.

Central register of government bodies

The Commission’s analysis of non-principal bodies reinforces the need for a central register of government bodies, as recommended in the Phase One Report.

In addition to establishing the register, which departments should continually update, the Commission advocates annual reporting by the Department of Finance.

The report would highlight new, abolished and consolidated bodies across portfolios, and the Commonwealth generally. A regular report would assist ministers, the Parliament, departments and the public to monitor where public resources are directed.


Recommendation 14: Reduce the number of non-principal government bodies

Further to the Commission's recommendations to rationalise the number of government bodies contained in its Phase One Report, the Commission recommends a significant rationalisation of the 696 non-principal government bodies, including by:

  1. taking action on 482 existing non-principal bodies by:
    1. abolishing 35 bodies;
    2. merging 6 bodies;
    3. consolidating 57 bodies;
    4. privatising 1 body;
    5. reviewing with a view to rationalising 383 bodies; and
  2. regularly reassessing the operations and continuing need for all remaining non principal bodies.

Recommendation 15: Further action on principal government bodies

Building on the recommendation in the Phase One Report, the Commission recommends action for the following principal bodies:

  1. consolidate the Australian Government Solicitor's Office of General Counsel into the Attorney-General's Department and undertake a review to establish options for the wind-up of the remainder of the entity, including possible sale of the entity's client book;
  2. the office of the Public Service Commissioner be relocated to the Department of Employment, with some existing functions of the Australian Public Service Commission also amalgamated into that department;
  3. Comcare's claims management function be outsourced and private sector underwriting of Comcare's workers' compensation insurance scheme pursued; and
  4. an independent review be undertaken of Airservices Australia with a particular focus on the scope of its activities as well as its planned capital expenditure programme.