Bills Digest 108 1996-97
Commonwealth Authorities and Companies Bill 1996
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Commonwealth Authorities and Companies Bill 1996
Date Introduced: 12 December 1996
House: House of Representatives
Portfolio: Finance
Commencement: On the same day as the Financial Management and
The Commonwealth Authorities and Companies Bill 1996 (the CAC Bill)
forms part of a package of four Bills and associated measures designed
to modernise controls on Commonwealth finances and over businesses owned
or operated by the Commonwealth.
The other Bills in the package are:
- the Auditor-General Bill 1996 (the Auditor-General Bill);
- the Audit (Transitional and Miscellaneous) Amendment Bill 1996 (the
Transitional Provisions Bill); and
- the Financial Management and Accountability Bill 1996 (the FMA Bill).
The Auditor-General Bill, amongst other things, provides for the re-establishment
of the Office of Auditor-General under the proposed new financial accountability
regime replacing the Audit Act 1901 (the Audit Act); and styles
the Auditor-General as an 'independent officer of the Parliament'.This
Bill also re-creates the Australian National Audit Office (ANAO) as an
independent statutory body employing staff under the Public Service
Act 1922 but with a capacity to contract out work where considered
appropriate by the Auditor-General.Together with the Transitional Provisions
Bill, the Auditor-General Bill makes provision for a wider role for Parliament
(through what will be the Joint Committee of Public Accounts and Audit)
in selecting the Auditor-General and in monitoring the performance of
that Office and the ANAO. The Auditor-General Bill also re-establishes
the Office of Independent Auditor who is the Parliament's auditor of the
ANAO.
The Transitional Provisions Bill formally repeals the Audit Act,
proposes consequential changes to enabling legislation affecting Commonwealth
authorities so as to link those bodies to the CAC Bill, and provides for
the Auditor-General in office at 30 June 1997 to see out the remainder
of their 10 year term.The Public Accounts Committee Act 1951 is
to be amended to enlarge the powers and functions of the Parliamentary
Joint Committee of Public Accounts (JCPA).
The FMA Bill seeks to establish a regulatory framework for Commonwealth
instrumentalities which financially are agents of the Commonwealth, that
is, those bodies which do not 'own' their funds but operate squarely within
the provisions of sections 81 and 83 of the Commonwealth Constitution.Such
bodies include the Departments of State, the Parliamentary Departments
and many Statutory authorities and government agencies which manage public
money or property on behalf of the Commonwealth.The Bill also specifies
the powers and responsibilities of the Minister for Finance with regard
to their duties as custodian of the Treasury of the Commonwealth under
the Constitution.
The principal object of the CAC Bill is to bring a greater degree of
uniformity and clarity to financial reporting standards applying to Commonwealth
authorities and to establish standards of conduct for those engaged in
the management of those entities.In doing so the CAC Bill repeals Part
XI of the Audit Act and, together with the Transitional Provisions Bill,
replaces a multitude of specific legislative provisions contained in the
enabling legislation establishing many Commonwealth authorities. The CAC
Bill also extends the mandate of the Auditor-General to all Commonwealth
authorities and Commonwealth companies although slightly different rules
will apply in respect of wholly-owned and partly-owned Commonwealth companies
and in relation to Government Business Enterprises (GBEs).
The present Bill and the associated measures are similar but not identical
to a package of Bills introduced by the previous Government in June and
December 1994.(1) The earlier Bills were subject of a JCPA Report(2) and
debated in both Chambers. However, the legislation was not passed before
the Parliament was prorogued on 29 January 1996 for the General Election
of 2 March 1996.
Terminology
As the Senate Finance and Public Administration Legislation Committee
noted in preparing its most recent List of Commonwealth Bodies,
there is no general agreement or commonly applied standard in relation
to the definition of the various types of Commonwealth body.(3)The FMA
and CAC Bills, if passed, would go some way to addressing this problem.
The audit Bills collectively set up a reporting and accountability framework
for the full range of Government bodies.That classification is based not
on the type of functions performed by each those bodies but is applied
according to their legal personality and, in particular, the source or
degree of control they exercise over their funding. Under this schema,
budget dependent agencies such as the Government Departments generally
are dealt with under the FMA Bill whilst independent 'self-funded' bodies
including many Commonwealth authorities and Commonwealth companies are
dealt with under the CAC Bill.
As most readers know, where a term is defined in the Bill, the meaning
given to it in the legislation prevails over the 'dictionary meaning'
and any popular or current usage given that expression.(4) For example,
GBEs for the purposes of the CAC Bill will be any Commonwealth authority
or Commonwealth company that is prescribed by the regulations to be a
GBE. Hence, it is possible (but unlikely) that some of the 13 entities
which are now commonly regarded as GBEs may not be treated as such for
the purposes of this legislation.(5)
The more important terms defined in the CAC Bill are discussed in the
Main Provisions section of this Digest.
Coverage
According to the Senate Standing Committee on Finance and Public Administration,
as at June 1993 there were 1236 Commonwealth bodies outside the departmental
framework of administration. These comprised:
- 358 Statutory authorities and statutory offices;
- 327 non-statutory bodies; and
- 551 companies/associations.(6)
In its 1996 Report, the Committee used a slightly different approach
to classification but the results are (unsurprisingly) not dissimilar:
Commonwealth Bodies by Type and Total
June 1996
Associated Company Controlled Incorporated Non Statutory Statutory Chief
Company Limited Company -Statutory Authority Office Company
by Association Body
Guarantee
49 57 287 140 457 307 51 24
Perhaps the most significant change in the make-up of government bodies
was the reduction in the number of GBEs. In 1993, there were 19, as previously
noted there are presently only 13.(7)
A non exhaustive list of Statutory authorities which will be subject
to the CAC Bill forms Attachment A to this Digest.
Government Accounting Framework
Whilst many Statutory authorities and Commonwealth companies enjoy a
degree of independence from ministerial direction and some are relatively
free from public service staffing controls, they are subject to government
control and supervision either by way of:
- their own enabling legislation;
- the provisions of Part XI of the Audit Act(8); or
- specific reference to the general provisions of the Audit
Act.
Moreover, Statutory authorities and Commonwealth companies are from
time to time required to seek special appropriations or else pay dividends
into consolidated revenue. More fundamentally, Commonwealth authorities
and companies can never be said to be entirely divorced from the constraints
imposed by the Constitution which sets the parameters for the Government's
accounting framework.
The accounting framework of the Commonwealth is broadly defined by the
Constitution.
Section 51 provides that the Parliament has power to make laws for taxation
and borrowing money on public credit. Parliament also has the exclusive
right to impose customs and excise duties (section 90).
Money raised or revenue received by the Executive Government must form
part of one Consolidated Revenue Fund (CRF) which may be appropriated
(drawn on) for Commonwealth purposes (section 81).
No money can, however, be drawn from the Treasury of the Commonwealth
except under an appropriation made by law (section 83).
Public money may only be appropriated on the initiative of the Executive
Government (section 56) as a message from the Governor-General to the
House of Representatives recommending an appropriation is required.
Since federation, the defining elements of day to day Commonwealth financial
administration have been section 81 and 83 of the Constitution and the
Audit Act, which, as has been frequently noted, was the fourth
piece of legislation enacted by the Commonwealth.
The Audit Act establishes the framework for financial administration
of the Executive Government and the roles, powers and duties of Commonwealth
officers responsible for financial administration. Three tiers of subordinate
(delegated) legislation prescribe these powers and functions in more detail.They
are:
- the Finance Regulations - made on the authority of the Governor-General
- the Finance Directions - given on the authority of the Minister for
Finance; and
- Secretaries' Directions - given on the authority of the Secretary
of a Department to the staff of that Department.
Commonwealth Authorities and Companies and Audit Controls
Many Commonwealth/Statutory authorities and government companies are
not subject to the standard controls imposed by the Audit Act but
are subject to specific measures contained in the enabling legislation
under which they operate.
In 1979, the Audit Act was amended by inserting Part XI to establish
some basic financial provisions relating to the operations of Statutory
authorities and certain other bodies. This was a first step towards standardisation
of reporting, accounting and ethical requirements of Statutory authorities
to which Part XI applied. The 1979 amendments did not, however, subject
the authorities affected to the other provisions of the Audit Act.
Part XI of the Audit Act currently sets out financial provisions for
bank accounts, the keeping of proper accounts, investment, audit by the
Auditor-General, annual reports and financial statements of prescribed
authorities that operate outside the obligations and safeguards provided
by the public account. Division 2 of Part XI applies to commercial authorities;
Division 3 applies to non-commercial authorities.
In addition, the Department of Finance has (since 1983) issued a special
publication,'Guidelines for Financial Statements of Public Authorities
and Commercial Activities'. These guidelines seek to 'facilitate the preparation
of general purpose financial reports of public authorities and commercial
activities that convey relevant and reliable information to users and
enable management to discharge their accountability in an effective manner.'(9)
The Guidelines apply to the financial statements of:
- Commonwealth public authorities required by an Act to comply with
the Guidelines;
- Commonwealth public authorities that are referred to in an instrument
of the Minister for Finance approving the forms of those statements
as set out in Part II of Schedule 2 of the Guidelines;
- Departmental trust accounts that are required by a determination of
the Minister pursuant to section 41D of the Audit Act to prepare
financial statements in the form set out in Part II of Schedule 2 of
the Guidelines.
The Guidelines do not apply to companies owned or controlled
by the Commonwealth.(10)
Standardisation
In 1986(11) and 1987(12), the Government indicated its intention to
standardise reporting arrangements for incorporated authorities.
In April 1989, the Parliamentary Joint Committee of Public Accounts
(JCPA) presented its Report No. 296, The Auditor-General: Ally of the
People and Parliament - Reform of the Audit Office, which recommended
that the Audit Act be repealed and replaced with more modern and flexible
financial management.(13) This recommendation was accepted by the Government
in November 1989.(14)
In November 1989, the Senate Standing Committee on Finance and Public
Administration recommended that general provisions for formation, reporting
audit and disposal of government companies be set out in a Government
Companies Act.(15) The report also gave added weight to the recommendations
made by the JCPA in its 1989 Report cited above.
In June 1990, a new national scheme for the regulation of companies
generally (the Corporations Law) was agreed by the Commonwealth
and the States and Territories. This move to greater uniformity also added
impetus to the push treating Commonwealth owned companies in a like manner
to their private sector counterparts.
The above developments, and the drive for greater efficiency and accountability
in public enterprises and undertakings generally, have also added weight
to proposals for standardising financial and reporting requirements for
Commonwealth authorities if for no reason other than to simplify the task
of monitoring their activities.
Ministerial Responsibility
The pursuit of more uniformity and enhanced accountability has not been
entirely free of controversy although the underlying elements of that
controversy have not always been clearly articulated. In the context of
the present package, accountability and standardisation are seen as fundamental
goals.
A theme running through the submissions to the JCPA Enquiry into the
1994 audit Bills was that relations between Ministers and Commonwealth
authorities and businesses do not readily conform to any fixed set of
principles or a convenient 'one-size-fits-all' approach. (Subsequent amendments
have sought to address a number of specific concerns raised with the JCPA.)
Attempts to lay down hard and fast rules, particularly those designed
to bolster 'traditional' notions of ministerial responsibility or extend
them to all Statutory authorities, must circumvent a number of hazards.
For example, there is a myriad of rules governing the financial relations
of Commonwealth authorities and companies because there is a myriad of
authorities and companies serving myriad purposes. These corporate objectives
and functions are not always clearly defined or integrated into policy
formulation. Indeed as the Department of Finance itself observed,'([in
some instances] Statutory authorities have grown up through a series of
ad hoc government decisions, without prior careful consideration of the
national benefits and costs of their establishment.'(16)
To impose a standard set of requirements on such an array of interests
is an ambitious step but one which has not been explicitly challenged
to date.
This is not, however, to say that efficiency and accountability are
mutually incompatible. In May 1994, the Industry Commission supported
the fundamental tenets of accountability in relation to GBEs, concluding
that:
Boards should be accountable to parliaments through the relevant minister(s).
Accountability is supported by the preparation of a corporate plan,
annual report and indicators of financial and non financial performance
as well as external audit.(17)
The fundamental question is one of degree. How to minimise the costs
of responsible management without unduly inhibiting managerial initiative
or opening the door to political interference in decision-making. One
starting point is to recognise that Statutory authorities and government
companies exist outside departmental structures for the very purpose of
extricating them from day to day control by Ministers. Another is to acknowledge
that the absence of day to day control should not lead to an abrogation
of responsibility so that at the minimum, Statutory authorities can be
legitimately expected to comply with Government policies and should endeavour
to meet performance targets set for them by Government.
In attempting to balance the above considerations the Hawke Government
enunciated what may still be a useful set of 'ground rules' for determining
the relationship between a Minister and any given statutory body or government
enterprise:
The responsibility of a Minister for an authority derives from sections
61 and 64 of the Constitution, and is shown by the assignment of the
enabling Act by the Administrative Arrangements Order.The following
factors have a bearing upon the role a Minister may be called upon to
take and the extent of the responsibility to be borne in relation to
an authority's affairs:
- Authorities are accountable to the Parliament through the responsible
Minister.
- The degree of autonomy of an authority from Ministerial control
will depend upon the nature of the functions which justified its establishment
and for which independence is specifically warranted. However, outside
areas of specific autonomy of an authority, general government policies
should be adhered to. Appropriate Ministerial controls, including
powers of approval or direction, should normally be provided in the
legislation.
- Areas of independence and those subject to Ministerial controls
(and the nature of those controls) should be clearly and precisely
specified in enabling legislation, including activities for which
specific Ministerial approval must be sought.
- Where an authority is required by statute to perform a function
independently of Ministerial direction or superintendence, it is the
authority which must take responsibility for day-to-day discharge
of the function and for reporting to Parliament, through the responsible
Minister, accordingly. The authority's annual report will be the normal
means for rendering this account.
- Even where independence is stipulated, the activities of an authority
will normally be monitored by the Minister to ensure satisfactory
observance of the requirements of the existing charter, the adequacy
of that charter, and the general quality of performance, including
assurances that the conduct of business by an authority conforms to
appropriate public standards of propriety and probity. In meeting
these obligations, the Minister needs to be kept regularly advised
of the activities of an authority.If suitable procedures do not exist
for this purpose they should be established, if necessary on a statutory
basis.
- The nature and extent of a Minister's role and responsibilities
in each particular case vary according to the specific legislative
provisions relating to the respective functions and responsibilities
of the Minister and the statutory authority.(18)
The CAC Bill
The present CAC Bill closely resembles the Commonwealth Authorities
and Companies Bill 1994 as read a third time in the House of Representatives,
i.e. the 1994 Bill as amended in response to JCPA Report No. 331 (see
below).
A earlier version of the CAC Bill was introduced on 29 June 1994 by
the Minister for Finance, the Hon Kim Beazley and referred, on his motion,
to the JCPA for review with an advisory report to be presented by 23 August
1994. Extensive public hearings were held and on 23 August 1994 the House
agreed to extend the reporting deadline till 22 September 1994.
The JCPA presented its Report No. 331, entitled, An Advisory
Report on the Financial Management and Accountability Bill 1994, the Commonwealth
Authorities and Companies Bill 1994 and the Auditor-General Bill 1994,
and on a Proposal to Establish an Audit Committee of Parliament, in
September 1994, which generally welcomed the introduction of the CAC Bill
noting that:
- it would enable Parliament to view the accountability requirements
of the vast range of Commonwealth authorities and companies as a whole;
- it would ensure that the accountability requirements are explicit
and consistent for each class of Commonwealth entity;
- it would strengthen and clarify the mandate of the Auditor-General;
and
- the task of amending one Bill to reflect contemporary best practice
standards will be far easier than amending individual enabling Acts,
company memoranda and articles.(19)
JCPA Report No. 331, was, however, critical of a number of aspects
of the Bill and the Committee made a series of recommendations for improving
the legislation.
When the CAC Bill was debated, the Government moved a series of 20 amendments
which in part addressed the concerns raised by the JCPA. The Bill was
passed by the House on 8 December 1994 and introduced into the Senate
on 6 February 1995. An amendment moved by the Australian Democrats was
passed(20) and the Bill returned to the House of Representatives which
rejected the Democrat amendment on 29 March 1995. As noted above, the
1994 audit Bills failed to pass during the life of the previous Parliament.
It should be noted that the substantive provisions of the Bill do not
represent a complete code for the regulation of Commonwealth authorities
and companies.Importantly, the audit package will also include general
policy statements issued by the Government [refer clauses 28 and 43]
and Finance Minister's Orders to be issued under clause 48 of the
CAC Bill.
Definitions
In a generic sense, most the bodies dealt with under this Bill may be
termed 'Statutory authorities'.A 'Statutory authority' is an organisation
established by an Act of Parliament to provide services to the community.
These come in many functional types including:
- trading
- adjudicatory
- regulatory
- public advisory and research functions
- educational, cultural and media functions
- investigation of and reporting on executive action
- inter-governmental functions.
Whilst Statutory authorities generally derive little or no revenue from
the services they deliver, there are exceptions in the form of two special
types of Statutory authorities:
- 'Statutory Marketing Authorities' (SMAs); and
- 'Government Business Enterprises' (GBEs).
The term 'statutory authority' is not defined in the CAC Bill as separate
operating rules and reporting requirements are intended to apply to different
types of entity coming within the scope of the legislation.
SMAs and GBEs
SMAs are financed through levies paid by growers or from sale of produce.
GBEs sell their services and derive a substantial proportion of their
revenue from those sales. Although the absolute amounts of Budget funding
can be large, Budget funding usually represents a much smaller proportion
of total funding of GBEs than is the case with ordinary Statutory authorities.
Some GBEs are completely independent of the Budget. GBEs may be established
either as Statutory authorities or companies.
The Explanatory Memorandum to the CAC Bill notes that:
- In general, 'GBEs' should satisfy three criteria: they are commercial,
trade outside the public sector, and are not primarily regulatory bodies.
- 'SMAs' generally are Commonwealth authorities whose operations are
funded significantly from levies (or similar charges) paid by primary
producers for whose benefit the authority performs marketing functions.(21)
What is, and what is not, a SMA or a GBE for the purposes of the Bill
is left to be determined by regulation [clause 5].
'Commonwealth authority'
Clause 7 sets out the bases for determining whether a body is
a 'Commonwealth authority' for the purposes of the Bill. A 'Commonwealth
authority', as defined, is either:
- a body corporate established for a public purpose by an Act; or
- a body corporate incorporated for a public purpose by regulation under
an Act or under an Ordinance of a Territory (other than Norfolk Island)
or regulations under such an Ordinance and are prescribed as Commonwealth
authorities under the CAC Act.
The expression 'Commonwealth authorities' does not, however, include:
- bodies incorporated under the Corporations Law of a State or Territory;
- Aboriginal associations incorporated under Part IV of the Aboriginal
Councils and Associations Act 1976; and
- trade unions within the meaning of the Workplace Relations Act
1996.
Subclause 7(3) provides that all money held by a Commonwealth
authority is held on its own account unless it is specifically defined
as public money for the purposes of section 5 of the FMA Bill.This provision
seeks to address any possible ambiguity in relation to money held by a
Commonwealth authority on trust.
'Commonwealth company' and 'wholly-owned Commonwealth company'
Clause 34 defines the expression 'Commonwealth company' to be
a body corporate that is incorporated, or taken to be incorporated, under
the Corporations Law of a State or Territory and in which the Commonwealth
has a direct controlling interest.Corporations controlled by the Commonwealth
but through a one or more intermediaries that are themselves Commonwealth
authorities or Commonwealth companies do not come within the definition
of 'Commonwealth company'.
The expression 'wholly-owned Commonwealth company' means any Commonwealth
company, which are beneficially owned by a person other than the Commonwealth.
'Subsidiary'
The expression 'subsidiary' is used in the Bill to mean an entity that
is controlled by an Commonwealth authority or Commonwealth company [clause
5].
'Director'
The term includes not only members of governing bodies of Commonwealth
authorities but also persons who are directors of Commonwealth companies
within the meaning of the Corporations Act 1989[clause
5].
'Officer'
As defined in the Bill, an 'officer' in relation to a Commonwealth authority
means not only a director of an authority but also any person who takes
part in the management of the authority [clause 5].
Role of Auditor-General
The Auditor-General must audit each Commonwealth authority and must
also audit the financial statements of each subsidiary of every Commonwealth
authority [clause 8] except certain subsidiaries operating outside
Australia [subclause 12(4)].
In relation to Commonwealth companies and their subsidiaries, the Auditor-General
is to be the auditor for the purposes of the Corporations Law or, if someone
else is the auditor, the Auditor-General is to prepare a report on the
company's financial statements and give it to the responsible Minister
[clause 35 and subclauses 36(2) and (3) and subclause 37(3)]. As
with subsidiaries of Commonwealth authorities, subsidiaries of Commonwealth
companies operating outside Australia may be exempted from being audited
by the Auditor-General [subclause 37(4)].
Clauses 16 and 17 of the Auditor-General Bill provides that the
Auditor-General may at any time conduct a performance audit of a Commonwealth
authority or company which is not a GBE.For GBEs, the Auditor-General
may only conduct a performance audit where:
- the Finance Minister; or
- the responsible Minister; or
- the Joint Committee of Public Accounts and Audit (JCPAA)
requests such an audit.(22)
Reporting Requirements
Annual Reports
Clause 9 provides that the directors of a Commonwealth authority must
prepare an annual report each financial year and that that report must
be given the responsible Minister by the 15th day of the 4th month after
the end of the financial year, i.e. presently October 15. Subclause
9(3) provides that the responsible Minister must table the report
in each House as soon as practicable.
Clause 36 provides that at least 14 days before each annual general
meeting, a Commonwealth company must give the responsible Minister a copy
of the company's annual report.There are, however, differing tabling requirements
for Commonwealth companies and those entirely owned by the Commonwealth.Subclause
36(4) provides that in respect of wholly-owned Commonwealth
companies the responsible Minister must table the documents in each House
as soon as practicable.In other cases, where shares or an interest in
the company are held by private interests, the responsible Minister must
table the documents but not until the company has held its annual general
meeting.
Clause 30 further provides that the annual accounting period
for subsidiaries of Commonwealth authorities should be brought into line
with those of the parent body except where the Finance Minister grants
an exemption [clause 31].
Interim Reports
Clause 13 provides that the Finance Minister may require a particular
Commonwealth authority or class of authority to provide regular interim
reports to the responsible Minister. Such a report must include a report
on operations prepared by the directors in accordance with the Finance
Minister's Orders [refer subclause 13(2) and clause 48]. Under
clause 15, Commonwealth authorities and their subsidiaries must
also inform the responsible Minister where they propose undertaking any
significant restructuring activity (e.g. form a company or participate
in the formation of a company or undertake a new business venture) as
detailed in the clause. Clause 16 also imposes a general duty on
all Commonwealth authorities to keep both their Minister and the Finance
Minister informed on their activities.
Subclause 38(1) provides that the Finance Minister may require
a particular wholly-owned Commonwealth company or class thereof
to provide regular interim reports to the responsible Minister. The responsible
Minister must table any such interim report in each House as soon as practicable.
Under clause 40, wholly-owned Commonwealth companies and their
subsidiaries must also inform the responsible Minister where they propose
undertaking any significant restructuring activity (e.g. form a company
or participate in the formation of a company or undertake a new business
venture) as detailed in the clause. Clause 41 also imposes a general
duty on all wholly-owned Commonwealth companies to keep both their Minister
and the Finance Minister informed on their activities.
All Commonwealth authorities and Commonwealth companies (other than
GBEs) must also prepare budget estimates for each financial year and for
any other period directed by the responsible Minister [clauses 14 and
39].
GBEs
As already indicated, the Bill makes specific provision for GBEs.
Clauses 17 and 43 severally provide that GBEs which are either
Commonwealth authorities or wholly-owned Commonwealth companies
must prepare corporate plans at least once a year and give them to the
responsible Minister.Such plans must cover a period of at least 3 years.
The responsible Minister must also be kept informed of significant changes
to the plan.
As noted above, GBEs which are wholly-owned Commonwealth companies
or are Commonwealth authorities must prepare budget estimates each financial
year.
Clause 19 provides for special conditions to apply to GBEs and
SMAs that are Commonwealth authorities in relation to banking and
investment.The significant difference between the requirements imposed
on Commonwealth authorities generally and those imposed on GBEs and SMAs
(that are authorities) is that the latter may invest 'surplus money' in
any manner that is consistent with sound commercial practice [paragraph
19(3)(d)]. Other Commonwealth authorities do not enjoy such discretion
and are confined to defined forms of deposit accounts and securities and
other methods 'approved by the Treasurer' [paragraph 18(3)(d)].
Miscellaneous
Clause 21 makes provision for dealing with possible conflicts
of interest involving directors of Commonwealth authorities.
Clause 22 provides that anyone involved in the management of
a Commonwealth authority must act honestly and exercise due care and diligence.
Clause 23 provides that officers of Commonwealth authorities
must not make improper use of information gained from their holding their
office.
Clause 32 provides that each Commonwealth authority must establish
and maintain an audit committee to help the authority and its directors
comply with their obligations under the Act. It appears that the rules
governing the operation of such committees are to be established by regulation.
Wholly-owned Commonwealth companies are also required to establish and
maintain audit committees [clause 44].
- The Auditor-General Bill 1994, the Commonwealth Authorities and Companies
Bill 1994, the Financial Management and Accountability Bill 1994 (introduced
June 1994) and the Audit (Transitional and Miscellaneous) Amendment
Bill 1994 (introduced December 1994).
- The Bills were referred to the JCPA by then Finance Minister, Kim
Beazley, on 29 June 1994.
- June 1996: 4.
- For a slightly different approach to the meaning of key terms to that
taken in the audit Bills, see the introduction to the 1996 Report of
the Senate Finance and Public Administration Legislation Committee,
List of Commonwealth Bodies.
- Provisionally these are: the Australian Postal Commission, Telstra,
the Defence Housing Authority, Australian Defence Industries, the Australian
Industry Development Corporation, the Export Finance Insurance Corporation,
the Australian Technology Group Ltd, Snowy Mountains Hydro-Electric
Authority, Airservices Australia, the Federal Airports Corporation,
the Australian National Railways Commission, ANL Ltd, and the Housing
Loans Insurance Corporation.
- Senate Standing Committee on Finance and Public Administration, List
of Commonwealth Bodies, June 1993:v-vi.
- There were 7 'casualties', being: Aerospace Technologies of Australia
Ltd, Commonwealth Funds Management Ltd, the Pipeline Authority, Qantas
Airways Ltd, Civil Aviation Authority, Australian Maritime Safety Authority,
and Commonwealth Bank of Australia. The one addition is Airservices
Australia.
- Approximately 80 Statutory authorities are required to meet the reporting
requirements of Part XI. Refer JCPA, Report No. 331: 25.
- Department of Finance, Guidelines for Financial statements of Public
Authorities and Commercial Activities, January 1994: 1.
- ibid.
- Minister for Finance, 'Statutory authorities and Government Business
Enterprises', Discussion Paper, AGPS, June 1986: 13-14.
- Minister for Finance, 'Policy Guidelines for Commonwealth Statutory
authorities and Government Business Enterprises', A Policy Information
Paper, AGPS, October 1987: 14-15.
- JCPA, Report No. 296, The Auditor-General: Ally of the People and
the Parliament - Reform of the Audit Office, 1989, AGPS, Canberra: 240.
- Minister for Finance, Senator the Hon Peter Walsh, Government Response
to JCPA Report No. 296, 1 November 1989.
- Senate Standing Committee on Finance and Public Administration, 'Government
Companies and their Reporting Requirements', Report, AGPS, November
1989: 18-19.
- Department of Finance, Policy Discussion Paper, op cit, 1986: 2.
- Industry Commission, 'Improving the efficiency of GBEs', Information
Paper, May 1994: 11.
- Minister for Finance, Policy Information Paper, op cit, 1987: 8-9.
- JCPA, An Advisory Report on the Financial Management and Accountability
Bill 1994, the Commonwealth Authorities and Companies Bill 1994 and
the Auditor-General Bill 1994, and on a Proposal to Establish an Audit
Committee of Parliament, Report No. 331, September 1994: 23.
- Senate, Hansard, 23 March 1995: 2000.
- Department of Finance, Explanatory Memorandum, Commonwealth Authorities
and Companies Bill 1996: 3-4.
- Refer Bills Digest No. 104, 1996–97: 15.
ATTACHMENT A
Commonwealth authorities and Commonwealth companies for the purposes
of the
Commonwealth Authorities and Companies Bill 1996
Aboriginal and Torres Strait Aboriginal and Torres Strait
Islander Commercial Development Islander Commission
Corporation
Aboriginal Councils Airservices Australia
Australia Council Australian Broadcasting Authority
Australian Dairy Corporation Australian Dried Fruits Board
Australian Film Commission Australian Film, Television and
Radio School
Australian Fisheries Management Australian Hearing Services
Authority
Australian Heritage Commission Australian Horticultural Corporation
Australian Industry Development Australian Institute of Aboriginal
Corporation (AIDC) and Torres Strait Islander Studies
Australian Institute of Criminology Australian Institute of Family
Studies
Australian Institute of Health and Australian Institute of Marine
Welfare Science
Australian Maritime College Australian Maritime Safety Authority
Australian Meat and Livestock Australian Military Forces Relief
Corporation Trust Fund
Australian National Maritime Museum Australian National Railways
Commission
Australian National Training Australian National University (ANU)
Authority
Australian Nuclear Science and Australian Pork Corporation
Technology Organisation
Australian Postal Corporation Australian Securities Commission
(for public monies see also FMA Act)
Australian Sports Commission Australian Sports Drug Agency
Australian Telecommunications Australian Tobacco Marketing
Authority (Austel) Advisory Committee
Australian Tourist Commission Australian Trade Union Training
Authority (ceased operation 1 July
1996)
Australian War Memorial Australian Wheat Board
Australian Wine and Brandy Australian Wool Research and
Corporation Promotion Organisation
Civil Aviation Safety Authority Coal Mining Industry (Long Service
(CASA) Leave Funding) Corporation
COMCARE Commonwealth Scientific and
Industrial Research Organisation
Companies and Securities Advisory Construction Industry Development
Committee Agency (ceased 1 July 1995)
Cotton Research and Development Criminology Research Council
Corporation
Dairy Research and Development Defence Housing Authority
Corporation
Director of National Parks and Employment Services Regulatory
Wildlife (aka Australian Nature and Authority
Conservation Agency)
Energy Research and Development Export Finance and Insurance
Corporation Corporation
Federal Airports Corporation Fisheries Research and Development
Corporation
Forest and Wood Products Research Grains Research and Development
and Development Corporation Corporation
Grape and Wine Research and Great Barrier Reef Marine Park
Development Corporation Authority
Health Insurance Commission Horticultural Research and
(Functions - Medibank, Medicare, Development Corporation
Pharmaceutical Benefits, Child care)
Housing Loans Insurance Corporation Indigenous Land Corporation
Land and Water Resources Research Land Councils
and Development Corporation
Law Reform Commission Meat Industry Council
Meat Research Corporation National Food Authority
National Gallery of Australia National Library of Australia
National Museum of Australia National Occupational Health and
Safety Commission
National Registration Authority for National Standards Commission
Agricultural & Veterinary Chemicals
Nuclear Safety Bureau Pig Research and Development
Corporation
Pipeline Authority Private Health Insurance
(wound-up August 1996) Administration Council
Private Health Insurance Complaints Reserve Bank of Australia
Commissioner
Royal Australian Airforce Welfare Royal Australian Navy Relief Trust
Trust Fund Fund
Rural Industries Research and Snowy Mountains Hydro-Electric
Development Corporation Authority
Special Broadcasting Service Stevedoring Industry Finance
Corporation Committee
Sugar Research and Development Tobacco Research and Development
Corporation Corporation
Torres Strait Regional Authority University of Canberra
Wool International Wreck Bay Aboriginal Community
Council
Note: Some Statutory authorities have not been included in the list
because they are specifically exempted from its application - for example,
authorities established by Commonwealth-State agreements.
Bob Bennett
25 February 1997
Bills Digest Service
Information and Research Services
This Digest does not have any official legal status. Other sources should
be consulted to determine whether the Bill has been enacted and, if so,
whether the subsequent Act reflects further amendments.
IRS staff are available to discuss the paper's contents with Senators
and Members and their staff but not with members of the public.
ISSN 1323-9031
Commonwealth of Australia 1996
Except to the extent of the uses permitted under the Copyright Act
1968, no part of this publication may be reproduced or transmitted
in any form or by any means, including information storage and retrieval
systems, without the prior written consent of the Parliamentary Library,
other than by Members of the Australian Parliament in the course of their
official duties.
Published by the Department of the Parliamentary Library, 1997.
This page was prepared by the Parliamentary Library, Commonwealth of
Australia
Last updated: 4 April 1997
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