Chapter 2Annual reports of agencies
Annual reports of agencies
2.1The committee selected the annual reports of the following entities for closer examination:
Agriculture, Fisheries and Forestry portfolio
Department of Agriculture, Fisheries and Forestry; and
the Grains Research and Development Corporation.
Infrastructure, Transport, Regional Development, Communication and the Arts (excluding Communications and the Arts) portfolio
Department of Infrastructure, Transport, Regional Development, Communications and the Arts; and
Airservices Australia.
Department of Agriculture, Fisheries and Forestry
2.2The Department of Agriculture, Fisheries and Forestry (DAFF) (formally the Department of Agriculture, Water and the Environment ) tabled its 2021–22 annual report in the Senate on 21 October 2022 out of session. The report provides an overview of the activities and achievements of DAFF over the previous financial year.
Secretary’s review
2.3The Secretary, Mr Andrew Metcalfe AO, reviewed DAFF’s key initiatives, successes, and challenges for the year including:
support for local communities, Indigenous organisations, scientists, wildlife, and natural resources during the bushfires and floods;
the response to serious animal and plant diseases, such as foot and mouth disease;
updating the DeliveringAg2030 plan that will support the innovation and growth of the agriculture sector;
a record gross value of $81 billion for agricultural production, $12 billion more than 2020–21; and
developing an Indigenous Platform for Shared Benefits Realisation, which will establish the foundations and accountability for DAFF’s purpose.
Purpose and objectives
2.4DAFF outlines its purpose as ‘enhancing Australia’s agriculture, environment, heritage and water resources through regulation and partnership’. The department lists six objectives to achieve this purpose: agriculture; environment and heritage; being future ready; biosecurity; Antarctic; and water resources. In its summary, DAFF reported that 27 performance measures were achieved, or their baseline had been set, 16 measures were partially or substantially achieved, and four measures were not achieved. The four measures that were not achieved were:
stability or improvement in trajectory of the Threatened Species Main Index. An update to the index was delayed, and the most recent data is from 2017;
approval bilateral agreements are in place, underpinned by national environmental standards and supported by strong assurance. The relevant bills lapsed during the prorogation of Parliament and therefore an Environment Assurance Commissioner was not legislated;
increase in the volume of water recovered for environmental purposes in the Murray-Darling Basin to meet Basin Plan targets. Similarly to 2020–21, no progress on surface or groundwater water recovery; and
number of water resource plants accredited under Commonwealth law. A target of 33 accredited plans was set, however only 13 plans were accredited during 2021–22.
Key activities
2.5This section examines the key aspects of the agriculture and biosecurity sectors of DAFF as these sections are under the purview of the committee.
Agriculture
2.6DAFF highlighted their objective to assist the industry to accelerate growth towards a $100 billion agricultural sector by 2030. The department recorded a record high gross value of $81 billion in 2021–22.
2.7Supporting Australian farmers was an important activity for the department during 2022-22. DAFF supported farmers via the Farm Business Resilience Program, which sits under the Future Drought Fund. The program aims to assist farms with planning for and managing risks by offering a variety of learning and development opportunities. During 2021-22, more than 6,500 farmers participated in the program and the department facilitated over 4,000 learning and development activities.
2.8Other activities reported under the agriculture sector included:
increased access to 46 agricultural, fisheries and forestry export markets with a potential value of approximately $337 million;
a reduction in the department’s regulatory costs for agricultural exports by $12 million in 2021–22, which is on target for $21.4 million by 2023–24; and
a continued restoration of Australia’s access to live poultry and eggs market access that was lost due to avian influence outbreaks in 2020.
Biosecurity
2.9The department highlights their continued efforts to reduce the likelihood of exotic pests and diseases entering and becoming established or spreading across Australia.
2.10Increasing public engagement with biosecurity information was a key activity for 2021-22. A significant achievement for DAFF was providing culturally and linguistically appropriate content to support the re-opening on the Australian border and resumption of the international travel. The department also developed numerous webinar and podcast episodes, which focuses on emerging biosecurity threats and risk such as foot and mouth disease and lumpy skin disease.
2.11The department strengthened their engagement with neighbouring countries in the Indo-Pacific region by working with government and non-government organisations related to biosecurity and animal and plant health. During 2021-22 DAFF set up eight new formal arrangements with government agencies.
2.12Other activities report under the biosecurity sector included:
a 45 percent reduction of Brown marmorated stick bugs detected;
continued vigilance in monitoring the global spread of African swine fever;
a 79 percent reduction of consignments of imported goods where khapra beetle is detected; and
the decrease of biosecurity non-compliance for high-value cargo that is imported into Australia.
Staffing and financial information
2.13DAFF reportedly employed a total of 7,783 people during the reporting period, of whom 6,868 were ongoing and 916 were non-ongoing.
2.14DAFF reported a comprehensive income loss of $12.6 million in 2021–22 against a budgeted loss of $107.9 million. The discrepancy has been attributed primarily to changes of asset revaluation reserves of $88.4 million.
2.15Other key financial details include:
total expenses – $1.82 billion;
total own-source income – $469.76 million; and
revenue from the Australian Government – $1.13 billion.
Committee comment
2.16For the purposes of its report to the Senate, the committee considers the department’s 2021–22 annual report to be compliant with reporting requirements and to be ‘apparently satisfactory’.
Grains Research and Development Corporation
2.17The 2021–22 Annual Report of the Grains Research and Development Corporation (GRDC) presented information on the operations and performance of the agency during the reporting period. The report was tabled in the Senate on 28 October 2022.
Chair and Managing Director’s report
2.18The Chair, Mr John Woods and the Managing Director, Mr Nigel Hart, emphasised the GRDC’s role in driving the profitability and productivity of grains operations, ensuring the industry’s sustainability and increasing market competitiveness. Other points of interest included:
the investment of $25 million into in an innovative, new analytics investment platform;
a five and half year joint investment of $11.6 million with Advanta Seeds, the University of Queensland and the Queensland Department of Agriculture and Fisheries to address lodging in sorghum; and
the launch of the National Grower Network meetings across Australia with the aim to identify and explore opportunities to develop regionally relevant investments to boost productivity and profitability for the industry.
Purpose and objectives
2.19GRDC outlines its purpose as ‘to invest in research, development and extension to create during profitability for Australian grain growers.’ To measure GRDC’s performance, a key indicator of a minimum of six percent average farm business Rates of Return (RoR) by 2023 was set. To accomplish this, GRDC lists five main objectives; improve yield and yield stability; maintain and improve price; optimise input costs; reduce post-farmgate costs; and manage risk to maximise profit tan minimise losses.
2.20In summary, GRDC reported a total of 13 performance measures to accomplish their purpose. Of these eight were achieved, two were substantially or partially achieved, and three were not achieved. The three measures that were not achieved were:
a minimum yield increase of two percent for pulses per annum. A decreased pulse yield on the 5 year average for pulses was reported in 2021-22;
a minimum of 20 percent closure of the gap between potential and actual yields by 2023. The five-year average yield gap for wheat was 29.25 percent during the reporting period (2016–2020), which does not meet the performance criteria; and
to establish a behavioural economics initiative to research grower decision-making, however this was not achieved during reporting period.
2.21GRDC’s key performance indicator was substantially achieved during 2021-22. The agency reported a RoR of 5.7 percent, which based on the ten-year trend, the RoR by June 2023 is 4.68 percent.
Key Achievements
2.22This section provides a snapshot of GRDC’s key achievements that were accomplished during the reporting period.
Improved yield and yield stability
2.23To deliver enduring profitability for grain growers, the GRDC made investments aimed at extending yield potential and yield stability of all Australian grain crops.
2.24GRDC’s eight-year partnership with Agriculture Victoria Research (AVR) concluded in 2022. Over the lifetime of the partnership, GRDC and AVR will have invested approximately $88 million. These investments went towards projects such as programs focused on profitable pulse crops and bridging the profitability gap.
2.25NSW Department of Primary Industries and GRDC continued their Grains Agronomy and Pathology Partnership during 2021–22. Through this program $65 million was committed to invest in grains research over a five-year period.
Capacity and ability
2.26GRDC’s Capability and Ability Framework highlights their approach to develop and maintain the people, infrastructure and delivery pathway to ensure the continued success of the Australian grains industry.
2.27During 2021-22, GRDC sponsored the Australian Rural Leadership Program (ARLP). The agency sponsors the ARLP to build leadership capacity in the Australian grains industry, by providing grains industry applicants the opportunity to complete the program.
2.28GRDC highlighted the importance of investing in developing research, by continuing the GRDC Grains Research Scholarships that supports PhD candidates to deliver innovative research solutions for Australian grain growers. GRDC is currently supporting 26 researchers via this program.
Staffing and financial information
2.29GRDC reportedly employed a total of 77 people during 2021–22, all of whom were ongoing employees.
2.30GRDC reported a total comprehensive income of $145.4 million against a budgeted loss of $12.5 million. The discrepancy has been attributed to GRDC’s own source revenue being up 77 percent due to higher industry contributions. It is noted that industry contributions were higher than budget due to the gross volume of production, demand and prices were extremely high throughout 2021–22.
2.31Other key financial details include:
total expenses – $212.44 million;
total own-source income – $245.98 million; and
revenue from the Australian Government – $95.66 million.
Committee comment
2.32For the purposes of its report to the Senate, the committee considers the agency’s 2021–22 annual report to be compliant with reporting requirements and to be ‘apparently satisfactory’.
Department of Infrastructure, Transport, Regional Development, Communication and the Arts
2.33The 2021–22 annual report of the Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA) (formally the Department of Infrastructure, Transport, Regional Development, and Communications) details the department’s activities and achievements during the reporting period. The report was tabled in the Senate on 21 November 2022 out of sittings.
Secretary’s review
2.34The Secretary, Mr Jim Betts, highlighted the ways in which the department was meeting its six main purposes while meeting, and responding to the challenges posed by the COVID-19 pandemic. Mr Betts emphasised the department’s commitments to connecting and linking all Australians, enriching out communities, and empowering all regions.
Purposes and performance
2.35The department has structured their annual report to provide a summary of its performance against six purposes. The six purposes are as follows:
supporting an efficient, sustainable, safe and accessible transport system and supporting jobs through infrastructure development;
improving living standards and facilitating economic growth in cities and regions, including Northern Australia;
supporting regional growth and resilience through building water infrastructure that improves water availability, connectivity, reliability and security for agricultural and other primary industry users;
providing governance frameworks and services to support communities in the territories;
enabling people in Australia to connect to effective safe communication services and enabling investment in communications technologies, for inclusiveness and sustainable economic growth; and
supporting sustainable and inclusive creative and cultural sectors and protecting and promoting Australian content and culture.
2.36During 2021–22 the department met 43 out of 61 performance targets, however there were 24 measures without performance targets. Of the 18 targets that did not meet expectations, 12 were partially met, four did not have data available and two did not meet the target at all. The two targets that were not achieved were:
the Implementation of the Inland Rail Interface Improvement Program. There were 38 proposals that received support through the program, however only 12 proposals were finalised by the end of the reporting period; and
city deals contributing to city productivity and liveability. The median house prices increased in all capital cities and regions, which greatly affected liveability.
Key activities
2.37This section examines the key activities under the infrastructure investment, transport connectivity, and aviation objectives as these areas are under the purview of the committee.
Infrastructure investment
The department highlights their continued support of the Black Spot Program during 2021–22. The program received $109.1 million to maintain its work targeting road locations where crashes are occurring or are at risk of occurring. The program also funds the Implementation of roundabouts, better lights, signage, road markings, and pedestrian crossings to help reduce the number of crashes on Australian roads.
2.38Other activities reported under infrastructure investment were:
the Northern Road project in Western Sydney, where approximately 35 kilometres of road was upgraded;
the Armadale Road Bridge in Western Australia;
the Adelaide River Flood Plan upgrades in Northern Territory; and
the Bruce Highway project in Queensland that saw a road upgrade between Caloundra Road interchange and the Sunshine Motorway.
Transport connectivity
2.39The department reiterated their continued support of major transport infrastructure in 2021–22 by financially supporting the development of the Western Sydney International (Nancy-Bird Walton) Airport, and the expansion of the National Intermodal Corporation (née Moorebank Intermodal Company).
2.40During 2021–22, DITRDCA in collaboration with state and territory governments, continued to support the Austroads initiative to develop a national data source to measure serious injuries. During the reporting period, the Road Safety Data Hub was established, however the department didn’t establish an ongoing consistent source of national serious injury data. They will continue their efforts during the next reporting period.
2.41Other activities under transport connectivity included:
the construction commencement of the Western Sydney Airport in November 2021;
the release of the 2020–21 National Freight and Supply Chain Strategy Annual Report in January 2022, that included three new indicators; and
178 kilometres of Inland Rail track was constructed.
Aviation
2.42DITRDCA highlighted their support for connecting regional Australia, by continuing the Regional Airline Network Support (RANS) program. The RANS program facilitates the supply of critical services, such as medical testing, supplies, and essential personnel to regional Australia. During 2021–22, over $1.5 million passengers have been carried on approximately 68,000 RANS-supported flights.
2.43Other activities reported under aviation included:
The Aviation Recovery Framework was released in December 2021, which outlines the Australian Government’s response to COVID-19 by supporting the operation and jobs of the aviation industry during the pandemic;
$29.6 million of grants under the Regional Airport Program; and
a decrease in CO2 domestic aviation emissions compared to 2020–21.
Staffing and financial information
2.44DITRDCA reportedly employed a total of 1,907 people during the reporting period, of whom 1,791 were ongoing and 116 were non-ongoing.
2.45DITRDCA reported a comprehensive income of $9.81 million in 2021–22 against a budgeted loss of $17.7 million. The surplus of $27.5 million has been primarily attribute to an underspend in the per- and poly-fluoroalkyl substances (PFAS) measure.
2.46Other key financial details include:
total expenses – $424.61 million;
total own-source income – $15.5 million; and
revenue from the Australian Government – $414.31 million.
Committee comment
2.47For the purposes of its report to the Senate, the committee considers the department’s 2021–22 annual report to be compliant with reporting requirements and to be ‘apparently satisfactory’.
Airservices Australia
2.48The 2021–22 Annual Report of Airservices Australia was tabled in the Senate on 26 October 2022. The report details the activities of the agency over the previous year.
Chairman and Chief Executive Officers report
2.49The Chairman, Mr John Weber and the CEO, Mr Jason Harfield, highlighted Airservices Australia’s ongoing effort to provide continuous air service to Australia, and ensuring safe, reliable and efficient use of airspace while still protecting the health and wellbeing of staff through the COVID-19 pandemic.
2.50Other activities and achievements Mr Weber and Mr Harfield noted over the reporting period included:
the continued support of the OneSKY Program in conjunction with the Department of Defence;
digitalising and automating airports, by implementing the use of remote digital tower technologies at two sites – Canberra Airport and Western Sydney International Airport;
the design of new flight paths for the new parallel runway at Brisbane Airport.
Performance
2.51Airservices Australia identified the following five objectives that the agency focused on in 2021–22:
match the needs of our customers with scalable service provisions, while maintaining safety as the first priority;
become a thriving, purpose and value-led workplace;
transition to a more flexible cost structure, with lower operating costs, emboldened by the $100 million in cost savings achieved throughout 2021–22;
continue to focus on the introduction of digitalised services across the network to prepare for future operating environments and improve productivity; and
transform our asset base to align capability to service demand and shirt capital commitments to operating expenses through partnerships with managed service providers.
2.52Airservices Australia’s performance is assessed against their key performance indicators (KPIs), and corporate plan initiatives, balanced against their three strategic pillars: customer, people and owner.
Customer
2.53The first strategic pillar aims to understand the industry’s needs and enhance services to deliver a better experience with more value for those that consume the agency’s services. This goal has been broken down to four different initiatives:
Service Performance Outcome matched to the needs of our customer;
OneSKY Program;
new dgital capabilities to drive efficiency; and
Enterprise Network Modernisation Program.
2.54The KPI results for customer performance matched or surpassed the targets set for 2021–22. The annual customer service survey’s result was 81 percent, 10 percent higher than targeted for the reporting period.
2.55Airservices Australia highlighted their progress under the OneSKY Program during the reporting period. However, it is noted that the project is experiencing an 18–24-month delay and is not likely to be completed till 2027, compared to the original 2025 timeline.
People
2.56The second strategic pillar seeks to create a thriving purpose and values-leg organisation. To achieve this pillar, Airservices Australia has created three initiatives: realigned operating model efficiency improvements; aligned strategic workforce and talent; and aligned values, leadership and behaviours.
2.57The KPI results indicate mixed results for people performance. Airservices Australia noted the Total Recordable Injury Frequency Rate (TRIFR) was unacceptable for the reporting period. The TRIFR result for 2021–22 was substantially higher than the targeted rate, but the agency expressed their leaders are fully committed to providing a safe working environment and have already commenced initiatives to promote injury management and early intervention management.
2.58The quarterly staff engagement survey showed promising results during 2021–22. Airservices Australia saw significant improvements in the survey, producing a 68 percent satisfaction rate compared to a target of 60 percent.
Owner
2.59The third strategic pillar aims to reform their revenue, cost model and financing structure to more efficient, flexible and sustainable. To achieve this goal, five initiatives were created to track its performance progress. The five initiatives are:
environmental stability;
community engagement;
cost-saving measures;
supplier engagement; and
liquidity management/gearing strategy.
2.60The KPI results indicated undesirable results for the agency. The agency reported negative 26.7 percent return of assets during the 2021–22 financial year. This was attributed to the reduced traffic associated with lockdowns and domestic and international border closures.
2.61Airservices Australia is actively working towards becoming carbon neutral, and they established an environmental footprint baseline in 2021–22.
Noise complaints
2.62A total number of people contacting the Noise Complaints and Information Service (NCIS) in 2021–22 was 4,634 nationwide. The leading airport with most contacts to the NCIS was Brisbane with 1,308. The spike in complaints for Brisbane Airport has been attributed to the Implementation of noise improvement trials, easing of COVID-19 restrictions and the 2022 Federal Election.
2.63Numerous airports had an increase of residents making complaints, such as Sydney, Hobart, and Adelaide. Airservices Australia has listed that the main contributor to the number of complaints is due to the easing of border restrictions and increased flight traffic.
2.64Bankstown Airport in NSW reported a 41 percent increase or residents contacting the NCIS, which has been primarily attributed to the increased number of emergency services aircrafts operating due to COVID-19 restrictions in NSW.
Staffing and financial information
2.65Airservices Australian reportedly employed 3,235 people during the reporting period, of whom 3,077 were full-time, 147 were part-time, and eleven were casual.
2.66 Airservices Australia reported a net loss of $347.6 million in 2021–22, compared to a net profit of $321.2 million in 2020–21. The net loss was largely attributed to the COVID-19 pandemic, with quarantine and lockdowns affecting the aviation industry.
2.67Other key financial details include:
total expenses – $1.1 billion; and
total income – $592.99 million.
Committee comment
2.68For the purposes of its report to the Senate, the committee considers Airservices Australia’s 2021–22 annual report to be compliant with reporting requirements and to be ‘apparently satisfactory’.
Senator Glenn Sterle
Chair