Public sector: New entities, and investments in companies

Budget Resources

Philip Hamilton

The Budget includes pre-announced funding for new agencies and statutory office-holders, particularly in the Defence and Attorney-General’s portfolios. Some entities will transition through an interim form before being established under legislation. The Australian Government Organisations Register (AGOR) administered by the Department of Finance categorises Commonwealth entities by form. A Department of Finance webpage and Parliamentary Library Quick Guide further describe these categories.

A notable feature of this Budget is the relatively high number of new entities being established, and equity investments in Government Business Enterprises (GBEs), including the intention to eventually acquire 100% ownership in a company that is currently privately-owned.

New agencies and statutory office-holders

Several new entities will be established in the Defence portfolio to perform roles associated with the nuclear-powered submarine program (for more on the program, refer to the ‘Nuclear’ Budget Review article).

From 1 July the Australian Submarine Agency (ASA) will manage and oversee Australia’s nuclear-powered submarine program, succeeding the current Nuclear-Powered Submarine Taskforce. The Minister has stated that the ASA will be established by Executive Order, which suggests an Executive Agency under section 65 of the Public Service Act 1999. The Budget allocated the ASA $4.2 billion over 10 years from 2023–24 and $482.7 million per year ongoing. This includes $15.3 million over 10 years from 2023–24 and $1.5 million per year ongoing to establish an Independent Monitor and Adviser (IMA). The IMA will provide ‘independent assurance for the nuclear-powered submarine program through periodic health-checks and proactive advice’. The Budget papers note that ‘the Agency will be funded through the Department of Defence until the Agency has been formally established’ (page 94).

In addition, $7.9 million is allocated in 2023–24 for the ASA to establish the Australian Nuclear-Powered Submarine Safety Regulator and ‘develop associated nuclear regulatory standards and frameworks’ (page 95). The Minister has stated that ‘the Regulator will be independent of the Australian Defence Force’s chain of command and directions from the Department of Defence [and] both the ASA and the Regulator will be non-corporate Commonwealth entities within the Defence portfolio and report directly to the Minister for Defence’. In his second reading speech for the Defence Legislation Amendment (Naval Nuclear Propulsion) Bill 2023, the Minister anticipated legislation to establish the Regulator ‘later this year’.

The Defence Innovation Hub and Next Generation Technologies Fund will be replaced by the Advanced Strategic Capabilities Accelerator (ASCA). Recent reporting noted that ‘ASCA is the Australian Strategic Research Agency Labor committed to in the 2022 election campaign but did not fund in its first budget last year’. The Defence Strategic Review report stated ‘it is our view that ASCA must be an unencumbered entity outside of Defence’ (page 73). A Department of Defence media release states that ‘from 1 July 2023 the operating model will be developed, tested, refined and progressively implemented over 18 months.’ ASCA has been allocated $3.4 billion over 10 years from 2023–24 to ‘translate disruptive new technologies into Defence capability rapidly, in close partnership with Australian industry. The cost of this measure will be met from within the existing resourcing of the Department of Defence’ (page 91). In June 2022, the Parliamentary Library published a Flagpost article on ASCA’s US equivalent, the Defense Advanced Research Projects Agency (DARPA), outlining how the ‘DARPA model’ could be implemented in an Australian context.

In the Attorney-General’s portfolio, the Inspector of the National Anti-Corruption Commission will receive $3.0 million over 4 years from 2023–24 and $0.8 million per year ongoing (page 60). This is a statutory position under the National Anti-Corruption Commission Act 2022.

The Budget provides $8.0 million over 4 years from 2023–24 and $2.0 million per year ongoing to establish an Anti-Slavery Commissioner (page 60). As part of a statutory review into the Modern Slavery Act 2018, an issues paper foreshadowed that establishing an Anti-Slavery Commissioner would require legislation or legislative amendments (page 49). The review’s report was due to be completed by 31 March 2023 and will subsequently be tabled in Parliament.

In December 2022, the Government announced its intention to abolish the Administrative Appeals Tribunal (AAT). A public consultation concluded on 12 May 2023. To support the establishment of a new federal administrative review body, and for transitional activities, the Budget provides $89.5 million over 5 years from 2022–23 and $1.5 million per year ongoing. The funding comprises:

  • $63.4 million over two years from 2023–24 to ‘appoint additional full-time members to address the backlog of AAT cases’
  • $14.4 million over 5 years from 2022–23 and $1.5 million per year ongoing for the Attorney-General’s Department to ‘manage the transition to the new administrative review body’
  • $11.7 million over two years from 2022–23 to ‘develop a modern case-management system for the new administrative review body’.

The Budget notes that ‘funding for this measure has already been provided for by the Government’ (page 61). In a related measure, the Budget provides $4.0 million in 2023–24 for the Immigration Assessment Authority (in the Home Affairs portfolio) to continue merits review of ‘unsuccessful protection visa applications eligible for fast track review under the Migration Act 1958’ (page 155).

A week before the Budget, it was reported that the Government would appoint a dedicated Privacy Commissioner. This would restore the Office of the Australian Information Commissioner (OAIC) to a three-commissioner structure (the other office-holders being the Information Commissioner and the Freedom of Information Commissioner). The Budget provides $44.3 million over 4 years from 2023‐24 and $8.4 million per year ongoing to support the Privacy Commissioner, and ‘progress investigations and enforcement action in response to privacy and data breaches, and enhance its data and analytics capability’ (page 64).

The Budget provides $83.2 million over 4 years from 2023–24 to establish a national Net Zero Authority (the Authority) to ‘promote orderly and positive economic transformation associated with decarbonisation and energy system change in regional areas, including support for impacted workers’. Establishing the Authority requires legislation, so from 1 July 2023 the Department of the Prime Minister and Cabinet will establish an interim agency to perform the relevant functions and develop the necessary legislation (page 192).

Following passage of the National Reconstruction Fund Corporation Act 2023 in April 2023, the Budget provides $8.2 million over 4 years from 2023–24 and $1.2 million per year ongoing for the Department of Industry, Science and Resources to establish and oversee the National Reconstruction Fund Corporation (NRFC). In addition, $53.2 million is allocated for the NRFC’s establishment and operational costs in 2023–24, with ongoing funding expected from investment revenues. It is estimated the NRFC will earn $188.7 million over the forward estimates from its $15.0 billion investment in loans, equity investments and guarantees (page 165).

The Budget includes $91.1 million over two years from 2023–24 including $0.2 million in capital funding to ‘commence the establishment of the Australian Centre for Disease Control’ (page 131). A ministerial media release referred to an ‘interim’ arrangement in the Department of Health and Aged Care, which suggests that the final structure is yet to be determined, or may require legislation (page 117).

In the Finance portfolio, $51.7 million over 4 years from 2023–24 and $12.4 million per year ongoing has been allocated to establish the Parliamentary Workplace Support Service as an independent statutory authority. The new body will provide human resources and work health and safety support to parliamentarians and staff employed under the Members of Parliament (Staff) Act 1984 (page 113), services which are currently provided by the Department of Finance.

Investments in companies

The Budget provides information about Government investments in several companies, but financial information is unreported due to ‘commercial sensitivities’.

The Budget provides equity funding to WSA Co Limited, a GBE, for ‘the construction of facilities to support border services and law enforcement operations at the Western Sydney International (Nancy-Bird Walton) Airport’ (page 172).

In the Defence portfolio the Government will provide an equity injection over 5 years from 2023–24 to Australian Naval Infrastructure Pty Ltd, a GBE, for ‘early construction and design works for a submarine construction yard and to design the Skills and Training Academy, in South Australia’ (page 96).

The Government also intends to eventually acquire 100% ownership of CEA Technologies Pty Ltd, an Australian company that designs, develops and manufactures highly-regarded civil and military radar and communications systems for land, sea and air. Describing the deal as ‘unusual’, the Australian Financial Review has reported that:

under the agreement the federal government will buy out American defence giant Northrop Grumman’s 49 per cent stake by July. Eighteen months later, CEA Technologies will become majority-owned by the Commonwealth and converted to a government business enterprise (GBE) as other minority shareholders are bought out.

At the end of that 18 months, the company’s co-founder, Ian Croser, will remain the lone minority shareholder. The Commonwealth has first rights to buy those shares if Mr Croser wants to divest them, or dies, meaning that over time the company will become 100 per cent owned by taxpayers. … Government sources maintained the deal was a one-off and it was not looking to buy other defence companies.

The Budget provides $3.2 million over 4 years from 2023–24 and $0.8 million per year ongoing to ‘support effective governance of the Commonwealth interest in CEA Technologies Pty Limited’ (page 114).


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