Chapter 2Examination of Annual Reports
General reporting observations
2.1The majority of Commonwealth entities within the Treasury Portfolio and Industry, Science and Resources (Industry) Portfolio successfully included all mandatory reporting requirements.
Page number identification within the list of requirements
2.2The non-corporate Commonwealth entities Resource Management Guide No. 135, and corporate Commonwealth entities Resource Management Guide No. 136 state that ‘[e]ntities must also provide details of the location of the information in the annual report that addresses each of the mandatory requirements specified by the Public Governance, Performance and Accountability (PGPA) Rule’, additionally noting that ‘[t]he information presented in entities’ annual reports should be able to be easily accessed by the reader’.
2.3Generally, the entities examined provided sufficient reference to the location of the listed requirements, with the exceptions of the Department of the Treasury (Treasury), the Australian Office of Financial Management (AOFM), the Australian Competition and Consumer Commission (ACCC), the Australian Prudential Regulation Authority (APRA), the Commonwealth Grants Commission (CGC), the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), and the National Reconstruction Fund Corporation, none of which included page numbers in the list of requirements.
2.4Moreover, while some reports did still reference sections in which the requirements could be found, the sections referred to were often extensive rather than discrete. As such, locating the specific requirements required more time than would be required if page numbers had been provided. In certain cases, the list of requirements referred to sections which were not, in fact, included within the report. The committee encourages all departments and agencies to include exact page references in future reports.
2.5Noting that the committee has drawn attention to this issue in previous reports on annual reports, in some cases dating back to 2019, it is not apparent why this issue has persisted.
2.6Additionally, some departments and agencies provided inaccurate page numbers in their list of requirements. While this was limited in most cases, most page numbers provided by the National Competition Council (NCC) were inaccurate, making scrutiny more onerous than it would have otherwise been and, in certain cases, making it difficult to ascertain if a requirement had been included in the report. The committee encourages the NCC to rectify these errors in future reports.
Failing to list requirements
2.7In the case of the ACNC, no list of requirements was provided. This presented a particular barrier to scrutiny as previous ACNC reports had referred to the annual report of the Commissioner of Taxation for many of its requirements. Because no indication was given within the ACNC’s annual report as to where the various requirements were to be found, it was not possible to determine whether the ACNC had included all its reporting requirements. The Committee strongly encourages the ACNC to rectify this omission in future reports.
Missing requirements
2.8A number of reports failed to include mandatory PGPA requirements. The most common missed requirement was a direct electronic address of the charter determining the functions of the entity’s audit committee. In general, few requirements were missed, and those that were tended to be aids to clarity and legibility—glossaries, electronic addresses, and the like—rather than material issues.
2.9However, the Office of the Accounting Board of Australia and the Tax Practitioners Board (TPB) both listed as ‘N/A’ (Not Applicable) requirements which are mandatory. These requirements included ‘[a] description of the outcomes and programmes administered by the entity’ and ‘[a] table summarising the total resources and total payments of the entity’. In both cases, no further explanation was provided as to why these requirements do not apply. The committee recommends that departments and agencies review this aspect of their reports so as to ensure that no requirements are overlooked in this way.
Reports examined
2.10The committee has selected the following annual reports for closer examination:
Treasury;
Housing Australia;
Department of Industry, Science and Resources (DISR); and
Commonwealth Scientific and Industrial Research Organisation (CSIRO).
Department of the Treasury
2.11The Treasury presented its 2023–24 annual report to Parliament out of session on 17 October 2024. The report was tabled in the Senate on 18 November 2024.
2.12In the Secretary’s review, Dr Steven Kennedy PSM reflected on the Treasury’s operations and achievements for the year in review, focussing particularly on the shifting international environment, decarbonisation, and cost of living pressures. Secretary Kennedy also described Australia’s recent economic performance, including wage growth and unemployment.
Performance reporting
2.13As stated in the 2022-23Department of the Treasury Corporate Plan (Treasury’s Corporate Plan), Treasury’s purpose is to ‘provide advice to the Government and implement policies and programs to achieve strong and sustainable economic and fiscal outcomes for Australians’. This statement remains consistent with Treasury’s outcome statements presented in its annual report.
2.14Treasury tracks its performance through five activities that are split into 13performance measures. For the 2023–24 period, the majority of the measures were either achieved or substantially achieved, with the exception of measures one and nine being partially achieved, and measure seven not achieved. Performance measure seven is:
Treasury contributes to the development of the Organisation for Economic Co-operation and Development Inclusive Framework on Base Erosion and Profit Shifting Action 1.
2.15Measure seven required Australia to sign the Pillar One Multilateral Convention and implement legislation to give domestic effect to a domestic minimum tax and the income inclusion rule under Pillar Two. According to Treasury, Australia did not achieve this as Pillar One has not been settled by the member nations of the Organisation for Economic Co-Operation and Development (OECD), and the Multilateral Convention has not been opened for signature.
2.16However, the Treasury noted that work had progressed against the performance target, including continued engagement in OECD-led negotiations and the drafting of legislation for Pillar Two.
Financial reporting
2.17For the 2023–24 reporting period, Treasury recorded an operating deficit of $6.38 million. In the previous 2022–23 reporting period, an operating deficit of $0.6 million was recorded. No explanation was provided for either the current or previous reporting period.
Housing Australia
2.18Housing Australia presented its 2023–24 annual report to Parliament out of session on 25 October 2024. The report was tabled in the Senate on 18November 2024.
2.19In the Message from the Chair and CEO, Chair Carol Austin and Chief Executive Officer Stuart Neilson reflected on the operations and achievements for the year in review, including launching of Housing Australia Future Fund Facility and National Housing Accord Facility programs.
Performance reporting
2.20As outlined in its 2023–24 Corporate Plan, the purpose of Housing Australia is to improve housing outcomes by:
strengthening efforts to increase the supply of housing;
encouraging investment in housing, particularly in the social or affordable housing sector ;
providing finance or grants that complement, leverage or support Commonwealth, state or territory activities relating to housing ;
contributing to the development of the scale, efficiency and effectiveness of the community housing sector in Australia; and
assisting earlier access to the housing market by eligible homebuyers.
2.21Housing Australia’s performance is measured according to 15 performance targets. In the 2023–24 reporting period, 13 performance targets were met, one was partially met, and one was not met.
2.22The performance target that was partially met was number of NHIF applications received.
2.23The performance target that was not met was number of individual Community Housing Provider (CHP) and sector-wide capacity grant applications granted.
2.24While the performance target was 6–10 individual CHP and sector-wide capacity grant applications approved, the result was only two applications approved. Housing Australia outlined that ‘[a]pplications were paused during the year due to probity considerations around providing grants to CHPs who may have used the capacity building support to assist them in developing an application for the competitive HAFFF and NHAF Funding Round One’.
Financial Reporting
2.25For the 2023–24 reporting period, Housing Australia recorded an operating surplus of $48.105 million. In the previous 2022–23 reporting period, an operating surplus of $26.104 million was recorded. No explanation was provided for either the current or previous reporting period.
Department of Industry, Science and Resources
2.26The Department of the Treasury presented its 2023–24 annual report to Parliament out of session on 29 October 2024. The report was tabled in the Senate on 18 November 2024.
2.27In the Secretary’s review, Ms Meghan Quinn PSM reflected on the operations and achievements for the year in review, focussing particularly on Future Made in Australia initiatives, new technology strategies, and decarbonisation. Ms Quinn also described Australia’s ongoing efforts to improve domestic resilience and insulate against supply chain shocks.
Performance Reporting
2.28DISR’s purpose is outlined in its annual report, consistent with the Department of Industry, Science and Resources Corporate Plan 2023–24. This purpose states, ‘[b]uilding a better future for all Australians by enabling a productive, resilient and sustainable economy, enriched by science and technology’.
2.29DISR’s performance is measured by 16 performance measures, with ‘a mix of output, efficiency and effectiveness’:
Output—the quantity of the goods and services produced by an activity (including their volume or quantity);
Efficiency—generally expressed as a ratio of inputs to outputs, where efficiency involves maximising outputs for a given volume of inputs. The timely delivery of an output is commonly used as a proxy for efficiency; and
Effectiveness—assess how well the department has delivered on its purposes, and where activities have had the intended impact or contributed to achieving the purposes.
2.30For the 2023–24 reporting period, 14 performance measures were met, three were partially met, and one was not met.
2.31Measures that were partially met were:
Measure One—Business co-investment through portfolio initiative funding
Measure Three—Apparent satisfaction with the overall experience of the grants application process through the business gov.au website
Measure Six—Anti-Dumping Commission compliance with legislated and World Trade Organization timeframes is maintained or improved
2.32The measure that was not met was Measure Two—Proportion of grants and services delivered to regional businesses
2.33Measure Two required DISR to ensure that 25 per cent or more of total grants or services were delivered to regional businesses. However, in the reporting period 2023–24, only 15 per cent of grants or services were delivered to regional businesses. DISR explains that this decrease from the previous year was a result of the closure of the Entrepreneurs’ Programme in May 2023; DISR notes that the measure ‘will be replaced in 2024–25 to capture the regional manager network, which better reflects the diversity of the department’s support to regions’.
Financial Reporting
2.34For the 2023–24 reporting period, DISR recorded an operating deficit of $4.94 million. In the previous 2022–23 reporting period, an operating surplus of $18.90 million was recorded. No explanation was provided for either the current or previous reporting period.
Commonwealth Scientific and Industrial Research Organisation
2.35CSIRO presented its 2023–24 annual report to Parliament out of session on 29October 2024. The report was tabled in the Senate on 18 November 2024.
2.36In the Chief Executive’s report, Ms Kirsten Rose and Dr Doug Hilton AO reflected on the operations and achievements for the year in review, focussing particularly on the energy transition and updates to research and infrastructure.
Performance Reporting
2.37CSIRO’s purpose, as outlined in its annual report, consistent with its corporate plan, is to ‘solve the greatest challenges through innovative science and technology’.
2.38CSIRO measures its performance against eleven performance criteria. For the 2023–24 reporting period, 6 performance criteria were achieved, four were partially achieved, and one was not achieved. The performance criteria not met was to do fewer, bigger things.
2.39CSIRO measured performance of this criterion against cross organisation engagement. Cross organisation engagement refers to how CSIRO shares its talent in order to enable a multi-disciplinary approach to solving problems. The target set for 2023–24 was 20 per cent of projects; CSIRO did not meet the target as only 19 per cent of projects met the criteria.
2.40CSIRO noted that the number of external projects had decreased from previous years, while some research units within the organisation had also been consolidated. Both these factors meant there was less opportunity for engagement across the organisation. CSIRO has stated that it will not carry this performance measure over to the next annual report and is instead considering more suitable methods.
Financial Reporting
2.41For the 2023–24 reporting period, CSIRO recorded an operating surplus of $14.64 million. In the previous 2022–23 reporting period, an operating surplus of $17.71 million was recorded. No explanation was provided for either the current or previous reporting period.
Senator the Hon Jess Walsh
Chair
Labor Senator for Victoria