Annual reports of departments
The annual reports of the following departments for the financial year
2018–19, were referred to the committee for examination and report:
Attorney-General's Department (the AGD); and
Department of Home Affairs (Home Affairs).
Tabling of report
The 2017–18 annual report was tabled in the Senate on 19 October
2018. The report was available to senators for the Supplementary Budget
Estimates 2018–19 hearing on 19 October 2018.
In his review for 2017–18, the secretary of the AGD, Mr Chris
Moraitis PSM, focused on the AGD's positive outcomes in developing policy
and programs and providing high quality advice to government, including the
following areas: the implementation of national intelligence and domestic
security reforms, human rights reform, constitutional law and the
implementation of the Third Action Plan of the National Plan to Reduce Violence
Against Women and their Children.
The Secretary's Review noted that there were a number of reform projects
which the AGD was involved in, particularly in relation to family law. The
Secretary reported that the AGD had instigated structural reforms to the
federal courts to assist families in saving time and costs in family law
In addition, the AGD launched services and conducted trials of improvements to
the family law system, particularly in relation to additional support services
for families experiencing family violence.
The Secretary's View reported that the AGD had significantly contributed
to national safety and security. Mr Moraitis stated that joint cyber security
centres had been established nationally to ensure Australians were prepared for
and protected from cyber-attacks.
He also noted the passage of two bills, the National Security Legislation
Amendment (Espionage and Foreign Interference) Bill 2017 and the Foreign
Influence Transparency Scheme Bill 2018, which he stated had successfully
enhanced Australia's national security.
The review also noted the AGD's work in relation to advising government
on implementing the recommendations arising from the Royal Commission into
Institutional Responses to Child Sexual Abuse, in addition to assisting
establishing the Royal Commission into Misconduct in the Banking,
Superannuation and Financial Services Industry.
The Secretary's outlook for 2018–19 noted that, as of July 2018, the AGD
was operating under a new structure designed to 'maximise our support to the
Attorney-General in his role as First Law Officer and minister responsible for
integrity and oversight'.
According to the Secretary, the new structure would encourage more effective
engagement with stakeholders and reflected the AGD's commitment to 'embracing
change, challenges and new opportunities in achieving better outcomes for
The outlook stated that the AGD would be working towards government
priorities, including: progressing structural reforms to the federal courts in
relation to family law matters and providing advice in relation to the
Australian Law Reform Commission's review into family law reform; developing
the first National Plan on Elder Abuse; leading the delivery of responses to
the recommendations from the Royal Commission into Institutional Responses to
Child Sexual Abuse; supporting a wide-ranging review of intelligence
legislation; and supporting the Royal Commission into Misconduct in the
Banking, Superannuation and Financial Services Industry.
Since the committee's previous Report on Annual Reports in 2018,
the AGD has adopted a new structure for performance reporting, applying four
high-level KPIs (Effectiveness; Efficiency in meeting goals; Professionalism,
skills and commitment; and Community impact) to each of the five strategic
priorities across the AGD.
This report also covers the first reporting period where the machinery-of-government
changes in relation to the creation of the Home Affairs Portfolio are reflected
in budgetary measures and organisational structure and outcomes.
Performance criteria and targets under each strategic priority outlined
in the Portfolio Budget Statement (PBS) for 2017–18.
This is, in turn, reflected in the Corporate Plan 2017–18.
The Corporate Plan outlines the relevant Key Performance Indicators (KPIs)
under each strategic priority and explains how each are connected to the
performance criteria outlined in the PBS.
The performance statement contained in the annual report reflects a combination
of the performance criteria in the PBS and the KPIs set by the Corporate Plan. This
approach provides a 'clean read' when compared with the PBS and Corporate Plan.
In the Report on Annual Reports (No. 1 of 2018), the committee
noted that one performance criterion, 'Community impact', was not applied to
Strategic Priority 1: Legal in its 2017–18 report.
This KPI was similarly not applied to Strategic Priority 1 in its
Corporate Plan 2017–18.
However, Strategic Priority 1 encompasses a number of programs, including
Program 1.1: Civil Justice and Legal Services and Program 1.2:
National Security and Criminal Justice – Operating Expenses, which have the
missing KPI applied where they appear in other Strategic Priorities. Further,
Program 1.9: Royal Commissions similarly does not have a 'Community
impact' KPI applied under Strategic Priority 1.
It is unclear why the 'Community impact' KPI was not included in the
KPIs for Strategic Priority 1. This is particularly illustrated where programs
incorporated in Strategic Priority 1 are incorporated in other Strategic
Priorities and have the missing KPI applied in that context. Additionally, the
lack of the KPI's application to Program 1.9: Royal Commissions is unclear,
given the nature of that program's application to the community at large. No
explanation was provided in the PBS, the Corporate Plan, or the annual report
explaining why this KPI was not applied to Strategic Priority 1.
Performance information for reporting period was informed by the
stakeholder survey conducted in May 2018, which sought stakeholders' views on
overall performance, effectiveness, the AGD's relationship with the
organisation in question, staffing, leadership, results and delivery.
The AGD largely met its KPIs for 2017–18.
KPIs that were not met included:
Strategic Policy 3, KPI 1: Effectiveness – Stakeholder and client satisfaction with the AGD's
effectiveness in maintaining the Commonwealth justice system. The AGD reported
that the stakeholder survey conducted across organisations utilising AGD's
services report that client satisfaction with 'staff effectiveness in
maintaining the justice system' recorded a 78 per cent score. The set
target of 80 per cent was narrowly missed by two points;
Strategic Policy 4, KPI 4: Community Impact – Australia's regional and global
position on criminal justice (Factor 8) in the World Justice Project's Rule of
Law Index. Factor 8 measures 'whether the criminal investigation, adjudication
and correctional systems are effective and whether the system is impartial,
free of corruption and improper influence, and protective of due process and
the rights of the accused'.
Australia's ranking in the Index is number 13 out of 113 countries; 
Strategic Priority 5, KPI 2: Effectiveness – Stakeholder and client
satisfaction with the AGD's effectiveness in enabling a free society. The AGD
reported a 75 per cent result, missing its target of 80 per cent;
Strategic Priority 5, KPI 4: Community impact – Australia's regional and global
position on fundamental rights (Factor 4) in the World Justice Project's Rule
of Law Index. The AGD's goal was for Australia to achieve position 10 or
above in the Index, but instead achieved position 13.
The annual report stated that the 2017 Index noted a significant decline
globally in Factor 4, resulting in 71 out of 113 countries included in the
Index experiencing a ranking drop, while Australia's ranking remained steady.
The AGD's performance evaluations also noted programs or areas of the AGD
which had subsequently been moved to a separate portfolio after
machinery-of-government changes. For example, one of the key activities under
Strategic Priority 4, the leadership of the development and coordination
of policy concerning a national domestic violence order scheme, was noted to
have transferred to the Department of Home Affairs.
The report provided commentary on the financial performance of the AGD,
marking an improvement in its financial reporting since the committee's
previous examinations of its annual report.
The Secretary's Review included a short summary of financial results,
stating that the AGD achieved an operating result of a $20.506 million surplus
post-income tax expense and asset revaluation increases. This was contrasted with
the analysis of financial performance of the previous financial year, which
reported an operating result of a $7.558 million surplus.
Mr Moraitis attributed the AGD's results particularly to the strong performance
by the Australian Government Solicitor and the timing of implementing budget
The total administered expenses for the financial year was reported to
be $426.166 million, which was a reduced figure compared to the 2016–17 period
which reported $622.135 million in total administered expenses. The expenses
for the reported financial year included $64.614 million for the royal
commissions, $294.887 million in grants payments, and $14.391 million paid
to the corporate entity within the portfolio, the Australian Human Rights
The report noted that the major impact on the AGD's financial results were
the changes to the Administrative Arrangements Orders (AAOs) of
20 December 2017 and 10 May 2018. The AAO changes resulted in
the transfer of $23.667 million of departmental funding and $37.438 million
of administered funding being transferred to Home Affairs.
The committee commends the AGD's improved financial reporting in
compliance with the requirements of the PGPA Rule, and considers the report to
be 'apparently satisfactory'.
Department of Home Affairs
Secretary's and Commissioner's
The Secretary of Home Affairs, Mr Michael Pezzullo, and the
Commissioner of the Australian Border Force (ABF), Mr Michael Outram APM,
provided separate reviews for the annual report.
The Secretary's Review noted that the 2017–18 annual report was the
first annual report provided for Home Affairs, which was established on
20 December 2017.
The creation of the portfolio was stated to be one of the most significant
reforms in national security in the past 40 years, and reflected the need to
remain vigilant to external threats while promoting inclusiveness and an open
Key areas of the review included: the establishment of two new Commonwealth
coordination functions for Transnational, Serious and Organised Crime and
Counter Foreign Interference; creating the Criminal Justice and Law Enforcement
Forum of Commonwealth Agencies; engaging with a range of agencies in order to
improve cooperation with national and local community groups in relation to
countering violent extremism; implementing new measures with the Aviation and
Maritime Security Division to strengthen security at airports, mail and air
cargo facilities; establishing a national resilience taskforce to create a
whole-of-government approach to intensifying natural hazards; providing support
to Operation Sovereign Borders and addressing the legacy caseload of illegal
maritime arrivals; migration and humanitarian entrants into Australia; enabling
online visa applications from countries such as China and India; and visa
intelligence and security capability operations to better manage applications.
In his Review, the ABF Commissioner stated that the ABF was continuing
its transition to 'a modern border law enforcement agency ensuring the
integrity of Australia's borders and facilitating legitimate trade and travel'.
Mr Outram noted that the establishment of the Home Affairs portfolio marked a
significant shift in the ABF's evolution, and would continue to collaborate,
coordinate and share information with other agencies across the Portfolio to
enhance intelligence and build collective capabilities.
The Commissioner also reported a number of achievements throughout the
2017–18 period, including: processing 43 million air travellers at the border,
with more than 25 million travellers using automated SmartGate technology;
growing cargo volumes, including over 50 million air cargo consignments, more
than 3 million sea cargo manifests processed, and over 54 million
international mail items inspected; over 43,000 detections of illicit and
restricted drugs; a 50 per cent increase in voluntary disclosures which
contributed to significant revenue recovery; contribution to the National
Illicit Firearms Strategy through Operation Athena and the Counter Terrorism
Unit at Australian ports of entry; continued responsibility of Operation
Sovereign Borders, including the interception of two people smuggling ventures
bound for Australia; and ensuring the facilitation of international trade,
including management of the Australian Trusted Trader program.
The annual report for 2017–18 provides comprehensive reporting on
performance in accordance with the requirements of the PGPA Act and PGPA Rule.
Performance reporting is displayed in a clear format and footnotes
throughout provide information about the source of each criterion, including
page references from the PBS and/or Corporate Plan, explanations of the distinction
between deliverables and KPIs, and relevant outcome and/or program information.
Due to the creation of the Home Affairs Portfolio, the Corporate Plan refers to
the Department of Immigration and Border Protection rather than Home Affairs.
As a result of the AAO changes, a number of performance deliverables and
KPIs were transferred to Home Affairs from other departments or portfolios.
Where this was applicable, the annual report clearly provides details regarding
the previous source of the criterion in addition to the outcome.
Home Affairs' overall standard of performance reporting in this annual
report was extremely high. The committee notes that Home Affairs appears to
have addressed comments made in the Report on Annual Reports (No. 1 of 2018)
in relation to the clear reporting of KPIs being met or not met.
The annual report states that while Home Affairs met a substantial
proportion of its KPIs, a number were not met across the following Purposes:
Purpose 2 (Promote responsive migration): Encourage voluntary
compliance to reduce overall non-compliance, measured by more than 75 per cent
of unlawful non-citizens engage voluntarily with the Department to resolve
their visa status. Home Affairs explained that while this number had reduced to
73 per cent in the 2017–18 period, this number had been relatively steady
over the past four years, and had coincided with changes to the Status
Resolution Program and the introduction of online services.
Purpose 3 (Advance trade and revenue): Percentage of tariff
clarifications, valuation of rules of origin advices completed within service
standards, measured by services and support provided to industry – regarding
tariff classification, valuation and rules of origin advice – completed within
service standards. Home Affairs explained that one of the service standards was
not maintained or improved due to an increase in requests for advice.
Purpose 3 (Advance trade and revenue): Engage with the
international community to improve consistency in global trade practices,
measured by improvement in consistency of global trade practices, reported
through department survey of industry groups. Home Affairs advised in its explanation
of the missed KPI that, while it did not undertake a formal survey to measure
the improvement in consistency of global trading practice, Home Affairs regularly
engaged with industry on a range of matters in relation to the global trading
Success measure 25, sourced from the Department of
Infrastructure, Regional Development and Cities Corporate Plan 2017–18, required
a target result, by 2017–18, of having source data and establishing a baseline
to monitor progress and inform targets. The target result was in relation to
regulated industry participants' understanding of security risk to their
operations and obligations under the transport security regulatory regime by
2017–18. Home Affairs explained that while data sources have been established,
a baseline was still being established based on the significant volume of
industry responses, and had thus not met the KPI.
Strategic Priority 4.1, sourced from the Attorney-General's
Department Corporate Plan 2017–18, requiring that stakeholder and
client satisfaction with the department's effectiveness in maintaining the
Commonwealth justice system and community safety reach a rating of 80 per cent
or higher. The department notes in its result that 79 per cent of respondents
were satisfied, although it is unclear whether this survey was conducted in
reference to the work of the Department of Home Affairs or the Attorney-General's
Strategic Priority 4.4, sourced from the Attorney-General's
Department Corporate Plan 2017–18, requiring that Australia's
regional and global position on criminal justice (Factor 8) in the World
Justice Project's Rule of Law Index – measuring how the rule of law is
experienced by the public countries around the world – be at position 10 or
higher. This target was missed, as Australia was positioned at 13.
The committee notes the failure to meet a number of the required KPIs.
However, the committee recognises that Home Affairs largely explained the causes
of having missed the KPIs. The committee also notes that a number of
performance indictor targets were added to the portfolio as a result of
machinery-of-government changes, and that Home Affairs may have had limited
time in which to achieve the KPIs assigned to it. The committee thus commends Home
Affairs' overall excellent results, particularly in light of the dynamic
changes to the portfolio's structure.
The total departmental operating result for 2017–18 was $324.4 million
operating deficit, which increased in comparison to 2016–17 which reported a
$276.6 million operating deficit. The annual report noted that, had the
Australian Government funded depreciation and amortisation expenses, the total
departmental operating result would have been a $33.9 million deficit.
The operating deficit (excluding depreciation and amortisation) was
stated to be as a result of non-cash expenses relating to write-down and impairment
of assets, and expenses relating to the uplift in employee provisions in
relation to a four per cent pay rise granted through the Statement of Intent
from the Fair Work Commission in June 2018.
The DHA reported that the reporting period's administered expenses were
$2.36 billion, which was an increase from the 2016–17 reporting period of
$2.12 billion. This was attributable to a one-off non-cash capital grant
expense in relation to the gifting of infrastructure to the Papua New Guinea
government after the cessation of Australia's involvement in managing the Manus
Island Regional Processing Centre.
Home Affairs' net asset position was strengthened to $1.32 billion
(assets minus liabilities), representing an increase from the previous
reporting period of $158.88 million. Liabilities equated to 38 per
cent of the total asset base.
Management of human resources
The PGPA Rule requires that statistics be provided regarding an entity's
APS employees on an ongoing or non-ongoing basis, including staffing classification
level, full-time employees, part-time employees, gender, staff location, and
employees who identify as Indigenous.
In Report on Annual Reports (No. 1 of 2018), the committee noted
that the annual report for the 2016–17 reporting period did not provide
statistics regarding employees who identify as Indigenous. The committee
encouraged the then Department of Immigration and Citizenship to provide
statistics in relation to Indigenous staff in future reports.
The 2017–18 annual report again failed to provide statistics regarding
employees who identify as Indigenous. It provided detail in relation to
targeted diversity recruitment, including the recruitment of 14 apprentices in
However, statistics in relation to the number, location and classification of
employees that identify as Indigenous were not provided.
The committee again encourages Home Affairs to provide statistics on Indigenous
staff as required by the reporting guidelines.
The committee found the annual report to be 'apparently satisfactory'.
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