Senator the Hon. Mathias Cormann
Minister for Finance
Date: Tuesday, 13 May 2014
The Abbott Government will drive major reforms to ensure the public service is as efficient, as effective and as accountable as possible.
This will involve the abolition or merger of Government bodies where possible, to eliminate duplication, remove waste, streamline Government services and reduce the cost of government administration for taxpayers.
These reforms are expected to deliver net savings of about $500 million over the forward estimates.
In recent years the number of different government bodies has grown out of control.
There are now so many different Commonwealth bodies that there is no actual authoritative and definitive figure.
The National Commission of Audit estimated that there were around 900 bodies. Further research by the Department of Finance prepared for the 2014-15 Budget found the number is closer to 1,000 different government bodies.
With so many bodies and agencies, many with overlapping responsibilities, lines of accountability are blurred and action can too often be uncoordinated. All of this is confusing and unnecessarily costly for the community.
The first phase of the Abbott Government’s Smaller Government Reform Agenda was implemented after the 2013 Election and reduced the number of government bodies by 40, including through:
- The merger of AusAID into the Department of Foreign Affairs and Trade;
- The merger of Resources, Energy and Tourism into the Industry Department;
- The merger of functions of the Department of Regional Australia, Local Government, Arts and Sport into other departments;
- The abolition of 23 non-statutory advisory bodies including: the Social Inclusion Board; the Australian Animals Welfare Advisory Committee; the Commonwealth Firearms Advisory Council; the International Legal Services Advisory Council; the National Intercountry Adoption Advisory Group; the National Steering Committee on Corporate Wrongdoing; the Antarctic Animal Ethic Committee; the Advisory Panel on the Marketing in Australia of Infant Formula; the High Speed Rails Advisory Group; the Maritime Workforce Development Forum; the Advisory Panel on Positive Ageing; the Insurance Reform Advisory Group; the National Housing Supply Council; the National Policy Commission on Indigenous Housing; the National Children and Family Roundtable; the Prime Minister’s Council on Homelessness; the Pulp and Paper Advisory Group; International Pro Bono Advisory Group; the National Alternative Dispute Resolution Advisory Council; the Centre for Workplace Leadership Advisory Group; the National Council for Education for Sustainability; and the National Sustainability Council; the Procurement Consultative Committee;
- The commencement of the process to sell Medibank Private;
- The abolition of the Climate Commission, Energy Security Council, the Independent Inspector General of Animal Welfare and Live Animal Exports, the Pharmaceutical Benefits Pricing Authority, the Coordinator-General for Remote Indigenous Services, the National Gambling Regulator;
- The introduction of legislation to abolish the Climate Change Authority, the Clean Energy Finance Corporation, and the Australian Charities and Not-for-profits Commission;
- The merger of the Grape and Wine Research and Development Corporation and Wine Australia to create the Australian Grape and Wine Authority; and
- The replacement of the Office of Fair Work Building Industry Inspectorate with the Australian Building and Construction Commission, replacing the Aged Care Standards and Accreditation Agency Ltd with the Australian Aged Care Quality Agency.
The second phase of the Abbott government’s Smaller Government Reform Agenda will be implemented in the 2014-15 Budget and deliver a further reduction of 36 government bodies.
That reduction will be achieved through abolitions, consolidations of functions into departments, mergers and by exploring further opportunities for privatisations, including:
The abolition of the:
- Abalone Aquaculture Health Accreditation Workshop
- Albury-Wodonga Development Corporation
- Australian Renewable Energy Agency
- Australian River Co. Limited
- Corporations and Markets Advisory Committee and its Legal Committee;
- National Water Commission
- COAG Reform Council
- Office of the Independent National Security Legislation Monitor; and
- Prime Minister’s Indigenous Business Policy Advisory Group.
The consolidation of the functions of several bodies into Departments:
- Australian Customs and Border Protection Service into the Department of Immigration and Border Protection, to form a single operational border group;
- The functions of Health Workforce Australia, the General Practice Education and Training Limited and the Australian National Preventative Health Agency into the Department of Health;
- Grape and Wine Research and Development Selection Committee and Wine Australia Corporation Selection Committee into the Department of Agriculture; and
- Telecommunications Universal Service Management Agency into the Department of Communications.
The merger of government bodies including:
- The merger of ComSuper into the Commonwealth Superannuation Corporation;
- The merger of five civilian merit review tribunals into a single organisation including:
- the Administrative Appeals Tribunal
- the Classification Review Board
- the Migration Review Tribunal
- the Refugee Review Tribunal, and
- the Social Security Appeals Tribunal;
- The merger of back-office functions of seven Canberra-based cultural collection institutions and archival institutions:
- the National Archives
- the National Film and Sound Archive
- the National Gallery
- the National Library
- the National Museum
- the National Portrait Gallery, and
- Old Parliament House);
- The merger of different functions of the Office of the Australian Information Commissioner into the Australian Human Rights Commission, the Administrative Appeals Tribunal, the Commonwealth Ombudsman and the Attorney-General’s Department
- The merger of some of the Private Health Insurance Administration Council functions into the Australian Competition and Consumer Commission and all other functions into the Australian Prudential Regulation Authority
- The merger of the Private Health Insurance Industry Ombudsman into the Office of the Commonwealth Ombudsman
- The merger of the AQUAPLAN Working Group into the Aquaculture Committee;
- The merger of the Australian Weeds Committee, Biosafety and Biosecurity Working Group and the Established Pests and Diseases Working Group into the National Biosecurity Committee;
- The merger of the National Competition Council Secretariat into the Australian Competition and Consumer Commission
- The merger of the National Blood Authority with the Australian Organ and Tissue Donation and Transplantation Authority.
Other key reforms to reduce the size of government and improve the efficiency of government services will be pursued in consultation with the States and Territories in the health portfolio.
Subject to this consultation, one single body – a new Health Productivity and Performance Commission would perform the functions currently provided by six different bodies, all with their own corporate structures:
- The Australian Commission on Safety and Quality in Health Care;
- The Independent Hospitals Pricing Authority;
- The National Health Funding Body;
- The National Health Funding Pool Administrator;
- The National Health Performance Authority; and
- The Australian Institute of Health and Welfare
The Government will not proceed with the establishment of two new bodies which the former Government sought to establish and fund in 2013:
- The Student Identifiers Agency;
- The Brisbane Cross River Rail and Melbourne Metro Projects Advisory Board.
The Government will conduct scoping studies into the possible privatisation of several government bodies:
- Defence Housing Australia
- the Royal Australian Mint
- Australian Hearing
- the Registry function of ASIC
Total general public service expenses are estimated to decrease by 33.6 per cent in real terms from 2013-14 to 2014-15 and decrease by 7.5 per cent in real terms over the period 2014-15 to 2017-18.
These savings are necessary so that the Government can repair the Budget and strengthen Australia’s future.
The Government will also pursue asset reductions within agencies through the progressive sale of a number of surplus properties.
The Government will achieve further efficiencies through implementing a Contestability Framework to methodically assess whether particular government functions should be open to competition and how competition should occur. This will allow competing providers to come from both inside and outside of government.
Over the next three years government functions will be systematically reviewed to determine if they are, in whole or in part, appropriate for competition or whether they should continue to be performed exclusively by government.
The third and most comprehensive phase of consolidation in the number of government bodies will be considered by government in time for inclusion in the MYEFO 2014-15.
A particular focus of this next stage will be to reduce the number of small agencies, which carry disproportionate and wasteful overheads.
To support better decision-making and limit the creation of new government bodies in the future, an Australian Government Governance Policy will be released later in 2014. It will have a particular focus on preventing the past proliferation of wasteful structures in the future and ensure government bodies operate as efficiently as possible.
Karen Wu - 0428 350 139