Secretary's speeches

4/2015

Secretary's speech – IPAA Annual Report Awards


Introduction

Good evening. Acknowledgement of country - Ngunnawal.

I am very happy to have the 2015-16 Budget, my first Budget as Finance Secretary, successfully delivered. It was both a stimulating and enlightening experience!

Tonight I will focus on the introduction of the new Commonwealth performance framework and the potential future role annual reports will have in this framework. I apologise to our ACT Government colleagues for this Commonwealth focus, but I'm sure that similar performance challenges exist in the ACT as well. I hope you find this interesting in that light.

The IPAA Annual Report Awards are an effective means of identifying and rewarding good practice in public reporting.

They bridge the gap that exists between all the hard work that goes into preparing them and the reason why we do them - to account to Parliament and the people for what we do with their money, in their name.

The IPAA Annual Report Awards help promote excellence and we anticipate that they will continue to perform this valued role as we evolve a new Commonwealth performance framework.

Over time annual reports have developed a bit of an unfortunate reputation. Many entities regard annual reports as a necessary but onerous and unavoidable impost.....like death and taxes. Others regard them as just a document to read before you have your job interview. It shouldn't be like this.

The accurate and effective public reporting of government performance is a vital and necessary part of any healthy democratic system and, as such, it is important that we get it right.

  • But, I think it is fair to say that, like many people, the current annual report requirements have consumed a few too many calories and could go on a diet.
  • In this regard I should say that this is an observation that applied to my department as much as any other....Finance's own Annual Report has increased from 195 pages to 317 pages in the last ten or so years.
    • Perhaps we are like the doctor who drinks, smokes and doesn't exercise.

The production of annual reports has become a large, resource intensive exercise for many entities, at a time when, as you all know, resourcing has become a significant issue.

There is a natural and healthy interplay between government and parliament. Parliamentary scrutiny of government is important. However, sometimes the focus on the issues of the day can skew the focus towards issues that perhaps don't retain their long term currency....but which still have to be complied with by all entities going forward, no matter their size.

When that happens, core components can become obscured. It may be time to return the annual report to a relatively lithe and svelte form.

We have to get annual reports back into shape, because they have a new dance partner to contend with - corporate plans; and, as things stand at present, most annual reports will need to engage a personal trainer to keep up. Actually, maybe there is a new, cost-recovered, role for Finance in all of this.

  • I say this in full recognition of the fact that the world is a much bigger and more complex place now then it was in the past, and that annual reports will need to continue to reflect this.

Consistent with the current Government's Smaller Government Reform agenda my department intends to explore opportunities to rationalise annual report requirements leading up to the 2015-16 reporting year.

  • We need to make the process of integrating the annual performance statements into annual reports a much easier exercise for all concerned and better ensure, as intended, a clear line of sight with the new corporate plan.

Context for transforming government and enhancing performance reporting

The Commonwealth Government has been and continues to pursue reforms aimed at streamlining our systems of public administration.

  • The Finance Minister has made a number of recent public statements regarding the Government's resolve "....to ensure that the public service is as efficient, as effective and as well targeted as possible".

The Government's public sector reforms aim to deliver greater value to taxpayers through better services, delivered faster and at a lower cost.

  • Finance has an important role in delivering these reforms. This includes delivering on the Government's Smaller Government Reform Agenda, expanding coordinated procurement arrangements for ICT products and services and reforming enterprise resource planning systems.

Building a smaller and more efficient government and driving positive reforms across the public sector is dependent upon high-quality performance data to inform rational decision-making.

Current approach to performance reporting

The Australian public sector produces a wealth of data that is used for internal purposes.

However, a particular challenge for us is improving the overall quality of what is published publicly for accountability purposes.

There are currently over 3,500 KPIs in relation to almost 600 programs, and yet the Australian Parliament is still dissatisfied with the quality and level of information it gets.

Where we struggle in Australia is in publishing a set of performance planning and reporting information that provides a complete picture of what entities do and achieve.

That is one reason it is important to celebrate examples of excellence in public sector reporting, such as the annual report award finalists and recipients here today.

My previous department was honoured to receive the silver award in last year's IPAA Annual Report Awards. So at least I can say I have done my part to try to improve the existing situation. But there is still ample room for improvement.

I also notice that this year's award criteria have been modified to remove the word 'attractiveness' – no doubt to avoid the outrageous gaudiness of the past!

I note that some entities have taken this to heart with a distinct monochrome look and feel pervading some of this year's entries – and I note my own department's subdued use of various shades of red in this regard – and also the Industry Department's similar, but perhaps more "risqué" approach, using different 'shades of grey' in theirs.

I commend the degree of restraint shown this year.

We need to develop performance data that more effectively draws the links between outputs, outcomes and the impacts of government programs and services.

One of the key objectives of the Public Governance, Performance and Accountability Act is to establish a performance framework across government entities that provides meaningful performance information to the parliament and the public.

This objective is being implemented through the introduction of the new enhanced Commonwealth performance framework, which will apply for the first time for the 2015-16 reporting period.

Enhanced Commonwealth Performance Framework

From next year every entity in the Australian Government will have to produce a corporate plan, which is published at the beginning of a reporting year, and an annual performance statement, which is published at the end of the reporting year in the entity's annual report.

  • These two documents are the bookends for the annual performance cycle.

I would make three points about these new requirements.
The first point is that there is a focus on purposes and activities, which aim to get entities to tell a story about what they actually do and how they meet their mission.
The second point is about expanding the performance information that will be required in corporate plans.

  • KPIs can't tell the complete story in and of themselves and we should all also consider other forms of performance measurement, such as benchmarking, peer review, surveys and evaluations.

The third point is about incremental change and allowing the framework to mature over time.

  • The initial focus is on strengthening the quality of entity level performance information at the entity level.
  • Subsequent reforms will seek to leverage improved cross-entity and whole-of-government performance information across like areas of activity.

As I mentioned at the start of my address, these reforms may result in the Annual Report Awards looking to reward different things in the future.

This could include, for instance, how effectively annual reports relate to corporate plans, as well as how well this interaction proceeds over time.

For instance there may be an opportunity to recognise the effective alignment between the purposes and activities identified in corporate plans and the actual results presented in annual reports.

  • A particularly current example of such excellence could be the success the Agriculture Portfolio has recently had in achieving one of its key purposes in 'safeguarding Australia's animal and plant health...' through its new innovative "war on Johnny Depp's terrier" activity?
  • Innovative performance measurement will be required to prove the effectiveness of this activity over time. But I am confident of its success.

I look forward to celebrating our improvements and successes in the years to come.


Last updated: 07 December 2015