BUSINESS SERVICES

Superannuation

Finance assisted the Minister in preparing legislation that was introduced into the Parliament during the year to give effect to a number of superannuation policies. The reform of Parliamentary superannuation arrangements to bring them more into line with community standards by deferring the payment of pensions to Members of Parliament elected at or after the next general election until age 55, or on invalidity or death was one example of Finance's work. The Department also worked on the replacement of the annual superannuation pension indexation, for members of the Public Sector Superannuation Scheme and the Commonwealth Superannuation Scheme, with twice-yearly indexation, implementing the Government's announcement in the 2001–02 Budget. Further changes were made to provide members of the Public Sector Superannuation Scheme, the Commonwealth Superannuation Scheme and the Parliamentary Contributory Superannuation Scheme with a pension commutation option to pay any superannuation surcharge assessments issued after their retirement.

Finance also made a submission and gave evidence to the Senate Select Committee on Superannuation and Financial Services inquiry into the benefit design of the Commonwealth's unfunded superannuation schemes.

Finance undertook a whole-of-government review of the framework for accounting for unfunded superannuation liabilities of Commonwealth employees. The results are due to be finalised in 2001–02. As well, the Department completed a tendering process to establish a new actuarial services contract and reviewed the actuarial framework for assessing agencies' employer superannuation costs. The review recommended the adoption of a simplified assessment framework that focuses on agencies' key employment decisions and their effect on agencies' superannuation contribution rates, and ties in more effectively with agency budgeting processes. Assessments under the new framework will be undertaken during 2001–02, applying rates as at 1 July 2002.

Comcover

Comcover announced that the average premium rate charged for FMA Act agencies in 2001–02 would be ten per cent less than the rate charged in 2000–01. Agencies operating under the CAC Act will have an increase of five per cent. By way of contrast, the premium rates for all major commercial insurance classes have increased by 15 to 20 per cent per annum over the last two years.

To further support the development of a risk management culture across the Commonwealth, Comcover introduced a number of initiatives. These included the launch of a national Risk Management Benchmarking Programme, which will enable participating agencies to compare their risk management performance with other Commonwealth and State and Territory public and private sector organisations.

Comcover continued to assist members in preparing their first risk management plans. At the end of the year, over 85 per cent of member agencies either had a risk management plan in place or were in the process of developing a plan.

Extending this service, Comcover commenced a series of quarterly risk management seminars for public and private sector risk management practitioners in the Australian Capital Territory and surrounding regions. Over 160 participants attended the first seminar. It gave participants an opportunity to network and be updated on current approaches to risk management and the treatment of new and emerging risks.

Remuneration Tribunal Secretariat

In line with the requirements of the Remuneration Tribunal Act 1973, the Tribunal completed annual reviews during 2000–01 of full-time offices, part-time offices, judicial and related offices, Principal Executive Offices (PEO), and Parliamentary Offices. It also reported on the additional salary payable to Ministers and commenced a review of overseas travel for Parliamentarians. To give effect to its decisions, the Remuneration Tribunal issued 25 determinations, all of which were tabled in Parliament and are available at the Tribunal's website at www.remtribunal.gov.au.

The PEO structure is the largest reform that the Remuneration Tribunal has undertaken for full-time public office holders, who are mainly Chief Executive Officers and Managing Directors of Commonwealth entities. The PEO structure improves consistency between the Government's overall workplace reform programme and the accountability provisions of the FMA Act, the CAC Act and the Public Service Act 1999.

The PEO structure applies public and private sector best practice principles to remuneration arrangements. It allows for an employing body to negotiate without reference to the Tribunal's productivity and work value increases in remuneration. It also puts in place a performance pay system and total remuneration environment with flexible packages. The PEO structure's ultimate aim is to develop a high performing public sector. The Department assisted the Minister to take forward amendments to the Remuneration Tribunal Act 1973 to assist with the implementation of the PEO structure, and to strengthen the Tribunal's role in ensuring appropriate accountability measures are established. During the year, 30 senior public offices were placed into the PEO structure.

On an international level, and taking the opportunity to increase their expertise, Remuneration Tribunal Secretariat staff undertook work with the Royal Thai Government in support of remuneration and redundancy reform.

Secretariat staff also developed major reforms in the area of travel entitlements for all public office holders. The Remuneration Tribunal produces its own annual report in accordance with section 12AA(2) of the Remuneration Tribunal Act 1973.

Service Charters

Introduced in 1997 as part of the Government's reform agenda, More Time for Business, Service Charters support a more client-focused, open and publicly accountable culture within the Commonwealth public sector.

The Special Minister of State presented the second whole-of-government report, Service Charters in the Commonwealth Government, to Parliament in November 2000. The report shows that Service Charters are now embedded in agency culture with 152 charters having been established since 1997, an increase of 21 per cent over the previous year. Highlights from the report show that 84 per cent of charters have influenced corporate planning, while 99 per cent of charters specify service standards. Agencies also reported strong performance against the Client Service Charter Principles with compliance rates in the range of 92–100 per cent against most Principles.

Given the high take-up rate by agencies, the Service Charter report of 1999–2000 will be the last detailed whole-of-government report on the initiative. Agencies will report their service delivery achievements through their annual reports, while whole-of-government reporting will be included in the State of the Service report published by the Public Service and Merit Protection Commission (PSMPC).

In December 2001, the Special Minister of State presented seven Service Charter—Awards for Excellence to five different agencies. The Health Insurance Commission won Platinum—the highest award—for demonstrating consistently high levels of service delivery in all categories of the award. Other winners included Centrelink, the Australian Federal Police, Aboriginal Hostels Limited and Austrade. To maintain the service-wide momentum on the initiative, the Service Charter—Awards for Excellence will continue on an annual basis. These Awards have become highly valued and provide tangible recognition of best practice in service delivery.

Closure of the Commonwealth Motor Vehicle Registry and the Staff Redeployment Unit

The Commonwealth Motor Vehicle Registry (CMVR), which provided registrations for red 'Z' Commonwealth-plated vehicles, was closed to new and renewing registrations on 1 December 2000. The last registrations on the CMVR will expire on 30 November 2001. At this time the CMVR will be effectively closed.

The closure has been managed successfully. As a result of negotiation with all States and Territories, all Commonwealth agencies that wish to have red 'Z' number plates can now obtain these from their local State or Territory registry. The CMVR and the State and Territory registries have reported a virtually trouble-free transfer of existing and new registrations to the new arrangements.

The finalisation of the closure of the CMVR requires amendments to the Commonwealth Vehicles (Registration and Exemption from Taxation) Act 1997. These amendments will repeal all parts of this Act dealing with vehicle registration.

The Staffing Redeployment Unit (SRU) was closed in December 2000, following the successful completion of its programme. The SRU managed the redeployment or redundancy process for non-SES staff resulting from the sale of the former Department of Administrative Services (DAS) businesses and some other DAS-related redundancies.

New Commonwealth Fleet Leasing Arrangements

The agreement for the provision of motor vehicle fleet leasing services to the Commonwealth was novated from Macquarie Fleet Leasing Pty Ltd (MFL) to Lease Plan Australia Limited (LeasePlan), effective from 5 July 2001. LeasePlan, which had previously provided fleet management services as sub-contractor to MFL, became the sole provider of fleet leasing services from that date.

Upon novation, the contractual arrangements governing the provision of motor vehicle fleet leasing services were amended to provide financial and operational benefits to the Commonwealth at both whole-of-government and agency levels. Key financial benefits of the new agreement with LeasePlan are:

• decreased monthly management fees;
  
  
• the elimination of residual risk fees on new leases entered into from 5 July 2001;
  
  
• a profit-sharing facility at agency level if the annual net proceeds from vehicles sold at lease end exceed nominated vehicle residual values.

In addition to the novation, all outstanding issues were resolved in relation to ongoing negotiations with MFL regarding the operation of the agreement governing the provision of motor vehicle fleet leasing services.

Residual Business Issues

Finance continued to assist under contract to Employment National with the rationalisation of their property sites during 2000–01. This process commenced in early 2000. Lease surrender negotiations of the three remaining properties yet to be released are well advanced. A settlement for an early end to the Lucent Technologies Australia Pty Ltd contract for the provision of telephony services to Employment National was also negotiated.

Information Technology Outsourcing Advice Unit

In response to the Humphry Review, Finance formed an IT Outsourcing Advice Unit to assist agencies in managing their transition of IT functions to the private sector. The unit stands ready to provide specialised assistance to agencies, at their request, on a commercial fee-for-service basis. The IT Outsourcing Advice Unit is part of the Government's response to recommendations arising from the Humphry Review into IT outsourcing in the Commonwealth. The Humphry Review was supported by a Secretariat consisting of Finance staff and reported to Government in December 2000.