Mandatory requirements

The governance policy requires that:

  • Unless provided by an express statutory power, the policy Minister, in developing or reviewing the governance structure of bodies must seek Cabinet approval (including a sub-committee of the Cabinet) or approval by the Prime Minister.1
  • A proposal to create a new body, or to review an existing body, must be assessed against the three-stage gateway test outlined in the three-stage gateway test and considering governance structures.
  • If the creation of a new body is found to be appropriate, entities must:
    • provide Finance with adequate assurance that the Australian Government Solicitor has confirmed the constitutionality of the new body
    • consult with Finance to ensure that the governance structure is properly designed.
  • A proposal to create a new body must explain how the new body can best deliver the activity efficiently. It should set this out in the context of the intended purpose of the activity along with the desired level of accountability to the Parliament and transparency to the public. The proposal must also allocate a sunset or review date to ensure the body is periodically reviewed against the governance policy.
  • If a new PGPA Act entity is proposed, then a cost–benefit analysis, commensurate with the size and risk of the entity, must be prepared, detailing the pros and cons of alternative governance options. These options should be developed in consultation with Finance before seeking approval from the Cabinet or the Prime Minister.
  • The policy minister must receive the agreement of the Prime Minister in writing before publicly announcing the creation of a new body.

Sections 19 and 91 of the PGPA Act, among other things, require that all Commonwealth entities and Commonwealth companies provide the Finance Minister with any reports, documents or information requested. Through this power, all Commonwealth entities and Commonwealth companies must, through their portfolio department, provide Finance, on behalf of the Finance Minister, with details of new Australian Government bodies or changes to existing bodies. Portfolio departments must email this information to AGOR@finance.gov.au.


1. The creation of a new body may constitute a new policy proposal and therefore the relevant budget processes apply.

Contact for information on this page: GovernancePolicy@finance.gov.au

Last updated: 18 December 2015