Professional Documents
Culture Documents
Inside The Queensland Commission of Audit - The Process, Main Findings and Implications
Inside The Queensland Commission of Audit - The Process, Main Findings and Implications
COMMISSION OF AUDIT –
THE PROCESS, MAIN FINDINGS
AND IMPLICATIONS”
Mark Gray
Adjunct Professor of Economics, University of Queensland
Chief Executive
Queensland Commission of Audit
UQ Business School
Brisbane
6 May 2013
THE PROCESS
2
ESTABLISHMENT
3
TERMS OF REFERENCE – OBJECTIVES
4
TERMS OF REFERENCE – SCOPE
Key issues
• Financial position
• Improving the State’s financial position
• Service delivery
• Government commercial enterprises
• The economy
5
TERMS OF REFERENCE – TIMETABLE
6
OTHER COMMISSIONS OF AUDIT
7
WHAT IS A COMMISSION OF AUDIT?
• Comprehensive review of the role, functions, activities of
government
– Focus on efficiency, effectiveness and value for money
• Not an “audit” in the formal sense
– not a “financial audit”
– not a “performance audit”
– but contains elements of both
• Unique perspective
– view from “the outside looking in”, not an inside view
• Opportunity only arises infrequently
– often with a change of government
– Rarely instigated by incumbent governments
8
KEY FEATURES
• Independence
• Transparency
• Opportunity
– to challenge the status quo
9
PROCESS
10
PROCESS cont….
• Submissions from all core Government departments and
Government Owned corporations (GOCs).
• No public submissions
– some unsolicited submissions received and considered
• No public hearings
– Commission met with Chairs and CEOs of all GOCs
• Secretariat had extensive ongoing contact with departments
and limited contact with external parties
• Secretariat undertook research and analysis of issues,
prepared papers for Commission’s deliberations
– papers formed basis for Reports
11
MAIN FINDINGS AND IMPLICATIONS
12
OVERVIEW OF FINAL REPORT
• Focus of the Report is renewal in the public sector to provide
better front-line services
• Most comprehensive review of Queensland Government
functions ever undertaken
13
GOVERNMENT RESPONSE
14
ECONOMIC AND FISCAL CHALLENGE
15
ECONOMIC AND FISCAL CHALLENGE cont …
Multifactor productivity growth, trend (a), 1985-86 to 2011-12
3 Queensland Rest of Australia
1
%
-1
-2
1986-87 1991-92 1996-97 2001-02 2006-07 2011-12
(a) Trend estimates are derived from original MFP data using an 11-term Henderson-weighted moving
average.
16
ECONOMIC AND FISCAL CHALLENGE cont …
-4
% of GSP
-8
-12
-16
-20
2015-16 2050-51
17
ECONOMIC AND FISCAL CHALLENGE cont …
18
SIZE OF GOVERNMENT
State Government expenditure as share of GSP
17
16
15
14
% of GSP
13
12
11
10
8
1983-84 1987-88 1991-92 1995-96 1999-00 2003-04 2007-08 2011-12
19
ROLE OF GOVERNMENT
Private provision of public services
20
ROLE OF GOVERNMENT cont …
Key principles to manage and deliver services
21
FRONT-LINE SERVICE DELIVERY
22
FRONT-LINE SERVICE DELIVERY cont …
State public sector wages: Queensland relative to all-states average
110
105
%
100
95
90
1983-84 1987-88 1991-92 1995-96 1999-00 2003-04 2007-08 2011-12
23
FRONT-LINE SERVICE DELIVERY cont …
Qld
106
104
% of national average
SA
102
WA
100
Vic
98
96
NSW
94
24
FRONT-LINE SERVICE DELIVERY cont …
150
140
Index: 2007-08 = 100
130
120
110
100
90
2007-08 2008-09 2009-10 2010-11 2011-12
25
FRONT-LINE SERVICE DELIVERY cont …
5,400
$ per casemix-adjusted separation
5,200
5,000
4,800
4,600
4,400
4,200
4,000
NSW Vic Qld WA SA
26
FRONT-LINE SERVICE DELIVERY cont …
27
FRONT-LINE SERVICE DELIVERY cont …
RECOMMENDATIONS
28
FRONT-LINE SERVICE DELIVERY cont …
RECOMMENDATIONS cont …
Education
• improved student performance through increased devolution,
autonomy and accountability at individual school level.
VET
• independent industry-led skills authority
• competitive market
• asset ownership to be separated from TAFE
29
THE PUBLIC SECTOR
30
PUBLIC SECTOR ARRANGEMENTS
Employing legislation Awards
• PS Act • 50 Awards
• 15 other acts • 50-60 Certified Agreements
Classification framework
• 250 levels
• 750 pay points Health Payroll
• 10 Awards
• Multiple industrial agreements
• 200 different allowances
Unnecessary complexity and • 24,000 different pay
rigidity combinations
31
THE PUBLIC SECTOR cont …
RECOMMENDATIONS
32
THE PUBLIC SECTOR cont …
RECOMMENDATIONS cont …
33
FINANCIAL MANAGEMENT
34
FINANCIAL MANAGEMENT PRACTICES
35
FINANCIAL MANAGEMENT cont …
RECOMMENDATIONS
• Intergenerational Report
• State Infrastructure Plan
• Simplified appropriation framework
• Improved budget, cash and asset management
• Charter of Budget Accountability
• Greater role for private sector in infrastructure
investment
• Queensland Productivity Commission
36
FISCAL REPAIR STRATEGY
37
38
39
40
Total Government debt to revenue ratio
140%
Actual Projection
120%
80%
60%
40%
20%
0%
2000-01 2003-04 2006-07 2009-10 2012-13 2015-16
Source: Treasury
41
Total Government gross debt, share of GSP
30%
Actual Projection
Queensland
25%
New South Wales
Victoria
20% Western Australia
15%
10%
5%
0%
2000-01 2002-03 2004-05 2006-07 2008-09 2010-11 2012-13 2014-15
Source: Australian Bureau of Statistics 5512.0, State Budgets and Mid Year updates, Treasury
42
Actual
Source: Treasury
43
FISCAL REPAIR STRATEGY
44
GOVERNMENT COMMERCIAL ENTERPRISES
45
GOVERNMENT COMMERCIAL ENTERPRISES
46
GOVERNMENT COMMERCIAL ENTERPRISES cont ….
Ownership patterns in the National Electricity Market –
by indicative market share
Private Ownership Actew AGL Public- Private JV Public (planned to be privatised)6,7 Public Ownership
47
GOVERNMENT COMMERCIAL ENTERPRISES cont ….
Current Ergon and Energex pricing New Ergon and Energex pricing
period period
48
GOVERNMENT COMMERCIAL ENTERPRISES cont ….
RECOMMENDATIONS
• Dispose of businesses operating in commercial
markets, when conditions favourable:
– Energex ($9.2B)
– Ergon ($7.7B)
– Powerlink ($5.3B)
– CS Energy ($0.9B)
– Stanwell ($1.7B)
– Gladstone Ports Corporation ($1.2B)
– Townsville Port Authority ($376M)
– Queensland Investment Corporation ($18M)
49
GOVERNMENT COMMERCIAL ENTERPRISES cont ….
OTHER GOC RECOMMENDATIONS
Transport Services
• Bulk Ports North Queensland to have supply chain coordination
role.
• Mount Isa rail freight line integrated with Townsville Port Authority
• Passenger rail and bus services to be restructured to be delivered
through:
– contestable contracts
– franchise and lease arrangements
50
“BUSINESS AS USUAL” IS NOT SUSTAINABLE
• Low productivity
51
STRATEGIC BLUEPRINT
Innovative service Improved public Unlock scarce capital
delivery (including sector flexibility and and free up resources
greater use of efficiency for debt reduction and
non-government sector) new investment
52
VALUE OF COMMISSION OF AUDIT PROCESS
53