Department of Agriculture and Water Resources—Report for 2016-17, incorporating reports of the National Residue Survey, the Water Efficiency Labelling and Standards Scheme and the Water for the Environment Special Account (2024)

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Department of Agriculture and Water Resources—Report for 2016-17, incorporating reports of the National Residue Survey, the Water Efficiency Labelling and Standards Scheme and the Water for the Environment Special Account

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Department of Agriculture and Water Resources

Annual Report 2016-17

Department of Agriculture and Water Resources

Department of Agriculture and Water Resources ii

Contents

Overview 1

Secretary’s review 2

Our portfolio 6

Our department 8

Annual performance statements 13

Accountable Authority’s statement 14

Introduction to the annual performance statements 15

Strategic objective: Building successful primaryindustries 19

Strategic objective: Supporting agricultural communities 30

Strategic objective: Expanding agricultural, fisheries and forestry exports 37

Strategic objective: Sustaining natural resources for longer-term productive primary industries 51

Strategic objective: Improving water use efficiency and the health of rivers, communities,environmental assets, and production systems 61

Strategic objective: Managing biosecurity and imported food risk 70

Strategic objective: Building an efficient and capable department 87

Strategic objective: Being a best practice regulator 101

Management and accountability 106

Our governance 107

External service providers 112

External scrutiny 115

iii Annual Report 2016-17

Appendices 119

Appendix 1: Entity resource and outcome statements 120

Appendix 2: Ecologically sustainable development and environmental performance 135

Appendix 3: Human resources statistics 140

Appendix 4: Grants programs 143

Appendix 5: Report on the operation of the Natural Resources Management (Financial Assistance) Act 1992 145

Appendix 6: National Residue Survey Annual Report 2016-17 146

Appendix 7: Water Efficiency Labelling and Standards Scheme Annual Report 2016-17 149

Appendix 8: Water for the Environment Special Account 151

Financial statements 152

References 214

Abbreviations and acronyms 215

Glossary 217

List of tables 219

List of figures 222

Compliance index 223

Subject index 227

iv Department of Agriculture and Water Resources

Part 1

Overview Secretary’s review 2

Our portfolio 6

Our department 8

2 Department of Agriculture and Water Resources

As the secretary and accountable authority of the Department of Agriculture and Water Resources I welcome readers to our annual report for the year ended 30 June 2017. This report highlights the achievements of 2016-17 and outlines the key priorities for 2017-18. It also provides an account of our performance, based on our performance measures and targets.

One of our most important priorities has been the implementation of the Agricultural Competitiveness White Paper. Since the announcement of the White Paper in 2015, we have implemented 25 of 31 measures and the rest are on track, with longer implementation schedules. These measures can be expected to contribute to lowering tax, cutting red tape, building infrastructure, encouraging trade, developing northern Australia and supporting business to innovate and create jobs.

Another major priority was laying the groundwork for the Regional Investment Corporation, with legislation introduced to the parliament in June 2017. Once established, the corporation will streamline the delivery of farm business concessional loans and administer the National Water Infrastructure Loan Facility. Our dedicated departmental team will continue to work on this initiative in the coming year.

We also focused on building an inclusive and productive workplace. We released our Gender Equality Statement, pledging to provide a supportive environment for all employees, and we launched our ‘stretch status’ Reconciliation Action Plan, outlining the actions and targets we will implement to demonstrate our commitment to Aboriginal and Torres Strait Islander people.

Building successful primary industries Australia's rural industries performed well in 2016 -17, with a record-breaking winter crop contributing to agricultural production worth around $63 billion. We played a significant role in the success of the agriculture sector by supporting research and development programs delivered by our portfolio’s research and development corporations. On behalf of Australia’s primary industries, we collected, administered and disbursed around $790 million in levies, charges and Commonwealth matching payments to 18 levy bodies for use in research and development, animal and plant health and residue testing programs. In the first two rounds we have delivered more than $115 million through the Rural Research and Development for Profit Program, matched by almost $285 million in cash and in-kind contributions. Seven projects, worth $35.8 million, were funded under round three in June 2017.

Supporting agricultural communities Support for rural industries extended to specific purpose payments. In 2016-17, we made available $389 million in financial and business assistance to primary producers, including concessional loans to farm businesses affected by drought and retrospective price cuts by milk suppliers.

Secretary’s review

3 Annual Report 2016-17

Overview

Secretary’s review

We partnered with other agencies and third party bodies to improve the delivery of services, including the Farm Household Assistance package, which assisted 7,400 recipients and involved granting more than 1,400 Farm Household Allowance claims. Our Rural Financial Counselling Service Program also assisted primary producers to improve the financial management of their business, increase cash flow and adopt better farming and business practices. Additionally, we encouraged the uptake of risk management tools, such as Farm Management Deposits and insurance products that will assist our farmers to manage their financial risks and income variations.

Expanding agricultural, fisheries and forestry exports The exports story was positive, with ABARES estimating that the total agriculture, fisheries and forestry exports will be around $52 billion in 2016-17.

With Free Trade Agreements in place with the Republic of Korea, Japan and China, import tariffs were reduced or eliminated for some Australian agricultural products and the value of our exports to these countries increased in 2016-17. Our focus on technical market access resulted in improved access in 22 markets, new access in 19 markets, and we maintained and restored access in 11 other markets. We also continue to provide certification that exported goods meet importing country food safety and animal and plant health requirements. In 2016-17, we issued more than 347,000 export certificates, 50,900 manual certificates and managed the export of more than 2.7 million animals.

Our work with multilateral fora to set international standards included the development of a number of standards forwarded to the Codex Alimentarius Commission for adoption. We also hosted the Codex Committee on Food Import and Export Inspection and Certification Systems, led the expert group that drafted the international grains standard, and supported the development and adoption of cold treatment standards for fruit fly in citrus for Australian horticultural exporters.

Sustaining natural resources for longer-term productive primary industries Agricultural productivity relies on the good management of natural resources. The National Landcare Program continued to support the improved management of Australia’s natural resources and strengthen the capacity of farmers and communities to respond and adapt to changes in weather, climate and markets.

We are also seeing the results of fisheries management by the Australian Government. Since 2004, the number of fish stocks assessed as ‘uncertain if overfished’ has decreased from 28 to 11. The number of stocks assessed as ‘overfished’ has also decreased slightly. These results reflect sustained efforts to manage fisheries.

Our forestry work included reviewing the Regional Forest Agreements. This culminated in the 20-year extension of the agreement for Tasmania. We have also been implementing reforms to illegal logging laws. The report Reforming Australia’s illegal logging regulations—consultation Regulation Impact Statement was published in November 2016, and will inform recommendations to the government.

Improving water use efficiency and the health of rivers, communities, environmental assets and production systems Farmers, communities and the environment also benefit from the sustainable management of water resources. A key outcome of our collaborative work on the sustainable management of the Murray- Darling Basin was the recovery of more than 2,000 gigalitres of water for the environment. That’s about 80 per cent of our target and we are within sight of the delivery of the ambitious Murray-Darling Basin Plan. The water delivers environmental outcomes and helps protect and restore rivers, wetlands and floodplains in the Basin.

4 Department of Agriculture and Water Resources

In addition, the Water Legislation Amendment (Sustainable Diversion Limit Adjustment) Act 2016 was passed in November 2016, providing for a second notification of Sustainable Diversion Limit measures. In June 2017, the Murray-Darling Basin Ministerial Council endorsed a final package of adjustment measures which will allow us to protect the reliability of supply for irrigators, without diminishing the Basin Plan environmental outcomes.

This was also a significant year for the development of water infrastructure. We have funded 39 water infrastructure feasibility studies, including 16 in northern Australia. All feasibility studies are underway, with seven studies completed, including two in South Australia, three in Victoria and two in Western Australia. In February 2017, we opened the National Water Infrastructure loan facility to expressions of interest from state and territory governments.

Managing biosecurity and imported food risk Strengthening Australia’s biosecurity system is a major undertaking for the department. This is underpinned by the new Biosecurity Act 2015, which commenced on 16 June 2016. A number of achievements have helped us progress towards this goal, including the implementation of Agricultural Competitiveness White Paper measures and investment in pest and disease eradication programs.

We also completed the rollout of the Maritime Arrivals Reporting System (MARS). This intelligence-led and evidence-based online system ensures incoming vessels meet biosecurity regulations to minimise the risk of pests and diseases entering Australia. Since the system's implementation, the maritime industry’s compliance with biosecurity clearance requirements has significantly improved. MARS won the digital and data category in the 2017 Public Sector Innovation Awards.

We responded to the demand for biosecurity services which increases every year. In 2016-17, this included more than 20 million international travellers. We checked 158 million mail items, dealt with 18,000 vessels, inspected 45,000 sea containers and 31,226 lines of imported food. We also processed 1,800 dogs, 4,200 cats and 460 horses through our post-entry quarantine facilities.

The detection and rapid response to incursions show that our systems are largely working but biosecurity outbreaks inevitably occur. During the year, 35 exotic agricultural pests were detected and there were five detections of exotic environmental pests. We responded quickly to the outbreak of white spot disease in Queensland prawns through eradication and a coordinated assistance package for affected prawn farmers. We also responded to tomato potato psyllid in Western Australia and Varroa jacobsoni in Townsville. Additionally, we continued to fund programs to eradicate major biosecurity pests such as the red imported fire ant and we conducted preparedness exercises such as Exercise Athena, to explore our biosecurity capability.

Building an efficient and capable department Our focus on providing a safe workplace and supporting and challenging our staff to reach their potential and build rewarding careers has reaped rewards. The results from the latest Australian Public Service Commission’s Employee Census for employee engagement show that our ratings in the key areas of Team and Supervisor engagement improved and there was a slight decrease in the rate of unscheduled leave in 2016-17.

We have been investing in new systems, including a new financial management information system and a learning management system. These systems will help us become more efficient and provide even better services to clients and stakeholders.

I am pleased to report that, after several unsuccessful attempts, in June 2017 a new enterprise agreement was voted in that will bring increased remuneration to our hard-working staff.

5 Annual Report 2016-17

Overview

Secretary’s review

Reporting our performance This is the second edition of the annual performance statements prepared under the enhanced Commonwealth Performance Framework. Acting on advice from the Department of Finance and the Australian National Audit Office and looking to draw from better practice where we see it in other Commonwealth agencies, we have aimed to improve the accessibility, transparency and readability of the performance statements. We report against the performance targets set out in our 2016-17 corporate plan and ensure a line of sight between our stated purposes and our performance in delivering on our commitments.

The year ahead Our 2017-18 corporate plan outlines our priorities for the year ahead. We will continue to implement initiatives under the Agricultural Competitiveness White Paper, and introduce new ballast water management requirements as well as new policies for using onshore and emergency powers to respond to biosecurity incidents. We will also move closer to delivering the outcomes of the Murray- Darling Basin Plan and expand the scope for water infrastructure development. The establishment of the Regional Investment Corporation is in our sights and managing the funding for new projects under the Landcare Program is on our agenda. We will help industry set up the new Livestock Global Assurance Program and continue to support research and development in the agriculture, fisheries and forestry sectors. Investment in our people, policies, processes and systems will help us deliver on our commitments.

Our employees across Australia and around the globe are critical to our work and I thank them for their dedication over the past year. I would also like to pass on my appreciation to my former deputy secretary David Parker who has taken up a new career opportunity.

Daryl Quinlivan Secretary

6 Department of Agriculture and Water Resources

The Agriculture and Water Resources portfolio supports the sustainability, profitability and competitiveness of Australia’s agriculture, fisheries and forestry industries. The portfolio comprises the Department of Agriculture and Water Resources, statutory bodies and research and development corporations.

During 2016-17, the portfolio consisted of:

â¢ the Australian Government Department of Agriculture and Water Resources â¢ three statutory authorities that undertake regulatory roles: á² Australian Fisheries Management Authority á² Australian Pesticides and Veterinary Medicines Authority

á² Murray-Darling Basin Authority â¢ four research and development corporations: á² Cotton

á² Fisheries á² Grains á² Rural Industries â¢ one entity that undertakes both a regulatory role and acts as a research and development corporation:

á² Australian Grape and Wine Authority.

The Deputy Prime Minister and Minister for Agriculture and Water Resources, the Hon. Barnaby Joyce MP, was responsible for the portfolio in 2016-17.

Senator the Hon. Anne Ruston was appointed as the Assistant Minister for Agriculture and Water Resources on 21 September 2015. The Hon. Luke Hartsuyker MP was appointed as the Assistant Minister to the Deputy Prime Minister on 19 July 2016.

Our portfolio

7 Annual Report 2016-17

Overview Our portfolio

Fisheries Executive Director:

Dr Patrick Hone

Grains Managing Director (A/g): Dr Stephen Thomas

Rural Industries Managing Director: Mr John Harvey

Cotton Executive Director:

Mr Bruce Finney

Authorities

Australia Grape and WineAuthority Chief Executive Officer:

Mr Andreas Clarke

Australian Government Department of Agriculture and Water Resources Secretary: Mr Daryl Quinlivan

Australian Pesticides and Veterinary Medicines Authority Chief Executive Officer (Interim): Dr Chris Parker

Australian Fisheries Management Authority Chief Executive Officer:

Dr James Findlay

Research and development corporations

Assistant Minister to the Deputy Prime Minister The Hon. Luke Hartsuyker MP

Assistant Minister for Agriculture andWater Resources Senator the Hon. Anne Ruston

FIGURE 1 Portfolio structure at 30 June 2017

Deputy Prime Minister Minister for Agriculture and Water Resources The Hon. Barnaby Joyce MP

Murray-Darling BasinAuthority Chief Executive Officer:

Mr Phillip Glyde

8 Department of Agriculture and Water Resources

Our department

Our purpose We help drive a stronger Australian economy by building a more profitable, resilient and sustainable agriculture sector, and by supporting the sustainable and productive management and use of rivers and water resources.

Our role The department has a diverse role as a policy adviser to government, researcher, program administrator, service provider, market access negotiator and regulator.

Our work contributes to strengthening Australia’s primary industries, delivering better returns to primary producers at the farm gate, protecting Australia from animal and plant pests and diseases, and improving the health of Australia’s rivers and freshwater ecosystems.

Australian agriculture, fisheries and forestry are multi-billion dollar industries that benefit from our regulation, research, policies and programs to improve their productivity, competitiveness and sustainability.

We minimise the biosecurity risks to the environment and to human, animal and plant health by ensuring the safe movement of millions of people, goods, vessels and aircraft into and out of Australia.

Australia’s water is critical to the future of agriculture and the wellbeing of the environment and our communities. We work to improve the health of rivers and freshwater systems, to ensure the sustainable, efficient and productive management and use of water resources and to maximise social, economic and environmental benefits to water users and the community.

As a policy adviser to government, we provide rigorous, evidence-based advice, with a focus on whole-of-government priorities. Our policy advice is grounded in analysis undertaken by our scientists and economists.

Our outcomes We have three outcomes:

â¢ More sustainable, productive, internationally competitive and profitable Australian agricultural, food and fibre industries through policies and initiatives that promote better resource management practices, innovation, self-reliance and improved access to international markets.

â¢ Safeguard Australia’s animal and plant health status to maintain overseas markets and protect the economy and environment from the impact of exotic pests and diseases, through risk assessment,

9 Annual Report 2016-17

Overview

Our department

Program 1.5: Horticulture industry

Program 1.6: Wool industry

Program 1.7: Grains industry

Program 1.8: Dairy industry

Program 1.9: Meat and livestock industry

Program 1.10: Agricultural resources

Program 1.11: Drought programs

Program 1.12: Rural programs

Program 1.13: International marketaccess

Program 1.1: Agriculture adaptation

Program 1.2: Sustainable management— natural resources

Program 1.3: Forestry industry ª

Program 1.4: Fishing industry ª

Program 3.1: Water reform

Program 2.1: Biosecurity and export services

Program 2.2: Plant and animal health

Enabling activities

Regulatory activities

Building successful primary industries

Supporting agricultural communities

Expanding agricultural, fisheries and forestry exports

Sustaining natural resources for longer-term productive primary industries

Improving water use efficiency and the health of rivers, communities, environmental assets and production systems

Managing biosecurity and imported food risk

Building an efficient and capable department

Being a best practice regulator

a Activities under these programs also contribute to the strategic objective Building successful primary industries.

Programs Strategic objectives

inspection and certification, and the implementation of emergency response arrangements for Australian agricultural, food and fibre industries.

â¢ Improve the health of rivers and freshwater ecosystems and water use efficiency through implementing water reforms, and ensuring enhanced sustainability, efficiency and productivity in the management and use of water resources.

Our objectives In 2016-17, we changed our program structure in the portfolio budget statements to align the programs with six strategic objectives, and introduced two corporate strategic objectives, as shown in Figure 2.

FIGURE 2 Programs and strategic objectives 2016-17

10 Department of Agriculture and Water Resources

Our priorities The department’s priorities for 2016-17 were: â¢ implementing initiatives under the Agricultural Competitiveness White Paper to build the infrastructure to support a competitive agriculture sector

â¢ implementing the government’s election commitments â¢ continuing to build a modern, flexible and responsive biosecurity system under the Biosecurity Act 2015 â¢ pursuing new market access for Australian exporters, including opportunities arising from

completed free trade agreements with North Asian countries, and supporting work on prospective free trade agreements â¢ implementing programs for new water infrastructure, including the National Water Infrastructure Loan Facility, the National Water Infrastructure Development Fund and new irrigation schemes

in Tasmania â¢ delivering programs to support the implementation of the Murray-Darling Basin Plan through water recovery and the Sustainable Diversion Limit adjustment mechanism â¢ driving regulatory reform to be a trusted, effective and transparent best practice regulator â¢ continuing to modernise our approach to service delivery to provide efficient and effective services

that meet our clients’ needs â¢ investing in our people to continue to build our capability and effectiveness â¢ contributing to the government’s initiative to manage public data as a national resource for the

benefit of the Australian people.

11 Annual Report 2016-17

Overview

Our department

Our structure Our divisions work individually and together to meet our objectives. Figure 3 shows our organisational structure.

FIGURE 3 Organisational structure at 30 June 2017

Our executive Mr Daryl Quinlivan has been the secretary of the department since June 2015. Mr Quinlivan is responsible for the efficient and effective operation of the department. His other roles include:

â¢ chair of the National Biosecurity Committee â¢ chair of National Management Groups for nationally coordinated emergency responses to pest and disease incursions.

Four deputy secretaries assist the secretary across a range of issues and departmental functions and oversee the work of particular divisions.

Agricultural Policy

Fran Freeman

Farm Support

Greg Williamson

Sustainable Agriculture, Fisheries and Forestry

Ian Thompson

Secretary Daryl Quinlivan

Deputy Secretary Cindy Briscoe

Biosecurity Animal

Tim Chapman

Biosecurity Plant

David Heinrich (A/g)

Compliance

Robyn Cleland (A/g)

Service Delivery

Nico Padovan

Biosecurity Policy and Implementation

Matt Koval

Australian Chief Veterinary Officer Mark Schipp

Chief Scientist and Chief Plant Protection Officer

Kim Ritman

ABARES Executive Director:

Peter Gooday (A/g)

Exports

Greg Read

Water

Tim Fisher (A/g)

Trade & Market Access

Paul Ross (A/g)

Assurance and Legal

General Council

Alice Linacre

Corporate Strategy and Governance

Simon Smalley (A/g)

Finance and Business Support

Chief Finance Officer

Emily Canning

Information Services

Chief Information Officer

Peter McKeon

Deputy Secretary Lyn O’Connell

Deputy Secretary Paul Morris (A/g) Deputy Secretary David Williamson

Department of Agriculture and Water Resources 12

Ms Lyn O’Connell started as deputy secretary in the department in October 2015 and is responsible for the Biosecurity and Service Delivery divisions, and oversees the Australian Chief Veterinary and Chief Plant Protection Office.

Mr David Williamson was appointed deputy secretary in May 2016. Mr Williamson is responsible for the Agricultural Policy, Farm Support, and Sustainable Agriculture, Fisheries and Forestry divisions.

Ms Cindy Briscoe commenced with the department in October 2016 and is responsible for the Assurance and Legal, Corporate Governance and Strategy, Finance and Business Support, and Information Services divisions.

Mr Malcolm Thompson joined the department in July 2017, following the departure of Mr David Parker to head the Clean Energy Regulator. Mr Thompson is responsible for the Exports, Trade and Market Access, and Water divisions, and the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).

Reporting This annual report covers reporting requirements for the Department of Agriculture and Water Resources and has been prepared in accordance with the Public Governance, Performance and Accountability Act 2013. It includes the:

â¢ annual report required under subsection 26(1) of the Natural Resources Management (Financial Assistance) Act 1992 (See Appendix 5) â¢ annual report of the National Residue Survey program, required under section 10 of the National Residue Survey Administration Act 1992 (see Appendix 6) â¢ annual report of the Water Efficiency Labelling and Standards Scheme, required under section 75 of

the Water Efficiency Labelling and Standards Act 2005 (see Appendix 7) â¢ annual report of the Water for the Environment Special Account, required under section 86AI of the Water Act 2007 (see Appendix 8).

Portfolio agencies table their own reports, which are available on their websites.

Disability reporting Since 1994, non-corporate Commonwealth entities have reported on their performance as policy adviser, purchaser, employer, regulator and provider under the Commonwealth Disability Strategy. In 2007-08, reporting on the employer role was transferred to the Australian Public Service Commission’s State of the Service reports and the APS Statistical Bulletin. These reports are available on the Commision’s website. Since 2010-11, entities have not been required to report on these functions.

The Commonwealth Disability Strategy has been overtaken by the National Disability Strategy 2010-2020, which sets out a 10-year national policy framework to improve the lives of people with disability, promote participation and create a more inclusive society. A high-level, two-yearly report will track progress against each of the six outcome areas of the strategy and present a picture of how people with disability are faring. The first of these progress reports was published in 2014.

Part 3 Part 2

Annual performance statements Accountable Authority’s statement 14

Introduction to the annual performance statements 15

Strategic objective: Building successful primaryindustries 19

Strategic objective: Supporting agricultural communities 30

Strategic objective: Expanding agricultural, fisheries and forestry exports 37

Strategic objective: Sustaining natural resources for longer-term productive primary industries 51

Strategic objective: Improving water use efficiency and the health of rivers, communities,environmental assets, and production systems 61

Strategic objective: Managing biosecurity and imported food risk 70

Strategic objective: Building an efficient and capable department 87

Strategic objective: Being a best practice regulator 101

Department of Agriculture and Water Resources 14

Accountable Authority’s statement

I Daryl Quinlivan, as the Accountable Authority for the Department of Agriculture and Water Resources (the department), present the department’s annual performance statement for 2016-17, prepared in accordance with sub-section 39(1)(a) of the Public Governance, Performance and Accountability Act 2013.

In my opinion, this performance statement accurately presents the department’s performance in the year ending 30 June 2017, and complies with sub-section 39(2) of the Act.

Daryl Quinlivan Secretary 1 October 2017

Annual Report 2016-17

Annual performance statements Introduction to the annual performance statements

Introduction to the annual performance statements

The performance statements report on our results against the performance measures and targets as defined in the department’s performance framework. These results are reported in the context of our strategic objectives. The framework is published in full as part of our 2016-17 corporate plan, available on our website.

Figure 4 sets out the enhanced Commonwealth Performance Framework.

FIGURE 4 Commonwealth Performance Framework

Enhanced Commonwealth Performance Framework - key components of relevant publications

Annual Performance Statement (October following year) - Entity based

Included in the Commonwealth entity’s annual report. Focuses on recent performance.

Reports on the actual performance results for the year against the forecasts made in the corporate plan and portfoliobudget statements, and provides other performance information relevant to the entity.

Provides an analysis of the factors that contributed to the entity’s performance results.

Portfolio Budget Statements (May) Portfolio based

Supports Annual Appropriations. InformsSenators and Members of Parliament of proposed allocation of other resources to government outcomes and programs.

Provides links to relevant programs undertaken by other Commonwealth entities.

Provides high-level performance information for current, ongoing programs, particularly a forecast of performance for the current year.

Provides detailed prospective performance information for proposed new budget measures that require a new program or significantly change an existing program.

Corporate Plan (August) Entity based

Primary planning document of a Commonwealth entity.

Sets out the purposes of the entity, the activities it will undertake to achieve its purposes and the results itexpects to achieve over a minimum four year period.

Describes the environment in which the entity operates, the capacity it requires to undertake activities and adiscussion of risk.

Explains how the entity’s performance will be measuredand assessed.

Department of Agriculture and Water Resources 16

The portfolio budget statements include information on the contribution of our programs to our purpose, based on a select number of performance measures and targets from the department’s performance framework

The corporate plan sets out our purpose, the activities we will undertake to achieve that purpose and the results we expect to achieve over a four-year period, based on the performance measures and targets in the performance framework.

The annual performance statements report the actual results in the given reporting year, and an analysis of the factors that contributed to the result. Results are reported in the context of the performance measures and targets for the given year.

Our performance measures are designed to assess the effectiveness, efficiency and quality of our activities in meeting our strategic objectives. In 2016-17, we report against eight strategic objectives. Each strategic objective is supported by one or more objectives. The relationship between our programs and strategic objectives is set out at Figure 2.

The relationship between strategic objectives, objectives, performance measures and targets is defined at Figure 5. The entire framework is set out in the 2016-17 corporate plan.

Annual Report 2016-17

Annual performance statements Introduction to the annual performance statements

FIGURE 5

Department of Agriculture and Water Resources performance framework 2016-17

Our purpose

We help drive a stronger Australian economy by building a more profitable, resilient and sustainable agriculture sector, and by supporting the sustainable and productive management and use of rivers and water resources.

Our strategic objectives

Building successful

primary industries

Supporting agricultural communities

Expanding agricultural, fisheries and

forestry exports

Sustaining natural resources for longer-term productive primary industries

Improving water use efficiency and the health of rivers, communities, environmental assets

and production systems

Managing biosecurity and imported food risk

Building an efficient and capable department

Being a best practice regulator

Our objectives

Improve the net

farm-gate returns for agriculture, fisheries, forestry, food and fibre

industries.

Provide targeted assistance to help primary producers, their families

and communities

manage adjustment pressures in hard times.

Maximise returns to primary producers from selling into export markets.

Provide certification of exports to meet importing country requirements.

Promote stewardship of agricultural land,

forests and fisheries to maintain the quality of natural resources, including in times of drought.

Improve the environmental health of the Murray-Darling Basin consistent

with national and international obligations by recovering water and prioritising water-saving infrastructure projects.

Help communities, irrigators and businesses use water resources

sustainably and efficiently, consistent with nationally agreed water reforms.

Use evidence-based risk management to ensure the safe movement into and out of Australia of people, animals, plants, food and

cargo.

Coordinate emergency responses to exotic pest and disease

incursions.

Focus on performance, deliver on our objectives, meet our statutory

obligations and parliamentary requirements, and continuously build organisational capability.

Encourage regulators to undertake their functions with

the minimum impact necessary

to achieve regulatory objectives and to effect positive, ongoing and lasting cultural change.

Our performance measures—as specified in the 2016- 17 corporate plan

Our targets—as specified in the 2016 -17 corporate plan

Department of Agriculture and Water Resources 18

Our performance reporting The performance measures and targets reported as part of the 2016-17 annual performance statement are based on the 2016-17 corporate plan. The inclusion of targets provides a specific focus for reporting. Our performance reporting has also been improved by the experience of preparing the 2015-16 annual performance statements, and advice received from the Department of Finance and the Australian National Audit Office. This has resulted in a number of changes that aim to improve the readability and structure of our performance statements.

We report separately on each strategic objective as its own chapter of the annual performance statements. Each chapter sets out the strategic objective and its related objectives, and provides a report on the performance measures and activities listed in the 2016-17 corporate plan, and an analysis of the factors that contributed to the performance outcome. Each target is supported by relevant data, information and an assessment methodology, which is maintained by the department.

Annual Report 2016-17

Annual performance statements

Strategic objective: Building successful primaryindustries

Annual performance statements

Strategic objective: Building successful primaryindustries

Objective: Improve the net farm-gate returns for agriculture, fisheries, forestry, food and fibre industries.

Strategic objective: Building successful primaryindustries

We develop and administer policies and programs to help Australia’s primary industries and producers become more productive and profitable. Our work contributes to strengthening primary industries and better farm-gate returns to primary producers.

We provide advice to the Australian Government on how to help our primary industries remain productive into the future, and administer government programs and legislation that support this objective, including the collection of levies for research, development and marketing. We collaborate with industries and state and territory governments to address domestic and international issues, and work with statutory and industry-owned research and development corporations to promote innovation.

Our scientific and economic research through ABARES provides evidence-based research and data to support policy and decision making across our strategic objectives.

We report the following activities and achievements against this strategic objective in the context of the performance measures, targets and activities described in our 2016-17 corporate plan.1 These include: â¢ delivering the third round of the Rural Research and Development for Profit program and monitoring the progress of funded projects for the first and second rounds

â¢ continuing levies reform, including enabling rural research and development corporations to access levy payer information.

There are additional activities outlined in the 2016-17 corporate plan that are not addressed in the measures and targets. These are reported at the end of the chapter.

1 Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 15

Department of Agriculture and Water Resources 20

Industry performance

Annual performance statement

TABLE 1 Performance measure—Portfolio industries record an increase in productivity a

Target Result against performance measure

Average annual productivity growth for the past 10 years is equal to or exceeds average annual market sector productivity growth over the same period.

Met: Over the past 10 years, the average annual productivity growth for the agriculture, fishing and forestry sector was 0.80%. This exceeded average annual market sector productivity growth of 0.43% over the same period b.

In the 2015-16 performance statement we reported that the average annual productivity growth for the agriculture, fishing and forestry sector was 0.98%, exceeding the average annual market sector productivity growth of 0.38% over the same period c.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 15. b Based on actual Australian Bureau of Statistics data for the years 2007-08 to 2015-16, and a forecast for 2016-17. Measured on a value-added basis, and with a trend adjustment in 2007-08 to account for volatility at the beginning of the time period. c Based on Australian Bureau of Statistics data for the years 1995-96 to 2015-16. Measured on a gross output basis.

TABLE 2 Performance measure—The rate of return on capital invested across portfolio industries is maintained or increased a

Target Result against performance measure

The trend growth for the past 10 years ispositive. Met: Over the period 2007-08 to 2016-17, the annual trend growth for the rate of return on capital was 0.15% for broadacre and dairy

farms b.

This is an increase from 2015-16 results, where the growth for rate of return on capital was 0.01% c.

a Performance measures and targets published in the Portfolio Budget Statements 2016-17 , p.33 and Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 15. b Based on actual ABARES broadacre and dairy farm surveys for the years 2007-08 and 2015-16, and a forecast for 2016-17. Rates of return on capital invested are not collected for businesses in the fishing and forestry sector. A trend adjustment in 2007-08 is undertaken to account for volatility at the beginning of the time period. c Based on ABARES broadacre and dairy farm surveys data for the years 1995-96 to 2015-16.

Productivity growth and rates of return in the agricultural sector In spite of growing global food demand, farm businesses have faced declining terms of trade (output prices relative to input prices). Improving productivity is one of the key ways in which farmers can increase profitability and meet the challenges of uncertain seasonal conditions and other factors beyond their control.

Productivity growth is therefore an important measure of performance for Australian agriculture. It reflects changes in the efficiency with which farmers use land, labour and capital to produce agricultural outputs. It is generally assessed over longer timeframes.

Over the past 10 years, the average annual productivity growth in the agriculture, fishing and forestry sector was 0.80 per cent. This exceeds annual average productivity growth in the market sector of 0.43 per cent over the same period.

Annual Report 2016-17

Annual performance statements

Strategic objective: Building successful primaryindustries

Annual performance statements

Strategic objective: Building successful primaryindustries

While productivity growth in the agricultural sector is partially explained by broader changes in the Australian economy, there is a significant relationship between longer-term productivity growth in the agricultural sector and research and development, as reported in our 2015-16 annual performance statements.2 We also report on recent investment in the research and development section of this chapter of the performance statements.

FIGURE 6 10-year growth in agricultural and market sector productivity, 2007-08 to 2016-17

10-year agriculture

10-year market

100

105

110

115

120

125

130

2016 -17

2014 -15

2012 -13

2010 -11

2008 -09

Note: Based on actual Australian Bureau of Statistics data for the years 2007-08 to 2015-16 and a forecast for 2016-17. Measured on a value-added basis and with a trend adjustment in 2007-08 to account for volatility at the beginning of the time period.

Rates of productivity growth across the Australian economy have slowed in the past decade or two, compared with earlier decades. This is not an isolated occurrence and similar trends have been observed in other developed economies. Potential causes of this slowdown include a falling pace of innovation, sectoral shifts to lower productivity sectors and, in the case of Australia, the fading impact of past economic reforms and information and communication technologies.

Care needs to be taken when interpreting trends in productivity and profitability in the agriculture, fishing and forestry sectors as they are subject to significant factors outside the department’s control— particularly global economic performance and the effects of climate variability. It should also be noted that this productivity target refers to the ANZSIC06 industry division of ‘agriculture, fishing and forestry’, meaning that productivity fluctuations in related industries, such as food processing and logistics possibly classified as ‘manufacturing and transportation’, are not captured.

Despite such volatility, farm businesses in the broadacre and dairy industries have, on average, generated positive returns on capital investment over the past 10 years. Overall, the rates of return on capital in the agriculture sector remain volatile, reflecting years of good and poor seasonal conditions beyond the control of producers. As a measure of longer-term profitability, annual trend growth in the rate of return on capital (excluding land appreciation) for broadacre and dairy farms was 0.15 per cent over the 10 years to 2016-17.

This implies, broadacre and dairy farm businesses have generated returns comparable with other forms of capital investment, once differences in risks have been accounted for.

2 Department of Agriculture and Water Resources Annual Report 2015-16, p. 25.

Department of Agriculture and Water Resources 22

FIGURE 7 Average rate of return on capital for broadacre and dairy farms, 2007-08 to 2016-17

2016 -17

2014 -15

2012 -13

2010 -11

2008 -09

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Note: Based on actual ABARES broadacre and dairy farm surveys for the years 2007-08 and 2015-16 and a forecast for 2016-17. Rates of return on capital for broadacre and dairy farms exclude land appreciation. Data on rates of return on capital invested are not collected for businesses in the fishing and forestry sector. A trend adjustment in 2007-08 is undertaken to account for volatility at the beginning of the time period.

Research and development

Annual performance statement

TABLE 3 Performance measure—Investment in rural research and development corporation programs demonstrates positive returns a

Target Result against performance measure

100% of allocated funding under the Rural Research and Development for Profit program expended in accordance with the agreed timetable.

Met: The Rural Research and Development for Profit program aims to improve farm-gate productivity and profitability and deliver real outcomes for Australian farmers. Total funding available for the program is $180.5 million over eight years, ending on 30 June 2022.

Grant funding of $114.7 million has already been awarded to 36 projects over the first three rounds of the program, matched by almost $170 million in cash and in-kind contributions from successful applicants and their partners. Round three grant agreements were executed in June 2017. Seven projects, worth $35.8 million, were funded under round three.

Grant agreements for all projects are in place and projects are progressing in accordance with agreed timeframes.

100% of rural research and development corporations are compliant with statutory and contractual requirements.

Met: Under their funding agreements, research and development corporations provide annual compliance audit reports and certification reports.

All rural research and development corporations advised that they were materially compliant with their obligations for 2015-16.

All research and development corporations are obliged to notify the department of any significant events that may materially impact their ability to comply with their funding agreements.

Pending formal notification for 2016-17 of material compliance, no research and development corporation has advised of any events. Research and development corporations provide their compliance audit reports as part of finalising their annual reports.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 15.

Annual Report 2016-17

Annual performance statements

Strategic objective: Building successful primaryindustries

Annual performance statements

Strategic objective: Building successful primaryindustries

Rural research and development investment We continue to provide funding to and work with research and development (R&D) corporations to help them meet the government’s requirements. In 2016-17 the Australian Government provided $271.7 million in matching funding to the RDCs. Investment in research and development and innovation is vital for ongoing growth and improvement in the productivity, profitability, competitiveness and sustainability of Australia’s agriculture, fishing, forestry, food and fibre industries.

Government investment in primary industry innovation:

â¢ recognises that the large number of small producers could not gain an economic return from individual investment in research and that R&D outputs are largely non-rival in nature and can be applied broadly across farms

â¢ acknowledges the significant intra- and inter-industry spillovers and regional and rural benefits that accrue from publicly supported R&D â¢ addresses important national development and sustainability objectives, such as biosecurity and natural resource management.

Investment in such initiatives provides both industry and community benefits.

During 2016-17, the Australian Government provided $35.8 million for seven projects as part of the third round of the Rural Research and Development for Profit program. Cash and in-kind contributions from five RDCs and their project partners bring the total value of projects in round three to more than $94.8 million. These projects will all contribute to the objective of realising significant productivity and profitability improvements for primary producers through:

â¢ generating knowledge, technologies, products or processes that benefit primary producers â¢ strengthening pathways to extend the results of rural R&D, including understanding the barriers to adoption â¢ establishing and fostering industry and research collaborations that form the basis for ongoing

innovation and growth of Australian agriculture.

Projects funded under the first two rounds are tracking well and delivering outcomes that are helping to improve the productivity and profitability of Australian farmers. The program funds projects that deliver practical and accessible results for farmers, such as:

â¢ better control of major weeds â¢ new technologies to measure lean meat yield and eating quality of meat â¢ better use of nitrogen to improve soil quality â¢ improving seasonal and extreme weather forecasts for farmers â¢ improving emergency animal disease responses in livestock industries.

In December 2016, the program’s first project, led by the Rural Industries Research and Development Corporation, was completed. Known as ‘eXtensionAUS’, the project was developed to meet the needs of rural and regional Australia in the extension of knowledge to enable collaboration and improve the delivery of information to Australian farmers and fishers.

The project provides a direct benefit to farmers by facilitating a stronger extension system. It has delivered a web-based hub that consolidates existing knowledge, tools and resources and, through a Community of Practice function, encourages ongoing collaboration between extension professionals to improve the delivery of research to farmers.

Department of Agriculture and Water Resources 24

Snapshot: Smarter Irrigation for Profit In 2015, the Australian Government funded the Smarter Irrigation for Profit project under round one of the Rural Research and Development for Profit program. Grant funding of $4million was awarded to the project, which was matched by almost $6.4 million in cash and in-kind contributions by industry and research partners.

The project aims to improve the profit of cotton, dairy, rice and sugar irrigators with the support of research and development partners and farmer-led irrigation technology learning sites. The research and extension is collecting commercially relevant comparative data on different irrigation systems and technologies.

The project will provide growers with a better understanding of the implications for capital investment, management and resource requirements associated with different irrigation systems. The project is also investigating the use of automation technology for farming systems.

The expected outcomes are:

â¢ 10 to 20 per cent improvement in water productivity, efficiency and farmer profitability

â¢ adoption of new irrigation technologies and science applications by farmers and irrigation professionals to improve farm profits

â¢ improved cross-sector industry research collaboration with public and private sectors in four major irrigation industries, providing a legacy platform that for other sectors can benefit from.

In 2016-17, the project held 10 key activities across the rice, dairy, cotton and sugar industries, involving 16 research and development partners, 21 farmer demonstration sites and almost 3,000irrigators.

These industries are improving their access to crop and climate-based irrigation technologies and practice, to improve the uptake and application of irrigation water to crops and pastures. By improving water application methods and fine-tuning irrigation scheduling, costs can be reduced, water saved, yield and crop quality improved and profits increased.

Source: Joe Foley, University of Southern Queensland

Annual Report 2016-17

Annual performance statements

Strategic objective: Building successful primaryindustries

Annual performance statements

Strategic objective: Building successful primaryindustries

Rural research and development capability

Annual performance statement ABARES is the department’s research arm. We provide professionally independent multidisciplinary research, analysis and advice to inform decision-makers in this department, other government agencies and the private sector on significant issues affecting Australia’s agriculture, fishing and forestry industries.

TABLE 4 Performance measure—Stakeholders and clients assess ABARES research and analysis as high-quality evidence-based, accurate and meeting their needs a

Target Result against performance measure

80% of underpinning research, advice, forecast, projects and data services meet stakeholder expectations and are delivered within agreed timeframes b.

Not met: In 2015-16, ABARES reported a high level of satisfaction with its products, based on a client survey. However, in 2016-17, the client survey response rate was not sufficient to support an assessment of ABARES performance for the period.

We have initiated a revised system of evaluation that will support enhanced reporting in future years.This will provide advice in relation to client satisfaction.

ABARES publications continue to enjoy wide use and acceptance by stakeholders. Media monitoring indicates that ABARES products continue to be prominent in the rural news media and significant in defining industry performance.Anecdotal evidence suggests ABARES products are highly regarded by policymakers and industry stakeholders.

85% of respondents are satisfied that the ABARES Outlook Conference met or exceeded expectations c.

Not met: 80.4% of respondents reported that, overall, Outlook 2017 met or exceeded their expectations.While this is lower than the 90% satisfaction rate reported in 2015-16, it remains a highly regarded conference for the rural sector. Feedback on program design, speaker recommendations and content will be used to improve the quality of future conferences.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 29. b Client satisfaction survey as measured by an annual survey of ABARES clients. c Client satisfaction survey as measured by an annual survey of ABARES Outlook 2017 conference participants.

Levies

Annual performance statement

TABLE 5 Performance measure—A high level of efficiency is achieved in collecting and distributing levies to fund research and development in research and development corporations a

Target Result against performance measure

Levy collection processes cost no more than 1.2%of levies disbursed. Met: Cost-recovery charges in 2016-17 represented 0.94%oflevies disbursed.

Inspections of levy agent records cover at least 30% of levy revenue over a three-year rolling average. Met: The record inspection program covered 30% of levy revenue in 2016-17.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 15.

Department of Agriculture and Water Resources 26

Levies administration We are responsible for collecting, administering and disbursing levies. Levies are collected from producers to fund marketing, research and development, animal and plant health, and residue testing programs. The implementation of the levies system enables our agricultural sectors to respond to industry needs and helps maintain and strengthen their positions in highly competitive international markets through resource sharing and cooperation.

There are currently 110 levies on 75 commodities and we are responsible for collecting and disbursing levies to 18 levy recipient bodies.

In 2016-17, we disbursed $792.916 million (including the government-matched research and development expenditure) to levy recipient bodies. Staff processed 46,080 returns for 75 commodities.

We support the integrity of the levies system through a national compliance program, using a mix of compliance activities. The risk-based program ensures coverage of 30 per cent of the collection each year on an average over three years.

We publish semi-annual reports for our stakeholders, which provide a financial overview of the administration and disbursem*nt of levies and charges.

Improving our levies system In 2016-17, we further improved the levies system to deliver better value for money to levy payers. This included the design of levy payer registers; working with primary industries to introduce or amend levies and charges and streamlining transactions through Levies Online.

We are also delivering a program of work aimed at further improving levies policy, processes and legislation. This includes consulting with stakeholders on options for a more flexible, less complex process; reviewing sunsetting levies legislation; and delivering the government’s response to the Senate inquiry on levies.

Additional activities and initiatives under the Agricultural Competitiveness White Paper Our work under this strategic objective also included delivering a number of initiatives from the Australian Government’s Agricultural Competitiveness White Paper. These initiatives are aimed at strengthening the agricultural sector and ensuring it remains as competitive as possible for primary producers. Such activities include providing primary producers with information on cooperatives and streamlining the regulation of agricultural and veterinary chemicals.

Annual Report 2016-17

Annual performance statements

Strategic objective: Building successful primaryindustries

Annual performance statements

Strategic objective: Building successful primaryindustries

Providing primary producers with information on cooperatives

The $13.8 million Farm Co-operatives and Collaboration Pilot Programme gives farmers business tools to improve farm-gate returns. Through the pilot programme, farmers will be empowered with knowledge and resources to establish cooperatives and adopt innovative business models to boost their bargaining position in the marketplace.

The pilot programme is delivering expert advice and information to farmers and farmer groups across the nation and will run until 30 June 2018.

Streamlining the regulation of agricultural and veterinary chemicals

The Australian Government has committed $17.1 million to improve farmers’ and other users’ access to agricultural and veterinary chemicals, while retaining protections for the health and safety of humans, animals and the environment. We have been preparing draft legislation to streamline Australia’s agricultural and veterinary chemical regulations.

During 2016-17, we also funded two studies on intellectual property and quality assurance arrangements, to inform a forthcoming review of the agricultural and veterinary chemical legislative framework announced by the Deputy Prime Minister in April 2017.

Further information on progress on White Paper measures is provided.

Country-of-origin food labelling The Australian Government recognises consumers want clear and accurate labelling to help them identify and buy food grown and processed in Australia. We worked with the Department of Industry, Innovation and Science, other agencies and businesses on improving the country-of-origin food labelling framework.

The new labelling framework commenced on 1 July 2016 and businesses have two years to change their food labels. Early indications are that the reforms have been well received by consumers and industry, with many food businesses adopting the new labels ahead of the 1 July 2018 deadline.

Changes to income tax averaging for farmers Tax averaging ensures that primary producers with fluctuating incomes pay no more tax over a number of years than individuals on comparable, but steady, incomes. This is achieved by making a ‘tax adjustment’ each year in which averaging applies.

The Tax and Superannuation Laws Amendment (2016 Measures No. 2) Act 2016, which received Royal Assent on 28 February 2017, allows primary producers to be opted back into income averaging 10 years after they opted out. Primary producers who opted out of income averaging for 2006-07, or an earlier financial year, will be opted back into income averaging for the first financial year after 2016-17 in which their taxable primary production income is greater than that for the previous financial year. Prior to the amendment, a primary producer who opted out of income tax averaging could never opt back in, except in special circ*mstances.

The following table lists the status of initiatives under the Agricultural Competitiveness White Paper. Many of the measures are discussed in the annual performance statement.

Department of Agriculture and Water Resources 28

TABLE 6 Status updates— Agricultural Competitiveness White Paper

Measure Status

Building the infrastructure of the 21st century

National Water Infrastructure Development Fund Ongoing

Freight modelling for agriculture - expand CSIRO’s TranSIT Implemented

A fairer go for farm businesses

Productivity Commission inquiry into regulations affecting agriculture and fisheries Implemented

Reforms to country-of-origin labelling Implemented

Streamlining the regulation of agvet chemicals Ongoing

Cooperatives and innovative business model knowledge Implemented

ACCC engagement in agricultural sector Implemented

Changes to income tax averaging for farmers—allowing opt-in Implemented

Farm Management Deposits—Increasing the deposit limit to $800,000 Implemented

Farm Management Deposits—Allowing loan offset Implemented

Simplified accelerated depreciation—fencing Implemented

Strengthening our approach to drought and risk management

Better seasonal forecasting Implemented

Tax arrangements for water facilities and fodder storage Implemented

Managing Farm Risk Programme Implemented

Transitional drought and drought recovery concessional loans (implemented) and Drought Concessional Loans Scheme —(Ongoing) Ongoing

Farm Management Deposits—early access provisions in drought Implemented

Increased case management—Farm Household Allowance Implemented

Advice and assistance from ATO to taxpayers in drought Implemented

Additional resources to Rural Financial Counselling Service Implemented

Enhanced social and community support Implemented

Drought Communities Programme Implemented

Pest animal and weed management in drought-affected areas Implemented

Farming Smarter

Clearer research development & extension priorities Implemented

Extend Rural Research & Development for Profit programme Implemented

Improve efficiency of research & development corporations—governance Implemented

Annual Report 2016-17

Annual performance statements

Strategic objective: Building successful primaryindustries

Annual performance statements

Strategic objective: Building successful primaryindustries

Measure Status

Funding to RIRDC for research, development & extension for small industries, levies—tea tree oil and export fodder Implemented

Boost emergency pest and disease eradication Implemented

Manage established pest animals and weeds Ongoing

Accessing Premium Markets

Technical barriers to trade (new agricultural counsellors) Implemented

Strengthening Australia’s Biosecurity—surveillance, community-based action, scientific capability and information and analysis

Ongoing

Enhanced traceability systems Ongoing

Note: Measures from the Agricultural Competitiveness White Paper . A number of the measures are discussed within the 2016-17 annual performance statements.

Department of Agriculture and Water Resources 30

Strategic objective: Supporting agricultural communities

We provide targeted support and financial assistance to primary producers and rural small businesses. Some of these programs involve mutual obligations that encourage producers to adopt better-practice approaches to managing their businesses.

Other programs provide assistance and support to farm businesses during times of hardship, such as severe drought. In the longer term, these programs are designed to improve the ability of primary producers to manage risks and support their families and communities.

Australian farmers contribute approximately $64 billion to our nation’s economy. Supporting viable farm businesses to better manage through hardship, including drought, is firmly in the national interest.

We report achievements against this strategic objective in the context of the performance measures, targets and activities described in our 2016-17 corporate plan.1 This includes:

â¢ providing concessional loans to farm businesses affected by drought and retrospective price cuts of milk suppliers Murray Goulburn, Fonterra, and National Dairy Products in 2015-16, through agreements with state and territory governments

â¢ working with the Department of Human Services to provide the Farm Household Allowance â¢ delivering the Rural Financial Counselling Service program to support primary producers â¢ encouraging farmers to consider whether agricultural insurance is right for them.

We undertook additional activities as reported in the department’s 2016-17 corporate plan. These include:

â¢ continued work with states and territories on a national approach to drought assistance, including preparations for a review of the Intergovernmental Agreement on National Drought Program Reform, which is due to expire on 1 July 2018. Agriculture ministers have agreed to a terms of reference and a working group has been established, with all jurisdictions represented. It is expected that a report will be provided to ministers by early 2018

â¢ work with the Treasury, the Australian Prudential Regulation Authority and finance industry stakeholders to finalise parameters for the regular collection of robust data on farm debt levels and serviceability.

1 Department of Agriculture and Water Resources Corporate Plan 2016-17, pp. 17-18.

Objective: Provide targeted assistance to help primary producers, their families and communities manage adjustment pressures in hard times.

Annual Report 2016-17

Annual performance statements

Strategic objective: Supporting agricultural communities

Annual performance statements

Strategic objective: Supporting agricultural communities

Drought and rural assistance programs

Annual performance statement

TABLE 7 Performance measure—Financial and business assistance improves primary producers’ business and personal circ*mstances a

Target Result against performance measure

$388 million is made available to primary producers bc. Met: During 2016-17, the Australian Government made available over $389 million in financial and business assistance to

primaryproducers.

Less than 3% of drought-related concessional loans are in arrears greater than 90 days. Met: At 30 June 2017, there were no drought-related concessional loans in arrears greater than 90 days.

100% of current Farm Household Allowance recipients complete Farm Financial Assessments and Financial Improvement Agreements in the required timeframes d.

Met: In 2016-17, there were more than 1,400 Farm Household Allowance claims granted. For these claims there were no overdue Farm Financial Assessments or Financial Improvement Agreements for customers without an appropriate exemption granted. As at 30June 2017, more than 7,400 recipients had been granted assistance under the Farm Household Allowance.

a Performance measures and targets published in the Portfolio Budget Statements 2016-17, p. 35 and Department of Agriculture and Water Resources Corporate Plan 2016-17, pp. 17-18. b Based on funding made available by government for the drought concessional loans (ongoing), Rural Financial Counselling Service, Managing Farm Risk Programme and uptake of the Farm Household Allowance. c The Farm Household Allowance is an uncapped, demand-driven program. d The required timeframes for assessments and agreements are outlined in the Farm Household Support Act 2014 ; further guidance on extensions is contained in supporting instruments.

Farm Household Allowance The Farm Household Allowance provides eligible farmers and their partners experiencing financial hardship with assistance through planning and training for long-term financial improvements as well as income support for up to three years.

As at 30 June 2017, 7,472 recipients had been granted assistance under Farm Household Allowance since 1 July 2014.

The Farm Household Allowance program is demand driven. Expenditure includes direct payments made to recipients and the cost of waiving debts raised in previous financial years. Farm Household Allowance expended around $66 million in 2016-17 providing support to farmers and farmers’ partners.

During 2016-17, the government also made the following changes to improve the Farm Household Allowance program and its underpinning legislation:

â¢ In December 2016, the Farm Household Support (Non-farm Assets) Minister’s Rule 2016 was amended to clarify the treatment of water assets under the Farm Household Support Act 2014. The change exempted the first $1.1 million in the value of an applicant’s water assets from the non-farm assets limit. This followed feedback about certain asset classes not captured within the definition of farm assets, and was done as an interim measure pending amendments to the Act.

â¢ On 5 April 2017, amendments to the Act came into effect to improve the accessibility and efficiency of the Farm Household Allowance. The improvements included removing two mandatory waiting periods that applied under Social Security legislation to speed up payments to eligible applicants and more precisely defining farm assets used to assess eligibility. These improvements have enabled those experiencing hardship to receive payments at the earliest possible opportunity, to help them take the appropriate steps to improve their financial circ*mstances.

Department of Agriculture and Water Resources 32

â¢ In April 2017, the Farm Household Support (Non-farm Assets) Amendment Rule 2017 was executed to preserve the operation of the Act and the Farm Household Support (Non-farm Assets) Minister’s Rule 2016 prior to 5 April 2017.

As part of the Australian Government’s Dairy Support Package, we worked with the Department of Human Services to hold dairy industry roundtables in Victoria, to hear from affected farmers and their communities. Several participants who had accessed Farm Household Allowance told the roundtables the measure had been useful and beneficial.

In early 2017, we released the Victorian Dairy Roundtables Report which outlined key themes raised by stakeholders, and responses provided during the roundtable meetings or subsequently agreed between the department and the Department of Human Services. Most of the issues raised about the timeliness of accessing support have been addressed by the department and through Department of Human Services’ implementation of the FHA program.

Snapshot: Turmeric farmers reap the benefits of the Farm Household Allowance Three years ago, Heyden and Eleanor Lane were vegetable farmers in Nymboida, New South Wales, struggling through the area’s worst drought in recorded history. Now they are the largest organic turmeric producers in Australia.

Heyden has no doubt their turnaround is due in large part to the Farm Household Allowance, jointly delivered by the Department of Agriculture and Water Resources and the Department of Human Services.

‘It’s been brilliant’, Eleanor said. ‘It’s given us the opportunity to pour everything back into the farm and put food on the table’.

Both Heyden and Eleanor applied for the allowance and found the assistance worked well for them.

‘It’s been a good long-term solution’, Heyden said. ‘We’re going to bounce right out of this drought’.

‘We had 24millimetres of rain over a 17-month period, lost our entire mature ready-to-harvest crops and completely ran out of irrigation water. With very little money, we were faced with some hard decisions’.

The Farm Household Allowance gave Heyden and Eleanor time to assess their options. It also paid for consultants to advise them on their transition from mixed vegetable to organic turmeric farming, which is now paying dividends.

Their Farm Household Case Officer, Cath Curan, proved to be a valuable support.

‘Service was unbelievable’, Heyden said. ‘It’s been good to have someone to talk to and Cath’s been a big help’.

‘From on our knees, like we were, we’re going to come out of this the largest organic turmeric producer in Australia’.

Heyden and Eleanor sell their turmeric in a number of ways, including online. They are now looking at expanding operations to supply large supermarket chains in Australia and even to export into Asia, where turmeric is commonly used in cooking and health products.

Heyden predicts they will stop needing the allowance a few months before their three years are up.

‘Many farmers have come off the allowance voluntarily’, Cath said. ‘They’ll say they’re okay as it has helped them over the hump’.

Annual Report 2016-17

Annual performance statements

Strategic objective: Supporting agricultural communities

Annual performance statements

Strategic objective: Supporting agricultural communities

Concessional loans In 2015-16, the Drought Recovery and Dairy Recovery Concessional Loans schemes were extended to 31 October 2016 until the opening of the Farm Business Concessional Loans Scheme in 2016-17. We concluded negotiations with all states and territories, except Western Australia, on loan settings and arrangements for the Farm Business Concessional Loans Scheme, which opened for applications on 1 November 2016. As at 30 June 2017, 209 farm businesses were approved for loans worth $123.608 million under the 2016-17 Farm Business Concessional Loans Scheme, noting that applications under the scheme are still being assessed.

The Farm Business Concessional Loans Scheme provides up to $250 million annually (2016-17 and 2017-18). Eligible farm businesses are able to access two types of loans under the scheme—Drought Assistance Concessional Loans and Dairy Recovery Concessional Loans. Loan amounts are up to a maximum of $1 million in total with conditions applying. The maximum loan term is 10 years, with interest-only repayments for the first five years.

Dairy Recovery Concessional Loans were extended to Victorian dairy farm businesses affected by the National Dairy Products retrospective price reduction during 2016-17. These loans had previously been made available to commercially viable dairy farm businesses in Victoria, New South Wales, South Australia and Tasmania affected by the 2016 decisions of Murray Goulburn and Fonterra to reduce farm-gate milk prices retrospectively.

We extended the eligibility for the Farm Business Concessional Loans Scheme to eligible farmers who will have exhausted their full three-year entitlement to the Farm Household Allowance by 30 June 2018. These Business Improvement Concessional Loans will be for debt restructuring purposes and will be available in 2017-18.

Snapshot: Turmeric farmers reap the benefits of the Farm Household Allowance continued

Cath has also put Heyden and Eleanor in touch with a Rural Financial Counsellor to help them apply for a grant for future expansion. With a custom-designed turmeric harvester and big plans for the future, the family’s future looks bright and turmeric yellow.

Photograph: Turmeric crop in Nymboida, New South Wales.

Department of Agriculture and Water Resources 34

From 2018-19, the Regional Investment Corporation will be the national administrator for Commonwealth farm business concessional loans, and the National Water Infrastructure Loan Facility. Until the corporation is fully operational in July 2018, farm businesses will continue to apply for concessional loans under existing loans schemes through state delivery agencies.

Annual performance statement

TABLE 8 Performance measure—Primary producers use deposits and withdrawals under the Farm Management Deposits Scheme to manage their financial risks and income variations a

Target Result against performance measure

The number of primary producers using Farm Management Deposits is maintained or increased. Met: The total number of primary producers that used Farm Management Deposits increased during 2016-17

as shown by the number of active Farm Management Deposit accounts, which rose from 51,387 in June 2016 to 54,383 in June 2017.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 17-18.

Farm Management Deposits Farm Management Deposits assist primary producers to deal more effectively with fluctuations in cashflows. The scheme is designed to increase the self-reliance of Australian primary producers by helping them manage financial risk and meet business costs in low-income years by building up cash reserves.

On 1 July 2016, a number of changes to the scheme came into effect, including a doubling of the cap on deposits from $400,000 to $800,000, the re-establishment of an early access trigger during times of drought, and allowing Farm Management Deposits to be used to offset the interest costs of primary production business debt.

During 2016-17, the scheme reached its highest level of deposits since the program began in 1999. On 30 June 2017, $6.09 billion was held in primary producer accounts across multiple industries. Queensland and New South Wales also recorded strong increases of 32.4 per cent and 27.8 per cent, respectively. Industry-wise, there were significant increases in deposits for beef (35.4 per cent), sheep (27.9 per cent), grapes (27.4 per cent) and grain (20.4 per cent).

We worked with the Treasury to make consequential amendments to the scheme’s regulations, updating the information that banks must provide to primary producers that hold Farm Management Deposits. This completed improvements made under the Agricultural Competitiveness White Paper.

Communication activities were also undertaken to encourage more primary producers to participate in the Farm Management Deposit Scheme. Communication was targeted to primary producers, accountants, financial advisers and financial institutions, and included media advertising, fact sheets and direct mail-outs to relevant stakeholders.

The department, working with the Treasury and the Australian Prudential Regulation Authority (as the collection agency), in March 2017 released a consultation package calling for submissions regarding the annual collection of data on farm debt. It is anticipated that the annual publication of industry-level statistics on agricultural lending will allow stakeholders—such as governments, financial institutions, peak industry and farming organisations—to effectively discuss and debate the state of agricultural lending, as well as the nature and causes of debt stress and how measures provided by all parties can be best targeted to assist farmers.

Annual Report 2016-17

Annual performance statements

Strategic objective: Supporting agricultural communities

Annual performance statements

Strategic objective: Supporting agricultural communities

Annual performance statement

TABLE 9 Performance measure—Recipients of business and financial assistance report improved business management skills and increased confidence to make informed business decisions a

Target Result against performance measure

The number of farm businesses encouraged to seek a new insurance product increases. Met: During the year, 46 farm businesses applied to the Managing Farm Risk Programme. While this was an

increase from 2015-16, uptake of the rebates has not been as strong as originally expected. This may be due to a range of factors, including that farmers are able to seek insurance and claim a rebate at a time that is right for them at any point within the four-year program. Farmers could be monitoring the forecasts and choosing to seek insurance and apply for a rebate when they need to manage greater risk. There are two years remaining in the program.

80% of clients who used the Rural Financial Counselling Service report being more confident in making informed business decisions.

Partially met: This measurement was implemented when the grant funding round began on 1 April 2016. Providers have only had one opportunity to report on progress in that time (for the period April to September 2016). While anecdotal information from exit surveys shows that most clients report being more confident in making informed business decisions, there is not yet sufficient reporting to show the target has been met.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 17-18.

Managing Farm Risk Programme The Managing Farm Risk Programme provides rebates to farmers to help them prepare and apply for insurance that assists with the management of drought and other production risks. While the uptake has been slow, during 2016-17, around 80 per cent of applicants reported that the Programme that the availability of a rebate under the program encouraged them to apply for a new insurance. Those with insurance reported reduced stress levels, and easier access to secure finance.

In February 2017, the department used digital and print media to advertise the Managing Farm Risk Programme to coincide with the multi-peril crop insurance offering season. The department also engaged media outlets and journalists to increase awareness of the program.

We have commenced a routine review of the program to evaluate its effectiveness in meeting its objectives. This is the government’s first funding program to encourage consideration of the uptake of agricultural insurance. The program has underspent against its initial budget. During 2016-17, funding for the Managing Farm Risk Programme was adjusted from the $5,550,000 made available at the start of 2016-17. A total of $1,375,000 was reallocated for concessional loans funding, and $1,065,000 was redirected to the Rural Financial Counselling Service to help providers manage the expected high demand from farmers transitioning off the Farm Household Allowance.

Department of Agriculture and Water Resources 36

Annual performance statement

TABLE 10 Performance measure—Funding and grants programs are delivered according to requirements and have a positive end-of-program evaluation a

Target Result against performance measure

100% of Rural Financial Counselling Service providers meet requirements. Met: All providers met the requirements of their Deed of Grant and have received their milestone payments in

full. Reporting on end-of-program evaluation is expected in 2019-20.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 17-18.

Rural Financial Counselling Service The Rural Financial Counselling Service assists a range of clients who are experiencing or are at imminent risk of suffering financial hardship, by discussing their financial options and providing support to help them make the right decision for their families and businesses.

In 2016-17, there were 4,754 active Rural Financial Counselling Service clients. During the year, more than 2,100 clients stopped using the program. Approximately three-quarters of clients who left the service did so because their circ*mstances improved. Responses indicate the most common reasons for a client ceasing engagement with the program were because they improved the financial management of their business, increased their cashflow or improved their farming or business practices. Less than 7 per cent sold their property and left farming.

The Australian Government has allocated $72.03 million to the program over four years to June 2020. Providers are contracted from 1 April 2016 until 30 June 2019 and the government has an option to extend arrangements for a further 12 months if required.

Part of this funding includes $7.1 million to assist areas suffering from the effects of drought, and $1.6 million in 2016-17 to assist farmers (including those transitioning off support from the Farm Household Allowance) by giving them access to professional advice to work through their financial situation.

Annual Report 2016-17

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

2 Strategic objective: Expanding agricultural, fisheries and forestry exports

We handle the technical aspects of market access and negotiate with trading partners on arrangements to open, maintain and improve access. We also provide expert advice in negotiations to restore markets when trade is disrupted.

We work with the Department of Foreign Affairs and Trade to achieve the best outcomes for Australian agricultural, fisheries and forestry exports in bilateral and multilateral trade negotiations.

We provide export inspection and certification services for primary producer’s to ensure exporters meet the requirements of trading partners and maintain their access to international markets. We also manage quota arrangements for commodities (including dairy, meat and livestock) exported to the European Union, Japan and the United States.

Australia exports around 60 per cent of its farm, fish and forest products.

We report achievements against this strategic objective in the context of the performance measures, targets and activities described in our 2016-17 corporate plan.1 This includes:

â¢ implementing Australia’s free trade agreements and continuing to work towards new agreements with other trading partners â¢ delivering the Agricultural Competitiveness White Paper initiative—Agricultural Trade and Market Access Cooperation program â¢ developing new market access strategies at the country, region and commodity levels and â¢ reporting on export certification achievements as these are essential to export outcomes.

There are additional activities outlined in the 2016-17 corporate plan that are not addressed in the measures and targets. These are reported at the end of the chapter.

1 Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 21.

Objective 1: Maximise returns to primary producers from selling into exportmarkets.

Objective 2: Provide certification of exports to meet importing countryrequirements.

Department of Agriculture and Water Resources 38

Increased exports

Annual performance statement

TABLE 11 Performance measure—Trend in value of agricultural exports increases in real terms over time ab

Target Result against performance measure

The value of agricultural exports exceeds the average of the previous 10 years.

This target reports on rural exports (agriculture, fisheries and forestry).

Met: In 2016-17, rural exports were valued at $52.1billion, significantly higher than the 10-year average of $43.4 billion. This is slightly higher than the value of rural exports in 2015-16 ($49.4 billion), and still well above the 10-year average.

The value of agricultural exports to China, Japan and the Republic of Korea exceeds the 10-year average. Partially met: Total agricultural exports to China, Japan and the Republic of Korea in 2016-17 were valued at an

estimated $18.2 billion. The estimated results by country were as follows:

China—$10.1 billion, well above the 10-year average of $5.9 billion.

Japan—$4.7 billion, slightly lower than the 10-year average of $5.1 billion.

Korea—$3.4 billion, well above the 10-year average of $2.5 billion.

Overall, the value of exports to these three countries in 2016-17 increased by an estimated $3.2 billion, when compared with exports estimates reported in the 2015-16 performance statement.

a Ten-year average is based on ABARES and Australian Bureau of Statistics data and covers the period 2006-07 to 2015-16 and is reported in real (2016-17 constant dollar) terms. Matters outside the control of the department, which affect production and currency movements, also influence export volumes and value. b Performance measure and target published in the Portfolio Budget Statements 2016-17 , p. 37 and the Department of Agriculture and Water Resources Corporate Plan 2016-17, p.21.

Value of rural exports We work to facilitate trade and market access arrangements that contribute to export performance. This assists Australian primary producers pursuing opportunities to compete in international markets.

Australia’s export of rural resources remains positive, with significant and sustained increases in the value of exports in 2016-17. The value of rural exports was an estimated $52.1 billion. This is significantly higher than the 10-year, long-term average of $43.4 billion (Figure 8). This comprised agriculture exports of $47.3 billion, fisheries exports valued at $1.4 billion and forestry exports valued at $3.4 billion. The final estimates for exports will be made available online as part of the ABARES Agricultural commodities series.

Annual Report 2016-17

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

FIGURE 8 Value of rural exports in real terms (2016-17 constant dollar), 2006-07 to 2016-17

10-year prior average

Value of rural exports in real terms ($b)

2016 -17

2014 -15

2012 -13

2010 -11

2008 -09

2006 -07

Note: Australian Bureau of Statistics 2017, International trade, Australia, cat. no. 5465.0. The 10-year average is based on ABARES and Australian Bureau of Statistics data for the period 2006-07 to 2015-16. The value of 2016-17 exports is based on preliminary estimates only.

Total agricultural exports comprise cropping and livestock exports. Cropping exports, in both volume and value terms, fluctuate with seasonal conditions that affect production. Wheat remains the largest crop exported in value terms. Horticultural exports have grown in importance over the past 10 years. ABARES reports show increased exports over recent years.

While there will be year-on-year variation in export by value, there is a significant longer-term trend. This has been driven by a range of factors, including the changing diets of Asia’s middle class, depreciation of the Australian dollar, improved market access following the negotiation of several free trade agreements and the success and drive of Australia’s exporters. This also reflects our efforts to overcome technical barriers to trade, and the delivery of high-quality export certification. This is being pursued through bilateral and multilateral processes.

ABARES commodity forecasting and analysis provide up-to-date data on Australian and world markets for agricultural commodities.

Department of Agriculture and Water Resources 40

Snapshot: Raise a glass—China set to become Australia’s largest wine market China and Hong Kong have continued to grow in importance as markets for Australian wine exports. Exports to China increased by 55 per cent to $416 million in 2015-16, making it Australia’s second-largest wine market ahead of the United States. Exports to Hong Kong, Australia’s sixth-largest market, rose by 4 per cent to $142 million.

China was forecast to overtake the United States in 2016-17 as Australia’s largest wine exportmarket.

Exports to China and Hong Kong added a cumulative $2.8 billion to the value of Australian wine exports in the 10 years to 2015-16, reversing a downward trend in overall value that began in 2006-07.

The China-Australia Free Trade Agreement, which came into force in December 2015, will progressively reduce wine tariffs to zero by 1 January 2019. Thisis expected to further improve the competitiveness of Australian wine, particularly against French and American imports. Chinadoes not have a free trade agreement with either country.

FIGURE 9 Index of value of Australian wine exports and total value of exports, selected countries, 2006-07 to 2015-16

Index

2006-07 =100

United Kingdom

Total value of exports (right axis)

United States Hong Kong

China

2016-17 $m

500

1000

1500

2000

2500

3000

3500

4000

100

200

300

400

500

600

700

800

2015 -16

2013 -14

2011 -12

2009 -10

2007 -08

Source: ABARES

The value of Australian wine exports to China is forecast to increase by 40 per cent in 2016-17. Continued expansion of the Chinese middle class and the high-quality and value perceptions of Australian wine are expected to support exports over the medium term. However, growth is projected to slow from 2018-19 onwards as competition intensifies from other suppliers such as Argentina, Chile and South Africa.

Annual Report 2016-17

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

Exports to free trade agreement countries In 2016-17, China was Australia’s largest agricultural export market in value terms, followed by Japan, the United States and Indonesia. Australia has pursued free trade agreements with a number of countries. These provide:

â¢ better Australian access to important markets â¢ an improved competitive position for Australian exports â¢ more prospects for increased two-way investment â¢ reduced import costs for Australian businesses and consumers.

The Australian Government has implemented free trade agreements with the Republic of Korea, Japan and China. These agreements will reduce or eliminate import tariffs on many Australian agricultural exports over the next 20 years.

Based on the export information available, there has been an increase in exports to all three countries since 2013-14. ABARES estimates Australian agricultural exports to China in 2016-17 were worth $10.1 billion, exports to the Republic of Korea were worth $3.4 billion and exports to Japan worth $4.7 billion.

The value of exports to China and the Republic of Korea exceeded the 10-year average. Exports to Japan were below the 10-year average, but are now approaching the 10-year average (Figure 10).

FIGURE 10 Value of agricultural exports to China, Japan and the Republic of Korea in real terms (2016-17 constant dollar)

Korea 10-yr avg Korea

Japan 10-yr avg Japan

China 10-yr avg

China

2016 -17

2014 -15

2012 -13

2010 -11

2008 -09

2006 -07

Source: Australian Bureau of Statistics, 2017, International trade, Australia, cat NO. 5465.0. The 10-year average is based on ABARES and Australian Bureau of Statistics data for the period 2006-07 to 2015-16. The value of 2016-17 exports is based on preliminary estimates only.

Department of Agriculture and Water Resources 42

Building market access

Annual performance statement

TABLE 12 Performance measure—Access to overseas markets accepting Australian agricultural, fisheries and forestry exports is gained, maintained or improved a

Target Result against performance measure

Exports markets are gained, maintained or improved. Met: There were 52 market access achievements in 2016-17: â¢ improved access to 22 markets

â¢ new access to 19 markets

â¢ maintained access to six markets

â¢ restored access to five markets.

a Performance measure and target published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 21.

Building market access We play a key role in technical market access, negotiating with trading partners on arrangements to open, maintain and improve access for commodities, and providing expert advice in negotiations to restore markets when trade is disrupted.

We work with industry, state and territory governments and other Australian Government agencies, including through our overseas network, to address trade disruptions and maintain or restore market access.

We take a strategic view of our international approach, in keeping with our International Strategy 2016-19. Through the strategy we will be focusing on:

â¢ prioritising export and import technical market access requests in collaboration with industries, state and territory governments and trading partners â¢ negotiating science-based, commercially viable conditions for prioritised Australian exports â¢ proactively advocating acceptance by trading partners of Australia’s export inspection, verification

and certification systems â¢ continuing to reform the biosecurity system to maintain Australia’s favourable pest and disease status.

Restoring market access There were some disruptions to trade during 2016-17, which we are seeking to address with each destination country.

Horticulture to Indonesia

In 2016-17, the horticulture trade was impacted by Indonesia’s import licensing regime that set quotas, seasonal import permits and reference price systems. This has affected a range of horticultural export commodities, particularly Australian citrus exports. The United States (US) and New Zealand have taken Indonesia to the World Trade Organisation (WTO} dispute settlement body over their import licencing

Annual Report 2016-17

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

regime for horticultural (and animal products). The WTO Panel ruled in favour of the US and New Zealand. At the time of writing, Indonesia has appealed the ruling. The department continues to advocate for removal of horticulture trade restrictions through bilateral forums and in Ministerial and senior officials’ level meetings.

Meat exports to the United Arab Emirates

In February 2017, the United Arab Emirates (UAE) introduced new standards for accreditation of halal certification bodies. Following the implementation of these standards, the department was advised that the number of bodies approved to provide halal certification for meat exported to the UAE had been reduced from eight to three. We continue to pursue the UAE government to clarify the process for listing certifying bodies for exports.

Plant commodities to Myanmar

In February 2017, Myanmar requested pest lists from all trading partners to establish import conditions for plant commodities currently traded. To ensure our markets are maintained we provided submissions by the requested deadline of 31 March 2017, and at the time of writing was waiting for a response from Myanmar. Trade continues for all commodities currently traded in the interim, excluding seed potatoes and wheat for sowing.

Melons to New Zealand

Australia’s export of melons to New Zealand was temporarily suspended in early 2017. In response we conducted audits and provided information about Australian melon production systems to the New Zealand government. New Zealand restored market access for Australian melons in June 2017.

Annual performance statement

TABLE 13 Performance measure—Positive industry feedback is received on agreed market access priorities and resolution of market access problems a

Target Result against performance measure

Positive market research results. Met: The majority of stakeholders indicated the department’s market access activities had opened up new opportunities that had increased export volumes or had flow-on effects to other commodities. It was noted that work by the department is helping raise the profile of lesser-known commodities in markets such as China and Japan.

Stakeholders noted the department went about its market access activities in a professional manner, was willing to listen and consider other points of view, and priorities for market access were based on sound research. There were comments suggesting that transparency about market negotiations and setting realistic timeframes could improve.

Major industry associations reported their relationship with us was strong, with regular contact occurring. Smaller associations had less contact with us and were looking to improve engagement.

a Performance measure and target published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 21.

Department of Agriculture and Water Resources 44

Evaluating our market access activities During 2016-17, we undertook market research on stakeholder feedback on our market access work.

Major industry associations reported that their relationship with us was strong, with regular contact occurring. Smaller associations had less contact with us and were critical about how market priorities were set, believing their priorities received less attention than the major industry associations.

Communicating market access activities by email was seen as an effective method of delivering information to a wide audience. Industry associations also played a critical role in delivering the department’s information to their members. Online information was seen as an area for improvement, including the possibility of a central area for stakeholders to lodge their interest in certain topics and developing a summary of all our activities.

Key issues we should address in resolving market access were identified as:

â¢ improving our timeliness â¢ building our industry knowledge â¢ setting market access priorities.

Stakeholders said we went about our activities in a professional manner and based market access priorities on sound research. However, they identified a need to expedite matters relating to goods held up in transit or stranded at ports.

Stakeholders believed the quality of Australian agricultural products and biosecurity measures placed us in a very strong position to negotiate more favourable market access outcomes for producers. The majority of stakeholders interviewed suggested our market access activities had opened new opportunities, which had contributed to increased export volumes and/or flow-on effects to other commodities.

Annual Report 2016-17

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

International engagement

Annual performance statement

TABLE 14 Performance measure—International policy and standards supporting Australian agricultural, fisheries and forestry exports are maintained or improved a

Target Result against performance measure

The department influences the work of international standard-setting bodies, including the Codex Alimentarius Commission, International Plant Protection Convention (IPPC) and World Organisation for Animal Health (OIE).

Met: There was progress in relation to the following matters:

Australia participated in 12 Codex committees during the year. Australia influenced and contributed to the development of many standards, more than 50 of which are being forwarded to the Codex Alimentarius Commission for adoption. Australia also hosted the 23rd session of the Codex Committee on Food Import and Export Inspection and Certification Systems, which finalised the draft Principles and Guidelines for Monitoring the Performance of National Food Control Systems, as well as agreeing to seek approval from the commission for three new pieces of work.

Australia influenced and contributed to the review, development and adoption of several IPPC standards. Australia hosted an expert group that drafted the international grains standard and actively supported the development and adoption of cold treatment standards for fruit fly in citrus that are used by Australian horticultural exporters. Australia currently chairs the Commission on Phytosanitary Measures and its executive bureau (the governance body of the IPPC). The chair has used this position to drive key global plant health issues such as the association of pests with the movement of sea containers, harmonising approaches to detect and respond to plant pests moving through e-commerce, and the establishment of a committee to oversee plant health capacity development and the implementation of standards.

Australia influenced and contributed to the review and development of several OIE standards in 2016-17. New procedures have also been introduced for the official recognition of disease status by the OIE.

Feedback from the United Nations Food and Agriculture Organization (FAO) and the OECD confirms Australia’s participation demonstrates leadership and influences effective change.

Met: We play a constructive and active role in a host of multilateral forums. During the year the Minister for Agriculture and Water Resources attended the United Nations Food and Agriculture Organization (FAO) conference in Rome. Australia participates in relevant regional bodies. Our participation in these bodies involves multiple agencies. We are a significant financial contributor to FAO.

a Performance measure and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 21.

Department of Agriculture and Water Resources 46

TABLE 15 Performance measure—Australia’s international agricultural relationships are upheld a

Target Result against performance measure

100% of all portfolio statutory reporting obligations under international agreements are met.

Met: Australia met its reporting obligations as a member of the Codex Alimentarius Commission, the International Plant Protection Convention and the World Organisation for Animal Health. We are active participants in developing initiatives and meeting Australia’sobligations.

100% of membership funds to international organisations are paid in accordance with Australia’s international obligations and statutory requirements.

Met: Australia contributed $13.491 million to the United Nations Food and Agriculture Organization in 2016-17. Australian also contributed $263,187 to OIE.

The department actively participates in bilateral and multilateral negotiations, meetings and high-level visits to pursue and promote Australia’s international tradeobjectives.

Met: As evidenced by the results against other performance targets, the department has played a role in bilateral and multilateral negotiations and held a range of meetings. We pursued key issues through our international network of counsellors. We responded to the trade issues, and in keeping with our International Strategy 2016-19 , we:

â¢ prioritised export and import technical market access requests in collaboration with industries, state and territory governments and trading partners

â¢ negotiate science-based, commercially viable conditions for prioritised Australian exports

â¢ proactively advocate acceptance by trading partners of Australia’s export inspection, verification and certificationsystems.

a Performance measure and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 21.

Setting international standards We participate in a range of multilateral forums, where we seek to influence the work and strategic priorities of international standards setting bodies. In keeping with our strategic objectives, we participate in key international and regional forums addressing trade, standards and rule setting. Where there are significant benefits to Australia and portfolio stakeholders, we will seek a leadership role.

Contributing to the development of international standards and rules reduces unnecessarily restrictive and sometimes costly requirements on market access and affords Australia the opportunity to implement biosecurity policies that adequately protect our favourable pest and disease status. We ensure international standards are based on science through our work on the World Trade Organization Sanitary and Phytosanitary Committee and on international standard-setting bodies such as the Codex Alimentarius Commission, the International Plant Protection Convention and the World Organisation for Animal Health.

Representing Australia’s interests We use our lead role in many international commodity organisations, including those representing the grains, cotton, sugar and wine industries, to promote improved market transparency and determine the least trade-restrictive international standards for product labelling, safety and marketing.

We facilitate bilateral meetings and workshops to discuss trade-related matters and to strengthen relationships with trading partners and coordinate study tours, visits and audits to progress new market access or maintain existing trade.

Annual Report 2016-17

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

During the year, there were four high-level overseas visits by portfolio ministers. The Deputy Prime Minister represented Australia at the G20 Agriculture Ministers meeting in Berlin. Portfolio ministers also represented Australia’s agricultural interests overseas with visits to China, Indonesia and the Solomon Islands.

Export certification

Annual performance statement

TABLE 16 Performance measure—Export certification meets importing country requirements a

Target Result against performance measure

Less than 1% of consignments are rejected as a result of export certification failure b.

Met: There were no consignments rejected because of a failure to meet export certification requirements.

No markets are lost as a consequence of failed departmental certification services. Not met: There was one instance of a market suspension, with live horse exports to the United Arab Emirates suspended for five months.

Less than 5% of quota allocations are rejected because of quota certificationfailures.

Met: All quotas were allocated in accordance with relevant legislation. No quota allocations were rejected.

a Performance measure and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 21. b Target published in the Portfolio Budget Statements 2016-17 , p. 46.

Certifying exports We certify the compliance of exported goods to meet importing country food safety and animal and plant health requirements. In 2016-17, we issued more than 347,207 export certificates and 50,900 manual certificates and managed the export of more than 2,700,000 animals (Table 17).

TABLE 17 Compliance certification of export commodities by number processed, 2013-14 to 2016-17 a

Item 2016-17 2015-16 2014-15 2013-14

Export certificates for dairy 35,993 36,507 31,744 31,595

Export certificates for eggs 431 453 408 266

Export certificates for fish 25,049 24,604 22,738 22,545

Export certificates for grains and horticulture produce 99,351 81,675 68,325 63,083

Export certificates for meat by-products 7,795 7,256 9,164 6,167

Export certificates for meat for human consumption 158,368 225,669 174,706 156,057

Export certificates for skins and hides 8,095 8,414 9,760 9,741

Export certificates for wool 12,125 10,809 12,044 10,928

Exports of cats 3,658 3,400 3,726 3,209

Department of Agriculture and Water Resources 48

Item 2016-17 2015-16 2014-15 2013-14

Exports of dogs 8,470 8,658 8,299 7,637

Exports of live cattle 909,065 1,244,396 1,356,162 1,141,229

Exports of live goats 29,208 80,144 88,897 79,691

Exports of live sheep 1,826,240 1,944,802 2,135,550 1,953,058

a Includes electronic and manually generated certificates.

As part of Agricultural Competitiveness White Paper initiatives, we are designing a streamlined traceability system to support market access for agricultural exports. The new system will modernise current electronic documentation and establishment register databases, increase our reporting capacity to assist decision-making, introduce interactive workflow processes and capture and report on incident management. The traceability system is on track to be built by July 2018 and the project is expected to be implemented by July 2019.

The introduction of inspections by external plant authorised officers is supporting a more effective and timely system that continues to deliver high-quality product to export markets. As at 30 June 2017, we had 1,174 industry-based authorised officers performing export inspections, with another 1,085 applications being processed.

Horses to the United Arab Emirates In August 2016, the United Arab Emirates banned the import of Australian horses and their transit through the UAE, following inspections of a consignment of 39 horses from Australia. At the time of import, several horses were obviously unwell and during their post-entry quarantine period, 37 tested positive for strangles disease.

With the support of our Dubai counsellor, we conducted a thorough investigation and advised the UAE Government of the outcome on 17 October 2016.

A new health certificate was successfully negotiated, and new testing arrangements for strangles disease were agreed in January 2017. We developed new standard operating procedures for pre-export quarantine premises, in consultation with regional veterinarians and industry.

Export of horses to the United Arab Emirates is underway and Australian horses are able to again transit through Dubai to European countries and attend the Dubai World Cup, the world’s most lucrative event on the racing calender.

Annual Report 2016-17

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

Annual performance statements

Strategic objective: Expanding agricultural, fisheries and forestry exports

Snapshot: Greater efficiency in certification for livestock exporters In 2016-17, we successfully implemented approved arrangements for livestock exporters, with 100per cent of consignments now exported under the risk-based framework. Approved arrangements have reduced administrative duplication, improved timeframes for consignment approval and allowed compliant exporters to operate with less intervention.

Following approval of each arrangement, we monitor the performance and obligations of approved arrangement holders through a combination of scheduled and targeted inspections and audits. By supporting exporters through this implementation and providing regular feedback on performance, 98 per cent of consignments in 2016-17 were assessed as compliant.

For those consignments assessed as non-compliant, sanctions have been applied including corrective action requests, increased inspection rates and additional audits.

Approved arrangements provide an opportunity for exporters to reduce their costs, while continuing to manage animal health and welfare risks. Since implementation, the cost of certification to exporters has reduced by an average of 45 per cent, contributing to the sustainability of the industry whilst improving the efficiency and capability of livestock export regulatory systems.

Additional activities

Priority projects under the Agricultural Trade and Market Access Cooperation program The Agricultural Trade and Market Access Cooperation (ATMAC) program offers grants for projects to promote cooperation in accessing international markets. Total grant funding of $3.1 million (GST exclusive) has been made available over four years from 1 July 2015 to 30 June 2019. Funding of $1.65 million was made available in 2016-17.

Reviewing the quota administration system We are completing regulation impact statement (RIS) on the management of our export quotas. The RIS examines the effectiveness and efficiency of the existing tariff rate quota (TRQ) administration. It identifies areas where TRQ management can be improved.

Following the completion of consultation in August 2017, we will prepare recommendations for a final RIS.

Department of Agriculture and Water Resources 50

Rolling out projects to help small exporters improve market access We administer the Package Assisting Small Exporters, which provides up to $15 million over four years to support activities by small exporters to improve market access. The program comprises three components:

â¢ a rebate for eligible export-registered establishments in the meat, dairy, fish, eggs, horticulture and grain sectors (no longer available) â¢ a fees and charges review (now complete) â¢ funding for projects that support market access.

The program is due to conclude on 30 June 2018.

Trialling an electronic system for export certification Approximately 50 per cent of our export meat certificates are issued electronically directly to authorities in importing countries. We are continuing efforts to extend paperless certification, which will help improve clearance processes for exports.

In 2016-17, we conducted trials with countries including Indonesia, Malaysia, New Zealand and Thailand, and the European Union. These trials enable countries to gain a better understanding of the technology requirements, align their certificate data and information and assess the potential impact on their clearance activities.

Implementing the recommendations of the plant and meat export cost-recovery reviews We worked with industry consultative committees through our Cost Recovery Taskforce to undertake

the fees and charges review, which was completed in 2015. Implementation is ongoing.

Snapshot: Live animal exports— Noah’s Ark While the live export of cattle and sheep is important, the majority of export consignments of live animals are for companion animals and other species, including horses, birds and bees, aquatics, corals and invertebrates.

The largest number of consignments each year are dogs and cats travelling with their owners to new homes in more than 30 countries. In addition to the 12,000 companion animals that departed our shores in 2016-17, we exported almost 15,000 bees and more than 2,000 horses for breeding and sports purposes.

The oldest animals exported were two 50-year-old Australian saltwater crocodiles from Rockhampton to Turkey. The male and female crocodiles—five and three metres long, respectively—were exported via Brisbane and Singapore to their final home at an underwater zoo in Istanbul. Our officers worked with Turkish counterparts to make this unusual export happened as smoothly as possible, ensuring all importing requirements were in order and that the welfare of the animals was maintained during the voyage.

Live animal export also extends to animal reproductive material, including embryos, eggs, ova and sem*n—anything from which a complete live animal can be produced. In 2016-17, more than 375,000 embryos and batches of sem*n left Australia in 239consignments.

Annual Report 2016-17

Annual performance statements

Strategic objective: Sustaining natural resources for longer-term productive primary industries

Annual performance statements

Strategic objective: Sustaining natural resources for longer-term productive primary industries

Strategic objective: Sustaining natural resources

for longer-term productive primary industries

We administer programs to promote the adoption of land-use management practices that sustain and improve Australia’s soils, waters and vegetation, support agricultural production, and strengthen the capacity of farmers and communities to respond and adapt to changes in weather, climate and markets. We work with other agencies, industry and stakeholders to support national approaches to natural resource management.

We support the ecologically sustainable management of Australia’s forests through regional forest agreements and are responsible for measures to combat illegal logging and its associated trade. We also represent Australia’s interests overseas to promote sustainable forest management.

We work with the Australian Fisheries Management Authority (AFMA) on managing Commonwealth fisheries, and with the state and territory agencies on national approaches to the sustainable management of the fishing industry.

Our work strengthens Australia’s primary industries and the sustainable management of natural resources.

We report achievements against this strategic objective in the context of the performance measures, targets and activities described in our 2016-17 corporate plan.1 This includes:

â¢ providing analysis and advice to build the capability of farmers, fishers and foresters to productively and sustainably manage Australia’s natural resources â¢ working with the Department of the Environment and Energy to administer the National Landcare Program and design future natural resource management programs â¢ administering the natural resource management and related grants programs

We also report on activities that are improving the resource base for the agriculture, fisheries and forestry sectors.

There are additional activities outlined in the 2016-17 corporate plan that are not addressed in the measures and targets. These are reported at the end of the chapter.

1 Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 23.

Objective: Promote stewardship of agricultural land, forests and fisheries to maintain the quality of natural resources, including in times of drought.

Department of Agriculture and Water Resources 52

Improving the resource base

Annual performance statement

TABLE 18 Performance measure—The status of the resource base is maintained or improved a

Target Result against performance measure

The percentage of fish stocks solely managed by the Commonwealth that are not overfished was maintained or increased in the previous year b.

Met: In 2015, 72% of fish stocks solely managed by the Commonwealth were classified as not overfished. In 2014, 71% were classified as not overfished. There are policies in place to improve sustainability of fishing and to improve the information supporting assessment of fisheries impacts.

100% of active Commonwealth fisheries maintain approval under Part 13A of the Environment Protection and Biodiversity Conservation Act 1999 .

Met: All fisheries managed solely by the Commonwealth were operating with approval under Part 13A of the Act.

Ground cover is maintained or increased in the reporting year compared with the 10-year average c.

Not available: Regular ground cover monitoring and reporting is expected to begin in 2018. This is a new measure yet to be fullyimplemented.

a Performance measure and targets published in the Portfolio Budget Statements 2016-17 , p. 38, and Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 23. b Status is assessed retrospectively for the previous year. c The methodology for assessing the status of the resource base using remote sensing is under development.

Managing the resource base

Fisheries

We work with AFMA in managing Australia’s Commonwealth fisheries and engage state and territory agencies on national approaches to sustainable management of the fishing industry. We represent Australia’s interests overseas to promote responsible fishing practices and combat illegal, unreported and unregulated fishing, and we report on the status of fisheries resources on the high seas.

In its 2016 Fishery status reports, ABARES reported on the status of fish stocks in fisheries solely and jointly managed by the Commonwealth. The total number of fish stocks in fisheries solely managed by the Commonwealth increased from 47 in 2004 to 65 in 2015 (Figure 11).

Annual Report 2016-17

Annual performance statements

Strategic objective: Sustaining natural resources for longer-term productive primary industries

Annual performance statements

Strategic objective: Sustaining natural resources for longer-term productive primary industries

FIGURE 11 Biomass assessment for Australian managed fish stocks

Over*shed Uncertain

Not over*shed

2015 2013 2011 2009 2007 2005

Source: Patterson, H, Noriega, R, Georgeson, L, Stobutzki, I & Curtotti, R 2016, Fishery status reports 2016 , ABARES, Canberra

Since 2004, the number of fish stocks assessed as ‘uncertain if overfished’ decreased from 28 to 11. The number of stocks assessed as ‘overfished’ also decreased slightly. These results reflect efforts over the past 10 years to control fishing efforts and ensure harvest levels are sustainable.

The assessment of whether a fish stock is ‘overfished’ is based on the estimated biomass of a stock. An assessment of ‘subject to overfishing’ is based on the level of harvest. During 2015, no fish stocks in fisheries solely managed by the Commonwealth were classified as subject to overfishing. Assessments of these figures do not include fisheries jointly managed with the states, territories and other countries.

The Fishery status reports offer an independent assessment of the biological and economic status of the key commercial fish stocks managed by the Australian Government.

Although management of Australian fisheries is the responsibility of the relevant state, territory or Commonwealth fisheries management agency, the Environment Protection and Biodiversity Conservation Act 1999 also plays an important role in ensuring the ecological sustainability of Australia’s fisheries. In 2016-17, all active fisheries managed solely by the Commonwealth were operating with approval under Part 13A of the Act. In addition, these approvals are informed by assessments undertaken by the Department of the Environment and Energy against the Guidelines for the ecologically sustainable management of fisheries.2

During 2016-17, we worked with AFMA to identify potential amendments to the Fisheries Management Act 1991 to strengthen enforcement powers and provide greater disincentives for illegal, unreported and unregulated fishing. The proposed amendments received support from relevant Australian Government agencies, and work is under way to amend the legislation.

We also work across the region to improve international fisheries management. For example, we represent Australia in the Regional Plan of Action to Promote Responsible Fishing Practices, and we support AFMA in capacity-building in the region. We are also involved in setting harvest limits in the western and central Pacific.

In May 2017, the Australian Government responded to the Productivity Commission’s inquiry into the regulation of the Australian marine fisheries and aquaculture sectors. The report identifies a number of opportunities to increase productivity and reduce regulatory burden. The Government will work with state and territory governments to develop a cross jurisdictional strategy to progress the report’s recommendations.

2 2007, Guidelines for the ecologically sustainable management of fisheries , Department of the Environment and Water Resources, 2nd edition.

Department of Agriculture and Water Resources 54

Work is already being undertaken in these areas as part of our efforts to implement a number of Agricultural Competitiveness White Paper initiatives to reduce red tape in the fishing industry. This includes:

â¢ shifting to single jurisdiction fisheries management â¢ devolving aquaculture management to the states and territories â¢ sharing licensing and compliance services â¢ extending export approvals to 10 years for low-risk fisheries.

Snapshot: Fishery status reports The Fishery status reports offer an independent assessment of the biological and economic status of the key commercial fish stocks managed by the Australian Government. The reports provide a review of fisheries management effectiveness and flag potential problems or uncertainty emerging in the status of fish stocks so that they may be addressed.

For the biological status, the reports assess if fish stocks are overfished and if they are subject to overfishing. The former category reflects the biomass of the stock, while the latter is based on the level of harvest.

The 2016 reports found that of the 93 fish stocks managed solely by the Australian Government, 66 stocks (or 71 per cent) were both not overfished and not subject to overfishing. The reports also showed that, for the third consecutive year, no stocks managed solely by the Australian Government were classified as subject to overfishing.

The evaluation of economic status in the reports assesses each fishery’s performance against the economic objective of the Fisheries Management Act 1991 to maximise net economic returns to the Australian community within the constraints of ecologically sustainable development.

Photo source: Lee Georgeson ABARES.

Annual Report 2016-17

Annual performance statements

Strategic objective: Sustaining natural resources for longer-term productive primary industries

Annual performance statements

Strategic objective: Sustaining natural resources for longer-term productive primary industries

Agriculture

Ground cover information is critical for land management and the assessment of soil condition in Australia. We are developing systems for reporting on ground cover in agriculture, using remote sensing technologies. Increased ground cover is associated with protection of our soil resources and reduced loss of soil arising from wind and water erosion.

Regular ground cover monitoring and reporting is expected to begin in 2018. It will be used as an indicator of soil and vegetation conditions to monitor the performance of the new National Landcare Program commencing in July 2018. We have also worked closely with agencies such as CSIRO to provide an improved set of ground cover information products to support land managers.

We are coordinating ongoing mapping programs with state and territory agencies. This has wide application and broadens the opportunities to address strategic needs. For example, land-use mapping is being used for activities to improve biosecurity outcomes, for natural resource management and in response to emergencies.

Snapshot: Sustainable harvest strategies for international fisheries In 2016-17, we successfully led Australia’s efforts to negotiate important measures towards sustainable harvest strategies in the Pacific and Indian oceans.

The Western and Central Pacific Fisheries Commission, representing 26 countries, adopted binding measures on harvest strategies. The Indian Ocean Tuna Commission, with 31 member countries, agreed to a work plan to develop its harvest strategies.

Formalising harvest strategies will help tuna fisheries in our region to continue supporting economic development and food security.

The strategies are also important to Australia’s domestic fisheries industry, ensuring that stocks are fished responsibly by other countries and subjecting international fleets to the same high standard of management as fishers here in Australia.

These steps towards regional sustainable fisheries will ensure the profitability and competitiveness of Australia’s fishing industry into the future.

Department of Agriculture and Water Resources 56

Snapshot: Situational awareness for biosecurity—new developments in land-use mapping Each year, ABARES releases a compilation of updated land-use mapping. This includes ‘catchment-scale’ mapping, compiled in collaboration with the state and territory partners of the Australian Collaborative Land Use and Management Program (ACLUMP).

Funding from the National Landcare Program has enabled ACLUMP to map horticultural crops and intensive animal industries and their facilities for management of biosecurity risks. In 2015, this included mapping banana plantations following an outbreak of Panama disease tropical race 4.

As part of a Rural Research and Development for Profit project with Horticulture Innovation Australia Limited, ACLUMP has developed national maps of mango, avocado and macadamia plantations. This has been assisted by the development of a land use survey app by the Queensland Department of Science, Information Technology and Innovation (QDSITI). Users record the location and attach a photograph that is used to validate the desktop map. Industry users are also encouraged to review the draft map using an interactive web map produced by QDSITI.

The data was used to assess the impact of Tropical Cyclone Debbie in March 2017 on agriculture, including horticultural tree crops around the Mackay area of the north Queensland coast. Mapping is supported by high-resolution satellite imagery and validation points to ensure reliability.

Satellite imagery used as a base map for land use mapping of horticultural tree crops

Field validation points collected with the land use survey app Source: Queensland Department of Science, Information Technology and Innovation

Annual Report 2016-17

Annual performance statements

Strategic objective: Sustaining natural resources for longer-term productive primary industries

Annual performance statements

Strategic objective: Sustaining natural resources for longer-term productive primary industries

Forestry

We work with the other jurisdictions to maintain the forest resource base. This work includes reviewing regional forest agreements, implementing illegal logging laws, including consideration of reforms, and international engagement.

RFAs are 20-year plans for the conservation and sustainable management of Australia’s native forests. There are 10 RFAs in four States: Western Australia, Victoria, Tasmania and New South Wales. The agreements provide certainty for forest-based industries, forest-dependent communities and conservation. On 20 January 2017, the Australian and Victorian governments extended the East Gippsland RFA by 13 months, to 27 March 2018. This extension will allow the governments to consider the outcomes from the third five-yearly review of Victoria’s RFAs which is expected to be completed early in 2018. The Australian Government is working closely with all the RFA states to complete their five-yearly reviews and 20-year rolling extensions. The Tasmanian RFA is expected to be extended by 20 years early in the 2017/18 financial year.

The report Reforming Australia’s illegal logging regulations—consultation regulation impact statement3 was published in November 2016, seeking feedback on options for reducing the regulatory burden on Australian businesses. The results of this consultation will inform recommendations to the government on the operation of Australia’s illegal logging laws.

The Forest Industry Advisory Council, an advisory body to the Australian Government, released a report on transforming Australia’s forest industry. The report outlines a vision to transition the forest industry to a bio-economy and includes a goal of tripling the economic value of the industry by 2050. We are already delivering against a number of the recommendations and developing an implementation plan.

The National Institute for Forest Products Innovation was a government election commitment that allocated $4 million towards the establishment of the institute, with hubs in Launceston, Tasmania, and Mount Gambier, South Australia. The institute will investigate innovation in areas such as forest management, timber processing, wood fibre recovery, advanced manufacturing and the bio-economy.

Matching funding has been confirmed by the South Australian and Tasmanian governments and we will be seeking industry contributions at the project level.

Unplanned bushfires have a significant impact on forests, in particular the availability of habitat for wildlife and timber for the forestry industry. We provided funding for mechanical fuel load reduction trials, which are currently investigating whether there are operational and economic advantages in the mechanical removal of fuel loads compared with, or as well as, prescribed or planned burning.

International engagement

Australia’s international forestry engagement supports market access for Australian forest products and promotes an open dialogue with key strategic policy and trading partners.

In 2016-17, we actively participated in a variety of international forestry forums, including the United Nations Forum on Forests, the MontrÃ©al Process Working Group on Criteria and Indicators, the Food and Agriculture Organization of the United Nations Committee on Forestry, the Asia-Pacific Economic Cooperation Experts Group on Illegal Logging and Associated Trade, and the International Tropical Timber Organization.

Attendance at these meetings furthers Australia’s international profile as a producer of sustainable legal timber and timber products, while encouraging the trade in legally harvested timber and improving market access. Australia has ongoing formal bilateral relationships on forestry with the People’s Republic of China, Indonesia, the Republic of Korea, Malaysia, New Zealand and Papua New Guinea.

3 2016, Reforming Australia’s illegal logging regulations: consultation regulation impact statement, Department of Agriculture and Water Resources, Canberra, November.

Department of Agriculture and Water Resources 58

Building the capability of farmers, fishers and foresters

Annual performance statement

TABLE 19 Performance measure—Positive industry feedback on the applicability and usability of better practice information that the department provides a

Target Result against performance measure

Positive market research results Met: We work with and through regional delivery and other

organisations to deliver information. Stakeholders recognised this has been beneficial in fast-tracking the uptake of sustainable land management practices and improving productivity.

a Performance measure and target published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 23.

Evaluating our capability-building activities We undertook market research in 2016-17 to engage our stakeholders on the applicability and useability of better practice information for natural resource management. Stakeholders supported our ongoing focus on providing funding to extension groups, regional organisations, industry associations and Landcare facilitators to deliver natural resource management education.

The research indicated activities under the National Landcare Program, including the Regional Funding Program, Sustainable Agricultural Small Grants and the Reef 2050 Plan, are delivering benefits for farmers in fast-tracking the uptake of practices and improving productivity. Interviewees noted that there is scope for us to increase awareness of our activities in this area to include natural resource management information and programs and to play a more direct role in some areas. This research will inform the implementation of new programs.

Effective program delivery

Annual performance statement

TABLE 20 Performance measure—Funding and grants programs are delivered according to requirements and have positive program evaluations a

Target Result against performance measure

100% of the sustainable agriculture outcomes of the National Landcare Program are delivered in accordance with grant guidelines and financial reporting arrangements.

Met: All outcomes of the National Landcare Program were delivered in accordance with grant guidelines and financial reporting arrangements.

More than 70% of evaluations under the sustainable agriculture components of the National Landcare Program are positive.

Met: Assessment of project documentation provided by grantees is routinely undertaken. The projects show positive outcomes. In May 2017 we undertook a formal evaluation of the entire program over the period from 2013-2017. The evaluation shows positive outcomes, and the results have informed successor programs.

a Performance measure and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 23

Annual Report 2016-17

Annual performance statements

Strategic objective: Sustaining natural resources for longer-term productive primary industries

Annual performance statements

Strategic objective: Sustaining natural resources for longer-term productive primary industries

Delivering the National Landcare Program The National Landcare Program is a key part of the Australian Government’s commitment to natural resource management. The government has invested $1 billion through the National Landcare Program from July 2014 to June 2018. A further $1.08 billion has been committed to continue the program to June 2023.

This includes continued commitment to Landcare networks, the 20 Million Trees program and regional delivery. This funding helps support local environmental and sustainable agriculture projects including implementing the Reef 2050 Plan and the new SMART Farm program, which encourages local delivery, innovation, partnerships and community capacity-building.

In 2016, we collaborated with the Department of the Environment and Energy to conduct a review of the National Landcare Program and its predecessors.4 The report found: â¢ investment has contributed to the increased adoption of better land management practices, leading to improved agricultural productivity, a ‘clean and green’ brand that assists access to markets, and

improved farm-gate returns â¢ investment in soil health has improved management of soil acidification, water and wind erosion and organic carbon depletion in many regions â¢ the programs have successfully removed pest animals and weeds that are major threats both to

agricultural productivity and threatened plants and animals, and developed and extended new control methods â¢ investment in natural resource management has created strong and interconnected local and regional networks and organisations that have integrated conservation, community, farming and

government interests â¢ farm-gate profits, productivity and market access have improved because of the delivery of the program, and the program has supported the development and adoption of new and innovative

farm practices and technologies â¢ expanding partnerships to include better connections with organisations such as industry bodies and research organisations would facilitate increased sharing of expertise and knowledge â¢ there is support for an increased focus on concepts like resilience and adaptive capacity â¢ the effectiveness and efficiency of direct small grants vary, but there remains strong support for

small grants that target issues of importance to the community.

Additional activites During 2016-17, we were also involved in additional activities that are not assessed against the performance measures and targets. This included continuing work on delivering Agricultural Competitiveness White Paper initiatives, including research and national plans to manage pest animals and weeds.

We reviewed the Australian Pest Animal Strategy, and the Weeds Strategy and developed new strategies for 2017-2027. We are continuing work to implement the Established Pest Animals and Weeds Measure, a $50 million investment over four years to 2018-19 to improve the tools, technologies, information and skills that farmers and their communities need to tackle pest animals and weeds.

This includes a project agreement for pest animal and weed management in drought-affected areas. The project will help increase the profitability of farmers by providing $25.8 million over four years to help the New South Wales, Queensland, Victorian, Western Australian and South Australian governments to reduce the impact of feral and pest animals and weeds in drought-stressed regions. In 2015-16, $15 million in government funding was provided to those states and a further $4 million was committed in 2016-17.

4 2017, The Report on the Review of the National Landcare Program , Commonwealth of Australia

Department of Agriculture and Water Resources 60

Snapshot: Electronic monitoring at work in Commonwealth fisheries In recent years, electronic monitoring technologies have replaced at-sea observers in the Commonwealth Eastern Tuna and Billfish Fishery, the Western Tuna and Billfish Fishery and the gillnet, hook and trap sector, with the aim of improving the quality of logbook reporting and compliance with regulations.

Electronic monitoring uses gear sensors and video cameras to automatically record fishing activities on a central computer. The footage is stored and can be independently reviewed and verified later onshore for both management and compliance purposes.

ABARES is exploring the impact of electronic monitoring on national logbook reporting and international data exchange obligations through the Western and Central Pacific Fisheries Commission. This will provide important insights and lessons on the effectiveness of electronic monitoring and its role in the improvement of fishery-dependant data.

ABARES is also collaborating with international partners to examine what data collection tools could be used in the absence of at-sea observers to meet scientific data requirements. This work will assist in the development of an electronic standard for the Western and Central Pacific FisheriesCommission.

Photo: Electronic monitoring equipment on a fishing vessel. Source: AFMA, 2017

Annual Report 2016-17

Annual performance statements

Strategic objective: Improving water use efficiency and the health of rivers, communities, environmental assets, and production systems

Annual performance statements

Strategic objective: Improving water use efficiency and the health of rivers, communities, environmental assets, and production systems

We provide advice to the Australian Government on how best to achieve social, economic and environmental benefits from the use of water resources.

We administer government programs and legislation that support this strategic objective, including the Water Act 2007, and programs implementing the Murray-Darling Basin Plan, the National Water Infrastructure Development Fund and the National Water Infrastructure Loan Facility.

We also support sustainable and productive management and use of rivers and water resources in partnership with other governments and water users.

We report achievements against this strategic objective in the context of the performance measures and targets described in our 2016-17 corporate plan.1 This includes:

â¢ administering programs and infrastructure projects to support the implementation of the Murray-Darling Basin Plan (Basin Plan) through water recovery and the sustainable diversion limit adjustment mechanism

â¢ delivering the National Water Infrastructure Loan Facility and the National Water Infrastructure Development Fund.

There are additional activities outlined in the 2016-17 corporate plan that are not addressed in the measures and targets. These are reported at the end of the chapter.

1 Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 25.

Objective 1: Improve the environmental health of the Murray-Darling Basin consistent with national and international obligations by recovering water, including by prioritising water-saving infrastructure projects.

Objective 2: Help communities, irrigators and businesses to use water resources sustainably and efficiently consistent with nationally agreed water reforms.

Department of Agriculture and Water Resources 62

Water recovery

Annual performance statement

TABLE 21 Performance measure—Water recovery continues in the Murray-Darling Basin, consistent with the Water Recovery Strategy a

Target Result against performance measure

Gap bridging water registered to the Commonwealth Environmental Water Holder (CEWH) is at least 1,695 gigalitres (GL) by 30 June 2017b.

Partially met: As at 30 June 2017, water entitlements with a long-term average annual yield (LTAAY) of 2,083.3 GL have been secured or agreed on in funding contracts towards ‘bridging the gap’ to the surface water sustainable diversion limits (SDLs) in the Basin Plan. Of this, 1,714.2 GL LTAAY is held by the CEWH. The registered recovery target for 2016-17 was reduced in the 2017-18 Portfolio budget statements from 1,768 GL as a result of the re-scoping of the Goulburn-Murray Water Connections Project, which delayed the transfer of water entitlements.

As at 30 June 2017, 2.7 GL LTAAY has been recovered towards ‘bridging the gap to the groundwater SDLs of 40.4 GL LTAAY and has been registered withthe CEWH.

a Performance measures and targets published in the Department of Agriculture and Water Resources Portfolio Budget Statements 2017-18, p. 58. b All water recovery figures are expressed in long-term average annual yield (LTAAY) terms. The current Commonwealth water recovery target is 2,044 GL LTAAY, being 2,750 GL (Murray-Darling Basin Plan) less 650 GL (target for supply measure offsets plus at least 106 GL of efficiency measures so as to be consistent with the 5 per cent SDL net adjustment limit), less 162 GL LTAAY state recoveries. These figures may change following the operation of the SDL adjustment mechanism and the outcome of the Northern Basin review in 2017.

We are responsible for implementing the Australian Government’s contribution to the Basin Plan. We work with other Australian Government agencies, Basin states and the Australian Capital Territory to provide long-term sustainable management of Murray-Darling Basin water resources for farmers, communities and the environment.

The Basin Plan sets sustainable diversion limits (SDLs) on the amount of water that can be taken out of the system for consumptive use. A reduction to these SDLs is achieved mainly through our water recovery programs, which involve investing in more efficient on- and off-farm irrigation infrastructure and strategic purchasing of water entitlements.

As at 30 June 2017, 2,083.3GL of surface water on average over the long term (LTAAY) had been contracted, with 1,714.2 registered with the Commonwealth Environmental Water Holder towards the current target of 2,750 gigalitres (GL). This target is expected to decrease as a result of the Northern Basin review, which has recommended a reduction in the target of 70 GL LTAAY subject to states implementing a range of ‘toolkit’ measures.

These measures include the protection of environmental flows and works to improve fish habitat and connectivity, and are designed to improve water management so that similar environmental outcomes can be achieved under the Basin Plan. Groundwater recoveries of 2.7 GL LTAAY have been achieved towards the groundwater target of 40.4 GL LTAAY.

This water is managed by environmental agencies including the Commonwealth Environmental Water Holder. The water is used to deliver environmental outcomes and to help protect and restore rivers, wetlands and floodplains in the Basin.

The government has prioritised investment in more efficient water infrastructure rather than the purchase of water entitlements, with more than $8 billion committed to infrastructure and water efficiency measures in the Murray-Darling Basin. This policy aims to minimise any adverse impact of water recovery as a result of the Basin Plan, as well as increasing the sustainability of irrigated agriculture across the Basin.

Annual Report 2016-17

Annual performance statements

Strategic objective: Improving water use efficiency and the health of rivers, communities, environmental assets, and production systems

Annual performance statements

Strategic objective: Improving water use efficiency and the health of rivers, communities, environmental assets, and production systems

More than 900 kilometres of irrigation network delivery channels across the Murray-Darling Basin are being modernised through refurbishing, automation, reconfiguration and replacing existing open channels with pipeline. Reduced system-level water losses are resulting in improved capacity to deliver the same amount of water to the farm gate while extracting less water from rivers. The benefits of Australian Government investment in more than 2,000 on-farm water efficiency projects are far-reaching, including greater flexibility in crop choice, increased yields and improved quality.

The Australian Government has now accredited the first Water Resource Plan (WRP) under the Murray-Darling Basin Plan, providing certainty for water users and communities in the Warrego- Paroo-Nebine area. The accreditation of the WRP is a significant milestone in the implementation of the Murray-Darling Basin Plan. It is the first of 36 WRPs required under the Basin Plan. WRPs give local communities and irrigators the certainty they need about water planning and sharing going forward, including annual limits and rules on the use of water for consumptive and environmental purposes.

Snapshot: On-Farm Irrigation Efficiency Program Reg and Kay Lehmann, who grow wine grapes in Renmark, South Australia, are seeing substantial water and labour savings after installing a modern watering system, funded under the Australian Government’s On-Farm Irrigation Efficiency Program (OFIEP).

OFIEP is a competitive grants program funding upgrades to improve efficiency and productivity of on-farm irrigation.

The Lehmanns replaced 21.5 hectares of old sprinklers with new pumps, filtration and irrigation equipment, an automated drip system and an EnviroSCAN soil moisture monitoring system. These initiatives saved around 48 megalitres (ML) of water—an average of 2.3 ML per hectare.

‘The old system was prone to blockages from ants, it watered unevenly and it required a lot of manual labour on checking and fixing’, Mr Lehmann said.

He estimates the old system took 200 hours of labour a year to maintain.

‘Much of this work was at unsociable times (weekends) and was always wet, as it involved driving up and down in sprinklers, which was not pleasant’, he said.

Now 15 hours of labour a year suffices, mostly related to filtration, flushing drip lines and occasionally fixing drip lines punctured by kangaroos.

The new system uses about 5.5 to 6.5 ML per hectare of water per year. The 22,000-litre tank collects and reuses backflush water, saving between 4 and 8 ML a year. The tank design prevents sediment from recirculating, with a valve to flush it out.

The new system cost $146,090—less than many new drip systems— because the main pipeline was already in place.

In addition to the economic benefits, the Lehmanns are also enjoying social and environmental benefits.

‘Given the labour savings, I now feel like I am semi-retired. With the old system, I would have needed to sell up as it was not sustainable. There are environmental benefits as well because my irrigation drains never run now’, MrLehmannsaid. Photo: Mr Reg Lehmann in his vineyard, Renmark, South Australia. Source: SAMDBNRM BoardCase Study reportprepared by RMCG,19 February 2016

Department of Agriculture and Water Resources 64

Sustainable Diversion Limit adjustment mechanism

Annual performance statement

TABLE 22 Performance measure—Basin governments agree on and implement a package of measures for notification to the Murray-Darling Basin Authority on the sustainable diversion limit adjustment mechanism a

Target Result against performance measure

Commonwealth funding agreement(s) are in place for supply and constraints projects notified in the reporting year.

Partially met: On 16 June 2017, the Murray-Darling Basin Ministerial Council endorsed the final package of sustainable diversion limit adjustment mechanism (SDL) measures, including a second notification to incorporate an additional SDL adjustment project made possible by the November 2016 amendments to the Water Act 2007 . Officials formally notified the Murray-Darling Basin Authority of the final package of measures, including the second notification on 28June 2017.

The Australian Government can only confirm funding for the package of supply and constraints measures when the SDL adjustment is determined by the Murray-Darling Basin Authority in the second quarter of 2017-18. Funding arrangements with jurisdictions will be finalised at that time.

The Basin plan is amended to provide for a second notification. Met: The Water Legislation Amendment (Sustainable Diversion Limit Adjustment) Act 2016 was passed by parliament on 9November 2016

and received Royal Assent on 23November 2016. The Act amended the Basin Plan to provide for a second SDL adjustment notification by 30 June 2017 to maximise the benefits of the SDL adjustment mechanism and improve the socio-economic and environmental outcomes of the Basin Plan.

Basin governments agree on a second notification of further measures. Met: On 16 June 2017, the Murray-Darling Basin Ministerial Council endorsed the final package of SDL adjustment measures, including

a second notification to incorporate an additional SDL adjustment project. Officials formally notified the Murray-Darling Basin Authority of the final package of measures, including the second notification on 28 June 2017.

Identified pilot efficiency measure projects are delivered. Met: The Australian Government On-farm Further Irrigation Efficiency (COFFIE) South Australian pilot funded 13 projects with annual water

savings of 814 megalitres.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 25.

Annual Report 2016-17

Annual performance statements

Strategic objective: Improving water use efficiency and the health of rivers, communities, environmental assets, and production systems

Annual performance statements

Strategic objective: Improving water use efficiency and the health of rivers, communities, environmental assets, and production systems

Progress towards sustainable diversion limits The Basin Plan’s SDL adjustment mechanism enables the Basin SDLs for surface water (10,873 GL per year) to be changed up or down by no more than 5 per cent, as long as environmental, social and economic outcomes are not compromised. A range of safeguards ensures there is no change to the reliability of supply for water consumers, and places limits on changes to environmental outcomes.

In 2016-17, we achieved a number of key milestones in the implementation of the SDL adjustment mechanism. The Water Legislation Amendment (Sustainable Diversion Limit Adjustment) Act 2016 was passed in November 2016, providing for a second notification of SDL adjustment measures by 30 June 2017. The legislation provided further opportunity for Basin governments to prepare new and enhanced projects to maximise the socio-economic and environmental benefits from the operation of the SDL adjustment mechanism. This builds on the package of measures agreed by the Murray-Darling Basin Ministerial Council on 22 April 2016.

A further milestone was reached on 9 June 2017, when Basin governments agreed at the Council of Australian Governments meeting to endorse the Murray-Darling Basin Ministerial Council’s plan outlining how the Basin Plan will be implemented. Through the plan, the governments committed to actions including an independent analysis of the efficiency measures program consistent with the Basin Plan requirement for socio-economic neutrality.

The plan includes implementing a package of SDL adjustment projects that, combined with remaining contracted water recovery projects, is expected to fully offset the remaining water recovery gap in the Southern Basin. The independent analysis will report to the Ministerial Council in December 2017.

On 16 June 2017, the Ministerial Council endorsed the final package of SDL adjustment projects. In consultation with governments and Basin communities, the Murray-Darling Basin Authority will determine the SDL adjustment from these agreed projects by 15 December 2017.

These projects will result in approximately 600 gigalitres less environmental water being recovered from productive use, while still meeting Basin Plan environmental outcomes and protecting the reliability of supply for irrigators. Savings of water through the projects mean there will be more water left in the Murray-Darling Basin for productive use, including for agricultural purposes.

The Commonwealth On-farm Further Irrigation Efficiency (COFFIE) program aims to recover efficiency measures entitlements under the SDL adjustment mechanism. The program commenced with a pilot program in South Australia on 14 September 2016. The COFFIE program is a procurement-based model that values water entitlements at a multiplier of the market value and funds on-farm infrastructure improvements that achieve water savings. As at 21 June 2017, 13 projects were approved and underway, accounting for water savings of 814 ML. The program is proving popular, with $4,228,264.80 contracted from the $15 million budgeted for the pilot, and additional projects are being developed.

Department of Agriculture and Water Resources 66

National Water Infrastructure and development

Annual performance statement

TABLE 23 Performance measure—National Water Infrastructure Development Fund investments provide affordable water to support the growth of regional economies a

Target Result against performance measure

At least 25 water infrastructure feasibility studies are funded, including at least five in Northern Australia. Met: Of the 39 water infrastructure feasibility studies funded, 16 are located in northern Australia.

a Performance measure and target published in the Portfolio Budget Statements 2016-17, p. 53 and Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 25.

TABLE 24 Water infrastructure feasibility studies, by funding recipient and amount funded

Recipients Feasibility studies Total funding

($m)

Outside northern Australia In northern Australia

New South Wales 3 - 2.350 -

Victoria 9 - 3.868 -

Queensland 6 9 6.721 18.080

Western Australia 3 4 2.395 3.891

South Australia 2 - 3.700 -

Northern Territory - 2 - 3.485

CSIRO - 1 - 15.000

Note: The $5million Ord stage 3 feasibility study announced in the White Paper on Developing Northern Australia is reported against Western Australia ($2.5million) and the Northern Territory ($2.5million).

TABLE 25 Performance measure—The National Water Infrastructure Loan Facility is established to support state and territory governments’ investment in water infrastructure that will provide affordable water to support regional economic growth a

Target Result against performance measure

Arrangements in place for state and territory governments to access the loan facility.

Met: On 8February2017, the loan facility opened for expressions of interest for water infrastructure loans from state and territory governments.

a Performance measure and target published in the Portfolio Budget Statements 2016-17, p. 53 and Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 25.

Annual Report 2016-17

Annual performance statements

Strategic objective: Improving water use efficiency and the health of rivers, communities, environmental assets, and production systems

Annual performance statements

Strategic objective: Improving water use efficiency and the health of rivers, communities, environmental assets, and production systems

Water infrastructure The National Water Infrastructure Development Fund gives effect to the Australian Government’s commitment to start the detailed planning necessary to build water infrastructure, including dams, pipelines or managed aquifer recharge. This will help secure the nation’s water supplies and deliver regional economic development benefits for Australia, while also protecting our environment. The fund comprises a capital component ($440 million) and a feasibility component ($59.5 million).

Capital component The Australian Government has committed $247.5 million to co-fund the construction of Rookwood Weir, Queensland ($130 million), Dungowan Dam, New South Wales ($75 million), Macalister Irrigation District modernisation, Victoria ($20 million), South West Loddon pipeline, Victoria ($20 million) and McLaren Vale wastewater treatment and reuse, South Australia ($2.5 million).

The funding is conditional on state governments matching the Australian Government’s funding commitment, gaining all required regulatory and planning approvals and demonstrating the economic viability of each project.

In addition, funding of $192.5 million, including approximately $40 million for water infrastructure in northern Australia, is available to state and territory governments to co-fund the construction of economically viable water infrastructure through the capital fund expressions of interest process. Capital funding is available from 1 July 2017.

All state and territory governments have signed on to the National Partnership Agreement for the National Water Infrastructure Development Fund—capital component under the Federal Financial Relations Act 2009.

The Australian Government has committed $59.5 million for 39 water infrastructure feasibility studies, including $40.4 million for 16 studies in northern Australia. All feasibility studies are underway, with seven studies completed, including two in South Australia, three in Victoria and two in Western Australia. This funding includes commitments for the feasibility studies announced in the White Paper on Developing Northern Australia, including:

â¢ $15 million for the CSIRO-led Northern Australia Water Resources Assessment project covering the Fitzroy River (Western Australia) and Mitchell River (Queensland) catchments and the Finniss, Mary, Wildman and Adelaide catchments in the Darwin region (Northern Territory) to be completed by June 2018

â¢ $5 million for the Nullinga Dam (Queensland) feasibility study â¢ $5 million for the Ord stage 3 feasibility study, comprising $2.5 million to assess the suitability of the Keep River Plains (Northern Territory) for irrigated agriculture and $2.5 million to assess increasing the size of Lake Argyle (Western Australia) by raising the spillway.

All states except the Australian Capital Territory have signed on to the Partnership Agreement for the National Water Infrastructure Development Fund—feasibility component under the Federal Financial Relations Act 2009.

The $2 billion National Water Infrastructure Loan Facility is available to state and territory governments to provide concessional variable rate loans to co-fund the construction of nationally significant water infrastructure.

The loan facility opened for expressions of interest on 8 February 2017 and will be open continually for expressions of interest subject to availability of funding.

The loan facility is complementary to the development fund and provides state and territory governments with access to concessional loans to encourage them to bring forward the construction of major water infrastructure projects such as dams, weirs, pipelines and managed aquifer recharge projects. The goal is to provide affordable and secure water supplies to support the growth of regional economies and communities across Australia.

Department of Agriculture and Water Resources 68

The administration and operation of the loan facility will transfer from our department to the Regional Investment Corporation on its establishment in 2018.

Snapshot: Water infrastructure investment in Northern Australia The Australian Government’s investment in northern Australia recognises the region’s unique circ*mstances, especially the lack of water resource assessments at catchment level, which is a barrier to water infrastructure development.

The government has committed $40.4million for 16 feasibility studies across northern Australia, to assess available water resources and the feasibility of new dams, pipeline and managed aquifer recharge projects. This includes funding for the 2017 election commitment for a feasibility study into the Hell’s Gate Dam ($2.2million), funding for studies announced through an expression of interest process, and funding announced in the White Paper on Developing Northern Australia .

In addition, the government has committed $130million to co-fund with the Queensland Government the construction of Rookwood Weir, provided the business case demonstrates that the project is economically viable. The detailed business case, funded by the Australian Government ($2million), is being delivered by Building Queensland.

FIGURE 12 National Water Infrastructure Development Fund feasibility studies, Northern Australia

Queensland Western Australia

Northern Territory

South Australia

Darwin catchments WRA

NT Ord Stage 3

Northern Territory Irrigation

WA Ord Stage 3 & Ord River Siphon

Oakover Valley Irrigation

Pilbara Irrigated Agriculture

Fitzroy catchment WRA

Nullinga Dam

North West Qld Strategic Water Storage Lakeland Irrigation Area

Burdekin Falls Dam & Burdekin Haughton Channel Capacity Upgrade

Urannah Dam

Lower Fitzroy River Infrastructure Project

Clermont Water Security

Hells Gate Dam

Mitchell catchment WRA

Tropic Of Capricorn

0 250 500 Km

Northern Australia: National Water Infrastructure Development Fund feasibility studies

Feasibility study location

Northern Australia Water Resource Assessment (WRA) catchments

Rivers

The locations of feasibility studies under the National Water Infrastructure Development Fund are based on best available information, as provided by the Department of Agriculture and Water Resources and public sources. Some projects with multiple locations have been simplified to a single indicative point.

Map produced by ABARES (Australian Bureau of Agricultural and Resource Economics and Sciences), Australian Government Department of Agriculture and Water Resources, May 2017.

Source: ABARES

Annual Report 2016-17

Annual performance statements

Strategic objective: Improving water use efficiency and the health of rivers, communities, environmental assets, and production systems

Annual performance statements

Strategic objective: Improving water use efficiency and the health of rivers, communities, environmental assets, and production systems

Additional activities We undertook several activities to contribute to improving water-use efficiency and the health of rivers, communities, environmental assets and production systems.

National Partnership Agreement on Implementing Water Reform in the Murray- Darling Basin

We conducted an annual assessment of each jurisdiction’s performance against milestones in the National Partnership Agreement on Implementing Water Reform in the Murray-Darling Basin. The assessment considered performance against milestones for the period 1 July 2015 to 30 June 2016, and was completed on 31 October 2016.

Water Efficiency Labelling and Standards Scheme

We made the first registrations of ultra-water-efficient toilets and showers under the Water Efficiency Labelling Standards Scheme. This was made possible with the publication of a new standard that allows for the registration and labelling of four-star showers (high pressure only) and six-star toilets.

Great Artesian Basin Strategic Management Plan

We released the new Great Artesian Basin Strategic Management Plan to enable consultation with stakeholders. The plan is expected to be completed in 2017. As part of the development of the plan, a consultation process occurred in early 2017.

Lake Eyre Basin condition assessment

We delivered the draft Lake Eyre Basin State of the Basin Condition Assessment 2016 report as a requirement under the Lake Eyre Basin Intergovernmental Agreement. The draft report was released for public comment on 22 May 2017 and submissions closed on 30 June 2017. The report is expected to be considered by ministers and will inform the review of the Intergovernmental Agreement.

International relationships on water cooperation

We advanced Australia’s international relationships on water cooperation, finalising a new memorandum of understanding on water cooperation between Australia and the Indonesian Government. It is awaiting ministerial signing.

Australian water reform experience and water resource management expertise have been well promoted and received at international high-profile forums with the department’s support and contributions, including the United Nations- and World Bank-led High-Level Panel on Water and the 2017 G20 Agricultural Ministers’ meeting.

Department of Agriculture and Water Resources 70

Strategic objective: Managing biosecurity and imported food risk

We undertake activities to preserve Australia’s favourable animal and plant health status. Our work helps maintain overseas markets and protect human health, the environment and the economy.

Australia’s biosecurity system aims to anticipate, prevent, prepare, detect and respond to and recover from biosecurity risks. Working across the biosecurity continuum—offshore, at the border and onshore—our biosecurity system relies on a risk-based approach supported by research, science and intelligence, which help us target what matters most.

This system is underpinned by the Biosecurity Act 2015, which commenced on 16 June 2016. The legislation has been designed to be flexible and responsive to changes in technology and future challenges. It aims to promote a shared responsibility between government and industry, provide a modern regulatory framework, reduce duplication and regulatory impacts, and allow for current and future trading environments.

This system is essential as it protects Australia’s environment and economy from exotic pests and diseases and helps maintain Australia’s reputation as an exporter of clean, green agricultural, fisheries and forestry commodities. We undertake a process of continuous improvement to ensure the actions taken to manage risks meet our international obligations and our appropriate level of protection (ALOP). The ALOP requires a high level of sanitary and phytosanitary protection aimed at reducing biosecurity risks to a very low level.

Our core activities include providing biosecurity services to screen people, cargo and food entering through Australia’s airports and seaports, and undertaking post-entry quarantine for animals and plants brought into the country. Our biosecurity controls work to minimise the risk of pest and disease incursions in Australia and protect our rural industries as well as our unique environment.

We collaborate with state and territory governments and industries to prepare for and respond to outbreaks of exotic animal and plant pests and diseases. We do this through the Intergovernmental Agreement on Biosecurity, the Emergency Animal Disease Response Agreement, the Emergency Plant Pest Response Deed and the National Environmental Biosecurity Response Agreement.

Objective 1: Use evidence-based risk management to ensure the safe movement into and out of Australia of people, animals, plants, food and cargo.

Objective 2: Coordinate emergency responses to exotic pest and diseaseincursions.

Annual Report 2016-17

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

In this chapter, we report on biosecurity performance measures and targets as reported in the 2016-17 corporate plan1 under the following themes: â¢ maintaining Australia’s pest and disease status â¢ responding to pest and disease incursions

â¢ managing import risks â¢ engaging with the community to increase public awareness on biosecurity risks.

Maintaining Australia’s pest and disease status

Annual performance statement

TABLE 26 Performance measure—Australia maintains a favourable pest and disease status ab

Target Result against performance measure

Qualitative assessment that the nature and impact of animal and plant biosecurity incursions has not significantly harmed Australia’s favourable pest and disease status.

Met: In 2016-17, there was no disruption or loss of export market access because of exotic pest and disease incursions (based on a World Organisation for Animal Health standard). The same result was reported in 2015-16.

There was also no reported export disruption or loss because of exotic plant pest incursions for 2016-17.

Pest and disease eradication is funded through the year based on national priorities.

Met: Pest and disease eradication was funded throughout the year based on national priorities agreed under formal national response arrangements for pest and disease incursions.

Funding was based on multi-year programs involving state and territory governments. The level of funding was commensurate with funding provided in previous years.

In 2016-17, there was an outbreak of white spot syndrome virus in south-east Queensland, tomato potato psyllid in Western Australia and the Varroa jacobsoni bee mite in Northern Queensland. Responses to these diseases are beingpursued.

The Intergovernmental Agreement on Biosecurity is found to be effective in managing the national biosecurity system.

Met: An independent review of the agreement was released by all Australian agriculture ministers in July 2017. The review reported that the agreement has created a framework for governments to coordinate and identify priority areas of reform and action to build a stronger and more effective national biosecuritysystem.

It noted that this was an important step for governments, recognising the value of strengthening and institutionalising intergovernmental relationships and building on the previous memoranda of understanding between Australia’s governments.

a Assessment based on information, including World Organisation for Animal Health notifications, plant incursions and market access issues directly related to biosecurity. b Performance measures and targets published in the Portfolio Budget statements 2016-17 , p. 50, and the Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 27.

1 Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 26.

Department of Agriculture and Water Resources 72

Maintaining a favourable pest and diseases status The World Organisation for Animal Health (OIE) is the intergovernmental organisation responsible for improving animal health worldwide, issuing international animal disease alerts and assessments of the animal disease status of member nations.

The OIE provides official recognition of member countries’ risk status for bovine spongiform encephalopathy (BSE) and freedom from six other animal diseases. In 2016-17, Australia maintained the highest possible status, with continued OIE recognition of having a negligible BSE risk and freedom from:

â¢ African horse sickness â¢ classical swine fever â¢ contagious bovine pleuropneumonia â¢ foot-and-mouth disease â¢ peste des petit* ruminants â¢ rinderpest.

This official recognition of Australia’s disease status is important to market access, benefiting producers and exporters of Australian animals and animal products.

Australia has identified 40 national priority pests that are the focus of government investment and action. Activities include developing contingency plans and diagnostic protocols, introducing import requirements on risk material and developing communication tools to raise awareness.

Funding biosecurity response programs There are three emergency response agreements to cover the management and funding of emergency response incidents, including cost-sharing arrangements. These allow governments and industry to work together under a shared decision-making approach.

These agreements set out the management and funding of nationally cost-shared responses:

â¢ Emergency Animal Disease Response Agreement (EADRA)—animal disease incursions â¢ Emergency Plant Pest Response Deed (EPPRD)—emergency plant pest incidents â¢ National Environmental Biosecurity Response Agreement (NEBRA)—biosecurity incidents that primarily impact the environment and/or social amenity and where the response is for the

public good.

In 2016-17, we coordinated the Australian Government’s role in nationally cost-shared responses, including responses to two new detections and contributing to 14 eradication programs initiated in previous years. This includes two pests that were declared eradicated during this period and another two pest detections that transitioned to nationally cost-shared management responses. In addition, four eradication programs have continued that are not nationally cost-shared, including three that are Australian Government-funded and one that is funded by the lead jurisdiction with Australian Government assistance.

The current responses are given effect through the EPPRD and the NEBRA. Others are off-deed responses.

Eradication is not always possible. In such cases, biosecurity efforts switch to recovery from an incursion, or ongoing management through local and regional biosecurity practices to reduce the spread and harm that a pest or disease causes.

During the year, 35 exotic agricultural pests were detected, of which 23 are, or may be, nationally significant. Additionally, there were five detections of exotic environmental pests, three of which are or may be nationally significant.

Annual Report 2016-17

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

TABLE 27 Responses underway in 2016-17 for plant pests and environmental pests—nationally cost-shared

No. Response Response arrangement Cost-shared

budget for 2016-17 ($m)

1 Tomato potato psyllid ( Bactericera co*ckerelli) in WA Emergency Plant Pest Response Deed $3.100

2 Varroa mite ( Varroa jacobsoni) in Qld Emergency Plant Pest Response Deed $1.285

3 Khapra beetle ( Trogoderma granarium) in SA Emergency Plant Pest Response Deed $1.199

4 Banana freckle (Phyllosticta cavendishii ) in the NT a Emergency Plant Pest Response Deed $3.736

5 Chestnut blight ( Cryphonectria parasitica ) inVic Emergency Plant Pest Response Deed $0.151

6 Exotic fruit fly ( Zeugodacus cucurbitae,

Bactrocera dorsalis and B.trivialis ) in Torres Strait and Qld

Emergency Plant Pest Response Deed $0.235

7 Giant pine scale ( Marchalina hellenica) in SA and Vic Emergency Plant Pest Response Deed $1.064

8 Red witchweed ( Striga asiatica) in Qld Off-deed $1.200

9 National tropical weeds ( Limnocharis flava, Miconia calvescens, Mikania micrantha, Miconia nervosa and Miconia racemosa ) inQld

Off-deed $2.648

10 Red imported fire ants ( Solenopsis invicta ) at South East Qld b

Off-deed $19.027

11 Red imported fire ants ( Solenopsis invicta ) at Brisbane Airport, Qld National Environmental Biosecurity Response Agreement

$0.216

12 Red imported fire ants ( Solenopsis invicta ) at Yarwun, Qld National Environmental Biosecurity Response Agreement

$0.061

13 Red imported fire ants ( Solenopsis invicta ) at Port Botany, NSW c National Environmental Biosecurity Response Agreement

N/A. 2016-17 financial year not nationally cost-shared

14 Electric ant ( Wasmannia auropunctata) in Cairns, Qld c Off-deed N/A. 2016-17

financial year not nationally cost-shared

15 Browsing ant ( Lepisiota frauenfeldi) at Darwin Port, NT National Environmental Biosecurity Response Agreement

$0.287

a Cost-sharing actual figure up to 31 March 2017. b Indicative budget. c 2016-17 financial year not nationally cost-shared.

Department of Agriculture and Water Resources 74

TABLE 28 Responses underway in 2016-17 for plant pests and environmental pests—not nationally cost-shared

No. Response Response arrangement Cost-shared

budget for 2016-17 ($m)

16 Macao paper wasp ( Polistes olivaceus ) in the Cocos (Keeling) Island a National Environmental Biosecurity Response Agreement

N/A. CWTH funded, in-kind assistance from WA

17 Red imported fire ant ( Solenopsis invicta ) in Port of Brisbane, Qld b Off-deed N/A. CWTH funded,

border incident

19 Browsing ant ( Lepisiota frauenfeldi) at Perth Airport, WA c Off-deed N/A. CWTH funded,

border incident

a Australian Government-funded, in-kind assistance from WA. b Australian Government-funded, border incident. c Indicative budget.

Intergovernmental Agreement on Biosecurity Within government, Australia’s approach to biosecurity is underpinned by the Intergovernmental Agreement on Biosecurity between the Australian Government and all mainland states and territories. The agreement was signed by the first ministers of all jurisdictions except Tasmania2 and came into effect in 2012. The agreement created a framework for governments to identify and collaborate on priority areas of reform and actions to improve the national biosecurity system. The agreement reflects the intrinsic value of our intergovernmental relationships.

An independent review of the agreement was undertaken during 2016-17 and the review was released by all Australian agriculture ministers in July 2017. The report provides an important roadmap to guide the efforts of Australian, state and territory governments, the community and industry in strengthening the national biosecurity system over the next five to 10 years.

The report recognised that the Intergovernmental Agreement on Biosecurity was a positive development and acknowledged that the challenges facing government stewardship of the national biosecurity system continue to increase. In light of the challenges of managing biosecurity into the future, the report notes that:

â¢ biosecurity risks are increasing because of factors such as increased global trade and travel, increased agricultural expansion and intensification, increased urbanisation close to farmlands and other factors such as climate change

â¢ a tight fiscal environment for governments places significant pressure on biosecurity budgets and the ongoing capacity of jurisdictions to meet their commitments â¢ stakeholders, especially those bearing an increasing share of the costs, want a greater say in decision-making about the national system, greater alignment of biosecurity and market

access efforts, more efficient delivery of government services and stronger arrangements for environmental biosecurity â¢ major incidents continue to test public confidence in the national biosecurity arrangements

The report will be considered by agriculture ministers early in 2017-18.

2 Tasmania did not sign the agreement because of concerns with a particular provision. However, it has agreed to abide by the other provisions and participates in all activities relating to the agreement.

Annual Report 2016-17

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Snapshot: Combatting Xylella fastidiosa In May 2017, we funded and hosted Australia’s first international symposium to raise awareness of Australia’s #1 National Priority Plant Pest, Xylella fastidiosa. Australia is currently free of this bacterial plant pathogen, and the symposium was part of our efforts to keep it that way.

Xylella is one of the most significant emerging plant disease threats worldwide. It is transmitted by common sap-feeding insects such as sharpshooters and spittlebugs.

Xylella is a quarantine concern because it:

â¢ has the ability to expand its geographical range and invade new areas

â¢ has a complex biology that enables it to colonise numerous host plants and common insects

â¢ causes damage to agricultural industries totalling millions of dollars annually.

More than 350 cultivated and uncultivated plant species are at risk. The primary driver of economically costly Xylella incursions is human activity, as people trade or transport infected plants and insects.

Xylella-caused diseases have cost the Californian grape industry an estimated US$104 million a year and the Brazilian citrus industry US$120 million a year. Xylella has also caused the loss of more than a million olive trees in southern Italy.

The international symposium covered four themes:

â¢ Xylella and its vectors

â¢ diagnostics and surveillance

â¢ management and control

â¢ research and collaboration.

The themes were addressed by speakers from Italy, France, Taiwan and the United States. Speakers drew on their countries’ extensive experience in responding to incursions or managing established pests, their insect vectors and the associated socio-economic complexities. Experts from Australia and New Zealand reported on potential impacts in our region and our preparedness to respond quickly if Xylella is detected. The highly successful two-day symposium was attended by 102 international and national delegates and speakers.

An important message from the symposium was the responsibility shared by all Australians, from producers to governments and the general public, to protect against the risk of Xylella and its insect

vectors. Producers need to take proactive measures to identify and report any unusual pest or disease symptoms. Similarly, the public can help keep Australia free of Xylella by not bringing in plants or plant parts such as cuttings, flowers and leaves through the airport or by mail.

Department of Agriculture and Water Resources 76

Snapshot: Combatting Xylella fastidiosa continued The symposium was supported by funding through the Stronger Biosecurity and Quarantine Initiative and the Agricultural Competitiveness White Paper . Presentations and a report on the symposium will be made available in the future.

Speakers at International Symposium on Xylella fastidiosa , 17-18 May 2017 from left to right: Peter Whittle, Robert Taylor, Marie-AgnÃ¨s Jacques, Alexander Purcell, Wen-Ling Deng, Tony Arthur, Anna Maria D’Onghia, Donato Boscia, Rodrigo Krugner, Leigh Pilkington, Baldissera Giovani, Jim Farrar, and Beth Stone-Smith. Source: Department of Agriculture and Water Resources.

Annual Report 2016-17

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Managing biosecurity risk

Annual performance statement

TABLE 29 Performance measure—The effectiveness and efficiency of biosecurity and food interventions on import pathways improves a

Target Result against performance measure

The post-intervention compliance rate for passengers and mail is maintained or improved.

Partially met: The post-intervention compliance rate of passengers was 96.9% for 2016-17, marginally lower than the compliance rate of 97.4% in 2015-16.

For 2016-17, the post-intervention compliance rate of mail was 99.9%, which was also the 2015-16 rate.

Interventions on low-risk pathways are reduced b.

Met: The compliance-based inspection scheme for plant imports to Australia rewards importers that demonstrate consistent compliance with Australia’s biosecurity requirements by providing them with a risk-based inspection rate. These importers benefit from fewer inspections at the border resulting in reduced inspection costs and faster clearance of their goods.

We added eight new commodities in 2016-17, bringing the total to 25. A further four commodities will be added in 2017.

The compliance rate for all food inspected is maintained or improved. Met: Between 1 January and 31 December 2016, the compliance rate for all food inspected was 99%, compared with 98.6% in 2015.

The compliance rate for risk food was approximately 99.1% in 2016, compared with 98.9% in 2015.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 27. b For imported plant products only.

Biosecurity work at the border We undertake a range of activities to prevent biosecurity risks reaching Australia or emerging in Australia. Biosecurity Import Risk Analyses, reviews and other assessments are key activities to identify pests and diseases that might be associated with imports. We use these risk tools to set import conditions that reduce the likelihood of pests entering, becoming established or spreading in Australia.

Each year we process millions of arriving passengers, mail items, cargo consignments and animals sent to Australia. In 2016-17, the estimated compliance rate for air passengers was 96.9 per cent. This is a marginal decrease from 2015-16, despite the continuing increase in the number of international clearances. The number of international mail articles increased in 2016-17, and the estimated compliance rate was 99.9 per cent, the same as the previous year.

Table 30 shows the scale of our biosecurity work at the border. The tables also include additional information on compliance rates for air passengers and international mail. The ‘compliance rate’ estimates the proportion of arriving air passengers and international mail items that comply with our requirements on entry into the Australian community. This statistical estimate was developed in collaboration with the Centre of Excellence for Biosecurity Risk Analysis.

Department of Agriculture and Water Resources 78

TABLE 30 Size of the import task

Item Unit 2014-15 2015-16 2016-17

Passengers International clearances ’000 18,000 19,000 20,500

Seizures of items from air passengers a ’000 260 270 290

Compliance rate air passengers (estimate) b % 97.3 97.4 96.9

Airports where we have staff no. 8 8 9

Sea passenger and crew clearances ’000 600 800 840

Seizures of items from sea passengers c ’000 3.5 3.9 3.5

Mail International mail articles

Non-letters d

Letters

Total

’000

54,000

92,000

146,000

57,000

81,000

138,000

82,000

76,000

158,000

Seizures of mail articles ’000 24 23 30

Compliance rate mail (estimate) b % 99.9 99.9 99.9

International mail facilities where we have staff no. 4 4 4

Vessels Pratique visits—first ports ’000 18 18 18

Cargo Wharf Gate sea container inspections e ’000 130 250 130

Country Action List (CAL) sea container inspections (first port) f ’000 57 46 45

Commercial consignments referred to the department g ’000 450 450 450

Air freight consignments referred to the department (under $1,000) ’000 610 640 520

Import permit applications received ’000 22 19 20

Import permits issued ’000 17 17 19

Live animal imports processed at government post-entry quarantine facilities no. cats 1,600

dogs 3,700 horses 390 avians 140 queen bees 0

alpacas 12

cats 1,500 dogs 3,700 horses 340 avians 160 queen bees 0

ruminants 0

cats 1,800 dogs 4,200 horses 460 avians 110 queen bees 0

ruminants 7

Hatching eggs processed at government post-entry quarantine facilities h ’000 4,200 6,600 11,000

a Seizures include declared and non-declared items. b ‘Compliance rate’ in previous annual reports related only to high-risk biosecurity goods. The estimates for 2016-17 and prior years have been adjusted to provide the estimated ‘compliance rate’ for all biosecurity risk goods. c Seizures include declared and non-declared items. d Non-letters include parcels and other articles. Declining mail volumes, predominantly letter class and other articles, attributed to increased use of electronic mail and fluctuations in the Australian dollar. e Wharf-gate inspect external surfaces of imported containers as they leave the wharf gates. f Country action list (CAL) countries are identified due to a particular risk from that country. gIncludes full import declarations greater than $1,000 dollars and long-form self-assessment clearance. Goods that are part of larger consignment or commercial require permit or approval. h Variance in hatching eggs figures due to highly pathogenic avian influenza (HPAI) outbreaks in the Northern Hemisphere in 2014-15.

Annual Report 2016-17

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Our risk-based arrangements at the border support partnerships with importers whose commercial systems meet biosecurity requirements. These approved arrangements provide an opportunity for businesses to reduce costs while still managing biosecurity risks.

As of 30 June 2017, there were 3,653 approved arrangements in place with a range of businesses, including customs brokerages, cold stores, freight companies and importers. During the year, 408 businesses voluntarily cancelled their approved arrangements. We revoked one approved arrangement and four approved arrangements were suspended for a period of six months in response to the importation of prawns infected with white spot syndrome virus.

We continued to work with the Centre of Excellence for Biosecurity Risk Analysis on ways to encourage importers to implement processes that reduce the likelihood of biosecurity risk material being present in consignments such as plant material. This work will be used to inform tailored approaches for compliance-based inspection protocols.

Intelligence and research provide important information on how to prevent and prepare for biosecurity risks. In 2016-17, we started developing the Biosecurity Integrated Information System. The system will provide a more sophisticated way of collecting and making available the data we need to manage biosecurity risks more effectively.

Annual performance statement

TABLE 31 Performance measure—Responses to biosecurity and imported food incidents improve a

Target Result against performance measure

The department assesses that responses to biosecurity and imported food incidents have improved.

Met: We have put in place a major program of reviews as specified in the Agricultural Competitiveness White Paper . This includes initiatives that strengthen biosecurity through enhanced surveillance, intelligence and traceability systems such as the Maritime Arrivals Reporting System. This will improve our abilities to respond to biosecurity and imported food incidents.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 27.

Managing maritime arrivals December 2016 marked the official end of the staged rollout of our Maritime Arrivals Reporting System (MARS) across Australia. MARS is an intelligence-led and evidence-based online system used to ensure incoming vessels meet biosecurity regulations to minimise the risk of pests and diseases entering Australia. Since its implementation, MARS has had a significant positive impact on the maritime industry’s compliance with Australia’s vessel biosecurity clearance system.

MARS allows us to see a single electronic record of each international sea journey. This makes it easier to carry out vessel inspections and assess biosecurity risks.

The system won in the digital and data category in the 2017 Public Sector Innovation Awards in July 2017. Run by the Institute of Public Administration Australia and the Public Sector Innovation Network, the awards recognise, celebrate and share exceptional innovations in government.

Managing ballast water risks Ballast water taken up at international ports and coastal waters by vessels outside Australia’s territorial waters is considered a high risk to the environment. The Biosecurity Act 2015 creates a national framework for regulating the biosecurity risks posed by ballast water. It gives effect to the International Maritime Organization’s International Convention for the Control and Management of Ships’ Ballast Water and Sediments 2004 which Australia ratified on 8 June 2017. The convention comes into force internationally and in Australia on 8 September 2017.

Department of Agriculture and Water Resources 80

Marine pest review The marine pest review was an election commitment to protect Australia’s marine environment and resources. The review made 13 recommendations and focuses on prevention activities, better relationships between researchers, marine-based industries, government and the community. In 2016-17, we continued to implement the recommendations in consultation with stakeholders. The work is expected to be completed in 2018.

Snapshot: DNA tests keeping out exotic mosquitoes Mosquitoes are not just annoying pests with a bite that makes you itch. They are responsible for more human deaths than any other animal, transmitting diseases such as malaria, dengue fever and the Zika virus.

Thankfully, many of the nastier mosquito species are not present in Australia and we aim to keep it that way. We perform vector monitoring at first points of entry around Australia to detect and respond quickly to exotic mosquitoes that may inadvertently be imported on international aircraft, vessels and imported cargo.

In 2015-16, there was an unprecedented number of exotic mosquito detections, with 55 separate detections at international airport passenger terminals across Australia. In response, we teamed up with research group cesar pty ltd to identify the origin of the exotic mosquitoes using next-generation DNA sequencing.

This highly sensitive DNA testing determined that the exotic mosquitoes were coming from a single geographical origin. Using these results, we worked with the relevant foreign government and the airlines flying from the point of origin to investigate the cause of the increased detections. We also collaborated with the Department of Health to introduce additional disinfection treatments for aircraft arriving from the identified country.

As a result, there was a significant decline in the number of exotic mosquito detections at international airport passenger terminals between October 2016 and April 2017, with only four separate exotic mosquito detections.

DNA testing has become an important tool for identifying the origins of exotic mosquitoes, showing that we are serious about preventing these unwelcome passengers from enteringAustralia.

Annual Report 2016-17

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Agricultural Competitiveness White Paper During the year, we continued to work on the biosecurity surveillance and analysis initiative under the Agricultural Competitiveness White Paper, which is focussed on enhancing the biosecurity system to help us better target biosecurity risks and in turn support our access to premium markets overseas.

There were a large number of improvements in 2016-17. Some key highlights include:

â¢ new markets for our agricultural exports have been opened and maintenance of existing markets with new health protocols developed and improvement to conditions to support our agricultural exports. New markets include:

á² fruits and vegetables to New Zealand; á² breeder cattle and buffalo to Cambodia; á² live pigeons to Zimbabwe and the United Arab Emirates; á² and bovine genetics to India. â¢ several markets have also been regained, including feeder cattle to Japan and queen honey bees and

packaged bees to Canada. Health certificates and protocols for a range of agricultural exports to over 15 trading partners have also been finalised â¢ enhanced surveillance activities including: á² additional Indigenous ranger groups to undertake biosecurity work in remote northern regions;

á² pro-active Foot and Mouth Disease training in Nepal and emergency animal disease identification, investigation and reporting training for approximately 220 private veterinarians; á² conducting more plant, animal and aquatic surveys in Australia; á² more plant and animal health surveys with neighbouring countries and territories;

á² completed the first rabies response simulation exercise in Timor-Leste; á² established new sentinel herds in northern Australia, Timor-Leste and Papua New Guinea.

These surveillance activities help us to detect and respond to biosecurity threats both onshore and offshore before they reach Australia. It also importantly provides evidence to show freedom from pests and diseases to support access to export markets for our agricultural produce. â¢ more accurate and modern diagnostic methods for high priority threats, and contemporary

diagnostic equipment including more powerful microscopes, cameras, DNA analytical machines, culture incubators and autoclaves to provides faster, more reliable diagnostic results to optimise our response to possible biosecurity threats.

â¢ enhancement to the International Biosecurity Intelligence System (IBIS) which has demonstrated benefits for real time notification and management of new and emerging biosecurity risks as they arise around the world.

â¢ finalising the review of import conditions for a range of animal and plant products.

Managing imported food risk We administer the Imported Food Inspection Scheme, which monitors importer compliance with Australia’s food standards. Food Standards Australia New Zealand provides advice on foods that pose a medium to high risk to public health. We classify these as ‘risk food’ under the inspection scheme, and classify all other food as ‘surveillance food’. Risk food is subject to an inspection rate of 100 per cent and surveillance food is subject to an inspection rate of 5 per cent.

Between 1 January and 31 December 2016, we inspected 31,226 lines of imported food, and applied 95,186 tests. The compliance rate was 99.0 per cent for all food inspected, and the compliance rate for risk food was approximately 99.1 per cent, an improvement on 2015.

Department of Agriculture and Water Resources 82

Snapshot: Implementing a risk-based approach to biosecurity management The department is strengthening its risk based management of biosecurity. The compliance-based inspection scheme (CBIS) was introduced to allow the department to focus its resources on plant import pathways of high biosecurity risk.

The CBIS identifies suitable plant commodities through extensive data analysis based on historical import data, failure and leakage rates. This information is used to select plant commodities that pose a low residual risk to Australia’s biosecurity and would therefore be suitable for the scheme.

Previously, the majority of commodities on the scheme were processed plant products for human consumption, spices and nuts. In the 2016-2017 financial year, the department has trialled horticultural fresh produce onto the scheme. The trial has demonstrated that CBIS can be implemented on fresh produce pathways. There are now 25 eligible plant products on the CBIS, with seven commodities added in the 2016-2017 financial year, including horticultural fresh produce. Many other commodities have also been assessed for their potential to be added onto the scheme in the next financial year.

To qualify under the CBIS, an importer must pass a defined number of consecutive inspections and document assessments for an eligible commodity. Only once they have demonstrated their compliance by meeting this threshold they qualify for a reduced pre-determined risk-based inspection rate. Inspection rates under CBIS range from 10-50 per cent, depending on the risk posed by the commodity. If a qualified importer fails one of their random inspections, they will return to a 100 per cent inspection rate until they once again meet the compliance threshold.

The CBIS presents a smarter, stronger risk-based approach to managing biosecurity. The scheme also acts as an incentive for importers to consistently comply with Australia’s biosecurity requirements. It is a mechanism for the department to target its resources to the risk areas, which will enhance the efficiency and effectiveness of biosecurity risk management and protecting Australian producers from exotic pests and diseases.

Annual Report 2016-17

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Responding to pest and disease incursions

Annual performance statement

TABLE 32 Performance measure—Risk assessments for imported goods use science-based risk analysis, drawing on the best available scientific information and advice a

Target Result against performance measure

100% of import risk assessments are conducted in accordance with regulations and the best available science and advice.

Met: 100% of import risk assessments were conducted in accordance with the regulations of the Biosecurity Act 2015 and/or relevant department policies and procedures.

The target requirement for best available science was addressed through involvement of expert department staff and internal reviewers and external peer review where appropriate.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 27.

Responding to pest and disease incursions Australia’s response to exotic pest and disease incursions has implications for its international export reputation, and for the effects on domestic agricultural production. We coordinate national activities to ensure a comprehensive, consistent and informed approach to response activities for biosecurity and work collaboratively with government agencies and industry groups to ensure a unified approach to animal, plant and food safety emergencies.

We carry out a range of activities that enhances our ability to respond to incidents. This includes developing sector-specific response plans and conducting and participating in training activities and simulation exercises. We are also a signatory to three emergency response agreements that cover the management and funding of emergency response incidents, including cost-sharing arrangements, and allow governments and industry to work together under a shared decision-making approach.

The agreements set out the management and funding of nationally cost-shared responses to: â¢ animal disease incursions (Emergency Animal Disease Response Agreement) â¢ emergency plant pest incidents (Emergency Plant Pest Response Deed) â¢ biosecurity incidents that primarily impact the environment and/or social amenity (National

Environmental Biosecurity Response Agreement).

The EADRA is available on the Animal Health Australia website, the EPPRD is available on Plant Health Australia’s website and the NEBRA is available on the Council of Australian Governments website.

During 2016-17, 85 plant pests were notified under national emergency arrangements. Of these, eight were considered to be a pest of concern, with six deemed not technically feasible to eradicate. One notification is still under consideration and one has moved to a nationally cost-shared management. A further 12 notifications are under active consideration and 65 did not require an active response.

The Varroa jacobsoni bee mite and tomato potato psyllid were detected and managed under the EPPRD. We also provided $9,235 to AUSVEG, the industry representative body for vegetable and potato growers, to engage a scientific expert as part of the response to the tomato potato psyllid incursion.

During 2016-17, white spot syndrome disease was also detected in prawns and prawn product in south-east Queensland. An Aquatic Animal Disease Emergency Response Deed is still under development, so the response was managed according to existing nationally agreed procedures. We coordinated the government assistance package for affected prawn farmers.

Department of Agriculture and Water Resources 84

Annual performance statement

TABLE 33 Performance measure—The ability of governments, industry and the community to quickly and effectively respond to exotic pest and disease incursions improves a

Target Result against performance measure

Responses to pest and disease incursions and outbreaks are managed according to relevant frameworks.

Met: In 2016-17, all responses to pest and disease incursions and outbreaks were managed according to the following national frameworks:

â¢ Emergency Plant Pest Response Deed

â¢ National Environmental Biosecurity Response Agreement

â¢ Emergency Animal Disease Response Agreement

Where a national framework is still under development, responses were managed according to existing nationally agreed procedures (for example, responses to aquatic animal diseases).

Requests for rapid response in the event of a significant exotic pest or disease outbreak are responded to immediately.

Met: We received requests during 2016-17 in relation to white spot syndrome disease in prawns in Queensland and tomato potato psyllid in Western Australia. We initiated a response within two days for bothrequests.

100% of priority emergency plans (AUSVETPLAN, AQUAVETPLAN, EMPLAN and PLANTPLAN) reflect contemporary science on emergency responses to plant and animal pests and diseases.

Met: Our plans included AUSVETPLAN, AQUAVETPLAN, EMPLAN and PLANTPLAN.

We collaborated with state and territory governments to publish five EMPLAN manuals and revise six priority AQUAVETPLAN manuals. Two revised AQUAVETPLAN manuals were published. We collaborated with Animal Health Australia, jurisdictions and industry to update and finalise the 11 priority AUSVETPLAN manuals published by Animal HealthAustralia.

During 2016-17, our PLANTPLAN guidelines were also amended to include normal commitments, jobs cards of key roles in an emergency response and operating guidelines for the Consultative Committee on Emergency Plant Pests. PLANTPLAN provides nationally consistent guidelines for response procedures as well as the key roles and responsibilities of industry and government during emergency responses to plant pestincidents.

Information for these plans is assembled from a number of reliable primary sources, including advice from scientists, engineers or other professionals with recognised expertise on the species or likely emergency operations, and from published, peer-reviewed literature. Reputable secondary sources of information, such as internet databases and ‘grey’ literature is used to supplement this advice or to prepare summary information and plans for expert review.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 27.

Preparing for pest and disease incursions At the end of 2016, we led an international emergency animal disease simulation. Exercise Athena tested arrangements for deploying personnel across international borders to respond to emergency animal disease events. This included the collaborative efforts of veterinary authorities from Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States. Within the exercise, the department requested assistance from signatories to the International Animal Health Emergency Reserve (IAHER) Arrangements, which enables countries to share personnel during an emergency animal disease event.

Annual Report 2016-17

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Annual performance statements

Strategic objective: Managing biosecurity and imported food risk

Snapshot: White Spot Syndrome virus On 1 December 2016, the presence of white spot syndrome virus was confirmed on a prawn farm located on the Logan River in south-east Queensland. Prior to this outbreak, Australia was considered free of the virus. Over the next 10 weeks, the virus spread to six other prawn farms located on the Logan River. It was also detected in the environment in the Logan and Brisbane Rivers and Moreton Bay. The virus has not been detected elsewhere in Australia as of 30 June 2017.

An emergency aquatic animal disease response was initiated on 1 December 2016, with the objective of eradicating the disease from prawn farms. Biosecurity Queensland within the Queensland Department of Agriculture and Fisheries is leading the response. We undertook the national coordination of incident management processes, as well as informing Australia’s trading partners and the World Organisation for Animal Health. A number of staff were also deployed to assist Biosecurity Queensland.

The eradication phase of the disease response was completed towards the end of May 2017 and, as at 30 June 2017, there had been no new outbreaks detected. The disease response program is now focusing on surveillance and biosecurity management to minimise any further spread in the wild.

We are conducting a major assessment of the biosecurity risks of and import conditions for prawns and prawn products for human consumption from all countries.

Funding has been allocated to the white spot disease outbreak, with $1.3 million provided to the Queensland Department of Agriculture and Fisheries for response activities, including $400,000 to be paid directly to farmers for reimbursem*nt of expenses incurred as part of the Queensland Government’s response.

An additional $221,000 has been allocated to the Australian Prawn Farmers Association to appoint a biosecurity liaison officer and engage scientific experts. Funding of $220,000 has been allocated to the Queensland Seafood Industry Association to appoint a biosecurity liaison officer to develop and implement an industry communication toolkit for the wild-harvest seafood industry.

In May 2017, the Australian Government announced it would provide up to an additional $20million in funding directly to the prawn industry. This funding will cover owner reimbursem*nt costs for prawn farmers affected by the outbreak, including the costs of farms standing down for up to 18months as part of an agreed eradication response plan. Prawn farmers will repay up to $4 million of this funding through an industry levy.

Currently there is no formal industry-government agreement for responses to significant aquatic animal disease outbreaks. As such, there is no formal mechanism to assist industry and the affected jurisdiction with some of the costs of the outbreak, nor is there a formal mechanism for the response costs to beshared.

This incident has highlighted the importance of having a formal agreement in place. We are working with aquaculture industries, state and territory governments and Animal Health Australia to develop a draft agreement by the end of 2017.

Department of Agriculture and Water Resources 86

Exercise Athena gave us the opportunity to test procedures, train staff and raise awareness of the requirements for participating in an animal disease response.

The exercise plays an important part in building our capability and preparedness in managing and responding to pest and disease incursions. Exercises such as this enable the department to identify improvements and best practice examples in respect to the identification, selection, deployment and repatriation of our staff during a response.

Stakeholder and community engagement

Annual performance statement

TABLE 34 Performance measure—Public awareness of biosecurity risks improves a

Target Result against performance measure

The number of followers on and the total reach of the ‘Australian Biosecurity’ Facebook page is maintained or increased.

Met: As at 30 June 2017, the ‘Australian Biosecurity’ Facebook page had 4,331 followers, an increase of 2,825 followers compared to the same point in 2016.

From 1 July 2016 to 30 June 2017, the page reached a cumulative audience of 561,642 people, with 14,002 engagements. The most successful post had an engagement rate of 29.3% and reached 9,487 Facebook users.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 27.

Increasing the public’s awareness of biosecurity We have continued to expand our efforts to increase the Australian public’s awareness of biosecurity requirements. This has included the development and release of a number of YouTube videos on our priority plant pests, airport and mail centre biosecurity statistics and collaborative efforts with other agencies, and awareness of our requirements around cultural and seasonal events.

A priority under the Agricultural Competitiveness White Paper is to improve understanding of biosecurity and increase involvement in biosecurity initiatives through shared responsibility.

We’ve established a Scientific Advisory Group for legislated Biosecurity Import Risk Analyses BIRA) and a BIRA liaison officer role to enhance our engagement with stakeholders on key biosecurity matters.

For biosecurity awareness in northern Australia, a focus has been on the development of applications that are accessible on mobile devices to capture, store and share biosecurity surveillance information to improve community engagement. This year we:

â¢ helped build capability of Indigenous rangers by providing biosecurity training and networking opportunities to share skills and experience so that ranger groups are better placed to maintain and undertake biosecurity work

â¢ developed a mobile application to assist Indigenous rangers doing biosecurity work to collect and submit plant, animal and aquatic data. This will allow rangers to upload photos, record GPS coordinates and track files and see current and previous information. It will allow field information to be assessed quicker and help with the early detection of potential biosecurity threats

â¢ we also promoted the need to be biosecurity aware through song - the music video, which is available on the department’s website is performed by Indigenous artists and captures the connection to land and the biosecurity partnership between governments, producers and Aboriginal and Torres Strait Islander communities

â¢ we continued this promotion by partnering with an northern Indigenous company (enVizion) to explain the importance of biosecurity in northern Australia to communities and the broader community by focussing on the work of Aboriginal and Torres Strait Islander rangers and biosecurity officers.

Annual Report 2016-17

Annual performance statements

Strategic objective: Building an efficient and capable department

Annual performance statements

Strategic objective: Building an efficient and capable department

2 Strategic objective: Building an efficient and capable department

Our corporate capability underpins our work to deliver the government’s programs and achieve our strategic objectives.

Our Governance Strategy 2015-19 outlines the principles we apply to our business administration and operations management activities across the department. These include the authority that underpins our actions, our oversight and accountability mechanisms, and how we approach our business assurance and risk management.

Our People Strategy and Action Plan 2014-17 strengthens our client focus, helps us provide safe workplaces and promotes high performance to support and challenge our staff to reach their potential and build rewarding careers.

Through our Finance Strategy 2014-19, we undertake prudent financial management, make investments to maintain and improve our services to the government and our clients, and ensure our cost-recovered services are efficient, transparent and sustainably funded.

Our scientific and economic research through ABARES provides evidence-based research and data to support policy and decision-making across our strategic objectives.

We report achievements against this strategic objective in the context of the performance measures, targets and activities described in our 2016-17 corporate plan.1 This includes:

â¢ improving our safety and rehabilitation management systems and fostering a positive safety culture â¢ continuing efforts to effectively managing unscheduled absences.

There are additional activities outlined in the 2016-17 corporate plan that are not addressed in the measures and targets. These are reported at the end of the chapter. We report on ABARES research at page 25, and service delivery at page 103.

1 Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 29.

Objective: Focus on performance, deliver on our objectives, meet our statutory obligations and parliamentary requirements, and continuously build organisational capability.

Department of Agriculture and Water Resources 88

Our workforce

Annual performance statement

TABLE 35 Performance measure—A positive, professional and engaged workforce is maintained or improved a

Target Result against performance measure

The employee engagement score in the APS Employee Census is maintained or improved bc. Met: In 2017, our engagement scores (out of 10) for selected categories were ‘Job’ 6.8, ‘Team’ 6.6, ‘Supervisor’ 7.3 and

‘Agency’ 5.9. There has been a steady improvement in our results over the past five years and these are comparable with the APS average.

The gender balance across the Executive Level and Senior Executive Service classifications is 50% across the department, and there is progress toward 50% in each division.

Met: As at 30 June 2017, 50.4% of Executive Level and Senior Executive Service employees were women.

Across the department, 50% of our employees were women, an increase from 49% in 2015-16. We have set targets to increase the percentage of women in the Service Delivery and Information Services divisions. The percentage of women increased in both these divisions. We will report across all divisions in the future.

The unscheduled absence rate is reduced. Met: Our personal leave rate for 2016-17 was 14.5 days per full-time equivalent (FTE), compared with 14.9days per FTE in 2015-16 d.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-2017 , p. 29. b Australian Public Service Commission census results are assessed retrospectively for the year. c Employee engagement score uses the average engagement scores across the categories ‘Job engagement’, ‘Team engagement’, Supervisor engagement’ and ‘Agency engagement’. d Measured using the Australian Public Service Commission personal leave metric, excluding ‘Compensation’ and ‘Unauthorised leave’ types.

Managing our workforce As at 30 June 2017, we employed 4,606 full-time equivalent staff (FTE), 130 of whom were casual. Our workforce is diverse and includes accountants, biosecurity officers, economists, information and communication technology specialists, meat inspectors, policy officers, program administrators, scientists, survey staff and veterinary officers. Our staffing statistics are at Appendix 3.

Employee engagement

We participated in the Australian Public Service Commission’s annual APS Employee Census to measure employee engagement and our performance against our People Strategy and Action Plan 2014-17. The census highlighted areas where we perform well, identifies improvement opportunities and benchmarks Australian Public Service (APS) achievement levels.

Our 2017 census results for employee engagement showed an increase in the key categories of ‘Team’ and ‘Supervisor’ and were comparable with the APS average. For the first time, our score for ‘Agency engagement’ was higher than the APS average. The 2017 engagement results reflect a steady improvement since 2012.

Annual Report 2016-17

Annual performance statements

Strategic objective: Building an efficient and capable department

Annual performance statements

Strategic objective: Building an efficient and capable department

TABLE 36 APS Employee Census results—department engagement (2012-2017) and APS (2017)

Engagement type 2012 2013 2014 2015 2016 2017 APS 2017

Job 6.4 6.6 6.6 6.7 6.8 6.8 6.8

Team 6.3 6.4 6.4 6.4 6.5 6.6 6.6

Supervisor 6.7 7.0 7.0 7.0 7.1 7.3 7.4

Agency 5.7 5.8 5.7 5.7 5.8 5.9 5.8

The census results also indicate that employee advocacy, loyalty and discretionary effort are higher in our department than the APS average.

We celebrate employee engagement with #ThatsMyStory, an internal digital package of communication activities using emotional storytelling techniques. The video and written profile campaign, launched in 2016, shares our employees’ passion for the department, the work they do and how it contributes to Australia’s economy and way of life. This initiative received an award from the Australian Public Service Commission and the Institute of Public Administration Australia.

An inclusive and productive workplace

In 2016-17, we continued our commitment to building and maintaining an inclusive and productive workplace environment. Some of the most significant improvements in this year’s census results were in the areas of inclusion and diversity. In the area of diversity, 79 per cent of participating employees agreed the department is committed to creating a diverse workforce. This is an increase of 11 per cent from the 2016 results.

We launched our Growing reconciliation: Reconciliation Action Plan 2017-2019 (RAP). This is our fourth RAP. It demonstrates our commitment to reconciliation within the organisation and across its sphere of influence. This includes a commitment to specific reconciliation actions and targets in the three years to 2019. The plan is supported by our staff, portfolio and partner agencies, stakeholders and communities (see Snapshot: Growing reconciliation).

We participated for the first time in the 2016 Reconciliation Barometer Survey, with 853 staff providing key insights into how they understand and engage with history, cultures and issues of First Australians.

During the year, we published a Gender Equality Commitment Statement, which gives effect to the principles of the Australian Public Service Gender Equality Strategy 2016-19 and reinforces our intention to build a gender-equitable and inclusive workplace. We have set gender equality targets and identified a range of actions to support our commitment statement. At the end of 2016-17, for the first time, our department comprised 50 per cent women.

We also implemented unconscious bias training, an initiative which was championed by our Culturally and Linguistically Diverse employee network and our other diversity networks. We hosted our first ‘Plus Series’ meeting. This format brings together a small number of the executive with an equal number of staff from diverse backgrounds to share their experience in the workplace.

Department of Agriculture and Water Resources 90

TABLE 37 Representation of diversity groups, 30 June 2016 and 30 June 2017

Female

Aboriginal and Torres Strait Islander People with a disability

Employment Type

30 June 2017

30 June 2016

30 June 2017

30 June 2016

30 June 2017

30 June 2016

Ongoing 2,357 2,216 84 88 88 89

Non-ongoing 290 262 18 11 10 10

Total 2,647 2,478 102 99 98 99

Percentage 50.4 49.2 1.9 2.0 1.9 2.0

Note: Includes staff on leave without pay and excludes the secretary. These figures are based on all female employees and employees who identify themselves as members of one or more diversity groups.

In the area of performance management, 65 per cent of participating employees agreed their most recent informal performance feedback would help improve their performance, an 11 per cent improvement from 2016. This trend was reinforced by noticeable improvements in perceptions that supervisors provided clear and consistent performance expectations (up 6 percentage points) and supervisor commitment to performance management (up 6 percentage points).

The total ongoing separation rate for ongoing employees increased in 2016-17 from 6.5 per cent to 7.5 per cent. In 2015-16 our separation rate remained well below the APS average of 9.6 per cent. As at 30 June 2017, data was not available for the APS in 2016-17.

TABLE 38 Ongoing separations 2015-16 and 2016-17

2016-17 2015-16

Number of ongoing employees 4,633 4,439

Total ongoing separations 338 288

Natural attrition (including transfers) 243 228

Redundancies, invalidities and terminations 95 60

% separating (the department) 7.5 6.5

In 2016-17, the personal leave rate was 14.5 days per FTE, compared with 14.9 days per FTE in 2015-16. Although this is an improvement, the rate remains high compared with the APS average.

We continue to focus on reducing unscheduled absence. In 2016-17, we created a positive attendance program, a multifaceted approach to improve our corporate culture and ensure our managers are skilled and equipped with tools to manage leave effectively within their teams.

Enhancing our learning and development to reinforce an active learning culture We developed, sourced and delivered a range of electronic and face-to-face training courses to build our people’s capability and ensure we meet our legislative and regulatory obligations.

The 2017 APS Employee Census reported that 67 per cent of our staff felt the department provided access to effective learning and development—a 5 per cent improvement on our 2016 result, and 3 per cent higher than the APS average.

Annual Report 2016-17

Annual performance statements

Strategic objective: Building an efficient and capable department

Annual performance statements

Strategic objective: Building an efficient and capable department

In 2016-17, we launched our learning management system—Learnhub. We worked on innovative approaches to training delivery, including immersive, interactive training and video-based eLearning. We also began rolling out a new pre-assessment option for mandatory eLearning courses, giving staff the opportunity to answer assessment questions without having to work through content with which they are already familiar.

We continued to deliver training to support the integrity of biosecurity operations as well as ensuring staff were competent and confident to use new powers under the Biosecurity Act 2015. We delivered training in alignment with our established competency requirements to ensure our staff were able to undertake business as usual activities in accordance with national standards. The technical training was supported by on the job assessment to validate training and assure competency.

We also boosted our corporate training, with new courses on unconscious bias, financial management, project management and work health and safety.

Snapshot: Growing reconciliation Our Growing reconciliation: Reconciliation Action Plan 2017-2019 (RAP) embodies our commitment to an inclusive Australian society that benefits our staff, partners, stakeholders and communities. The RAP supports activities around reconciliation with the department and our communities.

The RAP is the product of extensive engagement, including with our First Australians staff located across the breadth of our business. It has a broad set of ambitious targets underpinned by in-depth consultation, including regular forums, focus groups and meetings with our Aboriginal and Torres Strait Islander Ambassadors and the RAP working group.

The RAP was launched in March 2017, and received a stretch rating from Reconciliation Australia. We are one of a handful of APS agencies to hold this high status, which reflects our ambition to not only be an employer of choice but to put reconciliation into practice.

Our planned program of work covers five focus areas, emphasising the work of the department and our values:

â¢ Extending respect—widespread cultural learning, reconciliation awards, acknowledgment practices and efforts to address bias and racism

â¢ Northern futures—strengthening capacity for biosecurity surveillance and increasing contracted work with ranger groups

â¢ Inspired partnerships—partnering with ranger and community groups, sponsorships, outreach, and social media pilots

â¢ Rewarding careers—recruitment and retention in entry level programs, mentoring, and short-term secondments

â¢ Collective decisions—Indigenous procurement, divisional planning for reconciliation, RAP implementation andreporting.

Department of Agriculture and Water Resources 92

Work health and safety

Annual performance statement

TABLE 39 Performance measure—The department maintains safe and healthy workplaces a

Target Result against performance measure

The notifiable incident rate is maintained or reduced b.

Not met: In 2016-17, the rate of notifiable workplace injuries was 4.94perthousand employees, compared with 2.82 in 2015-16.

Of the 20 notifiable incidents reported to Comcare, 6 were classified as ‘serious injury’ and 14 classified as ‘dangerous incident’. Although the incident rate has increased slightly since 2015-16, reporting of notifiable incidents demonstrates a positive reporting culture, particularly of dangerous incidents. These will be used as lead indicators to proactively identify risk areas and take measures to prevent future incidents.

The department’s Comcare premium is maintained or reduced. Met: Our Comcare premium for 2017-18 was set at $11.4 million, a reduction of $1.1 million from 2016-17 ($12.5 million).

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17 , p. 29. b A notifiable incident is defined in the Work Health and Safety Act 2011 and includes death of a worker; or serious injury or illness requiring immediate treatment as an inpatient at a hospital; or treatment within 48 hours of exposure to a substance or dangerous incident prescribed by the Work Health and Safety Regulations.

Maintaining safe and healthy workplaces Strengthening work health and safety management systems to reduce injuries remains a key focus for us. In 2016-17, we delivered a number of initiatives, including:

â¢ a hazardous chemical management program and online chemical management compliance system â¢ an online system to record WHS risks and corrective actions, ensuring a nationally consistent and transparent approach to managing risk across the department â¢ completing a WHS training needs analysis report â¢ face-to-face training across the department in the areas of fatigue, risk management, and third-

party premises â¢ developing hazardous manual task and noise management strategies.

Over the past few years, we have improved our application of early intervention strategies to provide more timely and effective support to our people, while reducing the number of claims being lodged with Comcare. These measures are expected to have long-lasting benefits.

In 2016, we developed and rolled out an effective early intervention workshop for supervisors, and introduced the Re-connect program to more effectively address long-term compensation claims.

During the year, we recorded our lowest number of accepted claims (22 claims in 2016-17, down from 60 in 2015-16). As a result of our efforts, our indicative workers’ compensation premium for 2017-18 was reduced by $1 million on the previous year.

The 2016-17 external audit of our Rehabilitation Management System was conducted in May 2017. Our compliance rate increased to 88.5 per cent, compared with 85 per cent in 2015-16.

Annual Report 2016-17

Annual performance statements

Strategic objective: Building an efficient and capable department

Annual performance statements

Strategic objective: Building an efficient and capable department

TABLE 40 Reported serious personal injuries, prescribed incapacities and dangerous occurrences to employees 2015-16 and 2016-17

Category 2016-17 2015-16

Deaths 0 0

Serious personal injuries a 6 7

Dangerous occurrences b 14 5

a Serious personal injury means that a person needs emergency treatment by a doctor; treatment in a hospital as a casualty, with or without being admitted to the hospital; or admission to hospital. b Dangerous occurrences are ‘near misses’ that could have, but did not, result in death, serious personal injury or incapacity.

TABLE 41 Investigations, directions and notices under work health and safety legislation 2015-16 and 2016-17

Category 2016-17 2015-16

Investigations 3 10

Provisional improvement notices 0 0

Directions or notices 0 0

Financial performance

Annual performance statement

TABLE 42 Performance measure— the department delivers a balanced and financially sustainablebudget

Target Result against performance measure

A balanced budget is set at the beginning of the financial year. Met: We operated within our approved balanced budget (consistent with allowable losses) for 2016-17.

The department ended the year with a surplus of $12.7 million after allowable losses.

The department manages its cash in accordance with its capital management plan and with regard to its forward year commitments.

Met: We have a healthy balance sheet and cash reserves which place the department in a good position to meet its short term obligations.

The end-of-year financial position is consistent with forecasts from the start of the year.

Met: We performed better than the forecast at the start of the year. The improvement reflects better than expected cost-recovery revenue, the delayed pay rise and the favourable impact from government bond rateadjustments.

Department of Agriculture and Water Resources 94

Managing our finances Our 2014-2019 five-year finance strategy has the long-term objective of ensuring the department remains a financially sustainable Department of State and service delivery organisation. In particular, the strategy aims to ensure our cost-recovered services, which represent more than half of departmental expenditure, are efficient, transparent and sustainably funded.

In 2016-17, we implemented a number of initiatives to improve financial management. The initiatives include centralisation of non-discretionary expenditures, implementation of an activity-based accounting system, improvements in our departmental forecasting and reporting capability, and the establishment of a cost-recovery board. These initiatives have supported decision-making on the allocation of resources to meet changing business needs and to ensure the department is financially sustainable.

Our 2016-17 internal budget aligned to the Portfolio Budget Statements with an expected balanced budget (consistent with allowable losses). The 2016-17 full year result is in surplus of $12.7 million after allowable losses.

Revenue

In 2016-17, our revenue increased by $49 million from 2015-16 to $798.3 million. The increase was primarily due to additional revenue from government, totalling $37.2 million for new measures from the Agricultural Competitiveness White Paper and for the transfer of water resources functions from the Environment portfolio. Own source income increased by $11.8 million, primarily from Biosecurity arrangements and resources received free-of-charge for the Mickleham Post-Entry Quarantine Facility.

Figure 13 shows the own source income received by the department over the past seven years and estimated own source income from 2017-18 as per the Portfolio Budget Statements 2017-18.

FIGURE 13 Own source income, 2010-11 to 2020-21

100

150

200

250

300

350

400

450

2020 -21

2018 -19

2016 -17

2014 -15

2012 -13

2010 -11

Annual Report 2016-17

Annual performance statements

Strategic objective: Building an efficient and capable department

Annual performance statements

Strategic objective: Building an efficient and capable department

Total sales of goods and services revenue (including cost-recovery) collected in 2016-17 was $389.3 million with the breakdown by cost-recovery arrangement shown in Figure 14.

FIGURE 14 Sale of goods and services revenue by cost-recovery activity 2016-17

$m 50 100 150 200 250

0.7 1.1 1.4 2.3

4.1 4.1 5.1

241.9

6.6

Biosecurity Arrangement Food Export Arrangement

Plant Export Arrangement Live Animal Export Arrangement

Levies Revenue Service ABARES projects

National Landcare program

Indonesia Emerging Diseases program Water Eciency Labelling Scheme

Other

National Residue Survey

31.8

90.2

Note: ‘Other’ includes PGPA s. 74 receipts for biosecurity plant and animal health programs.

Departmental expenses

Our expenses totalled $802.3 million in 2016-17, against an estimated budget of $800.8 million (Portfolio Budget Statements 2016-17).

Figure 15 shows the trend of departmental operating expenses over the past seven years, and budgeted expenditure figures from 2017-18 as per the Portfolio Budget Statements 2017-18.

FIGURE 15 Departmental expenses 2010-11 to 2020-21

550

600

650

700

750

800

850

2020 -21

2018 -19

2016 -17

2014 -15

2012 -13

2010 -11

Note: Budget influx in 2015 and slow decline thereafter is mainly due to Water Resources machinery of government changes and Agricultural Competitiveness White Paper measures.

Department of Agriculture and Water Resources 96

Cost-recovery reserves

We manage four Cost-Recovery Implementation Statements, comprising eight cost-recovery arrangements and the National Residue Survey arrangement. These are supported by cost-recovery reserves.

Figure 16 outlines the cost-recovery reserve balances at the end of the year.

FIGURE 16 Cost-recovery reserve balances at 30 June 2017

16.8

8.3

0.9 0.7 0.6

4.0

-12

-8

-4

6.7

-3.3 -11.0

Live Animal Exports

Arrangement

Horticultural Exports

Arrangement

Seafood & Eggs Arrangement

Dairy Export Arrangement Non-Prescribed Goods

Arrangement

Meat Export Arrangement

Grain & Seed

Exports Arrangement

Biosecurity Arrangements

National Residue Survey Arrangement

Note: Only surplus reserves are recorded in the department’s financial statements.

Administered program performance

We have a range of administered programs. The material programs are:

â¢ A Competitive Agriculture Sector—boosting farm profits through rural research and development â¢ Drought Concessional Loans Scheme â¢ Drought Recovery Concessional Loans Scheme â¢ Farm Business Concessional Loans Scheme â¢ Rural Financial Counselling Service â¢ Farm Household Allowance â¢ Sustainable Rural Water Use and Infrastructure Program (SRWUIP).

We managed administered assets of $2,010.4 million on behalf of the government. This largely comprised $696.5 million in loans and investments in seven portfolio entities of $369.5 million.

Administered revenue received for 2016-17 was $591.1 million, an increase of $36.0 million on the 2015-16 revenue figure of $555.1 million. This result was mainly because of increased levy revenue of $32.3 million and other revenue of $2.9 million. Additionally, other gains of $129.9 million are recognised in 2016-17, primarily relating to the recognition of water entitlement assets received free-of-charge under the SRWUIP grants program.

Annual Report 2016-17

Annual performance statements

Strategic objective: Building an efficient and capable department

Annual performance statements

Strategic objective: Building an efficient and capable department

Expenditure for 2016-17 was $1,505.6 million, an increase of $325.3 million on the 2015-16 expenditure figure of $1,180.3 million. This increase was primarily in connection with levy disbursem*nts and Commonwealth contributions valued at $54.3 million, the SRWUIP valued at $193.6 million and the payments valued at $59.7 million to Murray-Darling Basin Authority as a result of the transition to a corporate Commonwealth entity.

Managing our assets

A significant portion of the our expenditure is related to property leases and property maintenance costs. We maintain around 110 sites across Australia ranging from office accommodation to post-entry quarantine facilities, laboratories, data facilities and residences in remote locations. As at 30 June 2017, our asset base was valued at $161.9 million. Our major investments are in land, buildings and ICT hardware and software.

We invest in new assets to improve our systems and processes. We manage capital investment through an annual capital plan that reflects both government priorities and ongoing business needs. We use key principles of the balanced scorecard framework to evaluate capital proposals and ensure investments are made effectively.

Information and communications technology

Annual performance statement

TABLE 43 Performance measure—Information and communications technology meets the department’s business needs a

Target Result against performance measure

No clients or staff are affected by an unplanned outage of department-managed ICT infrastructure or business application b.

Not met: In 2016-17, core department systems were available 96.45% of the time, with only 22 incidents affecting general availability and 72 incidents involving an unplanned outage that affected users of department systems.

Incidents where unplanned outages affected users included localised network outages and events that were outside our control, such as power outages. The effect of these incidents on users ranged from reduced performance through to full system outages.

Ninety per cent of ICT projects are delivered on time and within budget c. Partially met: In 2016-17, we completed 28 major ICT projects. We delivered 100% of the projects within budget. However, 46% of the

projects exceeded the scheduled delivery time frame.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 29. b Excludes failures of infrastructure or equipment hosted by external vendors or on public networks that are outside of the department’s control. c Major projects are ICT-enabled projects valued at $50,000 and above. Minor work projects are those valued at under $50,000. Performance is based on the IT project management framework, which allows project modifications (scope, budget, timing) in response to changing business needs and priorities.

Our information and communications technology Managing ICT capability and reliability is critical to our performance and delivery of services to clients. We monitor performance using an industry-standard impact and urgency matrix, where widespread impacts are rated ‘critical’ and more localised impacts to sites or systems are rated ‘high’.

Where full system outages occur, these are categorised in terms of duration, scope and severity of impact. Significant outages are subject to root cause analysis and reporting. We seek to minimise impacts on clients and put in place preventative strategies.

Department of Agriculture and Water Resources 98

Snapshot: Northern Australia Quarantine Strategy gets better access to the web Patchy and unreliable internet and mobile phone reception are issues for many remote and regional, departmental office and work sites. Improving capability is critical to managing biosecurityrisk.

With this in mind, we rolled out improved ICT access for our Aboriginal and Torres Strait Islander rangers and officers in Torres Strait and northern Australia.

Our rangers carry out biosecurity surveillance activities through the Northern Australia Quarantine Strategy (NAQS). This valuable work provides an early warning system for exotic pest, weed and disease detections across northern Australia and helps to mitigate the unique biosecurity risks facing the region.

Following extensive investigation, we began work to deploy services including improved mobile phone connectivity and Wi-Fi access to 10 sites in Torres Strait and other sites, including Christmas Island and the Cocos (Keeling) Islands. We also deployed internet connectivity to departmental vehicles used in Torres Strait.

We continue to support the biosecurity surveillance work of our rangers by providing ICT solutions for the collection, storage and reporting of tropical biosecurity data; to improve the diagnostic capacity of tropical biosecurity; and to expand biosecurity surveillance.

Further work will continue under the White Paper on Developing Northern Australia and the Agricultural Competitiveness White Paper initiatives to expand the biosecurity work of Aboriginal and Torres Strait Islander rangers.

To ensure good governance across projects we manage our ICT project work through an ICT Project Management office.

In 2016-17, we continued an active program of ICT projects focused on delivering the objectives of our ICT strategy. We delivered 100 per cent of projects within budget. However, 46 per cent of the projects exceeded their scheduled delivery dates. This partly reflects project modifications.

Annual Report 2016-17

Annual performance statements

Strategic objective: Building an efficient and capable department

Annual performance statements

Strategic objective: Building an efficient and capable department

Additional activities During 2016-17, we achieved a number of successful outcomes for activities that contributed to improving our department’s efficiency and capability and ensuring the delivery of services to our staff and stakeholders.

A new Enterprise Agreement

A ballot for a new enterprise agreement was conducted in June 2017 and we were successful in receiving a majority ‘yes’ vote. The Department of Agriculture and Water Resources Enterprise Agreement 2017-20 commenced in July 2017.

Information and Data Management Agenda

In May 2017, we implemented our first Information and Data Management Agenda. As part of the agenda, we developed a new Information and Data Management Framework that looks at different information and data management functions, and how we can increase our maturity level in these functions. The framework includes a number of key activities that will be implemented over time. A new Information Management Committee will be established to provide strategic oversight of our information and data management practices. A new Data Policy Team is also being established to drive the implementation of this work.

This work will help us contribute to the government’s Public Data Policy and Digital Continuity 2020 Policy. It highlights the importance of properly managing our information and data assets to maximise their value, use and re-use. The new framework will also enable us to start releasing non-sensitive data publicly.

Implementing the government’s Shared and Common Services Program Agenda

The Shared Services Program is a major whole-of-government change transformation activity. The program aims to:

â¢ drive business process standardisation across the APS by consolidating service provision from 94 agencies into designated public sector providers (Hubs) by the end of 2020-21, each offering end to end financial and human resource services

â¢ consolidate corporate services across the APS. To this end, numerous consumer agencies will be transitioning their core transactional services to their nominated provider.

We are fully engaged with the program and have committed to select a service hub to host the department’s core transaction services. The transactional services in scope for the Tranche 1 project includes Financial Management (FMIS) and Human Resource Management (HRMIS) functions as follows:

â¢ accounts payable â¢ accounts receivable â¢ general ledger management â¢ credit card management â¢ payroll.

In preparing for the changes under the program, we are implementing an FMIS Replacement Project (TechnologyOne) and HRMIS (Aurion Version 11) to ensure that our business systems and practices will align with our selected hub practices. We are a participant in the Annual Shared Services Benchmarking Exercise and contribute to the Department of Finance’s Standardisation of Business Processes project for the APS.

Department of Agriculture and Water Resources 100

Biosecurity Integrated Information Systems and Analytics (BISSA) Program

The Biosecurity Integrated Information System and Analytics (BIISA) program comprises two major initiatives funded by the Agricultural Competitiveness White paper. The BIISA is a business led, technology enabled program to improve the effectiveness of biosecurity functions by providing a technical architecture that facilitates decision making supported by better data access, data sharing and analysis. BIISA initiatives will enhance the department’s analytic capability to support better decision-making and management of biosecurity risks. BIISA also provides an opportunity to re-engineer biosecurity business processes to optimise efficiency and effectiveness. When fully implemented, BIISA will improve the way the department manages biosecurity risks, facilitates trade and market access, responds to policy changes, reviews existing import conditions and reacts to biosecurity issues or emergencies. Work on the program commenced in January 2017 and is on track for delivery in 2020.

Cyber Security Our ongoing information security program mitigates information security risks by implementing controls recommended by Australian Signals Directorate (ASD) and taking into account the unique insights into contemporary threats that we receive from our close working relationships with our ICT suppliers. We prioritise controls selected from ASD’s strategy to mitigate cyber security incidents. Our Secure Internet Gateway service is provided by Macquarie Telecom. This gateway, in combination with systems managed by the department and DCX Technology, effectively isolate our Internet facing systems from the internal network and provides a number of additional security services including spam and malware filtering for email, DMZs to isolate web servers and other Internet facing systems, load balancing to increase system availability, monitoring services integrated with our Security Incident and Event Monitoring system (SIEM), Denial of Service (DOS) prevention and Intrusion Prevention System.

Macquarie Telecom blocks unsophisticated DOS attacks. If the department or another agency using the gateway is the victim of a sophisticated Distributed Denial of Service (DDOS) attack, Macquarie works with the agencies and upstream ISPs to mitigate the attack. We use a variety of controls to block and detect attacks that attempt to install malicious software on our systems. These controls include inspection of email attachments and files downloaded from the Internet, application whitelisting, a combination of blacklisting and whitelisting websites, host and network intrusion prevention systems and centralised security incident and event monitoring through the SIEM system. We regularly re-assesses its risk posture, taking into account all credible sources of information, to ensure adequate controls are in place to manage known threats and to be positioned to respond to and recover from adverse cyber events.

Agricultural Intelligence Transformation Project

The Agricultural Intelligence Transformation Project (AITP) aims to transform ABARES’ extensive data holdings into an environment where they are discoverable, accessible and usable by the department, government, stakeholders and clients.

Users of ABARES data will be able to better understand and respond to future agricultural risks and opportunities, provide quicker and more consistent responses to data and information requests, access enhanced analytical tools and business intelligence, and be able to more easily discover innovative solutions to policy questions including through self service solutions

The focus of the AITP-Phase One is the transformation of the ABARES farm survey system and associated business processes as a pilot project preceding the full transformation of ABARES business processes and data holdings into the enterprise environment.

Delivering major infrastructure projects

We commenced Phase Two of delivering the Mickleham post-entry quarantine facility in Victoria. This has expanded the range of services now available at the facility at Mickleham, with additional capacity for cats and dogs and the ruminants facility now up and running. Work is progressing to move the avian facility in 2017-18.

Annual Report 2016-17

Annual performance statements Strategic objective: Being a best practice regulator

101

Annual performance statements Strategic objective: Being a best practice regulator

2 Strategic objective: Being a best practice regulator

We aim to be a trusted, effective and transparent regulator. We operate under a risk-based compliance approach that recognises good performance by reducing regulatory burden on our stakeholders.

We consider the regulatory burden for individuals, businesses and community organisations arising from our regulatory functions. This is given effect through a range of measures such as regulation impact statements and annual reporting on regulatory performance. Importantly, we are seeking to improve the experience and access for regulated entities through online service delivery and improved service standards. While this is not without challenges, there is a clear pathway to improvement over time.

The Regulator Performance Framework provides the basis for assessing our performance as a regulator. The first report on our performance was published in 2017.

We also report on other elements of our regulator performance role in relation to specific strategic objectives, including trade and market access, natural resource management and biosecurity.

No internal performance measures and targets for our regulatory performance were developed as part of the 2016-17 corporate plan. However, in this chapter we report against the targets identified in our 2017-18 corporate plan to provide a baseline for performance measurement in future years.

Objective: Encourage regulators to undertake their functions with the minimum impact necessary to achieve regulatory objectives and to effect positive, ongoing and lasting cultural change.

Department of Agriculture and Water Resources 102

Regulatory performance

Annual performance statement

TABLE 44 Performance measure—Regulatory practices seek to minimise the impact of regulation on clients and stakeholders a

Target Result against performance measure

New and amended regulations consider impacts on regulated entities b. Met: In 2016-17, we prepared 33 preliminary assessments and four regulation impact statements. The completed statements

were certified as best practice by the Office of Best Practice Regulation.

We assess and report our performance as a regulator under the Regulator Performance Framework c.

Met: The 2015-16 regulator performance report was published on our website in 2017. It reported our performance against key performance indicators.

a Performance measures and targets published in the Department of Agriculture and Water Resources Corporate Plan 2017-18 , p. 29. b Based on regulator impact assessments and preliminary assessments undertaken by the department in 2016-17. c Based on published regulator performance assessments for the preceding year.

Regulation impact statements Regulation impact statements (RIS) are required for all decisions made by the Australian Government and its agencies that are likely to have a regulatory impact on businesses, community organisations or individuals—unless the proposed change is a minor or machinery change. The Office of Best Practice Regulation (OBPR) determines whether a RIS is required based on preliminary assessments that we prepare. Where there are significant impacts on regulated entities, the OBPR may require us to develop a regulatory impact statement. This ensures the impact on regulated entities is assessed and minimises the likelihood of unintended negative impacts.

The regulatory assessments published in 2016-17 were:

â¢ Imported Food Reforms â¢ Regulation impact statement: Export tariff quota regulatory streamlining â¢ Tea Tree oil Levy â¢ Horticulture Code of Conduct.

Regulator Performance Framework We report annually on our regulatory performance. Performance is assessed against the six key indicators in the framework:

1. Regulators do not unnecessarily impede the efficient operation of regulated entities.

2. Communication with regulated entities is clear, targeted and effective.

3. Actions undertaken by regulators are proportionate to the regulatory risk being managed.

4. Compliance and monitoring approaches are streamlined and coordinated.

5. Regulators are open and transparent in their dealings with regulated entities.

6. Regulators actively contribute to the continuous improvement of regulatory frameworks.

This is published as a standalone Regulator Performance Framework report. To support our assessment, evidence-based metrics have been developed and approved by the Agricultural Industry

Annual Report 2016-17

Annual performance statements Strategic objective: Being a best practice regulator

103

Annual performance statements Strategic objective: Being a best practice regulator

Advisory Council. While we perform a broad range of functions to support the achievement of regulatory objectives, the following core regulatory functions are within scope: â¢ delivery of biosecurity functions â¢ control of exports, including certification

â¢ regulation of the importation of timber products and processing of raw logs to combat illegal logging â¢ monitoring of imported food â¢ implementing the Water Efficiency Labelling and Standards Scheme â¢ collecting levies for research, development and marketing.

The Regulator Performance Framework report lists the activities we undertake to improve the operation of our regulations. In 2016-17, these included:

â¢ implementing the first phase of the Biosecurity Act 2015 â¢ efforts to reduce the impact of regulatory compliance with the Illegal Logging Prohibition Regulation 2012 â¢ reviewing the agricultural exports regulation to improve export opportunities and reforms â¢ efforts to clarify labelling obligations under the Water Efficiency Labelling and Standards Scheme â¢ improving accountability to levy payers through annual reporting on the performance of the

levy system.

Our next report is due to be published in early 2018 and will be informed by a survey of our biosecurity and export regulation clients.

Service delivery

Annual performance statement

TABLE 45 Performance measure—Business processes and client services are improved through the better use of modern technology and improved work practices, and agreed service standards are met ab

Target Result against performance measure

Service delivery modernisation initiatives implemented in the reporting year provide benefits to clients.

Met: During 2016-17, our Service Delivery Modernisation program delivered a range of benefits to clients, including enhancements to the Post Entry Biosecurity System and implementation of an online facility for clients to apply to establish an approved arrangement.

Agreed service standards are met. Partially met: We are delivering our services within agreed timeframes and have demonstrated our strong commitment to improving our service delivery by meeting or exceeding our performance targets across 17 of the 18 client service standards.

For example, during the year, we received 220,747 calls through our national client service number. Of the 94.7% of calls answered, 87.8% were answered within the service level standard of 120seconds, against our service target of 80%.

The inspection of goods at an approved premises target of 95% of inspections being undertaken within 3 business days of booking was not met in two locations because of periods of significant short-term increases in inspection activity.

a Excludes failures of infrastructure or equipment hosted by external vendors or on public networks that are outside the department’scontrol. b Performance measure and targets published in the Department of Agriculture and Water Resources Corporate Plan 2016-17, p. 29.

Department of Agriculture and Water Resources 104

Service Delivery Modernisation Program Our Service Delivery Modernisation (SDM) program continues to find new ways to improve how we deliver biosecurity and export-related services.

Improvements to the Post Entry Biosecurity System have allowed importers of plants and plant material to move from paper-based post-entry quarantine processes to online process for managing bookings, releases and payment.

A new facility for approved arrangements means around 80 industry participants have moved from paper forms to online applications. This is providing a number of benefits, including improved data quality and performance.

Other SDM initiatives currently underway are expected to deliver significant benefits for clients and our workforce, including the provision of a single authenticated access point to department services.

Our service standards Our Client Service Charter outlines our service commitments and establishes benchmarks for the delivery of biosecurity and export-related services.

The quality of service provided to our clients is measured against 18 client service standards. During 2016-17, we expanded the range of client service standards beyond our client contact services to include our import and export services.

TABLE 46 Performance against service standards, 2016-17

Category Service standard Met/not met

Client contact services

Via phone Met

Via online forms Met

Via phone bookings or email Met

Import services

Inspection of goods at an approved premises Not met

Treatments Met

Inspection of non-standard vessels Met

Assess/issue documentation lodged via COLS Met

Assess/issue documentation lodged via email Met

Attend in-office for clearing of import and export goods Met

Import applications using BICON Met

Export services

Inspection of goods at an export registered establishment Met

Inspection of export goods for airfreight Met

Inspection of export goods for sea freight Met

Inspection of bulk vessels for export Met

Assess/issue export documentation Met

Plant export authorised officer applications - application assessment Met

Plant export authorised officer applications - deed of obligation Met

Plant export authorised officer applications - instrument of appointment Met

Annual Report 2016-17

Annual performance statements Strategic objective: Being a best practice regulator

105

Annual performance statements Strategic objective: Being a best practice regulator

We encourage feedback from the community and our stakeholders. During 2016-2017, we received 28 compliments, 253 complaints and 19 suggestions through our feedback channels.

Client feedback is reported quarterly to our Executive Management Committee, which considers trend data for planning and improving client interactions. We have also sought structured feedback on our services and this will inform our consideration of regulatory performance. We report on findings in relation to biosecurity performance.

Snapshot: Implementation of improved online Services - BICON The Australian Government’s Biosecurity Import Conditions system (BICON) was launched in phases from August 2015 and became fully operational on 15 July 2016. BICON provides ready access to biosecurity import conditions for more than 20,000 plants, animals, minerals and biological products. It can be used to determine whether a commodity intended for import intoAustralia:

â¢ is permitted

â¢ is subject to import conditions

â¢ requires supporting documentation

â¢ requires treatment

â¢ requires an import permit.

Importers can apply, track and manage BICON import permits online through a registered user account. The system is also used to notify registered users when published conditions change, ensuring importers are aware of the most current import conditions.

Receiving more than 1.8 million unique web hits a month, and with more than 15,000 registered importers, BICON has made it much easier for importers to comply with their biosecurity obligations. We have calculated that this will lead to an annual saving of more than $26million in compliance costs and regulatory burden. The lessons learnt from the first year of operation will inform system improvements.

Photo: Bicon website screenshot.

Part 3

Management and accountability Our governance 107

External service providers 112

External scrutiny 115

107 Annual Report 2016-17

Management and accountability Our governance

The Executive Management Committee (EMC) oversees the implementation and improvement of our governance structures and business operations, shares responsibility for building capability and promotes collaboration between business areas, other agencies and our stakeholders. During the year, the EMC shifted from weekly to fortnightly meetings.

In 2016-17, the EMC was supported by two sub-committees. â¢ Business Transformation Committee â¢ People, Safety and Culture Committee.

Following a sub-committee review, we are looking to implement a number of new processes during 2017-18.

TABLE 47 Executive committees—roles and membership at 30 June 2017

Committee Role Membership

Executive Management Committee

The EMC makes decisions and provides guidance to:

â¢ ensure the department achieves its purpose and objectives

â¢ build and maintain organisational capability

â¢ monitor performance against departmental objectives and priorities

â¢ monitor and respond to strategic, business and operational risks

â¢ allocate budgets and ensure financial sustainability

â¢ assure compliance with legislative, governance and administrative frameworks.

Met 35 times in 2016-17

Secretary (chair)

Deputy secretaries

Chief Finance Officer

Advisors:

Chief Information Officer

General Counsel

First Assistant Secretary, Service Delivery

First Assistant Secretary, Corporate Strategy and Governance (secretariat)

Audit Committee chair (as observer every quarter)

Our governance

108 Department of Agriculture and Water Resources

Committee Role Membership

Business Transformation Committee

The BTC is responsible for:

â¢ driving the strategic direction for business transformation within the department.

â¢ identifying linkages between projects and programs, particularly Tier 1 and Tier 2, and advise the EMC about the projects prior to funding.

â¢ identifying and prioritising substantial and significant change issues and related impacts to advise the EMC.

â¢ ensuring impacts of change activities across the portfolio are manageable for staff andclients.

â¢ promoting sharing of business experiences and best practice for change initiatives.

If delays were outside of the tolerance bounds set by the relevant Board, then the issues from projects and programs considered Tier 1 or Tier 2 come to the committee for resolution.

Met seven times in 2016-17

Deputy secretaries (one as chair)

Chief Finance Officer

Chief Information Officer

First Assistant Secretary, Corporate Strategy and Governance

First Assistant Secretary, Compliance

First Assistant Secretary, Service Delivery

First Assistant Secretary, Biosecurity Policy and Implementation

Executive Director, ABARES

The committee also includes the followingadvisors:

Assistant Secretary, Business Assurance

Assistant Secretary,

Design and Change

Assistant Secretary,

People Capability

Assistant Secretary,

Information Management and Public Data Taskforce

Assistant Secretary, Food Competition and Investment

Assistant Secretary, Operations Integration

People, Safety and Culture Committee

The PSCC is responsible for:

â¢ making recommendations to the EMC on overarching strategies and plans, and other people-related strategies of significance for the department orportfolio

â¢ making decisions, as appropriate, to implement or operationalise other issues, consistent with previous directions and decisions of the EMC

â¢ monitoring workforce impacts and associated risks to the department, and overseeing the effective implementation of appropriate management actions

â¢ undertaking regular performance monitoring on work health and safety, rehabilitation, performance, culture and unplanned absence

â¢ overseeing the resourcing, performance, implementation and continuous improvement of the department's people systems

â¢ identify and respond to strategic issues including work health and safety incidents, hazards and risks.

Met seven times in 2016-17

PSCC membership includes:

Deputy secretary (Chair)

First Assistant Secretary, Corporate Strategy and Governance (Deputy Chair)

First Assistant Secretary, Service Delivery Division

Three first assistant secretaries

Four assistant secretaries including one regional member

One external member from an APS agency at the discretion of the Chair.

109 Annual Report 2016-17

Management and accountability Our governance

Managing our risk Our Enterprise Risk Management Policy and Framework is administered in line with the requirements of the Commonwealth Risk Management Policy. We take a risk-based approach to policy and program development, integrating risk management with governance, planning and performance management processes.

A new on-line portal, Planning Hub, which integrates planning, risk management, reporting and project planning into one tool, was deployed and successfully used to undertake risk assessments during the 2017-18 divisional business planning process.

An award of ‘Highly Commended’ was presented to the department in the Enterprise-wide Risk Management category at the biennial Comcover Awards for Excellence in Risk Management. This was the only award presented to a Commonwealth entity within this category.

During 2016-17 five strategic risks to achieving our purpose were monitored through the EMC:

â¢ Pest and disease incursions—maintaining capacity to prevent and respond to incursions â¢ Maintain and improve market access—enabling the expansion of agricultural, fisheries and forestry exports, as well as preparing for and responding quickly to any loss of market access â¢ Effective implementation of government priorities—ensuring the department meets timing and

delivery expectations in respect of key government initiatives â¢ Maintain and enhance reputation—ensuring the department continuously and effectively engages with key stakeholders and has their trust and respect â¢ An efficient and effective department—ensuring the financial, workforce and systems capability of

the department is sufficient to meet our legal obligations and achieve our strategic objectives.

Each division developed a risk management plan as part of its annual business plan, and risk management procedures were integrated into project management processes.

A review of our strategic risks and strategic objectives was undertaken in 2016-17, resulting in a streamlining of strategic risks from five to four. The four new strategic risks will come into effect in 2017-18. We have updated our Enterprise Risk Management Policy and Framework accordingly.

Our fraud control We are committed to actively promoting the standards of behaviour outlined in the Australian Public Service Employment Principles, Values and Code of Conduct established under the Public Service Act 1999, the Public Interest Disclosure Act 2013 and the Public Governance, Performance and Accountability Act 2013. Our Fraud and Corruption Control Plan is informed by independent fraud and corruption risk assessments. These assessments evaluate existing and emerging fraud and corruption risk and detail controls and treatment strategies to address these risks.

Our fraud and corruption awareness strategy includes mandatory training and regular fraud-related messaging to all staff to build understanding, recognition and reporting of fraud and corruption.

Allegations of fraudulent, corrupt and criminal behaviour involving the department, organisations or individuals who receive funding and services through our programs are investigated in accordance with the Attorney-General’s Department’s ‘Australian Government Investigations Standards’. All reasonable measures are taken to recover the proceeds of fraud against the department.

In accordance with the Law Enforcement Integrity Commissioner Act 2006, prescribed members of the department are under the jurisdiction of the Australian Commission for Law Enforcement Integrity (ACLEI).

110 Department of Agriculture and Water Resources

Our security Our Department Security Plan provides the protective security framework for mitigating against security risks to our people, information and assets in accordance with the Australian Government Protective Security Policy Framework.

Staff who require access to security classified information are required to obtain and maintain an appropriate security clearance. We undertake physical security risk assessments to protect our assets. We actively protect our information through mechanisms such as electronic access control and remote monitoring.

Our Security Executive, Agency Security Advisor, and Information Technology Security Officer provide protective security advice.

We report annually on our Protective Security Policy Framework compliance to the Attorney-General’s Department and other key stakeholders.

Our assurance process The Audit Committee oversees an annual internal audit work program, undertaken by an independent internal audit team and contracted external service providers. The work program is developed in consultation with senior management and is reviewed regularly to ensure it is relevant and responsive to changes and business risks. The work program is approved by the Secretary.

The Audit Committee provides independent advice and assurance on reviewing the appropriateness of our financial reporting, performance reporting, system of risk oversight and management, and system of internal control.

Our operations are subject to further scrutiny by the Inspector-General of Biosecurity, a statutory body that reviews and reports on the way the department exercises its biosecurity powers, and the process for conducting import risk analyses.

The Australian National Audit Office conducts performance and financial statement audits on the department.

TABLE 48 Audit Committee—role and membership at 30 June 2017

Committee Role Membership

Audit Committee Provides independent assurance

and advice to the secretary on the department’s risk, control and assurance framework

Met five times in 2016-17

Ms Jenny Morison, independent member (chair)

Mr Geoff Knuckey, independent member

Ms Anthea Tinney, independent member

Mr David Parker (deputy chair)

Mr Nico Padovan, member

111 Annual Report 2016-17

Management and accountability Our governance

Compliance In 2016-17, we did not report to the Minister any significant issue that has affected the department under paragraph 19(1) (e) of the Public Governance, Performance and Accountability Act 2013.

Remuneration Senior executive remuneration policy

The Remuneration Tribunal determines a classification structure for offices of secretary, specifies total remuneration pay points for each level, and determines the level that applies to the department’s secretary. The secretary of the Department of the Prime Minister and Cabinet assigns which total remuneration pay point within the level applies to the secretary.

The secretary determines the remuneration for the department’s Senior Executive Service (SES) officers under section 24 (1) of the Public Service Act 1999, with regard to the Workplace Bargaining Policy 2015.

Our remuneration policy allows variations in remuneration between individual jobs, based on market and work-value considerations. This is vital to our ability to compete effectively for the best people in the employment market.

Non-salary benefits

Non-salary benefits provided to SES Band 3 employees as part of their remuneration package include superannuation and car parking. SES Band 1 and 2 employees receive superannuation as the only non-salary benefit and pay for car parking.

The only non-salary benefits provided to non-SES officers as part of their remuneration package are generally limited to superannuation. In exceptional cases, employees may have private use of a Commonwealth vehicle where it is deemed necessary for the performance of their duties.

112 Department of Agriculture and Water Resources

External service providers

Our procurement practices reflect the policies and principles outlined in the Commonwealth Procurement Rules. We focus on:

â¢ value for money â¢ encouraging competition â¢ efficient, effective, economical and ethical use of government resources â¢ accountability and transparency â¢ compliance with Australian Government policies.

Our divisions are responsible for their own procurement, subject to the accountable authority instructions and supporting departmental guidelines that complement the Commonwealth Procurement Rules.

We engage consultants where we lack specialist expertise or when independent assessment, research or review is required. Consultants are typically engaged to investigate or diagnose a defined issue or problem; carry out defined reviews or evaluations; or provide independent advice, information or creative solutions to assist in the department’s decision-making. Before engaging consultants, we take into account the skills and resources required for the task, the skills available internally and the cost-effectiveness of engaging external expertise.

We also enter into purchaser-provider arrangements with a range of government, industry and private sector agencies for services to improve the productivity, competitiveness and sustainability of Australia’s agriculture, fisheries and forestry industries.

Consultancies In 2016-17, the department entered into 81 new consultancy contracts with the total number of active consultancies being 133. Actual expenditure of all active consultancy contracts was $12,554,166.

Table 49 shows the number and value of consultancies with a value greater than $10,000 and total expenditure on consultancies for 2016-17 and the two previous years.

113 Annual Report 2016-17

Management and accountability External service providers

TABLE 49 Consultancies—number, value and total expenditure

Category 2016-17 2015-16 2014-15

Number of consultancies with a value greater than $10,000 let during the year

81 93 60

Total value of consultancies with a value greater than $10,000 let during the year

$6,134,619 $28,063,419 $4,592,735

Actual expenditure on new and ongoing consultancies during the year $12,554,166 $9,705,960 $3,146,584

Note: The value of 2015-16 consultancies greater than $10,000 is higher due to a significant water investment.

Indigenous procurement The government’s Indigenous Procurement Policy was launched on 1 July 2015 and aims to leverage the Commonwealth’s annual multi-billion procurement spend to:

â¢ drive demand for Indigenous goods and services â¢ stimulate Indigenous economic development â¢ grow the Indigenous business sector.

We support and implemented the government’s policy which includes considering Indigenous suppliers for all remote contracts and for all contracts valued between $80,000 and $200,000.

In 2016-17, the portfolio was set a target of 3 per cent or 31 contracts. The number of contracts entered into with Indigenous suppliers was 84, including multi-year contracts. Goods and services provided included Indigenous ranger services, building fit out, demolition and temporary personnel. Information on the Indigenous Procurement Policy, targets and results are available at the Department of the Prime Minister and Cabinet website.

Procurement initiatives to support small business We support small business participation in the Commonwealth procurement market. Small and medium enterprises participation statistics are available on the Department of Finance website.

We recognise the importance of ensuring small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury website.

Our procurement practices support small and medium enterprises by using:

â¢ the Commonwealth Contracting Suite for low-risk procurements valued at under $1 million â¢ small business engagement principles, as outlined in the government’s industry innovation and competitiveness agenda, such as communicating in clear, simple language and presenting information in an accessible format

â¢ credit cards where possible for purchases under $10,000.

114 Department of Agriculture and Water Resources

Other contract information The secretary did not exempt any contracts let during 2016-17 from being published on AusTender on the basis that publication would disclose exempt matters under the Freedom of Information Act 1982.

All contracts drafted by the department valued at $100,000 or more (GST inclusive) and let during the year provided for the Auditor-General to have access to the contractor’s premises.

Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.

Advertising and market research Payments to advertising agencies, market research organisations, polling organisations, direct mail organisations and media advertising organisations are set out in Table 50.

During 2016-17, we conducted an advertising campaign relating to biosecurity restrictions on importation of red dates into Australia. The campaign titled ‘Red Dates’ was advertised in a number of Chinese publications. Further information on red date import conditions is available on the department’s website and in the reports on Australian Government advertising prepared by the Department of Finance.

TABLE 50 Advertising and market research for 2016-17

Organisation Description Expenditure a

Advertising agencies—creative head hours billed:

N/A - -

Market research organisations

DBM Consultants Pty Ltd Stakeholder perception of department’s performance $148,363.88

Instinct and Reason PtyLtd

Social attitudes and understanding of biosecurity to support market access and plant health surveillance

$314,930.00

Q&A Market Research Focus groups in regards to marine pests and communities $24,032.34

The Social Research Centre Pty Ltd Pest animal and weeds management survey $24,961.91

Polling organisations

N/A - -

Direct mail organisations

N/A - -

Media advertising organisations—including recruitment and tender notices

Dentsu Mitchell Advertising $130,003.03

Recruitment $114,050.80 b

Total $756,341.96

a All figures are inclusive of GST. b Best available estimate as at 30 June 2017.

115 Annual Report 2016-17

Management and accountability External scrutiny

Parliamentary committee reports Parliamentary committees tabled five reports relevant to the department.

TABLE 51 Parliamentary committee reports tabled in 2016-17

Committee Inquiry Tabling date

Senate Environment and Communications References Committee

Factory freezer trawlers in the Commonwealth Small Pelagic Fishery 23 November 2016

House Standing Committee on Agriculture and Water Resources Roundtable on the biosecurity of the Australian honey bee industry

27 March 2017

Senate Environment and Communications References Committee

Risks and opportunities associated with the use of the bumblebee population in Tasmania for commercial pollination

12 June 2017

Senate Finance and Public Administration References Committee

The operation, effectiveness, and consequences of the Public Governance, Performance and Accountability (Location of Corporate Commonwealth Entities) Order 2016

13 June 2017

Joint Standing committee on Trade and Investment Growth Leveraging our advantages—the trade relationship between Australia

and Indonesia

19 June 2017

External scrutiny

116 Department of Agriculture and Water Resources

Government responses to inquiry reports The Australian Government responded to four parliamentary committee reports relevant to the department, shown in Table 52.

TABLE 52 Government responses tabled in 2016-17

Committee Inquiry Tabling date

Senate Rural and Regional Affairs and Transport References Committee Implications of the restriction on the use of fenthion on Australia’s horticultural industry

5 October 2016

Senate Rural and Regional Affairs and Transport Legislation Committee Annual Reports (No. 1 of 2015) 14 March 2017

Senate Select Committee on the Murray-Darling Basin Plan

Refreshing the Plan 16 February 2017

Senate Environment and Communications References Committee Environmental Biosecurity 28 June 2017

Reports by the Auditor-General The Auditor-General tabled five Australian National Audit Office (ANAO) reports on the department’s activities.

ANAO Audit Report No.17 2016-17: Design and Monitoring of the Rural Research and Development for Profit Programme

The audit assessed the effectiveness of the design process for the Rural Research and Development for Profit program, including performance measurement and reporting arrangements. The ANAO made two recommendations around the program’s design and performance measures. We agreed with both recommendations.

ANAO Audit Report No.18 2016-17: Confidentiality in Government Contracts: Senate Order for Entity Contracts (Calendar Year 2015 Compliance)

The audit assessed the appropriateness of the use and reporting of confidentiality provisions in Australian Government Contracts of the department and other entities. This was the ANAO’s first audit of compliance since the Senate Order was amended to allow the reporting of procurement contracts via AusTender for the purposes of the order.

We agreed with the overall findings in the ANAO report and will implement additional measures to improve compliance when assessing confidentiality provisions.

ANAO Audit Report No.34 2016-17: Implementation of the Biosecurity Legislative Framework

The audit assessed the effectiveness of the department’s implementation of the new biosecurity legislative framework. The report found the department had effectively established arrangements that supported a sound planning approach in the implementation of the new biosecurity legislative framework in accordance with legislated timeframes.

The ANAO made one recommendation aimed at the department finalising and implementing an effective Benefits Realisation Framework to effectively assess the impact the new legislation and the value of the reduction in costs and regulatory burden for external stakeholders. We agreed with the recommendation.

117 Annual Report 2016-17

Management and accountability External scrutiny

ANAO Audit Report No.52 2016-17: Managing Underperformance in the Australian Public Service

The audit assessed the effectiveness of the management of underperformance by the department and other entities and identify opportunities for improvement. The report identified four areas of key learnings for all entities relating to practices for managing underperformance.

We noted the report’s conclusions and acknowledged the need for change in the management of underperformance with the recommendations being incorporated into the review of our Performance Management Framework and associated processes.

ANAO Audit Report No.58 2016-17: Implementation of the Annual Performance Statements Requirements 2015-16

The audit assessed the department’s implementation of the annual performance statements requirements under the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the enhanced Commonwealth Performance Framework. As this was the first year of published performance statements under the PGPA Act, no recommendations were made but key areas were identified in the report for further attention by the department.

We agreed with most of the ANAO’s findings indicating areas in which its performance measurement and reporting could be improved. These findings will inform its continued efforts to mature its performance reporting.

We did not accept the finding that its Audit Committee did not meet the requirements of its charter, or the requirements and intent of the PGPA Rule, in providing assurance of the certification process. The committee undertook a range of work to meet its charter and the department considers that the assurance provided was consistent with advice from the Department of Finance on the role of audit committees in the certification process. We are committed to ensuring the Audit Committee meets the requirements of the PGPA Rule.

Reports by the Australian Commissioner for Law Enforcement Integrity (ACLEI) Since 1 July 2013, certain staff members have been prescribed to be within the ACLEI’s jurisdiction. Prescribed staff currently include the secretary, regional managers, members of staff involved in the assessment, clearance or control of vessels or cargo imported into Australia, and members of staff with access to the Integrated Cargo System.

In 2016-17, the ACLEI did not release any reports on the activities of the department.

Other reports In 2016-17, the Commonwealth Ombudsman did not release any reports on the activities of the department.

Freedom of information We make documents available to the public under the Freedom of Information Act 1982 (FOI Act), either in response to requests for access to information, or through its websites, in accordance with the Information Publication Scheme (IPS).

Agencies subject to the FOI Act are required to publish information to the public as part of the IPS, in accordance with Part II of the Act. Each agency must display on its website a plan showing what information it publishes in accordance with the IPS requirements. Our IPS plan is available on our website under ‘reporting’.

118 Department of Agriculture and Water Resources

We also publish corporate and operational information on our website, and reports on information accessed through FOI applications in a disclosure log.

In 2016-17, we received 85 requests for access under the FOI Act and three requests for internal review and no requests for external review. We finalised 86 requests and four internal reviews. All requests were processed in accordance with the statutory timeframes. Further statistical data on FOI requests received and processed by the department and all Commonwealth agencies each financial year are published by the Office of the Australian Information Commissioner.

In 2016-17, the Australian Information Commissioner did not review any decisions by the department to refuse access to a document requested under the FOI Act.

Reports by the Inspector-General of Biosecurity The Inspector-General of Biosecurity has a broad scope to review the performance of biosecurity risk management systems and issues that are the department’s responsibility. The Inspector-General makes key findings and recommendations available publicly unless they contain information that is considered prejudicial to the public interest. We provide administrative support to the Inspector-General.

During 2016-17, the Inspector-General:

â¢ completed a review of the biosecurity risks posed by invasive vector mosquitoes, especially Aedes spp., entering or establishing in Australia â¢ initiated reviews of: á² the circ*mstances leading to the 2017 suspension of uncooked prawn imports into Australia and

the biosecurity considerations relevant to future trade in uncooked prawns á² the risks posed by ‘hitchhikers and contaminants’ (biosecurity risk material) associated with cargo containers, transport methods and conveyances (for example, vessels and aircraft) á² the biosecurity risk management lessons that can be drawn from an analysis of recent (up to

10 years) terrestrial pest and disease incursions, border breaches and high-risk interceptions into Australia, as well as considering information from other QUAD countries (Canada, New Zealand and USA).

The Inspector-General of Biosecurity’s reports are available on its website.

Disclosure of information under the Biosecurity Act 2015 Section 590 of the Biosecurity Act 2015 (Biosecurity Act) requires the Director of Biosecurity to report on the use of protected information for the period 16 June 2016 to 30 June 2017. This is the first report on the use of protected information since the commencement of the Biosecurity Act in 2016.

During 2016-17, there were no reports of potential breaches of the Biosecurity Act in relation to the use of protected information.

There have been two written authorisations to disclose protected information under section 580(3) of the Biosecurity Act.

Part 7

Appendices Appendix 1: Entity resource and outcome statements 120

Appendix 2: Ecologically sustainable development and environmental performance 135

Appendix 3: Human resources statistics 140

Appendix 4: Grants programs 143

Appendix 5: Report on the operation of the Natural Resources Management (Financial Assistance) Act 1992 145

Appendix 6: National Residue Survey Annual Report 2016-17 146

Appendix 7: Water Efficiency Labelling and Standards Scheme Annual Report 2016-17 149

Appendix 8: Water for the Environment Special Account 151

120 Department of Agriculture and Water Resources

TABLE 53 Entity resource statement, 2016-17

Actual available appropriation for 2016-17 $’000

Payments made 2016-17 $’000

Balance remaining 2016-17 $’000

(a) (b) (a)-(b)

Ordinary annual services1

Departmental appropriation

Prior year departmental appropriation 48,805 48,805 -

Departmental appropriation 2 385,627 330,413 55,214

s. 74 retained revenue receipts 28,646 28,646 -

Total 463,078 407,864 55,214

Administered expenses

Outcome 1 118,406 102,002

s. 74 retained revenue receipts 439 439

Prior year available 38,751 26,636

Section 51 determinations (8,160) -

Outcome 2 31,056 27,602

s. 74 retained revenue receipts 177 177

Prior year available 3,327 1,664

Section 51 determinations (3,490) -

Outcome 3 404,093 294,325

s. 74 retained revenue receipts 7 7

Prior year available 25,169 11,718

Section 51 determinations (73,951) -

Appendix 1: Entity resource and outcome statements

121 Annual Report 2016-17

Management and accountability Appendix 1: Entity resource and outcome statements

Actual available appropriation for 2016-17 $’000

Payments made 2016-17 $’000

Balance remaining 2016-17 $’000

Total 535,824 464,570

Total ordinary annual services A 998,902 872,434

Other services3

Administered expenses

Specific payments to States, ACT, NT and local government

Outcome 3—National Urban Water and Desalination Plan

2,100 1,972 128

Total 2,100 1,972 128

Departmental non-operating

Equity injections 12,703 4,658 8,045

Prior year available 4,603 1,404 3,199

Total 17,306 6,062 11,244

Administered non-operating

Administered assets and liabilities 487,045 234,090 252,955

Prior year available 296,885 45,000 251,885

Total 783,930 279,090 504,840

Total other services B 803,336 287,124

Total available annual appropriations (A+B) 1,802,238 1,159,558

Special appropriations

Special appropriations limited by criteria/entitlement

Agricultural and Veterinary Chemicals (Administration) Act 1992—s. 58 (6) amount payable to the APVMA

34,460

Australian Animal Health Council (Live-stock Industries) Funding Act 1996, s. 5

7,519

Australian Grape and Wine Authority Act 2013 , s. 32—payments to the Authority

33,029

Australian Meat and Live-stock Industry Act 1997 , s. 63(2)—payments to the industry marketing body

76,978

122 Department of Agriculture and Water Resources

Actual available appropriation for 2016-17 $’000

Payments made 2016-17 $’000

Balance remaining 2016-17 $’000

Australian Meat and Live-stock Industry Act 1997 , s. 64(2)—payments to the industry research body

26,013

Australian Meat and Live-stock Industry Act 1997 , s. 64A(2)—payments to the livestock export marketing body

3,422

Australian Meat and Live-stock Industry Act 1997 , s. 64B(2)—payments to the livestock export research body

685

Australian Meat and Live-stock Industry Act 1997 , s. 64C(2)—payments to the meat processor marketing body

9,800

Australian Meat and Live-stock Industry Act 1997 , s. 64D(2) - payments to the meat processor research body

7,506

Australian Meat and Live-stock Industry Act 1997 , s. 66(1)—Commonwealth contribution to industry research body

49,303

Dairy Produce Act 1986 , s. 6(1) 57,968

Egg Industry Service Provision Act 2002 , s.8(1) 9,763

Farm Household Support Act 2014, s. 105— Payments for Farm Household Allowance

61,601

Forestry Marketing and Research and Development Services Act 2007 , s. 9(1) payments and matching payments to an industry services body and Commonwealth administration expenses

11,913

Horticulture Marketing and Research and Development Services Act 2000 , s. 16(9)

104,878

Pig Industry Act 2001 , s. 10(1) 21,262

Plant Health Australia (Plant Industries) Funding Act 2002, s. 6

2,230

Plant Health Australia (Plant Industries) Funding Act 2002, s. 10B

4,796

Primary Industries Research and Development Act 1989, s. 30(3)—Cotton R&D Corporation

11,487

Primary Industries Research and Development Act 1989, s. 30(3)—Grains R&D Corporation—Other Grains

105,756

Primary Industries Research and Development Act 1989, s. 30(3)—Grains R&D Corporation—Wheat

105,147

123 Annual Report 2016-17

Management and accountability Appendix 1: Entity resource and outcome statements

Actual available appropriation for 2016-17 $’000

Payments made 2016-17 $’000

Balance remaining 2016-17 $’000

Primary Industries Research and Development Act 1989, s. 30(3)—Rural Industries R&D Corporation

6,663

Primary Industries Research and Development Act 1989, s. 30A(3) and s.30B(9)—Fisheries R&D Corporation

20,669

Public Governance, Performance and Accountability Act 2013, - s58, National Residue Survey, Departmental

16,000

Public Governance, Performance and Accountability Act 2013, s. 77—Repayments

1,445

Sugar Research and Development Services Act 2013 , s. 7—payment to the sugar industry services body

32,662

Wool Services Privatisation Act 2000 , s. 31(4)

73,001

Water Act 2007— S86AG— AAO 21/9/2015 Environment to Agriculture

110,000

Total special appropriations C 1,005,956 1,005,956

Special Accounts4

Opening balance 94,069

Appropriation receipts 5 245,991

Non-appropriation receipts to Special Accounts 391,927

Payments made 539,914

Total Special Accounts D 731,987 539,914 192,073

Total resourcing (A+B+C+D) 3,540,181 2,705,428

Less appropriations drawn from annual or special appropriations above and credited to Special Accounts and/or payments to corporate entities through annual and special appropriations 5

652,498 652,498

Total net resourcing for Agriculture 2,887,683 2,052,930

1 Appropriation Acts (Nos.1 and 3) 2016-17. This also includes prior year departmental appropriation, s. 74 retained revenue receipts and s. 51 determinations. 2 Includes an amount of $9.9 million in 2016-17 for the Departmental Capital Budget. For accounting purposes this amount has been designated as ‘contributions by owners’. 3 Appropriation Acts (Nos.2 and 4) 2016-17. This also includes prior year administered appropriation and s. 51 determinations. 4 Does not include ‘Special Public Money’ held in Services for Other Entities and Trust Moneys Special accounts (SOETM). 5 Appropriation receipts from the department's annual appropriations for 2016-17 are included above.

124 Department of Agriculture and Water Resources

TABLE 54 Expenses for Outcome 1, 2016-17

Outcome 1: More sustainable, productive, internationally competitive and profitable Australian agricultural, food and fibre industries through policies and initiatives that promote better resource management practices, innovation, self-reliance and improved access to international markets.

Budget* 2016-17

$’000 (a)

Actual Expenses 2016-17

$’000 (b)

Variation 2016-17

$’000 (a) - (b)

Program 1.1: Agricultural Adaptation

Administered expenses

Ordinary annual services (Appropriation Act No. 1)

Clean Energy Future—Creating Opportunities on the Land— extending the benefits of the Carbon Farming Initiative

10,526 11,617 (1,091)

Expenses not requiring appropriation in the Budget year

Write-down and impairment of assets - (2) 2

Departmental expenses

Departmental appropriation 6,893 6,956 (63)

Expenses not requiring appropriation in the Budget year 249 267 (18)

Total for Program 1.1 17,668 18,838 (1,170)

Program 1.2: Sustainable Management - Natural Resources

Administered expenses

Ordinary annual services (Appropriation Act No. 1)

A More Competitive and Sustainable Fisheries Sector— Recognise OceanWatch as a Natural Resource Management Group

600 600 -

Stronger Farmers, Stronger Economy—strengthening research, skills and management of natural resources—Pest Animal and Weed Management

9,150 1,997 7,153

National Landcare Program 909 3,499 (2,590)

National Landcare Program transfer to Special Account (909) (3,499) 2,590

National Carp Control Plan 2,548 4,291 (1,743)

Special Accounts

Natural Resources Management Account—s. 80, PGPA Act 2013 [s. 11, Natural Resources Management (Financial Assistance) Act 1992]

1,923 3,202 (1,279)

Departmental expenses

Departmental appropriation 12,770 6,577 6,193

Expenses not requiring appropriation in the Budget year 153 198 (45)

Total for Program 1.2 27,144 16,865 10,279

125 Annual Report 2016-17

Management and accountability Appendix 1: Entity resource and outcome statements

Budget* 2016-17

$’000 (a)

Actual Expenses 2016-17

$’000 (b)

Variation 2016-17

$’000 (a) - (b)

Program 1.3: Forestry Industry

Administered expenses

Ordinary annual services (Appropriation Act No. 1)

National Institute for Forest Products Innovation - establishment

- 200 (200)

Special appropriations

Forestry Marketing and Research and Development Services Act 2007, s. 9(1) payments and matching payments to an industry services body and Commonwealth administration expenses

10,561 11,898 (1,337)

Departmental expenses

Departmental appropriation 5,804 4,364 1,440

Expenses not requiring appropriation in the Budget year 116 165 (49)

Total for Program 1.3 16,481 16,627 (146)

Program 1.4: Fishing Industry

Administered expenses

Ordinary annual services (Appropriation Act No. 1)

A More Competitive and Sustainable Fisheries Sector—Support for Recreational and Commercial Fishing Peak Bodies 200 300 (100)

Fisheries Resources Research Fund 440 1,043 (603)

Special appropriations

Primary Industries Research and Development Act 1989 , s. 30A(3) and s. 30B(9)—Fisheries R&D Corporation 21,431 23,283 (1,852)

Departmental expenses

Departmental appropriation 10,404 7,355 3,049

Expenses not requiring appropriation in the Budget year 189 263 (74)

Total for Program 1.4 32,664 32,244 420

Program 1.5: Horticulture Industry

Administered expenses

Special appropriations

Horticulture Marketing and Research and Development Services Act 2000, s. 16(9) 95,796 99,693 (3,897)

Departmental expenses

126 Department of Agriculture and Water Resources

Budget* 2016-17

$’000 (a)

Actual Expenses 2016-17

$’000 (b)

Variation 2016-17

$’000 (a) - (b)

Departmental appropriation 1,505 1,902 (397)

Expenses not requiring appropriation in the Budget year 87 77 10

Total for Program 1.5 97,388 101,672 (4,284)

Program 1.6: Wool Industry

Administered expenses

Special appropriations

Wool Services Privatisation Act 2000 , s. 31(4) 69,100 74,953 (5,853)

Departmental expenses

Departmental appropriation 937 871 66

Expenses not requiring appropriation in the Budget year 23 24 (1)

Total for Program 1.6 70,060 75,848 (5,788)

Program 1.7: Grains Industry

Administered expenses

Special appropriations

Primary Industries Research and Development Act 1989 , s. 30(3)— Grains R&D Corporation—Other Grains 84,443 106,827 (22,384)

Primary Industries Research and Development Act 1989 , s. 30(3)— Grains R&D Corporation—Wheat 98,234 106,015 (7,781)

Departmental expenses

Departmental appropriation 1,761 1,069 692

Expenses not requiring appropriation in the Budget year 36 52 (16)

Total for Program 1.7 184,474 213,963 (29,489)

Program 1.8: Dairy Industry

Administered expenses

Ordinary annual services (Appropriation Act No. 1)

Dairy Industry Assistance Package - 900 (900)

Special appropriations

Dairy Produce Act 1986 , s. 6(1) 58,451 52,944 5,507

Departmental expenses

Departmental appropriation 946 657 289

127 Annual Report 2016-17

Management and accountability Appendix 1: Entity resource and outcome statements

Budget* 2016-17

$’000 (a)

Actual Expenses 2016-17

$’000 (b)

Variation 2016-17

$’000 (a) - (b)

Expenses not requiring appropriation in the Budget year 17 28 (11)

Total for Program 1.8 59,414 54,529 4,885

Program 1.9: Meat and Livestock Industry

Administered expenses

Special appropriations

Australian Meat and Live-stock Industry Act 1997 , s. 63(2)—payments to the industry marketing body

66,120 75,601 (9,481)

Australian Meat and Live-stock Industry Act 1997 , s. 64(2)—payments to the industry research body

22,075 25,606 (3,531)

Australian Meat and Live-stock Industry Act 1997 , s. 64A(2)—payments to the livestock export marketing body

4,095 3,443 652

Australian Meat and Live-stock Industry Act 1997 , s. 64B(2)—payments to the livestock export research body

821 689 132

Australian Meat and Live-stock Industry Act 1997 , s. 64C(2)—payments to the meat processor marketing body

5,665 10,623 (4,958)

Australian Meat and Live-stock Industry Act 1997 , s. 64D(2)—payments to the meat processor research body

10,071 6,587 3,484

Australian Meat and Live-stock Industry Act 1997 , s. 66(1)—Commonwealth contribution to industry research body 53,662 55,783 (2,121)

Pig Industry Act 2001 , s. 10(1) 21,888 21,249 639

Departmental expenses

Departmental appropriation 755 1,161 (406)

Expenses not requiring appropriation in the Budget year - 56 (56)

Total for Program 1.9 185,152 200,798 (15,646)

Program 1.10: Agricultural Resources

Administered expenses

Ordinary annual services (Appropriation Act No. 1)

A Competitive Agriculture Sector—Boosting Farm Profits Through Rural Research and Development

19,799 18,400 1,399

A Competitive Agriculture Sector—Improved Access to Agricultural and Veterinary Chemicals

2,532 2,500 32

Agricultural and Veterinary Chemicals Minor Use Program 143 136 7

Australian Grape and Wine Authority 2,000 2,000 -

128 Department of Agriculture and Water Resources

Budget* 2016-17

$’000 (a)

Actual Expenses 2016-17

$’000 (b)

Variation 2016-17

$’000 (a) - (b)

Beef Week and the Beef Australia Expo - 850 (850)

Community Development Grants Program - 100 (100)

Northern Australia Rice industry - 1,000 (1,000)

Rural Industries Research and Development Corporation 9,170 9,170 -

Stronger Farmers, Stronger Economy—a fairer go for farm businesses—farm co-operatives and collaboration pilot 6,888 6,888 -

Special appropriations

Agricultural and Veterinary Chemicals (Administration) Act 1992 — s. 58 (6) amount payable to the APVMA 30,770 31,331 (561)

Australian Grape and Wine Authority Act 2013 , s. 32—payments to the Authority 29,551 32,562 (3,011)

Egg Industry Service Provision Act 2002 , s. 8(1) 9,160 9,712 (552)

Primary Industries Research and Development Act 1989 , s. 30(3)— Cotton R&D Corporation 10,753 12,260 (1,507)

Primary Industries Research and Development Act 1989 , s. 30(3)— Rural Industries R&D Corporation 8,189 7,130 1,059

Sugar Research and Development Services Act 2013 , s. 7—payment to the sugar industry services body 28,933 33,150 (4,217)

Expenses not requiring appropriation in the Budget year

Write-down and impairment of assets - 967 (967)

Departmental expenses

Departmental appropriation 56,892 43,495 13,397

Expenses not requiring appropriation in the Budget year 1,928 1,437 491

Total for Program 1.10 216,708 213,088 3,620

Program 1.11: Drought Programs

Administered expenses

Ordinary annual services (Appropriation Act No. 1)

Farm Business Concessional Loans Scheme—administration 6,250 538 5,712

Drought relief package—concessional loans—administration - 127 (127)

Drought recovery concessional loans scheme—administration - 74 (74)

Expenses not requiring appropriation in the Budget year

129 Annual Report 2016-17

Management and accountability Appendix 1: Entity resource and outcome statements

Budget* 2016-17

$’000 (a)

Actual Expenses 2016-17

$’000 (b)

Variation 2016-17

$’000 (a) - (b)

Farm Business Concessional Loans Scheme—discount expenses 387 3,044 (2,657)

Drought Recovery—concessional loans—administration - 160 (160)

Drought Recovery—concessional loans—discount expenses - 2 (2)

Drought relief package—concessional loans—administration 1,320 1,979 (659)

Write-down and impairment of assets - 56 (56)

Departmental expenses

Departmental appropriation 2,891 3,244 (353)

Expenses not requiring appropriation in the Budget year 37 49 (12)

Total for Program 1.11 10,885 9,273 1,612

Program 1.12: Rural Programs

Administered expenses

Ordinary annual services (Appropriation Act No. 1)

Rural Financial Counselling Service 16,232 17,297 (1,065)

Stronger Farmers, Stronger Economy—new drought management framework—managing farm risk program

5,550 114 5,436

Special appropriations

Farm Household Support Act 2014, s. 105—payments for Farm Household Allowance 117,736 60,833 56,903

Expenses not requiring appropriation in the Budget year

Write-down and impairment of assets - 5,389 (5,389)

Farm Finance—concessional loans scheme—administration 1,550 1,550 -

Departmental expenses

Departmental appropriation 10,356 8,526 1,830

Expenses not requiring appropriation in the Budget year 153 429 (276)

Total for Program 1.12 151,577 94,138 57,439

Program 1.13: International Market Access

Administered expenses

Ordinary annual services (Appropriation Act No. 1)

Agriculture Advancing Australia—International Agricultural Cooperation

145 145 -

130 Department of Agriculture and Water Resources

Budget* 2016-17

$’000 (a)

Actual Expenses 2016-17

$’000 (b)

Variation 2016-17

$’000 (a) - (b)

Food and Agriculture Organization of the United Nations (FAO) 12,636 13,491 (855)

Indonesia-Australia Red Meat and Cattle Partnership 2,695 3,197 (502)

International Organisations Contributions 1,855 2,104 (249)

Stronger Farmers, Stronger Economy - improvements to access premium markets - cooperation activities 1,500 1,495 5

Departmental expenses

Departmental appropriation 34,510 31,655 2,855

Expenses not requiring appropriation in the Budget year 523 723 (200)

Total for Program 1.13 53,864 52,810 1,054

Outcome 1: Totals by appropriation type

Administered expenses

Ordinary annual services (Appropriation Act No. 1) 111,768 104,073 7,695

Special appropriations 857,505 862,172 (4,667)

Special Accounts 1,923 3,202 (1,279)

Expenses not requiring appropriation in the Budget year 3,257 13,145 (9,888)

Less amounts transferred within the department (909) (3,499) 2,590

Departmental expenses

Departmental appropriation 1,2 146,424 117,832 28,592

Expenses not requiring appropriation in the Budget year 3 3,511 3,768 (257)

Total expenses for Outcome 1 1,123,479 1,100,693 22,786

2015-16 2016-17

Average Staffing Level (number) 607 581

1 Departmental Appropriation combines Ordinary annual services (Appropriation Acts No. 1) and Retained Revenue Receipts under section 74 of the PGPA Act 2,013. 2 Departmental appropriation allocations are notional and reflect the current structure of the department. 3 Departmental ‘Expenses not requiring appropriation in the Budget year’ is made up of depreciation expenses, amortisation expense, write down and impairment of assets and resources received free of charge. * Original budget as presented in the 2016-17 Portfolio Budget Statements (PBS).

131 Annual Report 2016-17

Management and accountability Appendix 1: Entity resource and outcome statements

TABLE 55 Expenses for Outcome 2, 2016-17

Outcome 2: Safeguard Australia's animal and plant health status to maintain overseas markets and protect the economy and environment from the impact of exotic pests and diseases, through risk assessment, inspection and certification, and the implementation of emergency response arrangements for Australian agricultural, food and fibre industries.

Budget* 2016-17

$'000 (a)

Actual Expenses 2016-17

$'000 (b)

Variation 2016-17

$'000 (a) - (b)

Program 2.1: Biosecurity and Export Services

Administered expenses

Ordinary annual services (Appropriation Act No. 1)

A Competitive Agriculture Sector—support for small exporters 2,422 2,334 88

Stronger Farmers, Stronger Economy—improvements to access premium markets—Improve Biosecurity

8,480 8,062 418

Centre of Excellence for Biosecurity Risk and Research 1,782 1,793 (11)

Expenses not requiring appropriation in the Budget year

National Residue Survey Account—s. 80, PGPA Act 2013, [s. 6 , National Residue Survey Administration Act 1992 ]

9,243 10,341 (1,098)

Write-down and impairment of assets - (179) 179

Departmental expenses

Departmental appropriation 176,689 195,648 (18,959)

Special Accounts

Australian Quarantine and Inspection Service Special Account— s. 78, PGPA Act 2013 381,033 388,086 (7,053)

National Residue Survey Account—s. 80, PGPA Act 2013 [s. 6, National Residue Survey Administration Act 1992 ] 10,252 11,347 (1,095)

Expenses not requiring appropriation in the Budget year 11,936 27,115 (15,179)

Total for Program 2.1 601,837 644,547 (42,710)

Program 2.2: Plant and Animal Health

Administered expenses

Ordinary annual services (Appropriation Act No. 1)

A Competitive Agriculture Sector—Stronger Biosecurity and Quarantine Arrangements

1,888 1,146 742

A Competitive and Sustainable Fisheries Sector—Review of Invasive Marine Pests

1,643 1,096 547

Animal Biosecurity and Response Reform 983 958 25

Commonwealth membership of Animal Health Australia and Plant Health Australia 2,052 2,213 (161)

International Organisations Contribution—World Organisation for Animal Health 241 263 (22)

132 Department of Agriculture and Water Resources

Budget* 2016-17

$'000 (a)

Actual Expenses 2016-17

$'000 (b)

Variation 2016-17

$'000 (a) - (b)

Other Exotic Disease Preparedness Program 633 632 1

Payment to CSIRO—Contribution to the operating costs of the Australian Animal Health Laboratory

8,047 8,047 -

Plant Biosecurity and Response Reform 1,385 1,384 1

Stronger Farmers, Stronger Economy—strengthening research, skills and management of natural resources—Emergency Response Exotic Pest and Disease Incursions—Immediate Assistance Fund

1,500 - 1,500

Special appropriations

Australian Animal Health Council (Live-stock Industries) Funding Act 1996, s. 5 6,401 7,415 (1,014)

Plant Health Australia (Plant Industries) Funding Act 2002, s. 6 2,026 2,217 (191)

Plant Health Australia (Plant Industries) Funding Act 2002, s. 10B 2,448 4,759 (2,311)

Departmental expenses

Departmental appropriation 40,990 25,804 15,186

Expenses not requiring appropriation in the Budget year 580 1,030 (450)

Total for Program 2.2 70,817 56,964 13,853

Outcome 2: Totals by appropriation type

Administered expenses

Ordinary annual services (Appropriation Act No. 1) 31,056 27,928 3,128

Special appropriations 10,875 14,391 (3,516)

Expenses not requiring appropriation in the Budget year 9,243 10,162 (919)

Departmental expenses

Departmental appropriation 1,2 217,679 221,452 (3,773)

Special Accounts 391,285 399,433 (8,148)

Expenses not requiring appropriation in the Budget year 3 12,516 28,145 (15,629)

Total expenses for Outcome 2 672,654 701,511 (28,857)

2015-16 2016-17

Average Staffing Level (number) 3,505 3,759

1 Departmental Appropriation combines Ordinary annual services (Appropriation Act No. 1) and Retained Revenue Receipts under section 74 of the PGPA Act 2,013. 2 Departmental appropriation allocations are notional and reflect the current structure of the department. 3 Departmental 'Expenses not requiring appropriation in the Budget year' is made up of depreciation expenses, amortisation expense, write down and impairment of assets and resources received free of charge. * Original budget as presented in the 2016-17 Portfolio Budget Statements (PBS).

133 Annual Report 2016-17

Management and accountability Appendix 1: Entity resource and outcome statements

TABLE 56 Expenses for Outcome 3, 2016-17

Outcome 3: Improve the health of rivers and freshwater ecosystems and water use efficiency through implementing water reforms, and ensuring enhanced sustainability, efficiency and productivity in the management and use of water resources.

Budget* 2016-17

$'000 (a)

Actual Expenses 2016-17

$'000 (b)

Variation 2016-17

$'000 (a) - (b)

Program 3.1: Water Reform

Administered expenses

Ordinary annual services (Appropriation Act No. 1)

Commonwealth Contribution under the Murray-Darling Basin 14,100 12,960 1,140

Murray-Darling Basin Authority 84,746 59,739 25,007

Stronger Farmers, Stronger Economy—National Water Infrastructure Development Fund 7,000 7,000 -

Sustainable Rural Water Use and Infrastructure 298,247 214,680 83,567

Other services (Appropriation Act No. 2)

National Urban Water and Desalination Plan 2,100 1,972 128

Special appropriation

Water Act 2007 110,000 110,000 -

Transfer to special account (110,000) (110,000) -

Special Accounts

WELS Account— s.80 PGPA Act 2013 [s.64(1) Water Efficiency Labelling and Standards Act 1,981 1,407 574

Water for the Environment Special Account—s.80 PGPA Act 2013 [s.86AB Water Act 2007 ] 110,000 1,791 108,209

Water Resources Special Account 2016 - 658 (658)

Expenses not requiring appropriation in the Budget year 416,245 173,324 242,921

Write-down and impairment of assets - 497 (497)

Departmental expenses

Departmental appropriation 29,382 30,601 (1,219)

Expenses not requiring appropriation in the Budget year - 1,090 (1,090)

Total for Program 3.1 963,801 505,719 458,082

Outcome 3: Totals by appropriation type

Administered expenses

Ordinary annual services (Appropriation Act No. 1) 404,093 294,379 109,714

Ordinary annual services (Appropriation Act No. 2) 2,100 1,972 128

134 Department of Agriculture and Water Resources

Budget* 2016-17

$'000 (a)

Actual Expenses 2016-17

$'000 (b)

Variation 2016-17

$'000 (a) - (b)

Special accounts 111,981 3,856 108,125

Special appropriations 110,000 110,000 -

Less amounts transferred within the department (110,000) (110,000) -

Expenses not requiring appropriation in the Budget year 416,245 173,821 242,424

Departmental expenses

Departmental appropriation 1,2 29,382 30,601 (1,219)

Expenses not requiring appropriation in the Budget year 3 - 1,090 (1,090)

Total expenses for Outcome 3 963,801 505,719 458,082

2015-16 2016-17

Average Staffing Level (number) 116 173

1 Departmental Appropriation combines Ordinary annual services (Appropriation Acts No. 1) and Retained Revenue Receipts under section 74 of the PGPA Act 2,013. 2 Departmental appropriation allocations are notional and reflect the current structure of the department. 3 Departmental 'Expenses not requiring appropriation in the Budget year' is made up of depreciation expenses, amortisation expense, write down and impairment of assets and resources received free of charge. * Original budget as presented in the 2016-17 Portfolio Budget Statements (PBS).

135 Annual Report 2016-17

Management and accountability

Appendix 2: Ecologically sustainable development and environmental performance

The Department of Agriculture and Water Resources has a statutory requirement under section 516A of the Environment Protection and Biodiversity Conservation Act 1999 (the EPBC Act) to report on:

â¢ our contribution to ecologically sustainable development (ESD) through our outcomes and activities â¢ the environmental performance of our internal operations.

Ecologically sustainable development principles The principles of ESD outlined in section 3A of the EPBC Act are that:

â¢ decision-making processes should effectively integrate both long-term and short-term economic, environmental, social and equity considerations â¢ if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation â¢ the present generation should ensure that the health, diversity and productivity of the environment

is maintained or enhanced for the benefit of future generations â¢ the conservation of biological diversity and ecological integrity should be a fundamental consideration in decision-making â¢ improved valuation, pricing and incentive mechanisms should be promoted.

Our contribution to ecologically sustainable development through our outcomes and activities Our outcomes embody the ESD principles:

136 Department of Agriculture and Water Resources

We play a leading role or contribute to national and international policies with significant ESD objectives. We deliver programs to fund research, training and projects aimed at mitigating climate change and improving sustainable resource management. Our role in biosecurity is critical to maintaining biodiversity in Australia and overseas. We also deliver funding to community organisations and to the portfolio research and development corporations whose work includes activities supporting ESD.

Our work supports the goal of development that meets Australia’s current needs while conserving our ecosystems for the benefit of future generations.

Our key activities in 2016-17 are outlined in Part 2: Annual performance statements.

Legislative responsibilities The following legislation, administered by the department under the current Administrative Arrangements Order, contributes directly to ESD:

â¢ Agricultural and Veterinary Chemicals Act 1994 â¢ Agricultural and Veterinary Chemicals (Administration) Act 1992 â¢ Agricultural and Veterinary Chemicals Code Act 1994 â¢ Biosecurity Act 2015 â¢ Export Control Act 1982 â¢ Fisheries Administration Act 1991 â¢ Fisheries Management Act 1991 â¢ Illegal Logging Prohibition Act 2012 â¢ Natural Resources Management (Financial Assistance) Act 1992 â¢ Primary Industries and Energy Research and Development Act 1989 â¢ Regional Forest Agreements Act 2002 â¢ Torres Strait Fisheries Act 1984 â¢ Water Act 2007 â¢ Water Efficiency Labelling and Standards Act 2005.

Environmental impact of our operations

Energy efficiency Our central office buildings in the Canberra CBD maintain a base building rating of 4.5 stars under the National Australian Built Environment Rating System. Both buildings contain T5 energy efficient lighting and movement sensors, which turn off lighting in office areas after hours. The buildings also contain energy efficient window blinds, which reduce the energy required to heat and cool the buildings during the day. We acknowledge the importance of green energy in the electricity contracts for our Canberra buildings. These contracts include a 10 per cent allocation of green power through the whole-of-government electricity contract.

Our electricity and gas consumption has increased primarily because of the commissioning of the plant facility at the post-entry quarantine facility at Mickleham in Victoria. In 2016-17, our energy consumption (excluding diesel and petroleum products) increased by 42 per cent to 73,149 gigajoules. It is important to note that the energy consumption at the majority of our buildings decreased during the year. We continue to take initiatives to reduce overall energy consumption across the department.

137 Annual Report 2016-17

Management and accountability

Appendix 2: Ecologically sustainable development and environmental performance

FIGURE 17 Energy consumption, 2012-13 to 2016-17

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2016-17 2015-16 2014-15 2013-14 2012-13

Transport We monitor the fuel consumption and kilometres travelled for all fleet vehicles and encourage drivers to purchase ethanol blended fuel (E10) where possible. We increasingly replaced fleet with efficient hybrid or diesel vehicles where this is practical. During 2016-17, the proportion of hybrid vehicles in our fleet has grown to 39 per cent and diesel vehicles to 16 per cent. As at 30 June 2017, we had 396 fleet vehicles, which included 158 hybrid vehicles and 65 diesel vehicles. Total fleet numbers have decreased.

In 2016-17, we consumed 17,704 gigajoules in transport fuels for passenger vehicles. There was a rise in consumption because of an increase in distance travelled.

FIGURE 18 Transport energy consumption, 2012-13 to 2016-17

5,000

10,000

15,000

20,000

25,000

30,000

2016-17 2015-16 2014-15 2013-14 2012-13

We consistently exceed the target set under the Commonwealth Green Vehicle Guide (GVG) requires that half of all fleet vehicles have a GVG rating of 10.5 or above by 2020. Our fleet averages a GVG rating of 13, and 384 vehicles, or 92 per cent of the fleet, exceed the 10.5 GVG rating. We encourage staff to consider a variety of personal transport methods to reduce emissions, including cycling and public transport.

138 Department of Agriculture and Water Resources

Water conservation Our central office buildings recycle and capture stormwater to flush all toilets. In bathrooms and change rooms, we have waterless urinals, water saving shower heads, infrared motion-active hand basins and 4A-rated dual flush toilets. These initiatives contribute to reducing our reliance on the local water supply.

Waste management We continue to encourage good recycling practices, providing ready access to segregated waste streams in the office environment. Recycling bins are located throughout central office buildings in kitchens and common areas and include general waste, organic recycling and co-mingled recycling.

The organic waste stream is a unique feature of our central office buildings and can be used to dispose of compostable materials and foodstuffs. Through this process, all organic waste from all levels of the participating buildings is collected and relocated off-site and then processed into mulch for further use. This reclaims usable materials and reduces the quantity of general waste from these sites.

Over the five years to 30 June 2017, we have increased reclaiming of usable materials and reducing the quantity of general waste. The organic waste stream captured 10.3 tonnes of organic waste in 2016-17.

FIGURE 19 Organic waste collected 2012-13 to 2016-17

2016-17 2015-16 2014-15 2013-14 2012-13

139 Annual Report 2016-17

Management and accountability

Appendix 2: Ecologically sustainable development and environmental performance

The co-mingled recycling program continues to be well supported in the Canberra offices. We collected and processed 49 tonnes of co-mingled recycling in 2016-17.

FIGURE 20 Co-mingled recycling collected 2012-13 to 2016-17

2016-17 2015-16 2014-15 2013-14 2012-13

140 Department of Agriculture and Water Resources

TABLE 57 Employees (headcount) by classification and employment type

30 June 2017 30 June 2016

Classification Ongoing Non-ongoing Ongoing Non-ongoing

APS 1 3 5 4 4

APS 2 15 28 16 36

APS 3 481 176 707 168

APS 4 1,211 72 976 69

APS 5 652 57 616 32

APS 6 920 110 861 113

Meat Inspectors 1-4 143 128 150 133

EL 1 712 30 637 29

EL 2 406 10 378 14

SES 1 67 - 69 -

SES 2 17 1 20 -

SES 3 5 - 5 -

Total 4,632 617 4,439 598

Note: Headcount includes staff on leave without pay and excludes the secretary.

Appendix 3: Human resources statistics

141 Annual Report 2016-17

Management and accountability Appendix 3: Human resources statistics

TABLE 58 Employees (headcount) by attendance and employment type

Employment type 30 June 2017 30 June 2016

Ongoing employee full time 3,832 3,595

Ongoing employee part time 800 844

Non-ongoing employee full time 200 198

Non-ongoing employee part time 66 29

Non-ongoing employee casual 351 371

Total 5,249 5,037

Note: Headcount includes staff on leave without pay and excludes the secretary.

TABLE 59 Employees (headcount) by physical location and employment type

30 June 2017 30 June 2016

Physical Location Ongoing Non-ongoing Ongoing Non-ongoing

ACT 2,294 199 2,091 180

NSW 698 61 728 61

NT 53 14 54 7

QLD 602 127 587 127

SA 177 30 174 32

TAS 9 4 8 4

VIC 519 111 533 103

WA 261 71 246 84

Overseas 19 - 18 -

Total 4,632 617 4,439 598

Note: Headcount includes staff on leave without pay and excludes the secretary.

142 Department of Agriculture and Water Resources

Table 60 Employment contractual arrangements at 30 June 2017

Arrangement No. of employees under contract

Enterprise agreement 5,180

s.24(1) determinations 69

Common law contracts 0

Non-SES Australian Workplace Agreements 0

Total 5,249

TABLE 61 Department salary structure at 30 June 2017

Classification Salary range

APS1 $43,606-$48,847

APS2 $51,298-$53,331

APS3 $56,034-$73,135

APS4 $62,818-$78,362

APS5 $69,238-$83,930

APS6 a $77,602-$109,584

EL1 $94,208-$106,301

EL2 b $113,671-$146,971

SES c $210,368-$364,191

Note: Remuneration negotiated through Australian Workplace Agreements or Individual Flexibility Arrangements can exceed the salary ranges for non-SES classifications. a Positions requiring mandatory veterinary qualifications can access paypoints between $92,404 and $109,584. b Positions requiring mandatory veterinary or scientific qualifications can access paypoints between $134,497 and$146,971. c SES salaries are determined on a case-by-case basis. APS3 to APS5 includes salary ranges of both the Meat Inspection EA and Departmentof Agriculture, Fisheries and Forestry EA.

143 Annual Report 2016-17

Management and accountability Appendix 4: Grants programs

Information on grants awarded by the department in 2016-17 is available on the department’s website.

TABLE 62 Grants programs for 2016-17

Program 1.1 Agricultural adaptation

Carbon Farming Futures—Action on the Ground a

Carbon Farming Futures—Extension and Outreach a

Carbon Farming Futures—Filling the Research Gap a

Program 1.2 Sustainable management—natural resources

Control Tools and Technologies for Established Pest Animals and Weeds Program

National Landcare Program (including Community Landcare Grants 2013-14, 25th Anniversary Landcare Grants, Regional Delivery) ab

National Landcare Program - Sustainable Agriculture Small Grants Round 2015-16 a

Program 1.10 Agricultural resources

Assistance Grants—Access to Industry Priority Uses of Agvet Chemicals

Rural Research and Development (R&D) for Profit

Leadership in Agricultural Industries Fund

Science and Innovation Awards for Young People in Agriculture, Fisheries and Forestry

Appendix 4: Grants programs

144 Department of Agriculture and Water Resources

Program 1.12 Rural programs

Rural Financial Counselling Service 2016-2019 (RFCS) a

Managing Farm Risk Program

Program 1.13 International market access

Australia-China Agricultural Cooperation Agreement (ACACA) Program

Agricultural Trade and Market Access Cooperation Program (ATMAC)

Program 2.1 Quarantine and export services

Centre of Excellence for Biosecurity Risk Analysis (CEBRA) a

Package Assisting Small Exporters (PASE)

Program 3.0 Water Reform

Sustainable Rural Water Use and Infrastructure Program—New South Wales Private Irrigation Infrastructure Operators Program a

Sustainable Rural Water Use and Infrastructure Program—On-Farm Irrigation Efficiency Program a

Sustainable Rural Water Use and Infrastructure Program—Private Irrigation Infrastructure Program in South Australia a

a No new opportunities called, management of existing grants only. b Joint program with the Department of the Environment and Energy.

145 Annual Report 2016-17

The Natural Resources Management (Financial Assistance) Act 1992 assists the development and implementation of an integrated approach to natural resource management. In particular, this approach supported the Sustainable Agriculture component of the National Landcare Program. Under subsection 26(1) of the Act, a report must be prepared each year on the operation of the Act and agreements made under it. This is that report.

The 2016-17 appropriations funded under the Act totalled $4.97 million, comprising $3.50 million of administered funds from the Landcare appropriation and the balance in departmental funding. Appropriations in 2015-16 were $7.53 million.

Section 11 of the Act established the Natural Resource Management special account and allowed $3.50 million of administered funds to be paid into the special account to cover agreements made under Section 6. In addition, funds from 2015-16 were carried forward in the special account.

As well as projects approved for funding in previous financial years, which were outlined in the 2015-16 annual report, project funding provided in 2016-17 included:

â¢ $2.59 million to support activities focusing on Wild Dog Management â¢ $0.99 million to support Landcare Australia Limited activities including the National Landcare Conference, State and National Landcare Awards, and community awareness activities for the Landcare community

â¢ $0.27 million for the Wild Dog Alert System, which aids land managers to prevent wild dog incursions and attacks on livestock. The system provides an unprecedented opportunity to monitor wild dog activity and efficiently inform the development and review of strategic regional wild dog management plans

â¢ $0.06 million for the National Honey Bee Survey, which will collect baseline data on the current economic situation of Australian beekeepers. The survey will capture the adoption of research and development initiatives, the state of honey bee health and the size of the commercial pollination services sector

â¢ $0.19 million for river remediation near Tamworth, which will provide the Namoi Catchment with economic, social and environmental benefits from reduced erosion. The Peel River Anabranch project will address streambank erosion issues on a stretch of the Peel River, a watercourse of the Murray-Darling Basin.

Appendix 5: Report on the operation of the Natural Resources Management (Financial Assistance) Act 1992

146 Department of Agriculture and Water Resources

Appendix 6: National Residue Survey Annual Report 2016-17

The National Residue Survey (NRS) monitors residues of pesticides and veterinary medicines and environmental contaminants in Australian food commodities. This monitoring is fully industry funded, principally through levies on the commodities that are tested.

The NRS tests animal commodities including cattle, sheep and pigs, camels, deer, goats, horses, kangaroos, poultry (chicken, duck turkey etc.), ratites (emus and ostriches), wild boars, honey, eggs and aquatic species (both aquaculture and wild-caught seafood).

In horticulture, the almond, apple, citrus, macadamia and pear industries all participate in NRS testing.

The NRS grains program covers:

â¢ cereals (wheat, barley, oat, maize, sorghum and triticale) â¢ pulses (chickpea, cow pea, pigeon pea, field pea, faba bean, lentil, vetch, navy bean, mung bean and lupin) â¢ oilseeds (canola, sunflower, soybean, safflower and linseed).

Information about NRS activities in 2016-17 is reported in Strategic objective: Managing biosecurity and imported food risk.

Under section 10 of the National Residue Survey Administration Act 1992 (the NRS Act), the Minister for Agriculture is required to provide an annual report to Parliament, setting out details of the operation of the NRS Special Account. In accordance with the NRS Act we provide the annual report for the NRS, including key financial information below.

TABLE 63 National Residue Survey—summary of results for all random monitoring programs in 2016-17

Commodity

Total number of samples

Compliance with relevant Australian Standards (%) a

Animal products (36 different products sampled)

Meat, eggs, honey and aquatic species 9,613 99.77

Plant products (32 different products sampled)

Grains and Horticulture 9,774 99.07

a The compliance rate is based on numbers of samples in compliance. In a very small number of samples, one sample may contain more than one violative residue.

147 Annual Report 2016-17

Management and accountability

Appendix 6: National Residue Survey Annual Report 2016-17

TABLE 64 National Residue Survey—revenue and expenses

2016-17

$’000

2015-16 $’000

Revenue

Sale of goods and rendering of services 655 911

Interest on investments 426 399

Levies 10,342 10,579

Revenue from government 1 363

Total revenue 11,424 12,251

Expenses

Employee benefits 1,825 1,896

Analytical testing 5,883 5,668

Other 3,165 3,034

Total expenses 10,873 10,598

Surplus/(deficit) 551 1,653

TABLE 65 National Residue Survey—assets, liabilities and equity

2016-17

$’000

2015-16 $’000

Assets

Trade and other receivables 1,354 1,699

Investments 16,000 14,500

Intangibles and other assets 1,795 2,094

Total assets 19,149 18,293

Liabilities

Suppliers and other payables 910 595

Employee provisions and other liabilities 916 918

Total liabilities 1,826 1,513

Equity

Reserves 16,829 16,274

Other 494 506

Total equity 17,323 16,780

148 Department of Agriculture and Water Resources

TABLE 66 Transactions in and out of the National Residue Survey Account

2015-16

$’000

2016-17 $’000

Balance brought forward from previous period 1,524 1,723

Receipts

Appropriation for reporting period 9 363

Other Receipts 26,205 24,356

Total receipts 26,214 24,719

Payments

Payments made to employees (1,880) (1,831)

Payments made to other (24,621) (23,087)

Total payments made (26,501) (24,918)

Total balance carried to the next period 1,237 1,524

149 Annual Report 2016-17

Management and accountability

Appendix 7: Water Efficiency Labelling and Standards Scheme Annual Report 2016-17

Section 75 of the Water Efficiency Labelling and Standards Act 2005 (WELS Act) requires the WELS Regulator to, as soon as practicable after the end of each financial year, prepare a report on the operation of the WELS scheme during the year.

The Water Efficiency Labelling and Standards Scheme Annual Report 2016-17 covers the operation of the WELS scheme from 1 July 2016 to 30 June 2017.

Background The objectives of the WELS Act are to: â¢ conserve water supplies by reducing water consumption â¢ provide information for purchasers of water-use and water-saving products

â¢ promote the adoption of efficient and effective water-use and water-saving technologies.

The WELS Act and corresponding state and territory legislation provide for the operation of the WELS scheme. The scheme is administered by the Australian Government on behalf of the other governments.

Through the scheme, information is provided to consumers on the water efficiency and general performance of water-using and water-saving products, allowing informed choice to be made regarding water use. As a result, domestic water savings in the order of 100 gigalitres per annum are now being realised nationally. These savings are projected to increase to 204 gigalitres per annum by 2030 with the replacement of products to more efficient models.

It is estimated that water efficiency improvements have resulted in consumer savings of $520 million per annum in household utility bills (e.g. water, electricity and gas). These savings are projected to increase to $2 billion per annum by 2030.

Dishwashers, clothes washing machines, taps, showers, lavatories, urinals and flow controllers are all covered by the WELS scheme. To be legally supplied, these products must meet the performance and testing requirements of the WELS standard, and must be registered and labelled correctly.

Operation of the WELS scheme

General In August 2016, the Water Efficiency Labelling and Standards Determination 2013 (No. 2) was amended to give effect to a new WELS Standard: AS/NZS 6400:2016 Water Efficient Products - Rating and Labelling. The new standard allows for the registration and labelling of four-star showers (high

Appendix 7: Water Efficiency Labelling and Standards Scheme Annual Report 2016-17

150 Department of Agriculture and Water Resources

pressure only) and six-star toilets. The amendment to the determination also provides for transitional arrangements for the registration and labelling of high pressure showers. The WELS Regulator made additional arrangements to assist industry with transitioning to new label designs and requirements for promotional material required by the amended standard.

Commonwealth, state and territory governments agreed to the 2016-2019 WELS Scheme Strategic Plan and to the joint government response to the recommendations of the second independent review of the WELS scheme.

In collaboration with Standards Australia and several interested countries, WELS staff began exploring the development of an ISO International Standard for water efficient product testing, rating and labelling. Work toward an ISO International Standard is expected to commence in early 2017-18.

During 2015-16, the administration of the WELS Act was transferred to the Department of Agriculture and Water Resources from the Department of the Environment. Transition and integration of the WELS registrations database into the Department of Agriculture and Water Resources was completed in the first half of 2016-17, with minimal disruption to clients.

The WELS scheme newsletter (InkWELS) returned with the first issue published in June 2017. The InkWELS newsletter is planned to be circulated quarterly with information about the latest developments with WELS and highlights of our achievements.

A project to update the WELS website has commenced and is expected to be completed in the first half of 2017-18.

Assistance was directly provided to product manufacturers and suppliers, particularly giving guidance on product registrations, through telephone and online enquiries.

As of 30 June 2017, there were 24,468 registrations (20,965 products and 3,503 variants) and 3,738 ceasing registrations (2,678 products and 1,060 variants) under the WELS scheme.

Compliance and Enforcement The WELS Act requires that all products be registered and labelled at all points in the supply chain.

In 2016-17, compliance activities focused on the whole of supply chain and internet-based sales. Communication with the building, construction and development industry, aimed at increasing awareness in the industry of their responsibilities under the WELS Act, commenced in 2017.

The approach to compliance with the WELS legislation is outlined in the WELS Compliance and Enforcement Policy. The policy was updated in March 2017 to include references to the WELS Regulator’s Infringement Notice Statement, which was also first published in early 2017.

Consultation with industry was undertaken to identify industry views on where compliance and enforcement efforts should be focused over the three years from 2017 to 2020.

All inspections and follow-up enforcement actions were undertaken in accordance with the WELS Compliance and Enforcement Policy.

Financial Total fee revenue collected from the registration of WELS products during 2016-17 was $1.526 million.1

1 Department of Agriculture and Water Resources figures only.

151 Annual Report 2016-17

Appendix 8: Water for the Environment Special Account

Section 86AI of the Water Act 2007 requires the secretary of the department to, as soon as practicable after 30 June each year, prepare and provide to the Minister a report on the operation of the Water for the Environment Special Account (WESA).

Payments totaling $1,790,598.34 were made from the WESA during 2016-17.

Measures that remove constraints on water movement through the regulated system are a key element of the sustainable diversion limit (SDL) adjustment mechanism set out in the Murray-Darling Basin Plan. Business cases, prepared by New South Wales, Victoria and South Australia using funding paid in 2015-16 were submitted and assessed as part of the SDL adjustment mechanism process. No payments were made during 2016-17 toward preparation of business cases or implementation of constraints measures.

In September 2016, a Deed of Standing Offer was signed with the South Australian Murray-Darling Basin Natural Resources Management Board (SAMDBNRM Board) as the delivery partner for a pilot of the Commonwealth On-Farm Further Irrigation Efficiency (COFFIE) program. The COFFIE program is the first being developed to implement the efficiency measures component of the SDL adjustment mechanism set out in the Basin Plan. The program will assist irrigators to improve the water use efficiency and productivity of their irrigation activities, with water savings being made available to the environment.

Thirteen on-farm projects have been approved with a total value of $4,228,264.80 and contracted water recovery of 814 megalitres. Payments of $1,749,523.95 have been made. No water contracted has yet been returned to the Commonwealth Environmental Water Holder. All water contracted to date under the COFFIE program has involved works within the South Australian River Murray water resource plan area (SS11).

Payments totaling $41,074.39 were made for specialist advice in the development and promotion of the COFFIE program.

TABLE 67 Water for the Environment Special Account

Financial year Appropriated amount Movement of funds Expended

2015-16 $40,000,000 Nil $3,985,145.00

2016-17 $110,000,000 $70,000,000 $1,790,598.34

Part 5

Financial statements Independent auditor’s report 153

Statement by the Chief Executive and Chief Finance Officer 158

Overview 159

Statement of comprehensive income 163

Statement of financial position 164

Statement of changes in equity 165

Cash flow statement 166

Notes to and forming part of the financial statements 167

Administered schedule of comprehensive income 194

Administered schedule of assets and liabilities 195

Administered reconciliation schedule 191

Administered cash flow 192

Notes to and forming part of the financial statements 193

153 Annual Report 2016-17

Financial statements

INDEPENDENT AUDITOR’S REPORT

To the Minister for Agriculture and Water Resources

Opinion

In my opinion, the financial statements of the Department of Agriculture and Water Resources for the year ended 30 June 2017:

(a) comply with Australian Accounting Standards - Reduced Disclosure Requirements and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015; and

(b) present fairly the financial position of the Department of Agriculture and Water Resources as at 30 June 2017 and its financial performance and cash flows for the year then ended.

The financial statements of the Department of Agriculture and Water Resources, which I have audited, comprise the following statements as at 30 June 2017 and for the year then ended:

â¢ Statement by the Secretary and Chief Finance Officer; â¢ Statement of Comprehensive Income; â¢ Statement of Financial Position; â¢ Statement of Changes in Equity; â¢ Cash Flow Statement; â¢ Administered Schedule of Comprehensive Income; â¢ Administered Schedule of Assets and Liabilities; â¢ Administered Reconciliation Schedule; â¢ Administered Cash Flow Statement; and â¢ Notes to and forming part of the financial statements, comprising a Summary of Significant Accounting

Policies and other explanatory information.

Basis for Opinion

I conducted my audit in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Department of Agriculture and Water Resources in accordance with the relevant ethical requirements for financial statement audits conducted by the Auditor-General and his delegates. These include the relevant independence requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants to the extent that they are not in conflict with the Auditor-General Act 1997 (the Code). I have also fulfilled my other responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Key Audit Matters

Key audit matters are those matters that, in my professional judgement, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters.

Key audit matter

Accuracy and completeness of Own Source Revenue

Refer to Note 2A ‘Sale of Goods and Rendering of Services’; and Note 14 ‘Regulatory Charging Summary’

How the audit addressed the matter

The audit procedures I conducted to address the collection of own source revenue included:

â¢ reviewed the assurance processes over the

interface and transfer of data between revenue subsystems and the finance system, including the IT general and application controls for the system

GPO Box 707 CANBERRA ACT 2601 19 National Circuit BARTON ACT Phone (02) 6203 7300 Fax (02) 6203 7777

Department of Agriculture and Water Resources 154

This was an area of focus due to the value of revenue collected from biosecurity activities and the risk that the self-assessment process results in under-collection of import and export revenue. In 2016-17, total revenue reported from biosecurity activities was $389.2 million.

Biosecurity fees are collected across the country for both imports and exports through multiple systems via manual and online applications. Agriculture uses systems and processes managed by another

Department for the collection of fees arising from imports.

The revenue collected from imports is dependent on information provided by importers via a self-assessment declaration. Agriculture run a compliance program to obtain assurance that declarations accurately report the value and nature of goods imported.

The administrative and IT system arrangements that support the collection of export fees are complex and geographically dispersed.

that records receipts;

â¢ undertook an assessment of governance and reporting arrangements at Agriculture to obtain assurance over the completeness of import revenue collected on Agriculture’s behalf;

â¢ evaluated the design and effectiveness of

Agriculture’s compliance programs that provide management with assurance over the

completeness and accuracy of self-assessment revenue;

â¢ conducted testing on a sample basis of revenue transactions and year end accrual calculations, validating them to supporting documentation; and

â¢ evaluated the appropriateness of the methodology applied to determine the fees charged for cost recovery activities and assessed the application of Agriculture’s policy for the calculation and reporting of the remission of fees in accordance with the cost recovery model.

Key audit matter

Accuracy and completeness of the collection and distribution of primary industry levies and charges

Refer to Notes 16A ‘Levy Disbursem*nts and Commonwealth Contributions’; and 17A ‘Levies Fees and Charges’

Levies are collected from primary industry producers and agents using a self-assessment regime, therefore there is an inherent risk of under-collection arising from the submission of inaccurate levy returns and declarations whether accidental or deliberate.

The rates charged and collected as levies and charges, are derived through a complex estimation of anticipated agricultural production.

The payments to research and development industry bodies are material and the calculations are complex. These payments are a combination of the amounts collected from producers together with a co-contribution by the Commonwealth.

For the 2016-17 reporting period the total levies reported were $555.4 million and the amount distributed to research and development industry bodies was $826.1 million.

How the audit addressed the matter

To audit the collection and payments of primary industry levies and charges, I performed the following audit procedures:

â¢ assessed the operating effectiveness of the IT general controls and the application controls specific to the levies IT system including an assessment over the completeness and accuracy of data transferred between the levies IT system and the finance system;

â¢ evaluated the design and effectiveness of, and tested on a sample basis, Agriculture’s National Compliance Program which applies a risk based approach to reviewing the accuracy and

completeness of submitted returns and levies collected;

â¢ tested on a sample basis revenue transactions and payments to supporting documentation, agreed calculations and sighted approvals;

â¢ agreed all changes of levy rates recorded in the levies IT system to approvals signed by the Minister; and

â¢ assessed the methodology and reasonableness of the inputs used for the estimation of the year end accrual and tested post year end receipts, on a sample basis, to assess if income was recorded in the correct period.

Key audit matter

Valuation of Loans to the State and Territory governments for drought and farm finance assistance

Refer to Note 18A Trade, Taxation and Other

How the audit addressed the matter

To audit the concessional loans to State and Territory governments I performed the following audit procedures:

â¢ tested the impairment assessment and evaluated

155 Annual Report 2016-17

Financial statements

Receivables

This was an area of focus given the significance of this balance to Agriculture’s administered receivable balances and the significant judgement applied to and complexity of calculations in assessing the valuation and impairment of the loan balances.

Each loan package is subject to specific eligibility criteria, limits and lending terms.

For the year ended 30 June 2017 the receivables balance that related to these concessional loans was $696.5 million.

the supporting assumptions for the valuation of the loans;

â¢ assessed Agriculture’s monitoring of loans and service payments collected to assess the accuracy and completeness of reporting by the State and Territory governments; and

â¢ performed substantive testing, on a sample basis, including recalculation of interest revenue received and agreed approvals of new loans or variations to existing loans to supporting documentation.

Key audit matter

Valuation of the Jointly Controlled Arrangements: River Murray Operations (RMO) and Living Murray Initiative (LMI)

Refer to Note 19: Reconciliation of Opening and Closing Balances of Property, Plant and Equipment

This was an area of focus given the significance of this balance to Agriculture’s administered asset balances, the fact that the Joint Venture arrangements are managed by another entity on behalf of, and with limited oversight by, the joint owners and the variety and unique nature of the assets managed and maintained under the arrangements. This increases the risks associated with their valuation.

For the year ended 30 June 2017 the balances that relate to these jointly controlled operations are $532.6 million infrastructure assets and $124.6 million water entitlements.

How the audit addressed the matter

I conducted the following procedures to audit the valuation of the amounts reported:

â¢ evaluated management’s oversight and

information gathering processes over the balances reported in the financial statements;

â¢ assessed the stock take instructions and results to obtain evidence over the valuation of assets;

â¢ evaluated the appropriateness of the valuation model adopted to assess the accuracy of values recorded for individual assets; and

â¢ considered the effectiveness of the impairment assessment.

Accountable Authority’s Responsibility for the Financial Statements

As the Accountable Authority of the Department of Agriculture and Water Resources, the Secretary is responsible under the Public Governance, Performance and Accountability Act 2013 for the preparation and fair presentation of annual financial statements that comply with Australian Accounting Standards - Reduced Disclosure Requirements and the rules made under that Act. The Secretary is also responsible for such internal control as the Secretary determines is necessary to enable the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Secretary is responsible for assessing the Department of Agriculture and Water Resources’ ability to continue as a going concern, taking into account whether the entity’s operations will cease as a result of an administrative restructure or for any other reason. The Department of Agriculture and Water Resources is also responsible for disclosing matters related to going concern as applicable and using the going concern basis of accounting unless the assessment indicates that it is not appropriate.

Auditor’s Responsibilities for the Audit of the Financial Statements

My objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian National Audit Office Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

As part of an audit in accordance with the Australian National Audit Office Auditing Standards, I exercise professional judgement and maintain professional skepticism throughout the audit. I also:

Department of Agriculture and Water Resources 156

â¢ identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

â¢ obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circ*mstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control;

â¢ evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Accountable Authority;

conclude on the appropriateness of the Accountable Authority’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the entity to cease to continue as a going concern;

â¢ evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation; and

â¢ obtain sufficient appropriate audit evidence regarding the financial information of the Department of Agriculture and Water Resources or its business activities to express an opinion on the financial statements. I am responsible for the direction, supervision and performance of the audit. I remain solely responsible for my audit opinion.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

From the matters communicated with those charged with governance, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circ*mstances, I determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Australian National Audit Office

Clea Lewis

Executive Director

Delegate of the Auditor-General

Canberra

1 September 2017

157 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES

Financial Statements for the period ended 30 June2017

Department of Agriculture and Water Resources 158

159 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES

Overview

Basis of Preparation of the Financial Statements

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013(PGPA).

The financial statements have been prepared in accordance with the:

ï· PGPA Financial Reporting Rule (FRR) for reporting periods ending on or after 1 July 2016; and

ï· Australian Accounting Standards and Interpretations - Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.

New Australian Accounting Standards

No accounting standard has been adopted in the current reporting period earlier than the application date as required by the standard.

The following new, revised or amended standards and interpretations were first applied to the current reporting period and had a material effect on the department’s financial statements:

ï· AASB 124 Related Party Disclosures: disclosure of transactions between not-for-profit government entities and their related parties as well as remuneration of key management personnel.

ï· AASB 1053 Application of Tiers of Australian Accounting: Changes in the Financial Reporting Rules now allow public sector entities to adopt the reduced disclosure requirements. The department is classified as a Tier 2 entity.

All other new, revised or amended standards and interpretations adopted in the current reporting period did not have a material effect, and are not expected to have a future material effect on the department’s financial statements.

Comparative Figures for 2016 Financial Year

Certain comparative amounts have been reclassified to conform with the 2017 financial year’s reporting presentation. In particular special account balances, which are outlined at Note 13 and Note 25, have been reclassified from Appropriations receivable to Cash and cash equivalents.

The Grains Research and Development Corporation (GRDC) have disclosed a change to prior year balances in the 2016-17 financial statements. The restatement related to a loans and receivable financial asset for royalty revenues not previously recognised in GRDC financial statements.

As the department recognises investments in corporate commonwealth entities at net asset value, the prior year balance for other investments has been restated accordingly. The correction to the balance of other investments as at 30 June 2016 was $13 838 000. The correction has an impact of $13 838 000 to opening retained surpluses for the financial year ended 30 June 2017. The corrections are disclosed in the tables below:

ADMINISTERED SCHEDULE OF COMPREHENSIVE INCOME

Reported Restated

2016 2016

$'000 $'000

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services

Administered revaluations taken to reserves 6 907 20 745

Total other comprehensive income 6 907 20 745

Total comprehensive loss 6 907 20 745

Department of Agriculture and Water Resources 160

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES

ADMINISTERED SCHEDULE OF ASSETS AND LIABILITIES

Reported Restated

2016 2016

$'000 $'000

ASSETS

Financial assets

Cash and cash equivalents 1 56 321

Trade, taxation and other receivables 589 929 589 929

Other investments 333 718 347 556

Other financial assets 61 000 61 000

Total financial assets 984 648 1 054 806

Total assets administered on behalf of Government 984 648 1 054 806

Taxation

The department is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).Revenues, expenses, assets and liabilities are recognised net of GST except where the amount of GST incurred is not recoverable from the Australian Taxation Office and for receivables and payables.

Competitive Neutrality

The department operates a number of Cost Recovery Arrangements across the Biosecurity, Export Certification and other business services areas in accordance with the Cost Recovery Guidelines and are therefore not for profit activities. The department is not subject to competitive neutrality arrangements for this reason.

Reporting of Administered activities

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes. Except where otherwise stated, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.

Budgetary Reports and Explanations of Major Variances

The primary statements include variances between the original budget as presented in the 2016-17 Portfolio Budget Statements (PBS) and the 2016-17 final outcome as presented in accordance with Australian Accounting Standards. The Budget is not audited. Explanations of the major variances are presented in notes 15 and 26.

Breach of Section 83 of the Constitution

Section 83 of the Constitution provides that no amount may be paid out of the Consolidated Revenue Fund except under an appropriation made by law. In 2017 the department identified two special appropriations with statutory conditions for payments which could result in potential breaches of s83 of the constitution.

Total expenditure of $60 833 000 under the Farm Household Support Act 2014 was made during 2016-17, of this, overpayments identified and recorded as debts to be recovered from the recipients, may be potential breaches. As at 30 June 2017the total debts recorded were $2 605 000. A total of 11 actual breaches were identified (2016: 26), with a

total value of $2 052.32 (2016: $2 599.33).

It should be noted that it is impossible to completely eliminate the potential for section 83 breaches for payments made by the Department of Human Services on behalf of the department. In the majority of cases, information provided by customers is relied upon to calculate the entitlements paid. This information, provided by customers is not always accurate or is subject to changing circ*mstances which can result in a breach of section 83 of the constitution.

161 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES

Total expenditure of $6,931,400 was paid to Plant Health Australia (PHA), under the Plant Health Australia (Plant Industries) Funding Act 2002 (PHA Act), during 2016-17 (2016: $5,108,870). In June 2017, the department identified a number of payments - made on behalf of plant industries that are members of the PHA, which have resulted in breaches of s83 of the Constitution. In seeking legal clarification about the status of Plant Industry Members, it was identified that a

number of these organisations were not declared by the Minister for Agriculture and Water Resources to be the relevant Plant Industry Member under the PHA Act. The department is not authorised to make payments to PHA for undeclared organisations. As a result, the department identified 22 breaches (2016: 24) totalling $565,671.24 (2016:$312,101.56). This represents a technical breach only and payments to PHA have been made in line with policy objectives. There is no intention to recover the levies paid.

The department continues to review its processes and controls for all payments to minimise the possibility of future breaches. The department will continue to monitor its level of compliance with section 83 of the Constitution across all legislation for which it is administratively responsible. Where possible, amendments to legislation will continue to be progressed.

The Australian Government continues to have regard to developments in case law, including the High Court’s most recent decision on Commonwealth expenditure in Williams v Commonwealth [2014] HCA 23, as they contribute to the larger body of law relevant to the development of Commonwealth programs. In accordance with its general practice, the Government will continue to monitor and assess risk and decide on any appropriate actions to respond to risks of expenditure not being consistent with constitutional or other legal requirements.

Events After the Reporting Period

Departmental

There have been no events after the reporting period that had the potential to significantly affect the ongoing structure and financial activities of the department.

Administered

There have been no events after the reporting period that had the potential to significantly affect the ongoing structure and financial activities of the department.

Department of Agriculture and Water Resources 162

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Overview………………………………………………………………………………………………….………………………………..159

Departmental Financial Statements .........................................................................................................................................163

Note 1: Expenses ..................................................................................................................................................................167

Note 2: Income ......................................................................................................................................................................170

Note 3: Financial Assets.........................................................................................................................................................172

Note 4: Non-Financial Assets ...............................................................................................................................................173

Note 5: Payables ...................................................................................................................................................................176

Note 6: Provisions ..................................................................................................................................................................177

Note 7: Restructuring .............................................................................................................................................................178

Note 8: Contingent Assets and Liabilities ..............................................................................................................................179

Note 9: Key Management Personnel Remuneration .............................................................................................................180

Note 10: Related Party Disclosures .......................................................................................................................................180

Note 11: Financial Instruments ..............................................................................................................................................181

Note 12: Appropriations .........................................................................................................................................................183

Note 13: Special Accounts .....................................................................................................................................................184

Note 14: Regulatory Charging Summary ...............................................................................................................................185

Note 15: Budgetary Reports and Explanations of Major Variances .......................................................................................186

Administered Financial Statements ..........................................................................................................................................189

Note 16: Administered - Expenses ........................................................................................................................................193

Note 17: Administered - Income ............................................................................................................................................195

Note 18: Administered - Financial Assets ..............................................................................................................................197

Note 19: Administered - Non-Financial Assets ......................................................................................................................199

Note 20: Administered - Payables .........................................................................................................................................203

Note 21: Administered - Restructuring ......................................................................................................................………..204

Note 22: Administered - Contingent Assets and Liabilities ....................................................................................................205

Note 23: Administered - Financial Instruments ......................................................................................................................206

Note 24: Administered - Appropriations .................................................................................................................................207

Note 25: Administered - Special accounts .............................................................................................................................209

Note 26: Administered - Budgetary Reports and Explanations of Major Variances ...............................................................211

Note 27: Interest in Cooperative Research Centre .................................................................................................................213

163 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2017

The above statement should be read in conjunction with the accompanying notes.

Departmental Financial Statements

Original Budget Variance

2017 2016 2017 2017

Notes $'000 $'000 $'000 $'000

NET COST OF SERVICES

Expenses

Employee benefits 1A 507 626 490 459 515 395 ( 7 769)

Suppliers 1B 242 385 223 695 239 665 2 720

Grants 1C 9 283 10 175 13 740 ( 4 457)

Depreciation and amortisation 4 29 634 26 595 25 200 4 434

Finance costs 1D 120 250 216 ( 96)

Write-down and impairment of assets 1E 12 182 16 775 5 561 6 621

Other expenses 1F 1 091 925 1 019 72

Total expenses 802 321 768 874 800 796 1 525

Own-source income

Own-source revenue

Sale of goods and rendering of services 2A 389 251 380 676 397 677 ( 8 426)

Interest 2B 761 803 306 455

Other revenue 2C 30 275 28 431 15 203 15 072

Total own-source revenue 420 287 409 910 413 186 7 101

Gains

Other gains 2D 2 290 855 3 120 ( 830)

Total gains 2 290 855 3 120 ( 830)

Total own-source income 422 577 410 765 416 306 6 271

Net cost of services 379 744 358 109 384 490 ( 4 746)

Revenue from Government 375 687 338 491 371 583 4 104

Surplus / (deficit) attributable to the Australian Government ( 4 057) ( 19 618) ( 12 907) 8 850

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation reserves 1 631 ( 2 000) - 1 631

Total other comprehensive income 1 631 ( 2 000) - 1 631

Total comprehensive income / (loss) attributable to the Australian Government ( 2 426) ( 21 618) ( 12 907) 10 481

Department of Agriculture and Water Resources 164

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES STATEMENT OF FINANCIAL POSITION as at 30 June 2017

The above statement should be read in conjunction with the accompanying notes.

Original Budget Variance

2017 2016 2017 2017

Notes $'000 $'000 $'000 $'000

ASSETS

Financial assets

Cash and cash equivalents 3A 27 652 42 891 3 150 24 502

Trade and other receivables 3B 95 711 73 203 90 695 5 016

Other investments 16 000 14 500 13 500 2 500

Accrued interest 200 196 203 ( 3)

Accrued revenue 4 693 4 894 3 081 1 612

Total financial assets 144 256 135 684 110 629 33 627

Non-financial assets

Land and buildings 4 39 763 40 254 43 819 ( 4 056)

Property, plant and equipment 4 36 672 34 953 30 767 5 905

Intangibles 4 85 423 82 390 115 239 ( 29 816)

Inventories 2 297 2 292 2 589 ( 292)

Prepayments 8 086 8 728 4 864 3 222

Total non-financial assets 172 241 168 617 197 278 ( 25 037)

Total assets 316 497 304 301 307 907 8 590

LIABILITIES

Payables

Suppliers 5A 21 507 22 648 17 431 4 076

Other payables 5B 42 234 50 473 48 541 ( 6 307)

Total payables 63 741 73 121 65 972 ( 2 231)

Interest bearing liabilities

Leases - - 70 ( 70)

Total interest bearing liabilities - - 70 ( 70)

Provisions

Employee provisions 6A 143 459 143 946 134 198 9 261

Other provisions 6B 11 459 11 430 13 212 ( 1 753)

Total provisions 154 918 155 376 147 410 7 508

Total liabilities 218 659 228 497 213 452 5 207

Net assets 97 838 75 804 94 455 3 383

EQUITY

Contributed equity 120 844 96 384 107 931 12 913

Asset revaluation reserves 25 665 24 034 26 034 ( 369)

Industry reserves 43 931 38 481 46 705 ( 2 774)

Accumulated deficit ( 92 602) ( 83 095) ( 86 215) ( 6 387)

Total equity 97 838 75 804 94 455 3 383

165 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES STATEMENT OF CHANGES IN EQUITY for the period ended 30 June

2017

The above statement should be read in conjunction with the acco

mpanying notes.

Accumulated deficit

Asset revaluation

reserves

Industry reserves

Contributed equity

Total equity

2017

2016

2017

2016

2017

2016

2017

2016

2017

2016

$'000

Opening balance

Balance carried forward from previous period

( 83 095)

( 71 702)

24 034

26 034

38 481

46 706

96 384

81 061

75 804

82 099

Adjusted opening balance

( 83 095)

( 71 702)

24 034

26 034

38 481

46 706

96 384

81 061

75 804

82 099

Comprehensive income

Surplus / (deficit) for the period

( 4 057)

( 19 618)

( 4 057)

( 19 618)

Other comprehensive income

1 631

( 2 000)

1 631

( 2 000)

Total comprehensive income

( 4 057)

( 19 618)

1 631

( 2 000)

( 2 426)

( 21 618)

Transactions with owners

Contributions by owners

Equity injection - Appropriations

12 703

6 055

12 703

6 055

Departmental capital budget

9 940

9 969

9 940

9 969

Restructure - refer note 7

( 701)

Assets Transferred from

Department of Finance

1 817

Total transactions with owners

24 460

15 323

24 460

15 323

Transfers between equity components

( 5 450)

8 225

5 450

( 8 225)

Closing balance attributable to Australian Government

( 92 602)

( 83 095)

25 665

24 034

43 931

38 481

120 844

96,384

97 838

75 804

1 Relates to the transfe

r of furniture, fittings and equipment assets from the Department of Finance for Phase 1 of the Post Entry Quarantine Facility Project - Mickleham

Accounting policy Equity Injections Amounts appropriated which are

designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly

in contributed equity in that year. Industry Reserves

Each cost recovered program holds

a separate Industry Reserve and in years where the costs of the cost recovered program exceed revenue, the shortfall is first met from

the individual industry reserv

e balance and then from other retained earnings. Transfers are then made between the Industry Reserves and retained earnings as required.

Department of Agriculture and Water Resources 166

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES CASH FLOW STATEMENT for the period ended 30 June 2017

The above statement should be read in conjunction with the accompanying notes.

Original Budget Variance

2017 2016 2017 2017

Notes $'000 $'000 $'000 $'000

OPERATING ACTIVITIES

Cash received

Appropriations 366 609 337 535 385 893 ( 19 284)

Sale of goods and rendering of services 378 120 369 649 392 116 ( 13 996)

Interest 331 411 306 25

Net GST received 23 258 21 939 17 017 6 241

Other 24 225 24 793 15 203 9 022

Total cash received 792 543 754 327 810 535 ( 17 992)

Cash used

Employees 510 417 488 728 512 535 ( 2 118)

Suppliers 269 230 242 690 258 479 10 751

Grants 9 364 10 175 13 740 ( 4 376)

Other 1 091 925 1 069 22

Total cash used 790 102 742 518 785 823 4 279

Net cash from operating activities 2 441 11 809 24 712 ( 22 271)

INVESTING ACTIVITIES

Cash received

Proceeds from sales of property, plant and equipment 40 26 - 40

Proceeds from sales of financial instruments 14 500 12 500 13 500 1 000

Interest 426 399 - 426

Total cash received 14 966 12 925 13 500 1 466

Cash used

Purchase of property, plant and equipment 9 073 8 572 2 577 6 496

Purchase of land and buildings 3 246 7 702 13 596 ( 10 350)

Purchase of intangibles 19 870 23 620 25 863 ( 5 993)

Purchase of financial instruments 16 000 14 500 13 500 2 500

Total cash used 48 189 54 394 55 536 ( 7 347)

Net cash used by investing activities ( 33 223) ( 41 469) ( 42 036) 8 813

FINANCING ACTIVITIES

Cash received

Contributed equity 6 062 1 772 7 384 ( 1 322)

Departmental capital budget 9 481 9 969 9 940 ( 459)

Total cash received 15 543 11 741 17 324 ( 1 781)

Net cash from financing activities 15 543 11 741 17 324 ( 1 781)

Net increase / (decrease) in cash held ( 15 239) ( 17 919) - ( 15 239)

Cash and cash equivalents at the beginning of the reporting period 42 891 60 810 3 150 39 741

Cash and cash equivalents at the end of the reporting period 3A 27 652 42 891 3 150 24 502

167 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 1: Expenses 2017 2016

$'000 $'000

Note 1A: Employee Benefits

Wages and salaries 373 117 352 181

Superannuation

Defined contribution plans 37 304 33 538

Defined benefit plans 38 656 34 906

Leave and other entitlements 37 254 48 824

Separation and redundancies 3 632 3 419

Other employee expenses 17 663 17 591

Total employee benefits 507 626 490 459

Accounting policy

Accounting policies for employee related expenses are contained in Note 6A.

Note 1B: Suppliers

Goods and services supplied or rendered

Analytical testing 9 552 8 006

Contractors and consultants 43 715 34 028

IT services 46 562 46 295

Legal expenditure 2 399 1 600

Office equipment, stores and consumables 5 521 5 628

Travel 23 955 22 558

Property operating expense 18 222 17 990

Quarantine services 1 833 1 782

Staff development and recruitment 10 108 8 157

Other 13 606 13 190

Total goods and services supplied or rendered 175 473 159 234

Goods supplied 13 802 12 120

Services rendered 161 671 147 114

Total goods and services supplied or rendered 175 473 159 234

Other suppliers

Operating lease rentals 54 158 50 951

Workers compensation expenses 12 754 13 510

Total other suppliers 66 912 64 461

Total suppliers 242 385 223 695

Department of Agriculture and Water Resources 168

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Leasing commitments

The department in its capacity as lessee holds the following significant leasing arrangements:

ï· Leases of motor vehicles for operations - from 1 February 2013, the department is a party to the Fleet Services Contract with SG Fleet Pty Ltd. An individual fixed rate is defined for each sub-agreement (vehicle). Retention of the vehicle past expiry date may result in a new lease sub-agreement; and

ï· Leases for office, laboratory or other accommodation - lease contracts for accommodation are subject to adjustment on an annual fixed basis, to market values and to consumer price index (CPI) increases. Renewal options vary from 1 to 5 years.

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

2017 2016

$'000 $'000

Within 1 year 40 114 38 090

Between 1 to 5 years 118 513 116 062

More than 5 years 9 341 31 677

Total leasing commitments 167 968 185 829

Accounting policy

Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets.

Note 1C: Grants

Public sector:

Australian Government entities (related parties) 1 099 3 796

State and Territory Governments 1 726 294

Private sector:

Non-profit organisations 4 533 2 479

For profit organisations 1 026 2 824

Overseas 899 782

Total grants 9 283 10 175

Note 1D: Finance Costs

Finance leases - 104

Unwinding of discount 120 146

Total finance costs 120 250

Accounting policy

All borrowing costs are expensed as incurred

The department has derecognised finance leased equipment in 2016 and all equipment is now owned by the department. The interest rate implicit in the lease averaged for 2016 was 6.00%.

169 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2017 2016

$'000 $'000

Note 1E: Write-Down and Impairment of Assets

Impairment on financial instruments 1 117 2 877

Remission of fees 8 482 12 066

Impairment of intangibles 1 639 955

Write-off of property, plant and equipment 944 877

Total write-down and impairment of assets 12 182 16 775

Note 1F: Other Expenses

Official Development Assistance 1 084 925

Other 7 -

Total other expenses 1 091 925

Department of Agriculture and Water Resources 170

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 2: Income 2017 2016

$'000 $'000

Own-Source Revenue

Note 2A: Sale of Goods and Rendering of Services

Provision of goods 16 3

Rendering of services 389 235 380 673

Total sale of goods and rendering of services 389 251 380 676

Figure 1 shows sales of goods and services revenue by cost recovery activity for 2016-17

* Other includes PGPA Act s74 receipts for biosecurity plant and animal health programs.

Accounting policy

Revenue from the sale of goods is recognised when:

ï· the risks and rewards of ownership have been transferred to the buyer; and

ï· the department retains no managerial involvement or effective control over the goods.

Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred as at 30 June bear to the estimated total costs of the transaction.

The department is responsible for the collection of fees for regulatory charging under the Export Control Act 1982 and the Biosecurity Act 2015. Regulatory charging disclosure is included at Note 14.

$241,855

$90,195

$31,820

$6,579

$5,120

$4,144

$4,101

$2,275

$1,407

$1,100

$655

Biosecurity

FoodExport

PlantExport

LiveAnimalExport

LeviesRevenueService

ABARESProjects

NationalLandcareProgram

IndonesiaEmergingDiseasesProgram

WaterEfficiencyLabellingScheme

Other*

NationalResidueSurvey

$ â $50,000 $100,000$150,000$200,000$250,000$300,000

$000

FIGURE1Sourcesofcostârecoveryrevenue2015â16

171 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2017 2016

$'000 $'000

Note 2B: Interest

Deposits 426 399

Penalties 335 404

Total interest 761 803

Accounting policy

Interest revenue is recognised using the effective interest method.

Note 2C: Other Revenue

Levies 10 341 10 579

State contributions 1 764 1 717

Sub-lease rental 921 804

Resources received free of charge - Mickleham Post Entry Quarantine Facility 9 360 4 680 Resources received free of charge - airport accommodation 2 977 2 832

Resources received free of charge - ANAO fees 565 530

Other 4 347 7 289

Total other revenue 30 275 28 431

Note 2D: Other Gains

Gain on derecognition of finance lease liability:

Carrying value of lease liability derecognised - 844

Carrying value of asset derecognised - ( 817)

Gain from asset sales:

Proceeds from sale 40 26

Carrying value of assets sold ( 6) ( 6)

Gain on derecognition of makegood:

Carrying value of liability derecognised 482 169

Carrying value of asset derecognised ( 219) ( 27)

Workers compensation refund 1 523 -

Other 470 666

Total other gains 2 290 855

Accounting policy

Resources Received Free of Charge

Resources received free of charge are recognised as income when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government entity as a consequence of a restructuring of administrative arrangements or as a contribution by owners in accordance with Resource Management Guide (RMG) 123.

Sale of Assets

Gains from the disposal of assets are recognised when control of the asset has passed to the buyer.

Other Gains

Gains may be realised or unrealised and are usually recognised on a net basis.

Revenue from Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the department gains control of the appropriation. Appropriations receivable are recognised at their nominal amounts.

Department of Agriculture and Water Resources 172

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 3: Financial Assets 2017 2016

$'000 $'000

Note 3A: Cash and Cash Equivalents

Special Accounts 25 638 37 749

Cash on hand or on deposit 2 014 5 142

Total cash and cash equivalents 27 652 42 891

Note 3B: Trade and Other Receivables

Goods and services receivables in connection with

Goods and services 21 949 15 572

Total goods and services receivables 21 949 15 572

Appropriations receivables

Existing programs 52 741 43 663

Departmental capital budget 459 -

Unspent equity injection 11 244 4 603

Total appropriations receivable 64 444 48 266

Other receivables

Statutory receivables 4 283 5 201

Departmental supplementations 3 458 3 458

Other 2 785 1 648

Total other receivables 10 526 10 307

Total trade and other receivables (gross) 96 919 74 145

Less impairment allowance

Goods and services ( 1 208) ( 942)

Total impairment allowance ( 1 208) ( 942)

Total trade and other receivables (net) 95 711 73 203

Accounting policy

Loans and Receivables

Trade receivables have fixed or determinable payments that are not quoted in an active market and are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at end of the reporting period. Allowances are made when collectability of the debt is no longer probable

173 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 4: Non-Financial Assets

Reconciliation of the O

pening and Closing Balances of Property, Plant and Equipment and Intangibles 2017

Land

Buildings

Leasehold

Improvements

Other

property, plant & equipment

Computer Software

Total

$’000

As at 1 July 2016

Gross book value

2 285

2 155

48 930

41 825

108 938

204 133

Work in progress

5 539

1 250

19 049

25 838

Accumulated depreciation and impairment

( 18 655)

( 8 122)

( 45 597)

( 72 374)

Total as at 1 July 2016

2 285

2 155

35 814

34 953

82 390

157 597

Additions

By purchase or internally developed

6 569

7 256

19 870

33 695

Transferred from the Department of Finance

1 817

Revaluations and impairments re

cognised in other comprehensive income

( 80)

( 462)

2 742

( 569)

1 631

Impairments recognised in

the operating result

( 12)

( 725)

( 1 639)

( 2 376)

Reclassification

( 1 073)

1 675

( 602)

Depreciation expense

( 64)

( 7 452)

( 7 522)

( 14 596)

( 29 634)

Other movements

( 659)

Disposals

By write-off

( 207)

By sale

( 6)

Total as at 30 June 2017

2 205

1 629

35 929

36 672

85 423

161 858

Total as at 30 June

2017 represented by:

Gross book value

2 205

1 629

34 373

33 590

121 029

192 826

Work in progress

3 699

3 826

24 495

32 020

Accumulated depreciation and impairment

( 2 143)

( 744)

( 60 101)

( 62 988)

Total as at 30 June 2017

2 205

1 629

35 929

36 672

85 423

161 858

Relates to the transfer of furn

iture, fittings and equipment assets from the Department of Finance for Phase 1 of the Post Entry Quarantine Facility Project - Mickleham

Other movements of ($658 750) i

nclude derecognition of a makegood asset at Burwood Highway, Knoxfield ($218 750) and the Sydney Airport Corporation’s contribution towards fitout ($440 000).

3 These classes of assets are all held at fair value. 4The carrying amount of computer software included $24 395 607 p

urchased software and $61 027 859 internally generated software.

No significant items of property

, plant and equipment are expected to be sold or disposed of within the next 12 months

Department of Agriculture and Water Resources 174

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Contractual commitments for the acquisition of property, plant, equipment and intangible assets

There were no contractual commitments for the acquisition of property, plant and equipment as at 30 June 2017.

Accounting policy

Assets are recorded at cost on acquisition except as stated. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Non-financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.

Asset Recognition Threshold

Purchases of property, plant and equipment are recognised initially at cost in the Statement of Financial Position. The department applied the following asset recognition thresholds:

2017 2016

Land and buildings $0 $0

Leasehold improvements $150 000 $20 000

Property, plant and equipment $5 000 individual purchases/ $50 000 group purchases $5 000 individual purchases/no threshold for group purchases

Internally developed software $200 000 $50 000

Purchased software $150 000 $5 000

Purchases under the applied thresholds are expensed in the year of acquisition.

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘makegood’ provisions in property leases taken up by the department where an obligation exists to restore the property to its original condition. These costs are included in the value of the department’s leasehold improvements with a corresponding provision for the ‘makegood’ recognised.

The department’s intangible assets comprise internally developed software and purchased software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Revaluations and fair value measurement

All property, plant and equipment assets are measured at fair value. The department did not measure any non-financial assets at fair value on a non-recurring basis as at 30 June 2017.

Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets’ fair values at the reporting date. Independent revaluations for property, plant and equipment are conducted every three years, however further valuations are undertaken dependent upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised in the surplus or deficit. Revaluation decrements for a class of assets are recognised in the surplus or deficit except to the extent that they reverse a previous revaluation increment for that class.

Any accumulated depreciation at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

175 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Recurring and non-recurring fair value measurements - valuation processes

The department engaged the service of Australian Valuation Solutions (AVS) to conduct a detailed external valuation of non-financial assets (excluding intangibles) at 30 June 2017 (30 June 2016: JLL were engaged to conduct an external valuation on land and building assets) and has relied upon those outcomes to establish carrying amounts. An annual assessment is undertaken to determine whether the carrying amount of the assets is materially different from the fair value. AVS has provided written assurance to the department that the models developed are in compliance with AASB13 - Fair Value Measurement.

In 2017 a revaluation decrement of $80 000 was recorded for land (2016: $1 265 000 decrement), revaluation decrement of $462 000 for buildings (2016: $735 000 decrement), revaluation increment of $2742 000 for leasehold improvements (2016: $0) and $1 294 000 decrement for other property, plant and equipment (2016: $0).

Depreciation and amortisation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the department using, in all cases, the straight-line method of depreciation.

Intangible assets are amortised on a straight-line basis over their anticipated useful life.

2017 2016

Buildings 40-50 years 40-50 years

Leasehold improvements Lesser of useful life or lease term Lesser of useful life or lease term

Property, plant and equipment 3 to 15 years 3 to 15 years

Internally developed software 5 to 10 years 5 to 10 years

Purchased software 3 years 3 years

Depreciation charges for 2017 of $29 634 134 were: ï· funded by cost recovery arrangements of $12 835 830 (2016: $14 752 000); and ï· unfunded of $16 798 304 (2016: $11 843 000).

Impairment

All non-financial assets were assessed for impairment at 30 June 2017. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair valueless costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cashflows, and the asset would be replaced if the entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

An impairment loss of $2 376 000 (2016: $955 000) was recognised in the operating result.

Accounting policy

Prepayments

No indicators of impairment were found for prepayments.

Inventories

Inventories held for distribution are valued at cost, adjusted for any loss of service potential.

Costs incurred in bringing each item of stores inventory to its present location and condition are recorded at purchase cost and managed on a first-in-first-out basis.

In 2017 no items of inventory were recognised at fair value less cost to sell.

Department of Agriculture and Water Resources 176

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 5: Payables 2017 2016

$'000 $'000

Note 5A: Suppliers

Trade creditors and accruals 3 508 3 627

Operating lease payable 17 999 19 021

Total suppliers 21 507 22 648

Settlement is usually made within 30 days.

Note 5B: Other Payables

Salaries and wages 3 324 2 374

Superannuation 572 268

Separations and redundancies 895 1 944

Accrued expenses 29 984 42 257

Unearned income 5 156 1 600

Statutory payables associated with employees 480 723

Other 1 823 1 307

Total other payables 42 234 50 473

Accounting policy

Separation and Redundancy

Provision is made for separation and redundancy benefit payments. The department recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that the terminations will be carried out. Separation and redundancy is reported as a payable when an agreement has been reached with the relevant employee and therefore the payable can be measured with high certainty.

Superannuation

The majority of the department’s staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap), however some staff have elected to be members of other private superannuation funds.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

The department makes employer contributions to the employees’ superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The department accounts for the contributions as if they were contributions to defined contribution schemes.

The liability for superannuation recognised at 30 June 2017 represents outstanding contributions.

177 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 6: Provisions 2017 2016

$'000 $'000

Note 6A: Employee Provisions

Leave 143 459 143 946

Total employee provisions 143 459 143 946

Accounting policy

Liabilities for ‘short-term employee benefits’ and termination benefits due within twelve months of the end of the reporting period are measured at their nominal amounts.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will apply at the time the leave is taken, including the department’s employer superannuation contribution rates to the extent that leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave has been determined by reference to the work of an actuary as at 30 June 2017. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Note 6B: Reconciliation Other Provisions

Provision for lease incentives Provision for

restoration Total

$'000 $’000 $’000

As at 1 July 2016 6 905 4 525 11 430

Additional provisions made - 1 652 1 652

Amounts reversed - ( 482) ( 482)

Amounts used ( 1 114) ( 147) ( 1 261)

Unwinding of discount or change in discount rate - 120 120

Total as at 30 June 2017 5 791 5 668 11 459

The department currently recognises 41 (2016: 18) provisions for premises requiring restoration to their original condition at the conclusion of the lease. The provisions reflect the present value of this obligation.

Accounting policy

Provision for Restoration

The cost of restoring properties leased by the department is based on estimates for completing remedial work. In some instances the actual cost to complete this work may be more or less than the makegood provision.

Department of Agriculture and Water Resources 178

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 7: Restructuring

2016

Water policy and resources The Department of the Environment 1 2

$'000

FUNCTIONS ASSUMED

Assets recognised

Trade and other receivables 4 614

Total assets recognised 4 614

Liabilities recognised

Employee provisions 5 315

Total liabilities recognised 5 315

Net liabilities assumed ( 701)

Income

Recognised by the receiving entity 19 071

Recognised by the losing entity 11 449

Total income assumed 30 520

Expenses

Recognised by the receiving entity 19 050

Recognised by the losing entity 12 204

Total expenses assumed 31 254

1. Water policy and resources was assumed from the Department of the Environment during 2015-16 due to an Administrative Arrangements Order made on 21 September 2015.

2. The net liabilities assumed from the Department of the Environment were ($701 000). In respect of functions assumed, the net book values of assets and liabilities were transferred to the entity for no consideration. 3. There were no Administrative Arrangement Order changes related to the department during 2016-17

179 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 8: Contingent Assets and Liabilities

Quantifiable Contingencies

There were no quantifiable contingent assets or contingent liabilities at 30 June 2017 (2016: Nil).

Unquantifiable Contingencies

At 30 June 2017, the department was pursuing a number of legal claims for damages / costs. The department is expecting to succeed in claims against a variety of parties, although the cases are continuing. It is not possible to estimate the amounts of any eventual payments which might be recovered in relation to these claims.

Proceedings have commenced in the Federal Court of Australia seeking compensation for alleged losses due to the temporary suspension of exports of live animals to Indonesia that was put in place on 7 June 2011. The quantum of any damages sought has not been quantified. The Department of Finance, which has responsibility

for Comcover (the Australian Government’s general insurance fund), has assumed insurance responsibility for the potential claims under its insurance arrangements with the department.

Accounting policy

Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the relevant notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

Department of Agriculture and Water Resources 180

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 9: Key Management Personnel Remuneration 2017 2016

$'000 $'000

Total short-term employee benefits 2 802 2 472

Post-employment benefits 522 432

Other long-term benefits 314 275

Total key management personnel remuneration expenses1,2 3 638 3 179

Key management personnel are those individuals having authority and responsibility for planning, directing and controlling the activities of the department, directly or indirectly. The department has determined the key management personnel to be members of the Executive Management Committee including acting arrangements for a period of 8 weeks or more.

The total number of key management personnel that are included in the above table is 13, being 11 substantive officers and two acting for part of the year (2016: 14, being 11 substantive officers and three acting for part of the year).

1. The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Minister. The Portfolio Minister's remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the entity.

2. The comparative information has been restated to disclose remuneration of key management personnel, as defined above. In the 2015-16 financial statements, the senior management personnel remuneration note included all substantive SES level staff and acting arrangements for the full year.

Note 10: Related Party Disclosures

Related party relationships:

The department is an Australian Government controlled entity. Related parties to this entity are Key Management Personnel, including the Portfolio Minister and Assistant Ministers, the River Murray Operation (RMO) and Living Murray Initiative (LMO) joint operations as well as other Australian Government entities.

Transactions with related parties:

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. These transactions have not been separately disclosed in this note.

Giving consideration to relationships with related entities, and transactions entered into during the reporting period, the department has determined there are no related party transactions that require separate disclosure.

181 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 11: Financial Instruments 2017 2016

$'000 $'000

Note 11A: Categories of Financial Instruments

Financial Assets

Held-to-maturity investments

Negotiable securities - certificates of deposit 16 000 14 500

Total held-to-maturity investments 16 000 14 500

Loans and Receivables

Cash and cash equivalents 27 652 42 891

Trade receivables 20 741 14 630

Other financial assets 4 893 5 090

Total loans and receivables 53 286 62 611

Total financial assets 69 286 77 111

Financial Liabilities

Financial liabilities measured at amortised cost

Trade creditors 3 508 3 627

Total financial liabilities measured at amortised cost 3 508 3 627

Total financial liabilities 3 508 3 627

At 30 June 2017, there are 11 (2016: 11) certificates of deposit maturing at different dates within the next 12 months. Interest rates range from 2.62% to 2.87% (2016: 2.75% to 3.11%), payable upon maturity

1. The net income from interest revenue for held-to-maturity investments in 2017 is $351 000 (2016: $399 000). 2. The net income from interest revenue for loans and receivables in 2017 is $299 000 (2016: $404 000).

Accounting policy

Financial assets

The department classifies its financial assets in the following categories:

ï· held-to-maturity investments;

ï· available-for-sale financial assets; and

ï· loans and receivables.

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets are recognised and derecognised upon trade date.

Effective Interest Method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Income is recognised on an effective interest rate basis except when financial assets are recognised at fair value through profit or loss. The department has no financial assets that are recognised at fair value through profit or loss.

Department of Agriculture and Water Resources 182

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Held-to-Maturity Investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the department has the positive intent and ability to hold to maturity are classified as ‘held-to-maturity investments’. Held-to-maturity investments are recorded at amortised cost using the effective interest method less impairment, with revenue recognised on an effective yield basis.

The departmental held-to-maturity investments are recognised in the Statement of Financial Position as other investments and are made up of negotiable certificates of deposit.

Available-For-Sale Financial Assets

‘Available-for-sale financial assets’ are non-derivatives that are either designated in this category or not classified in any of the other categories.

Available-for-sale financial assets are recorded at fair value. Gains and losses arising from changes in fair value are recognised directly in reserves (equity) with the exception of impairment losses. Interest is calculated using the effective interest method and foreign exchange gains and losses on monetary assets are recognised directly in profit or loss. Where the asset is disposed of or is determined to be impaired, part (or all) of the cumulative gain or loss previously recognised in the reserve is included in the surplus or deficit for the period.

The department recognises administered other investments as available-for-sale.

Loans and Receivables

Trade receivables and cash and cash equivalents have fixed or determinable payments that are not quoted in an active market and are classified as ‘Loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.

Impairment of Financial Assets

Financial assets are assessed for impairment at the end of each reporting period.

Financial assets held at amortised cost - If there is objective evidence that an impairment loss has been incurred for receivables or held to maturity investments held at amortised cost, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Statement of Comprehensive Income.

Available-for-sale financial assets - If there is objective evidence that an impairment loss on an available-for-sale financial asset has been incurred, the amount of the difference between its cost, less principal repayments and amortisation, and its current fair value, less any impairment loss previously recognised in expenses, is transferred from equity to the Statement of Comprehensive Income.

Financial assets held at cost - If there is objective evidence that an impairment loss has been incurred, the amount of the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash flows discounted at the current market rate for similar assets.

Financial liabilities

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or ‘other financial liabilities’. Financial liabilities are recognised and derecognised upon ‘trade date’. All of the department’s financial liabilities are categorised as other financial liabilities.

Other Financial Liabilities

Other financial liabilities are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The department recognises all financial liabilities at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

183 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 12: Appropriations

Note 12A: Annual and Unspent Appropriations ('Recoverable GST exclusive') 2017 2016

$'000 $'000

Ordinary annual services

Opening unspent appropriation balance 48 805 39 939

Annual Appropriation - Operating 375 687 321 871

Annual Appropriation - Capital budget1 9 940 9 969

PGPA Act Section 74 receipts 28 646 28 917

PGPA Act Section 75 transfers - 16 620

Prior year PGPA Act section 75 transfers - 4 614

Total appropriation available 463 078 421 930

Appropriation applied (current and prior years) 407 864 373 125

Closing unspent appropriation balance 55 214 48 805

Balance comprises appropriations as follows:

Appropriation Act (No. 1) 2014-15 - 3 754

Appropriation Act (No. 1) 2015-16 - 21 819

Appropriation Act (No. 3) 2015-16 - 18 090

Appropriation Act (No. 1) 2016-17 48 286 -

Appropriation Act (No. 3) 2016-17 4 104 -

Supply Act (No. 1) 2016-17 810 -

Cash on hand 2 014 5 142

Total unspent appropriation - ordinary annual services 55 214 48 805

1 Departmental Capital Budgets are appropriated through Appropriation Acts (No.1,3,5). They form part of ordinary annual services, and are not separately identified in the Appropriation Acts. The variance between amounts appropriated in 2017 and appropriation applied is $6 409 000.

Other Services

Opening unspent appropriation balance 4 603 320

Annual Appropriation - Equity injection 12 703 6 055

Total appropriation available 17 306 6 375

Appropriation applied (current and prior years) 6 062 1 772

Closing unspent appropriation balance 11 244 4 603

Balance comprises appropriations as follows:

Appropriation Act (No. 4) 2013-141 240 240

Appropriation Act (No. 2) 2015-16 203 1 278

Appropriation Act (No. 4) 2015-16 2 756 3 085

Appropriation Act (No. 2) 2016-17 2 595 -

Appropriation Act (No. 4) 2016-17 5 319 -

Supply Act (No. 2) 2016-17 131 -

Total unspent appropriation - other services 11 244 4 603

1 $240 000 has been administratively quarantined in anticipation of repeal. The variance between amounts appropriated in 2017 and appropriation applied is $6 641 000.

Total unspent appropriation 66 458 53 408

Department of Agriculture and Water Resources 184

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 12B: Special Appropriations ('Recoverable GST exclusive')

Authority

Appropriation applied 2017 2016

$'000 $'000

Public Governance, Performance and Accountability Act 2013, s. 58, National Residue Survey Prior year investments redeemed in current year ($14 500 000), Redemptions of current year investments (gross) (nil). ( 16 000) ( 14 500)

Total special appropriations applied ( 16 000) ( 14 500)

Note 13: Special Accounts

Australian Quarantine and Inspection Service Special Account (AQIS)1 National Residue Survey

Account (NRS)2

2017 2016 2017 2016

$'000 $'000 $'000 $'000

Balance brought forward from previous period 36 225 57 242 1 524 1 723

Increases:

Appropriations credited to special account 132 483 126 797 9 363

Other increases 361 984 351 468 26 205 24 356

Total increases 494 467 478 265 26 214 24 719

Available for payments 530 692 535 507 27 738 26 442

Departmental decreases

Payments made to employees ( 303 194) ( 298 273) ( 1 880) ( 1 831)

Payments made to other ( 203 097) ( 201 009) ( 24 621) ( 23 087)

Total decreases ( 506 291) ( 499 282) ( 26 501) ( 24 918)

Total balance carried to the next period 24 401 36 225 1 237 1 524

Balance made up of:

Cash held in the Official Public Account 21 548 26 900 1 237 1 524

Cash held in entity bank accounts 2 853 9 325 - -

Total balance carried to the next period 24 401 36 225 1 237 1 524

1 Appropriation: Public Governance, Performance and Accountability Act 2013 section 78.

Establishing Instrument: Financial Management and Accountability Determination 2010/11 - Australian Quarantine and Inspection Service Special Account Establishment 2010.

Purpose: For expenditure relating to the provision of quarantine and inspection services and payment of moneys to the Consolidated Revenue Fund as agreed to by the relevant Minister and Minister for Finance.

2 Appropriation: Public Governance, Performance and Accountability Act 2013 section 80.

Establishing Instrument: National Residue Survey Administration Act 1992 section 6 (1).

Purpose: For the purposes of conducting national residue surveys and to provide for collection of the NRS levy imposed by various acts.

185 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 14: Regulatory Charging Summary 2017 2016

$'000 $'000

Amounts applied

Departmental

Annual appropriations 71 987 64 309

Own source revenue 374 805 364 653

Total amounts applied 446 792 428 962

Expenses

Departmental 463 097 449 658

Total expenses 463 097 449 658

Revenue

Departmental 391 981 373 384

Total revenue 391 981 373 384

Amounts written off

Departmental 9 305 12 066

Total amounts written off 9 305 12 066

Regulatory Charging Activities:

Dairy Exports Program Services Meat Export Program Services Fish and Egg Export Program Services National Residue Survey Services Grain and Seed Export Program Services Non-Prescribed Goods Export Program Services Horticulture Exports Program Services Passenger Program Services Import Clearance Program Services Post Entry Plant Quarantine Program Services Levies Revenue Service Seaports Program Services

Live Animal Export Program Services Water Efficiency Labelling and Standards Scheme

Documentation (Cost Recovery Implementation Statements) for the above activities is available at:

Water Efficiency Labelling and Standards Scheme www.waterrating.gov.au/resource/cost-recovery-impact-statement

Other regulatory charging activities www.agriculture.gov.au/fees/cost-recovery/

Industry Rebates and Program Results

Biosecurity, export certification and quota management, and National Residue Survey (NRS) cost recovered activities are maintained on a program basis with many of the programs aligning to an industry sector. The management of each program, including the establishment of the level and structure of fees and charges, is conducted in consultation with an Industry Consultative Committee (ICC), as applicable, and the Department of Finance.

Where fees and charges collected for a cost recovered program exceed its costs during a financial year, the excess revenue is reported in the total comprehensive income (loss) for the period. The amount of excess revenue is transferred from retained earnings into an industry reserve.

Department of Agriculture and Water Resources 186

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 15: Budgetary Reports and Explanations of Major Variances

The following tables provide a comparison of the original budget as presented in the 2016-17 Portfolio Budget Statements (PBS) to the 2016-17 final outcome as presented in accordance with Australian Accounting Standards for the department. The Budget is not audited. Explanations of major variances are provided below.

Variances are considered to be ‘major’ based on the following criteria:

ï· the variance between budget and actual is greater than +/- 10% of the original budget for a line item; or

ï· the variance between budget and actual is greater than 2% of the relevant sub-total (i.e. total expenses, total income, total assets or total liabilities); or

ï· an item below this threshold but is considered important for the reader’s understanding or is relevant to an assessment of the discharge of accountability and to an analysis of performance of the department.

Statement of Comprehensive Income major budget variances Affected line items Variance amount $'000

Explanations of major variances

Expenses

Employee benefits ( 7 769) The variance relates to: the delayed implementation of pay increases under the department's enterprise agreement; and increases in the market yield (interest rate) for 10 year Government bonds, which has resulted in the reduction of the value of employee leave provisions.

Grants ( 4 457) The variance relates to an error in the original budget preparation,

misallocating an amount between grant and supplier expenses.

Depreciation and amortisation

4 434 Additional depreciation and amortisation expenses were incurred due to asset projects being completed earlier than anticipated in the original budget.

Write-down and impairment of assets 6 621 The budget reflects remission of fees for cost recovery arrangements. Fee remissions are a legislated mechanism used to reduce surplus

industry reserves by waiving a portion of revenue charged to industry participants. The actual remission program was reduced through the financial year. The budget does not include estimates for the write-down and impairment of receivables and non-financial assets.

Income

Sale of goods and rendering of services ( 8 426) The variance is mainly due to the lower than expected fee-for-service collections from the Cost Recovery Arrangements.

Other revenue 15 072 The variance is mainly due to the reclassification of resources received free of charge from other gains to other revenue, and unbudgeted rent received free of charge from the Department of Finance for the quarantine facility at Mickleham.

Revenue from Government

4 104 The original budget did not incorporate subsequent government measures which were published in the Portfolio Additional Estimates Statements.

187 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Statement of Financial Position major budget variances

Affected line items

Variance amount $'000 Explanations of major variances

Assets

Cash and cash equivalents

24 502 The original budget did not include the balance of special accounts, which is now required to be reported as cash and cash equivalents.

Trade and other receivables

5 016 The variance reflects the increased appropriation receivable balance due to a better than budgeted operating result and underspend against capital funding, offset by the reclassification of special account balances to cash and cash equivalents.

Other investments 2 500 The original budget included a realisation on the NRS investments that did not eventuate. Land and buildings ( 4 056) The variance is due to an underspend against capital funding, primarily related to Sydney regional office fitout. Property, plant and equipment

5 905 The variance relates to a reclassification of budgeted asset acquisitions from intangible assets to PP&E as well as recognition of the Mickleham Post Entry Quarantine Facility Project, transferred from the Department of Finance. Intangibles ( 29 816) The variance is a result of: a reclassification of budgeted asset

acquisitions from intangible assets to PP&E; additional amortisation expense as described in the statement of comprehensive income; a significant planned software purchase which was subsequently assessed as a partial contract for services (non-capital); and a higher budgeted opening balance due to information available at the time of budget preparation.

Prepayments 3 222 The variance includes prepaid Information Technology services which had originally been budgeted as part of an intangible asset. Due to the uncertainty that surrounds future events that impact prepayments, the department estimates prepayments based on information available at the time of budget preparation.

Liabilities

Suppliers 4 076 Due to the uncertainty that surrounds the timing of payments to

suppliers, the department estimates suppliers payable based on information available at the time of budget preparation.

Other payables ( 6 307) The variance relates to the timing of final payroll processing for the financial year, resulting in lower than budgeted salaries and wages payable.

Employee provisions 9 261 The original budget, based on provisions at the time of preparation, did not include provision movements for increased staffing levels, mainly driven by the Agricultural Competitiveness White Paper.

Department of Agriculture and Water Resources 188

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Cash Flow Statement major budget variances

Affected line items

Variance amount $'000 Explanations of major variances

Operating cash flows

Appropriations ( 19 284) The variance reflects the better than expected operating results and underspending in self-funded, capital investments. Sale of goods and rendering of services

( 13 996) The variance is mainly due to the lower than expected fee-for-service collections from the Cost Recovery Arrangements as described in the Statement of Comprehensive Income. Net GST received 6 241 The original budget for GST receipts is calculated based on the

estimated GST treatment of budgeted revenue and expenses.

Other 9 022 The original budget does not include receipts for items such as leave

transfers between commonwealth entities and refunds from suppliers.

Suppliers 10 751 The variance relates to additional GST paid to suppliers (see Net GST received) and higher than budgeted supplier expenses. Grants ( 4 376) The variance reflects the lower than expected grant expenses as

described in the Statement of Comprehensive Income.

Investing cash flows

Proceeds from sales of financial instruments

1 000 The Original Budget included a reducing balance of term deposits for the National Residue Survey (NRS), including a reduced opening balance as at 1 July 2016 compared to 2015-16 results. Therefore, maturing term deposits during 2016-17 were higher than budgeted.

Purchase of property, plant and equipment

6 496 The variance relates to a reclassification of budgeted asset acquisitions from intangible assets to PP&E

Purchase of land and buildings ( 10 350) The variance is due to an underspend against capital funding, primarily related to Sydney regional office fitout.

Purchase of intangibles

( 5 993) The variance is a result of a reclassification of budgeted asset acquisitions from intangible assets to PP&E and a significant planned software purchase which was subsequently assessed as a partial contract for services (non-capital).

Purchase of financial instruments 2 500 The Original Budget included a reducing balance of term deposits for the NRS. The NRS invests surplus funds from the special account in

term deposits and reinvested additional funds during 2016-17

Financing cash flows

Contributed equity ( 1 322) The variance reflects underspending in capital projects mainly associated with the Agricultural Competitiveness White Paper measures.

189 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES ADMINISTERED SCHEDULE OF COMPREHENSIVE INCOME for the period ended 30 June 2017

The above statement should be read in conjunction with the accompanying notes.

Administered Financial Statements

Original Budget Variance

2017 2016 2017 2017

Notes $'000 $'000 $'000 $'000

NET COST OF SERVICES

Expenses

Levy disbursem*nts and Commonwealth contributions 16A 826 072 771 754 750 644 75 428

Grants 16B 303 999 212 196 507 658 ( 203 659)

Payments to corporate Commonwealth entities 16C 89 296 16 263 108 758 ( 19 462)

Suppliers 16D 42 314 34 432 58 618 ( 16 304)

Direct personal benefits 60 833 57 224 117 736 ( 56 903)

Assets transferred to related entities 19 165 581 78 472 408 179 ( 242 598)

Depreciation and amortisation 19 7 737 7 610 7 759 ( 22)

Concessional loan discount 3 046 - - 3 046

Write-down and impairment of assets 16E 6 725 2 337 694 6 031

Total expenses 1 505 603 1 180 288 1 960 046 ( 454 443)

Income

Revenue

Taxation revenue

Levies fees and charges 17A 555 436 523 128 493 624 61 812

Total taxation revenue 555 436 523 128 493 624 61 812

Non-taxation revenue

Interest 17B 15 689 14 961 25 887 ( 10 198)

Other revenue 17C 19 948 17 015 6 389 13 559

Total non-taxation revenue 35 637 31 976 32 276 3 361

Total revenue 591 073 555 104 525 900 65 173

Gains

Other Gains 17D 129 895 99 291 221 134 ( 91 239)

Total gains 129 895 99 291 221 134 ( 91 239)

Total income 720 968 654 395 747 034 ( 26 066)

Net cost of services 784 635 525 893 1 213 012 ( 428 377)

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services

Administered revaluations taken to reserves

Non-financial assets 13 908 12 190 - 13 908

Other investments 21 957 8 555 - 21 957

Total other comprehensive income 35 865 20 745 - 35 865

Total comprehensive loss ( 748 770) ( 505 148) (1 213 012) 464 242

Department of Agriculture and Water Resources 190

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES ADMINISTERED SCHEDULE OF ASSETS AND LIABILITIES as at 30 June 2017

The above statement should be read in conjunction with the accompanying notes.

Original Budget Variance

2017 2016 2017 2017

Notes $'000 $'000 $'000 $'000

ASSETS

Financial assets

Cash and cash equivalents 166 435 56 321 - 166 435

Trade, taxation and other receivables 18A 733 552 589 929 919,046 ( 185 494)

Other investments 18B 369 513 347 556 339,001 30 512

Other financial assets 18C 67 164 61 000 58,207 8 957

Total financial assets 1 336 664 1 054 806 1 316 254 20 410

Non-financial assets

Land 19 1 467 1 467 1,467 -

Infrastructure 19 528 639 521 308 501,074 27 565

Plant and equipment 19 1 664 1 830 - 1 664

Flooding easem*nts 19 814 814 - 814

Intangibles 19 125 047 138 146 107,989 17 058

Prepayments 16 082 14 316 6,690 9 392

Total non-financial assets 673 713 677 881 617 220 56 493

Total assets administered on behalf of Government 2 010 377 1 732 687 1 933 474 76 903

LIABILITIES

Payables

Levy disbursem*nts and Commonwealth Contributions 20A 92 380 94 395 84,645 7 735

Grants 20B 7 867 41 429 31,246 ( 23 379)

Suppliers 1 504 1 958 615 889

Personal benefits 1 270 1 015 1,115 155

Other payables 808 54 - 808

Total payables 103 829 138 851 117 621 ( 13 792)

Total liabilities administered on behalf of Government 103 829 138 851 117 621 ( 13 792)

Net assets 1 906 548 1 593 836 1 815 853 90 695

191 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES ADMINISTERED RECONCILIATION SCHEDULE for the period ended 30 June 2017

The above statement should be read in conjunction with the accompanying notes.

2017 2016

$'000 $'000

Opening assets less liabilities as at 1 July 1 593 836 786 766

Net cost of services

Income 720 968 654 395

Expenses

Payments to entities other than corporate Commonwealth entities (1 416 307) (1 164 025) Payments to corporate Commonwealth entities ( 89 296) ( 16 263)

Other comprehensive income

Revaluations transferred to reserves

Non-financial assets 13 908 12 190

Other investments 21 957 8 555

Transfers (to)/from the Australian Government

Appropriation transfers from OPA

Administered assets and liabilities appropriations 279 090 237 642

Annual appropriations

Payments to entities other than corporate Commonwealth entities 459 600 296 751

Payments to corporate Commonwealth entities 89 296 16 120

Special appropriations (limited)

Payments to entities other than corporate Commonwealth entities 110 000 -

Special appropriations (unlimited)

Payments to entities other than corporate Commonwealth entities 562 744 537 404

Payments to corporate Commonwealth entities 317 212 280 196

Special account payments 719 -

Appropriation transfers to OPA

Transfers to OPA ( 757 033) ( 800 513)

Restructuring - 744 718

Personal Benefits - Withholding ( 143) ( 100)

Other movements ( 3) -

Closing assets less liabilities as at 30 June 1 906 548 1 593 836

Accounting Policy

Administered Cash Transfers to and from the Official Public Account (OPA) Revenue collected by the department for use by the Government rather than the department is administered revenue. Collections are transferred to the OPA maintained by the Department of Finance. Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of Government. These transfers to and from the OPA are adjustments to the administered cash held by the department on behalf of the Government and reported as such in the schedule of administered cash flows and in the administered reconciliation schedule.

Department of Agriculture and Water Resources 192

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES ADMINISTERED CASH FLOW STATEMENT for the period ended 30 June 2017

The above statement should be read in conjunction with the accompanying notes.

2017 2016

$'000 $'000

OPERATING ACTIVITIES

Cash received

Taxes 548 991 517 238

Net GST received 81 656 59 477

Other 19 478 8 995

Total cash received 650 125 585 710

Cash used

Levy disbursem*nts and Commonwealth contributions 828 087 769 182

Grants 417 176 270 126

Suppliers 46 320 34 967

Personal benefits 65 421 58 630

Payments to corporate Commonwealth entities 89 296 16 263

Total cash used 1 446 300 1 149 168

Net cash used by operating activities ( 796 175) ( 563 458)

INVESTING ACTIVITIES

Cash received

Repayments of loans to States and Territories 107 734 212 281

Interest received from loans to States and Territories 16 012 14 269

Total cash received 123 746 226 550

Cash used

Loans made to States and Territories 255 000 225 000

Purchase of Intangibles 24 085 13 223

Total cash used 279 085 238 223

Net cash used by investing activities ( 155 339) ( 11 673)

FINANCING ACTIVITIES

Cash received

Restructure1 - 55 303

Total cash received - 55 303

Net cash received from financing activities - 55 303

Net decrease in cash held ( 951 514) ( 519 828)

Cash and cash equivalents at the beginning of the reporting period 56 321 8 549

Cash from Official Public Account for

- Appropriations 1 817 942 1 368 113

- Special accounts 719 -

Total cash from Official Public Account 1 818 661 1 368 113

Cash to Official Public Account for:

- Appropriations 757 033 800 513

Total cash to Official Public Account 757 033 800 513

Cash and cash equivalents at the end of the reporting period 166 435 56 321

1 Cash received through restructure relates to the balance of special accounts transferred from the Department of the Environment due to an Administrative Arrangements Order made on 21 September 2015. Refer to Note 21.

193 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 16: Administered - Expenses 2017 2016

$'000 $'000

Note 16A: Levy Disbursem*nts and Commonwealth Contributions

Levy disbursem*nts

Corporate Commonwealth entities 211 922 168 599

Other 338 143 349 309

Commonwealth Contributions

Corporate Commonwealth entities 117 826 110 955

Other 158 181 142 891

Total levy disbursem*nts and Commonwealth contributions 826 072 771 754

Note 16B: Grants

Non-profit organisations 102 388 75 851

For profit organisations 176 933 77 480

Australian Government entities (related parties) 16 306 35 039

State and Territory Governments 6 231 15 019

Local Governments 1 972 8 748

Other 169 59

Total grants 303 999 212 196

Accounting policy The department administers a number of grant and subsidy schemes on behalf of the Government. Grant and subsidy liabilities are recognised to the extent that (i) the services required to be performed by the grantee have been performed or (ii) the grant eligibility criteria have been satisfied, but payments due have yet to be made.

Note 16C: Payments to Corporate Commonwealth Entities

Murray-Darling Basin Authority (MDBA) 72 699 7 492

Rural Industries Research and Development Corporation (RIRDC) 10 170 8 628

Fisheries Research and Development Corporation (FRDC) 4 291 -

Australian Grape and Wine Authority (AGWA) 2 000 -

Australian Pesticides and Veterinary Medicines Authority (APVMA) 136 143

Total payments to corporate Commonwealth entities 89 296 16 263

Accounting policy Payments to corporate Commonwealth entities from amounts appropriated for that purpose are classified as administered expenses, equity injections or loans of the relevant portfolio department. The appropriation to the department is disclosed in Note 24.

Department of Agriculture and Water Resources 194

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2017 2016

$'000 $'000

Note 16D: Suppliers

Goods and services supplied or rendered

Membership fees 15 903 16 008

Consultants 8 276 5 014

Contractors 5 043 1 882

Administration charge - loans 4 428 3 690

Purchase of data 5 009 5 079

Other 3 655 2 759

Total goods and services supplied or rendered 42 314 34 432

Goods supplied 5 836 5 951

Services rendered 36 478 28 481

Total goods and services supplied or rendered 42 314 34 432

Total supplier expenses 42 314 34 432

Note 16E: Write-Down and Impairment of Assets

Debt waiver of personal benefits receivable 4 874 1 372

Impairment on financial assets 752 436

Write-off of non-financial assets 501 287

Debt waiver - under Primary Industries Levies and Charges Collection Act 1991 598 242 Total write-down and impairment of assets 6 725 2 337

195 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 17: Administered - Income 2017 2016

$'000 $'000

Revenue

Taxation Revenue

Note 17A: Levies Fees and Charges

Primary industry levies 544 040 511 637

Primary industry charges 11 396 11 491

Total levies fees and charges 555 436 523 128

Figure 2 shows levy revenue by industry in 2016-17

Non-Taxation Revenue

Note 17B: Interest

Loans 15 570 14 938

Other 84 23

Unwinding of concessional loan discount 35 -

Total interest 15 689 14 961

$180,466

$112,415

$60,400

$59,344

$34,801

$32,793

$31,331

$22,230

$10,172

$7,161

$4,022

$204

$97

Field crops

Livestock transaction

Horticulture

Animal fibres

Livestock slaughter

Dairy and Honey

Agricultural and Veterinary Chemicals

Wine

Poultry

Forestry

Live export

Fisheries

Other

$000

Department of Agriculture and Water Resources 196

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2017 2016

$'000 $'000

Non-Taxation Revenue (Continued)

Note 17C: Other Revenue

Refunds of prior year payments 16 168 13 026

Registration Fees 1 526 1 328

Other 2 254 2 661

Total other revenue 19 948 17 015

Note 17D: Other Gains

Resources received free of charge - water entitlements 125 188 82 625

Joint operation gains 4 707 15 849

Other - 817

Total other gains 129 895 99 291

Accounting policy

All administered revenues are revenues relating to ordinary activities performed by the department on behalf of the Australian Government. As such, administered appropriations are not revenues of the individual entity that oversees distribution or expenditure of the funds as directed.

Revenue also includes contributions from State and Territory governments in connection with the performance of the Water Efficiency Labelling and Standards (WELS) Regulator, Lake Eyre Basin Community Advisory Committee and the Great Artesian Basin Coordinating Committee.

Levies, Fees and Other Charges

Levies are collected by the department on behalf of industry and are disbursed, in conjunction with any relevant Commonwealth contribution, to special accounts, statutory marketing authorities, Commonwealth research and development corporations, and other industry boards and authorities.

The levels of levy revenue and disbursem*nt during the year are monitored by the department with reference to production forecasts prepared by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), the Australian Bureau of Statistics (ABS) and field based data supplied by the department’s regional office compliance officers.

Levies are recognised on an accrual basis when the following conditions apply:

ï· the levy payer/commodity group can be reliably identified;

ï· the amount of levy payable can be reliably measured; and

ï· it is probable that the levy payable will be collected.

The value of the accrual recognised (2017: $67164 000, 2016: $61 000 000) relies on the estimation of the volume and value of probable future levy return lodgements, which relate to leviable commodity transactions that have occurred in the current financial year

Also forming part of the department’s other charges are Biosecurity penalties, fines and forestry import charges collected by the Department of Immigration and Border Protection. As reporting is the responsibility of the principal department, these collections are recognised in the department's financial statements as administered items.

Resources Received Free of Charge

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government entity as a consequence of a restructuring of administrative arrangements. Water entitlement assets valued at $125 188 000 were acquired in 2017 (2016: $82 625 000) for no cost under the Sustainable Rural Water Use and Infrastructure Program (SRWUIP) grant program and are included in asset additions in note 19.

197 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 18: Administered - Financial Assets 2017 2016

$'000 $'000

Note 18A: Trade, Taxation and Other receivables

Goods and services receivables in connection with

Goods and services 927 3 220

Total goods and services receivables 927 3 220

Taxation receivables

Levies fees and charges 10 958 11 102

Total taxation receivables 10 958 11 102

Loans

State and Territory Governments 696 504 552 249

Total loans 696 504 552 249

Other receivables

Personal benefits 2 605 1 857

Statutory receivables 12 565 15 178

Interest receivable from loans 2 603 2 961

Other receivables 10 227 6 115

Total other receivables 28 000 26 111

Total trade, taxation and other receivables (gross) 736 389 592 682

Less impairment allowance

Goods and services ( 124) ( 385)

Personal benefits ( 854) ( 680)

Levies fees and charges ( 1 859) ( 1 688)

Total impairment allowance ( 2 837) ( 2 753)

Total trade, taxation and other receivables (net) 733 552 589 929

At 30 June 2017, five loan schemes were in place. Loans to State and Territory Governments were made under the Farm Finance and Drought loan schemes for periods up to 5 years and the Dairy Recovery, Drought Recovery and Farm Business loan schemes for up to 10 years. No security is required on these loans to government agencies, but a charge over assets is held by jurisdictions issuing the loans to farmers.

Loans are subject to biannual impairment assessments. If a State or Territory Government is unable to recover loans provided to program recipients, the State or Territory Government's respective liability to the Commonwealth will be reviewed in accordance with the applicable loan agreements.

Principal is repaid in full at maturity. Interest rates were fixed with a 6 monthly review period. Effective interest rates averaged 3.39% (2016: 3.68%) for Farm Finance loans, 2.88% (2016: 3.17%) for Drought loans, 2.45% (2016: 2.79%) for Dairy Recovery and Drought Recovery loans, and 2.50% (2016: NA) for Farm Business loans. Interest payments are due on the 10th day of the month following collection.

Accounting policy Loans and Receivables Loan receivables from State and Territory Governments have fixed or determinable payments that are not quoted in an active market and are classified as ‘Loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.

Gains and losses due to impairment, derecognition and amortisation are recognised through profit or loss.

Department of Agriculture and Water Resources 198

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2017 2016

$'000 $'000

Note 18B: Other Investments

Australian Grape and Wine Authority (AGWA) 13 111 9 362

Australian Pesticides and Veterinary Medicines Authority (APVMA) 7 688 7 312

Cotton Research and Development Corporation (CRDC) 37 536 40 025

Fisheries Research and Development Corporation (FRDC) 19 725 11 533

Grains Research and Development Corporation (GRDC) 205 828 187 488

Murray-Darling Basin Authority (MDBA) 63 215 66 449

Rural Industries Research and Development Corporation (RIRDC) 22 410 25 387

Total other investments 369 513 347 556

Accounting policy

Administered Investments

Administered investments in subsidiaries are not consolidated because their consolidation is relevant only at the Whole of Government level.

Administered investments are measured fair value as at 30 June 2017. Fair value has been taken to be the Australian Government’s proportional interest in the net assets of the entities as at the end of reporting period.

The principal activities of each of the entity’s administered investments were as follows:

Corporate Commonwealth Entity: Australian Grape and Wine Authority (AGWA) Principal Activities: Foster and enable a competitive Australian wine industry by investing in research and development, building markets, disseminating knowledge and ensuring compliance.

Corporate Commonwealth Entity: Australian Pesticides and Veterinary Medicines Authority (APVMA) Principal Activities: Protection of the health and safety of people, animals, the environment, and agricultural and livestock industries through regulation of pesticides and veterinary medicines.

Corporate Commonwealth Entity: Cotton Research and Development Corporation (CRDC) Principal Activities: Adoption of innovation that leads to increased productivity, competitiveness and environmental sustainability through investment in research and development that benefits the Australian cotton industry and the wider community.

Corporate Commonwealth Entity: Fisheries Research and Development Corporation (FRDC) Principal Activities: Increased economic, social and environmental benefits for Australian fishing and aquaculture, and the wider community, by investing in knowledge, innovation, and marketing.

Corporate Commonwealth Entity: Grains Research and Development Corporation (GRDC) Principal Activities: New information and products that enhance the productivity, competitiveness and environmental sustainability of Australian grain growers and benefit the industry and wider community, through planning, managing and implementing investments in grains research and development.

Corporate Commonwealth Entity: Murray-Darling Basin Authority (MDBA) Principal Activities: Equitable and sustainable use of the Murray-Darling Basin by governments and the community including through development and implementation of a Basin Plan, operation of the River Murray system, shared natural resource management programs, research, information and advice.

Corporate Commonwealth Entity: Rural Industries Research and Development Corporation (RIRDC) Principal Activities: Increased knowledge that fosters sustainable, productive and profitable new and existing rural industries and furthers understanding of national rural issues through research and development in government-industry partnership.

2017 2016

$'000 $'000

Note 18C: Other Financial Assets

Accrued primary industry levies 65 225 59 340

Accrued primary industry charges 1 939 1 660

Total other financial assets 67 164 61 000

199 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Note 19: Administered

- Non-Financial Assets

Reconciliation of the O

pening and Closing Balances of Property, Plant and Equipment and Intangibles 2017

Land

Infrastructure

Plant &

equipment

Flooding easem*nts

Water

entitlements

Total

$’000

As at 1 July 2016

Gross book value

1 467

826 380

4 142

814

155 970

988 773

Accumulated depreciation and impairment

( 305 072)

( 2 312)

( 17 824)

( 325 208)

Total as at 1 July 2016

1 467

521 308

1 830

814

138 146

663 565

Additions

1,260

218

149,273

150 751

Revaluations recognised in other comprehensive income

13 908

Reversal of impairments recogni

sed in the operating result

3 229

Depreciation expense

( 7 449)

( 288)

( 7 737)

Other movements

( 3)

Disposals:

Transferred to related entities

( 165 581)

By write-off

( 388)

( 96)

( 17)

( 501)

Total as at 30 June 2017

1 467

528 639

1 664

814

125 047

657 631

Total as at 30 June

2017 represented by:

Gross book value

1 467

848 053

4 179

814

139 642

994 155

Accumulated depreciation and impairment

( 319 414)

( 2 515)

( 14 595)

( 336 524)

Total as at 30 June 2017

1 467

528 639

1 664

814

125 047

657 631

Department of Agriculture and Water Resources 200

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Impairment of non-financial assets

All assets were assessed for impairment. No impairment was recognised during the 2016-17 financial period.

Disposal of non-financial assets

No property, plant and equipment is expected to be sold or disposed of within the next 12 months.

Water entitlements acquired as part of the department’s responsibility with regard to the Water Act 2007 will be transferred to the Department of the Environment and Energy upon finalisation.

Revaluations of non-financial assets

Revaluations are conducted in accordance with the revaluation policy.

Infrastructure assets held by the River Murray Operation (RMO) joint venture, are revalued by an independent, external valuer on a three year cycle. For the year ended 30 June 2017 an internal management valuation, using the relevant Rawlinson's Building Price Index, was performed by the Murray-Darling Basin Authority (MDBA). Refer to Note 19 Joint Operations for more information on joint operation arrangements. A revaluation increment of $13 908 000 was recognised by the department.

All increments and decrements were credited to the asset revaluation surplus by asset class and included in the other comprehensive income section of the Administered Schedule of Comprehensive Income. No decrements were expensed.

Contractual commitments for the acquisition of property, plant, equipment and intangible assets

There was one contract entered into as at 30 June 2017 for the acquisition of water entitlements with a value of $38 001 116 which has not yet settled. It should be noted that the total contract value also included $39 998 884 for the diminution of the value of the underlying property and completion of additional contractual obligations.

There were no contractual commitments for the acquisition of property, plant and equipment as at 30 June 2017.

Accounting policy

Water Entitlements

The department acquires water entitlements in the Murray Darling Basin to achieve the Government's environmental policy objectives under the Water Act 2007.

Commonwealth water entitlements are held for non-commercial, long term environmental purposes, beyond the shorter term weather and accounting cycles, the benefits of which are not being captured for accounting purposes. As the Commonwealth's water entitlement holdings continue to increase so does the strategic importance of demonstrating a robust valuation assessment.

Under the Federal Financial Relations Framework, National Partnership Payments are processed centrally by the Department of the Treasury and paid directly to each state treasury for delivery of services, including water efficiency projects that generate water savings. State treasuries are responsible for distributing the funding within their jurisdiction. In the Commonwealth, the Treasurer is accountable for the appropriations, estimates and payments under the framework. For National Partnership agreements, the primary responsibility for policy is with the relevant portfolio Minister. The department receives water entitlements 'free of charge' in accordance with the terms and conditions of payments made by the Treasury under the National Partnership on Water for the Future (refer to Note 17D).

Under the Sustainable Rural Water Use and Infrastructure Program (SRWUIP), there are a number of projects which improve the efficiency of irrigation infrastructure and generate savings in the use of water. As part of the SRWUIP funding arrangement, the Australian Government will receive a share of that water saving in the form of water entitlements for use in delivering the Government's environmental watering objectives. Water acquired as a result of water savings arising from projects funded to improve the efficiency of water use are accounted for in accordance with the relevant Australian Accounting Standards.

Once the department has finalised water entitlements as an asset in use, the Water Act 2007 requires the department to transfer the entitlements to the Commonwealth Environmental Water Holder. The department recognises the transfer of the asset as an expense in accordance with the FRR. The department's remaining water entitlement holdings are as a result of the Living Murray Initiative (LMI) joint venture and entitlements that are not yet classified as in use.

201 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

The department values water entitlements at cost, in the absence of an active market, in accordance with AASB 138 Intangible Assets. Water entitlements are classified as indefinite life intangible assets as there is no foreseeable limit to the period over which the assets are expected to generate future economic benefits. Consistent with AASB 136 Impairment of Assets and the FRR, they are subject to annual impairment testing.

Under AASB 136, the impairment test is carried out by comparing the carrying amount (per the department's asset register) to the recoverable amount of the water entitlements. The recoverable amount of the water entitlements is the higher of fair value less costs to sell and value in use. The recoverable amount calculation is performed at the lowest practical level, taking into account the quality and availability of data.

The department's valuation methodology calculates the fair value of the water entitlements based on the best information available to reflect the amount that an entity could obtain from the disposal of the water entitlements in an arm's length transaction between knowledgeable, willing parties. This approach is consistent with AASB 136. The department uses a model to assess whether there has been a significant decrease in price or whether there has been a prolonged decline in the value of the entitlement, using the median price of water entitlements extracted from State water registries. If either of these conditions is met an impairment loss is recorded. Having reviewed water entitlement price movements, the department has determined that a decline in excess of 10 percent or a 9 months prolonged decline in the value of the entitlement is an appropriate benchmark for this market.

In addition to generating a fair value consistent with AASB 136 as outlined above, the methodology calculates value in use or depreciated replacement cost for the water entitlements. In other words, the methodology satisfies the requirements of each of the recoverable amount calculation methods given by AASB 136.

An impairment loss recognised in prior periods will be reversed if there is any indication that the impairment may no longer exist or may have decreased. The increased carrying amount attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years.

Joint operations

The Australian Government is a venturer in the following jointly controlled operations and assets: Share of Output

Principal 2017 2016

activity % %

River Murray Operations joint operation Asset Management 20 20

Living Murray Initiative joint operation Asset Management 20 20

The Australian Government’s interest, as a venturer, in assets employed in the above joint operations is detailed below. The amounts are included in the financial statements under their respective asset categories:

2017 2016

$'000 $'000

Joint Operations

Non-current assets

Land and buildings

River Murray Operations 1 467 1 467

Infrastructure

River Murray Operations 528 639 521 308

Plant & equipment

River Murray Operations 1 664 1 830

Flooding easem*nts

River Murray Operations 814 814

Water entitlements

Living Murray Initiative 124 593 121 363

Total non-current assets 657 177 646 782

Total assets 657 177 646 782

Department of Agriculture and Water Resources 202

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Accounting policy

Joint Operations

The Australian Government is an operator of jointly controlled assets held in the River Murray Operations (RMO) and Living Murray Initiative (LMI) joint operations. The Australian Government has control over its share of future economic benefits through its 20% share of the jointly controlled assets. The Australian Government recognises in its financial statements its share of the jointly controlled assets, classified according to the nature of the assets, its share of any liabilities incurred in respect of the joint operation and any income from the sale or use of its share of the output of the joint operation, together with its share of any expenses incurred by the joint operation.

Land, plant and equipment and flooding easem*nts

Land, plant and equipment and flooding easem*nts assets recognised by the department represent the Commonwealth Government's share in the RMO.

RMO land, plant and equipment and flooding easem*nts are carried at cost, consistent with the FRR.

Infrastructure

Infrastructure assets recognised by the department represent the Commonwealth Government's share in the RMO.

RMO infrastructure assets are recorded at fair value in accordance with AASB116 Property, Plant and Equipment and AASB13 Fair Value Measurement. Infrastructure assets are valued by an independent external valuer on behalf of the RMO every three years. In the intervening two years of the revaluation cycle, values are assessed by means of an internal management valuation. The latter is an indexation based valuation using the relevant Building Price Index.

Water Entitlements

Water entitlement assets recognised by the department include the Commonwealth Government's share in the LMI.

The determination of impairment and impairment reversals is conducted annually by an independent expert, using the volume-weighted average price on publicly reported market information on State registers reported from 1 July 2016 to 31 May 2017.

Depreciation

Depreciable infrastructure and plant and equipment assets are written-down over their estimated useful lives using the straight-line method of depreciation.

2017 2016

Infrastructure Up to 400 years Up to 400 years

Plant and equipment 3 to 80 years 3 to 80 years

203 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 20: Administered - Payables 2017 2016

$'000 $'000

Note 20A: Levy Disbursem*nts and Commonwealth Contributions

Levy disbursem*nts 28 419 33 427

Commonwealth contributions 63 961 60 968

Total levy disbursem*nts and Commonwealth contributions 92 380 94 395

Note 20B: Grants

Non-profit organisations 7 005 16 931

Australian Government entities (related parties) 522 12 552

State and Territory Governments 280 75

Local Governments - 17

Other 60 11 854

Total grants 7 867 41 429

Department of Agriculture and Water Resources 204

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 21: Administered - Restructuring

Water policy and resources The Department of the Environment1

2016

$'000

FUNCTIONS ASSUMED

Assets recognised

Cash and cash equivalents 55 303

Trade and other receivables 329

Other investments 63 084

Land and buildings 1 467

Property, plant and equipment 516 592

Water assets 107 989

Total assets recognised 744 764

Liabilities recognised

Suppliers 46

Total liabilities recognised 46

Net assets recognised 744 718

Income assumed

Recognised by the receiving entity 101 522

Recognised by the losing entity 69 004

Total income assumed 170 526

Expenses

Recognised by the receiving entity 219 248

Recognised by the losing entity 17 500

Total expenses assumed 236 748

1. Water policy and resources was assumed from the Department of the Environment during 2015-16 due to an Administrative Arrangements Order made on 21 September 2015. 2. The net assets recognised from the Department of the Environment were $744 718 000. In respect of functions assumed, the net book values of assets and liabilities were transferred to the entity for no consideration. 3. Cash and cash equivalents recognised represents the balance of special accounts. 4. There were no Administrative Arrangement Order changes related to the department during 2016-17

205 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 22: Administered - Contingent Assets and Liabilities

Quantifiable Contingencies

There were no quantifiable contingent assets or contingent liabilities as at 30 June 2017 (2016: Nil).

Unquantifiable Contingencies

The Australian Government encourages expenditure on research and development to increase the competitiveness and sustainability of industries within Australia. Under several Acts, the Commonwealth provides contributions to a number of nominated entities responsible for undertaking research and development activities in respect of portfolio industries. These contributions are typically made on a matching basis. Under legislation, entities are eligible for matching contributions which are subject to annual “caps” based on the total cumulative amount of levies collected, amounts spent on qualifying research and development and the annual level of the determined gross value of production. The operation of these annual caps can result in annual entitlements being limited to less than full cumulative levy collections and/or cumulative qualifying research and development expenditure. However, unpaid balances may still be claimable, depending on the level of the caps determined in future years and are therefore carried forward from year to year.

At 30 June 2017, the Commonwealth had a maximum potential liability in respect of matching payments of approximately $533 million (30 June 2016: $443 million). The Commonwealth's actual future liability is contingent on a combination of several currently indeterminable independent factors which are beyond the control of both the department and the recipient entities, in particular the future annual levels of levy collections and determined gross values of production. The likelihood of meeting the eligibility requirements and the amount of future payments is uncertain. Hence, the total liability is considered unquantifiable.

Accounting policy Indemnities At the time of completion of the financial statements, there was no reason to believe that the indemnities would be called upon, and no liability has been recognised.

Department of Agriculture and Water Resources 206

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 23: Administered - Financial Instruments 2017 2016

$'000 $'000

Note 23A: Categories of Financial Instruments

Financial Assets

Loans and receivables

Cash and cash equivalents 166 435 56 321

Goods and services 803 2 835

Loans to State and Territory Governments 696 504 552 249

Interest receivable from loans 2 603 2 961

Other receivables 10 227 6 115

Total loans and receivables 876 572 620 481

Available-for-sale financial assets

Other investments 369 513 347 556

Total available-for-sale financial assets 369 513 347 556

Total financial assets 1 246 085 968 037

Financial Liabilities

Financial liabilities measured at amortised cost

Trade creditors 1 504 2 012

Grants payable 7 867 41 429

Total financial liabilities at amortised cost 9 371 43 441

Total financial liabilities 9 371 43 441

1. The net income from interest revenue for loans and receivables in 2017 is $15 689 000 (2016: $14 961 000).

207 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 24: Administered - Appropriations

Note 24A: Annual and Unspent Appropriations ('Recoverable GST exclusive')

2017 2016

$'000 $'000

Ordinary annual services Opening unspent appropriation balance 67 247 39 460

Annual Appropriation - Operating 553 555 138 574

PGPA Act section 74 receipts 623 1 627

PGPA Act section 75 transfers - 315 885

Prior year PGPA Act section 75 transfers - 25 852

PGPA Act section 51 determinations ( 85 601) ( 210 259)

Total available appropriation 535 824 311 139

Appropriation applied (current and prior years) ( 464 570) ( 243 892)

Closing unspent appropriation balance 71 254 67 247

Balance comprises appropriations as follows:

Appropriation Act (No.1) 2012-131 4 934 4 934

Appropriation Act (No.1) 2013-141 821 821

Appropriation Act (No.1) 2015-16 - 51 297

Appropriation Act (No.3) 2015-16 - 10 195

Appropriation Act (No.1) 2016-171 41 607 -

Appropriation Act (No.3) 2016-17 3 224 -

Supply Act (No.1) 2016-171 20 668 -

Total unspent appropriation - ordinary annual services 71 254 67 247

The variance between amounts appropriated in 2017 and appropriation applied is $89 608 000. 1 A portion of these appropriations amounting to $30 755 000 has been administratively quarantined in anticipation of repeal.

Other services Opening unspent appropriation balance 296 885 185 000

Annual appropriation - States, ACT, NT and Local government 2 100 3 400

Annual appropriation - Administered assets and liabilities 487 045 250 000

PGPA Act section 75 transfers - 63 846

Prior year PGPA Act section 75 transfers - 43 280

PGPA Act section 51 determinations - ( 5 500)

Total available appropriation 786 030 540 026

Appropriation applied (current and prior years) ( 281 062) ( 243 141)

Closing unspent appropriation balance 504 968 296 885

Balance comprises appropriations as follows:

Appropriation Act (No.2) 2013-141 35 000 35 000

Appropriation Act (No.2) 2014-15 137 781 157 781

Appropriation Act (No.4) 2014-15 10 000 30 000

Appropriation Act (No.2) 2015-16 69 104 74 103

Appropriation Act (No.2) 2016-17 184 232 -

Supply Act (No.2) 2016-17 68 851 -

Cash on hand - 1

Total unspent appropriation - other services 504 968 296 885

The variance between amounts appropriated in 2017 and appropriation applied is $208 083 000. 1 $35 000 000 has been administratively quarantined in anticipation of repeal.

Total unspent appropriation 576 222 364 132

Department of Agriculture and Water Resources 208

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Appropriations reduced under Section 51 of the PGPA Act include: $64 126 000 relating to current year and $21 475 304 from prior year Administered items, however Appropriation Acts are not adjusted at law.

The Department of the Environment and Energy has spent money from the Consolidated Revenue Fund (CRF) on behalf of the department, as a temporary arrangement resulting from the transfer of water functions between agencies.

Note 24B: Special Appropriations ('Recoverable GST exclusive')

Authority

Appropriation applied 2017 2016

$'000 $'000

Agricultural and Veterinary Chemicals (Administration) Act 1992 ( 34 460) ( 34 195)

Australian Animal Health Council (Live-stock Industries) Funding Act 1996 ( 7 519) ( 7 825) Australian Grape and Wine Authority Act 2013 ( 33 029) ( 28 989)

Australian Meat and Live-stock Industry Act 1997 ( 173 707) ( 181 839)

Dairy Produce Act 1986 ( 57 968) ( 57 691)

Egg Industry Service Provision Act 2002 ( 9 763) ( 8 611)

Farm Household Support Act 1992 - ( 3)

Farm Household Support Act 20141 ( 61 601) ( 57 431)

Forestry Marketing and Research and Development Services Act 2007 ( 11 913) ( 9 028) Horticulture Marketing and Research and Development Services Act 2000 ( 104 878) ( 93 620) Pig Industry Act 2001 ( 21 262) ( 19 793)

Plant Health Australia (Plant Industries) Funding Act 2002 ( 7 026) ( 5 045)

Primary Industries Research and Development Act 1989 ( 249 722) ( 217 011)

Public Governance, Performance and Accountability Act 2013 ( 1 445) ( 1 098)

Sugar Research and Development Services Act 2013 ( 32 662) ( 30 400)

Water Act 2007, limit for current year ($110 000 000), appropriation lapsed (nil) ( 110 000) - Wool Services Privatisation Act 2000 ( 73 001) ( 65 013)

Total special appropriations applied ( 989 956) ( 817 592)

1 The Department of Human Services spends money from the Consolidated Revenue Fund (CRF) on behalf of the department. The amount of $61 601 000 was spent from the Farm Household Support Act 2014 under this arrangement.

The following special appropriations had zero transactions and budgets during the reporting and comparative year:

ï· Australian Meat and Live-stock Industry (Repeals and Consequential Provisions) Act 1997

ï· Dairy Industry Service Reform Act 2003

ï· Egg Industry Service Provision (Transitional and Consequential Provisions) Act 2002

ï· Public Governance, Performance and Accountability (Consequential and Transitional Provisions) Act 2014

209 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 25: Administered - Special accounts

Natural Resources Management1

Water for the Environment Special Account2

2017 2016 2017 2016

$'000 $'000 $'000 $'000

Balance brought forward from previous period 2 370 8 534 50 595 -

Increases 3 660 5 963 110 000 53 175

Total increases 3 660 5 963 110 000 53 175

Available for payments 6 030 14 497 160 595 53 175

Administered decreases ( 3 253) ( 12 127) ( 1 790) ( 2 580)

Total decreases ( 3 253) ( 12 127) ( 1 790) ( 2 580)

Total balance carried to the next period 2 777 2 370 158 805 50 595

Balance made up of:

Cash held in the Official Public Account 2 777 2 370 158 805 50 595

Total balance carried to the next period 2 777 2 370 158 805 50 595

1 Appropriation: Public Governance, Performance and Accountability Act 2013 section 80. Establishing Instrument: Natural Resources Management (Financial Assistance) Act 1992 section 11.

Purpose: For the purposes of granting financial assistance in connection with projects relating to natural resources management.

2 Appropriation: Public Governance, Performance and Accountability Act 2013 section 80. Establishing Instrument: Water Act 2007 section 86AB.

Purpose: For the purpose of improving the water efficiency of irrigation infrastructure and improving delivery and storage of environmental water supply within the Murray Darling Basin.

Department of Agriculture and Water Resources 210

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Water Efficiency Labelling Scheme Account1 Water Resources Special

Account 20162

2017 2016 2017 2016

$'000 $'000 $'000 $'000

Balance brought forward from previous period 3 340 - - -

Increases 1 947 4 036 1 630 -

Total increases 1 947 4 036 1 630 -

Available for payments 5 287 4 036 1 630 -

Administered decreases ( 1 443) ( 696) ( 636) -

Total decreases ( 1 443) ( 696) ( 636) -

Total balance carried to the next period 3 844 3 340 994 -

Balance made up of:

Cash held in the Official Public Account 3 844 3 340 994 -

Total balance carried to the next period 3 844 3 340 994 -

1Appropriation: Public Governance, Performance and Accountability Act 2013 section 80. Establishing Instrument: Water Efficiency Labelling and Standards Act 2005 section 64.

Purpose: For the purpose of conserving water by reducing demand through the provision of water efficiency information about water-using products and promoting the adoption of efficient water-saving techniques.

2 Appropriation: Public Governance, Performance and Accountability Act 2013 section 78.

Establishing Instrument: PGPA Act (Water Resources Special Account 2016 - Establishment) Determination 2016/01.

Purpose: For the purpose of supporting inter-governmental activities relating to water.

Note: This special account was established on 31 August 2016.

The department has responsibility for the National Cattle Disease Eradication Special Account. For the year ended 30 June 2017, the total balance carried to the next period was $15 161 (2016: $15 161). There were no transactions debited or credited to the account during the current or prior reporting period.

Appropriation: Public Governance, Performance and Accountability Act 2013 section 80. Establishing Instrument: National Cattle Disease Eradication Act 1991 section 4.

Purpose: For the purpose of the eradication of any disease of cattle that is endemic in Australia.

The department has responsibility for the Building Australia Fund Water Portfolio Special Account. For the year ended 30 June 2017, the account had a nil balance and there were no transactions debited or credited to it during the current or prior reporting period.

Appropriation: Public Governance, Performance and Accountability Act 2013 section 80. Establishing Instrument: Nation-building Funds Act 2008 section 82.

Purpose: For the purpose of creating and developing water infrastructure.

211 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 26: Administered - Budgetary Reports and Explanations of Major Variances

Variances are considered to be ‘major’ based on the following criteria:

ï· the variance between budget and actual is greater than +/- 10% of the original budget for a line item; or

ï· the variance between budget and actual is greater than 2% of the relevant sub-total (i.e. total expenses, total income, total assets or total liabilities); or

Administered Schedule of Comprehensive Income major budget variances

Affected line items

Variance amount $'000 Explanations of major variances

Expenses

Levy disbursem*nts and Commonwealth contributions

75 428 The original budget amounts for levy disbursem*nts and Commonwealth contributions were determined based on the estimated gross value of production (GVP) provided by the relevant industry bodies. Higher than expected transactions occurred, most notably in respect to cattle, lamb, wool, grain and oilseed commodities.

Grants ( 203 659) The underspend is mainly due to a delay in the Sustainable Rural Water Use and Infrastructure program (SRWUIP) for negotiations on the Sustainable Diversion Limit Adjustment Mechanism process.

Payments to corporate Commonwealth entities

( 19 462) The variance is a result of reduced payments to the Murray Darling Basin Authority in connection with a delay in the South Australia Riverland Integrated Infrastructure program (SARFIIP).

Suppliers ( 16 304) The original budget reflects payments to the States for concessional loan administration as expenses in the budget year. However these are prepayments for financial statement purposes. In addition, there was a subsequent reallocation to budgeted grants expenses.

Direct personal benefits

( 56 903) The variance relates to the Farm Household Allowance scheme which experienced lower up-take rates than anticipated in the budget. Assets transferred to related entities

( 242 598) The variance is due to reduced water entitlements transferred to the Commonwealth Water Entitlement Holder, mainly related to delays in SRWUIP as described above. Write-down and impairment of assets

6 031 The variance mainly relates to debt waivers in relation to the Farm Household Allowance, following decisions and analysis performed after the initial budget was prepared.

Income

Levies fees and charges

61 812 The original budget amounts for levy fees and charges were determined based on the estimated gross value of production (GVP) provided by the relevant industry bodies. Higher than expected transactions occurred, notably in respect to cattle, lamb, wool, grain and oilseed commodities.

Interest ( 10 198) The concessional loan programs experienced lower take-up rates than was expected. This has resulted in less interest revenue compared to the expected amount in the original budget.

Other revenue 13 559 The original budget did not reflect the subsequent government decision to establish the Emergency Plant Pest Response levy. Other gains ( 91 239) The variance is due to reduced water entitlements transferred to the department, mainly related to delays in SRWUIP as described above. Other comprehensive income

Administered revaluations taken to / from reserves

35 865 Due to the uncertainty that surrounds the revaluation of assets, the department does not make budget estimates for amounts taken to / from reserves. The variance represents the total revaluation increment.

Department of Agriculture and Water Resources 212

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Administered Schedule of Assets and Liabilities major budget variances

Affected line items

Variance amount $'000 Explanations of major variances

Assets

Cash and cash equivalents

166 435 The original budget did not include the balance of special accounts, which is now required to be reported as cash and cash equivalents. Trade, taxation and other receivables

( 185 494) This is largely in connection with Concessional Loans which experienced lower up-take rates over the life of the scheme and higher repayment rates than anticipated when the budget was prepared.

Other investments 30 512 The value of other investments in portfolio agencies is determined by the net assets of these entities at 30 June. Due to the uncertainty that surrounds these balances, the department estimates the budget amount based on actual information available at that time.

Other financial assets

8 957 The variance relates to accrued primary industry levies and charges, which has increased in line with additional revenue from levies, fees and charges.

Property, plant and equipment 27 565 This balance relates to the department's 20% share of joint operations. The original budget did not incorporate changes in the balance of joint

operation assets, including revaluations.

Intangibles 17 058 The majority of this balance relates to the department's 20% share of joint operations. The original budget did not incorporate changes in the balance of joint operation assets, including revaluations.

Prepayments 9 392 The original budget reflects payments to the States for concessional loan administration as expenses in the budget year. However these are prepayments for financial statement purposes.

Liabilities

Levy disbursem*nts and Commonwealth Contributions

7 735 The original budget for liabilities associated with levy disbursem*nts and Commonwealth Contribution are determined based on historical outstanding levies fees, charges and accruals. Actual expenditure exceeded the original budget and this has been reflected in the outstanding liability (refer to explanation for levies fees and charges expenses).

Grants ( 23 379) The variance against budget aligns with reduced grant expenses for the 2016-17 financial year, such as the Sustainable Rural Water Use and Infrastructure program (SRWUIP) (refer to explanation for grants expense).

213 Annual Report 2016-17

Financial statements

DEPARTMENT OF AGRICULTURE AND WATER RESOURCES NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 27: Interest in Cooperative Research Centre

The Cooperative Research Centres Program, launched in 1990 by the Commonwealth Government, was established to assist two or more collaborators to carry out research contributing to the development of internationally competitive industry sectors. The program supports long term high quality research, improved links between research and application, and stimulation of education and training. The original agreement, that expired on 1 July 2012, for the Cooperative Research Centre for National Plant Biosecurity was for seven years.

The current five year agreement amended the name to the Plant Biosecurity Cooperative Research Centres (PBCRC) and is due to end on 30 June 2018. The department’s interest in the PBCRC for the year ending 30 June 2017 was 1 percent (2016: 1 percent)

During the financial year the department’s total cash and in kind contributions to the PBCRC from its own resources is estimated at $213 869 (2016 actual: $230 980, 2016 estimated: $227 380). The actual figure for in-kind contributions is not available until after the department's financial statements are finalised. The estimate is based on an average of the previous 3 years.

The department’s contributions and expenses are included in the Statement of Comprehensive Income. The department’s total contribution for the life of the Cooperative Research Centres listed above is estimated to be $2 243 196 in 2017 (2016 actual: $2 029 327, 2016 estimated: $2 025 727).

References Abbreviations and acronyms 215

Glossary 217

List of tables 219

List of figures 222

Compliance index 223

Subject index 227

Access and availability 252

Part 6

215 Annual Report 2016-17

References

Abbreviations and acronyms

ABARES Australian Bureau of Agricultural and Resource Economics and Sciences

ACLEI Australian Commissioner for Law Enforcement Integrity

ACLUMP Australian Collaborative Land Use and Management Program

AFMA Australian Fisheries Management Authority

ALOP appropriate level of protection

ANAO Australian National Audit Office

APVMA Australian Pesticides and Veterinary Medicines Authority

AQUAPLAN Australia’s National Strategic Plan for Aquatic Animal Health

AQUAVETPLAN Australian Aquatic Veterinary Emergency Plan

AUSVETPLAN Australian Veterinary Emergency Plan

BICON Biosecurity Import Conditions system

BSE bovine spongiform encephalopathy

COFFIE Commonwealth On-Farm Further Irrigation Efficiency program

CSIRO Commonwealth Scientific and Industrial Research Organisation

EADRA Emergency Animal Disease Response Agreement

EMC Executive Management Committee

EMPPLAN Australian Emergency Marine Pest Plan

EPPRD Emergency Plant Pest Response Deed

ESD ecologically sustainable development

FMIS Financial Management Information System

FOI Act Freedom of Information Act 1982

FOI freedom of information

FTE full-time equivalent

GST goods and services tax

Abbreviations and acronyms

216 Department of Agriculture and Water Resources

HRMIS Human Resources Management Information System

ICT information, Communication and Technology

IPPC International Plant Protection Convention

IPS Information Publication Scheme

MARS Maritime Arrivals Reporting System

NAQS Northern Australia Quarantine Strategy

NEBRA National Environmental Biosecurity Response Agreement

NRS National Residue Survey

NRS Act National Residue Survey Administration Act 1992

OBPR Office of Best Practice Regulation

OFIEP On-Farm Irrigation Efficiency Program

OIE World Organisation for Animal Health

PLANTPLAN Australian Emergency Plant Pest Response Plan

PSCC People, Safety and Culture Committee

QDSITI Queensland Department of Science, Information Technology and Innovation

RAP Reconciliation Action Plan

R&D research and development

RD&E Research, development and extension

RIS regulation impact statement

SAMDBNRM South Australian Murray-Darling Natural Resources Management Board

SDL Sustainable Diversion Limit

SES Senior Executive Service

SRWUIP Sustainable Rural Water Use and Infrastructure Program

TRQ tariff rate quota

UAE United Arab Emirates

US United States

WELS Water Efficiency Labelling and Standards scheme

WELS Act Water Efficiency Labelling and Standards Act 2005

WESA Water for the Environment Special Account

WHS work health and safety

WTO World Trade Organization

217 Annual Report 2016-17

References Glossary

administered items: revenues, expenses, assets and liabilities that the government controls, but which an agency or authority manages on the government’s behalf

APS employee: a person engaged under section22, or a person who is engaged as an Australian public service employee under section72 of the Public Service Act1999

biosecurity: the protection of the economy, environment and people’s health from pests and diseases

biosecurity continuum: the management of biosecurity risks offshore, at the border and onshore, with an emphasis on intelligence and information analysis, planning, verifying and auditing third-party serviceproviders

certification of exports: the provision of official documentation confirming that goods exported from Australia conform to the importing countries conditions

cost-recovery: the charging of fees to cover the costs of provision of government goods and services

enterprise agreement: an agreement between an employer and a group of employees, or between an employer and a union or unions representing employees, made under the Fair Work Act 2009

G20: the Group of Twenty forum for international economic cooperation, comprising members from 19countries and the European Union

headcount: the number of actual individuals—including staff on temporary transfer from other agencies and staff on any type of leave—employed at the time the data is collected. The total headcount figure only excludes office holders

levies: money collected and administered by the department on behalf of industry for use in research and development, marketing and promotion, plant and animal health programs and residue testing activities that benefit industry

market access: the openness of a country’s trading market to foreign goods and services

outcomes: the government’s objectives in each portfolio area. Outcomes are desired results, impacts or consequences for the Australian community, as influenced by the actions of the Australian Government. Actual outcomes are assessments of the end results or impacts achieved

performance information: evidence about performance that is collected and used systematically. Evidence may relate to appropriateness, effectiveness and efficiency. It may be about outcomes, factors that affect outcomes and what can be done to improve them

Glossary

218 Department of Agriculture and Water Resources

program: the name given to the variety of activities a government agency may undertake to achieve statedoutcomes

Portfolio additional estimates statements: statements prepared by portfolios to explain additional Budget appropriations in terms of outcomes and outputs

Portfolio budget statements: statements prepared by portfolios to explain the Budget appropriations in terms of outcomes and outputs (that is, where the appropriated funds are going to be spent)

quota: a limit to the amount of a particular commodity that can be exported or imported

sanitary and phytosanitary: relating to issues of human, animal and plant health, most often in regard to biosecurity measures

219 Annual Report 2016-17

References List of tables

List of tables

Page

1 Performance measure—Portfolio industries record an increase in productivity 20

2 Performance measure—The rate of return on capital invested across portfolio industries is maintained or increased 20

3 Performance measure—Investment in rural research and development corporation programs demonstrates positive returns 22

4 Performance measure—Stakeholders and clients assess ABARES research and analysis as high-quality evidence- based accurate and meeting their needs 25

5 Performance measure—A high level of efficiency is achieved in collecting and distributing levies to fund research and development in research and development corporations 25

6 Status updates—Agricultural Competitiveness White Paper 28

7 Performance measure—Financial and business assistance improves primary producers business and personal circ*mstances 31

8 Performance measure—Primary producers use deposits and withdrawals under the Farm Management Deposits Scheme to manage their financial risks and income variations 34

9 Performance measure—Recipients of business and financial assistance report improved business management skills and increased confidence to make informed business decisions 35

10 Performance measure—Funding and grants programs are delivered according to requirements and have a positive end-of-program evaluation 36

11 Performance measure—Trend in value of agricultural exports increases in real terms over time

12 Performance measure—Access to overseas markets accepting Australian agricultural, fisheries and forestry exports is gained, maintained or improved

13 Performance measure—Positive industry feedback is received on agreed market access priorities and resolution of market access problems 43

14 Performance measure—International policy and standards supporting Australian agricultural, fisheries and forestry exports are maintained or improved

15 Performance measure—Australia’s international agricultural relationships are upheld 46

220 Department of Agriculture and Water Resources

Page

16 Performance measure—Export certification meets importing country requirements 47

17 Compliance certification of export commodities by number processed, 2013-14 to 2016-17 47

18 Performance measure—The status of the resource base is maintained or improved 52

19 Performance measure—Positive industry feedback on the applicability and usability of better practice information that the department provides

20 Performance measure—Funding and grants programs are delivered according to requirements and have positive program evaluations 58

21 Performance measure—Water recovery continues in the Murray - Darling Basin, consistent with the Water Recovery Strategy 62

22 Performance measure—Basin governments agree on and implement a package of measures for notification to the Murray-Darling Basin Authority on the sustainable diversion limit adjustment mechanism

23 Performance measure—National Water Infrastructure Development Fund investments provide affordable water to support the growth of regional economies

24 Water infrastructure feasibility studies, by funding recipient and amount funded 66

25 Performance measure—The National Water Infrastructure Loan Facility is established to support state and territory governments’ investment in water infrastructure that will provide affordable water to support regional economic growth

26 Performance measure—Australia maintains a favourable pest and disease status 71

27 Responses underway in 2016-17 for plant pests and environmental pests—nationally cost shared

28 Responses underway in 2016-17 for plant pests and environmental pests—not nationally cost-shared 74

29 Performance measure—The effectiveness and efficiency of biosecurity and food interventions on import pathways improves

30 Size of the import task 78

31 Performance measure—Responses to biosecurity and imported food incidents improve 79

32 Performance measure—Risk assessments for imported goods use science-based risk analysis, drawing on the best available scientific information and advice

33 Performance measure—The ability of governments, industry and the community to quickly and effectively respond to exotic pest and disease incursions improves 84

34 Performance measure—Public awareness of biosecurity risks improves 86

35 Performance measure—A positive, professional and engaged workforce is maintained or improved 88

36 APS Employee Census results—department engagement (2012-2017) and APS (2017) 89

37 Representation of diversity group, 30 June 2016 and 30 June 2017 90

38 Ongoing separations, 2015-16 and 2016-17 90

39 Performance measure—The department maintains safe and healthy workplaces 92

221 Annual Report 2016-17

References List of tables

Page

40 Reported serious personal injuries, prescribed incapacities and dangerous occurrences to employees, 2015-16 to 2016-17 93

41 Investigations, directions and notices under work health and safety legislation, 2015-16 to 2016-17 93

42 Performance measure—the department delivers a balanced and financially sustainable budget 93

43 Performance measure—Information and communication technology meets the department’s business needs

44 Performance measure—Regulatory practices seek to minimise the impact of regulation on clients and stakeholders 102

45 Performance measure—Business processes and client services are improved through the better use of modern technology and improved work practices, and agreed service standards are met

103

46 Performance against service standards, 2016-17 104

47 Executive committees—roles and membership at 30 June 2017 107-108

48 Audit Committee—role and membership at 30 June 2017 110

49 Consultancies—number, value and total expenditure 113

50 Advertising and market research for 2016-17 114

51 Parliamentary committee reports tabled in 2016-17 115

52 Government responses tabled in 2016-17 116

53 Entity resource statement, 2016-17 120-123

54 Expenses for Outcome 1, 2016-17 124-130

55 Expenses for Outcome 2, 2016-17 131-132

56 Expenses for Outcome 3, 2016-17 133-134

57 Employees (headcount) by classification and employment type 140

58 Employees (headcount) by attendance and employment type 141

59 Employees (headcount) by physical location and employment type 141

60 Employment contractual arrangements at 30 June 2017 142

61 Department salary structure at 30 June 2017 142

62 Grants programs for 2016-17 143

63 National Residue Survey—summary of results for all random monitoring programs in 2016-17

146

64 National Residue Survey—revenue and expenses 147

65 National Residue Survey—assets, liabilities and equity 147

66 Transactions in and out of the National Residue Survey Account 148

67 Water for the Environment Special Account 151

222 Department of Agriculture and Water Resources

List of figures

Page

1 Portfolio structure at 30 June 2017 7

2 Programs and strategic objectives, 2016-17 9

3 Organisational structure at 30 June 2017 11

4 Commonwealth performance framework 15

5 Department of Agriculture and Water Resources performance framework 2016-17 17

6 10-year growth in agricultural and market sector productivity, 2007-08 to 2016-17 21

7 Average rate of return on capital for broadacre and dairy farms, 2007-08 to 2016-17 22

8 Value of rural exports in real terms (2016-17 constant dollar), 2006-07 to 2016-17 39

9 Index of value of Australian wine exports and total value of exports, selected countries, 2006-07 to 2015-16 40

10 Value of agricultural exports to China, Japan and the Republic of Korea in real terms (2016-17 constant dollar) 41

11 Biomass assessment for Australian managed fish stocks 53

12 National Water Infrastructure Development Fund feasibility studies, Northern Australia 68

13 Own source income 2011-12 to 2021-22 94

14 Sale of goods and services revenue by cost-recovery activity, 2016-17 95

15 Departmental expenses, 2011-12 to 2021-22 95

16 Cost-recovery reserve balances at 30 June 2017 96

17 Energy consumption, 2012-13 to 2016-17 137

18 Transport energy consumption, 2012-13 to 2016-17 137

19 Organic waste collected, 2012-13 to 2016-17 138

20 Co-mingled recycling collected 2012-13 to 2016-17 139

223 Annual Report 2016-17

References Compliance index

Compliance index

Description Page

Letter of transmittal. iv

Table of contents. ii

Abbreviations and acronyms. iii

Index. 227

Glossary. 217

Contact officers. 252

Internet home page address and Internet address for report. 252

List of requirements. 223

Review by accountable authority

A review by the accountable authority of the entity. 2-5

Overview of the entity

A description of the role and functions of the entity. 8-10

A description of the organisational structure of the entity. 11

A description of the outcome and program structure of the entity. 8-9

A description of the purposes of the entity as included in corporate plan. 8

An outline of the structure of the portfolio of the department. 6-7

Where outcome and program structures differ from PBS/PAES or other portfolio statements accompanying any other additional appropriation bills (other portfolio statements), include details of variation and reasons for change.

Not applicable

Report on performance

Annual performance statements in accordance with paragraph 39(1)(b) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and section 16F of the Public Governance, Performance and Accountability Rule 2014.

13-105

224 Department of Agriculture and Water Resources

Description Page

Report on financial performance

A discussion and analysis of the entity’s financial performance. 93-97

A table summarising the total resources and total payments of the entity. 120-134

If there may be significant changes in the financial results during or after the previous or current reporting period, information on those changes, including: the cause of any operating loss and how the entity responses to that loss and any matter that will have a significant impact on the entity’s future financial operations.

Not applicable

Corporate governance

Information on compliance with section 10 of the PGPA Act (fraud systems). iv

A certification by the accountable authority that fraud risk assessments and fraud control plans have been prepared.

A certification by the accountable authority that appropriate mechanisms for preventing, detecting incidents of, investigating or otherwise dealing with, and recording or reporting fraud that meet the specific needs of the entity are in place.

A certification by the accountable authority that all reasonable measures have been taken to deal appropriately with fraud relating to the entity.

An outline of structures and processes in place for the entity to implement principles and objectives of corporate governance.

107-111

A statement of significant issues reported to Minister under section 19(1)(e) of the PGPA Act that relates to non compliance with finance law and action taken to remedy non compliance. 111

External scrutiny

Information on the most significant developments in external scrutiny and the entity’s response to the scrutiny.

115-118

Information on judicial decisions and decisions of administrative tribunals and by the Australian Information Commissioner that may have a significant effect on the operations of the entity.

118

Information on any reports on operations of the entity by the Auditor General, a Parliamentary Committee, or the Commonwealth Ombudsman. 115-117

Information on any capability reviews on the entity that were released during the period. Not applicable

Management of human resources

An assessment of the entity’s effectiveness in managing and developing employees to achieve entity objectives. 87-93

â¢ Statistics on the entity’s APS employees on an ongoing and non ongoing basis; including:

â¢ Statistics on staffing classification level;

â¢ Statistics on full time employees;

â¢ Statistics on part time employees;

â¢ Statistics on gender;

â¢ Statistics on staff location; and

â¢ Statistics on employees who identify as Indigenous.

90, 140-142

225 Annual Report 2016-17

References Compliance index

Description Page

Information on any enterprise agreements, individual flexibility arrangements, common law determinations under 24(1) of the Public Service Act 1999 , common law contracts and AWAs. 142

Information on the number of SES and non SES employees covered by agreements etc. 142

The salary ranges available for APS employees by classification level.

A description of non salary benefits provided to employees. 111

Information on the number of employees at each classification level who received performance pay.

Information on aggregate amounts of performance pay at each classification level. Not applicable

Information on the average amount of performance payment, and range of such payments, at each classification level. Not applicable

Information on aggregate amount of performance payments. Not applicable

Assets management

An assessment of the effectiveness of assets management where asset management is a significant part of the entity’s activities.

Purchasing

An assessment of entity performance against the Commonwealth Procurement Rules. 112-113

A summary statement detailing the number of new contracts engaging consultants let during the period; the total actual expenditure on all new consultancy contracts let during the period (inclusive of GST); the number of ongoing consultancy contracts that were entered into during a previous reporting period; and the total actual expenditure in the reporting year on the ongoing consultancy contracts (inclusive of GST).

113

A statement that “During [reporting period], [specified number] new consultancy contracts were entered into involving total actual expenditure of $[specified million]. In addition, [specified number] ongoing consultancy contracts were active during the period, involving total actual expenditure of $[specified million]”.

112

A summary of the policies, procedures and main categories for which consultants were selected and engaged.

112-113

A statement that “Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.”

114

If an entity entered into a contract with a value of more than $100,000 (inclusive of GST) and the contract did not provide the Auditor General with access to the contractor’s premises, the report must include the name of the contractor, purpose and value of the contract, and the reason why a clause allowing access was not included in the contract.

114

If an entity entered into a contract or there is a standing offer with a value greater than $10,000 (inclusive of GST) which has been exempted from being published in AusTender because it would disclose exempt matters under the FOI, the annual report must include a statement that the contract or standing offer has been exempted, and the value of the contract or standing offer, to the extent that doing so does not disclose the exempt matters.

114

A statement that: “[Name of entity] supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance’s website.”

113

226 Department of Agriculture and Water Resources

Description Page

An outline of the ways in which the procurement practices of the entity support small and medium enterprises.

113

If the entity is considered by the department administered by the Finance Minister as material in nature—a statement that “[Name of entity] recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website.”

113

Financial statements

Inclusion of the annual financial statements. 152-213

Other mandatory information

Advertising and market research (Section 311A of the Commonwealth Electoral Act 1918 ) and statement on advertising campaigns. 114

A statement that “Information on grants awarded to [name of entity] during [reporting period] is available at [address of entity’s website].” 143

Outline of mechanisms of disability reporting, including reference to website for further information.

Website reference to where the entity’s Information Publication Scheme statement pursuant to Part II of the FOI Act can be found.

117

Work health and safety (Schedule 2, Part 4 of the Work Health and Safety Act 2011 ). 93

Ecologically sustainable development and environmental performance (Section 516A of the Environment Protection and Biodiversity Conservation Act 1999 ). 135-139

Correction of material errors in previous annual report. 226

Note: Table 18 from the 2015-16 Annual Report (Consultancies - number, value and total expenditure) has been corrected at table 49 of the 2016-17 Annual Report.

227 Annual Report 2016-17

References Subject index

Subject index

ABARES, 11, 87 Agricultural Intelligence Transformation Project, 100 commodity forecasting and analysis, 3, 38, 39, 41 electronic monitoring at Commonwealth fisheries, 60 Farm Survey system, 100 Fishery status reports, 52, 54 performance measurement, 25 updated land-use mapping, 56

abbreviations and acronyms, 215-216 Aboriginal and Torres Strait Islander people, 2 Ambassadors, 91 rangers, 98, 113

staff, 2, 90, 98 absences of staff, unscheduled, 87, 90 Accountable Authority statement, 14 ACLUMP (Australian Collaborative Land Use and Management Program), 56 administered programs, 96-97 advertising and market research, 114 AFMA (Australian Fisheries Management Authority), 6, 7, 52, 53 African horse sickness, 72 agricultural, fisheries and forestry exports, 37-50

additional activities, 49-50 building market access, 3, 10, 37, 42-44, 49, 50 export certification, 3, 37, 43, 47-49, 50 increased exports, 38-41 international engagement, 45-47, 49 agricultural and veterinary chemicals

regulation of, 27 residues of pesticides and veterinary medicines in food, 146 review of agricultural and veterinary legislative framework, 27 Agricultural and Veterinary Chemicals Act 1994, 136 Agricultural and Veterinary Chemicals (Administration) Act 1992, 136 Agricultural and Veterinary Chemicals Code Act 1994, 136

228 Department of Agriculture and Water Resources

Agricultural commodities series (ABARES), 38 agricultural communities secure water supplies, 67 securing economic base, 63

support for, 30-36 Agricultural Competitiveness White Paper, 2, 4, 5 additional revenue provided under, 94

status updates, 28-29 see also initiatives under Agricultural Competitiveness White Paper Agricultural Industry Advisory Council, 103-104 agricultural insurance, 3, 30, 35 Agricultural Intelligence Transformation Project, 100 Agricultural Policy Division, 11 agricultural sector: productivity growth and rates of return, 20-22 Agricultural Trade and Market Access Cooperation program, 37, 49 ANAO (Australian National Audit Office) see Australian National Audit Office (ANAO) animals animal health, 72 Animal Health Australia, 85 live animal exports, 50 processed (incoming), 77-78 tested for National Residue Survey, 146 see also biosecurity; pests and diseases annual performance statements see performance statements Annual Shared Services Benchmarking Exercise, 100 appropriate level of protection (ALOP), biosecurity, 70 APS Employee Census, 88-89, 90 APS Statistical Bulletin, 12 APS Values and Code of Conduct, 109 aquaculture Aquatic Animal Disease Emergency Response Deed, 83, 85 regulation of Australian marine fisheries and aquaculture sectors, 53 see also fisheries and fishing industry; pests and diseases Argentina wine export competition from, 40 Asia-Pacific Economic Cooperation Experts Group on Illegal Logging and Associated Trade, 57 asset management, 97 Assistant Minister for Agriculture and Water Resources, 6, 7 Assistant Minister to the Deputy Prime Minister, 6, 7 Assurance and Legal General Council Division, 11 110 processes, 110 Attorney -General’s Department Australian Government Investigations Standards, 109 compliance reporting to, 110 Audit Committee, 110 Auditor-General access to the contractor’s premises, 114 ANAO reports, 116-117 audits Australian National Audit Office, 110, 116-117 external, 110

229 Annual Report 2016-17

References Subject index

internal, 110 Rehabilitation Management System, 92 AusTender, 114 Australian Chief Veterinary Officer, 11 Australian Collaborative Land Use and Management Program (ACLUMP), 56 Australian Commission for Law Enforcement Integrity (ACLEI), 109 Australian Commissioner for Law Enforcement Integrity, 117 Australian Fisheries Management Authority (AFMA), 6, 7, 52, 53 Australian Government Investigations Standards, 109 Australian Government Protective Security Policy Framework, 110 Australian Grape and Wine Authority, 6, 7 Australian Information Commissioner, 118 Australian National Audit Office (ANAO), 5, 18, 110 reports, 116-117 Australian Pest Animal Strategy, 59 Australian Pesticides and Veterinary Medicines Authority, 6, 7 Australian Prawn Farmers Association, 85 Australian Prudential Regulation Authority, 30, 34 Australian Public Service Commission (APSC) APS Employee Census, 88-89, 90 award, 89 State of the Service Report, 12 Australian Public Service Gender Equality Strategy 2016-19, 89 AUSVEG, 83 avocado plantations, 56 awards and recognition Comcover Awards for Excellence in Risk Management, 109 Maritime Arrivals Reporting System (MARS), 4, 79 #ThatsMyStory, 89

ballast water, 79-80 banana plantations, mapping of, 56 Basin Plan see Murray-Darling Basin Plan bees

National Honey Bee Survey, 145 Varroa jacobsoni mite, 83 BICON system, 105 biosecurity ACLUMP mapping, 56 maintaining Australia’s pest and disease status, 4, 70, 71-76 managing biosecurity risk, 70, 74, 77-82 responding to pest and disease incursions, 4, 83-84 services, 4, 70 stakeholder and community engagement, 74, 80, 86 see also pests and diseases

230 Department of Agriculture and Water Resources

Biosecurity Act 2015, 4, 10, 70, 79, 91, 103, 118, 136 Biosecurity Animal Division, 11 Biosecurity Import Conditions system (BICON), 105 Biosecurity Import Risk Analyses, 77 Biosecurity Integrated Information System, 79 Biosecurity Legislation Implementation Program, 80 Biosecurity Plant Division, 11 Biosecurity Policy and Implementation Division, 11 Biosecurity Queensland, 85 bovine pleuropneumonia, 72 Briscoe, Cindy, 11, 12 BSE (bovine spongiform encephalopathy), 72 building successful primary industries see primary industries Business Improvement Concessional Loans, 33 Business Transformation Committee, 107

Canada Exercise Athena, 84, 86 Canning, Emily, 11 capability of farmers, fishers and foresters, 58 cargo (incoming) processed, 77-78 casual staff, 88 census of staff, 88-89, 90 Centre of Excellence for Biosecurity Risk Analysis, 77, 79 certification of exports, 3, 37, 43, 47-49, 50 cesar pty ltd, 80 change transformation activity, whole-of-government, 99-100 Chapman, Tim, 11 Chief Finance Officer, 11 Chief Information Officer, 11 Chief Scientist and Chief Plant Protection Officer, 11 Chile

wine export competition from, 40 China, People’s Republic of agricultural exports to, 40, 41

bilateral relationship on forestry, 57 free trade agreement, 40, 41 salmon from, 81 China-Australia Free Trade Agreement, 40, 41 citrus, cold treatment standards for fruit fly in, 3 Clarke, Andreas, 7 classical swine fever, 72 classification levels of staff, 140 Cleland, Robyn, 11 client feedback, 105

231 Annual Report 2016-17

References Subject index

Client Service Charter, 104-105 code of conduct (APS Values and Code of Conduct), 109 Codex Alimentarius Commission, 46 Codex Committee on Food Import and Export Inspection and Certification Systems, 3 Combatting Xylella fastidiosa, snapshot, 75-76 Comcare, 92 Comcover Awards for Excellence in Risk Management, 109 common law contracts, 142 Commonwealth Disability Strategy, 12 Commonwealth Environmental Water Holder, 62, 151 Commonwealth Green Vehicle Guide (GVG), 137 Commonwealth Ombudsman, 117 Commonwealth On-farm Further Irrigation Efficiency (COFFIE) program, 65, 151 Commonwealth Performance Framework, 15 Commonwealth Procurement Rules, 112 Commonwealth Risk Management Policy, 109 communication

biosecurity requirements, 86 Farm Management Deposit Scheme, 34 market access, 44 natural resource management, 58 communities see agricultural communities compensation, workers, 92 compliance

with biosecurity policies, 77-79, 81, 82 corporate governance, 110, 111 exported goods, 47-48 levies administration, 26 procurement policy, 112 WELS Act, 150 Compliance Division, 11 compliance index, 223-226 compliments, complaints and suggestions received, 105 concessional loans

to agricultural communities, 2, 33-34 for water infrastructure, 2, 4, 10, 61, 67 consultancies, 112-113 contagious bovine pleuropneumonia, 72 contractor’s premises, access by Auditor-General, 114 contractual arrangements, staff, 99, 142 cooperatives, farm, 27 corporate governance assurance process, 110 committees, 107-108 compliance, 111 corporate plans, 5, 15, 16, 18, 19 fraud control, 109 remuneration, 111 risk management, 109 security, 110

232 Department of Agriculture and Water Resources

Corporate Plan 2016-17, 15, 16, 18, 19 Corporate Plan 2017-18, 5 corporate strategic objectives see strategic objectives Corporate Strategy and Governance Division, 11 corporate training, 91 cost-recovery reserves, 96 Cost Recovery Taskforce: fees and charges review, 50 Cotton Research and Development Corporation, 6, 7 Council of Australian Governments (COAG), 65 counselling services, 30, 36 country-of-origin food labelling, 27 CSIRO, 55 Culturally and Linguistically Diverse employee network, 89 cyclones: Tropical Cyclone Debbie, 56

Dairy Recovery Concessional Loans, 33 Dairy Support Package, 32 dangerous occurrences, work related, 93 Data Policy Team, 99 dengue fever, 80 Department of Agriculture and Water Resources Enterprise Agreement 2017-20, 99 Department of Finance

advice on performance reporting, 5, 18 Standardisation of Business Processes project, 100 Department of Foreign Affairs and Trade trade negotiations, 37 Department of Health

disinfection treatment of arriving aircraft, 80 Department of Human Services and Dairy Support Package, 32

and Farm Household Allowance, 30 Department of Industry, Innovation and Science country-of-origin food labelling, 27 Department of the Environment

administration of WELS Act transferred from, 150 Department of the Environment and Energy assessments for ecologically sustainable management of fisheries, 53

review of National Landcare Program and its predecessors, 59

233 Annual Report 2016-17

References Subject index

departmental overview an efficient and capable department, 4, 87-100 executive, 11-12 finance, 93-97 organisational structure, 11 outcomes, 8-9 performance framework, 17 priorities, 10 purpose and role, 8 remuneration, 111 reporting, 12, 18 resource and outcome statements, 120-134 see also strategic objectives

Deputy Prime Minister, 6, 7, 27, 47, 80 deputy secretaries, 11, 12 designated public sector providers (Hubs), 99 Digital Continuity 2020 Policy, 99 Director of Biosecurity, 118 disability reporting, 12 disruptions to trade, 42-43, 48 diversity and inclusivity in workplace, 89-90 DNA tests keeping out exotic mosquitoes, snapshot, 80 dogs, wild, 145 Drought Assistance Concessional Loans, 33 droughts

drought and rural assistance programs, 31-36, 59 Intergovernmental Agreement on National Drought Program Reform, 30 pest animal and weed management in drought-affected areas, 59 see also sustainable resource management for primary industries

ecologically sustainable development, 135-136 Electronic monitoring at work in Commonwealth fisheries, snapshot, 60 electronic system for export certification, 50 Emergency Animal Disease Response Agreement, 70, 72, 83 Emergency Plant Pest Response Deed, 70, 72, 83 emergency responses, biosecurity, 70, 72, 83, 85 employees see staff energy efficiency in central office buildings, 136-137 enterprise agreement, 99, 142 Enterprise Risk Management Policy and Framework, 109 entity resource and outcome statements, 120-134 Environment Protection and Biodiversity Conservation Act 1999, 53, 135 environmental contaminants in food, 146 environmental performance, 136-139

234 Department of Agriculture and Water Resources

Established Pest Animals and Weeds Measure, 59 European Union pork from, 81 quota arrangements with, 37

trials of electronic export certification, 50 executive committees: roles and membership, 107-108 Executive Management Committee, 107

feedback from clients, 105 exempt contracts, 114 Exercise Athena, 84, 86 Export Control Act 1982, 136 exports

agricultural, fisheries and forestry exports, 37-50 to free trade agreement countries, 41 value of rural exports, 38-39 Exports Division, 11 ‘eXtensionAUS’, rural research and development program, 23 external scrutiny freedom of information, 117-118 independent review bodies, 116-117, 118 parliamentary committee reports, 115-116 external service providers, 112-114

Farm Business Concessional Loans Scheme, 33 Farm Co-operatives and Collaboration Pilot Programme, 27 farm debt: collection of data, 30, 34 farm-gate returns for primary producers, 19, 27, 33, 59 Farm Household Allowance, 3, 31-32 Farm Household Support Act 2014, 31 Farm Household Support (Non-farm Assets) Amendment Rule 2017, 32 Farm Household Support (Non-farm Assets) Minister’s Rule 2016, 31 Farm Management Deposit Scheme, 3, 34-35 Farm Support Division, 11 Farm Survey system (ABARES), 100 farmers, building capability of, 58 Federal Financial Relations Act 2009, 67 feedback

on annual report, 252 from clients, 105 finance audits, 110

department, 93-97 financial statements, 152-213 fraud control, 109 purchaser-provider arrangements, 112 resource and outcome statements, 120-134 see also remuneration

235 Annual Report 2016-17

References Subject index

Finance and Business Support Division, 11 Finance Strategy 2014-19, 87 Financial Management (FMIS) functions, 99-100 financial statements, 152-213 Findlay, James, 7 Finney, Bruce, 7 First Australians, 89, 91

see also Aboriginal and Torres Strait Islander people fish stocks, 52-54 Fisher, Tim, 11 Fisheries Administration Act 1991, 136 fisheries and fishing industry

Australian Fisheries Management Authority, 6, 7, 52, 53 building capability of fishers, 58 ecologically sustainable management of fisheries, 3, 53 Electronic monitoring at work in Commonwealth fisheries, snapshot, 60 fish stock status reports, 52-54 illegal, unreported and unregulated fishing, 53 reduction of red tape, 54 regulation of Australian marine fisheries and aquaculture sectors, 53 sustainable harvest strategies for international fisheries, 53, 55 see also agricultural, fisheries and forestry exports; sustainable resource management for primary industries Fisheries Management Act 1991, 53, 54, 136 Fisheries Research and Development Corporation, 6, 7 Fishery status reports, 52, 54 FMIS Replacement Project (TechnologyOne), 100 Fonterra Co-operative Group Limited, 30, 33 food

country-of-origin labelling, 27 managing imported food risk, 70, 81 residues of pesticides, veterinary medicines and environmental contaminants in, 146 standards, 81 Food and Agriculture Organization of the United Nations Committee on Forestry, 57 Food Standards Australia New Zealand, 81 foot-and-mouth disease, 72 Forest Industry Advisory Council, 57 forestry and forest industry

biosecurity, 70 building capability of foresters, 58 international forestry engagement, 57 purchaser-provider arrangements for, 112 Regional Forest Agreements, 3, 51, 57 see also agricultural, fisheries and forestry exports; sustainable resource management for primary industries Fraud and Corruption Control Plan, 109 fraud control, 109

236 Department of Agriculture and Water Resources

free trade agreements, 37 China-Australia, 40, 41 with Japan, 41 with Republic of Korea, 41

freedom of information, 117-118 Freedom of Information Act 1982, 114, 117, 118 Freeman, Fran, 11 fruit fly in citrus, cold treatment standards for, 3 fuel consumption in department vehicles, 137

G20 Agriculture Ministers meeting, 47, 69 Gender Equality Commitment Statement, 2, 89 Germany salmon from, 81

glossary, 217-218 Glyde, Phillip, 7 Gooday, Peter, 11 governance see corporate governance Governance Strategy 2015-19, 87 Grains Research and Development Corporation, 6, 7 grains tested for National Residue Survey, 146 grants programs, 143-144 Great Artesian Basin Strategic Management Plan, 69 Greater efficiency in certification for livestock exporters, snapshot, 49 ground cover information for agriculture, 55 Growing reconciliation: Reconciliation Action Plan 2017-2019 (RAP), 2, 89, 91 Growing reconciliation, snapshot, 91 Guidelines for the ecologically sustainable management of fisheries, 53

halal certification, 43 Hartsuyker, Luke, 6, 7 Harvey, John, 7 health and safety of staff, 87, 92-93 health of rivers see water use efficiency Heinrich, David, 11 Hone, Patrick, 7 Hong Kong

wine exports to, 40 horses: trade disruption, 48

237 Annual Report 2016-17

References Subject index

horticulture exporters, 3 mapping of horticultural crops, 56 tested for National Residue Survey, 146 trade disruption, 42-43

Horticulture Innovation Australia Limited, 56 HRMIS (Aurion Version 11), 100 Hubs: designated public sector providers, 99 Human Resource Management (HRMIS) functions, 99-100 human resources see staff

ICT (Information and Communication Technology) access, 97-99 illegal, unreported and unregulated fishing, 53 illegal logging, 57 Illegal Logging Prohibition Act 2012, 136 Implementation of improved online Services - BICON, snapshot, 105 Implementing a risk-based approach to biosecurity management, snapshot, 82 import risk assessments see biosecurity Imported Food Inspection Scheme, 81 importers, partnerships with, 79 incapacities, work related, 93 independent review bodies’ reports

Australian Commissioner for Law Enforcement Integrity, 117 Australian National Audit Office, 116-117 Inspector-General of Biosecurity, 118 parliamentary committees, 115-116 Indian Ocean Tuna Commission, 55 Indigenous Procurement Policy, 113 Indigenous rangers, 98, 113 Indonesia

agricultural exports to, 41 bilateral relationship on forestry, 57 memorandum of understanding on water cooperation, 69 trade disruption, 42-43 trials of electronic export certification, 50 information and communication technology (ICT), 97-99 Information and Communication Technology Strategy 2015-19, 87 Information and Data Management Agenda, 99 Information and Data Management Framework, 99 Information Management Committee, 99 Information Publication Scheme (IPS), 117 Information Services Division, 11 infrastructure projects

irrigation, 62 Mickleham post-entry quarantine facility, 100 in Murray-Darling Basin, 62 priority for 2016-17, 10 water, 4, 62, 66-68

238 Department of Agriculture and Water Resources

initiatives under Agricultural Competitiveness White Paper Agricultural Trade and Market Access Cooperation program, 37, 49 biosecurity surveillance and analysis, 81 biosecurity work of Aboriginal and Torres Strait Islander rangers, 98 building infrastructure, 10 management of pest animals and weeds, 59 reduce red tape in fishing industry, 54 strengthening agricultural sector, 26-27 supporting symposium on Xylella fastidiosa, National Priority Plant Pest, 75-76

injuries, incapacities and dangerous occurrences, work related, 93 InkWELS newsletter, 150 inquiries by parliamentary committees, 115-116 Inspector-General of Biosecurity, 110, 118 Institute of Public Administration Australia, 79, 89 insurance, agricultural, 3, 30, 35 insurance premiums, Comcover, 92 intensive animal industries and facilities, mapping of, 56 Intergovernmental Agreement on Biosecurity, 70, 74 Intergovernmental Agreement on National Drought Program Reform, 30 internal audit arrangements, 110 International Animal Health Emergency Reserve (IAHER) Arrangements, 84 international engagement on export markets, 45-47, 49 international fisheries see fisheries and fishing industry international forestry engagement, 57 international grains standard, 3 International Maritime Organization’s International Convention for the Control and Management of Ships’

Ballast Water and Sediments 2004, 79 International Plant Protection Convention, 46 international relationships on water cooperation, 69 international standards, 3, 46-47 International Strategy 2016-19, 42 International Tropical Timber Organization, 57 Ireland

Exercise Athena, 84, 86 irrigation and irrigators irrigation infrastructure, 62

Murray-Darling Basin, 63, 65 On-Farm Irrigation Efficiency Program, 63 Smarter Irrigation for Profit project, snapshot, 24 ISO International Standard for water efficient product testing, rating and labelling, 150

239 Annual Report 2016-17

References Subject index

Japan agricultural exports to, 41 free trade agreement with, 41 fresh beef and beef products from, 81 quota arrangements with, 37

Joyce, Barnaby, 6, 7

Korea, Republic of bilateral relationship on forestry, 57 free trade agreement with, 41 value of exports to, 41

Koval, Matt, 11

Lake Eyre Basin Intergovernmental Agreement, 69 Lake Eyre Basin State of the Basin Condition Assessment 2016 report, 69 land-use mapping: Situational awareness for biosecurity—new developments in land-use mapping, snapshot, 56

land use survey app, 56 Landcare Australia Limited, 145 Landcare Program, 3, 55, 56, 58, 59, 145 Law Enforcement Integrity Commissioner Act 2006, 109 Learnhub, 91 learning and development for staff, 90-91 legislation

Agricultural and Veterinary Chemicals Act 1994, 136 Agricultural and Veterinary Chemicals (Administration) Act 1992, 136 Agricultural and Veterinary Chemicals Code Act 1994, 136 Biosecurity Act 2015, 4, 10, 70, 79, 91, 103, 118, 136 Environment Protection and Biodiversity Conservation Act 1999, 53, 135 Export Control Act 1982, 136 Farm Household Support Act 2014, 31 Federal Financial Relations Act 2009, 67 Fisheries Administration Act 1991, 136 Fisheries Management Act 1991, 53, 54, 136 Freedom of Information Act 1982, 114 Illegal Logging Prohibition Act 2012, 136 Law Enforcement Integrity Commissioner Act 2006, 109 National Residue Survey Administration Act 1992, 12 Natural Resources Management (Financial Assistance) Act 1992, 12, 136, 145 Primary Industries and Energy Research and Development Act 1989, 136

240 Department of Agriculture and Water Resources

Public Governance, Performance and Accountability Act 2013, 12, 109, 111 Public Interest Disclosure Act 2013, 109 Public Service Act 1999, 109, 111 Quarantine Act 1908, 136 Regional Forest Agreements Act 2002, 136 Torres Strait Fisheries Act 1984, 136 Water Act 2007, 12, 61, 136, 151 Water Efficiency Labelling and Standards Act 2005, 12, 136, 149 Water Legislation Amendment (Sustainable Diversion Limit Adjustment) Act 2016, 4, 65 levies

administration, 26 to fund research and development, 2, 25-26 improving the system, 19, 26 for National Residue Survey, 146 Linacre, Alice, 11 Live animal exports— Noah’s Ark, snapshot, 50 loans schemes see concessional loans location

of department offices, inside back cover of staff, 141

macadamia plantations, 56 mail items (incoming) processed, 77-78 malaria, 80 Malaysia

bilateral relationship on forestry, 57 trials of electronic export certification, 50 management and accountability, 106-11 Managing Farm Risk Programme, 35-36 mango plantations, 56 mapping programs for agriculture, 55-56 marine pests, 80 Maritime Arrivals Reporting System (MARS), 4, 79 market access, 3, 10, 37, 42-44, 49, 50 market research, 114 McKeon, Peter, 11 meat exports: trade disruption, 43 melons: trade disruption, 43 memorandum of understanding on water cooperation, 69 Mickleham post-entry quarantine facility, 100 Minister for Agriculture and Water Resources, 6, 7 MontrÃ©al Process Working Group on Criteria and Indicators (forestry forum), 57 Morris, Paul, 11 mosquitos, exotic, 80 Murray Goulburn Co-operative Co Ltd, 30, 33

241 Annual Report 2016-17

References Subject index

Murray-Darling Basin environmental health of, 61 infrastructure and water efficiency measures, 62 Peel River Anabranch project, 145

Murray-Darling Basin Authority, 6, 7, 65 Murray-Darling Basin Ministerial Council, 65 Murray-Darling Basin Plan (Basin Plan), 61, 62 implementation of, 65

sustainable diversion limits, 10, 64-65, 151 Myanmar, 43

Namoi Catchment, 145 National Australian Built Environment Rating System, 136 National Dairy Products, 30, 33 National Disability Strategy 2010-2020, 12 National Environmental Biosecurity Response Agreement, 70, 72, 83 National Honey Bee Survey, 145 National Institute for Forest Products Innovation, 57 National Landcare Program, 3, 55, 56, 58, 59, 145

review of program and its predecessors, 59 National Partnership Agreement for the National Water Infrastructure Development Fund—capital component, 67 National Partnership Agreement on Implementing Water Reform in the Murray-Darling Basin, 69 National Residue Survey Administration Act 1992, 12 National Residue Survey Annual Report 2016-17, 146-148 National Water Infrastructure Development Facility, 61 National Water Infrastructure Development Fund, 10, 61, 67

feasibility studies, 68 National Water Infrastructure Loan Facility, 2, 4, 10, 34, 61, 67 natural resource management see sustainable resource management Natural Resources Management (Financial Assistance) Act 1992, 12, 136

report on, 145 Netherlands fresh beef and beef products from, 81 New Zealand

bilateral relationship on forestry, 57 Exercise Athena, 84, 86 fresh beef and beef products from, 81 ruminant genetics from, 81 trade disruption with Indonesia, 43 trials of electronic export certification, 50 non-ongoing staff, 90, 140 non-salary benefits, 111

242 Department of Agriculture and Water Resources

non-SES staff enterprise agreement, 99, 142 non-salary benefits, 111 workplace agreements, 142

Northern Australia quarantine strategy, 98 water infrastructure investment in, 68 White Paper on Developing Northern Australia, 67, 68

Northern Australia Quarantine Strategy gets better access to the web, snapshot, 98 Northern Basin review (Basin Plan), 62

objectives, 17, 19, 30, 37, 51, 61, 70, 87, 101 see also strategic objectives O’Connell, Lyn, 11, 12 Office of Best Practice Regulation (OBPR), 102 Ombudsman, 117 On-Farm Irrigation Efficiency Program, snapshot, 63 ongoing staff, 90, 140 organisational structure, department, 11 Outcome 1

ecologically sustainable development principles, 135 expenses and resources for, 124-130 Outcome 2 ecologically sustainable development principles, 135

expenses and resources for, 131-132 Outcome 3 ecologically sustainable development principles, 135

expenses and resources for, 133-134 outcome statements, 124-134 overview, 1-12

Package Assisting Small Exporters, 50 Padovan, Nico, 11 Panama Disease (bananas), 56 Papua New Guinea

bilateral relationship on forestry, 57 Parker, Chris, 7 Parker, David, 5, 12 parliamentary committee reports, 115

government responses to, 116 passengers (incoming) processed, 77-78 payment to small businesses, 113 Peel River Anabranch project, 145 People, Safety and Culture Committee, 107

243 Annual Report 2016-17

References Subject index

People Strategy and Action Plan 2014-17, 87, 88 People’s Republic of China see China, People’s Republic of performance framework Commonwealth, 5, 15

department, 17 performance management of staff, 90 performance measures, 17 performance reporting, 18 performance statements, 13-18

being a best practice regulator, 102, 103 building an efficient and capable department, 92, 93, 97 building successful primary industries, 20, 22, 25 expanding agricultural, fisheries and forestry exports, 38, 42, 43, 45-46, 47 improving water use efficiency and the health of rivers, communities, environmental assets, and production

systems, 62, 64, 66

introduction to, 15-16 managing biosecurity and imported food risk, 71, 77, 79, 83, 84, 86 performance framework, 17 performance reporting, 18 supporting agricultural communities, 31, 34, 35, 36 sustaining natural resources for longer-term productive primary industries, 52, 58 see also objectives; strategic objectives personal leave of staff, 90 personnel see staff peste des petit* ruminants (animal disease), 72 pesticides, veterinary medicines and environmental contaminants: residues in food, 146 pests and diseases

in drought-affected areas, 59 emergency responses, 70, 72, 83, 85 exotic mosquitoes, 80 foot-and-mouth disease, 72 maintaining Australia’s favourable status, 4, 70, 71-76 marine pests, 80 National Priority Plant Pest, Xylella fastidiosa, 75 Panama Disease (bananas), 56 preparing for pest and disease incursions, 84-86 responding to pest and disease incursions, 4, 83-84 rinderpest (animal disease), 72 strangles disease (horses), 48 see also biosecurity Planning Hub, 109 plant commodities: trade disruption, 43 plants see biosecurity; pests and diseases ‘Plus Series’ meeting, 89

244 Department of Agriculture and Water Resources

portfolio agencies, 12 Australian Government Department of Agriculture and Water Resources, 6 research and development corporations, 6 statutory authorities, 6 structure, 7

Portfolio Budget Statements, 9, 15, 16, 94, 95 Post Entry Biosecurity System, 104 prawns and prawn industry, 4, 79, 81, 83, 85 primary industries

Agricultural Competitiveness White Paper, 26-29 industry performance, 20-22 levies, 19, 25-26 performance statements, 20, 22, 25 research and development, 22 rural research and development, 23, 25 Smarter Irrigation for Profit project, snapshot, 24 strategic objective, 19 see also sustainable resource management Primary Industries and Energy Research and Development Act 1989, 136 primary producers, 19

cooperatives, 27 farm-gate returns, 19, 27, 33, 59 priorities for 2016-17, 10 priorities for 2017-18, 5 procurement initiatives, 113 Procurement Rules, Commonwealth, 112 Productivity Commission: Inquiry into the regulation of the Australian marine fisheries and

aquaculture sectors, 53

productivity growth and rates of return: agricultural sector, 20-22 programs see strategic objectives protected information, 118 Protective Security Policy Framework, 110 Public Data Policy, 99 Public Governance, Performance and Accountability Act 2013, 12, 109, 111 Public Interest Disclosure Act 2013, 109 Public Sector Innovation Awards 2017, 4, 79 Public Sector Innovation Network, 79 Public Service Act 1999, 109, 111 purchaser-provider arrangements, 112

245 Annual Report 2016-17

References Subject index

quarantine strategy, 98 Queensland Department of Agriculture and Fisheries, 85 Queensland Department of Science, Information Technology and Innovation (QDSITI), 56 Queensland Seafood Industry Association, 85 Quinlivan, Daryl, 7, 11 quotas for exports, 37, 49

Raise a glass—China set to become Australia’s largest wine market, snapshot, 40 rangers, Indigenous, 98, 113 R&D Corporations see research and development corporations Read, Greg, 11 Reconciliation Action Plan 2017-2019 (RAP), 2, 89, 91 Reconciliation Australia stretch rating, 91 Reconciliation Barometer Survey 2016, 89 Re-connect program, 92 recycling program in central office buildings, 138-139 ‘Red Dates’ advertising campaign, 114 red tape reduction in fishing industry, 54 Reef 2050 Plan, 58, 59 Reforming Australia’s illegal logging regulations—consultation regulation impact statement, 3, 57 Regional Forest Agreements, 3, 51, 57 Regional Forest Agreements Act 2002, 136 Regional Funding Program, 58 Regional Investment Corporation, 2, 34, 68 Regional Plan of Action to Promote Responsible Fishing Practices, 53 Regulation Impact Statements (RIS), 101, 102 Regulator Performance Framework, 101, 102-103 regulators and regulatory functions, 101-105 regulatory performance, 102 Rehabilitation Management System, 87, 92 remuneration

department policy, 111 non-salary benefits, 111 salary structure, 142 Secretary, 111 SES (Senior Executive Staff), 111 Remuneration Tribunal, 111 reporting

disability reporting, 12 performance reporting, 18 requirements for department, 12

246 Department of Agriculture and Water Resources

Republic of Korea see Korea, Republic of research and development corporations cotton, 6, 7 fisheries, 6, 7

grains, 6, 7 levies to fund, 25-26 rural industries, 6, 7, 22 residues of pesticides, veterinary medicines and environmental contaminants in food, 146 resource statement, 120-123 revenue, 94-95 reviews agricultural and veterinary legislative framework, 27 agricultural exports regulation, 103 Australian pest animal and weeds strategy, 59 biosecurity risks, 81, 118 corporate governance, 109, 110 Cost Recovery Taskforce: fees and charges, 50 fisheries management effectiveness, 54 Intergovernmental Agreement on Biosecurity, 74 Managing Farm Risk Programme, 35 marine pests, 80 National Landcare Program and its predecessors, 59 Northern Basin review (Basin Plan), 62 Performance Management Framework, 117 regional forest agreements, 3, 57 WELS scheme, 150 rinderpest (animal disease), 72 risk management biosecurity, 70, 74, 77-82 management of, 109 Ritman, Kim, 11 rivers, health of see water use efficiency Ross, Paul, 11 rural assistance and drought programs, 31-36, 59 Rural Financial Counselling Service, 3, 30, 36 Rural Industries Research and Development Corporation, 6, 7 investment in programs, 22, 23 Rural Research and Development for Profit program, 2, 24, 56 see also ABARES rural research and development capability (ABARES), 25 Ruston, Anne, 6, 7

247 Annual Report 2016-17

References Subject index

s. (24.1) determinations, 111, 142 safety in the workplace, 87, 92-93 salaries see remuneration sanitary and phytosanitary protection, 70 Schipp, Mark, 11 scrutiny see audits; external scrutiny; reviews Secretary, 7, 11

remuneration, 111 review of year, 1-5 security management, 110 Security Plan, 110 separations of staff, 90 service charter, 104 service delivery, 103-105 Service Delivery Division, 11 Service Delivery Modernisation (SDM) program, 104-105 SES (Senior Executive Staff) remuneration, 111 Shared Services Program, 99 Situational awareness for biosecurity—new developments in land-use mapping, snapshot, 56 small business procurement initiatives, 113 Smalley, Simon, 11 SMART Farm program, 59 Smarter irrigation for profit, snapshot, 24 snapshots Combatting Xylella fastidiosa, 75-76 DNA tests keeping out exotic mosquitoes, 80 Electronic monitoring at work in Commonwealth fisheries, 60 Fishery status reports, 54 Greater efficiency in certification for livestock exporters, 49 Growing reconciliation, 91 Implementation of improved online Services - BICON, 105 Implementing a risk-based approach to biosecurity management, 82 Live animal exports— Noah’s Ark, 50 Northern Australia Quarantine Strategy gets better access to the web, 98 On-Farm Irrigation Efficiency Program, 63 Raise a glass—China set to become Australia’s largest wine market, 40 Situational awareness for biosecurity—new developments in land-use mapping, 56 Smarter irrigation for profit, 24 Sustainable harvest strategies for international fisheries, 55 Turmeric farmers reap the benefits of the Farm Household Allowance, 32-33 Water infrastructure investment in Northern Australia, 68 White Spot Syndrome virus, 85

248 Department of Agriculture and Water Resources

South Africa wine export competition from, 40 South Australian Murray-Darling Basin Natural Resources Management Board (SAMDBNRM Board) Deed of Standing Offer with, 151 staff

Aboriginal and Torres Strait Islander, 2, 90, 98 casual, 88 census, 88-89, 90 classification levels, 140 disability reporting, 12 diversity and inclusivity in workforce, 89-90 employment type, 90, 140, 141 engagement, 88-89 health and safety, 87, 92-93 locations, 141 performance management, 90 personal leave, 90 salary structure, 142 separations, 90 training, 89, 90-91 unscheduled absences, 87, 90 workplace agreements, 99, 142 see also remuneration stakeholder engagement

agricultural lending, 34 biosecurity risks, 74, 80, 86 finance industry, 30 Great Artesian Basin Strategic Management Plan, 69 levies, 26 market access, 44 natural resource management, 58 regulatory burden, 101 service delivery, 105 WELS scheme, 149-150 Standardisation of Business Processes project, 100 Standards Australia, 150 State of the Service Report (APSC), 12 statutory authorities, 6, 7 strangles disease (horses), 48 strategic objectives, 9, 16

being a best practice regulator, 101-105 building an efficient and capable department, 87-100 building successful primary industries, 19-29 expanding agricultural, fisheries and forestry exports, 37-50 improving water use efficiency and the health of rivers, communities, environmental assets, and production

systems, 61-69

249 Annual Report 2016-17

References Subject index

managing biosecurity and imported food risk, 70-86 supporting agricultural communities, 30-36 sustaining natural resources for longer-term productive primary industries, 51-60 see also objectives; performance statements ‘stretch status’ Reconciliation Action Plan, 2 Stronger Biosecurity and Quarantine Initiative, 76 structure, departmental, 11 Survey of Australian Government Payments to Small Business, 113 Sustainable Agricultural Small Grants, 58 Sustainable Agriculture, Fisheries and Forestry Division, 11 sustainable diversion limits (Basin Plan), 10, 64-65, 151 Sustainable harvest strategies for international fisheries, snapshot, 55 sustainable resource management for primary industries, 51-60, 145

building capability of farmers, fishers and foresters, 58 effective program delivery, 58-60 improving resource base, 52 managing resource base, 52-55, 57 swine fever, 72

targets, 17 Thailand cooked duck meat from, 81 trials of electronic export certification, 50

#ThatsMyStory, 89 Thomas, Stephen, 7 Thompson, Ian, 11 Thompson, Malcolm, 12 timber, illegally logged, 57 timber and timber products see sustainable resource management for primary industries tomato potato psyllid, 4, 83 Torres Strait Fisheries Act 1984, 136 trade disruptions, 42-43, 48 Trade & Market Access Division, 11 training for staff, 90-91 transport energy, 137 Treasury

collection of data on farm debt levels, 30, 34 Tropical Cyclone Debbie, 56 tuna fisheries, 55

see also fisheries and fishing industry Turmeric farmers reap the benefits of the Farm Household Allowance, snapshot, 32-33 20 Million Trees program, 59

250 Department of Agriculture and Water Resources

unconscious bias training for staff, 89 United Arab Emirates, 43, 48 United Kingdom, 40 Exercise Athena, 84, 86

United Nations Forum on Forests, 57 United States agricultural exports to, 41 cooked turkey meat from, 81

Exercise Athena, 84, 86 fresh beef and beef products from, 81 quota arrangements with, 37 trade disruption with Indonesia, 43 wine exports to, 40 unscheduled absences of staff, 87, 90

values (APS Values and Code of Conduct), 109 Vanuatu fresh beef and beef products from, 81 Varroa jacobsoni bee mite, 4, 83 vessels (incoming) processed, 78, 79 veterinary chemicals see agricultural and veterinary chemicals veterinary medicine residues in food, 146 Victorian Dairy Roundtables Report, 32 Vietnam

dragon fruit from, 81

wages see remuneration waste management in central office buildings, 138-139 Water Act 2007, 12, 61, 136, 151 review of, 69

Water Amendment (Review Implementation and Other Measures) Act 2016, 69 water conservation in central office buildings, 138 Water Division, 11 Water Efficiency Labelling and Standards Act 2005, 12, 136, 149 Water Efficiency Labelling and Standards Determination 2013 (No. 2), 149 Water Efficiency Labelling and Standards (WELS) scheme, 69

Annual Report 2016-17, 149-150 review of, 150 water entitlements, purchase of, 62 Water for the Environment Special Account (WESA), 151 water infrastructure, 4, 62, 66-68 Water infrastructure investment in Northern Australia, snapshot, 68 Water Legislation Amendment (Sustainable Diversion Limit Adjustment) Act 2016, 4, 65

251 Annual Report 2016-17

References Subject index

water recovery, 10, 62-63 water resources feasibility studies across northern Australia, 68 social, economic and environmental benefits from use of, 61, 62, 65

water use efficiency, 10-11, 61-69 additional activities, 69 national water infrastructure and development, 66-68 sustainable diversion limit adjustment mechanism, 64-65 water efficiency labelling and standards scheme, 149-150 water recovery, 62-63

Weeds Strategy, 59 WELS Compliance and Enforcement Policy, 150 WELS Regulator, 149, 150 WELS Scheme Strategic Plan 2016-2019, 150 WELS Standard: AS/NZS 6400:2016 Water Efficient Products - Rating and Labelling, 149 WELS (Water Efficiency Labelling and Standards) scheme, 69, 149-150 Western and Central Pacific Fisheries Commission, 55, 60 White Paper on Agricultural Competitiveness see Agricultural Competitiveness White Paper White Paper on Developing Northern Australia, 67, 68, 98 white spot syndrome virus, prawns, 4, 79, 83, 85 whole-of-government change transformation activity, 99-100 Wild Dog Alert System, 145 Williamson, David, 11, 12 Williamson, Greg, 11 wine market, 40 work health and safety, 87, 92-93 workers compensation claims, 92 workforce management

inclusive and productive workplace, 89-90 staff engagement, 88-89 workplace agreements, 99, 142 Workplace Bargaining Policy 2015, 111 workplace diversity and inclusivity, 89-90 workplace health and safety, 87, 92-93 World Organisation for Animal Health, 46, 72, 85 World Trade Organization Sanitary and Phytosanitary Committee, 46

Xylella fastidiosa, National Priority Plant Pest, 75

year ahead, 5 year in review, 2-5

Zika virus, 80

252 Department of Agriculture and Water Resources

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Acknowledgements Printed by: Union Offset

Indexed by: Shirley Campbell

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Postal Address: PO Box 1682 Gladstone QLD 4680

Hobart (South East Region)

1/10 Argyle Street Hobart TAS 7001

Indian Ocean Territories (Northern Region)

Wharf Precinct, Gaze Road Christmas Island WA 6798

Postal Address: PO Box 854 Christmas Island WA 6798

Mackay (North East Region)

Customs House, Mackay Marina Mulherin Drive Mackay Harbour QLD 4740

Postal Address: PO Box 1517 Mackay QLD 4740

Melbourne (South East Region)

Customs House Corner Grant and Centre Roads Melbourne Airport VIC 3045

Postal Address: PO Box 1006 Tullamarine VIC 3043

Mickleham (Post-Entry Quarantine)

135 Donnybrook Road Mickleham VIC 3064

Norfolk Island

World Traders Complex Taylors Road Burnt Pine, Norfolk Island 2899

Postal Address: PO Box 925 Norfolk Island 2899

Perth (South West Region)

24 Fricker Road Perth Airport WA 6105

Postal Address: PO Box 606 Welshpool WA 6986

Sydney (Central East Region)

1 Crewe Place Rosebery NSW 2018

Postal Address: PO Box 657 Mascot NSW 1460

Townsville (North East Region)

Ground Floor—River Quays Building 7-13 Tomlins Street Townsville QLD 4810

Postal Address: PO Box 1245 Townsville QLD 4810

Department of Agriculture and Water Resources office locations Client contact number: 1800 900 090

agriculture.gov.au/about/reporting/annualreport

The ‘Biosphere’ Graphic Element

The biosphere is relevant to the work we do to help drive a stronger Australian economy by building a more profitable, resilient and sustainable agriculture sector, and by supporting the sustainable and productive management and use of rivers and water resources.