Advising on expenditure
Finance continued to support the Government in its budget preparation. In a year with two federal budgets, the Department’s stewardship role was central to providing well-considered and informed expenditure advice to the Government on a range of budget and financial issues.
In line with our purpose, Finance provided advice on whole-of-government expenditure, budget trends and policy issues. Our work and advice on expenditure supported the Government’s focus on sustaining Australia’s economic recovery and its response to the challenges of the pandemic.
Specific examples of Finance’s achievements under the performance theme of advising on expenditure are illustrated in the following case studies.
Advising on expenditure in a year with two Commonwealth budgets
Throughout 2020–21, Finance continued a high tempo of work in support of government decision‑making through budget processes, including the delivery of both the 2020–21 Budget and the 2021–22 Budget. The reporting year began with the release of the Economic and Fiscal Update on 23 July 2020 (2020 EFU) following the Government’s decision to delay the 2020–21 Budget due to the uncertainty arising from the onset of the COVID-19 pandemic.
The 2020–21 Budget was delivered on 6 October 2020. Building on the delivery of the 2020 EFU, Finance worked closely with the Treasury to prepare the Budget and support Commonwealth entities in meeting the Budget’s requirements and timeframes.
The task of delivering the 2020–21 Budget was made more complex with Finance concurrently supporting the delivery of the 2019–20 Final Budget Outcome, released on 25 September 2020. The pace of work continued with the delivery of the 2019–20 Consolidated Financial Statements on 7 December 2020 and the 2020–21 Mid-Year Economic and Fiscal Outlook on 17 December 2020.
The 2021–22 Budget was delivered on 11 May 2021. Finance’s advice on expenditure for this major update included the agreement of more than 2,500 costings and preparation of well over 100 Green Briefs to support consideration by the Expenditure Review Committee of Cabinet.
Alongside the delivery of these budget updates, Finance prepared three sets of annual appropriation bills and supported the issue of eight Advances to the Finance Minister, ensuring that resourcing was appropriately authorised for programs delivering services to all Australians. Additionally, Finance delivered all monthly financial statements to the Minister for Finance within the agreed timeframes. This supported the Government by providing timely information on financial performance and the impact of the COVID-19 pandemic, and the subsequent public release provided the parliament and stakeholders with regular updates on the key Budget aggregates.
Advances to the Finance Minister
In 2020–21, Finance supported the Government to implement timely and effective policy responses to the COVID-19 pandemic through the Advances to the Finance Minister (AFM).
In the October 2020–21 Budget, parliament supported a continuation, at a lower level, of the extraordinary AFM provisions in place to support the response to the COVID-19 pandemic. The Budget included AFM provisions of $10 billion across Appropriation Acts (Nos. 1 and 2) 2020–2021, which followed the $40 billion AFM provisions across Supply Acts (Nos. 1 and 2) 2020–2021.
Throughout 2020–21, Finance supported the Minister for Finance to make eight AFM allocations, totalling $2.930 billion.
Unlike AFM allocations made in 2019–20, which were primarily focused on immediate health responses to the pandemic, allocations made in 2020–21 largely supported economic responses. Allocations in 2020–21 assisted Australian producers to remain connected with global supply chains, provided funding to local governments for the delivery of local roads and community infrastructure, and supported the aviation sector to maintain regional and domestic aviation networks.
Cash management reforms implemented in March 2020 enabled Finance to provide Commonwealth entities with the ability to access funds made available through the AFM in near-real time, to meet urgent funding requirements.
To support the transparency of each AFM allocation, Finance worked closely with the Australian National Audit Office, which conducted periodic reviews of the AFM allocations in 2020–21. This process provided parliament with assurance that AFM allocations were being accurately reported and that Finance had effective internal controls to support the AFM.
Public sector resourcing and transformation
In 2020–21, Finance continued to support an efficient and high-performing public sector by providing operational support to the Government and Commonwealth entities to maintain effective and efficient use of public resources. The Department led ongoing improvements to public sector governance and resource management arrangements, including through Finance’s systems, frameworks, policy, advice and service delivery.
Specific examples of Finance’s achievements under the performance theme of public sector resourcing and transformation are illustrated in the following case studies.
A new whole-of-government procurement arrangement for management advisory services
In the 2020–21 Budget, the Government provided $4.5 million over four years to establish a new Whole-of-Australian-Government Management Advisory Services Consultancy Panel (the Panel) to improve the quality, consistency and efficiency of services. Finance is leading its establishment and ongoing management.
Whole-of-Australian-Government arrangements provide more efficient processes to deliver value for money, services and quality for the Commonwealth. They also offer increased transparency, standard terms and conditions and improved contract management that benefits both government and suppliers.
The Panel is being established in three phases, with each phase conducted via a separate open approach to market.
- Phase 1 – Financial Management Advisory Services – completed
- Phase 2 – Corporate Management Advisory Services – tender released in 2020–21 with services available in 2021–22
- Phase 3 – Commercial Management Advisory Services – tender released in 2021–22 with services available in 2022–23.
Phase 1 is completed with the request for tender released on AusTender on 5 November 2020 and closing on 11 December 2020. During this time, the Department conducted a range of industry briefings to explain the procurement process and address questions. Following assessment of the tenders, a total of 125 suppliers were identified as representing value for money and appointed to the Panel, including 86 small and medium-sized enterprises and two Indigenous suppliers.
Phase 1 services commenced on 12 July 2021. To further support, and provide consistency for, suppliers, the Department developed smart forms which streamline the process for requesting quotes and issuing orders under the Panel.
Work is currently underway to support phase 2 of the arrangements.
Established the Australian Public Service Accounting and Finance Profession Working Group
In 2021, in collaboration with the Chief Financial Officers of a number of entities, Finance established the Australian Public Service (APS) Accounting and Finance Profession Working Group. The working group provides a strong foundation for the ongoing collaboration, support and development of accounting and finance professionals in the APS. The working group's priority is to grow capacity and capability in line with the APS Workforce Strategy 2025.
Establishing the working group recognises that having a qualified, capable and collaborative accounting and finance profession in the APS is critical to ensuring strong public sector financial management. The initiative also aligns with our purpose as it increases the pool of qualified APS staff capable of providing high-quality advice on expenditure and financial reporting, assisting the Australian Government to achieve its fiscal and policy objectives.
Through 2021–22, Finance will lead the working group in continuing to focus on cross-portfolio approaches to recruitment, retention, learning and development, and mentoring and coaching for accounting and finance staff.
The new entity start-up guide
The Commonwealth entity start-up guide was launched on the Finance website in August 2020. The guide supports the rapid operational set-up of new Commonwealth entities once they are legally established.
The start-up guide is a web-based tool that sets out information on the legislation, policies, frameworks and processes necessary for the operation of a new Commonwealth entity.
Central to the start-up guide is the key contact information for those entities responsible for legislation, policies, frameworks and processes that a Commonwealth entity needs to apply. The guide provides a central location for this contact information that has enhanced the Commonwealth's ability to start delivering new services quickly.
At the close of the 2020–21 performance reporting period, Finance assessed the benefit the Commonwealth entity start-up guide had provided. Finance sought feedback from two groups of users—those who have recently set up a new Commonwealth entity and those Commonwealth entities responsible for the legislation, policies, frameworks and processes.
The first user group confirmed that the start-up guide had been an invaluable resource for planning and prioritising actions to set up a new Commonwealth entity that needed to be operational in a very short timeframe.
The second user group confirmed its continued support for the start-up guide as a valuable tool to inform those setting up a new Commonwealth entity and connect them with the best people to assist them.
Content in the start-up guide is reviewed regularly. As the tool is interactive and web-based, updates are made in real time to ensure that stakeholders have access to accurate information at all times. These reviews will continue to ensure that the tool remains fit for purpose.
Deliver the Commonwealth Investment Framework - Attracting Private Capital to Support Government Policy Priorities
The Commonwealth Investment Framework (CIF) supports the Australian Government to realise the benefit of investments that utilise the Commonwealth balance sheet for Australian citizens, businesses and communities. The CIF includes a Resource Management Guide (RMG) and a toolkit of practical, user-focused content, providing a ‘how-to’ for Commonwealth agencies.
Since the CIF’s launch, capital markets and the Government’s fiscal position have significantly changed due to the impacts of, and response to, COVID-19. The Government’s fiscal position has declined with the underlying cash balance projected to be in deficit through the medium term and net debt expected to increase to approximately $980 billion in 2024–25 (40 per cent of GDP), reflecting the Government’s increased borrowing requirements resulting from the COVID-19 pandemic.
Following the Government’s decision in the 2020–21 Budget, Finance was tasked with enhancing the Government’s commercial focus to facilitate more widespread use of commercial investment and procurement models in delivering policy outcomes. Finance is supporting agencies to consider the benefits of commercial financing and to create opportunities for partnership with the private sector in delivering government priorities. This will be achieved by:
- developing and piloting an expanded set of commercial options and approaches to secure private capital and capability
- working with key stakeholders to further support strategic engagement with the investment community.
These work streams focus on opportunities to leverage private sector capital, investment, innovation, risk appetite, and capability to maximise the efficiency and effectiveness of major government investments.
Property services governance – COVID-19 response
Under the Whole-of-Government Property Services Coordinated Procurement Arrangements, the Australian Government leverages private sector expertise and innovation in property services to drive efficiencies and inform strategic property decisions. In addition to leading the whole-of-government approach, Finance established the Property Services Governance Network to facilitate cooperation, engagement and oversight of property issues.
In response to COVID-19, and throughout 2020–21, Finance and the Property Services Governance Network worked closely with Property Service Providers and relevant specialists to facilitate rapid and coordinated responses to emerging property issues. The coordinated use of industry expertise assisted entities to manage the property-related challenges and disruption created by the pandemic.
Finance engaged with the Network to quickly implement the Rent Relief Policy for tenants of premises owned or leased by the Commonwealth, and leveraged GovTEAMS (an intra-government communications platform) to efficiently distribute guidance and key information to entities. This enabled the Commonwealth to rapidly implement support for 448 small and medium-sized enterprises and not-for-profit occupants, ensuring timely, appropriate and consistent action taken by entities. Rental relief has continued into the first half of 2021–22.
Promoting efficient, financially sustainable and sound governance arrangements for all GBEs: NBN Co debt raising
Throughout 2020–21, Finance worked closely and collaboratively with NBN Co and the Department of Infrastructure, Transport, Regional Development and Communications to successfully implement the Government’s decision to facilitate NBN Co raising up to $27.5 billion in private debt by 2024. Given the scale of debt raising, NBN Co is approaching multiple markets over a number of years.
The NBN Co 2021 Corporate Plan announced that NBN Co was expected to raise a total of $27.5 billion of external debt by June 2024 plus additional working capital facilities in order to repay its Commonwealth loan ($19.5 billion) and to invest in further network upgrades.
NBN Co’s agreements with the Commonwealth were updated in 2020–21 and tailored to incorporate private lenders, refine governance and reporting obligations, allow NBN Co to efficiently repay the Commonwealth loan and to establish a sustainable long-term global debt program.
Finance officials played a key role in designing an efficient approval framework based on commercial practices. This framework has worked efficiently in practice and successfully balances appropriate shareholder oversight while providing NBN Co with flexibility to respond quickly to changing market conditions.
NBN Co has been able to successfully raise private debt in domestic and international markets and has commenced repaying its Commonwealth loan.
Delivering effective services to, and for, government
Finance has continued to focus on providing a range of whole-of-government services, including ICT services and support services, to Commonwealth entities, parliamentarians and their staff. Throughout 2020–21, Finance continued to provide better services and outcomes in technology, delivering transformative, efficient and cost-effective services to, and for, government.
Specific examples of Finance’s achievements under the performance theme of delivering effective services to, and for, government are illustrated in the following case studies.
ICON Project team - engaging cultural heritage
The ICON (the Intra-government Communications Network) team in Government Network Services Branch, is responsible for providing certain telecommunications services for 82 government agencies. A significant component of these services is undertaking complex civil engineering projects to establish new, and maintain current, 'in ground' infrastructure. There are about 1,000 km of ICON infrastructure underground in the ACT.
When undertaking civil engineering projects, the ICON team considers a range of factors that may influence the outcome of works, have impacts on other commercial services (utilities, water, gas, power, sewer), and affect the environment or heritage, such as cultural or natural heritage sites.
In 2020–21, ICON's Fyshwick Infrastructure Upgrade project involved establishing a critical piece of infrastructure in unoccupied land linking Tennant St, Fyshwick, to Pialligo Avenue via a crossing of the Molonglo River.
While undertaking research on this area, the ICON team discovered that, in addition to environmental considerations, the area contained several cultural sites of high heritage significance, including:
- an Aboriginal site with surface and sub-stone artefact deposits
- extensive stone artefact scatter and reduction sites
- landforms of archaeological sensitivity where surface, subsurface and archaeological deposits may occur.
With a focus on preserving areas of heritage significance and a commitment to understanding the area in more detail, the ICON team:
- searched the ACT heritage register and relevant Commonwealth registers for Indigenous sites within or in close proximity to the project area
- conducted a Native Title search for the project area
- reviewed available Indigenous assessment reports for the project area.
Understanding the area’s significance was important for the Department, which contacted the Registered Aboriginal Organisations (RAOs) in the ACT. The RAOs attended a site inspection, providing the ICON team with guidance regarding a preferred route and an overview of the area's Indigenous history, describing how Indigenous communities lived along the river. During the site inspection, surface artefacts were uncovered, highlighting the area’s importance and emphasising the value of engaging with cultural heritage.
Throughout the works, the RAOs remained engaged and attended the site regularly. For the ICON team, the site visit and ongoing engagement with RAOs was powerful, providing Finance with its own connection to the area and a determination to ensure planning for all works considers, and avoids impact on, our shared cultural heritage.
COMCAR electric vehicle trial
COMCAR provides car-with-driver transport services for parliamentarians, the Governor-General, the federal judiciary and international guests of government. COMCAR maintains a fleet of cars in all capital cities.
In February 2021, Finance began a two-year trial to assess the viability of fully electric vehicles (EVs) for future COMCAR fleets. The trial began in Canberra, and further phases will be conducted in Sydney and Melbourne as the trial progresses.
The trial includes a detailed assessment of infrastructure, costs and operational capability requirements for COMCAR operations nationally. Finance has leased two EVs for the trial: a Hyundai Ioniq and a Tesla Model 3 long-range variant.
In conducting the trial, Finance is working with the Department of Industry, Science, Energy and Resources, the CSIRO and other entities to increase understanding of EV technology and infrastructure. Relevant trial data and findings will be shared across departments and provided to the Australian Government fleet provider.
The trial of EV technology demonstrates Finance’s commitment to leading by example in leveraging advances in technology, embracing innovation and supporting the Government’s commitment to reducing emissions in the road transport sector, including through the Future Fuels Strategy.
GovTEAMS adds sharing at protected level
The Department of Finance’s GovTEAMS service has provided secure, whole-of-government collaboration services at the OFFICIAL:Sensitive level to tens of thousands of APS staff since 2018. GovTEAMS has played an important role in supporting government delivery for Australians during the pandemic, with GovTEAMS registrations growing rapidly from 25,000 in February 2020 to 127,808 by 30 June 2021. GovTEAMS hosted an average of 40,000 online video and audio calls per month between May 2020 and October 2020 when the APS was most disrupted by COVID-19, including a record high of 54,534 calls in September 2020.
Finance began a pilot of GovTEAMS PROTECTED to facilitate the sharing of information at the protected level in January 2020, with 745 people from 10 agencies. Participants were chosen across a broad spectrum of government functions and levels, with all sharing a common need to communicate and collaborate at the protected level.
The trial successfully demonstrated the extent to which effective collaboration at the protected level can be achieved, providing case studies and examples of how value can be derived from implementing the GovTEAMS PROTECTED solution. The findings from the trial demonstrated that without effective cross-agency collaboration capability, there is:
- increased risk of Commonwealth information being exposed
- increased risk of users failing to comply with security obligations and being made personally liable for information leakage
- duplication of effort and cost across government
- inefficiency in business collaboration practices at the working level.
GovTEAMS PROTECTED became available for business-critical operations for nearly 700 users from 24 government agencies after the trial was successfully completed on 30 June 2021. The latest system features deliver innovative mobile access, allowing users to safely collaborate at the protected level from any location, on a wide range of modern digital devices. These features safely broaden the reach of protected collaboration beyond government’s limited number of protected-level secure terminals and secure physical locations.
GovTEAMS PROTECTED users can communicate securely in real time and collaborate virtually from anywhere, at any time. Users can work seamlessly with colleagues across government and industry, sharing information and knowledge, and collaborating using modern and digital work practices. GovTEAMS PROTECTED drives the efficient use of work time and assets by joining up stakeholders across government, industry and jurisdictions.
Shared Services transformation
The shared services transformation initiative is part of the Government’s vision for a more efficient and sustainable public sector. The initiative will transform the way the Australian Public Service (APS) operates by reforming and standardising traditional operating models to enable a one-APS way of doing business.
In 2020–21, Finance continued to focus on consolidating transactional-based corporate functions (e.g. payroll, accounts payable, accounts receivable, credit card, travel and expense management) into a small number of centralised processing hubs (provider hubs). Achievements in 2020–21 included:
The Service Delivery Office (SDO), Finance’s shared services provider hub, was one of the first shared services provider hubs to implement e-Invoicing into its technical environment in December 2019. The Government’s 2020–21 Budget measure included a requirement that all material non-corporate Commonwealth entities be enabled to receive e-Invoices by 1 July 2021. The SDO supported its material entities, the Department of Finance and the Department Education, Skills and Employment, to ensure they met this requirement.
Expense and travel
The SDO travel and expense management system is an integrated software as a service (SaaS) cloud-based platform that provides client agencies and their staff with a simple and easy to use online system. The end-to-end system enables users to seek endorsement of travel and associated expenses, acquittal of other official expenses and to process reimbursements in one system with no paperwork.
The system is integrated with the whole-of-government travel provider, making it easier for government to work with Australian business while reducing administrative time for agency staff.
In 2020–21, the SDO successfully implemented travel and expense management for six client agencies: the Digital Transformation Agency, Australian Skills Quality Authority, Australian Building and Construction Commission, Australian Public Service Commission, Fair Work Ombudsman and Safe Work Australia. Client agencies can enjoy a standardised and streamlined experience when entering expenses or booking and managing corporate travel. This eliminates manual processes, duplication, and the need to navigate between multiple systems when arranging travel.
Delivering a common corporate ICT Platform - GovERP
GovERP is a next-generation enterprise resource planning (ERP) platform that will replace disparate, ageing and near-obsolete back-office systems. GovERP is a contemporary, integrated, cyber-secure platform that will modernise and sustain human resources, financial and asset management to create additional capacity for the APS to focus on delivering outcomes for Australians. It will support greater efficiency and productivity for over 90 non-corporate Commonwealth entities and 130,000 public servants.
GovERP will deliver a common back-office system forming the digital backbone of the APS. It will enable the APS to implement a flexible operating model that will be more responsive in meeting the Government’s priorities. GovERP will standardise delivery of core transactional services, including payroll and accounts payable. This will make it easier for staff to move between agencies and to effect machinery-of-government changes, knowing that agency systems and processes will be the same.
Automation and data sharing through GovERP will accelerate government delivery against social obligations and business interactions—for example, integrated procurement will reduce the cost of doing business with government. Using cyber capabilities, GovERP will also safeguard the interests of government and the workforce that serves it.
In 2020–21, the following was achieved:
- The on-boarding and implementation approach for GovERP was agreed, including a forward work program for the consolidation and standardisation of the delivery of corporate services. The SDO and its 14 clients will on-board to GovERP as the first use case.
- In the 2021–22 Budget, the Government endorsed the combined first and second pass whole-of-government GovERP business case. Funding was provided to build the GovERP platform and on-board the SDO and its clients. Funding was also provided for the development of subsequent business cases to prepare for the next group of agencies to on-board to GovERP.
- Over 200 standardised business processes were aggregated into eight end-to-end value streams and tested across the APS. These provide the foundation for the development of the GovERP production solution and the GovERP process automation strategy.
- Approaches to market to procure four complementary (edge) functional capabilities including contractor management, travel and expense management, extended human resource management and procurement management. These capabilities will be made available to complement the GovERP core financial and payroll functionality to support enablement of end-to-end corporate business processes.
- In line with the APS Workforce Strategy, over 150 APS staff are being upskilled in SAP S/4 HANA capability to support current and future needs.
The development of the whole-of-government operating model and endorsement of the future work program enabled the Government to transfer responsibility for the detailed design, build and operation of the GovERP platform to Services Australia from 1 July 2021. Services Australia has expertise in the delivery of large-scale ICT initiatives and cyber security resources to manage a project of this size and complexity. Finance retains responsibility for the policy and governance oversight functions for the wider Shared Services Program and the SDO provider hub.
Finance continues to work with Services Australia on GovERP to deliver consistent and integrated business services through standardising and consolidating processes and software across Commonwealth entities. This approach will enable entities to focus on frontline priorities rather than back-end administration.