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Chief Operating Officer's Report

Successfully delivering the Government’s priorities requires a high performing organisation. During the 2018-19 financial year, we showed our commitment to investing in staff and Departmental capability, giving our staff members the best opportunity to reach their potential. Within the Corporate Operations Group, we are committed to making improvements to our services by ensuring customers are the focus of every interaction.

Leadership, capability and culture

The Australian Public Service (APS) State of the Service Employee Census (Staff Survey) illustrates the Department’s continued improvement of our leadership and culture. Since 2018, there have been significant improvements in staff recommending the Department as a good place to work, employees believing in our purpose and objectives, and staff being inspired to do their best work every day. Satisfaction with SES and EL2 leadership remain at high levels and continues to improve.

The Department’s Learning and Development Strategy 2016–2019 is in its final year of implementation. Through regular evaluation of training programs, increased awareness and participation in training, our staff are supported in their development of core skills, professional capabilities, corporate knowledge, leadership and building our desired culture.

Harnessing diversity

I am privileged to be the Department’s Senior Champion for the National Aboriginal and Torres Strait Islander Staff Network. The Department is committed to recognising, celebrating and commemorating the Aboriginal and Torres Strait Islander culture. In 2018-19, to ensure we continue to develop our culturally capable workplace, the Department:

  • celebrated National Reconciliation Week and NAIDOC week with a range of events;
  • celebrated 2019 as being the International Year of Indigenous Languages, hosting a Wiradjuri Language Workshop and Ngunnawal language workshops for the SES to learn acknowledgement of Country in language. Additionally, work progressed to rename meeting rooms in our Canberra offices in the Ngunnawal language, supported by translations; and
  • continued to encourage staff to undertake our Cultural Appreciation Program, a full day face-to-face program which gives employees a greater appreciation of Aboriginal and Torres Strait Islander culture, customs and traditions.

The Department maintained its Bronze status for the Australian Workplace Equality Index, proving that our initiatives to raise awareness for lesbian, gay, bisexual, transgender, and/or intersex inclusion were effective.

I also had the opportunity to contribute to the Hays Australia & New Zealand Diversity & Inclusion Report 2018-19.1 The report highlights the need for more inclusive workplaces regardless of employees’ backgrounds.

New Enterprise Agreement

In March 2019, the Fair Work Commission approved the Department’s new Enterprise Agreement (EA) for 2019–2022. Of the 78 per cent (3,297) of employees who voted, 62 per cent (2,041) voted yes for the new EA. Key changes include family and domestic violence leave, adjusting bandwidth hours by agreement, higher duties allowance to support job sharing and employee representation.

New Ways of Working Program

In 2018-19 the New Ways of Working Program was established to modernise our workplace over the next three to five years. The aim of the program is to establish a work environment that supports greater collaboration, flexibility and productivity, to break down barriers and enable staff to unlock their full potential. The New Ways of Working Program is looking at every aspect of our workplace across every location, including our physical workplace design, ICT solutions, learning and development requirements and corporate policies to better support our workforce. During the year, significant work was undertaken with staff to gather information on how to best deliver a workplace where we can all enjoy greater flexibility and productivity.

Rapid response to the 2019-20 Budget

I am proud of how well the Department delivered the early Budget in April 2019, and how we have been working closely with Ministers to implement priorities. The Budget saw an increase in Health, Aged Care and Sport spending of $20 billion over the four years from 2019-20, growing to $115 billion in 2022-23. Measures included those associated with primary care, mental health, aged care, physical activity and sport, Indigenous health, stronger remote, rural and regional health outcomes, National Health Agreement funding to public hospitals and further investment in research through the Medical Research Future Fund (MRFF).

Additionally, the Government invested $1.25 billion in local services, infrastructure projects and programs under the Community Health and Hospitals Program, to improve access to hospital and community health services. The Department has commenced substantial work to deliver these projects through Primary Health Networks, targeted grant funding and payments to states and territories.

Governance

A new senior governance committee structure came into effect in 2018-19, with the structure and functions designed to support an increased focus on implementation activities across the Department’s broad agenda. Significant effort was made in 2018-19 to ensure these committees are well supported to deliver on this moving forward. The following activities were undertaken in 2018-19:

  • oversight of the Department’s highest risk change projects, as well as Property and Information Technology Projects, has been managed by the newly established Investment and Implementation Board;
  • the Program Assurance Committee, which is focused on a risk-based approach to oversight, has been monitoring a selection of sub-programs, under the Portfolio Budget Statement level programs, which have been assessed as higher risk;
  • the re-established Policy and Evidence Committee has supported cross departmental and cross portfolio policy issues, identifying policy linkages, facilitating policy collaboration and ensuring advice is comprehensive and robust; and
  • the newly established Security and Workforce Integrity Assurance Committee commenced work on priorities in the Government’s Protective Security and Policy Framework reforms, supporting the Secretary and the Executive to approach security and workforce integrity risks with cohesiveness and coordination.

Sustainability/Environment

The Department is committed to reducing its environmental impacts through continuous improvement in environmental management and performance. As a result of our commitment, the largest of the Department’s Canberra offices (Sirius Building) was recognised by the National Australian Built Environment Rating System (NABERS) as a 6 star water and energy efficient building. This rating makes the building one of the most sustainable in Australia. This rating is for the base building2 and remains current until April 2020, when it will be reassessed.

The Department has recently entered into an extended lease on this building and secured commitment from the building owner to significantly invest in maintaining the base building rating, and improve the NABERS rating for tenant controlled systems and assets.

The long term accommodation strategy for the Department will see extensive improvements to the building’s occupational density, and introduce whole of life-cycle asset management strategies to optimise sustainable building management practice.

Contact Centre

In 2018-19, the Department significantly upgraded its Contact Centre, which provides corporate support, advice and processing to the Department’s internal and external stakeholders, including members of the public, on behalf of multiple branches and divisions. These functions include helpdesks, portal support, phone lines, inboxes and administrative processing. Our average volume of contacts per year is more than 173,000. The Contact Centre is a recognised entry and development opportunity for staff new to the APS looking to begin their careers with the Department.

Grant administration

The Department continues to maintain the largest and most diverse grant programs in the Commonwealth. We have built a strong working relationship with the Community Grants Hub (CGH) in the Department of Social Services, with more than 250 former Department of Health staff moving to the CGH in September 2018 as part of the Streamlining Government Grants Administration program. In particular, we also continue to work closely with the Business Grants Hub in the Department of Industry, Innovation and Science, and with the National Health and Medical Research Council to deliver on the $5 billion 10 year strategic plan for the MRFF.

Financial results

In 2018-19, the Department administered 27 Programs across six Outcomes. Administered expenses totalled $69.7 billion and were comprised primarily of payments for personal benefits of $46.1 billion (66.2 per cent of the total), including those for medical services, pharmaceutical services and private health insurance rebates. Subsidies, predominantly for Aged Care, amounted to $12.7 billion (18.1 per cent of the total). Grants expenditure was $9.2 billion (13.2 per cent of the total), the majority of which was paid to non-profit organisations.

At 30 June 2019, the Department’s administered assets totalled $3.4 billion, including investments in health related agencies and inventories held under the National Medical Stockpile. Administered liabilities were $3 billion, which included provisions for personal benefits, grants and subsidies.

Key administered expenditure is illustrated in Figures 1 and 2.

After adjusting for unfunded depreciation, the Department incurred an operating loss of $2.4 million (0.3 per cent of total expenditure). The Department is committed to delivering the program of Government within available resources and remains in a net asset position at 30 June 2019.

The Department’s financial statements, which include information on the unqualified financial performance of the Department, is provided in Part 4: Financial Statements.

Matt Yannopoulos PSM

Chief Operating Officer
September 2019

Figure 1: Breakdown of administered expenditure

 personal benefits; grants; subsidies; and other. The amount of administered expenditure has slightly increased from 2015–2019.

Figure 2: Administered expenditure by category

 personal benefits (66%); grants (13%); subsidies (18%); and other (3%). The chart also breaks down the personal benefits category into the subcategories of medical services (53%), pharmaceutical and pharmaceutical services (26%), private health insurance (13%) and other (8%).

Footnotes

  1. Available at: www.hays.com.au/diversity-inclusion/index.htm
  2. The term base building refers to the part of a multi-tenant building that directly serves and affects all tenants, such as the primary structure, hallways, elevators, stairwells and water supply.