Chapter 6: Services to Territories

The Public Governance, Performance and Accountability Rule 2014 requires this annual report to include a report on the Department's performance during 2015–16. A core element of this is the inclusion of an annual performance statement which demonstrates performance in relation to our purpose and programs.

Annual Performance Statements

Purpose One program contributes to the Services to Territories outcome (Outcome 4) set out in the Portfolio Budget Statements: Program 4.1 Services to Territories.

The purpose of this program is to provide good governance in the Australian territories
Results Table 6.1 details the performance criteria which relate to this purpose, and the result against each. Each criterion is published in both the 2015–16 Corporate Plan and the 2015–16 Portfolio Budget Statements against Program 4.1.

Table 6.1 Results Against Performance Criteria—Program 4.1 Services to Territories

Performance CriterionState-type services and grants are delivered to residents of the non-self-governing territories similar to comparable mainland communities
Result Achieved (new criterion 2015–16)

The Department delivered state-type services to the residents of the non-self-governing territories to a standard comparable with equivalent state communities. These services were delivered through various arrangements with the governments of WA, the Australian Capital Territory and NSW, the Shoalhaven City Council, and through direct service provision and commercial contracts.

Non-self-governing territories are governed only by Commonwealth law, usually through an Australian Government-appointed administrator. They are:
  • Ashmore and Cartier Islands
  • Australian Antarctic Territory
  • Christmas Island
  • Cocos (Keeling) Islands
  • Coral Sea Islands
  • Jervis Bay Territory, and
  • Territory of Heard Island and McDonald Islands.
Performance CriterionEssential infrastructure in the non-self-governing territories meets the needs of communities
Result Achieved (new criterion 2015–16)

The Department provided public infrastructure such as hospitals, schools, ports and airports for residents of the non-self-governing territories. A key project that commenced in 2015–16 was the upgrade of the Cascade Pier, a vital infrastructure project for Norfolk Island economic prosperity and safety. As a further element of the Norfolk Island reform process, the Department commenced capital upgrades at the Norfolk Island Central School, in addition to the newly formed Norfolk Island Health and Residential Aged Care Service.
Performance CriterionAdministration of the Australian Government's interest in self-governing territories is effective
Result Achieved (new criterion 2015–16)

The Department continued to engage with the self-governing territories and implement actions where appropriate. No actions were required in 2015–16.
Performance CriterionLegal frameworks are in place in the territories that provide comparable rights and protections to citizens as the rest of Australia
Result Achieved (new criterion 2015–16)

The Department has continued to manage the legal frameworks within the non-self-governing territories to ensure the rights and protections of residents are comparable to equivalent state communities. In 2015–16, the Department managed the legal frameworks to ensure appropriate legal protections were in place. This included for example, the Removal of Prisoners (Territories) Regulation 2015 which repealed the previous Regulation, and ensured the continuation of an administrative process that allows prisoners to make an application to the Secretary to be returned to a Territory after they have been discharged or released from custody.
Performance CriterionService delivery arrangements and contracts meet value-for-money criteria and deliver appropriate levels of services
Result Achieved (new criterion 2015–16)

The Department effectively managed service delivery arrangements (SDAs), including negotiating new multi-year arrangements with 16 Western Australia Government agencies. 2015–16 also saw the introduction of agreed SDA work plans, better defining the level of services to be delivered within the budget allocation. The Department conducted two major services tender processes with a new port facilities management contract executed and an air services tender being completed.
Performance CriterionFinancial and governance reform for Norfolk Island is progressed through constructive partnerships with the Norfolk Island community
Result Achieved (new criterion 2015–16)

The Department managed the effective implementation of the first phase of the Norfolk Island reform process, including the introduction of Australian Government taxation and social services. The work undertaken to establish the Norfolk Island Regional Council from 1 July 2016 further supported ongoing governance reform of Norfolk Island. In addition, the Department established constructive partnerships with the newly formed Norfolk Island Health and Residential Aged Care Service and the Norfolk Island Central School.
Results Key  
Achieved All milestones for 2015–16 were met or exceeded

Analysis against the Purpose:

Provide good governance in the Australian territories (Program 4.1)

The Department's ongoing role is fundamental to ensuring good governance and efficient and effective service delivery in the Australian territories.

Significant improvements were made to the legislative and service delivery framework governing the Norfolk Island community, including access to social services and the establishment of the Norfolk Island Regional Council, as a result of the Norfolk Island reform agenda managed by the Department.

A key project commenced in 2015–16 was the upgrade of the Cascade Pier, a vital infrastructure project for Norfolk Island economic prosperity and safety. As a further element of the Norfolk Island reform process, the Department commenced capital upgrades at the Norfolk Island Central School, in addition to the newly formed Norfolk Island Health and Residential Aged Care Service.

The effective provision of services to the non-self-governing territories, through partnerships with other state and territory governments or private sector providers, has enabled ongoing community access to services comparable with equivalent state communities.

The Department further supports these communities with significant investments in capital upgrade projects in priority service delivery areas, such as health care, education and transport infrastructure.

Administered Items

Table 6.2 provides a summary of the results achieved by each of the administered items under Program 4.1. Administered items are administered in accordance with relevant legislation, approved guidelines, and guidance by the Australian National Audit Office.

Table 6.2 Administered Items—Program 4.1 Services to Territories

Administered ItemACT Government—national capital functions
Result Funding of $1.8 million was provided to the ACT Government for the provision of services on behalf of the Australian Government.
Administered ItemCentenary of Canberra 2013—Constitution Avenue Upgrade
Result The Department provided $8.0 million to the ACT Government to deliver the upgrade of Constitution Avenue.
Administered ItemChristmas Island Phosphate Mining Rehabilitation
Result Funding of $2.0 million was provided to Parks Australia from the Christmas Island Phosphate Mining Rehabilitation Special Account to restore rainforest on relinquished mine sites.
Administered ItemLoan to the ACT Government—loose fill asbestos
Result $250.0 million was provided to the ACT Government as part of the $1.0 billion concessional loan to deliver its remediation program for houses affected by loose-fill asbestos.
Administered ItemNorfolk Island—Commonwealth administration
Result The Department provided $1.3 million in 2015–16 for the Office of the Norfolk Island Administrator, including to run and maintain Government House.
Administered ItemNorfolk Island—Kingston and Arthur's Vale Historic Area
Result The Department contributed $0.4 million for the Kingston and Arthur's Vale Historic Area, a World Heritage Australian Convict site.
Administered ItemOffice of Administrator, Northern Territory
Result Funding of $0.3 million went to support the activities of the Office of the NT Administrator.
Administered ItemServices to Indian Ocean Territories
Result A total of $104.0 million was provided in 2015–16 for operational expenses relating to the Indian Ocean Territories.
Administered ItemServices to Jervis Bay Territory
Result Funding of $5.9 million was provided in 2015–16 for services to the Jervis Bay Territory.
Administered ItemServices to Norfolk Island
Result The Department provided $8.9 million in 2015–16 for operational expenses relating to Norfolk Island.

Note: The budget and actual expenditure for each administered item is listed in Appendix A.

Case Studies

Christmas Island diesel supply services—a cooperative arrangement with the Department of Defence

Due to its isolated location, Christmas Island has a high dependency on diesel to maintain essential services and operations on-island. Diesel is used primarily to generate electricity via the single Commonwealth owned power station on the island. The Department of Defence, through the Royal Australian Navy, is also a major consumer of diesel on Christmas Island for its vessels.

Prior to July 2015, Defence had its own arrangements for obtaining diesel on Christmas Island. In June 2014, a Memorandum of Understanding (MoU) was established between the Department and Defence to work collaboratively to tender and manage the diesel supply service on Christmas Island. Under the MoU, Defence now contributes towards the maintenance and operation of the diesel supply and storage assets on Christmas Island and pays the same price per litre for diesel as the Department. The MoU will also inform future fuel services projects between the Department and Defence within the Indian Ocean Territories.

With the MoU in place, the Department conducted an open approach to market using a cooperative agency procurement method. This ensured a value-for-money supplier on Christmas Island from which both agencies could purchase diesel. This resulted in a diesel supply agreement with Indian Ocean Oil Company Pty Ltd from which was signed in May 2015, with effect from 1 July 2015.

By working collaboratively and establishing a cooperative procurement arrangement, both the Department and Defence now benefit from a lower diesel price on Christmas Island. Defence has provided positive feedback on the diesel supply service and the demand for fuel services by Defence has grown since the beginning of the contract. The diesel supply arrangement has also benefitted the local Christmas Island community with the new provider, the Indian Ocean Oil Company, employing Christmas Island residents for its on-island operations.

Norfolk Island reforms

In March 2015, the Australian Government announced comprehensive reforms for Norfolk Island to address the governance and economic sustainability issues which had arisen from Norfolk Island's previous governance model. This model was introduced in 1979 and meant the territory was responsible for its own local, state and federal functions. With a community of approximately 1,800 people and a small tourism-reliant economy, the previous governance model could not provide the Norfolk Island community with services of the same standard as available to mainland Australians.

Since May 2015, the Department has led a whole-of-government Norfolk Island reform process. The first phase of the reforms was completed on 1 July 2016 and involved extending Australian Government services and responsibilities to Norfolk Island. A key mechanism for implementing the reform effort was the Norfolk Island Inter-Agency Taskforce, coordinated by the Department and comprising senior members from all Australian Government agencies.

Engaging the community was a key focus of the Australian Government. An interim Norfolk Island Advisory Council was established in July 2015 to communicate the community's views on a range of reform matters to the Minister and to the Administrator of Norfolk Island. The Department also facilitated community engagement via the on-island Australian Government Information Centre, the Administrator's monthly reform update newsletter, coordinating Australian Government agency visits, dedicated web pages and a mailbox for community enquiries. The Department led direct community engagement for health and education services primarily through in-depth meetings with key interest groups.

As of 1 July 2016, several major milestones have been reached. Norfolk Island has been integrated with the majority of Australian Government services and systems including tax, health and social security, immigration, biosecurity and customs. The NSW Government has agreed to oversee health services and continue to provide teachers to the local school. At the local government level, the inaugural election of members to the new Norfolk Island Regional Council was held in May 2016 with the Council holding its first meeting on 6 July 2016. All of this has involved extending many Commonwealth laws to Norfolk Island and applying some NSW law as Commonwealth law on Norfolk Island.

The Department is also facilitating significant investment to modernise Norfolk Island's infrastructure, including over $13.0 million to redevelop Cascade Pier to better support cruise ship passenger arrivals and the offloading of freight. The Norfolk Island school and health and aged care service buildings are also receiving upgrades to improve building compliance, and work, health and safety standards.

The Department will continue with the reform work over the coming years to support state and Australian Government agencies to deliver a complete range of government services to Norfolk Island.

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Last Updated: 12 December, 2016