Section 4 : Other Reporting Requirements
4.1 Purchaser-provider arrangements
Cross agency overview
DOTARS has a purchaser-provider arrangement with Tasmania Assistance Services - Centrelink. A Memorandum of Understanding (MOU) between Centrelink and DOTARS was signed on 30 August 2002, and will conclude on 30 June 2007. Centrelink administers, on behalf of DOTARS, the Tasmanian Freight Equalisation Scheme, the Tasmanian Wheat Freight Scheme, and the Bass Strait Passenger Vehicle Equalisation Scheme. Each scheme operates under Ministerial Directions approved by the Minister for Transport and Regional Services.
Under the current arrangements, Centrelink reports to DOTARS against an agreed set of Key Performance Indicators on a monthly basis. Centrelink lies within the Human Services portfolio. Centrelink, therefore, also reports on its outcomes and output structure, providing a full set of financial statements within the PBS for the Family and Community Services portfolio.
The MOU noted above specifies services purchased, resources, management arrangements and expected levels of performance. DOTARS and Centrelink hold quarterly business meetings where any issues arising from changes to policy or administration are discussed and responded to as appropriate.
Up to 30 June 2004, Centrelink received $0.7m per annum to administer the Tasmanian Freight Equalisation Scheme and the Bass Strait Passenger Vehicle Equalisation Scheme. Following administrative responsibility for the Tasmanian Wheat Freight Scheme being transferred from the Department of Agriculture, Fisheries and Forestry to DOTARS from 1 July 2005, the administrative fee was renegotiated. Centrelink now receives $0.8m per annum to administer the schemes.
Performance against outcomes of purchased outputs
Performance of the services purchased from Centrelink relate to output 1.4.1 - Maritime and land transport, under Outcome 1 - Fostering an efficient, sustainable, competitive, safe and secure transport system .
4.2 Cost recovery arrangements
In accordance with the Government's schedule of cost recovery reviews, DOTARS has undertaken an assessment of its cost recovery arrangements against the Department of Finance and Administration's 'Commonwealth Cost Recovery Guidelines for Information and Regulatory Agencies' . The assessment resulted in Cost Recovery Impact Statements (CRIS) for the following activities: Noise Amelioration for Sydney and Adelaide Airports; Vehicle Safety Standards; and minor cost recovery arrangements. A summary of each CRIS follows.
Noise Amelioration for Sydney and Adelaide Airports
The Sydney Noise Amelioration Programme was introduced in 1994, after the opening of the third runway at Sydney airport, and the Adelaide programme was introduced in May 2000. The noise levy arrangements are designed to recover the costs of the Australian Government-funded noise amelioration programmes, which entail the acquisition and insulation of homes and certain public buildings in high noise areas near the Sydney and Adelaide airports. The arrangement is a reimbursement scheme whereby the Australian Government is reimbursed by levies for expenditure it has incurred on the programme.
The levy is designed to recover the administered costs of the noise amelioration programmes including:
- Costs of insulating homes/buildings
- Legal expenses and compensation
- Property acquisition
- Annual production of Australian Noise Exposure Index
- Levy collection fees paid to Airservices Australia, and
- Contract costs for the outsourced project manager function for both airports.
The table below show expenditures, levies collected and the amounts recovered over the four years ending 30 June 2004.
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The review concluded that the cost recovery arrangements complied with the principles contained in the Cost Recovery Guidelines with the exception that DOTARS' internal costs are not recovered. However, at the time of introduction of the levy the Australian Government specifically required that these costs be absorbed. DOTARS does not intend to alter these arrangements. Due to the unique one-off nature of the noise amelioration cost recovery arrangements, its reimbursement design and the findings of the review it is not proposed to further review the arrangements.
Vehicle Safety Standards
DOTARS provides regulatory services under the Motor Vehicles Standards Act 1989, which requires vehicles to meet Australian Design Rules (ADRs). Fees are charged to cover registration and approval activities, monitoring and compliance activities, and research integral to the regulatory activity. The costs of activities are not linked to revenues. An analysis of the revenues and costs is detailed in the table below.
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The CRIS found that the arrangements complied with the principles contained in the guidelines with the exception of over recovery of costs in relation to vehicle compliance. While the Registered Automotive Workshop Scheme (RAWS) appears to under recover, it is a relatively new scheme and, as volumes stabilise, revenues are anticipated to meet costs.
Revenues for vehicle compliance are based on a flat fee per vehicle and a principal reason for over recovery has been the substantial increase in the volume of vehicle sales - vehicle volumes increased by 27 per cent from 2000-01 to 2003-04. Costs, on the other hand, have remained relatively stable, being driven by the number of makes and models of vehicles sold in the Australian market and the number and complexity of ADRs.
The Government increased the funding available for Vehicle Safety Standards (VSS) activities in 2004-05, which has enabled an increase in activities, contributing to a significant reduction in over recovery in 2004 05.
The CRIS also found, however, that current projections indicate the over recovery will continue over the Budget and forward estimates period. As a result, Government has agreed in the 2005-06 Budget to address the gap through a combination of maintaining the ongoing level of funding and reducing fees for vehicle compliance. The table above reflects the impact in 2005-06 of these decisions.
DOTARS has scheduled a further review of VSS in two years after the fee reduction.
Minor cost recovery arrangements
DOTARS has identified its minor cost recovery arrangements as:
- Building Control at Leased Federal Airports - cost recovery revenues are in the range of $0.8m to $1.1m
- Environmental Protection at Leased Airports - in the range of $1.4m to $1.7m
- Airports Lease Administration - no costs recovered
- Coastal Trade Permits - in 2003-04 were approximately $0.3m
- Shipping and Aviation Statistics - in 2003-04 were approximately $0.03m
- Australian Transport Safety Bureau - in 2003-04 were approximately $0.1m, and
- Miscellaneous consultancies - vary from year to year but are not significant.
A consolidated CRIS has been completed for the minor cost recovery arrangements of DOTARS on the basis that the preparation of an individual CRIS for each of these arrangements is not warranted. The results of the reviews were that the minor cost recovery arrangements complied with the principles contained in the guidelines with the exception that in some instances DOTARS internal costs (salaries, on-costs and overheads), that are integral to the activity, were not cost recovered. In all cases, the Australian Government has specifically required that these costs be absorbed or there is a legal impediment to recovering these costs.
The guidelines require that each CRIS should identify when cost recovery arrangements will next be reviewed. All minor cost recovery arrangements are scheduled for review in five years. However, the Coastal Trade Permits activity has recently been transferred to a new organisational unit, which may impact the cost profile. Accordingly, it is scheduled for review after a full 12 months of operations (ie. during the 2005-06 financial year). Fees relating to the sale of safety videos (part of the cost recovery arrangements of the Australian Transport Safety Bureau) are being reviewed in the current financial year.
The CRIS for each of the reviewed activities can be found on DOTARS web site at www.dotars.gov.au/.
4.3 Australian Government Indigenous Expenditure