Australia: Release of the Report of the National Commission of Audit sets the scene for budget cuts

Following intense media speculation over the last few weeks (together with selective leaking of information), the Federal Government finally released the Report ("Report") from the National Commission of Audit ("Commission") yesterday afternoon.

The Commission was tasked to review all operations of State and Federal Governments with the intent to recommend measures to reduce what the Federal Government considers to be an unacceptably high level of Government deficit and Government spending. In a manner similar to the Productivity Commission, the Commission undertook a rigorous and comprehensive analysis of the operations of Government based on principles of economic rationalism. Issues such as societal benefit and equity, political expediency and ease of implementation did not form part of the agenda for the Commission.

Clearly, as with the earlier task undertaken by a similar body to the Commission in 1996 for the first Howard Government, it is unlikely that all or even the majority of recommendations will be implemented. However, the recommendations do provide the Federal Government with some level of justification as to any recommendations which it elects to adopt. It also allows the Federal Government to appear to be politically and socially considerate from those recommendations which it does not adopt.

The Federal Government has indicated that it will identify those recommendations it proposes to adopt during the Federal Budget to be delivered on 13 May 2014. Doubtlessly, that makes the terms of that Budget more controversial than would normally be the case.

However, in the short term, the comments of the Commission and its recommendation do raise some issues of significant interest to industry.
By way of summary, these include the following:

  • Recommendations to eliminate a number of programs where deemed there to be no genuine market failure and where benefits accrue entirely or the Government largely to the firm or industry supported. This includes recommendations to abolish the Automotive Transformation Scheme, the Steel Transformation Plan, Ethanol Production Subsidies, the Rural Financial Counselling Service, Enterprise Solutions, the Clean Energy Finance Corporation and specific funding to GM Holden and the Cadbury factory in Tasmania (although the removal of the latter would seem to be extremely unlikely given the support was granted to the Cadbury factory in the run-up to the last election).
  • The recommendations include recommendations that a number of bodies and programs intended to assist Australian exporters such as Austrade, the Export Finance & Insurance Corporation (EFIC), the Export Markets Development Grant Scheme (EMDG), the Asian Business Engagement Plan Grants and support for the tourism sector should all be abolished. The Commission suggests that the funding to Austrade does not appear to represent value for money with relatively high costs for the number of business opportunities generated with a low return on investment. As a result, the Commission also recommends that the residual functions of Austrade (such as trade facilitation) should be incorporated into a commercial arm of DFAT to focus on trade facilitation and diplomacy and reduce duplication of corporate services and other overheads. In relation to EFIC, the proposal is that the existing loan book should be transferred to DFAT to investigate options to on-sell or wind-up the loans. The Commission also formed the view (as did the previous National Commission of Audit) that the EMDG scheme should be abolished as the benefits of success are able to be captured by the business itself. I should add that I do not share these views!
  • In terms of broader industry assistance, the Commission has referred to support provided to industry through other trade protection such as tariffs and through other non-tariff forms of protection such as anti-dumping measures. In 2011/2012, the Productivity Commission identified that net tariff assistance to industry amounted to $1.1 billion. The Commission reiterated earlier comments by the Productivity Commission that Australia's current system of applying dumping fees to protect Australian producers from cheap imports "benefits a small number of import competing firms, but imposes greater costs on the rest of the economy". Accordingly, the Commission recommends that dumping protection should not be implemented unless the benefits exceed costs to other industries and to Australian consumers. The Commission (as did the Productivity Commission) recommended including a public interest test in determining whether measures should be applied even where dumping has been established. However, given that the Federal Government rejected that recommendation when it was made by the Productivity Commission and given the recent steps by the Federal Government to "enhance" and "toughen" our anti-dumping regime, such a fundamental change appears to be unlikely to be adopted.
  • There are also significant recommendations regarding rationalisation of Commonwealth bodies, authorities and agencies including recommendations to abolish (7), merge with other bodies (35), consolidate into the portfolio department (22), privatisation (9) and review, with a view to merging, abolishing or transferring (26).
  • In terms of opportunities for consolidation of Government agencies the Commission proposes a single border agency to be known as "Border Control Australia" through the merger of the border control functions of the Department of Immigration and Border Protection and the Australian Customs and Border Protection Service ('Customs'). However, that does not address other issues associated with those agencies, for example, revenue collection and administration of tariffs and other industry programs. Consolidation of border control operations into one agency has been flagged for some time with views that the revenue aspects of border control (such as customs duty and GST) should be transferred to the Australian Taxation Office (such as happened with excise duty) and the border agencies should be left purely to border control issues. That would be consistent with the practice overseas such as in the United States. However, there seems to be some significant practical issues with establishing one border control agency and, in the short term, the significant cost may well outweigh any longer-term benefit.

As always, we will bring further news to you and will report further on which of these recommendations are adopted within the Federal Budget.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.