02Governance

CEFC ANNUAL REPORT / 2015–16

Other legislation, policies of the Australian Government and key governance events

Public Governance, Performance and Accountability Act 2013 and compliance with finance law

As a corporate Commonwealth entity, in addition to the CEFC Act, the PGPA Act and its subordinate instruments are the main legislation that govern the Corporation’s activities. The PGPA Act imposes various duties, responsibilities and accountabilities on the CEFC Board (both as a collective and as individuals) and on employees.

As the main finance law for Government at the Commonwealth level, the PGPA Act sets the standard for the use of public resources and the management of risk. The Public Governance, Performance and Accountability Rule 2015 specifies further requirements at a more operational level of detail. Australian Accounting Standards Board (AASB) standards are applied to the Corporation by force of the Public Governance, Performance and Accountability (Financial Performance) Rule 2015, as outlined in Note 1 to the Financial Statements.

There were no significant issues of non-compliance with finance law identified and reported to the responsible Ministers in 2015-16.

Australian Government energy and environmental policies

The most important changes of Australian Government policy for the CEFC in 2015-16 were with respect to the abolition of the CEFC, and policy changes in respect of the Investment Mandate (see discussion on “Enabling Legislation” at page 101).

The 2015-16 year was characterised by a number of other important reviews and policy changes at the intersection of energy and environment policy – i.e. where the CEFC tends to invest as a “clean energy” financier. The major policy reviews and changes impacting the CEFC in the year included:

  • Passage of legislation just prior to the 2015-16 year to reduce the Renewable Energy Target (RET) impacted the CEFC in two important ways:
    1. Influenced the development of the Clean Energy Finance Corporation (Investment Mandate) Direction 2015 (No. 2) as evidenced by correspondence from the Hon. Greg Hunt, MP Minister for the Environment, tabled in the Senate debate on the legislation
    2. Provided a level of certainty to the market in pursuing renewable energy developments that were reliant on the RET, increasing demand for CEFC finance to support these developments.
  • Reduction and re-phasing of funding to ARENA:
    1. The CEFC was directed to create a new Clean Energy Innovation Fund with input from ARENA via the Clean Energy Finance Corporation (Investment Mandate) Direction 2016
    2. There was less grant funding available for deployment to the sector generally, impacting those investments that are incapable of supporting CEFC debt or equity investments without a grant.

Additionally, after the 2015-16 year, the bringing together of energy, energy efficiency, climate and environment policy into the one portfolio for the first time also brings significant opportunity for the CEFC to be engaged as part of the Australian Government “toolkit” supporting policy outcomes.

Other Australian Government policy affecting the CEFC

Following the change of Government on 18 September 2013, the CEFC has been notified of several changes to Australian Government policies that have sought to extend their application to the CEFC.

While these are not of legal effect, they have been notified to the CEFC, usually as an interim arrangement to assist in the rapid adoption of Australian Government policy. Some of these could take shape in future as PGPA Act Rules or Government Policy Orders (GPO) made as part of the PGPA Act reforms.

The CEFC has sought to adopt a co-operative approach to engagement with Government and seeks to comply with Government policy wherever possible. Complying in this way may circumscribe the CEFC’s scope of operations, despite the formal operational independence prescribed in the CEFC Act.

With respect to the Australian Government Public Sector Workplace Bargaining Policy, the CEFC has been in practical compliance. An exemption from the need to commence a process of enterprise bargaining was sought while the Bills to abolish the CEFC remained in the Parliament.

To 30 June 2016, policies informally notified to the CEFC by correspondence are set out in Figure 32.

Figure 32: Policies informally notified to the CEFC by correspondence

Date

Description

Action

24 September 2012

5 February 2013

Co-operation with Parliamentary Budget Office

The Australian Government published Australian Government Protocols Governing the Engagement Between Commonwealth Bodies and the Parliamentary Budget Officer

20 February 2012

Recruitment

Requests that the CEFC comply with the APSC’s Interim Recruitment Arrangements for non-APS Agencies (effective until 1 July 2015)

28 March 2014

2 November 2015

Employment Framework

Requests that the CEFC conduct bargaining under the Australian Government Public Sector Workplace Bargaining Policy; replaced on 2 November 2015 by the Workplace Bargaining Policy 2015

12 November 2015

Employment Framework

Application of the Commonwealth Aboriginal and Torres Strait Islander Employment Strategy

Other statutory requirements affecting the CEFC

As a corporate Commonwealth authority which acts actively and commercially in the finance sector, the CEFC complies with a range of other statutory reporting requirements. These are outlined below. An index to reporting requirements can be found in Appendix A.

Equal Employment Opportunity (Commonwealth Authorities) Act 1987

Under the Equal Employment Opportunity (Commonwealth Authorities) Act 1987 (EEO Act), the timing of the annual reporting requirement depends on when the entity first gained 40 employees or more.

The CEFC was formed as a Corporation on 3 August 2012, and the CEFC first attracted obligations under the EEO Act on 17 April 2014. In previous reporting periods the CEFC separately reported annually based on this anniversary. In order to bring the reporting period into line with the CEFC Annual Report (i.e. this document), the 2016 report covers the period 17 April 2015 to 30 June 2016 and is contained in Appendix B.

Environment Protection and Biodiversity Conservation Act 1999

The CEFC is required to report annually under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). A full report can be found in Appendix C.

Work Health and Safety Act 2011

The CEFC is required to report annually under the Work Health and Safety Act 2011 (WHS Act), and a full report can be found in Appendix D.

Judicial decisions and parliamentary committees

The CEFC is not aware of any judicial decisions or decisions of administrative tribunals that have had, or may have, a significant effect on the operations of the CEFC in 2015-16. There were also no reports about the CEFC made by the Commonwealth Ombudsman or the Office of the Australian Information Commissioner. There were no reports about the CEFC from the Auditor‑General other than the 2014-15 annual audit report accompanying the financial statements (as reproduced in the CEFC’s 2014-15 Annual Report).

As far as the CEFC is aware, the only Parliamentary Committee reports which substantially involved the CEFC during
2015-2016 were as follows:

  • The Senate Select Committee on Wind Turbines, which issued its Final Report (August 2015)
  • The Senate Environment and Communications Legislation Committee, which reported on Additional Estimates 2015-16 (March 2016).