The GRDC is accountable to its two key customer groups—Australian grain growers and the Australian Government—for its performance in addressing their identified priorities. The GRDC also meets its responsibilities under its governing legislation and the broader legal framework for Commonwealth statutory authorities.
Accountability to the Australian Government
Under the PIERD Act, the GRDC is accountable to the Australian Parliament through the Minister for Agriculture, Fisheries and Forestry, who is responsible for all RDCs, including the GRDC. During 2010–11, Senator the Hon. Joe Ludwig was the Minister for Agriculture, Fisheries and Forestry.
Australian Government priorities
The GRDC’s strategies and investments actively address the Australian Government’s National Research Priorities and ministerial research priorities for rural R&D. These priorities and the GRDC’s achievements in meeting them during 2010–11 are discussed in detail in Part 2.
The PIERD Act and the CAC Act provide that the responsible minister or the Finance Minister may direct the GRDC with respect to the performance of its functions and the exercise of its powers, or require it to provide information.
In July 1998, the responsible minister, the Minister for Primary Industries and Energy, issued a direction requiring the GRDC to comply with the reporting requirements of the Guidelines on Funding of Consultation Costs by Primary Industries and Energy Portfolio Statutory Authorities.
On 1 December 2004, the Finance Minister issued the Finance Minister’s (CAC Act Procurement) Directions 2004, requiring the GRDC to comply with the Commonwealth Procurement Guidelines.
On 18 December 2006, the Finance Minister required the GRDC to provide an annual report on compliance and financial sustainability, under section 16(1)(c) of the CAC Act. The requirements are detailed in Finance Circular 2008/05 Compliance Reporting–CAC Act bodies.
The GRDC is complying with the directions.
On 23 September 2008, the responsible minister, the Minister for Agriculture, Fisheries and Forestry, directed the GRDC to adopt the Australian Government Bargaining Framework. The GRDC is in the process of achieving compliance with this direction.
General policies of the government
Until 1 July 2008, under section 28 of the CAC Act, the responsible minister could notify the GRDC Board of any general Australian Government policies that apply to the GRDC.
The GRDC had been notified of the following policies as at 30 June 2008:
- Commonwealth Fraud Control Guidelines 2011 (replacing Commonwealth Fraud Control Guidelines 2002)
- Finance Circular No. 2006/06 Australian Government Foreign Exchange Risk Management Guidelines (replacing Finance Circular 2002/01 and Finance Circular 2004/11)
- Finance Circular No. 2005/09 Australian Government Cost Recovery Guidelines (replacing Finance Circular 2002/02)
- National Code of Practice for the Construction Industry and the associated Implementation Guidelines
- Australian Government Property Ownership Framework 2005
- Australian Government Protective Security Policy Framework (replacing Protective Security Manual 2005).
Section 28 of the CAC Act has been amended, and now provides that from 1 July 2008 the GRDC must comply with any General Policy Order made by the Finance Minister, to the extent that it applies to the GRDC. At 30 June 2011, the Finance Minister had not made any General Policy Orders that apply to the GRDC.
Accountability to the grains industry
Under the PIERD Act, the GRDC is made accountable to Australian grain growers through the industry’s representative organisation, Grain Producers Australia (GPA). The GRDC also consults widely with a range of other grower organisations.
In August 2010, GPA became successor to the Grains Council of Australia (GCA), maintaining the same business number and performing the legislative roles and prescribed functions previously undertaken by the GCA.
Grains industry priorities
In setting directions for 2010–11 (the fourth year of Prosperity through Innovation, the Strategic R&D Plan 2007–12), the GRDC identified industry priorities through direct consultations with GPA, as well as local research advisory committees, grower groups, grower organisations and individual grain growers. The key industry priorities were incorporated into the GRDC Annual Operational Plan 2010–11. The priorities and the GRDC’s achievements in meeting them during 2010–11 are discussed in detail in Part 2.
Each year the GRDC prepares a stakeholder report to assist the representative organisation to formulate advice to the Minister on setting the research levy rates which provide the basis for the corporation’s income. The draft Stakeholder Report 2011–12 was provided to GPA in December 2010 for comment. The final Stakeholder Report 2011–12 was provided to GPA in March 2011.
The GRDC also prepares a Growers’ Report. This 20-page report is a shortened form of the GRDC annual report, providing a reader-friendly summary of how the GRDC operates, the corporation’s financial situation and highlights of research investments. The 2009–10 report was circulated to growers and other Ground Cover subscribers in November 2010.
Industry levy rates
In 2010–11, a levy rate of 0.99 percent applied to all leviable crops covered by the GRDC, with the exception of maize, which was levied at 0.693 percent.
The levies were imposed and collected as stipulated by the following legislation:
- Primary Industries (Excise) Levies Act 1999, supported by the Primary Industries (Excise) Levies Regulations 1999, Schedules 4, 12, 20 and 25
- Primary Industries Levies and Charges Collection Act 1991, supported by the Primary Industries Levies and Charges Collection Regulations 1991, Schedules 8, 19, 29 and 34.
Proceeds from levies in 2010–11 are recorded in Note 4B of the Notes to the Financial Statements.
The GRDC paid the Australian Government Department of Agriculture, Fisheries and Forestry $598,827.18 for the collection and management of levies in 2010–11.
The GRDC paid GPA $24,285 plus GST for its participation in consultations with the corporation during 2010–11. GPA used these funds to meet its costs of preparing for and attending consultative meetings with the GRDC, to consider grains industry strategic directions and concerns and to assess the corporation’s performance against industry expectations.
The payments for consultation were made under the Guidelines on Funding of Consultation Costs by Primary Industries and Energy Portfolio Statutory Authorities, issued by the Minister for Primary Industries and Energy in July 1998. The guidelines also require that when a representative organisation conducts a project or consultancy on behalf of a statutory authority, details are to be included in the authority’s annual report.
The GRDC paid GPA $4,925.73 (GST inclusive) in 2010–11 towards its cost of participating in the National Working Party on Pesticide Applications.
The GRDC also paid the travel and accommodation costs of representatives of other grower groups, to attend formal consultation meetings with the GRDC.
The GRDC met some out-of-pocket costs for three grain growers nominated by GPA—Andrew Weidemann (Victoria), Ray Marshall (Western Australia) and Wayne Newton (Queensland)—to represent grain growers during development of the National Primary Industries Research, Development and Extension Framework.
Obligations under the Commonwealth Authorities and Companies Act
A system of accountability and reporting obligations for the GRDC, reflecting its obligations under the PIERD Act, is set out under the CAC Act. Under the CAC Act, the GRDC is obliged to:
- prepare an annual report (in the prescribed form, including a report of operations), and give it to the responsible minister by 15 October each year (section 9)
- ensure that any subsidiary’s financial statements are audited by the Auditor-General (section 12(1))
- prepare and provide to the responsible minister interim reports during a financial year, if required by the Finance Minister by notice in the Gazette (section 13)
- prepare and provide budget estimates (section 14)
- provide the responsible minister (in writing) with particulars of any proposal of the GRDC to undertake any one of a number of significant events (section 15)
- keep the responsible minister informed of the operations of the GRDC and its subsidiaries and provide such reports, documents and information as that minister or the Finance Minister requires (section 16)
- invest any reserves in accordance with the manners listed in section 18 or approved by the Finance Minister (approved under Commonwealth Authorities and Companies Act 1997—Investment Approval 2008/01—Grains Research and Development Corporation and Commonwealth Authorities and Companies Act 1997—Investment Approval 2008/01—Dematerialised equivalents)
- comply with any General Policy Orders of the Australian Government to the extent that the General Policy Order applies to it (sections 28 and 48A)
- ensure that the general policies of the Australian Government as notified to the corporation before 1 July 2008 are carried out (Table A Item 71).
Conduct of officers
The CAC Act imposes specific standards of general conduct for directors and other officers. Sections 22–27P ensure that officers of Commonwealth authorities are subject to standards of conduct comparable to those required of officers of companies under the Corporations Act 2001.
In particular, a director must disclose to a meeting of the Board the nature of any material personal interest in a matter to be considered by the Board and, unless otherwise determined by the Board or the Minister, ensure that he or she is not present at deliberations and does not take part in any decision on the relevant subject matter (section 27F to section 27K). These requirements are reinforced by the GRDC’s policy and procedures regarding conflict of interest, as discussed in the ‘Board’ section of Part 3.
A civil penalty regime is contained in the CAC Act (Schedule 2), to deal with any breach by directors of:
- annual reporting rules (section 11)
- accounting records (section 20)
- their general duty to exercise care and diligence (section 22)
- their general duty to act in good faith (section 23)
- their duty to not make improper use of the position of director to gain an advantage or cause detriment (sections 24 and 25).
The Auditor-General, under the CAC Act, is required to audit each Commonwealth authority’s financial statements. In addition, the Auditor-General Act 1997 confirms the power of the Auditor-General’s staff to carry out performance audits of Commonwealth authorities and, in this role, to obtain documents and information.
The Auditor-General’s Independent Audit Report on the GRDC for 2010–11 is presented on pages 106–107.
Judicial decisions and reviews by outside bodies
In 2010–11, the GRDC was not affected by judicial decisions.
On 15 February 2010 the Productivity Commission commenced a review of the RDCs, including the GRDC. The GRDC lodged two submissions to the review.
The Productivity Commission provided its final report to the Australian Government on 10 February 2011. The government released the final report on 15 June 2011 together with its preliminary response.
The Productivity Commission’s inquiry examined the effectiveness of the RDC model, including whether the current level of funding should be maintained and whether there are any impediments to effective and efficient functioning of the model.
The Productivity Commission recommended a decrease in the cap on the government’s matching funding, from 0.50 percent of the industry’s gross value of production to 0.25 percent.
In the government’s preliminary response, the Minister for Agriculture, Fisheries and Forestry announced that the government will not adopt the Productivity Commission’s recommendation to reduce the government’s matching funding, but there are opportunities for improvement in the efficiency and effectiveness of the RDC model. The government will develop a final response to the Productivity Commission report, following further consultation with stakeholders.
Information about the review, including all public submissions, is available on the Productivity Commission website, www.pc.gov.au. The government response is available on the Department of Agriculture, Fisheries and Forestry website, www.daff.gov.au.