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1 Machinery of government process

The terms ‘machinery of government changes’ (MoG changes) and ‘administrative re-arrangements’ are interchangeable and are used to describe a variety of organisational or functional changes affecting the Commonwealth.

Some common examples of MoG changes are:

  • changes to the Administrative Arrangements Order (AAO) (see Part 1.1 below) following a Prime Ministerial decision to abolish or create a department or to move functions/ responsibilities between departments/agencies
  • creation of a new statutory agency or executive agency, or abolition of such agencies
  • movement of functions into, or out of, the APS.

Not all MoG changes involve a change to the AAO. MoG changes within a portfolio, including movements from a department to a statutory agency within the same portfolio, and MoG changes involving the movement of only a small function from one portfolio to the other, would not normally require changes to the AAO. Agencies should consult PM&C on whether a change to the AAO is necessary.

1.1 Administrative Arrangements Order

Under section 64 of the Constitution, the Governor-General, on the advice of the Prime Minister, appoints Ministers, establishes departments of state and formally allocates executive responsibility among Ministers through the AAO.

The AAO is published in the Commonwealth Gazette and posted on the PM&C website. It contains an entry for each department of state which describes briefly the principal matters dealt with by that department and then lists all of the legislation administered by the Minister responsible for that department and other agencies in the Minister’s portfolio.

Under the AAO, in some cases two or more departments may be responsible for administering different aspects of the same legislation. Managing joint responsibility for legislation can be complex, and may require the development of protocols or processes relating to consultation, clearance and approval between relevant Ministers and their departments.

1.2 General machinery of government changes

MoG changes generally occur in the period immediately after a general election. However, a MoG change may be instigated by the Prime Minister either of his or her own accord or in response to the suggestion of another Minister at any other time. A Minister proposing a MoG change should consult other Ministers where relevant before writing to the Prime Minister. The decision to make a MoG change rests with the Prime Minister. If the Prime Minister wants to make a MoG change that involves an amendment to the AAO, he or she will advise the Governor-General who makes the change.

PM&C is responsible for providing advice to the Prime Minister on a proposed MoG change and, if required, prepares documentation necessary to give effect to that change. If the proposed change has been suggested by another Minister, the advice to the Prime Minister may draw on the views of Ministers affected by the proposed MoG change. Any financial or staffing implications arising from a MoG change will also be raised in the advice to the Prime Minister. PM&C may consult Finance, the Commission, and affected agencies on these matters as part of the briefing process.

1.3 Post-election machinery of government changes

While a MoG change may occur at any time, significant MoG changes usually occur immediately following an election. The process for considering MoG changes at such times is, by necessity, different from non-election times.

Following an election, the Secretary of PM&C provides a brief to the Prime Minister on possible MoG changes. This brief is confidential and there may not necessarily be formal consultation with departments on the detail of any changes being considered before the Prime Minister publicly announces MoG changes. Once the Prime Minister has announced the Ministry and new administrative arrangements, PM&C may contact affected departments to ensure the detail of the MoG changes is accurately reflected in the new AAO that has been prepared. PM&C also advises Finance and the Commission as soon as possible of the changes to departmental arrangements. The AAO may be further revised, and a new consolidation issued, if Secretaries identify that it does not accurately reflect arrangements.

In the event of major changes in portfolio responsibilities, the Secretary of PM&C will inform Secretaries of the nature of the changes to ensure that consistent information can be given to agency staff.

This is a particularly intense period of activity because the time between the announcement and the swearing-in of the new Ministry and making the AAO is normally, on average, three to five days. During this time departments will have an opportunity to seek clarification from PM&C on any matters of detail, such as the programs identified as moving with a particular function.

New Ministerial arrangements take effect on the day that the new Ministry is sworn in. Similarly, any changes to the AAO take effect on the day that the AAO is made by the Governor-General. For example, following the 2010 election, the Ministry was sworn in on 14 September 2010: the new AAO took effect on the same day, reflecting the creation of one new department and the renaming of two departments.

While the transfer of appropriations and the transfer of staff under section 72 of the PS Act are unlikely to be completed by the time the new AAO is made, the Prime Minister expects agency heads to implement AAO changes cooperatively and as soon as possible, if necessary by administrative means such as issuing new delegations.

Implementation of the changes should be predicated on the basis of achieving the best outcome from a whole-of-government perspective, not on the basis of achieving the best outcome for individual agencies. However, if as a result of a post-election MoG change, a department is abolished, transfers of staff and appropriations must take effect on the day the AAO is made.

Following an election, a consolidated AAO is usually issued on the day the new Ministry is sworn in. Shortly after, departments are asked to review the AAO to ensure that any changes that have been made to the AAO are accurate and reflect the Government’s intentions. If necessary, a second consolidated AAO would be issued.

1.4 Governance arrangements

Following a MoG change, agencies should ensure their structure and governance arrangements are appropriate. The specific structure and governance arrangements that an agency adopts should promote effective implementation of policy. Financial Management Reference Material No.2: Governance Arrangements for Australian Government Bodies provides guidance on these aspects. Further queries should be directed to the Governance Branch in Finance at LRB@finance.gov.au.

1.5 Name or title changes

An Act, or an instrument made under an Act, may contain a reference to a specific Minister, department or Secretary of a department. After an election or ministerial reshuffle, there may be ministerial and departmental changes and a re-allocation of functions, reflected in a new AAO, which make those references incorrect. In some cases, it will be desirable to amend the Act or instrument appropriately. However, it is not necessary to do so in every case, because sections 19B and 19BA of the Acts Interpretation Act 1901 give the Governor-General the power to make orders which have the same effect.

Such an order may provide that specified references to a Minister, department or Secretary of a department contained in an Act or instrument are to be read as if they referred to the Minister, department or Secretary that is now appropriate because of the AAO changes. Section 19B deals with the case where a ministerial office or a department has been abolished. Section 19BA deals with the case where the Minister, department or Secretary still exists, but the administrative responsibilities have been re-allocated.

The Attorney-General’s Department is responsible for preparing section 19B and 19BA orders in consultation with other agencies. This will occur as soon as practicable after an AAO is signed. Section 19B and 19BA orders must be registered on the Federal Register of Legislative Instruments and will generally take effect on the day after the order is registered.

1.6 Roles of central agencies

Four agencies are central to the MoG process.

Agency Role
Department of the Prime Minister and Cabinet

Inform agencies of the Prime Minister’s decisions on machinery of government changes.

Australian Public Service Commission

Advise on movement of staff and PS Act coverage.

Power to move staff under section 72 of the PS Act.

Advise on policy framework for determining remuneration, terms and conditions of employment and workplace arrangements.

Department of Finance and Deregulation

Advise on transfer of appropriations, superannuation issues, accounting, reporting, banking, legal and governance structures issues.

National Archives of Australia

Advise on policy, mechanisms and standards for the transfer of information, records and data between agencies.

Permit transfer of custody or ownership of records outside the Commonwealth where appropriate.

1.7 Supporting newly created agencies

While there can be issues with the transfer of resources to a newly created agency, and the protocols outlined at Part 2.2 may be relevant, there are additional challenges in establishing a new agency.

It is the responsibility of portfolio Secretaries to provide adequate support to newly created agencies within the portfolio. The setting up of new agencies poses significant challenges which require a high level of judgement and knowledge. Support by portfolio Secretaries could take the form of loaning experienced staff with expertise in corporate functions, or arranging/ supporting secondments where APS employees from other portfolios are needed.

While it will be rare, where a new portfolio Department is established, there will need to be similar assistance provided by the Departments and agencies that are transferring functions to the new Department.

1.8 Senior Executive Service cap

A cap on the number of Senior Executive Service (SES) employees was implemented in conjunction with the Review of the SES, completed in early 2011. The Government approved a recommendation of that Review that the SES cap arrangements should continue for five years, to the end of 2016.

The SES cap is administered and monitored by the Commission. The Commission will need to be advised of any SES staff movements occurring as a result of MoG changes. For further information on SES cap matters, see Part 5.

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