Go to top of page

Machinery of Government changes: A guide

Key message

Agencies deliver their corporate services through different operating models. Negotiating an agreement for the transfer of corporate staff, assets and appropriation can be complex.

The underlying focus is to achieve the most efficient and effective whole-of-government outcomes in support of the Government's objectives.

1. Agencies are expected to implement change in a way that is consistent with the principles outlined in the Executive Summary.

Corporate functions

2. The movement of corporate staff, assets and appropriations is for negotiation between affected agencies.

3. For a straightforward Machinery of Government (MoG) change where corporate delivery models are similar and costing methods are comparable, it may be appropriate for the transfer of corporate resources to be proportionate to the number of other staff moving from one agency to another.

4. Where a MoG change affects multiple agencies, or where corporate services are delivered and/or costed in different ways, then identifying employees to be moved and agreeing on the transfer of assets and funding is more complex.

5. As a general rule, decisions on the transfer of corporate staff, assets and appropriations following a MoG change should allow agencies to continue to deliver their corporate services in accordance with their existing operating models.

Where a MoG change is complex

6. If the MoG change is large, the New Policy Proposal - Standard Departmental Costing template (the template) should be used as a guide for the transfer of corporate services in the first instance.

7. It may not be appropriate to use the template where corporate services are funded differently and this could result in a windfall gain to once agency.

8. If there is no agreement to use the template, the funding to be transferred should be the total expenditure that the losing agency was going to commit to the function prior to the MoG change being announced.

Where a MoG change is small

9. If there is no mutual agreement by the parties to agree to a different model for funding transfers, the template should be used as the default to calculate the corporate services funding to be transferred.

Shared services

10. Where the losing and/or gaining entities involved in a Machinery of Government change uses a Shared Service Provider (SSP), the following guidelines apply:

The gaining and losing agencies use an SSP

  • Where all affected agencies use an SSP for corporate services, only funding to perform the corporate service function will be transferred.
  • Transfer of funding will take account of SSP costs, where these are different.
  • Memoranda of Understanding (MOUs) with SSPs can be updated as necessary

The gaining agency uses an SSP and the losing agency does not use an SSP

  • The gaining agency will normally receive funding, and not staff, for the relevant corporate services and the SSP of the gaining agency will normally receive the required staff to provide the additional corporate services.
  • Excess staff will remain with the losing agency to arrange redeployment or redundancy.
  • The SSP will continue to provide corporate services to the gaining agency, updating the relevant MOUs as necessary.

The gaining agency does not use an SSP and the losing agency does use an SSP

  • The gaining agency may have higher operating costs for corporate services than the losing agency. It is open to the gaining agency to arrange for the losing agency's SSP to continue to perform the corporate services function.
  • It is also open for the gaining agency to move their corporate services function to the losing agency's SSP.