Commonwealth Governance Structures Policy
Assessment Template – Review of New or Existing Body
This template is to assess the appropriateness of governance arrangements for new or
existing Australian Government bodies. The Governance Structures Policy provides an
overarching framework to ascertain fit for purpose governance structures, which includes
preventing the creation of unnecessary governance structures.
Section 1 through 3 of this template aims to identify and substantiate who is best placed to
undertake an activity and, if it is the Australian Government, the most appropriate
governance structure to achieve it. Section 4 is to provide greater substantiation of the
proposed structure (including the status quo) and a cost benefit analysis that compares the
proposed governance structure to at least two other possible structures.
Delete guidance notes in each section below once the section is completed.
Section 1: Details of Government body being reviewed
Portfolio:
[Insert portfolio name]
Body:
[Insert body name]
Purpose:
[Brief explanation of what the body does or will do]
Classification:
[Insert Classification]
Guidance notes:
Principal bodies
Commonwealth non-corporate and corporate or companies under the Public Governance,
Performance and Accountability Act 2013 (PGPA Act).
Secondary bodies
All other bodies, such as Committees, councils, boards, statutory office holders, advisory and
consultative bodies, COAG and inter-jurisdictional bodies and working groups linked to the
Australian Government.
Type of
government body:
[Insert Type of Government Body]
Guidance notes:
There are 12 types of bodies, the key characteristics of which are described as part of the
Australian Government Organisations Register. Types of bodies include, for example, noncorporate and corporate Commonwealth entities, Commonwealth companies, advisory bodies
and statutory office holders.
Specific review
recommendations
and/or
requirements:
[Insert any specific review recommendations and/or requirements]
Guidance notes:
Some reviews have been initiated at the direction of the Government through processes outside
of the smaller government reform agenda. Those reviews may have specific requirements that
need to be addressed when reviewing the governance arrangements of a body that complement
or are in addition to the requirements under the Governance Structures Policy.
Governance Assessment Template
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Page 1 of 5
Section 2: Review – Three stage governance gateway test
GATEWAY TEST 1
Does the
Commonwealth
have the
constitutional
power to
undertake the
activity?
Yes
[X]
There is constitutional power (i.e. a specific head of power or
executive power) or the activity has been formally referred
to the Commonwealth by the States.
Substantiate position and proceed to Test 2.
No
[X]
The Government cannot undertake or fund an activity where
it does not have the constitutional power or the activity has
not been formally referred to the Commonwealth by the
States. An alternative mechanism outside of the
Commonwealth Government may need to be considered.
Substantiate position and proceed to Section 4.
Substantiate position:
Guidance notes:


Can the activity be linked to an explicit legislative power of the Parliament or an executive
power of the Commonwealth contained in the Australian Constitution? Which one(s)?
Provide an overview of any legal advice obtained that explains the basis for your response to
gateway test 1, including any details of and considerations around potential constitutional risk
(your legal areas should be aware of this information following recent experience with the
Williams High Court case).
GATEWAY TEST 2
Is the Government
best placed to
undertake the
activity, in whole
or in part,
compared to an
external body?
Yes
[X]
The Government needs to undertake the activity and is best
placed to do so (e.g. more efficient, more effective or to
mitigate identified risks)
Substantiate position and proceed to Test 3.
No
[X]
The activity might be best undertaken outside of the
Government. The Government should cease the activity.
Substantiate position and proceed to Section 4.
Substantiate position:
Guidance notes:







What is the rationale for your response to gateway test 2?
What is the best mechanism to do the activity? Who is best placed to do the activity? Examples
include grants to state or territory governments, the private sector or the not-for-profit sector.
What is the level of involvement required of the Government? How is this best achieved in the
context of the governance principles set out in the Governance Structures Policy?
Does the activity need to be coordinated at the national level and why?
Is the Commonwealth obliged to perform the activity (eg. under a treaty, legislative provision or
public commitment)?
How directly or indirectly involved does the Government need to be, and why?
Would an arm’s-length arrangement effectively achieve the outcome (e.g. a funding
agreement)?
Governance Assessment Template
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Section 2: Review – Three stage governance gateway test
For principal bodies, the activity could be merged,
consolidated or subsumed within an existing principal
Commonwealth entity, in whole or in part (i.e. back office
merger, the cessation or transfer of some activities
GATEWAY TEST 3
Can the activity be
conducted by an
existing
Commonwealth
body, in whole or
in part?
Yes
[X]
For secondary bodies, the activity could be merged with or
subsumed within an existing body.
Substantiate position and proceed to Section 4.
The status quo or new entity may be appropriate.
No
[X]
Substantiate position and proceed to Section 3.
A governance assessment that validates the body’s current
governance structure will be required at Section 4.
Substantiate position:
Guidance notes:






What is the most efficient arrangement for the activity?
What would the new structure look like (e.g. activity rolled into an existing division or section
with a distinct branding)?
Are changes needed to existing legislation or company constitutions?
Are similar activities being undertaken already by an existing body operating in a similar area?
Statutory and non-statutory activities can often operate from within an existing body.
If the status quo is considered to be most appropriate, then provide an appropriate analysis
(refer to Section 4 below).
Section 3: Validation of existing structure
3.1 – Does the
body require
enabling
legislation?
Yes
[X]
Substantiate position and proceed to 3.2.
No
[X]
Substantiate position and proceed to 3.3.
Substantiate position:
Guidance notes:



3.2 – Will the
body exercise
coercive or
regulatory powers?
Is statutory independence from government required for the body?
Is legislation required to set clear roles and responsibilities, as well as mandate accountability
and transparency requirements?
Is a ministerial power of direction required in legislation?
Yes
[X]
Substantiate position and proceed to 3.3.
No
[X]
Substantiate position and proceed to 3.4.
Substantiate position:
Guidance notes:

Will the body involve regulatory functions under a law of the Commonwealth
(e.g. investigation, enforcement, registrations, or collection of taxes or fees)?
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Section 3: Validation of existing structure
3.3 – Will the body
primarily
undertake a noncommercial and
core government
function?
Yes
[X]
Substantiate position and proceed to 3.4.
No
[X]
Substantiate position and proceed to 3.5.
Guidance notes:


3.4 – Does the
body need to sue
or be sued, or does
it need to hold
money outside the
legal entity of the
Commonwealth?
Yes
Will the body undertake core government or policy functions?
Will it be primarily budget-funded?
[X]
The body could be structured as, or within, a corporate
Commonwealth entity, with staff employed under the Public
Service Act 1999 (unless there is a persuasive operational need
to employ staff otherwise).
Substantiate position and proceed to Section 4.
No
[X]
The body could be structured as, or within, a non-corporate
Commonwealth entity, with staff employed under the Public
Service Act 1999 (unless there is a persuasive operational need
to employ staff otherwise).
Substantiate position and proceed to Section 4.
Substantiate position:
Guidance notes:

3.5 – Does the
body have a
commercial focus?
Yes
Identify whether staff will be employed under the Public Service Act 1999? This will likely be
the case unless there is a persuasive operational need to employ staff through other
mechanisms.
[X]
The body could be structured as, or within, a corporate
Commonwealth entity.
Substantiate position and proceed to Section 4.
No
[X]
The body could be structured as, or within, a non-corporate
Commonwealth entity with staff employed under the Public
Service Act 1999 (unless there is a persuasive operational need
to employ staff otherwise).
Substantiate position and proceed to Section 4.
Substantiate position:
Guidance notes:





Does or will the body operate in a commercial market with its primary motive and focus being
profit making?
If yes, then in limited circumstances, it may be appropriate to establish the body as, or within, a
Commonwealth company incorporated under the Corporations Act 2001.
If yes, consider whether the entity should be established under section 87 of the PGPA Act.
If no, consider whether staff will be employed under the Public Service Act 1999? This will likely
be the case unless there is a persuasive operational need to employ staff through other
mechanisms.
Finance Ministerial approval is required prior to creation and announcement of a
Commonwealth company or an entity established under section 87 of the PGPA Act.
Governance Assessment Template
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Section 4: Cost benefit analysis – Review outcomes and resulting proposal
4.1 – Provide a
summary of review
findings and
alignment with the
Governance
Structures Policy.
4.2 – Provide a cost
benefit analysis.
Guidance notes:


Guidance notes:


4.3 – Proposed
review outcome
Provide a summary of review findings, including any need to change the governance
arrangements for an existing body.
Substantiate how the proposed governance arrangement meets the requirements of the
Governance Structures Policy.

In support of this, include a cost benefit analysis that compares and contrasts a minimum of
three viable options for a body’s governance structure.
The proposed governance changes may result in the need for a New Policy Proposal (NPP) to be
developed. The NPP needs to be prepared in accordance with Budget Process Operating Rules
and will assessed in accordance with the normal Budget process and timing.
Review outcomes could include proposing to:

Abolish a body (i.e. cease – body to be ceased, consolidation – cease body with the
function/activity undertaken by a portfolio department, transfer out – cease the body as
the function/activity is to be undertaken outside of the Commonwealth);

Merge a body into another non-departmental body (for example, another advisory body
etc) ;

Merge the back office functions (i.e. multi-entity shared corporate services arrangements
etc); and


Maintain the status quo.
If this template is used to assess the possible creation of a new body, ensure that the proposed
governance structure is considered and the outcome if this consideration is articulated here,
including:

details of the type of government body (example, non-corporate and corporate
Commonwealth entities, Commonwealth companies, advisory bodies and statutory office
holders); and

relevant financial implications (i.e. funded through direct appropriation, funded from
existing departmental funding); and

delivery mechanism and other relevant governance information (for example, staffing
considerations such as whether staff are Australian Public Service Act 1999 employees,
contracted specialist consultants, office holders paid via Remuneration Tribunal
determination conditions etc).
Governance Assessment Template
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