Corporate Overview
Who we are
Food Standards Australia New Zealand (FSANZ) is an independent statutory agency established by the Food Standards Australia New Zealand Act 1991.This was enacted following agreement between the governments of Australia and the States and Territories (through the Intergovernmental Food Regulation Agreement 2000) and the governments of Australia and New Zealand (under a Treaty), for a single bi-national food standards setting agency.
Our Vision
- To protect the health and safety of people in Australia and New Zealand through the development of effective food standards.
We do this collaboratively with all Australian governments and the government of New Zealand and with our industry, consumer and public health stakeholders.
Our Mission
Within the context of that vision, our mission is:
- To work as productive partners in the Australian and New Zealand food regulatory system.
Role and functions
Our role is to protect and inform consumers through the development of effective food standards and in a way that helps stimulate and support growth and innovation in the food industry.
We are responsible for developing, varying and reviewing standards and for developing codes of conduct with industry for food sold in Australia and New Zealand covering labelling, composition and contaminants. In Australia, FSANZ also develops food standards for food safety, maximum residue limits, primary production and processing and undertakes a range of other functions, including the coordination of national food surveillance and recall systems, conducting research and assessing policies about imported food.
Our main function is to develop, vary or review food regulatory measures, whether as a result of an Application from an outside body, through a Proposal of our own or by responding to policy initiatives from the Ministerial Council.
We do this by:
- assessing Applications and Proposals to amend or vary theAustralia NewZealand Food Standards Code;
- monitoring and evaluating hazards in food to support the development of food regulatory measures;
- fostering national and international networks; and
- strengthening the evidence base for food standards decision-making.
Appendix 6 details FSANZ’s functions and powers.
Ministerial responsibility
The Parliamentary Secretary to the Minister for Health and Ageing, The Hon. Christopher Pyne MP, has executive responsibility for FSANZ. Mr Pyne chairs the Australia New Zealand Food Regulation Ministerial Council.
Assessment of applications/proposals to amend/vary the Code
The Australia New Zealand Food Standards Code (the Code) came fully into effect in Australia and New Zealand in December 2002 when the former Australian Food Standards Code and the New Zealand Food Regulations were repealed.
During the year we received 23 Applications and prepared 8 Proposals, and finalised 24 Applications and 5 Proposals. Each Application and Proposal is the subject of comprehensive assessment and public consultation.
The FSANZ Board approves new standards or variations to food standards in accordance with policy guidelines set by the Australia and New Zealand Food Regulation Ministerial Council (Ministerial Council) made up of Australian Government, State and Territory and New Zealand Health Ministers as lead Ministers, with representation from other portfolios.
The process for amending the Code is prescribed in the Food Standards Australia New Zealand Act 1991(FSANZ Act). Figure 1 represents the different stages in the process, including the periods of public consultation. This process varies for matters that are urgent or minor in significance or complexity.
Organisation structure
We are part of the Australian Government’s Health and Ageing portfolio.
In response to the findings of an external Strategic Review carried out in 2003, FSANZ was restructured into four Branches to give effect, as practically as possible, to the functional separation of risk assessment of public health and safety hazards from the risk management function, to strengthen FSANZ’s science function, and to expand the role of the Wellington office.
These Branches are:
- Food Standards (Canberra)
- Food Standards (Wellington)
- Scientific Risk Assessment & Evaluation
- Food Safety & Services
A key feature of the reorganisation was to move to a flatter structure with less senior executive staff.
Details of our organisational structure are provided in the section of the Report under Our Accountability.
Report against the Corporate Plan
This annual report focuses on the performance of Food Standards Australia New Zealand as specified in the Portfolio Budget Statement and our Corporate Plan. The Corporate Plan describes our four key result areas – Our Regulatory Measures, Our Stakeholders, Our People, Our Accountability – and the management strategies that set out how the organisation will achieve its objectives and performance targets. The Corporate Plan provides the broad direction and priorities and establishes the basis for more detailed business plans and performance agreements for all staff.
Outcomes and outputs structure
The services provided by FSANZ contribute to one of the Health and Ageing Portfolio’s nine outcomes - the Population Health and Safety outcome:
- promotion and protection of the health of all Australians and minimising the incidence of preventable mortality, illness, injury and disability.
We seek to advance this outcome through the maintenance of a safe food supply.
In terms of the 2004-2005 Portfolio Budget Statement (PBS) we identified three major indicators of performance. Tables 1, 2 and 3 summarise our achievements against the targets identified in the Portfolio Budget Statements.
Appendix 4 provides details of our Outcomes and Output Structure.
Summary of financial performance
FSANZ is an Australian Government statutory agency and therefore operates primarily through an Australian Government appropriation. In 2004-2005 we received $13.515 million from the Australian Government. Because we also operate under an Agreement with New Zealand, the New Zealand Government also contributes towards the costs of those activities we undertake for Australia and New Zealand. In 2004-2005 this amounted to $1.395 million.
We also receive limited revenues for fee-for-service activities and royalties on publications. In accordance with the Commonwealth Authorities and Companies Act1997 the FSANZ Board is responsible for FSANZ’s financial management and operates in accordance with a forward financial plan.
Financial Outcomes
Operating outcome
During 2004-2005 operating revenue, including revenue from the Australian and New Zealand governments, was $17.397 million and operating expenses were $16.834 million, resulting in a net operating surplus of $0.563 million.
The operating surplus was $0.563 million higher than the budget as reported in the Portfolio Budget Statements 2004-2005. The higher surplus was due to contract services not being delivered as originally planned.
Operating revenue
Total operating revenue of $17.397 million compares to total actual revenue of $16.555 million for 2003-2004. The main changes related to an increase in the value of international training projects undertaken by FSANZ and funded by AusAid.
Operating expenses
Total operating expenses of $16.834 million compares to total operating expenses of $15.460 for 2003-2004. The main changes relate to increases in employee and administrative costs.
Equity
Our total equity increased by $0.472 million to $4.396 million in 2004-2005. The operating surplus of $0.563 million was offset by a decrease in reserves of $0.091 million due to the revaluation of non-current assets to fair value.
Total assets
The total value of FSANZ’s assets increased by $0.524 million to $8.385 million in 2004-2005. The main changes related to an increase in cash reserves offset by a decrease in the value of non-current assets.
Total liabilities
Our total liabilities increased by $0.053 million from last financial year to $3.990 million. The main changes related to an increase in employee provision for salaries and wages, superannuation and performance based pay.
Cash flows
Overall there was an increase in our cash balance, which increased by $0.862 million to $7.603 million as at 30 June 2005. The net increase in cash held primarily reflects the operating surplus and changes in balances of employee provisions and payables.
Four - Year Financial Plan
To date, FSANZ has operated on a three-year forward financial plan, reviewed annually by the Board. FSANZ has paid specific attention to the organisation’s equity target and the balance between staff costs and operating costs in its forward planning.
The revised Financial Plan:
- has been restructured in a format that includes a statement of financial performance (profit and loss), a statement of financial position (balance sheet), and cash flows;
- is a four year plan to align with the four year forward estimates of government appropriation in the Australian Government’s Portfolio Budget statements;
- includes provisions for managing (replacing or upgrading, as required) FSANZ’s capital items; and
- establishes a new suite of appropriate financial targets for the organisation.
The Four-Year Financial Plan sets some specific financial targets. We aim for:
- a working capital (current ratio) of about 1.5:1 (current assets divided by current liabilities). This is consistent with our previous approach and ensures that in any one year FSANZ could more than meet its short-term liabilities from its short-term assets;
- an end-of-year operating surplus or balanced budget in order to ensure the long-term viability of the organisation;
- total assets exceeding total liabilities; and
- a total equity position that is positive, in the order of $500,000, to allow for unexpected contingencies.
We have included a capital/asset management component into the four-year plan. This will allow us to stabilise the draw on the budget by ironing out the peaks and troughs that occur during the year. FSANZ’s major assets include office partitioning, computer hardware and in-house proprietary computer systems.
Our salary costs are the major, and increasing, component of our operating budget. We are in the process of looking at an appropriate staff/operating costs ratio and are undertaking an analysis of specific costs together with the drivers behind these costs.
The ratio of administrative costs to salary costs has dropped steadily from 79.48% in 2000-01 to 47.6% in 2003-2004, showing that savings have been largely achieved through productivity gains and by reducing administrative expenses.