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. Working within an integrated food regulatory system involving the governments of Australia and the New Zealand Government, we set food standards for the two countries.
Our ultimate goal is: a safe food supply and well-informed consumers. We have been given a range of responsibilities and powers under the FSANZ Act, listed in Appendix 3 and Appendix 6, which help us contribute to this outcome.
To achieve broad community support for our work and public confidence in our regulatory decisions, we maintain collaborative arrangements with our regulatory partners and with primary producers and processors, manufacturers, retailers, consumer organisations, public health bodies and other stakeholder groups.
FSANZ develops food standards, and joint codes of practice with industry, covering the content and labelling of food sold in Australia and New Zealand. Food standards provide the minimum regulatory burden necessary to maintain a safe food supply and informed consumers. In addition, the agency develops Australia-only food standards that address food safety issues – including requirements for primary production – and maximum residue limits for agricultural and veterinary drug residues.
We also undertake a range of other functions in Australia, such as national coordination of food surveillance and food recall systems, providing food handling advice to consumers, conducting research and supporting the Australian Quarantine and Inspection Service in the control of imported foods.
FSANZ is part of the Australian Government’s Health and Ageing portfolio. The Parliamentary Secretary for Health and Ageing, The Hon. Christopher Pyne MP, has executive responsibility for FSANZ.
How we develop food standards
To do business in Australia and New Zealand, food companies and retailers must comply with food standards (regulations) in the Australia New Zealand Food Standards Code. Food standards are legal requirements; non-compliance can attract penalties.
The trigger for the development of, or amendment to, a food standard can be an Application submitted by an outside body (usually a food business), a Proposal raised by FSANZ itself or policy advice issued by the Australia and New Zealand Food Regulation Ministerial Council. During the year, we received 20 Applications and initiated 2 Proposals.
The standard development process involves an evaluation of public health and other risks associated with the proposed change to the Code and the impact of the regulatory measures on the food industry and our international trading obligations. We then draft a legal standard for public comment. There may be one or more periods of public consultation for each standard.
Finally, the draft standard is considered for approval by the FSANZ Board and, if the Ministerial Council does not request a review of the decision within 60 days, we gazette (publish) the standard as law.
How we’re organised
FSANZ is a small agency, with offices in Canberra and Wellington, New Zealand. Our 146 employees are members of the Australian Public Service, including twelve people employed in New Zealand. We are governed by a Board with a wide range of expertise and experience in food matters, with members drawn from Australia and New Zealand.
We are organised into four Branches as shown in Figure 1.
Our place in the food regulatory system
Australia and New Zealand use food standards to maintain a safe food supply. As the standards-setting agency, FSANZ is therefore a key body in the food regulatory system, which involves three levels of government.
Figure 2 gives an indication of the linkages that contribute to the regulatory system.
The Parliamentary Secretary for Health and Ageing chairs the Australia and New Zealand Food Regulation Ministerial Council – the body that oversees the food regulatory system in Australia and New Zealand and which provides us with policy advice. This Ministerial Council comprises health and food ministers from the Australian and New Zealand governments and the governments of the Australian States and Territories. Other portfolios are also represented from time to time.
FSANZ sets food standards under the FSANZ Act and in response to guidelines from the Ministerial Council. We are assisted by our regulatory partners and by stakeholder groups, including consumers, the food industry and health professionals. However, we are not responsible for enforcing the standards. This is carried out by State and Territory jurisdictions, often through local government, and by the New Zealand Food Safety Authority.
Our reporting framework
Appendix 4 contains details of the outcomes and outputs structure we use in our reporting.
In summary, we report against the outcomes and performance measures identified in the FSANZ Budget Statement. We also give special attention in our reporting to priority areas for a given year. These are also contained in the Budget Statement and described in the Priorities and Performance section of this report.
In this way, we aim to provide the Australian Parliament and the community with evidence of financial accountability and achievement in addressing the primary goal of the agency: A safe food supply and well-informed consumers.
This year, we have reported against our commitmentsPortfolio Budget Statements 2005-06. Such commitments are made on an annual basis. They therefore reflect immediate priorities and issues. The FSANZ Board maintains a three-year corporate plan that provides a more strategic basis for our work. We have recently produced the document Corporate Plan 2006-09,which will provide guidance for the key strategic directions and performance indicators in our Budget Statements for those years.
We have also elected to describe our activities within four key result areas of the corporate plan: our regulatory measures; our stakeholders; our people; and our accountability. In risk management terms, failure in any one of these areas can compromise the integrity not just of FSANZ as a credible food regulator, but also the food regulatory system as a whole. It is therefore appropriate that we highlight progress in each area.
Our greatest contribution to accountability, however, is probably the transparency of our decision making, the openness and inclusiveness of our processes, and the independence of our advice. These approaches complement and enhance our formal reporting systems. They are major drivers for our business.
Summary of financial performance
In 2005-06, we received $13.770 million from the Australian Government. Because we also operate under an Agreement with New Zealand, the New Zealand Government contributes towards the costs of activities that we undertake for both countries – $1.356 million for the year. We also received limited revenues for fee-for-service activities and royalties on publications. In managing FSANZ’s finances, the FSANZ Board works to a four-year forward financial plan.
Financial outcomes
During the year, operating revenue – including revenue from the Australian and New Zealand governments – was $17.408million and operating expenses were $18.968 million. We funded the operating deficit of $1.560 million from our reserves. This was pre-approved by the Board and by the Minister for Finance and Administration as required by the Commonwealth Authorities and Companies Act 1997.
The Board agreed to an additional one-off expenditure of $1.532 million as a short-term measure to progress priority areas of work, with the main areas to receive this funding being:
- strengthening public health capability (page 55);
- strengthening social science capability (page 55);
- addressing under-resourcing in the dietary intake assessment area (page 53); and
- enhancing our information technology and communications systems capability (page 100).
Staff recruited to undertake these priority tasks have been employed on non-ongoing contracts, funded from reserves, as we can only maintain this level of expenditure for a limited period. However, we expect the benefits of this measure to have an immediate impact and to provide continuing benefits for the agency.
Four-year financial plan
The four-year plan has a number of assumptions relating to future income, changes in expenditure and the accrual of liabilities. We have assumed that revenue from the Australian Government is known from the Portfolio Budget Statements 2006-07. It includes additional Australian Government appropriations of $1.1 million in 2006-07 and $0.7 million in 2007-08 to implement the recommendations of a review conducted by the Food Regulation Standing Committee into FSANZ’s standards-setting processes. The New Zealand Government is making a proportional contribution.
In 2002-03, FSANZ received Australian Government funding for two programs. These programs are due to lapse at 30 June 2007 and will be reviewed in the 2007-08 budget process to determine whether they should continue. The first program funding is for the development of primary production and processing standards ($2.1 million over four years). The second is to meet increased costs incurred as a result of the creation of FSANZ in 2002 ($0.8 million over four years). We are seeking to have these funds made part of our on-going appropriations and we have assumed that these funds will continue for the period of the plan.
We expect other revenue to continue at levels similar to that received in 2005-06.
The four-year plan has two streams of expenditure: one for our base funding and the other for the priority expenditure identified above. We anticipate running a deficit budget again in 2006-07, but that expenditure will be reduced in 2007-08 and forward years to maintain a balanced budget.