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.
FSANZ is part of the Australian Government’s Health and Ageing portfolio. From 1 July 2006 to 21 March 2007, the Parliamentary Secretary for Health and Ageing, the Hon. Christopher Pyne MP, had executive responsibility for FSANZ. On 21 March, Senator the Hon Brett Mason was appointed Parliamentary Secretary for Health and Ageing and assumed responsibility for the agency.
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.
On 1 July 2007, the Food Standards Australia New Zealand Amendment Act 2007 was proclaimed, which will apply to all Applications to amend the Australia New Zealand Food Standards Code received on or after 1 October 2007.
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.
How we’re organised
FSANZ is a small agency, with offices in Canberra and Wellington, New Zealand. Our 146 employees have expertise in a range of disciplines, including microbiology, toxicology, food technology, dietary modelling, nutrition, food surveillance, law, communication, social sciences and economics.
We are governed by a 12-person Board, which approves recommendations for changes to the Food Standards Code made by FSANZ staff. Members of this Board, chaired by the Hon Rob Knowles AO, have been drawn from a wide range of stakeholder interests; three places on the Board are reserved for members from New Zealand.
At the operational level, we are led by a Chief Executive Officer, who is also a member of the Board. We are organised into five Branches, as shown in Figure 1, headed by a General Manager and our Chief Scientist.
Our place in the food regulatory system
The food regulatory system involves government at all levels in Australia and New Zealand (Figure 2). The Australia and New Zealand Food Regulation Ministerial Council, chaired by the Parliamentary Secretary for Health and Ageing, sets policy for food regulation in the two countries (except for food hygiene and some other matters in New Zealand) and is assisted in this regard by the Food Regulation Standing Committee (FRSC). This Council comprises the health and food ministers from the Australian and New Zealand Governments and the governments of the Australian States and Territories.
Policies, guidelines and other directions from the Ministerial Council feed into the standard-setting work carried out by FSANZ. In addition, our role and functions are prescribed by the FSANZ Act, and it is from this Act that we are required to base our regulatory decisions on the best available scientific information. We also seek to inform our decision-making with economics, social research and other evidence relating to the food matter in question.
Once we have gazetted (published) a food standard in the Australia New Zealand Food Standards Code, State and Territory agencies and the New Zealand Food Safety Authority assist industry to comply with the new regulation and enforce compliance. Non compliance can attract prosecution and possible penalties.
Our reporting framework
FSANZ’s accountability cycle commences with the agency’s Corporate Plan, which identifies four key result areas, and objectives for those areas, against which the Board assesses the performance of the agency. We are currently working to a three-year plan, spanning 2006-09.
The next step involves the Portfolio Budget Statement, a document that we prepare for the Australian Government, where we indicate the strategic directions of our work for the next financial year, the indicators and measures that we intendto use to monitor progress and the anticipated cost of this work. The Portfolio Budget Statement addresses the key result areas of the Corporate Plan, modifying the objectives and performance measures in the plan to suit the one-year timeframe of the Portfolio Budget Statement.
The annual report closes the accountability loop by providing details of how effectively we spent our budget allocation from the Australian Government and other sources.
In the annual report, we report progress against the key strategic directions listed in the Portfolio Budget Statement and actions that we took during the year that are subject to performance targets. Some of these targets are quantitative; others are qualitative. We also report where we have been unable to meet statutory timeframes in the completion of Applications and our responses to work referred to us by the Ministerial Council.
In its Report on Annual Reports 2007, the Senate Community Affairs Committee highlighted a comment from our 2005-06 annual report which stated: “…FSANZ considers that its greatest contribution to accountability 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’…”
We restate this view. Transparency not only provides the Australian Government with evidence of financial prudence and good governance by the agency, but also contributes to a high level of trust in the community in the food regulatory system. And public confidence in food, and government ability to protect consumers, is the ultimate goal of FSANZ and its regulatory partners.
How we develop food standards
Any individual or organisation can apply to have the Food Standards Code amended. However, the vast majority of Applications received come from the food industry seeking approval for the sale of new foods and the introduction of new food technologies, the use of food additives and processing aids, adjustments to pesticide residue levels allowed in food and changes to food labelling requirements.
We operate an inclusive and transparent process for the assessment of such Applications, including periods of public consultation, when we invite all parties with an interest in a food matter to provide evidence and opinion. Our assessment reports are made publicly available on our website. We also invite public comment through media advertising and on-line notifications to people on our Register of Interested Parties.
Our standard-development process falls into two main components: risk assessment and risk management. In line with international best practice, we conduct these two functions in different parts of our agency, bringing the two together at key stages of the process.
In summary, the risk assessment identifies the scientific hazards associated with a particular food issue or requested change to the Code, and the likelihood and severity of risks associated with those hazards. Risk assessors provide answers to questions posed by the risk managers, such as what is the prevalence of a particular pathogen in a food or industry sector? On receipt of the risk assessment, the risk managers consider whether existing regulatory measures provide sufficient protection to consumers or whether a change to provisions in the Code is warranted.
Although the driving force behind our decisions is one of consumer safety, we are also obliged by the FSANZ Act to consider the potential effect of our decisions on the food industry and on trade. We will only impose the minimum requirement necessary to achieve the food safety objectives. In addition, we also take into account dietary guidelines and other government health objectives in making decisions.
We publish our draft regulatory measures and invite governments, consumers, public health professionals and other stakeholders to comment. After considering submissions, we prepare a final report for the FSANZ Board which recommends a change to the Code. This final report summarises the public submissions and our response to them.
After the Board has approved a food standard, the Ministerial Council has sixty days in which to request us to review our decision. If no review(s) is required, or on completion of the review(s), the standard is gazetted and incorporated into theAustralia New Zealand Food Standards Code.
FSANZ also raises Proposals itself for changes to the Code. These are dealt with in the same way as described above. Proposals tend to be major projects, applying across whole industry sectors (e.g. primary production and processing standards) or to measures concerned with improving the health of the population (e.g. mandatory fortification).
In the section on Our Regulatory Measures, we discuss in some detail how the amended FSANZ Act will affect our processes and procedures.
Appendix 4 describes the outcomes and outputs structure of our reporting framework.
Summary of financial performance
In 2006-07, we received $15.039 million from the Australian Government. As part of the bilateral partnership agreement with New Zealand, the New Zealand Government contributed a further $1.739 million towards the costs of joint activities that we undertake for both countries. We also received limited revenues for fee-for-service activities and royalties on publications. In managing FSANZ’s finances, the FSANZ Board, through its Finance, Audit and Risk Management Committee, works to a four-year financial plan.
Financial outcomes
During the year, operating revenue – including revenue from the Australian and New Zealand Governments – was $18.751 million and operating expenses were $20.668 million. We funded the operating deficit of $1.529 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 FSANZ Board agreed to the operating deficit in order to ensure that we were able to continue to progress high priority work areas:
- Improving the effectiveness of food standards (page 47);
- Enhancing the evidence base for standards setting (page 59);
- Increasing the efficiency of our processes (page 29);
- Strengthening our engagement with stakeholders (page 71); and
- Fostering a collaborative regulatory system (page 78).
The year has again proved challenging in achieving these priorities. Accommodation has been an issue for us in 2006-07, with both the Canberra and Wellington offices filled to capacity. We expect to take up additional accommodation in September 2007.
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 2007-08. Included is additional funding 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 has made a proportional contribution.
Last year, and again in 2006-07, we ran an operating deficit funded from our reserves in order to deal with work priorities. The Australian Government has recognised our situation and agreed to provide additional funding in 2007-08 and forward years of approximately $3.1 million per annum. In addition, in 2007-08 the Government has provided $0.63 million to meet the costs of acquiring and fitting out additional office accommodation. The New Zealand Government is also increasing its contributions.
The four-year financial plan for 2007-08 and forward years assumes that FSANZ will operate a balanced budget over that period. We expect inevitable changes to both revenue and the level of expenditure as new priorities emerge and work loads change. The Finance, Audit and Risk Management Committee and the Board regularly review the four-year plan to ensure that our future financial position remains sound.