EXPLANATORY STATEMENT

Issued by authority of the Minister for Finance

Public Governance, Performance and Accountability Act 2013

Public Governance, Performance and Accountability Rule 2014

Public Governance, Performance and Accountability Amendment (Procurement Reporting Measures) Rules 2026

The Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) set out a framework for regulating resource management by Commonwealth entities and companies.

Section 101 of the PGPA Act provides that the Finance Minister may make rules by legislative instrument to prescribe matters giving effect to the Act.

Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws) the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend or vary any such instrument.

The Public Governance, Performance and Accountability Amendment (Procurement Reporting Measures) Rules 2026 (the Amendment Rules) amends the PGPA Rule to:

• modify the current annual reporting requirement for non-corporate Commonwealth entities (NCEs) at paragraph 17AG(10)(c) in response to the cessation of the Pay On-Time Survey (Survey). The amendment reflects the decision to cease the Survey after the 2021-22 reporting period and that information about NCE performance against the Supplier Pay On-Time or Pay Interest Policy is found on the NCE’s website, rather than on the Department of the Treasury’s website;
• introduce a new annual reporting requirement at section 17BG for corporate Commonwealth entities (CCEs) prescribed under section 30 of the PGPA Rule. The amendment requires prescribed CCEs to include an assessment of their performance against the Commonwealth Procurement Rules (CPRs), aligning with existing reporting requirements for NCEs. This amendment reflects the Government’s intention to implement Recommendation 4 in the Joint Committee of Public Accounts and Audit Report 498: Commitment issues – An inquiry into Commonwealth Procurement; and
• make several administrative amendments to improve its clarity.

The amendment to introduce a new reporting requirement for CCEs reflects a decision of Government to adopt a recommendation from the Joint Committee of Public Accounts and Audit (JCPAA) to improve entities’ reporting of compliance with the CPRs.

The CPRs are issued by the Minister for Finance under subsection 105B(1) of the PGPA Act. The CPRs set out the rules that Commonwealth officials from NCEs and prescribed CCEs must follow when performing duties related to procurement. The CPRs are remade as required to give effect to government policy or improve their clarity.

The CPRs incorporate the requirements of Australia’s international trade obligations and government policy into a set of rules which apply to Commonwealth procurement. The CPRs are written in plain English, reflecting their purpose in being a set of rules procuring officials can and must refer to when undertaking relevant procurements.

Under subsection 46(4) of the PGPA Act, the JCPAA must approve the rules prescribing annual report requirements. The Amendment Rules were approved by the JCPAA on 30 March 2026.

The principal instrument amended by the Amendment Rules, the PGPA Rule, is exempt from sunsetting pursuant to paragraph 54(2)(b) of the Legislation Act 2003, which provides that instruments prescribed by regulation are not subject to sunsetting.

The exemption was inserted by the Legislation (Exemptions and Other Matters) Amendment (2023 Measures No. 1) Regulations 2023 as item 53A in the table at section 12 of the Legislation (Exemptions and Other Matters) Regulations 2015.  

The PGPA Rule was made exempt from sunsetting pursuant to the following criteria (as provided for in the Attorney-General's Department’s Guide to managing sunsetting of legislative instruments):

• sufficiently large and complex that the administrative burden associated with remaking the instrument would outweigh any regulatory benefit 
• subject to regular review, and 
• subject to regular amendment. 

Further details on the basis for the exemption from sunsetting can be found in the explanatory statement to the Legislation (Exemptions and Other Matters) Amendment (2023 Measures No. 1) Regulations 2023. 

The Amendment Rules are a legislative instrument for the purposes of the Legislation Act 2003 and a disallowable instrument.

The Amendment Rules are subject to section 48A of the Legislation Act 2003, which automatically repeals legislative instruments whose only effect is to amend or repeal one or more other legislative instruments.

The whole of the instrument commences on the day after the instrument is registered.

Details of the Amendment Rules are set out in Attachment A. A statement of compatibility with human rights is at Attachment B.

Consultation

All NCEs and prescribed CCEs that existed at the time of consultation (102 NCEs and 25 prescribed CCEs) were consulted on the draft amendment. Entities were also consulted on the proposed subsequent changes to the relevant Department of Finance Resource Management Guides.

Eleven NCEs provided feedback, with no submissions from prescribed CCEs.

NCEs supported the intent to strengthen accountability and increase transparency although several NCEs noted there needed to be an appropriate balance between improved reporting and minimising administrative burden.

Feedback indicated the need for additional guidance for entities in adopting the proposed changes. The Resource Management Guides (RMG): Annual reports for non‑corporate Commonwealth entities (RMG 135) and Annual reports for corporate Commonwealth entities (RMG 136) will be amended to provide guidance to entities in preparing procurement performance information to include in their annual report to comply with the amendment to the PGPA Rule, and will incorporate entity feedback where possible.

The Amendment Rules were drafted by the Office of Parliamentary Counsel.

ATTACHMENT A

Details of the Public Governance, Performance and Accountability Amendment (Procurement Reporting Measures) Rules 2026

Section 1 – Name

This section states that the name of this instrument is the Public Governance, Performance and Accountability Amendment (Procurement Reporting Measures) Rules 2026.

Section 2 – Commencement

This section provides that the whole of the instrument commences on the day after the instrument is registered.

Section 3 – Authority

This section provides that this instrument is made under the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

Section 4 – Schedules

This section provides that the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) is amended as set out in Schedule 1 to this instrument.

Schedule 1—Amendments

Part 1—Procurement reporting measures

Item 1 – Section 4 (definition of Commonwealth Procurement Rules)

This item repeals the definition, including the note, and substitutes with an updated definition which references the current Commonwealth Procurement Rules (CPRs) that came into force on 17 November 2025.

The CPRs set out rules that officials from non-corporate Commonwealth entities (NCEs) and prescribed corporate Commonwealth entities (CCEs) must follow when performing duties related to procurement. The CPRs are publicly available on the Federal Register of Legislation.

The CPRs are applied as at17 November 2025.

Item 2 – Section 17AA (paragraph beginning “These requirements”)

This item repeals the paragraph beginning “These requirements” as the information is no longer required.

Item 3 – Paragraph 17AG(10)(c)

This item omits the sentence “The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website”, and substitutes with “Further information on payment times can be found at [entity web address]” as the Survey of Australian Government Payments to Small Business (Survey) has ceased with agreement from the Prime Minister.  

The Treasury had responsibility for compiling the payment performance of NCEs against the Supplier Pay On-Time or Pay Interest Policy (the Policy) for contracts valued at or below $1 million (GST inclusive). The $1 million threshold was used as a proxy to identify contracts with Small and Medium Enterprises (SMEs). Responses received as part of the Survey were collated in the Pay On‑Time Survey Performance Report (Report) prepared by the Treasury and published on the Treasury website. On 1 July 2022, the Policy was extended to all Commonwealth contracts and removed the $1 million threshold. This meant that the Policy, while not previously explicitly targeting SMEs, no longer measured the timeliness of NCE payments to SMEs.

The Treasury released the final Report for the 2021–22 financial year on 5 April 2023, and the Prime Minister agreed to cease the Survey on 6 May 2024. The proposed amendment will reflect that while NCEs must still report on payment timeframes, this information is no longer available on the Treasury website. To provide transparency of the impact of the updated Policy, NCEs are now required to maintain information on their performance against Payment Times/Pay On-Time Policy on their website and reference this in their annual report.

Item 4 – Subsection 17AG(10) (note)

This item repeals the note and substitutes with an updated note removing specific paragraph references to the CPRs to streamline the instrument.  

Item 5 – Section 17BA (paragraph beginning “These requirements”)

This item repeals the paragraph beginning “These requirements” as the information is no longer required.

Item 6 – At the end of Subdivision B of Division 3A of Part 2-3  

This item inserts a new section 17BG “Additional requirement for prescribed corporate Commonwealth entities” which establishes a requirement for CCEs prescribed in section 30 of the PGPA Rule to include information on the entity’s performance during the period against the CPRs.

The table in section 30 of the PGPA Rule prescribes the CCEs that are subject to the CPRs, or any written instrument created by the Finance Minister concerning procurement that affects those CCEs. NCEs and their functions are automatically ‘relevant entities’ for the CPRs. Prescribed CCEs are also considered ‘relevant entities’ for the CPRs. CCEs prescribed through section 30 of the PGPA Rule to date perform functions, either in part or in full, that are considered ‘covered procurement’ under Australia’s international government procurement obligations. Relevant international obligations have been incorporated in the CPRs.

The current reporting for compliance with the CPRs is limited to NCEs only. This amendment will extend annual reporting requirements to prescribed CCEs to include more detailed procurement performance information. The reporting of compliance with the CPRs will enable the Commonwealth to better measure and assess the effectiveness of the procurement framework, identify areas of risk and implement timely intervention strategies, where needed. The information will offer additional transparency of prescribed CCE compliance with the CPRs. This will also enable consistent reporting for entities subject to the CPRs to report on compliance.

Item 7 – Schedule 2 (table item dealing with PGPA Rule Reference 17AG(10)(c), column headed “Description”)

This item omits “The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website”, and substitutes “Further information on payment times can be found at [entity web address]” in the table. This item aligns with the amendments to paragraph 17AG(10)(c) of the PGPA Rule at Item 3 of this instrument, reflecting the cessation of the Survey and that information on payment times will be made available on the entity’s website.

Item 8 – Schedule 2A (at the end of the table)

This item inserts a new row at the end of the List of Requirements table at Schedule 2A of the PGPA Rule to reflect the requirement prescribed in new section 17BG.

Part 2—Transitional provisions

Public Governance, Performance and Accountability Rule 2014

Item 9 – In the appropriate position in Chapter 5

This item inserts a new section 44 which provides that amendments of this instrument relating to an annual report apply to any reporting period that beings on or after 1 July 2025.  

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Public Governance, Performance and Accountability Amendment (Procurement Reporting Measures) Rules 2026

The Public Governance, Performance and Accountability Amendment (Procurement Reporting Measures) Rules 2026 (Amendment Rules) are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) establish a framework for regulating resource management by Commonwealth entities and companies.

Section 101 of the PGPA Act provides that the Finance Minister may make rules by legislative instrument to prescribe matters giving effect to the Act.

The Amendment Rules amend the PGPA Rule to:

• modify the current annual reporting requirement for non-corporate Commonwealth entities (NCEs) at paragraph 17AG(10)(c) in response to the cessation of the Pay On-Time Survey (Survey). The amendment reflects the decision to cease the Survey after the 2021-22 reporting period and that information about NCE performance against the Supplier Pay On-Time or Pay Interest Policy is found on the NCE’s website, rather than on the Department of the Treasury’s website;
• introduce a new annual reporting requirement at section 17BG for corporate Commonwealth entities (CCEs) prescribed under section 30 of the PGPA Rule. The amendment requires prescribed CCEs to include an assessment of their performance against the Commonwealth Procurement Rules (CPRs), aligning with existing reporting requirements for NCEs. This amendment reflects the Government’s intention to implement Recommendation 4 in the Joint Committee of Public Accounts and Audit Report 498: Commitment issues – An inquiry into Commonwealth Procurement; and
• make several administrative amendments to improve its clarity.

Human rights implications

The Amendment Rules do not engage any of the applicable rights or freedoms.

Conclusion

The Amendment Rules are compatible with human rights as they do not raise any human rights issues.

Senator the Hon Katy Gallagher

Minister for Finance