Senator O'BRIEN —Turning to the ERDC funding issue, the budget amount for next financial year of $1.54 million is a drop of 92[half ] per cent from the current financial year estimated outcome. In November, the government announced funding of $4.32 million for national energy programs, which is up 131 per cent. In the context of that, can the department provide a list of all programs that have terminated since the announcement of the effective abolition of ERDC?

Mr Alderson —Certainly. The list is zero.

Senator O'BRIEN —No projects were terminated?

Mr Alderson —No. If you are talking about ERDC, and to explain the difference in the valuation, the corporation has been in the process of negotiating with ERDC grant recipients early termination of those contracts. As a consequence of that, some funds were brought forward into this year to facilitate early termination. But some research projects will carry into next year; hence residual funds are needed to meet the obligations in regard to those contracts.

Senator O'BRIEN —So how many negotiated an early termination of the contract?

Mr Alderson —I would have to take that on notice. I have not got the figure.

Senator O'BRIEN —Thank you. Can you provide us with the details of the projects that are continuing?

Mr Alderson —Certainly.

Senator O'BRIEN —Thank you. The funding in the 1998[hyphen]99 year of $1.54 million, I take it, will cover the costs arising to ERDC out of those contracts?

Mr Alderson —It will. It will cover the obligations in regard to the outstanding research projects.

Senator O'BRIEN —Do you expect a carryover from the 1997[hyphen]98 estimated outcome figure?

Mr Alderson —No. In fact, for the projects, I would imagine that that figure for 1997[hyphen]98 project money will be just about spot on. So, with project money, if there is a variation, it will be minimal.

Senator O'BRIEN —Has the minister's office or the department received a significant amount of correspondence from organisations or individuals regarding the abolition of the ERDC?

Mr Alderson —At the last inquiry, I think, a similar question was raised and we furnished a list. Since then, there has been very little correspondence.

Senator O'BRIEN —Could you update that list for us, please?

Mr Alderson —Certainly.

Senator O'BRIEN —Has there been subsequent correspondence between the department and the minister's office regarding the decision to abolish the ERDC since the last inquiry?

Mr Alderson —I would expect so. I think it is fair to say that there would have been. The government announced its intention to abolish the ERDC, and the regulation was prepared but did not pass through parliament. Therefore, there would have been correspondence between the department and the minister in regard to preparation of that regulation and the results.

Senator O'BRIEN —Can the committee be supplied with copies of that correspondence?

Mr Alderson —No. I believe that would be confidential correspondence between the department and the minister. It is a matter for the minister.

Senator O'BRIEN —Do you have an objection to it, Minister?

Senator Parer —It is not normal practice, but I am happy to have a look at it. I would not like to get it into that sort of—

Senator O'BRIEN —Without establishing precedents.

Senator Parer —Yes, that is right.

Senator O'BRIEN —Are there any innovative projects the subject of an agreement to terminate a contract for research which will no longer be carried out?

Mr Alderson —In terms of the projects that were with the ERDC, the arrangements for bringing forward the buy[hyphen]out of those contracts are such that the research projects will continue. It is just that the financial arrangements have been changed. Instead of grants appearing later on, they are now appearing up[hyphen]front; hence the change in the dollar values in here. So we do not have a situation where contracts have been chopped off at the knees and simply terminated.

Senator O'BRIEN —All of those projects are, effectively, continuing but the method of funding has changed.

Senator Parer —Net present value[hyphen]type calculations, I imagine, was it, Mr Alderson?

Mr Alderson —Yes. Basically, what has happened is that, in negotiating with the parties, the negotiation has resulted in a different tranche of payments. The consequential research can continue even with, for example, the abolition of ERDC.

Senator O'BRIEN —And this is a consequence of—

Mr Alderson —Facilitating the early wind[hyphen]up of the operation.

Senator O'BRIEN —Yes. Is it anything to do with the fact that the regulations were not passed by the Senate?

Senator Parer —No.

Mr Alderson —No. That was part of the normalised wind[hyphen]up when the government decided to terminate funding for ERDC.

Senator O'BRIEN —All contractual obligations have been met, or varied and met?

Mr Alderson —Indeed.

Senator O'BRIEN —I understand that there is a Queanbeyan based Sustainable Technology of Australia Ltd proposal which had been before ERDC to build a pilot plant for a new generation solar cell which produces power without direct sunlight. I understand that that project has not continued and that STA have not been able to raise alternate funding. Is the minister aware of that circumstance? It sounds like there is some knowledge there.

Mr Alderson —If I could comment on that, there is an issue between a Queanbeyan based company and a company which, in fact, was provided with a grant from the Energy Research and Development Corporation. The contract between the Energy Research and Development Corporation and the company which received the grant is proceeding, consistent with my response to your earlier question that contracts had been honoured.

The Queanbeyan based company is taking issue with some of the arrangements and the normal processes for dealing with such issues, for example, the Freedom of Information Act provisions, et cetera, are being followed at the moment. So the normal courses of recourse to a person who believes that he or she is aggrieved are being pursued.

Senator O'BRIEN —In relation to that project, was that a project for which there was not a negotiation to effectively terminate the contract on an early payment?

Mr Alderson —I do not know. In terms of that particular contract I would have to take that on notice because it would be included in the lists.

Senator O'BRIEN —Will you supply full detail about that matter, given that I am not sure exactly what you are saying. It seems to me there is a dispute about something and certain processes have been followed, but—

Mr Alderson —The Queanbeyan based company believes it ought to have been a party to the arrangements between ERDC and the company that received the contract. ERDC disputes this. It is a matter for the ERDC. Therefore, in order to pursue his interests the Queanbeyan company chief is seeking information through FOI, presumably in order to see if there is a basis for further action. That is the normal process.

Senator O'BRIEN —So you are saying that there was never a contractual relationship between ERDC and this Queanbeyan company?

Mr Alderson —Correct.

Senator O'BRIEN —Has the government received any representations from individuals or organisations regarding Australia's international competitiveness in renewable energy as a consequence of the abolition of the funding of the ERDC?

Mr Alderson —The list that was previously provided contained people who have made representations, those having interests in renewable energy matters.

Senator O'BRIEN —Will the government table that correspondence before the committee?

Mr Alderson —I would like to take that on notice and see the nature of that correspondence.

Senator O'BRIEN —Did the government explain why in early December last year the Minister for Finance and Administration rejected the board's recommendation that the ERDC contract a manager and indicated that all costs associated with the management of the ERDC portfolio beyond 1997[hyphen]98 would be absorbed within DPIE?

Senator Parer —It was a government decision. There were a couple of options and it was decided that the most effective way to conclude the wind[hyphen]up of the ERDC was to have the department do it. It was as simple as that, nothing more.

Senator O'BRIEN —Has it been suggested that that approach creates uncertainty about the wind[hyphen]up process?

Senator Parer —I have not heard that suggestion. I do not know whether anyone else has.

Mr Alderson —The only comment I can make on that is that there was obviously a much higher degree of certainty prior to the failure of the regulation to pass parliament in regard to the timing of the wind[hyphen]up because the regulation provided for the wind[hyphen]up to occur from 1 July. But the degree of certainty in regard to existing contracts has not changed because the government has said that those contracts will be honoured.

Senator O'BRIEN —So the ERDC continues and it now is to be funded for the purpose of administering its contracts. Is that right?

Senator Parer —No, the ERDC will not have any funds.

Mr Alderson —For the administration of the residual contracts past 1 July, the decision was that the costs of that administration would be picked up by DPIE. Of course, funds have been provided to honour the research contracts themselves, as is evidenced by the budget papers.

Senator O'BRIEN —Then where is the uncertainty that you are talking about, Mr Alderson?

Mr Alderson —Only in the sense that the corporation now continues as an entity until such time as parliament passes a regulation to abolish it. But there has been no change with regard to the government's decision not to provide it with further funds.

Senator O'BRIEN —Or until a government decides to use the shell body and resuscitate the organisation.

Mr Alderson —I would not comment on that.

Senator O'BRIEN —We are debating rather than asking questions at the moment, aren't we, Mr Alderson?

Senator Parer —It is a legal entity, Senator.

CHAIR —You have given your own ruling; go back to questions.

Senator O'BRIEN —Indeed, Mr Chairman, I did not want to have to involve you in that matter at all.

On gas access legislation, I want to ask about the gas industry regulation levy bill. Is there a decision by government to delay putting this bill to the Senate?

Mr Banfield —Are you talking about the third party access legislation?

Senator O'BRIEN —Yes.

Mr Banfield —It is currently before the parliament. My understanding is that some of the minor parties have expressed a view about aspects of that legislation and that in the circumstances it has not been passed by the Senate.

Senator O'BRIEN —Is it listed in the next fortnight of sittings?

Mr Banfield —Yes. It is hoped that it would be possible to pass it as a non[hyphen]controversial piece of legislation.

Senator O'BRIEN —We will probably know one Thursday whether it is going to get up or not. Minister, what is the timetable for the new look at the gas industry levy bill? Are you going to look at it again?

Senator Parer —No.

Senator O'BRIEN —Do you have a comment on it?

Senator Parer —This bill?

Senator O'BRIEN —The gas industry regulation levy bill.

Mr Banfield —Could you be a bit more specific, Senator. I am not sure I understand what you are driving at.

Senator O'BRIEN —I have the gas industry regulation levy bill in my notes. I will come back and clarify that on notice. Perhaps that is the best way.

CHAIR —Thank you to the officers from subprogram 1.10. I now call the officers from subprogram 1.11.

[12.43 p.m.]