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EMPLOYMENT, WORKPLACE RELATIONS, SMALL BUSINESS AND EDUCATION LEGISLATION COMMITTEE
Employment, Workplace Relations and Small Business Portfolio
Department of Employment, Workplace Relations and Small Business
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EMPLOYMENT, WORKPLACE RELATIONS, SMALL BUSINESS AND EDUCATION LEGISLATION COMMITTEE
Employment, Workplace Relations and Small Business Portfolio
Department of Employment, Workplace Relations and Small Business
Senator JACINTA COLLINS
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EMPLOYMENT, WORKPLACE RELATIONS, SMALL BUSINESS AND EDUCATION LEGISLATION COMMITTEE
(SENATE-Tuesday, 5 June 2001)
- Start of Business
Employment, Workplace Relations and Small Business Portfolio
- Office of the Employment Advocate
- Department of Employment, Workplace Relations and Small Business
Content WindowEMPLOYMENT, WORKPLACE RELATIONS, SMALL BUSINESS AND EDUCATION LEGISLATION COMMITTEE - 05/06/2001 - Employment, Workplace Relations and Small Business Portfolio - Department of Employment, Workplace Relations and Small Business
CHAIR —We will now move to outcome 3—An improved operating environment for small business.
—Dr Shergold, rather than go through this goddamn awful accrual document that we can never get on top of, I think it might be easier for me to run through the issues I have. I think that would be the quickest way. I think all of the officers will be able to handle most of the questions or have someone come forward. The first series under output 3 is the Small Business Enterprise Culture Program. How many projects were funded under the Small Business Enterprise Culture Program in the financial year 2000-01? Again, you can take that on notice or table a document.
Mr Fisher —The four funding rounds held to date have funded 97 projects totalling $4.15 million. If you want any more detail on the break-up per year, I would have to take that on notice.
Senator SCHACHT —I would appreciate a break-up per year. As at 1 January, how much money was left in the program for the year just ending?
Mr Fisher —I would have to take that on notice. I have the information on the financial years.
Senator SCHACHT —Could you also take on notice the details of the disbursements for the program as at 1 January to the present time?
Mr Fisher —I can provide information on that. There was one round announced on 17 May. There were 24 successful round 4 projects.
Senator SCHACHT —When?
Mr Fisher —On 17 May 2001.
Senator SCHACHT —And there were 24 successful programs?
Mr Fisher —That is right. That totalled $1.3 million.
Senator SCHACHT —When is the next assessment of a group of programs to funded likely to take place—from July onwards?
Mr Fisher —That is right. There will be two rounds in the coming financial year.
Senator SCHACHT —When are those two rounds?
Mr Fisher —The applications for the first round for the next financial year, round 5, close 27 July. You would expect that, following that, assessments will be between one month and two months before an announcement.
Senator SCHACHT —And the next one would be in the second half of the financial year?
Mr Fisher —Correct.
Senator SCHACHT —I know this is subject to, within the overall budget for the full year, the quality of the applications, but what would you anticipate for this coming year's budget—about half of the 27 July applications would be disbursed?
Mr Fisher —It is difficult to say. There is approximately $2 million remaining, and we would expect it to be approximately 50 per cent per round, but it will depend a little bit on the quality of the applications.
Senator SCHACHT —So you are talking about $1 million in that period. Mr Fisher and Dr Shergold, I presume you are aware that there are certain caretaker conventions if an election is called?
Dr Shergold —Yes, I am.
—That is very good. You are so positive about that, Dr Shergold. There should be no scandal breaking out then if we have to, in an election campaign, pull your minister into order. If the applications were successful but not announced by the time the Prime Minister had been to Government House and set a date for the election, the caretaker provisions would then pertain to the announcement of those grants that had not been publicly announced up to that time? Is that correct?
Dr Shergold —That is correct.
Senator SCHACHT —Even though they would have been approved, if they had not been announced by the time the election was called, the caretaker provision operates for the announcement as well, does it not?
Dr Shergold —I will take that on notice. But my understanding is that, if there has not been an announcement of the recipients of the grants, it does not proceed during the caretaker period.
Senator SCHACHT —They are thereby warned that, even though the government of the day had approved it, unless in the caretaker provision the opposition agrees to it, it is not automatically guaranteed past the election if there is a change of government?
Mr Fisher —The applicant would not have been advised of their success or otherwise before an announcement.
Senator SCHACHT —That clarifies it. The public announcement is when they are notified of their success. In that case, there will be no public announcement; therefore, they are not notified, even in private, that they have been successful.
Mr Fisher —That is right. The normal process has been that the day of the announcement is the day that the applicants are told.
Senator SCHACHT —Is your small business office still an office or is it a section?
Dr Shergold —It is the Office of Small Business.
Senator SCHACHT —We have not been able to grow it much bigger, Dr Shergold, despite my best efforts.
Dr Shergold —No, Senator: thanks, perhaps, to your efforts we now have a deputy secretary, Mr Steve Chapman, sitting beside me, who has particular responsibility for small business and, of course, we now have a Minister for Small Business.
Senator SCHACHT —I notice you have a Minister for Small Business. That is very good. I trust that I have been helpful and that, Dr Shergold, you have been able to lobby the government to save you embarrassment at the estimates.
Dr Shergold —Your interventions have been very helpful.
Senator SCHACHT —Is what we have just been talking about the only grant program funding you have within the Office of Small Business?
Dr Shergold —There is a program for small business incubators, as well.
Senator SCHACHT —In the coming year, when are the dates and the deadlines for calling for applications for incubators?
Mr Fisher —We have almost finalised an assessment round for this current financial year, so we have not called for a first round yet for the 2001-02 year, but I would expect that will be in late July, early August.
Senator SCHACHT —How much would you anticipate, approximately, for the next financial year?
Mr Fisher —There is $5 million available for the financial year.
Senator SCHACHT —So on average $2[half ] million?
Senator SCHACHT —Again the caretaker conventions will, as we have just discussed, apply to that?
Dr Shergold —Yes.
Senator SCHACHT —Thank you very much on that particular matter. Can you provide on notice the location of each of the projects that are about to be approved for both the enterprise culture program and the incubator program? You have said that there is one—
Mr Fisher —The round of incubators that we are almost—
Senator SCHACHT —For the year just ending, can you provide an up-to-date list of the location of those that have been successful and announced?
Dr Shergold —Yes.
Senator SCHACHT —How many were unsuccessful in the culture program applications? What were the total number of applications and how many got the tick and some money and how many went away saying that you were very cruel to them?
Dr Shergold —For round 4, which Mr Fisher has just indicated, there were 24 successful projects. I understand that there were 131 applications for funding.
Senator SCHACHT —Can you provide a breakdown of the geographic location of each of those 131 applications?
Dr Shergold —Yes, if that information is available—that is, if all of those grants are for particular geographical areas.
Mr Fisher —Sometimes these projects might cut across a whole state or—
Senator SCHACHT —I understand that. Subject to that limitation, which I think is reasonable, it would be very nice if you could provide the breakdown of those 131 applications. Twenty-four out of 131 is about a 20 per cent success rate, if my rough mathematics apply. What was the success rate in the previous year? Was it about the same? Are we getting about the same number of applications?
Mr Fisher —No. In the first 12 months there were a higher number of applications, from memory; it did drop a little the second year, and this year has been a little higher than the second. I would have to take on notice what the proportions were of those that were approved.
Senator SCHACHT —In the recent announcement of the Small Business Enterprise Culture Program, the majority of the successful applications for the $1.3 million funding in percentage terms ended up going to Queensland and Western Australia. Queensland got 38 per cent and, I am informed, has 19 per cent of Australian small businesses. Western Australia got 25 per cent and has 10 per cent of Australian small businesses. South Australia with seven per cent of Australian small businesses got 13 per cent. Victoria with 22 per cent of the Australian small businesses got only 12 per cent. New South Wales with 31 per cent of Australian small businesses got only five per cent. Is there any particular reason why Western Australia and Queensland did so well?
Mr Fisher —It simply reflects the number of the applications and the quality of the applications; it is a merit based program. On this occasion I suspect that there were more applications from those areas or at least higher quality applications.
Senator SCHACHT —So small business people in New South Wales and Victoria cannot write or read to put the form in?
—That is not what I said, Senator. The program is assessed under the guidelines and those projects that are approved meet the guidelines to a higher degree than those that are unsuccessful.
Senator SCHACHT —Is there any indication that some state governments are more proactive in their assistance to small business and, therefore, they can get more help for small businesses in putting forward their applications?
Mr Fisher —To my knowledge, I am not aware of any state government that actually helps any proponents to put together an application.
Senator SCHACHT —Not actually putting the application together. In South Australia, for example, there is a reasonably active Office of Small Business. There has also been, although it has gone through variations, a manufacturing centre that helps small manufacturing businesses get up to better quality, better performance, et cetera. I suspect that that might mean that there are people on the ground encouraging small businesses in South Australia by saying, `By the way, the federal government runs this program. You might be eligible to apply.' You have no anecdotal evidence of that occurring?
Mr Fisher —I am afraid not, but I would point out that with the enterprise culture program the applicants are not usually small businesses. They are usually groups that are providing a service—
Senator SCHACHT —The networking of small businesses in a smaller state is much more efficient. You have got fewer people to put together in the association and there are informal connections. I noticed during my time as a minister that that worked as well as anything in encouraging that activity. Anyway, you can assure me that it is totally merit based and that there is no favouritism given to those two states?
Mr Fisher —Absolutely.
Senator SCHACHT —It is not just because they happened to have state elections earlier this year?
Mr Fisher —Absolutely not.
Senator SCHACHT —Not that it was very successful for the coalition, I must say.
Senator FERRIS —Gratuitous comments, Senator Schacht.
Senator SCHACHT —The election result was not gratuitous; it is well known. So there is no account taken of the relative ratios of small businesses operating in the state. If the small business minister for New South Wales said to you, `This is a bit crook. We only got five per cent,' you would just show him the information cold and tell him that it is quality merit based and he missed out?
Dr Shergold —We would assure him that the projects were assessed against the criteria.
Senator SCHACHT —I think you just told me that the total for the small business culture program for the coming year is about $2.6 million?
Dr Shergold —About $2.2 million remains.
Senator SCHACHT —Thank you. With the 24 which have just been approved, you would expect to have about the same number in the July round, give or take 10?
Mr Fisher —The same number approved?
Senator SCHACHT —Yes.
Mr Fisher —Yes, it would about that order, I would expect.
—How much did you spend in 2000-01 on promoting the SBECP?
Mr Fisher —I would have to take that on notice. I do have some costs in terms of the ads that were placed in newspapers and the like. Perhaps I can give it to you before we—
Senator SCHACHT —Fine. Does the advertisement have the photograph of the minister in it?
Mr Fisher —No.
Senator SCHACHT —Does it have Dr Shergold's photograph instead?
Mr Fisher —There was no photo.
Senator SCHACHT —Bad luck, Dr Shergold. There is no television or radio?
Mr Fisher —No.
Senator SCHACHT —And it is only in trade magazines or trade related magazines?
Mr Fisher —I would have to check, but I think it was in national newspapers.
Senator SCHACHT —I see. Could you give me the figures, including advertising and promotion, for the last two years—what was spent and what is going to be spent in the coming year out of the budget to promote and advertise the SBECP? I am not against the promotion, unless you were spending $3 million to promote a program worth less than $3 million. I would think that would be a bit hot.
Mr Fisher —We will take that on notice. It is a relatively small amount, given the size of the program.
Senator SCHACHT —And if it is only in newspapers, you will give me the breakdown, frequency and so on for those? That is fine. Do you do it in any language other than English?
Mr Fisher —I do not think so, but again I would have to check.
Senator SCHACHT —If you could. And you might make a comment about whether the budget limit meant that you were not able to put it in a couple of relevant non-English papers, because there is a lot of ethnic small business activity out there. How do you assess the effectiveness of the program? Is that on the number of applications that turn up?
Mr Fisher —In terms of the overall program, I assume you mean?
Senator SCHACHT —The effectiveness of the promotion to get applications coming in, et cetera, and some visibility.
Mr Fisher —Yes. It is just on the number.
Senator SCHACHT —Therefore, has the number of applicants in the last three years for the program increased, stayed the same or decreased?
Mr Fisher —I would have to get you the exact numbers but the highest number, from memory, was in the first year. They did drop a little bit but then rose again in this last financial year. But I can get you the exact figures.
Senator SCHACHT —Is there any way in which the department or the office can measure the improvement in the small business culture that is taking place as a result of the program? I know you might say, `How long is a piece of string?'
Dr Shergold —No. In terms of that output, the quality we are looking for is the level of satisfaction of ministers with the assessment and approval processes of the program.
—So, those who are actually successful, you will go and talk to them? How do you assess the success?
Dr Shergold —With the level of satisfaction of ministers with the assessment and approval processes that are set in train.
Senator SCHACHT —That is a piece of string, isn't it? The minister is not going to bag his own program.
Dr Shergold —I do not think that is correct. In many areas of provision of policy advice ministers now provide performance feedback on the quality of that policy advice.
Senator SCHACHT —Only to the department; not to the public.
Dr Shergold —Otherwise, it would be very difficult for the assessment.
Senator SCHACHT —I agree with you.
Dr Shergold —On that you are wrong: in the annual report, you will see that I report on the performance assessments undertaken by the minister in terms of the policy advice we provide.
Senator SCHACHT —Does he have an external or a separate body do the assessment?
Dr Shergold —He makes the assessment.
Senator SCHACHT —On whose advice?
Dr Shergold —On his advice. It is his—
Senator SCHACHT —From the department? It is a circuitous system.
Dr Shergold —No, it is not circuitous. In terms of the provision of policy advice, obviously the minister is the client. In terms of how the quality of that advice is assessed, I would have thought that—as with other areas—you look at what the views of the client are. Therefore, there is now a ministerial assessment of the quality of the accuracy, the timeliness and the presentation of the briefs that are presented.
Senator SCHACHT —Dr Shergold, you send up to the minister after the end of this program or the end of each year a run down of what has happened, helped prepared by Mr Fisher and Mr Chapman and other sundry people in the department who are relevant, saying: the following applications were received, the following ones were successful, this amount of money was distributed, this was the range of projects, these were the organisations that received it, no money was pinched, no-one burnt the house down and no-one was raped or pillaged and that therefore, Minister, it has been a reasonable successful program. He reads it and says yes, that is a very successful program and sends a note back to you saying, `Dr Shergold, well done.' Therefore, you put it in the annual report that the assessment is correct and it was well done. That is a closed loop.
Dr Shergold —No. Ministers, for every piece of briefing, provide a quality index from one to five.
Senator SCHACHT —Who provides the quality index?
Dr Shergold —The minister.
Senator SCHACHT —But on the basis of the advice that you give him.
Dr Shergold —No. The minister assesses the quality of the advice he has received. Who else would be able to assess the quality of the policy advice other than the minister for whom it is prepared?
—Dr Shergold, I am not having a go. This is the madness, in my view, of some of these things about accrual accounting. The old saying—it is like asking the poacher how well his poaching is going. He is not going to dob himself in, is he? That is the system you have operating here. I am not having a go at you but this is the madness of accrual accounting taken to this nth degree. You are not going to dob yourself into the minister that you have stuffed it up, he is not going to dob himself in to the public that his department has stuffed it up and, when it goes back to be printed, neither of you are going to say, `We stuffed it up.' Simple as that.
Dr Shergold —I hear what you are saying. We find it an effective system.
Senator SCHACHT —Pardon?
Dr Shergold —I hear what you are saying but we find it an effective system.
Senator SCHACHT —For who? For you and the minister? Well, obviously.
Dr Shergold —For us to know whether the minister believes the advice he is receiving is timely and accurate and his belief about the quality of its argumentation.
Senator SCHACHT —I do not have the time to go through what is an endless, circuitous debate about this.
Dr Shergold —No. You asked me how performance in this area was assessed and I have explained.
Senator SCHACHT —Yes, I know. You have explained it and you have done it very well. It just seems to me to be odd. If you really want to get at it in a fair dinkum way, it should be said that they would be costly and it might not be worth while doing them. An external body should be employed to do the proper assessment and an independent report, without connection to you, the minister, the parliament or anybody else. That would then say that this was good, bad or ugly, and we would make a judgment as to whether or not they got it right. I know that we cannot do that on every program—and I will move on. I now turn to the Small Business Consultative Committee. I note with interest that the department's web site is still advertising that the SBCC was only carrying out its role until 31 December 2000. Has that committee been disbanded, or is it continuing to operate in some form or another?
Mr Fisher —The SBCC is continuing until 30 June 2001. If that information is incorrect on the web site, I was not aware of it, but I will ensure that it is corrected.
Senator SCHACHT —Obviously if it is on the web site with the wrong date, people might not have been accessing it; if they saw the dead date on it, they might have thought it was already dead. So please do that for us. Since the SBCC has been given an extension of life for half a year, how many times so far this year, 2001, has it met?
Mr Fisher —I have the total number of meetings, but I just have to check as to how many meetings it has had this financial year. I believe that it is four, but I would have to confirm that, and there is one more—
Senator SCHACHT —Were those four meetings set down as regular meetings through this six[hyphen]month period, or were they irregular meetings that were called as required?
Mr Fisher —They are regular meetings that are organised. In fact, the next meeting is scheduled for 28 June.
Senator SCHACHT —At the moment that would be the last meeting?
Mr Fisher —That is right.
—Could you also provide us with how much extra you have had to provide for the running of the SBCC in this six[hyphen]month extension?
Mr Fisher —Certainly.
Senator SCHACHT —Do the committee's terms of reference still include the following functions:
provide ongoing advice on, and where applicable, options to address:
. the compliance cost for small businesses of the taxation reform proposals
. the impact on small business of changes to the taxation system; and
. the most effective methods to develop and disseminate information to small business on the new taxation system and arrangements.
Mr Fisher —The terms of reference remain unchanged. So, yes, those words are still there.
Senator SCHACHT —So there have been three meetings and there is one to go.
Mr Fisher —I am sorry; I think there have been four with one to go, but I would have to check that. I am sorry; that is right.
Senator SCHACHT —With the roll-back that the government has been introducing to the GST since the beginning of this year—with changes to the taxation form and excise on petrol and sundry other related matters—has that committee been assessing and providing advice to the minister on the need for this roll-back to occur?
Dr Shergold —I believe that it would not be appropriate from the government's position to call that `roll-back'. In terms of the specific measures that you have indicated, the role of this committee is to provide advice on such issues.
Senator SCHACHT —I know that you will say this is policy, and so I cannot ask you the detail, but did it provide advice on these matters?
Dr Shergold —Yes.
Senator SCHACHT —Has the committee continued to receive as a result of its continuing existence submissions, comments and material from the small business community?
Mr Fisher —It has not formally sought any submissions or comment. But at other forums, such as the national Small Business Forum, that committee is usually there, and messages would come through that forum to the SBCC.
Senator SCHACHT —Has there been one meeting of the Small Business Forum since January?
Mr Fisher —Yes.
Senator SCHACHT —One?
Mr Fisher —One.
Senator SCHACHT —And were members of the SBCC there?
Mr Fisher —They were all invited. They were not all present, but a number of them were.
Senator SCHACHT —That was a public meeting but I cannot recollect the detail. Were there discussions at that forum about changes—I call it the beginning of roll-back and Dr Shergold calls it something else, so we will not argue about that semantic—to the quarterly arrangements for reporting on the GST payment, on the form and on the excise on petrol? Were they raised at that meeting?
—Senator, there were two guest speakers at that meeting. One was the Commissioner of Taxation, Michael Carmody, and the other was a small business representative on the Board of Taxation, John Bronger, so taxation was certainly mentioned in a very broad way. I cannot remember whether all of the things that you have mentioned were brought up.
Senator SCHACHT —Mr Carmody entered and exited the meeting still fully bodily and mentally intact after meeting with a cross-section of small business?
Dr Shergold —He did.
Senator SCHACHT —Did you hire bodyguards?
Dr Shergold —No.
Senator SCHACHT —No, you did not think that was necessary? I am surprised. I think the National Small Business Forum must be getting soft if he was able to escape without some threat, in view of what he has imposed on small business on behalf of your government. Are the SBCC members still the same as in the previous year? Have there been any changes?
Mr Fisher —There have been no changes except that Mr Chapman was a member of the SBCC from the Taxation Office. He still remains a member.
Senator SCHACHT —Has the SBCC sought private discussions or briefings from the taxation reform unit—is that what you call it?—of the Treasury? Mr Shergold, you mentioned it. I am talking about the guest speakers at the forum.
Mr Fisher —The Board of Taxation?
Senator SCHACHT —You had the two guest speakers at the forum. One of them was Mr Carmody. What about the other one?
Mr Fisher —He was from the Board of Taxation.
Senator SCHACHT —Was he a person dealing with small business issues?
Mr Fisher —Yes, he is John Bronger from the Pharmacy Guild of Australia.
Senator SCHACHT —Has the SBCC sought, separate from that forum, their own briefing from the Taxation Office about what is going on with these changes that the government has introduced through the GST in the last six months?
Mr Fisher —Senator, it would be normal practice for the committee to be briefed on issues by either people from the Taxation Office or from the Department of the Treasury at—I suspect—all of their meetings.
Senator SCHACHT —So someone has been turning up to those four meetings?
Mr Fisher —Yes, Senator.
Senator SCHACHT —Can you just take it on notice and provide me with the names of those people who have attended from Taxation and Treasury to give those briefings? I just want the names; I am not going to waste your time by arguing about giving me the policy document. I just want the names of the people. If I could get that by the end of the day it would be very nice because then I could track round to Treasury and ask them in their estimates tomorrow or the day after. This is not to trap anybody.
Dr Shergold —I will seek to see if we can provide those names by the end of the day.
—That would be very kind, Dr Shergold. You are being very kind today. You are not your usual combative self; maybe because I am asking polite questions today.
Senator JACINTA COLLINS —Ask him where he has been!
Dr Shergold —Senator Collins has interjected and she is right: I have had the morning off so I am still in relaxed mode.
Senator SCHACHT —I see. Has the SBCC made any direct recommendations—you will not tell me what they are, but you could indicate whether there have been any—since the beginning of the year to the government on the most effective way to assist small business with the costs of transition to a GST?
Dr Shergold —It does not make formal recommendations.
Senator SCHACHT —That is one of its objectives.
Dr Shergold —In this instance, it has not made formal recommendations.
Senator SCHACHT —You jumped in on the top of Mr Fisher pretty quick on that one.
Dr Shergold —Am I right, Mr Fisher?
Mr Fisher —Senator, the terms of reference actually call for them to provide advice and that is exactly what they do.
Senator SCHACHT —So you will not tell me whether they have made a recommendation on that particular pressing issue in the small business community of the cost of transitions?
Mr Fisher —That is right, Senator.
Senator SCHACHT —Has the committee dealt with evidence and submissions from the small business community—gathered in innumerable ways, from representations from members of parliament and the public et cetera—that the cost of the implementation of transition for most small businesses has been beyond the $200 provided by the government in the compensation package to small business?
Mr Fisher —It has not dealt with formal submissions from small businesses; it has, as I said before, dealt either with issues that the minister has asked them to look at or issues that they themselves have identified. Given that some of those people are representatives of small businesses, they would be some of the issues.
Senator SCHACHT —There have been plenty of spokespeople, representatives and members of academic institutions and accountancy organisations over the last 12 months who have been openly saying that the cost of implementing the GST administratively is thousands of dollars per small business. Has any of that material come before the SBCC?
Dr Shergold —The minister meets with many of those groups—
Senator SCHACHT —No, Dr Shergold. I am asking whether any of that material that has been publicly on the record—in any number of newspapers, on AM, on PM and in interviews on A Current Affair and anywhere else you care to poke a stick at—has come before the SBCC?
Mr Fisher —I think it would be fair to say that members of the SBCC would be aware of the information that is in the public domain and therefore would consider that in their deliberations.
—As a result of considering that in their deliberations, have they made any recommendations—without you telling me what that recommendation is, because I know Dr Shergold will not let you tell me that?
Mr Fisher —The committee has provided advice to the minister, but is not charged with making formal recommendations.
Senator SCHACHT —I have to say that, if that is the case, I am a little disappointed about the SBCC, but then of course I suspect various ministers have probably made it clear that they have gagged them. Nevertheless I will move on to the next one.
Dr Shergold —The SBCC do not feel gagged.
Senator SCHACHT —Of course you would say that, Dr Shergold.
Dr Shergold —I think it is important to put it on the record, otherwise the statements may go uncontested.
Senator SCHACHT —I did not bother asking you that because I knew you would say it. Dr Shergold, I did not want to waste your time or my time. If you did not say that, you would get sacked. It is your job to say that. It is a question that I was not going to waste your time or mine asking. We have been through this in previous estimates and we have had to agree to disagree about all of this, you being the good public servant that you are for your masters.
Has anyone raised with the SBCC or the Office of Small Business the need to provide an immediate write-off provision for GST related computer equipment and software? That is not just the SBCC; that is for your own office as well. Has anyone come forward with that idea or made representations?
Mr Fisher —Are you talking about post 1 July last year, because up to 1 July last year that provision was there, I understand?
Senator SCHACHT —But what about the past six months? That ran out on 1 January, didn't it?
Mr Fisher —It was 1 July last year.
Senator SCHACHT —Since then have people requested any further provision because they have found that their costs in this financial year are still going into the implementation? They have found that the software package that they got in March last year is now not up to scratch for what they are actually faced with so they have to go and do something else in this financial year.
Mr Fisher —I am not sure whether it has been raised formally in correspondence, but it has been raised in some discussions.
Senator SCHACHT —Has the SBCC been sympathetic to the proposal?
Mr Fisher —Sorry, I should correct that. I was talking about the Office of Small Business. It had been raised with the Office of Small Business and, as we would normally, we provided advice to the minister.
Senator SCHACHT —You provided advice, which is confidential. Did anyone at the Small Business Forum raise it at the meeting earlier this year?
Mr Fisher —I would have take that on notice.
Senator SCHACHT —Thank you. When it was raised—and you mentioned you were aware of the proposal—did you go and discuss it with accounting or taxation specialists?
—I am not sure. We have a lot of discussions, obviously, with Treasury and the Taxation Office, and we may well have raised it with them. If we did, it would have been for the purpose of providing advice to the minister.
Senator SCHACHT —Did the SBCC or the Office of Small Business ever consult with taxation specialists or accounting specialists about the redrafting of the business activity statement? I know this is a Treasury document and a taxation document, but you are the Office of Small Business—you are not the defence department—so you are relevant in this area.
Mr Fisher —In one of the questions that we took on notice last time we did provide advice that the chair of the Small Business Consultative Committee and officers from the Office of Small Business attended the meeting that was chaired by the Prime Minister back in February, where he was consulting with a range of industry organisations, including accountants.
Senator SCHACHT —Good. The chair was there—was anyone from the office there?
Mr Fisher —The Office of Small Business?
Senator SCHACHT —Yes.
Mr Fisher —Yes.
Senator SCHACHT —That is just the Prime Minister giving it a general tick, and then the wheels of government move along to get to the implementation stage. As always, the devil is in the detail in the drafting of these documents. Were you involved regularly with the Taxation Office in redrafting the BAS to make it an annual document?
Mr Fisher —Yes.
Senator SCHACHT —So you can take either a pat on the back or a kick in the shins, whichever way small business wishes to see the BAS document. You were involved?
Mr Fisher —We were involved formally with the Taxation Office.
Senator SCHACHT —Was the SBCC involved as well?
Mr Fisher —I understand that some members—or at least the chair—were consulted by the Taxation Office through a different mechanism from that which we were involved in.
Senator SCHACHT —Are you happy that any suggestions you put forward were generally taken up?
Dr Shergold —That goes too far.
Senator SCHACHT —I was just trying to take sneak it through. You must take a dose of sugar or something before I come in to keep yourself awake so that I do not get one of these through! Can one of your officers distract you for a while, or can you go to the toilet or something? The Treasurer said on 12 May this year:
...based on the experience of two quarterly returns, and following extensive consultation with business and accounting groups, with a specific focus on the needs of small business, and the (new BAS) measures will dramatically reduce reporting requirements.
Does the department or the SBCC agree with the Treasurer on that?
Dr Shergold —It is the same response. By saying that, it is giving an indication of the policy advice that we provide.
—Since the new form—and we have gone now to an annual BAS—have you received, either as SBCC or the Office of Small Business, any further representations that the annual BAS document is still too complicated or too difficult or that there is too much requirement to read other taxation documents before you fill it in?
Mr Fisher —Not to my knowledge. Again, I would have to take it on notice. We do get a fair bit of ministerial correspondence, so I would have to check.
Senator SCHACHT —And Treasury would not tell you if they have had any advice on this matter at all, would they, knowing Treasury?
Mr Fisher —We do ask Treasury for advice on these sorts of things.
Senator SCHACHT —Occasionally they send you a smoke signal, I suppose, do they?
Mr Fisher —For some of the questions we took on notice last time we did need to go to Treasury, and they provided their response.
Senator SCHACHT —I noticed some of their answers. I was rather surprised they actually deigned to answer them within 12 months—that is not usually their practice. There is a document, I am told, that is 100-odd pages that small businesses had to read before they filled in the quarterly document. Do they still have to read the full 180-page document as a briefing before they can have a go at the annual BAS document?
Mr Fisher —I do not think so.
Senator SCHACHT —So if they read that once, they should be right now for the yearly document?
Mr Fisher —Mr Chapman might correct me, but my understanding is that there is a simple guide that goes out with that form.
Senator SCHACHT —Simple? 140 pages?
Mr Fisher —That is not the document I am referring to. I am talking about the simple BAS Basics booklet.
Senator SCHACHT —How many pages is that? I must have read publicity about another briefing document. That must be Treasury's, not yours.
Mr Fisher —It is from the tax office.
Senator SCHACHT —Which is yours? The BAS Basics one?
Mr Fisher —No, BAS Basics is from the ATO.
Senator SCHACHT —Roughly how many pages is that?
Mr Chapman —Just to perhaps clarify some of the comments: the larger document referred to is a reference guide, which has a fairly comprehensive index attached to it which means that a business person could look up the particular aspect of their BAS and refer to the specific section within the broader guide. With the changes that the government brought in earlier this year, there was a shorter document and it was only of a number of pages—
Senator SCHACHT —Fewer than 20?
Mr Chapman —As I recall, it was fewer than 20. That highlighted the changes to the system.
Senator SCHACHT —Only the changes, but you still have to read the other document first, do you, so you know what the changes are?
Mr Chapman —No, to repeat myself: the other document was a reference guide. If there was a particular aspect you needed assistance with, you would read that section.
—We are just playing with words, but I understand the point you have to make. The government promised in 1996 that it would reduce the paperwork to small business by 50 per cent. Since the change of government, the taxation act has gone up from about 3,500 pages to nearly 8,000, which is not a 50 per cent reduction in taxation matters. Can you show us where, in total, now that the GST paperwork is available, small business has had a 50 per cent reduction in paperwork?
Dr Shergold —I believe we have been through this before.
Senator SCHACHT —I wish you would answer it, and then I wouldn't have to do it ever again.
Dr Shergold —We have already indicated, for example, that there have been significant reductions in terms of red tape with regard to surveys undertaken by the Australian Bureau of Statistics. It was the Bell task force that concluded that a 50 per cent objective was a policy objective; the government's objective is to reduce the overall regulatory burden on small business.
Senator SCHACHT —Dr Shergold, the then Leader of the Opposition promised to reduce paperwork by 50 per cent during the election campaign of 1996 before he became Prime Minister and responsible for government. That was the coalition's promise. I am just asking you: has it been met?
Dr Shergold —In my response to you, I have indicated that the department interprets that commitment as a policy objective rather than now a legislative requirement.
Senator SCHACHT —Are you into core and non-core promises over there now, Dr Shergold?
Dr Shergold —I am referring to a previous answer I provided to you.
Senator SCHACHT —Just because you provided it to me previously does not mean to say it is correct. The coalition promised a 50 per cent reduction. You have now interpreted it to get your minister or the government off the hook; that is your business as a loyal public servant. You do have a document there on the Liberal Party's election policies in February-March 1996, which says a 50 per cent reduction in paperwork for small business. You must have that document in the files somewhere.
Dr Shergold —Since then, not only has there been a reduction in terms of surveys, but there has been the introduction of annual regulatory plans; regulatory performance indicators; the business entry point, which certainly provides much easier access for small business to government programs; the ability to undertake transactions on line; and the time boxes. So there are a significant number of initiatives that can be pointed to in terms of reducing red tape.
Senator SCHACHT —But you cannot tell me that it has been reduced by 50 per cent, can you?
Dr Shergold —I cannot tell you that there has been a reduction of 50 per cent.
Senator SCHACHT —I do not blame you. No-one could. It was an amazingly stupid promise that could never be kept. It is impossible to remember. To then dump the GST on them makes it absolutely impossible. Are you, in the Office of Small Business, aware of a comment in a survey in my state's paper, the Sunday Mail, in May of this year, which said:
One in five of Australian businesses want a GST shake-up if Labor wins the federal election later this year. The GST is proving troublesome, particularly for small business operators who cannot afford accountancy firms and are largely doing the books themselves.
Are you aware of that survey?
Mr Fisher —Not specifically, no. What date was that again?
Senator SCHACHT —May. It was only last month. It was in the Sunday Mail, so there are only four issues a month. I thought you might have noticed those comments. Do you have any estimation for the accountancy profession? Of 900,000 small businesses in Australia, how many do their own books and how many employ a certified accountant or a practising accountant?
Mr Fisher —No, we do not have that information. Our latest information was that there is a little over one million small businesses.
Senator SCHACHT —That figure includes farmers, does it?
Mr Fisher —No, it does not include farmers.
Senator SCHACHT —There are a million, and you have no idea how many of those employ accountants to do their bookwork—not just their annual tax return but also their bookwork—on a regular basis?
Mr Fisher —No, I do not.
Senator SCHACHT —Do you think that it would be useful information to gather, irrespective of the argument about the GST, for quality assurance and quality practice? It might mean another survey, which Dr Shergold would worry would drive small business mad with filling in forms and time boxes, but it might be useful information to find out and might encourage more small businesses to see that taking on an accountant is a reasonable cost.
Mr Fisher —It is the sort of thing that we would usually raise with the Bureau of Statistics if we were inclined to pursue it and ask whether they were going to do some survey that we could include a question in.
Senator SCHACHT —It might be a suggestion you can look at anyway. I imagine you will have to take this one on notice: what is the average cost of convening the SBCC, including fees, administration and secretarial support?
Dr Shergold —We will take that on notice.
Senator SCHACHT —Have these costs increased or decreased since its inception? Please take that on notice too.
Mr Fisher —I could give you the total costs for the last three years if that is helpful.
Senator SCHACHT —Yes, please.
Mr Fisher —In 1998-99, the total cost was $88,230; in 1999-2000, it was $73,119; and in 2000-01, to date, it is $49,499.
Senator SCHACHT —I think I asked for that to be broken up a bit, but you can do that for us?
Mr Fisher —Yes.
Senator SCHACHT —The University of New South Wales was quoted in the Financial Review of 1 May 2001, which said:
The Australian Taxation Office has imperilled a proposed independent study of the cost to business of complying with the new tax system by refusing to supply researchers with any information.
Are you aware of that? Were you approached by that university to provide any information for that study?
—Not to my knowledge.
Senator SCHACHT —Are you aware of that proposed independent study by New South Wales?
Mr Fisher —No, I am not.
Senator SCHACHT —It would not interest you to help them?
Mr Fisher —We would be interested in it but, as I say, I am not aware of it. I can check with my office to see if anybody else—
Senator SCHACHT —I think what I might do is send a copy of the Hansard to the University of New South Wales and get them to ring you, Mr Fisher. They might put an application in for you to help them in that independent study, which looked to me to be quite a worthwhile proposal.
I have been over this before, Dr Shergold, so I am not going to belabour the point, but I still cannot quite work out what your role as the Office of Small Business is on policy development vis-a-vis the crunch role that the Australian Taxation Office and Treasury have in this area on most of the matters relating to small business. Is there any particular area you wish to highlight where your office has played a role in developing and implementing policy that affects small business in Australia?
Dr Shergold —As required by the ministers, the office provides advice both to the senior minister and to the Minister for Small Business on policy issues.
Senator SCHACHT —Is there any particular project about which the history books in 20 years time will say, `By geez, that Shergold and his mob were pretty good; they got this project up and running to help small business'—and someone will get a thesis written on it and get a doctorate or something? If they went through the paperwork under the 30-year rule once all those documents become available, will there be something there that will be a shining light?
Dr Shergold —I am sure that, in 30 years, the researcher will be very impressed by the skill of the policy advice that we provide to ministers.
Senator SCHACHT —But will he actually say that the skill of preparing the advice actually meant an improvement in small business somewhere?
Dr Shergold —In that regard they will look at the achievements of the minister and of the government of which the minister is a member.
Senator SCHACHT —On that basis, I suspect it will be a short thesis for a PhD. I am just surprised that there might not be something you could comment on that you thought was a worthwhile task that led to an improvement that you could outline even in next year's annual report of the department—not in the PBS but in the annual report—to say—
Dr Shergold —You have identified a number of significant changes which have been introduced over the last six months and you have been informed that the Office of Small Business has had a policy role in the development of those initiatives.
Senator SCHACHT —On that basis, I suspect you are a bit like the boy in Holland putting his fingers in all the holes in the dike as the GST starts swamping the flood control system of Australian small business! If you can call that an achievement, then so be it. It is not something that you would actually put up there with the Nobel Peace Prize, I suppose. I am not going to belabour this because we will go round and round the table, as we have previously.
What is the total cost—and you might draw my attention to where this is in the PBS—of providing the operations of the Office of Small Business? What is your total budget?
Dr Shergold —If you look at outcome 3—
Senator SCHACHT —On what page?
Dr Shergold —On page 65 at table 2.1.3, you will see the total resources for outcome 3, and that is for small business.
Senator SCHACHT —So $7,716,000 is your total budget? Is that right?
Dr Shergold —Yes. That is the budget estimate for next year.
Senator SCHACHT —Why has it gone down by about $800,000 compared to the estimate for this year?
Mr Dobbie —Total appropriations—both administered and departmental—for outcome 3, which is the Office of Small Business, equal $7.7 million. Some $2.2 million of that is the Small Business Enterprise Culture Program, which is administered funds, and $5.5 million is departmental funds. That is both direct costs of the Office of Small Business and an attribution of some of the indirect costs of the department.
Senator SCHACHT —That is fine. I thought you might have commented on why, in output 1.3, `Information, education and communication', the estimate for this year, which is $6.2 million, will go down to $5.4 million overall. But in that subline it is from $1.9 million down to $900,000. Why is there a decrease of $1 million in that line? The reason is basically the major change.
Dr Shergold —That is correct.
Mr Fisher —I would have to check to be sure, but some of the information under `Information, education and communication' reflects that, in the coming year, apart from the annual review, there would not be any other publications whereas, in previous years, we have had some responsibility for some publications. I would have to check that.
Senator SCHACHT —Take it on notice and tell me which publications you have had responsibility for in past years which you will no longer be responsible for in the coming year that mean you have saved $1 million. Is that right?
Dr Shergold —Yes. We will take that on notice.
Senator SCHACHT —Was that a savings option that Finance put on you or was it a review of process?
Dr Shergold —That is an internal departmental decision.
Senator SCHACHT —Give me an idea of the publications that you previously supported that you are not going to have this coming year.
Mr Fisher —Under the government's New Deal Fair Deal initiative, there was a publication relating to the letting of contracts and a legal issues guide. They are two that readily come to mind.
Senator SCHACHT —And you are not going on with them because they have seen out their usefulness?
Mr Fisher —It is not a matter of not going on with them. They were published. There was a commitment to do that. They have been done. The cost of keeping them up to date is relatively minor, compared with the original cost.
—So you will be able to reprint them when demand is there?
Mr Fisher —Yes, except that the legal issues one, for example, is primarily web based, so it is usually just updating on the Internet.
Senator SCHACHT —Was the preparation of that material the major cost in that $1.9 million, not actually printing and distribution?
Mr Fisher —It would be both. As I said, we would have to take it on notice. I assume that some of that would be from enabling services too.
Mr Dobbie —At least half of the $1 million reduction in that particular output is because of the reallocation of overheads. I said a few minutes ago that this is both a direct cost—that is, the cost that directly attributed to the Office of Small Business—and the allocation of indirect costs, which are finance, human resource management, et cetera.
Senator SCHACHT —Where have those overheads been reallocated to give you such a large saving?
Mr Dobbie —In the main, the one outcome which now incurs more costs in the budget year than it has in this current year is outcome 4. We felt that we were not previously allocating an appropriate proportion of overhead costs to outcome 4.
Senator SCHACHT —I see. So what you are saying is that the Office of Small Business was bludging on the rest in the allocation of overhead cost.
Dr Shergold —No, it was not bludging. It is a path leader within the department. This is simply a process of going through the allocation of the cost of enabling services.
Senator SCHACHT —I know. But this means that your superannuation cost payment is now proportionately put on the Office of Small Business.
Mr Fisher —I think I can say that—
Senator SCHACHT —That is true, is it not, Dr Shergold? I am not sure that small business would think it is fair that they have to pick up your super cost proportionately.
Dr Shergold —I have not agreed that that is the case.
Mr Fisher —The budget for running the Office of Small Business for this current year and the budget for the next financial year are very similar; there is very little difference in the direct costs.
Senator SCHACHT —Mr Dobbie said that one of the main changes has been that you have had to pick up more of the overhead costs. Is that right?
Dr Shergold —Yes. So it is the reallocation of the indirect costs; the direct prices available to the Office of Small Business this year are very similar to those of next year. If you look at the bottom of that page, you will see that the average staffing level for the office remains 36.
Senator SCHACHT —On page 65?
Dr Shergold —Correct.
Senator SCHACHT —But if you have had to pick up more costs for the overheads—
Mr Dobbie —No. The outcome of our four outcomes that picked up more costs in the budget year than they are currently picking up is outcome 4, not outcome 3.
—Yes. I am a simple soul—I apologise for not getting this right in my head. We have agreed that the biggest one-line decrease in the office's activities is 3.1.3 where we have said that there is no longer any need to print material that has already been done, et cetera—that is fine; I understand that—but what you have said has got me slightly confused.
Mr Dobbie —Let me try to clarify it. There is $1 million reduction in 3.1.3.
Senator SCHACHT —How can that have a reduction if you are allocating more overhead costs to the Office of Small Business?
Mr Dobbie —We are not. I keep saying that. We are allocating more overhead costs to online services, which is outcome 4.
Senator SCHACHT —I see. So Dr Shergold's superannuation has gone off to online services.
Dr Shergold —I hope my superannuation is very safe, Senator.
Senator SCHACHT —It is an obvious overhead cost that has to be shared around from the head of the department; it is the same in any department.
Senator JACINTA COLLINS —I was just wondering how old Dr Shergold might be.
CHAIR —How old is Senator Schacht?
Senator SCHACHT —I turn 55 in December, so I have access to my parliamentary superannuation without having to worry about being burned alive in the populist press. Thank you for explaining that. I think I now understand somewhat. In its role of looking after policy and program development for small businesses in Australia, can the office explain the advantages of the government's changes to the simplified accounting method—that is, what types of businesses can use SAM? In my old days that used to mean surface-to-air missile, but I hope it has a better effect than that SAM did.
Mr Fisher —The simplified accounting method is for those businesses that are selling both GST-free and GST-payable goods. Without this new system, that would be very complex. This allows them to average a figure, from memory, at the outset and to make a payment based on that figure rather than having to have point of sale equipment or a very sophisticated accounting system or stock system that differentiates between what is GST free and what is not GST free.
Senator SCHACHT —For a layperson like me, can you give an example of a specific type of business that can use that method?
Mr Fisher —A corner store may be selling fresh food—fruit and vegetables and the like—and may also be selling packets of biscuits or whatever. If somebody comes to you—
Senator SCHACHT —Or a chicken with a thermometer up its bum, I suppose, to quote the Treasurer on this matter.
Mr Fisher —It may be hot chicken or cold chicken, and there is a difference in the GST treatment. This system allows the proprietor to account for those differences in a simple way.
Senator SCHACHT —Will the SBCC or your office monitor, over the next six or 12 months, the success of SAM in helping small businesses and whether the outcome is what you desire it to be and they desire it to be: simplification?
Mr Fisher —As I said before, the SBCC at the moment has its life to 30 June.
Senator SCHACHT —After the 30th, you will be in the hot seat, Mr Fisher, as the last person left standing on this matter.
Mr Fisher —As we would with any issue relating to the introduction of the new tax system, we would continue to provide advice to the minister on it.
—Is there any particular way you can monitor the implementation and operation of the SAM?
Mr Fisher —Usually by correspondence that comes in and the various consultative mechanisms that we have, both formal and informal—
Senator SCHACHT —Is it a matter you are going to list with the Small Business Forum or with the two major accountancy professions in Australia? Will you seek their views, say, in six months time or three months time? It seems to me they are the only bodies that have enough track record and enough contact to work out whether it is doing what you hope.
Mr Fisher —We have not advised them of that, but that would be one of the ways that we could do that.
Senator SCHACHT —I trust you will do that. Let me move on quickly. Do you have any emphasis in your office, any particular program, on educating small businesses about e-commerce and the online environment, apart from putting Dr Shergold's superannuation as an overhead on the new section of the department—the online department?
Dr Shergold —That is pretty crucial to it, because the department has the responsibility for the business entry point, and that has a major education, information and communication role.
Senator SCHACHT —Good. What I want you to do is tell me how much you will spend in the coming year on that education and promotion program. I agree with you, Dr Shergold—this is one thing we agree on absolutely—that the entry point for electronic commerce is a major issue positive for small business if done properly.
Dr Shergold —I will take it on notice.
Senator SCHACHT —Also, you will have to look at this internationally as well as nationally, because the advantage of e-commerce is in international operations.
Dr Shergold —Correct, Senator. I am very proud that a recent international survey done of government IT by Accenture—I think it was of 24 countries, but I will confirm that—indicated that, in terms of the Australian situation, the department was at the leading edge in the application of information technology.
Senator SCHACHT —Would that be part of your claim for a productivity bonus on your performance as head of the department this year, Dr Shergold?
Dr Shergold —It may well be.
Senator SCHACHT —Very good. But your performance bonus will not be assessed on the fact that there has been a monumental increase of red tape on small business during the time you have been head of the Office of Small Business as the department secretary.
Dr Shergold —I am sure all those matters will be taken into account.
—I certainly hope so. I want to move on to a specific case, and I have to say that I am not fully briefed on every angle of the detail here so, if you want to take some of this on notice, I would not be at all surprised. Is the department aware of the recent case of Absolut Beachwear and the impact the TRIPS agreement has had on small businesses such as this? Senator Alston has been involved in the TRIPS agreement as information technology minister. As I understand it, Absolut Beachwear, an Australian small business, lost a case against Absolut Vodka in the British court. The issue was the use of the domain name `Absolut Beachwear'. Although the business was legitimately registered in Australia by both trademark and domain name, under the TRIPS agreement they had no standing against the internationally registered company Absolut Vodka. The small Australian business had to shut its doors as they had been ordered by the British court to pay $24,000 in damages to the multinational Absolut Vodka. Are you aware of the case?
Dr Shergold —No. If you have a question on it, I think you should direct it to Communications, Information Technology and the Arts.
Senator SCHACHT —And perhaps also to the intellectual property office or whoever handles the implementation monitoring. We have not got Senator Alston in estimates yet, but I am raising the issue that it is a classic case of a small business not being able to protect itself. At the first level, with the change in the international court, I should imagine that big-business pockets gave them a real advantage in this case. Then, secondly, there is the issue of whether you have discussed the operation of the TRIPS with Senator Alston's department. We suspect that examples such as this will keep occurring around the world: someone will have been registered in Australia with IPO and have a trademark, a domain name, and then they will get knocked on the head because they are up against a multinational like this company and many others. I think it is an issue where small business is on a hiding to nothing, unfortunately.
Mr Fisher —I am not aware of the particular case.
Senator SCHACHT —Can I ask you to take on notice at least to contact Senator Alston's department about the TRIPS agreement? If the TRIPS agreement is operating like this, I know what will happen in the end: there will be a lot of hostility in the Australian community at the international agreement always being in favour of the big guy rather than the small guy. As we know, certain elements in the Australian community want to use any evidence like this to argue against the broader issues of competitive international trade et cetera.
Dr Shergold —I am happy to take that on notice, although I understand that you are going to ask the question anyway—
Senator SCHACHT —If I get the chance. With estimates I might miss these things. I am told that the episode was on the Small Business Show—
Dr Shergold —Thank you.
Senator SCHACHT —so you might also get the transcript of that to look at. To save time, I will put a series or group of questions on notice, Mr Chairman. Again, they are to do with some issues on GST information, et cetera; but to save time, I think they are better placed on notice. Does the Office of Small Business provide the minister's office with a media monitoring service?
Dr Shergold —The Office of Small Business does not do so; the department provides such a service.
Senator SCHACHT —Your department overall, Dr Shergold. Does this include print and electronic media monitoring?
Dr Shergold —It is predominantly print media monitoring.
Senator SCHACHT —Does `predominantly' mean that you do not automatically get a transcript of an interview like that conducted on the Small Business Program?
Dr Shergold —No, we do not automatically. In instances where we know that there has been a significant interview, I will have that transcript sought, but it is not automatic.
Senator SCHACHT —Do you automatically get a print service of clippings from all the national metropolitan dailies and regional newspapers?
Dr Shergold —Yes, we do—and predominantly now in electronic form.
—Is that a faxed reproduction of the article, or does it come off the web site of the particular paper?
Dr Shergold —No. We have moved away from the faxed reproduction to having it presented in electronic form.
Senator SCHACHT —Have instructions been given specifically to the firm doing the media monitoring that emphasis be given to ensuring that small business matters are expeditiously reported to the minister's office?
Dr Shergold —We have provided a number of key words that the system picks up; they would, of course, include `small business'. That provides the media coverage, and that is made available to members of the department and to ministers' offices.
Senator SCHACHT —Such key words as: small business, GST, crook government, scandalous minister?
Dr Shergold —Those words are not on the list, as I remember.
Senator SCHACHT —Is `Macfarlane' a key word?
Dr Shergold —Yes, I believe that the names of all ministers would be key words.
Senator SCHACHT —Is `Fitzgibbon' a key word—the shadow minister?
Dr Shergold —Perhaps.
Senator SCHACHT —You might check that, please. Is `Schacht' a key word?
Dr Shergold —I do not believe so.
Senator SCHACHT —Spelt as the German version and not in the English way that you would like me to be sometimes!
CHAIR —Are there any more questions or is that your grand finale?
Senator SCHACHT —No, it is not my grand finale. It probably will be some day—shot! Can you just give me a breakdown for the year just ending on how much was spent on media monitoring—
Dr Shergold —Yes.
Senator SCHACHT —and what you anticipate in the budget to be spent in the coming 12 months?
Dr Shergold —Yes.
Senator SCHACHT —Do you have a specific contract signed?
Dr Shergold —We do have a specific contract signed. I am sorry that I do not know the details but it is not incorporated in outcome 3. I will certainly be able to provide the information of the cost of the contract.
Senator SCHACHT —Do you know whether the cost has gone up in this year we are just completing?
Dr Shergold —No. It has gone down as we have moved away from getting printed media monitoring.
—I see. There are a number of questions that I will put on notice that follow up on this particular matter. I have questions on one last area: the business entry point. Is it true to say that the funding announced in the present budget of an additional $8.2 million for the business entry point has been offset by efficiencies from DEWRSB in the vicinity of $33 million?
Dr Shergold —Yes. To some extent, the costs of the business entry point have been offset in that way.
Senator SCHACHT —Pardon my ignorance about acronyms but what does DEWRSB stand for?
Dr Shergold —We are it. We are the Department of Employment, Workplace Relations and Small Business.
Senator SCHACHT —I used to be DOPIE or something. That is what it is, sorry. I have just come from Defence and I was trying to work out whether you were some sort of new Exocet missile or something that I had not picked up on. Do the department have any plans to enhance the BEP in the coming 12 months?
Mr Gibbons —Yes, the department will continue the program of enhancement that has run through this financial year into the next financial year.
Senator SCHACHT —So that is the main reason for the additional $8.2 million—the enhancement? Is that right?
Mr Gibbons —The $8.2 million is what has been made available to the department. We are currently working on the program for next year. Some of that will go to maintaining what is already there, some will go to consultation with stakeholders about what they would like to see put on the site and the rest will go on development of those items that are chosen for enhancement after consultation.
Senator SCHACHT —How much roughly do you suspect will be spent on the enhancement and the further development of the BEP, which I think is a commendable program? I am not criticising it.
Mr Gibbons —Maintenance of the BEP will probably run at about $5.5 million dollars. Enhancement will probably run about $1.5 million.
Senator SCHACHT —Is there any particular enhancement you can point to that you are looking forward to doing to the BEP?
Mr Gibbons —We are working in concert with our colleagues in tax to incorporate more tax based transactions into the BEP and we are also looking to make it possible for users to personalise it more and to customise it and so on.
Senator SCHACHT —So you are at the cutting edge, Mr Gibbons, of providing a 50 per cent reduction in paperwork to meet the Prime Minister's promise of 1996?
Mr Gibbons —We are making a contribution to the reduction in paperwork across a range of transactions.
Senator SCHACHT —Good, Mr Gibbons. You might get an Order of Australia if you pull this off, not to say some thanks from the small business community. Will this enhancement require additional staff?
Mr Gibbons —No.
Senator SCHACHT —So it will all be carried out by the existing staff—
Mr Gibbons —Or contracted.
Senator SCHACHT —How much of it will be contracted out?
—It is not a question of contracting it out; it is a question of contracting in someone with a particular skill for three weeks here or a month there.
Senator SCHACHT —So the extra workload will be covered by short-term contracts of people coming in to do the work to add the enhancement on?
Mr Gibbons —Working with the people we have on a permanent basis and supplementing the skills base as we need it.
Senator SCHACHT —Does that mean that the workload of existing staff will be increased without extra remuneration or—
Mr Gibbons —No.
Senator SCHACHT —I look forward to that. When do you expect to have these enhancements operational? By the end of the year?
Mr Gibbons —They will be made available as they are completed, probably on the basis of a quarterly release arrangement.
Senator SCHACHT —And they will be announced with some publicity—quite rightly—so people are aware of them?
Mr Gibbons —That has generally been the case to date.
Senator SCHACHT —Do you have any estimate of what the BEP penetration is into the small business community out of Mr Fisher's one million small businesses?
Mr Gibbons —We know that BEP is in the top five most visited government sites in the country, looking at federal, state and local government. It is in the top 30 most visited sites in the country. So its penetration is quite good.
Senator SCHACHT —For the sake of the non-aficionados of the Internet, is that 10 million hits or is it two million?
Mr Gibbons —I think it is running now at about 400,000 page visits a month.
Senator SCHACHT —So it is about 4[half ] million a year.
Mr Gibbons —Yes.
Senator SCHACHT —Do you do any direct assessment by surveying the small business community about how they are using it? Do you use the system itself to ask them what they think and how it can be improved?
Mr Gibbons —Market research has driven most of the development in the last two years. We have done that through commissioning specific studies. We also survey users through the site itself.
Senator SCHACHT —Is there a particular budget you have to promote the BEP each year to spend on advertising, presentations, cocktail parties or whatever may be reasonable in that area?
Mr Gibbons —We do not have a specific budget for promotion of the BEP, but when there are major milestones that need to be promoted, we draw from the funds available for the—
Senator SCHACHT —So the funds would come out of the $8.2 million?
Mr Gibbons —That is correct.
Senator SCHACHT —You can take this on notice: could you supply us with some estimate of what you spent on those quite necessary promotions to the year just ending?
—We can do that.
Senator SCHACHT —Do you have any targets for the coming financial year of what should be the small business uptake of BEP?
Mr Gibbons —There are two parts to that. One is the small business community that already has access to the Internet. We certainly want to increase our penetration there. We think the way to do that is to increase the provision of transactions in areas that they have told us are of most interest to them. While we are focusing a lot of effort with our tax colleagues at the moment on bringing into the online world some of the tax based transactions—
Senator SCHACHT —But if you had just under five million hits to the page, based on that figure you gave me a while ago, would you hope that you might be able to get it to nearly six million in this coming 12 months?
Mr Gibbons —We do not have a specific target yet in mind, but we certainly want to see it increase and we want to move our position up the ladder.
Senator SCHACHT —Win the premiership. How many accesses were you getting two years ago? Was it two million or three million?
Mr Gibbons —It was not even on the scale.
Senator SCHACHT —How many years of operation have you had?
Mr Gibbons —It is now in its third.
Senator SCHACHT —At the end of the first year, what were you at? A couple of million?
Mr Gibbons —No, it would have been around a hundred thousand a year.
Senator SCHACHT —So you are claiming a big percentage increase. Well done. No-one argues with that. It is a good outcome. What evidence do you have to meet the department's claim that the BEP is a cost-effective measure in terms of `reducing small business compliance by providing 24 hours a day, seven days a week access to government sites'? Have you done any survey on this? Have you done an independent measure?
Mr Gibbons —We have done several surveys. The results confirm that in the last two years the products we have put on the site not only have been welcomed by the small business community but also have been used by the small business community. We know that having them available outside normal hours is critical. When we look at the log that tells us when people use the site and what transactions they use it for, it is interesting to note that most of the heavy duty work occurs outside normal business hours.
Senator SCHACHT —Yes, when they are at home trying to work out how to do that rotten BAS. I understand that. Mr Chairman, that is all the questions I have for the officers.
CHAIR —I will just indicate where we are likely to be going next. There are no more questions for outcomes 2 and 3. We will be going back to output group 2.1, and then output group 2.2, but there are no questions for coalmining industry and long service leave funding nor the Defence Force Remuneration Tribunal, so any officers involved in those can go home.
Senator CARR —Before you close, I understand that your intention is to adjourn the committee at the conclusion of those two programs.
CHAIR —It is.
Senator CARR —The minister is not available tonight?
CHAIR —The minister is not available tonight.
—I take it, Dr Shergold, that after this suspension you will be able to give some advice on the matters that I raised yesterday in regard to the Job Network.
Dr Shergold —No, Senator. At the end of the session yesterday I approached the chair and asked if you had placed questions on notice that I could have examined and they were not available, so I am now presuming I will take them on notice to respond to them.
Senator CARR —Hang on a minute.
CHAIR —Senator Carr, you were not prepared to provide the documentation so we do not have the questions. How can the officer respond to a question he does not have?
Senator CARR —We will have to ask some more questions then.
CHAIR —You did not provide the questions. How can you expect him to respond?
Dr Shergold —Senator, I asked you if you would leave the questions so that I could examine them overnight.
Senator CARR —I suggested to you that we were not going to provide you with our documentation because we believed that it provided information which was confidential to me.
CHAIR —Therefore, there was the request to have the questions separate.
Senator CARR —I had no trouble getting a tape of last night's proceedings. I find it remarkable that, with all the resources that are available to your department, you could not establish access to a tape of last night's proceedings.
CHAIR —There was a clear understanding, Senator, that you were going to provide questions.
Senator CARR —There was no clear understanding. In fact, it was specifically said that we were not providing additional documentation other than the questions which were clearly on transcript.
CHAIR —We do not have the questions.
Dr Shergold —I have indicated I will take them on notice.
Senator CARR —Well, I will have some more questions for you following this suspension of proceedings.
Proceedings suspended from 3.48 p.m. to 4.11 p.m.
CHAIR —We will now move to Output group 2.1—Workplace relations framework.
Senator CARR —I have some questions in relation to Leonie Green and Associates.
Dr Shergold —I can bring you up to date on what has happened. I had hoped to have the specific questions last night; I did not. At the end of last night's Senate estimates, I held a meeting with the relevant general managers. At 8.30 this morning, I asked for an investigation to be begun, at my request, of Leonie Green and Associates. That investigation is under way. At this stage, I am informed that there is no evidence of any contractual breaches, but you will understand that I do not want to answer further until the investigation is completed.
Senator CARR —Thank you, Dr Shergold. Has your investigation had drawn to its attention a letter sent by Leonie Green and Associates to job seekers regarding an offer of employment to look for work for themselves?
Dr Shergold —I imagine that any such letter would be part of the investigation.
—Will the investigation go to the issue of the discussion with David McShane, Centrelink liaison officer, DEWRSB, Melbourne?
Dr Shergold —It probably will not. This is my frustration. I have asked for an investigation to take place on the basis of the relatively limited statements that you made yesterday. The statement you are now making was not identified yesterday. You can be assured that other allegations that you are now raising will now also be taken into account in the investigation.
CHAIR —Senator Carr, if you provide a list of the specific questions you want answered, the officers can go away and investigate them.
Senator CARR —I raised a series of questions with you yesterday, Dr Shergold—
Dr Shergold —This last one was not raised yesterday.
Senator CARR —Let me just finish, Dr Shergold. I know how frustrating it is having to deal with these committees. The allegations that I raised with you yesterday concerned the operations of Leonie Green and Associates. I indicated to you yesterday that this was a company which I had been advised had established a subsidiary labour hire company, Anchorage Employment. I asked whether you could confirm that.
I asked whether it was the case that this company had received a subsidy from your department for 15-hour job placements for a fee of $370 and that the personnel were employed for 15 hours through the job matching placement and paid $200, and there was a profit of $150 per job seeker. The persons were then relegated to the unemployment pool yet again, and there have been at least 12 complaints. I also asked you whether the department was aware of these matters, whether those complaints had been registered in the system, whether this was legal, whether the practice was becoming more and more widespread and whether this was a form of rorting the system and the exploitation of job seekers.
Dr Shergold —Correct
Senator CARR —When we concluded our proceedings last night, I went down to Sound and Vision and got a copy of the tape. I had the tape played back, and I have a copy of that tape now. I would have thought that your department, with the resources that you have available, would have been able to secure a similar facility.
CHAIR —Order! This is not normal Senate practice. If you have questions to an officer, you put those questions to the officer in writing. You do not expect them to go down to the bowels of the building and rat through your rantings to find out which questions you asked. That is not normal Senate practice, and you know it is not.
Senator CARR —Thank you for your advice. Dr Shergold, the point is that your officers, like me, could have rung Sound and Vision and got a copy of the tape or could have rung the secretary of this committee and got a copy of the tape. They could have performed the normal function. I take it these proceedings are transmitted to your department in some form or other?
CHAIR —Again, Senator. That is not normal practice.
Senator CARR —Is it the case or not, Dr Shergold? Do you monitor these proceedings?
Dr Shergold —Early this morning I got a copy of the transcript. The questions that you asked and have repeated now are the questions that are under investigation.
Senator CARR —Thank you, Dr Shergold.
Dr Shergold —My point here is that you are now raising new questions and allegations that are not presently being investigated.
—As I think we have now established, you do have the resources to get a copy of the transcript, and you have a copy of the transcript as you have just indicated. It was not inappropriate for me to consider that that would be the normal course of action.
CHAIR —It is inappropriate, Senator. That is not normal procedure. Dr Shergold has done that, but that is not normal procedure. If you want questions on notice to officers, you provide them in writing. You do not expect them to rat through the tapes.
Senator CARR —We have heard your view on this subject.
CHAIR —I am just reminding you of normal practice and would ask that in future you follow that rather than this rather strange procedure you are trying to set up now.
Senator CARR —It is quite clear, though, that the department has those questions. We now want to establish the nature of the investigation that they have launched, given that you did say you would come back to us and make a statement on the matters I raised with you. One of the issues that I did pursue with you was the extent to which the department was aware of what I regard to be a scam. When I asked the question yesterday, and the tape clearly indicates this to me, your officers indicated to me that they did not know about it.
Dr Shergold —I certainly indicated that I did not know about it; I cannot speak for my other officers.
Senator CARR —I urge you to look at the tape. The transcript may not be quite so evident on this, but clearly the tape is. While one understands that one can misinterpret gestures, the clear indication I have from your officers is that they were not aware of it.
CHAIR —Are we to interpret non-verbal language now, Senator? I thought we went by Hansard records.
Senator CARR —I asked you a specific question regarding Centrelink. I will ask you again: is it your understanding, or are you aware, that these are issues that have been canvassed through a Centrelink liaison officer—an officer of your department in Melbourne—and David Shaw of the contracts management branch of your department?
Dr Shergold —At the time that you raised that, I was not aware, and at this stage I am still not aware. But then I have not received the results of the investigation at this stage.
Senator CARR —Of course, it would be difficult to have any investigation competently carried out when it only commenced at 8.30 this morning. I think that would be a reasonable conclusion to draw.
CHAIR —Why don't we wait until the answers come back and then proceed on that basis?
Senator CARR —Because it is clear that this department needs further advice—it is quite apparent to me. Are you aware of a letter sent to job seekers from this particular entity, Leonie Green and Associates, saying that personnel will in fact be breached if they do not accept the offers by the subsidiary of Leonie Green and Associates, Anchorage Employment, to take up 15 hours work with them?
Dr Shergold —I am not aware of such a letter. It may well exist.
Senator CARR —Are you aware that the letter actually says that the personnel—
Dr Shergold —I am not aware of the letter at all.
Senator CARR —Clearly there is a copy of the letter in the department.
Dr Shergold —Okay.
—I put to you that that is the case. I also put to you that this letter has been discussed at some length by officers of your department.
Dr Shergold —I am unaware of the letter.
Senator CARR —The letter indicates in a footnote that job seekers will be breached if they do not respond. It does not say that, but in fact it says that there may be reduced payments if a job seeker refuses an offer of employment. Is that true? Would a person who was placed in a situation such as this, whereby they were told to go to work for a subsidiary of the Job Network member, lose payments if they did not accept this so-called offer of employment?
Dr Shergold —It would depend. You will understand that I cannot possibly answer this question until I have all the facts.
Senator CARR —But you can indicate to me whether or not that is consistent with the regulations at the moment.
Dr Shergold —It would depend upon the facts.
Senator CARR —I am quoting here from correspondence, signed by Mr David McShane, that says Centrelink may reduce payments if a job seeker refuses an offer of employment—which is true. It is quoting from the letter and evaluating that letter.
Dr Shergold —That is certainly correct.
Senator CARR —That is the point I asked of you. I am clear about that, thank you. Is it the case that the Lilydale manager of Centrelink has raised concerns with the department about these matters?
Dr Shergold —Not to my knowledge, but I will have that as part of the investigation.
Senator CARR —Have any senior officers of your department, other than the officers I have referred to, been asked to give advice on the appropriateness of the practice and the fears of job seekers in regard to this matter?
Dr Shergold —I do not know. I will take that question on notice.
Senator CARR —Thank you. Have any of your senior officers, apart from the ones I have named already, had brought to their attention the letter distributed by Leonie Green and Associates or their subsidiary hire firm, Anchorage Employment, in relation to offers of employment?
Dr Shergold —I do not know. I will take that question on notice.
Senator CARR —I ask you to do that, if that is the case. What is the department's attitude towards the said letter and the appropriateness of such a letter being sent to job seekers, particularly given the intimidatory effect that such a letter would be intended to have on persons being approached to accept such offers?
Dr Shergold —While not accepting the remarks that you made in passing about the intimidatory nature of the letter, I will take your question on notice.
Senator CARR —Thank you. How many job seekers have been referred by Leonie Green and Associates to their labour hire subsidiary or subsidiaries—because there may well be more than one?
Dr Shergold —That is already a subject of the investigation.
Senator CARR —You cannot tell me now—you do not have that information?
Dr Shergold —No.
—Can you advise the committee how many job seekers have been employed for 15 hours?
Dr Shergold —I will do.
Senator CARR —Thank you. How many for more than 15 hours and for what duration?
Dr Shergold —Yes.
Senator JACINTA COLLINS —On that point, is it within your ability to make that differentiation?
Dr Shergold —I am taking the question on notice to see if I can distinguish the number of hours of work undertaken by clients.
Senator JACINTA COLLINS —My question is: would that data ordinarily be available to you?
Dr Shergold —Obviously, the data would be available in terms of 15 hours because that is the number of the benchmark in terms of a payment. I doubt that we would collect this but it is possible that the provider, Leonie Green and Associates, may have some information.
Senator JACINTA COLLINS —So they may provide us with the information of the proportion of people they give solely 15 hours to as compared to those that they give more ongoing labour hire arrangements to?
Dr Shergold —Yes. I will seek to gain as much information as I can.
Senator CARR —I have a couple of questions in this regard. How many complaints have been received by any officers of the department regarding the practices of Leonie Green and Associates and Anchorage Employment? Can you take that on notice?
Dr Shergold —I will.
Senator CARR —How and at what levels within the department have such concerns been addressed? Having received a copy of the Green letter, who did Mr Shaw consult in the department and seek further advice from about this Green letter?
Dr Shergold —Mr Shaw was someone from Centrelink?
Senator CARR —That is right.
Dr Shergold —I will ask Mr Shaw.
Senator CARR —He is your departmental liaison officer, if I recall.
Dr Shergold —I apologise to him.
Senator CARR —How many contracts does Leonie Green and Associates, Anchorage Employment and other subsidiaries of Leonie Green and Associates have with the department in any capacity?
Dr Shergold —I will take that on notice.
Senator CARR —Thank you very much. Is Leonie Green herself a senior office holder in the National Employment Services Association?
Dr Shergold —She is.
Senator CARR —And she is the industry representative for the Job Network members and the government's partner in negotiations about the future directions of the Job Network? Would that be a fair description of her role within that network?
Dr Shergold —No. She is the chair of the NESA board.
—She is the chair?
Dr Shergold —Yes.
Senator CARR —She is quite a significant member of the board if she is the chair, then, and she is also a significant player within the industry itself, isn't she?
Dr Shergold —I would anticipate that she is a significant player within the employment services industry.
Senator CARR —It is put to us that DEWRSB has provided advice to Job Network members and to others within the department for staff to back off on this particular matter. The term `back off' is used in correspondence to us. Would you concur with that description of the advice that has been tendered by the department?
Dr Shergold —I am not aware of any such actions but I will also have that investigated as part of the review.
Senator CARR —Have any complaints been made to the minister's office in regard to this matter?
Dr Shergold —I will refer that question to the minister's offices but, to my knowledge, no.
Senator CARR —If it is found to be that you have different advice, could you indicate to us at what time those complaints were made to the minister?
Dr Shergold —I will refer that question to the minister's offices.
Senator CARR —Can you advise whether or not any senior member of your department has directed staff not to take any action on this matter and not to discuss this matter?
Dr Shergold —I will also have that allegation investigated.
Senator CARR —Thank you very much. Finally, IPA and Drake also have subsidiary labour hire companies, do they not?
Dr Shergold —May I correct this if I am wrong? I believe the answer is yes.
Senator CARR —Could you indicate to the committee how many people have been placed through their subsidiary labour hire companies?
Dr Shergold —I will take that question on notice.
Senator CARR —And how many have collected a fee from the department for doing so? Presumably, not everyone placed through them would attract a fee, would they?
Dr Shergold —It would depend upon the arrangement. In many instances, the labour hire companies are used to provide wage assistance to employers who take on these employees for some period. I will take your questions on notice.
Senator CARR —Thank you. Could I have advice on the number of people who have been employed for 15 hours through these placements, how many have been employed in addition to the 15 hours through these placements and the duration of those additional placements over the 15 hours?
Dr Shergold —Subject to the data that is available, I will provide that information.
Senator CARR —Thank you.
Senator JACINTA COLLINS —Dr Shergold, further on this letter—
Dr Shergold —Which letter are you referring to? The letter from Leonie Green and Associates?
Senator JACINTA COLLINS
—Yes. I want you to investigate comments by—
Dr Shergold —Senator, could I have a copy of the letter from which you are quoting?
Senator CARR —No, we have already indicated to you that we are not providing our correspondence on this.
CHAIR —You make it very difficult for—
Senator CARR —Dr Shergold, the department clearly has discussed this quite widely. I find it quite astounding that the secretary of the department cannot secure this correspondence.
Dr Shergold —Senator, I did not come here to answer questions on outcome 1. I had understood quite clearly that we were here to discuss outcomes 3 and 2 this afternoon.
CHAIR —That is correct.
Dr Shergold —I do not have my staff available to me. In order to answer the question, I asked if I could have a copy of the letter before commenting.
Senator CARR —Dr Shergold, we will go through this ground again. We discussed yesterday that you would come back with a response to the matters that I raised yesterday—
CHAIR —Which you did not provide in writing, and you are not providing them in writing again.
Senator CARR —I am surprised that Ms Riggs is not here. We have discovered that you in fact did have the transcript as of 8.30 this morning. I am surprised that you have not had an opportunity to assess these matters. You clearly feel it necessary to establish an investigation, which I understand.
Dr Shergold —Senator, half the matters—
Senator CARR —It is hard for me to argue—
Dr Shergold —have only been raised today.
CHAIR —Senator Carr, you are interrupting the officer—
Senator CARR —On the contrary, he is interrupting me.
CHAIR —And you are again following the same procedure of yesterday of not providing the officer with the information beforehand. It is an incredibly unfair position you are putting the officer in.
Senator CARR —I tell you what is unfair: it is people being ripped off by these sorts of scams. That is what is unfair.
Senator JACINTA COLLINS —Dr Shergold, what I am seeking to do is provide you with some additional information in your investigation. I cannot provide you with a copy of the letter, which has been given to me in confidence. It is quite obvious by some of the information provided to me in confidence that it has been canvassed in detail within your office.
Dr Shergold —Okay.
Senator JACINTA COLLINS —Senator Carr has given you the name of the officer who we are aware has canvassed it.
Senator CARR —Two.
Senator JACINTA COLLINS
—There is one particular element of that canvassing that I would like you to look at in your investigation, which is comments as follows from Mr McShane. He indicates, in discussing this letter:
Job seekers should not feel threatened by this letter as there is no legislative requirement for the job seeker to respond to the letter. Nor does the letter indicate that the job seeker must respond. The footnote does not say, `The job seeker will be breached if they do not respond.' It states that Centrelink may reduce payments if a job seeker refuses an offer of employment, which is true.
For what other reason, apart from breaching someone, would Centrelink be reducing someone's payments if they do not accept an offer of employment?
Dr Shergold —I will take the question on notice when I have examined the letter.
Senator JACINTA COLLINS —But you understand my concern about that type of rationalisation?
Dr Shergold —I only vaguely understand now because I have not yet seen this letter. Until I read it, it is difficult for me to place it in context.
Senator JACINTA COLLINS —I understand that. I am just raising for your information that this seems to be a rationalisation applied within your department which reinforces our concern that there has been an attempt to dampen the matter.
CHAIR —We will now move back to outcome 2.1.
Senator JACINTA COLLINS —Is this the right area to ask whether you have commissioned a survey of workplace attitudes?
Mr Hoy —Yes.
Senator JACINTA COLLINS —Have you?
Mr Hoy —Could you explain a bit more what you have in mind?
Senator JACINTA COLLINS —I will come to it a bit further on, but there are a number of questions, it appears, that employees are being canvassed on. It appears that it may relate to a survey commissioned by the department on general workplace attitudes. Have you got a few going at the moment?
Mr Hoy —We have commissioned one survey which I think might be the one you are talking about. We have contracted the University of Melbourne, the Institute of Applied Economic and Social Research, to provide some information to us on community attitudes to individual agreement making.
Senator JACINTA COLLINS —Is there a separate survey being conducted by NCS Pearson?
Mr Hoy —Not that I am aware of.
Senator JACINTA COLLINS —Or could they be doing the canvassing for the University of Melbourne?
Mr Hoy —I do not know. I would have to take that on notice and give you some advice.
Senator JACINTA COLLINS —If you could. What is the nature of the survey?
Mr Hoy —The University of Melbourne, through the Institute of Applied Economic and Social Research, produces regular surveys on this. We have commissioned them to give us some specific advice on community attitudes to individual agreement making.
Senator JACINTA COLLINS
—Who is being surveyed?
Mr Hoy —As I understand, they are surveying the normal community through which they undertake their normal research. They do this as a matter of course. We have asked them if they would give us some advice through that process as to what the community attitudes were.
Senator JACINTA COLLINS —When you say `the normal community', they try to get a representative sample of the population in general?
Mr Hoy —As I understand, they do.
Senator JACINTA COLLINS —Do you know how wide ranging it is?
Mr Hoy —No, I do not.
Senator JACINTA COLLINS —How many subjects?
Mr Hoy —No, I do not know that.
Senator JACINTA COLLINS —Can you take that on notice?
Mr Hoy —Yes, I assume that we could ask them and provide that information to the committee.
Senator JACINTA COLLINS —But you have commissioned research and you do not know how large the sample is?
Mr Hoy —I personally do not know, but I could give you some more information on notice.
Senator JACINTA COLLINS —The department would know?
Mr Hoy —I assume we do, yes.
Senator JACINTA COLLINS —Before they decide to commission research you would have some idea of the methodology that is involved.
Mr Hoy —I think so, but I do not have the details.
Senator JACINTA COLLINS —So you obviously do not have a copy of the questions?
Mr Hoy —I do not, but I think I could get them for you.
Senator JACINTA COLLINS —When was the survey commissioned?
Mr Hoy —I am not sure. I would need to take that on notice and let you know.
Senator JACINTA COLLINS —The time frame for reporting back?
Mr Hoy —As I understand, it is imminent.
Senator JACINTA COLLINS —How much was it?
Mr Hoy —I am advised it was $64,194.
Senator JACINTA COLLINS —Does it inquire into such matters as whether they prefer to negotiate directly with their employer?
Mr Hoy —I would need to get some advice on notice on that.
Senator JACINTA COLLINS —Another one: is the subject better off now than they were two years ago?
Mr Hoy —I will give that on notice.
Senator JACINTA COLLINS
—When you look at that, can you apprise us of the purpose of particularly that last question?
Mr Hoy —Yes, I will.
Senator JACINTA COLLINS —Presumably it goes into consideration of factors beyond simple workplace issues—for example, the effects of the GST, income tax rates change, and other like questions.
Mr Hoy —I will give you that on notice.
Senator JACINTA COLLINS —I would like to know what possible benefit answers to a question such as, `Is the subject better off now than they were two years ago?' would be to the department.
Mr Hoy —Again, I will give you that advice.
Senator JACINTA COLLINS —Was there any involvement by the minister or his office in the letting of the contract or the formulation of the questions?
Mr Hoy —I do not know, but I will give that information on notice.
Senator JACINTA COLLINS —Is there any reason why whoever dealt directly with this matter is not present today?
Mr Hoy —I cannot answer that. I know about that consultancy generally, along with a number of other consultancies. I can give you general information, but I cannot give you the level of detail you are seeking.
Senator JACINTA COLLINS —Can't you even give me the detail of the process for formulating the questions?
Mr Hoy —No, I cannot.
Senator JACINTA COLLINS —For a $64,000 project for the department?
Mr Hoy —The answer is that that happened before I took over responsibility for this group, and I know only general information on it.
Senator JACINTA COLLINS —What was the process for formulation of the questions? Could you provide the committee with the survey and the results if and when they become available?
Mr Hoy —I will take that on notice.
Senator JACINTA COLLINS —Would you also provide the contract documents, correspondence, meeting notes, emails and any other documentation held by the department in relation to the survey?
Mr Hoy —I will take that on notice.
Senator JACINTA COLLINS —In relation to AWIRS, what is the status of the Australian industrial relations workplace survey?
Mr Hoy —In terms of whether there is a third AWIRS survey, the government has that under consideration but has not made a decision on it.
Senator JACINTA COLLINS —Is there any reason why making a decision on this has been so protracted?
Dr Shergold —Senator, Mr Hoy cannot answer that. It is a matter for government to decide when they make decisions.
Senator JACINTA COLLINS
—Have there been any problems with the survey to date?
Dr Shergold —No.
Senator JACINTA COLLINS —Turning to another matter of general interest, are you aware of the decision by Commissioner Drake on 20 February in Coffs Harbour re the Challenge Inc enterprise agreement?
Mr Hoy —Not personally, no.
Senator JACINTA COLLINS —Commissioner Drake made two interesting points in relation to the Workplace Relations Act and intellectually disabled people, namely, employees in that case did not or were not capable of understanding the agreement and, therefore, could not make an informed vote on the agreement, the Workplace Relations Act makes no special provisions for intellectually disabled workers and there is no power to delegate the employee's vote to, say, a family member or a carer. Is the department attempting to address some of the issues as they relate to intellectually impaired workers?
Mr Smythe —The department has had some discussions with Family and Community Services about that issue, but that is as much as I can tell you at this stage.
Senator JACINTA COLLINS —So discussions have been instigated but there is no progress to report?
Mr Smythe —That is correct.
Senator JACINTA COLLINS —If anything comes to light within the period that you are providing us with answers to questions on notice, could you include that, please?
Mr Smythe —Certainly.
Senator JACINTA COLLINS —The Employee Entitlement Support Scheme is in 2.2, isn't it?
Dr Shergold —Yes.
Senator JACINTA COLLINS —I have finished questions on 2.1, Mr Chairman.
CHAIR —We will move to 2.2—Workplace relations services
Senator CARR —Dr Shergold, I asked yesterday about the operations of the workplace reform group. Do you have officers here who can assist me?
Dr Shergold —Yes.
Senator CARR —I take it that you still have a workplace reform group?
Mr Manthorpe —We are now called the Workplace Relations Implementation Group.
Senator JACINTA COLLINS —It is still down here as the sectoral reform facilitation.
Mr Manthorpe —That is an element within the group.
Senator JACINTA COLLINS —What else is in that group?
Mr Manthorpe —EESS, the Employee Entitlement Support Scheme, the Office of Workplace Services, Trades Recognition Australia, Australian government employment matters—a range of things.
Senator JACINTA COLLINS —Defence?
Mr Manthorpe —And the Defence Force Remuneration Tribunal to the extent that it is our policy role to advise government on those matters.
—Would you say that you have wound back the original emphasis on workplace reform?
Dr Shergold —No, Senator.
Senator CARR —Does it take a lower priority, Mr Manthorpe, in terms of your operation, given that there are all these other functions for you to administer?
Mr Manthorpe —All of those functions have always existed within the department.
Senator CARR —But they have now been consolidated, haven't they?
Mr Manthorpe —No, the sectoral reform element that you are referring to was always an element within a group or a division and it still is.
Senator CARR —So is there still a meat industry component?
Mr Manthorpe —There is.
Senator CARR —What does that component do?
Mr Manthorpe —I think that I would say that, in terms of the resource we dedicate to that industry, it is probably less than it has been in the past. The role of that element of the group is to monitor industrial relations and workplace relations matters in the meat processing industry; to liaise with parties in the industry as appropriate; to keep across significant disputes; to provide advice to government; and to consider whether there are specific activities that government ought to play in relation to that industry. That is broadly how I would describe it.
Senator CARR —Thank you. How many officers are involved?
Mr Manthorpe —Specifically in meat?
Senator CARR —In meat.
Mr Manthorpe —At this stage I would say less than one.
Senator CARR —And how many altogether are there in your section which deals with all of these matters?
Mr Manthorpe —In terms of the sectoral reform matters, there are about 10 or 11 people involved in that presently.
Senator CARR —What do the others do?
Mr Manthorpe —The sectoral reform team considers workplace relations matters in a variety of industries, including meat, manufacturing, building and construction and coalmining.
Senator CARR —Waterfront?
Mr Manthorpe —That is still something for which we have a watching brief.
Senator CARR —But it is mainly in construction?
Mr Manthorpe —It is across those industries I mentioned, as well as some others, such as retail.
Senator CARR —So you have people in retail. How would you allocate the resources of the 10 people? Are the bulk of them on construction?
Mr Manthorpe —No.
Senator CARR —How would they be deployed?
—I would probably say that we divide them up depending on the demands of the time and what issues are running.
Senator CARR —They vary? You will allocate officers as issues arise?
Mr Manthorpe —Yes.
Senator CARR —What sorts of issues?
Mr Manthorpe —Workplace relations issues.
Senator CARR —Strikes?
Mr Manthorpe —Significant disputes.
Senator CARR —Disputes and lockouts?
Mr Manthorpe —Potential.
Senator CARR —What other issues? Are they the only matters in terms of workplace relations?
Mr Manthorpe —We are interested in understanding the industries and competitive circumstances within which the industries operate, not merely and narrowly the workplace relations issues.
Senator CARR —Workplace culture and those sorts of things?
Mr Manthorpe —I would not use that phrase. It is perhaps the competitive circumstances within which the industries operate.
Senator CARR —But labour market type issues?
Mr Manthorpe —That is probably a fair statement.
Senator CARR —Yes. Are you concerned with management or just with employees?
Mr Manthorpe —We are concerned with providing advice to government about workplace relations issues in those industries.
Senator CARR —But it is the operations of the labour market, is it, rather than the management of those issues?
Mr Manthorpe —I would not have used that phrase. If you want me to describe what the area does in a sentence, I would say that we seek to provide advice to government about workplace relations issues in those industries.
Senator CARR —Thank you, Mr Manthorpe. Most policy advice areas, of course, fit that function. I appreciate that. Do you administer any particular programs?
Mr Manthorpe —No, I do not think so. Let me take that on notice.
Senator CARR —Thank you. What is the budget for the Workplace Relations Implementation Group?
Mr Manthorpe —Do you mean the sectoral reform element or the group as a whole?
Senator CARR —Let us just have a look. What is the budget for the whole group and what is the sectoral reform within that?
Mr Manthorpe —The budget for the whole group for the next financial year is something in the order of $9.7 million.
Senator CARR —And how much of that is for the sectoral reform?
—Something in the order of $2.5 million. I will check those figures and correct them if I am wrong, but I think that is the order of the expenditure.
Senator CARR —Do you liaise with parties in the industry?
Mr Manthorpe —Yes.
Senator CARR —Does that include companies?
Mr Manthorpe —Yes.
Senator CARR —Unions?
Mr Manthorpe —On occasions.
Senator CARR —How often have you liaised with unions? Could you give me an indication of how often you would contact a union about an industrial dispute?
Mr Manthorpe —It would be fair to say that, in the recent past, we have had less contact with unions than with employers.
Senator CARR —Within the last six months, how often?
Mr Manthorpe —I do not know.
Senator CARR —Could you give me an indication? Has it been once, twice or never?
Mr Manthorpe —I do not know.
Senator CARR —You cannot recall an occasion in the last six months where you have contacted a union?
Mr Manthorpe —I am not doing all the contacting.
Senator CARR —But you manage the section. As you are the manager, presumably people would advise you that they had made contact with this organisation or that organisation. As the manager of the unit, you cannot recall an occasion in the last six months where you have contacted a union about an industrial dispute?
Mr Manthorpe —I cannot recall one, but that does not mean that it has not happened.
Senator CARR —In the last 12 months?
Mr Manthorpe —I am not sure.
Senator CARR —Could you take on notice for me the points of contact you have had with unions over the last 12 months with respect to industrial disputes, and which unions and on what disputes?
Mr Manthorpe —I can take that on notice.
Senator CARR —You have been involved with workplace reform units, or various descriptions thereof, for quite some time, haven't you?
Mr Manthorpe —Yes.
Senator CARR —You were present at the Senate hearings on 7 June 1999.
Mr Manthorpe —I was.
Senator CARR —Do you recall when I asked you questions about the O'Connor's dispute?
Mr Manthorpe —I do.
Senator CARR —Have you been involved with the O'Connor's dispute since that time?
—Yes. But not recently.
Senator CARR —You personally have not been involved in recent times?
Mr Manthorpe —That is right.
Senator CARR —When was the last time you or any of your officers sought to discuss the O'Connor's dispute with the AMIEU?
Mr Manthorpe —I do not believe we have.
Senator CARR —Ever?
Mr Manthorpe —That is my understanding. I think that question was raised in June 1999.
Senator CARR —I thought that, since that time, you might have had an opportunity to wander down and talk to them. This involved a dispute which is the longest lockout in Australian history. Do you think that would be worth talking to them about?
Mr Manthorpe —We make judgments about who to talk to all the time. Our role is to provide assistance to the government. We make judgments in fulfilling that role.
Senator CARR —I appreciate that. Do you think your assistance to the government is aided by having a broad range of views on industrial disputes?
Dr Shergold —Senator, that is an unfair question. The officer is giving you the factual information of whether meetings have occurred. The nature of that policy advice and whether it is useful to the government is something for the government to comment on.
Senator CARR —Dr Shergold, I take your point that the evaluation of the advice will be a matter for government. As you know, we hope that in due course that government will change and that we will have an opportunity to evaluate the quality of that advice. But I would have thought it was reasonable for me to ask the departmental officer whether he thought his advice to government might be improved by having access to a broad range of views. What do you think, Dr Shergold? Do you think your officers, when they are providing advice, ought to have access to a wide range of views?
Dr Shergold —I think my officers, in providing that advice, seek to balance a wide range of views, and they can capture those views in a variety of ways.
Senator CARR —How would they capture the views of one party to the next without discussing—
Dr Shergold —They can capture the views in a variety of ways—from talking to them directly or from the public statements or media statements made by organisations. There are a variety of methods.
Senator CARR —Dr Shergold, I trust that you will not have the opportunity to rely upon my views, from what appears in the newspapers. I would be surprised if you would expect me to do the same about you. Why would it be any different for the AMIEU in regard to the longest lock-out in Australian history?
Dr Shergold —Senator, we may have different judgments. It is the judgment of the department that the way it has sought and developed policy advice in this area is appropriate.
Senator CARR —Mr Manthorpe, given that you provide advice to government on an obviously important area of economic activity, you liaise with parties and assist government in terms of developing a specific attitude—I believe is the expression you used—
Mr Manthorpe —I did not use the word `attitude'.
—Well, action that they might follow? Is that the word you used? Perhaps I have misquoted you.
Mr Manthorpe —I am not sure—
Senator CARR —Perhaps it does not appear in the press, but we could say the `actions' that government might follow?
Mr Manthorpe —Yes.
Senator CARR —On that matter, are you aware of the allegations made on oath in the Australian Industrial Relations Commission on 28 February 2001, 1 March 2001 and 2 March 2001, during the Ray Murphy unfair dismissal case in which the meat industry firm O'Connor did not lead evidence?
Mr Manthorpe —Can you provide me with more advice on what the allegations were? I do not think I am.
Senator CARR —You are not aware of those?
Mr Manthorpe —I do not think so. If you tell me more, they may be allegations that have been aired in the media of which I am aware.
Senator CARR —There are a series of allegations that have been aired in the media. The Ray Murphy unfair dismissal case involved—if my recollection serves me right—allegations, uncontested by the company, that the company had secretly employed a professional strike breaker named Bruce Townsend who had hired spies and who had them placed in the workplace; that he paid them to go to union meetings with the express role of getting rid of the union from that site; that he had inflicted assaults upon union members, with the express view of getting them to fight and have them sacked from that workplace; and that there had been persistent attempts to entrap union members into stealing in order to justify their sacking. All of these cases were put uncontested before the commission and aired recently on the Sunday program on Channel 9. Further, it was alleged that the company executive, Mr Peter Allen, urged a spy to perjure himself before the Australian Industrial Relations Commission, that the company executive, Mr Peter Allen, offered a bribe to an ex-employee, Mr Andrew Bould, to give false evidence against a union member in the Australian Industrial Relations Commission. Are you aware of those allegations?
Mr Manthorpe —Yes, but only from the media reporting of them.
Senator CARR —You did not think it necessary to read the Industrial Relations Commission transcripts where these matters were heard under oath?
Dr Shergold —The officer has answered your factual question. He was only aware of those statements from the media reports. That is the answer to the question.
Senator CARR —Does he think it appropriate that these allegations be tested by reading the transcripts of the Australian Industrial Relations Commission?
Dr Shergold —I do not think it is appropriate to ask whether it is appropriate to have done different things than have occurred in terms of developing policy advice for the government. The officer has told you that he was aware of those statements from the media; he has not read the transcript.
Senator CARR —Dr Shergold, do you think that that sort of behaviour is appropriate?
Dr Shergold —The behaviour that is set out in the statement?
—The behaviour set out before the Industrial Relations Commission, which was uncontested?
Dr Shergold —I would not comment on that.
Senator CARR —Mr Manthorpe, in your preparation of this matter for discussion in the department, was any evaluation made as to the veracity of these allegations?
Mr Manthorpe —I do not believe so.
Senator CARR —What is your attitude about these particular uncontested allegations?
Dr Shergold —Senator, it is not appropriate to ask an officer what their attitude is towards issues.
Senator CARR —Does the department have a policy on this sort of behaviour?
Mr Manthorpe —The department does not have a policy position in relation to those assertions.
Senator CARR —You have said to me that you did liaise with parties to the dispute. You have already indicated that you did not liaise with the meat industry union. Have you liaised with O'Connor's?
Mr Manthorpe —Not recently, but yes.
Senator CARR —When was the last time you liaised with the O'Connor company?
Mr Manthorpe —I do not think I have liaised with them since the latter part of 1999.
Senator CARR —Could you please indicate to the committee the dates on which any of the department's officers have had contact with the O'Connor company since 1999?
Mr Manthorpe —I think the answer is that since 1999 there has been none. There may have been some contact with the company in the context of responding to an FOI request from the AMIEU, in the normal course of handling that FOI request. That was not undertaken by me, I do not think, but rather by the people who were doing the FOI work. Beyond that, I will take that question on notice.
Senator CARR —I appreciate that you personally might not have had contact, but have any of the officers in the department had contact with the O'Connor company—that is, G & K O'Connor Pty Ltd—or their legal advisers in regard to this matter? I can understand how they could delegate responsibility for liaison with government to their legal advisers.
Mr Manthorpe —Yes. The question of the legal advisers will require us—
Senator CARR —I am sorry?
Mr Manthorpe —Your extension of the question now to the legal advisers will require us to do some more work, so I will see how we can—
Senator CARR —I appreciate that. I do not expect you to be able to give me instant answers on these matters.
Mr Manthorpe —That is fine. I will take that on notice.
Senator CARR —Thank you. Have you or any of your officers had any contact with O'Connor's or any persons acting on its behalf since the Channel 9 program was broadcast?
Mr Manthorpe —Not to my knowledge, but again I can take that on notice.
Senator CARR —Have you or any of your officers had any contact with O'Connor's in the period leading up to the broadcast of the Channel 9 program?
—Not to my knowledge, but again I will test that.
Senator CARR —Dr Shergold, in your experience, is it unlawful under the Workplace Relations Act to deunionise a workplace?
Dr Shergold —I will not comment on a hypothetical question. It would depend on what you incorporate in the notion of deunionising a workplace.
Senator CARR —Is the department aware of the recent Federal Court decision in regard to this matter that was, in fact, referred to with the Employment Advocate this morning?
Mr Manthorpe —I am aware of the decision.
Senator CARR —What was the department's response to that decision? Have you any analysis of that decision in terms of the question of deunionising the work force?
Dr Shergold —To the extent that we have an analysis, it will be provided to the minister.
Senator CARR —And therefore not available to the committee?
Dr Shergold —Correct.
Senator CARR —Are you aware of my return to order?
Mr Manthorpe —Yes.
Senator CARR —For a department that says they have had no contact with this company and no meetings or no involvement in this dispute, you can understand why I might be a little suspicious in that you have 820 files in the department. Is that right—820 files?
Mr Manthorpe —Certainly there are not 820 files; there might be four or five files containing—
Senator CARR —How would you describe it—820 folios? How would you describe it?
Mr Manthorpe —I am not sure of the exact number. I have heard the figure of 820.
Senator CARR —That is the number that I have been using.
Mr Manthorpe —They are files containing material relating to the dispute.
Senator CARR —Obviously they relate to the dispute, but they are more than just press clippings, aren't they?
Mr Manthorpe —I do not want to pre-empt the government's response to your return to order by entering into a discussion about what the documents might be.
Senator CARR —Contained within those 820 folios, there is a whole series of documents—emails and other documents—between officers? Is that correct?
Mr Manthorpe —Yes. Senator, a minute ago you asserted that the department had asserted that it had no contact with the company in relation to the dispute, but that isn't something that we have asserted.
Senator CARR —I am sorry. Perhaps you could explain to me what the contact with the company has been. That was the intent of my question: I asked you for details of all contact with the company since 1999. I thought you said that you had none.
Mr Manthorpe —No, you did not ask me about—
Senator CARR —Let us clarify the situation if there is some confusion. What has been the contact between you and your officers and the company since 1999?
—To my knowledge, there have been three meetings, which I attended, with the company and a number of telephone contacts with the company. Also, I indicated to you a few moments ago that I had not personally engaged in any contact with the company, to my recollection, since the latter part of 1999.
Senator CARR —I was interested in knowing whether or not you had, and I understood you to be saying that. But whether or not any of your officers had had contact with the company—
Mr Manthorpe —I have taken that on notice.
Senator CARR —Yes, you have taken that on notice. Are you saying that the three meetings you attended with the company were prior to 1999?
Mr Manthorpe —No, they were in 1999.
Senator CARR —We will have a look at what the contact has been. But are you saying that the department is not denying contact with the company?
Mr Manthorpe —No, we have never denied that, as the transcript of 7 June 1999 demonstrates.
Senator CARR —How would you describe your involvement in this dispute?
Mr Manthorpe —We have monitored the dispute, we have analysed it and we have provided advice in relation to it and whether or not there was a need for government action in relation to it.
Senator JACINTA COLLINS —Did this advice that you indicate you gave in relation to the dispute commence before the lockout?
Mr Manthorpe —I do not think we provided any advice before the lockout, no.
Senator JACINTA COLLINS —So the advice that you provided, and I presume—and correct me if I am wrong—to the employer, in this dispute all occurred after the employer's decision to lockout their employees?
Mr Manthorpe —First of all, when I say `advice', I mean advice within government.
Senator JACINTA COLLINS —I am sorry; I thought you said `advice to the employer'.
Mr Manthorpe —I did not say that. I said `provision of advice', and that would be provision of advice to government.
Senator CARR —Have you given the company any encouragement to lock out its workers?
Mr Manthorpe —No.
Senator CARR —So you are just innocent bystanders, observers—
Dr Shergold —We are not innocent bystanders; we are doing the normal job of public servants in the way that Mr Manthorpe has described in terms of monitoring the dispute and giving advice to government.
Senator CARR —There has been no encouragement to the company whatsoever to lock out its work force?
Mr Manthorpe —No.
Dr Shergold —No.
Senator CARR —Were you surprised to hear that the former minister, Mr Peter Reith, said on the public record, on 11 April—presumably this would be in your files—that he had no objection to G & K O'Connor's export abattoir locking out its 334 workers?
—We will not comment on a statement by the minister.
Senator CARR —Are you aware of the statement?
Dr Shergold —Yes.
Senator CARR —Are you saying that the department has no view on the actions of the company to deunionise its work force?
Dr Shergold —To the extent that we have a view, it will be conveyed in the policy advice presented to the minister.
Senator CARR —How many more folios are there in the department in relation to the O'Connor dispute, other than those I have named in my return to order?
Mr Manthorpe —I do not know.
Senator CARR —Could you provide me with a list of all folios other than the ones I have named in my return to order?
Mr Manthorpe —I can give you a numerical—
Senator CARR —No, I would like to know the names of each of the folios, other than these ones.
Dr Shergold —I will take that on notice.
Senator CARR —I understand there are probably other ways for me to secure this. I assume that you do not want to pre-empt the government's position in regard to the response to the return to order, so I take it you are not prepared to table the files today?
Dr Shergold —Correct.
Senator CARR —How prepared is the department for the possibility of further action being taken within the Senate on this matter? Are you prepared for a senate inquiry, for instance?
Dr Shergold —We will be prepared in the normal way.
Senator CARR —You are aware of the standing orders on these issues, I take it?
Dr Shergold —Yes.
Senator CARR —That is clearly one option that is available to us if we cannot have access to the documents. We may need to look further into the dispute. I think it is only reasonable that we do have a thorough investigation of this matter.
Senator JACINTA COLLINS —Still on the area of sectoral reform, can you tell me which sectors are currently the areas of particular focus, apart from meat?
Mr Manthorpe —I think they would essentially be the list I mentioned 20 minutes ago or however long ago it was.
Senator JACINTA COLLINS —Sorry, I might not have been in the room at the time.
Mr Manthorpe —That is fine. They were construction, manufacturing, retail and coalmining. I have already mentioned to Senator Carr that we still have a watching brief in relation to stevedoring matters.
Senator JACINTA COLLINS —So there are six?
Mr Manthorpe —And higher education.
Senator JACINTA COLLINS —Higher education is another one?
—What do you do in higher education? That is always likely to spark my interest.
Mr Manthorpe —We provide assistance to DETYA in relation to the Higher Education Workplace Reform Program.
Senator CARR —Do you mean the salaries supplementation issue?
Dr Shergold —Yes.
Senator JACINTA COLLINS —So that is now seven. Am I correct in my recollection that, in the origins of this approach to sectoral reform, it originally had four?
Mr Manthorpe —Yes, that is usually the number people talk about. If you are talking about coal, meat, construction and stevedoring, yes.
Senator JACINTA COLLINS —Perhaps Senator Carr in his investigation might want to look at some of the other sectoral activities as well, such as stevedoring?
Senator CARR —There is a range of options available to us here. I am particularly interested in your activities in the meat industry.
Senator JACINTA COLLINS —I am looking at page 61 of the PBS in terms of the quality of sectoral reform facilitation. As alluded to by Dr Shergold before, one of the points is:
[middot]Level of satisfaction of the Minister with the provision of policy advice.
The next one is:
[middot]Level of stakeholder satisfaction with administration of legislation.
What is meant there?
Mr Manthorpe —I think that refers to the legislation in respect of the coalmining industry long service leave fund. I suspect that is the legislation that is referred to.
Senator JACINTA COLLINS —Some people get paid a hell of a lot to do these sorts of things, don't they?
Mr Manthorpe —I beg your pardon, sorry?
Senator JACINTA COLLINS —There is nothing in here that would give you any reason to believe it relates to coal. The next dot point here is:
[middot]Level of satisfaction of the Minister and others with liaison and communication activities.
Who are these `others'?
Mr Manthorpe —Other people we liaise with.
Senator CARR —You mean employer associations and that sort of thing?
Mr Manthorpe —Employers and employer associations.
Senator CARR —There have been no unions you have liased with. Who else do you liase with?
Senator JACINTA COLLINS —I am more interested in the communication activities. What is referred to there? We had the discussion earlier that you provide policy advice to the minister. What are the other communication activities, apart from the provision of policy advice?
Mr Manthorpe —Promotion of the Workplace Relations Act.
Senator JACINTA COLLINS
—So sectoral reform is where all of the initiatives in relation to the promotion of the Workplace Relations Act should reside?
Mr Manthorpe —I would not say all of them, but that has been a focus of the work over the last several years.
Senator JACINTA COLLINS —What else?
Mr Manthorpe —That is the answer.
Senator CARR —What is the nature of the promotion of the Workplace Relations Act that you undertake?
Mr Manthorpe —We have prepared factual publications on the Workplace Relations Act about the operation of the act in various industries, for instance.
Senator CARR —Is there any media advertising required there? Is that the sort of thing you mean?
Mr Manthorpe —No, I do not think so.
Senator CARR —Just pamphlets and the like?
Mr Manthorpe —That sort of thing.
Senator JACINTA COLLINS —Could we see a copy of all of those promotional materials?
Mr Manthorpe —I will take that on notice.
Senator JACINTA COLLINS —I presume, given we are talking about communication activities within sectoral reform facilitation, these are communication activities tailored to particular sectors?
Mr Manthorpe —Yes, they can be.
Senator JACINTA COLLINS —But not always?
Mr Manthorpe —I would have to check.
Senator CARR —Can you give us a list of the groups you would regularly liaise with?
Mr Manthorpe —I can take that on notice to see how practical that is.
Dr Shergold —It would be a very long list. We could certainly indicate the organisations that we would liaise with most frequently.
Senator CARR —Thank you.
Senator JACINTA COLLINS —Page 74 of Budget Paper No. 2 of the 2000 budget details the Employee Entitlements Support Scheme for financial years 2000-01, 2001-02 and 2002-03, which is $55 million in the first year and $40 million in each of the outlying years. Can you please direct me to the item in the current budget papers which guarantees this program beyond 2003?
Dr Shergold —There is a forward estimate.
Senator JACINTA COLLINS —Is there? Where is that?
Mr Hoy —There is no provision in the budget papers beyond 2003. The government decision at the time was to appropriate money for those three years and then, in the third year, undertake a review.
Senator JACINTA COLLINS
—It is my understanding—correct me if I am wrong, but I think the department has advised me of this in the past—that you have decided to continue down the path of the administrative scheme rather than the review that was originally announced. Is that right?
Mr Hoy —No, the scheme was set up on an administrative basis. That was a government decision. The government does have the option to consider legislation, but it has not underpinned it with legislation at this point in time.
Senator JACINTA COLLINS —The original announcement indicated that the administrative arrangements were interim pending a review?
Mr Hoy —Yes, and that is the review I talked about, which is in the third year.
Senator JACINTA COLLINS —In the third year?
Mr Hoy —Yes.
Senator JACINTA COLLINS —I think the original announcements, if I recall them, said that a review would be occurring earlier than that.
Mr Hoy —I will stand corrected. Mr Manthorpe might be able to assist.
Mr Manthorpe —I might be able to provide you with some further clarification on that. When the scheme was first announced in February 2000, government was still giving consideration to the viability or otherwise of alternative approaches, particularly the insurance model that had been canvassed in Minister Reith's discussion paper in August 1999. Consequently, at that point—February 2000—the government indicated that the scheme was being put in place on an interim basis while consideration was being given to those other matters. In about April 2000, the government decided not to proceed with an insurance option and indicated that EESS would continue for three years; hence the funding for the three years.
Senator JACINTA COLLINS —So this was prior to the 2000 budget statement that the government decided not to investigate the originally proposed review.
Mr Manthorpe —No, sorry. It did investigate the proposal, but it decided not to proceed with that proposal.
Senator JACINTA COLLINS —Yes. Are you telling me that that all occurred before the 2000 budget?
Mr Manthorpe —I think so. It was at about the same time.
Senator JACINTA COLLINS —Would you take that on notice and confirm it for me?
Mr Manthorpe —Yes, I can. I am not sure what you are getting at.
Senator JACINTA COLLINS —You do not need to be sure what I am getting at.
Dr Shergold —We will provide that information.
Mr Manthorpe —We will find out.
Senator JACINTA COLLINS —Thank you. What you are telling me now in relation to the scheme is that it basically exists at the discretion of the minister and there is no specific forward estimate for expenditure beyond June 2003. Is that correct?
Mr Hoy —There is no funding beyond 2003; that is correct.
Senator JACINTA COLLINS —Can you provide the total costs involved in the EESS program from 1 July 2000?
Mr Manthorpe —If you bear with me for a moment, I can do that.
Senator JACINTA COLLINS
—Could you include, but separate if possible, administration costs as opposed to payments to former employees?
Mr Manthorpe —So far in 2000-01 we have spent a little over $6.7 million on employee entitlements and around $2.2 million on administration.
Senator JACINTA COLLINS —And what was the total allocation?
Mr Manthorpe —The total allocation was $55 million.
Senator JACINTA COLLINS —So you have a fairly massive underspend at this stage.
Dr Shergold —But you understand, Senator, that this is a program that is available on demand.
Senator JACINTA COLLINS —Yes, I understand the nature of it.
Dr Shergold —It is based upon the number of people who are affected by loss of employee entitlements.
Senator JACINTA COLLINS —So that $55 million was in the first year?
Mr Manthorpe —That is for 2000-01.
Senator JACINTA COLLINS —How many inquiries were received in that period?
Mr Manthorpe —I can give you a figure off the top of my head for the whole period of the scheme, which is now 15 or 17 months. That is around 17,000 calls on our hotline.
Senator JACINTA COLLINS —Are you able, on notice, to separate those out so that I can look at the precise period we are talking about?
Mr Manthorpe —I can do that.
Senator JACINTA COLLINS —Thank you. Similarly, how many actual applications were received?
Mr Manthorpe —Just bear with me and I will get that for you. Senator, I do not seem to be able to lay my hands on that quickly. If I can find it before the end of the hearing, I will let you know; otherwise I will take it on notice.
Senator JACINTA COLLINS —Okay. Equally, in terms of the total number, the period since 1 July.
Mr Manthorpe —The figure on the period before 1 July 2000 is in the year 1 activity report.
Senator JACINTA COLLINS —So we are really just after the period since.
Mr Manthorpe —Correct. If I can find it before the end of the hearing, I will give it to you.
Senator JACINTA COLLINS —Okay. Have you got the year 1 activity report figure as well?
Mr Manthorpe —I do. In the period up to the end of June 2000 we received 892 claims.
Senator JACINTA COLLINS —Were all of those claims successful?
Mr Manthorpe —No. Some small number were rejected on the grounds of lack of eligibility.
Senator JACINTA COLLINS —What were the reasons for the lack of eligibility?
—They would have been the eligibility test set out in the operational arrangements for the scheme. Perhaps the company they worked for had not gone insolvent or perhaps the employees had been terminated for reasons other than the insolvency of the company—reasons like that, reasons associated with the published tests in the scheme.
Senator JACINTA COLLINS —You said it was a relatively small number. If you do not have it handy now, could you tell me what that number is?
Mr Manthorpe —Yes, I can take that on notice.
Senator JACINTA COLLINS —In both the periods, as well.
Mr Manthorpe —Yes.
Senator JACINTA COLLINS —I am also interested—and since it is a relatively small number this should not be that difficult for you—in what the precise reasons were for ineligibility.
Mr Manthorpe —I will take that on notice but it might be difficult for us in the sense that we have now had several hundred cases that we have processed. Each of those has a file. If our computer system is set up in such a way that I can define the reasons for non-eligibility in respect of a non-eligible person, then it will be straightforward for us to get that information. If it is not, I would be a bit reluctant for us to go through 300 or 400 files to find whether there are any particular ineligible individuals in each case. Sometimes, for instance, there might be a case where a number of employees get a payment and, for arguments' sake, two employees might not be eligible because they are the directors or something like that. So it would be quite a time consuming task to go back and check that, potentially. But I will see what I can do.
Senator JACINTA COLLINS —You are suggesting you might need to check more files than just those you know were unsuccessful because they were not eligible?
Mr Manthorpe —That is right. What I mean by `file' is a case of an insolvent employer. Sometimes, everyone in a case will be ineligible. That will be easy to find. Sometimes in a case most of the employees are eligible but there might be one or two people who are not. That is the problem.
Senator JACINTA COLLINS —To the extent that information is easily achievable at this point, I would like it.
Mr Manthorpe —Sure.
Senator JACINTA COLLINS —And it may well be that you can deal with it on a case by case rather than on an individual employee basis, so you can tell me that in X number of cases—
Mr Manthorpe —Yes. I will see what I can do. I think I will be able to do that.
Senator JACINTA COLLINS —In each state and territory, how many cases of business insolvency leading to possible loss of employee entitlements have been reported to the department since 1 July 2000?
Mr Manthorpe —In the financial year to when?
Senator JACINTA COLLINS —Since 1 July 2000.
—Okay. What I have got here is a list that does not quite meet that description. I have got a list by state of all the cases since the commencement of the scheme. Would you like me to read out those figures or would you like me to take the question on notice?
Senator JACINTA COLLINS —So it is since the commencement of the scheme?
Mr Manthorpe —Yes.
Senator JACINTA COLLINS —How many are there?
Mr Manthorpe —There are 856 cases. Would you like me to give you a figure by state? It will only take a moment, if you wish.
Senator JACINTA COLLINS —I am also interested in how many employees are involved in each case as well.
Mr Manthorpe —I can tell you, and this goes back to the question I took on notice a couple of minutes ago, that I have now found the piece of paper that tells me how many completed claim forms we have received. As at 18 May 2001, we had received 6,450 completed claim forms in respect of 804 employers. That has now gone up to 856.
Senator JACINTA COLLINS —Obviously, I do not want you to go through that number of actual cases now but I would prefer not to need to wait until the end of July to be given that as an answer to a question on notice. Perhaps you can undertake to put that data into some form of table, state by state, and provide it to the committee within the next few days.
Mr Manthorpe —So this is data, state by state, for this financial year?
Senator JACINTA COLLINS —Yes.
Mr Manthorpe —I will see what can be done.
Senator JACINTA COLLINS —It should not be that difficult to nominate the timing of the cases.
Dr Shergold —You want the number of cases and the number of employees?
Senator JACINTA COLLINS —Yes—by state and territory.
Dr Shergold —We will seek to do that as speedily as possible.
Senator JACINTA COLLINS —Thank you. Tell me whether this is going to make the demand too difficult within the time frame we just discussed, but could you also provide: the name of each business; the amount of the potential loss that had been reported to the department in that period; payments that have been made in each of these cases; and, in each case, the average amount of loss reported and the average amount of assistance received from the scheme?
Dr Shergold —For each of the 843 cases?
Senator JACINTA COLLINS —It is not 843, because we are cutting it down to those since 1 July.
Mr Manthorpe —It is about 720. I have a piece of paper here that tells me that.
Senator JACINTA COLLINS —Then that is going to make it much more onerous.
Mr Manthorpe —It is about 720 cases. I want to place some fences around this in the sense that, in respect of some of those 720 employers, we do not know yet whether they are insolvent. It is alleged by a claimant that they are insolvent, but I would prefer not to put a list on the public record that alleged that a company was insolvent when it might turn out that it was not.
Senator JACINTA COLLINS
—If that is the case then you can list those cases as `company X' in whatever state and characterise them as allegation, at this stage.
Dr Shergold —Do you need the names, Senator, or would it do if you knew the average number of employees and the average amount of payments outstanding?
Senator JACINTA COLLINS —I need the names in those cases where it is not a problem of unsubstantiated allegation, yes.
Dr Shergold —We will take that one on notice. It will take longer. We will try and produce the table you have required speedily.
Senator JACINTA COLLINS —How many cases have been refused assistance and for what specific reasons has assistance been refused? We have just discussed what one of them might be.
Mr Manthorpe —I have run through practically all of the basic eligibility tests. They might not be insolvent at all. The employees might have been terminated for reasons other than the insolvency of their employer.
Senator JACINTA COLLINS —But that is different to the case level refusal, if you understand what I am saying.
Mr Manthorpe —Yes. The reasons a case would be refused would only be lack of insolvency or insolvent but paid all their employees. Sometimes we get a claimant but then, a week later, they get their money.
Senator JACINTA COLLINS —I am interested in that data as well.
Mr Manthorpe —We will see what we can produce.
Senator JACINTA COLLINS —What is the total sum paid by the Commonwealth to employees under the scheme since July 2000? That is what you gave me earlier.
Mr Manthorpe —Yes, I have given you that figure.
Senator JACINTA COLLINS —That concludes that section. The only remaining question I have for Dr Shergold results from evidence this morning from the Employment Advocate. It is an issue that the Employment Advocate has taken on notice. Unfortunately, Mr McMillan is no longer here, but he assisted the committee this morning on the department investigating allegations of the circulation of pornographic material within the Office of the Employment Advocate.
This morning, the Employment Advocate indicated that he was aware of allegations of material depicting bestiality. He understood that they were the matter of an investigation by the department, but that no evidence to that effect had been found. Mr McMillan indicated that he was not aware of such allegations. He indicated that he believed, were the department to have conducted such an investigation, he would have been aware of it. The Employment Advocate has asked to take that on notice and investigate it further from his end. I give the department that same opportunity and ask whether, to your knowledge, such an investigation has occurred. The question is: has the department investigated an allegation that material depicting bestiality has been circulated within the Office of the Employment Advocate?
Dr Shergold —I am not aware of any investigation regarding material of that nature.
Senator JACINTA COLLINS
—Mr McMillan was not either, but I raise it again at the department level because that was the original assertion of the Employment Advocate. If he comes back to us and says, `Yes, that definitely did happen in the department,' I would equally like you to have that opportunity to reflect internally and say, `No, we are now sure that it didn't.'
Dr Shergold —I will take it on notice, so that if I discover in the next day or two that I am aware of such an investigation, I will let you know. Earlier today, there was a question asked about external attendees at the SBCC meetings. I have that material now available, if I could read it into the record.
CHAIR —Do you want to table it or read it?
Dr Shergold —I can table it.
CHAIR —There being no objections, it is so ordered. That concludes the estimates for the Employment, Workplace Relations and Small Business portfolio. I thank Dr Shergold and his officers.
Committee adjourned at 5.37 p.m.