Senator O'BRIEN —Firstly I would like to ask about the Bass Straight Passenger Vehicle Equalisation Scheme. Can you let me know the purpose of the additional funding of $4.298 million? That is on page 30.

Ms Blackburn —Senator O'Brien, I am going to ask our colleague Craig Harris to come to the table to deal with your questions on Bass Strait.

Mr C. Harris —Could you repeat the question, Senator?

Senator O'BRIEN —On page 30 of the portfolio additional estimates statement there is additional funding of $4.298 million. What is it for?

Mr C. Harris —It is basically for increased demand under the scheme. We originally estimated about $11.2 million would be required for the scheme to pay for passengers crossing Bass Strait. With the Tasmanian government's decision to implement the Devilcat service during the summer period again, we had to increase the funding because of the demand on the scheme and on cat.

Senator O'BRIEN —So that is entirely to do with the additional service provided during the summer months?

Mr C. Harris —That is correct.

Senator O'BRIEN —There have been a number of occurrences which have affected the service, such as the oil contamination—if that was what it was—issue for the Spirit and a number of crossing curtailments in the summer because of weather. Presumably those factors will reduce to some extent the Commonwealth's expenditure on this item. Has any work been done on that to date?

Senator Macdonald —To find out what the rest of the cost is?

Senator O'BRIEN —Some of it should just about be known. For example, the Spirit problems are well and truly over.

Senator Macdonald —I was just clarifying your question. Do you mean what we have saved as a result of it?

Senator O'BRIEN —Yes, the financial effect, if there has been any.

Mr C. Harris —We have not looked into that in any particular detail at this stage. In the past our estimates tended to be a little bit under the mark by the end of the financial year and we have needed additional funding anyway. Demand always tends to outstrip what TT Line predict it will be, so we have not actually changed the forecast funding at this stage. With regard to the problems with the Devilcat over the last month or so, we understand it would be about 1,000 cars less, which does not have a great impact on the budget forecast.

Senator O'BRIEN —Presumably the year to date figures, as they run through, would indicate if the Spirit problem had any significant impact.

Mr C. Harris —There has not been a great deal of impact at this stage.

Senator O'BRIEN —There was a requirement that the scheme be reviewed or monitored once a year by the Bureau of Transport Economics. The first BTE report was released in January 1998. The second report was released in May last year and covered the period 1 July 1997 to 30 June 1998. Is there a subsequent report?

Mr C. Harris —The third monitoring report, which covers 1998-99, is in the process of being finalised. A draft has been created by the bureau.

Senator O'BRIEN —When that is finalised, will it be possible for a copy to be supplied to the committee?

Mr C. Harris —I would think so.

Senator O'BRIEN —On the question of MIFCo, can the committee get an update on exits from the waterfront work force?

Ms Blackburn —I will ask my colleague Linda Addison, who has detailed figures for you on MIFCo, to answer.

Ms Addison —I am sorry, Senator, would you mind repeating the question?

Senator O'BRIEN —I want an update on exits from the waterfront work force—how many have gone, who is left and what companies did they leave.

Ms Addison —As to where we are at, we are almost complete. We have three more redundancies to fund and they will take place this week. Two of the redundancies are from a company that made people redundant in Queensland and the third is a final person from the Patrick group of companies. We are up to 1,484 redundancies altogether.

Senator O'BRIEN —Including those three?

Ms Addison —No, those three will be on top of that. At the conclusion of the three payments this week we will still have four redundancy matters still to be resolved. Those four relate to the Patrick labour hire companies, Patrick Stevedores No. 1 and Patrick Stevedores No. 2. They are redundancies where the particular people involved have claimed total and permanent disability through SERF, which is the superannuation fund which looks at those matters. We are not sure of the timetable for the resolution of those because they are subject to the hearings of the superannuation fund.

Should the superannuation fund accept the claims for total and permanent disability, there is no need to fund a redundancy. However, we have left it that, should the superannuation fund reject those claims for total and permanent disability, those people will be able to claim a redundancy. So the timetable for that is unknown. Other than that, it is complete. All redundancies had to be completed under the program by 31 October last year and MIFCo is in the process of just finalising the final payments

Senator O'BRIEN —How does that timetable deadline affect those four claims?

Ms Addison —The deadline relates to the actual redundancy, so the redundancy had to occur before 31 October. Those redundancies have occurred so the time frame does not affect them.

Senator O'BRIEN —On another front, is any company or person in arrears as far as their payments in accordance with the provisions of the stevedoring industry levy act?

Mr C. Harris —I am not aware of any companies being in arrears at this stage. Under the act, penalties can be imposed automatically. A decision was made to remit penalties to a date, up until December.

Senator O'BRIEN —It was just a wholesale decision to remove penalties, not in individual cases.

Mr C. Harris —It was understood at the time of implementing the scheme that it might take some of the smaller companies some time to implement procedures whereby they could make timely payments. We are dealing with fairly small amounts of money from some of the smaller stevedoring companies. The two major stevedores have always paid on time, and that takes up something like 95 per cent of the payments.

Senator O'BRIEN —Is the income stream as predicted under the stevedoring industry levy act? Is it on budget?

Mr C. Harris —It is probably a little bit ahead of budget at this stage.

Senator O'BRIEN —Have we advanced the prediction of the pay-off time, given that there was a proposal to extend? There has been some revision as to what is going to be funded now and I just wonder if any work has been done on when it is predicted that the levy can cease because the loan funds, which are guaranteed by the Commonwealth, have been paid off.

Mr C. Harris —It is estimated that the levy will probably cease around 2007 or 2008.

Senator O'BRIEN —That is a bring forward, isn't it?

Mr C. Harris —Marginally, I believe.

Ms Blackburn —The original estimate was for 2010.

Senator O'BRIEN —There were some changes to what can be funded. Did those changes bring the estimate back to 2007 or 2008 or did those changes, combined with an increased experience of payments, bring the pay-off time back, forward or whatever the appropriate terminology is?

Ms Blackburn —You will recall that with the legislation it was proposed to increase the cap to $350 million. The parliament approved only an increase to $300 million. That of itself did not necessarily change the calculations because the calculations to that date were based on what we expected to pay in redundancies.

You might also recall that the original increase from 250 to 350 was sought because the costs of the redundancies were greater than had initially been anticipated. So the change in the timing of the loan is a combination of two things: the increased income stream and also the setting of the interest rates for the loan, which has given us a fair degree of certainty now about the cost of the bulk of the loan and also of the proposal to make additional payments in the first year, which will potentially reduce the costs of the loan.

So most of it at the moment is a balancing between the setting of the interest costs for the loan and finalising the total amount of that loan, which will happen on 15 July this year. A significant part of the loan is already at a fixed interest rate so we know what that obligation is. There is a remaining part which will be finalised very shortly and then the interest rate on that will be fixed before 15 July. That will then give us the total costs of the MIFCo loans.

CHAIR —Senator O'Brien, do you have much more of this?

Senator O'BRIEN —No. I have another subject that I will go to next, not necessarily the MIFCo funds. These officers are involved—shipping reform.

Senator Macdonald —There is no way we will get to the National Capital Authority tonight, so I will tell them they are not needed tonight and we will leave the rest until 7.15 p.m. Is that okay?

Senator O'BRIEN —That is fine by me, or earlier.

CHAIR —We will adjourn until 7.15 p.m.

CHAIR —I call the committee to order. I think that the first thing that we have to do before we start questions again is resolve what we are doing tonight and with the rest of our program. Senator O'Brien, maybe the best thing is to hand over to you.

Senator O'BRIEN —I have just spoken to Senator Allison, who has half an hour's worth as well, which blows out my earlier estimate. I think that we could be involved through to half past 9 or 10 o'clock before we get to any other issues. Just to clarify where we were before dinner, on the assumption that we thought some time around 9 o'clock before, we need to add half an hour on to that.

CHAIR —So what are you suggesting?

Senator O'BRIEN — I have spoken to Senator Mackay. She says that at 9 o'clock she is committed to doing Office of the Status of Women in another committee and they have organised their program all day on that basis. So we might be having an argument about a relatively small amount of time, anyway. My suggestion is that we get on with it.

Senator Macdonald —Mr Chairman, the officers from Regional Services are coming at 7.30, which was going to happen. They had to wait until then to find out whether they were needed, so they were coming here to wait, anyhow. I have told National Capital Authority that they certainly will not be needed tonight, but if in the expectation that we might finish this at around 9.30 and the program was that we would go until 11 o'clock, I would like to proceed with Regional Services and try to get as much of that over as possible so that we have a clear go at AFFA tomorrow so that we can try to finish at a reasonable time. That would be the concern.

I understand Senator Mackay's predicament. We always had that predicament when we were in opposition, but we cannot really rearrange the committee. There are a number of senators on each committee. What has been the normal practice is that if one senator cannot there be to ask the questions, then that senator gives their question to another senator to deal with it. That has always been the way we have attended to it. That is how I hoped we would be able to deal with it tonight.

CHAIR —Can you be up here at 10?

Senator MACKAY —As indicated, I have got OSW starting some time between 9 o'clock and 9.30. The Finance and Public Administration Committee has rearranged their program so that I can do that. That is why, when the committee secretariat contacted our office, we agreed to Regional commencing tomorrow morning. On the basis of that, then Public Administration reorganised their itinerary. So there is an agreement with the committee that we do Regional tomorrow morning and I think that most senators from our side anyway have organised their programs with that in mind. That is the decision of the committee at this point: that we start Regional tomorrow morning. I have portfolio responsibilities in OSW. The government there has organised its program to take account of that. So it cannot happen.

Senator Macdonald —You are saying that we cannot have it because it does not suit you. The committee decided to sit until about 11 o'clock. So just because it does not suit you, we have an early night which I do not suppose I object to but it means that we have an extra long day tomorrow when we could be doing things tonight.

Senator MACKAY —The committee made a decision in the lead-up to this estimates that Regional would come on tomorrow morning.

CHAIR —Can I just make a comment, because that is not correct. The committee made no such decision whatsoever. The program went around, and if you look at the agenda it says quite clearly `Continuing from Monday, 7 February'. The intent of the committee always was and always has been that when you finish one program you go on to the next one. So I just do not accept that we made the decision to do that. But I am trying to facilitate the process.

Senator MACKAY —Yes. Do you want me to go back to Senator Hill and say that we will require to spill over OSW to Friday? Do you want me to do that?

Senator Macdonald —Senator, that is a matter for you, but it is a problem that we always had. The convenience of individual senators did not interfere with the running of the program.

Senator MACKAY —But the schedule was that Regional would start tomorrow.

CHAIR —No, that is not correct. I am sorry, Senator Mackay, but that is not correct.

Senator MACKAY —Maybe that should have been the decision, then. I assumed that it was when the secretariat contacted our office. I assumed that Regional would start tomorrow because that is what we were apprised of. I understand that that was predicated on the basis that Transport would go all night, which was also my understanding. Because of the difficulties that Senator O'Brien has had with questions on notice, which is not his fault and is not the department's fault, he has been unable to ask a number of questions and they have been taken on notice. If he had presumably been given the questions on notice that he asked for in a timely fashion, then estimates would have proceeded for the remainder of the day.

CHAIR —That is an assumption that we cannot make.

Senator O'BRIEN —We have made assumptions on how long we were going to go. My assumptions before have been blown out by Senator Allison's attendance, which I was not aware of, and that is no criticism of her. My understanding of the discussion earlier was that, if we were going to go to 10, then it was not an issue about whether we pull stumps at 10 rather than at 11. I have already indicated to the chair that, in terms of trying to finish tomorrow, I am prepared and I know Senator Forshaw is prepared to go an additional couple of hours if it means finishing. The fact is that representatives of the department are here. They could have been here earlier or they could be waiting all night, depending on what happens. It is just a matter of facilitating it so that this committee works well together, and we normally do. I do not think all that much turns on it, frankly.

Senator Macdonald —Senator O'Brien, I appreciate your cooperation but we had the same problem the last time, I think, with particular senators not being available so the rest of us just have to wait. We are all busy: you have other things to do, Senator Hutchins has other things to do, Senator Ferris has other things to do, I have other things to do. But suddenly because -

Senator O'BRIEN —No, it is not a matter of suddenly; I guess it is a question of what people's understandings were. But the fact of the matter is that we make the assumption about how late we are going to go with this at the moment. We have probably pushed it out 15 minutes. So we might be talking more and more about something that does not happen.

Senator Macdonald —And if we had finished at 4 o'clock this afternoon, suddenly you have all the answers you wanted about aviation.

Senator O'BRIEN —Senator Mackay was not tied up in another committee.

Senator Macdonald —So we still have to wait until tomorrow morning to do Regional Services.

Senator O'BRIEN —But if we did that and then Senator Mackay finished at 9' clock, we would have had to adjourn until tomorrow, because AFFA is not available until tomorrow. On the other hand, if AFFA were available now, I could start AFFA now.

Senator Macdonald —We could probably get AFFA, but it might be a bit much now.

Senator O'BRIEN —I do not think you will. I think they made the request that they not be on until tomorrow.

Senator MACKAY —That is a bit convenient, isn't it.

Senator O'BRIEN —Everyone makes requests.

CHAIR —I am not aware of any requests from AFFA that they not be here until tomorrow and I will ask the secretariat.

Senator O'BRIEN —That is what I was told.

Senator MACKAY —Why don't we ring them up.

CHAIR —You can hardly ring them at this stage. Can we have a commitment that we will start AFFA? The program was that we finish this one by 1 o'clock tomorrow and start AFFA at 2 o'clock, lunchtime.

Senator MACKAY —I am not sure how long Regional is going to take. That will depend on the answers, obviously.

CHAIR —Yes, but if there are questions not answered, you can put them on notice.

Senator MACKAY —Yes, but I cannot give a commitment to finish by 1 o'clock. If we did, say, finish by 1 o'clock, that would mean that we would be doing AFFA potentially from 2 o'clock in the afternoon until 1 o'clock in the morning. With the dinner break, that is a long time for AFFA and that only gives Regional four hours.

CHAIR —Regional is part of one department; AFFA is a whole department. We allocated the time and we gave roughly two-thirds of the time to Transport and Regional Development and we gave one-third of the time to AFFA. So they have already cut their time back. Senator O'Brien said that if he was not finished—a number of us are going to have difficulties being here Friday, including him—he is prepared to go a little bit later, and that is reasonable.

Senator MACKAY —I think we will complete tomorrow.

CHAIR —If we can have some sort of an understanding

Senator O'BRIEN —I think the understanding we have is that everyone will do what they can to finish tomorrow. If that is replicated on all sides of the table, then we are confident we will finish tomorrow. That is the nature of the undertaking.

Senator Macdonald —There are 10 divisions in the portfolio. Seven of them relate to matters we will finish today and three of them—the National Capital Authority and the two regional ones—are a much smaller part of it. With any luck, we can finish Transport by about 9 o'clock. We could save ourselves sitting until 1 o'clock in the morning to finish AFFA if we can start on AFFA tomorrow morning, or at least finish Regional tomorrow morning having started it tonight. Perhaps we could even do that and then other senators who wanted to deal with Regional could deal with them tonight and then, as a special concession for Senator Mackay, we could bring them back just to have her matters dealt with in the morning.

Senator O'BRIEN —We are happy with that.

Senator MACKAY —Yes.

Senator O'BRIEN —I do not know who else wants to ask questions, but I am happy to stay here and give you the quorum if other senators want to ask questions on the basis that if there are no questions they will come back tomorrow, and if there are some questions they will be dealt with and they will still come back tomorrow for Senator Mackay.

Senator MACKAY —Some of us are here on Friday, Minister, because we have to ask questions in relation to GST on local government and Treasury. So it would have saved a lot of time had I been able to ask these questions under Regional.

Senator Macdonald —Senator, you must understand the procedure. You ask questions at this estimates committee on this portfolio. On Treasury portfolio matters you ask the Treasury. That has nothing to do with us. If you cannot understand that and if you persist in the accusations that it is all our fault because we are not answering Treasury matters -

Senator MACKAY —Minister, I will ask this question of you that I did not ask this morning: why do you put out press releases in relation to GST on local government if it is not your portfolio?

Senator Macdonald —I am the local government minister and I have an interest in that. I discuss it with Mr Costello and we do things, just as I issue press releases in relation to health matters in local government.

Senator MACKAY —I saw that.

Senator Macdonald —But we do not ask health questions in this; you go to the health portfolio. Even the most junior senator can understand that.

Senator MACKAY —Does this mean that you are incapable of answering questions in relation to the GST on local government?

CHAIR —That question should be withdrawn. It is totally out of order. It is most unnecessary. We know what the standing orders are in regard to this. You can put out press releases on the GST, I can put out press releases on the GST, and so can anybody else who is a member of parliament.

Senator Macdonald —I just irks me that this committee has to rearrange itself. I know it is difficult; we spent 13 years in opposition. We knew how it was to run from one to the other.

Senator MACKAY —I am glad you are used to it. The reality is that I am the shadow minister as you are a minister. I have portfolio responsibilities unlike everybody else on this committee.

Senator Macdonald —So do we all.

Senator MACKAY —Presumably, Minister, what you are trying to do is line up for some speech in the chamber in relation to this. But without your intervention, this committee actually operates pretty well and we will finish AFFA tomorrow by 1 o'clock.

Senator Macdonald —You have spent hours in the chamber -usually when I am not there, I might say -

Senator MACKAY —You are rarely there.

Senator Macdonald —being personal about me and about this committee. I have never responded. They are such petty, childish comments you make that they do not concern me.

Senator MACKAY —Is that out of order, Mr Chairman?

CHAIR —No. Can we get back to the business tonight?

Senator Macdonald —I could not be bothered talking about you in the chamber.

CHAIR —What we will do is exhaust as far as we can everybody here who has questions to ask on Regional Development. We have the officers being kept here, which was agreed to a couple of hours ago. We will complete as much as that. We will commence in the morning on what is left and we will finish by 1 o'clock on that and we will go on to AFFA at 2 o'clock.

Senator MACKAY —I cannot agree to that, as I indicated, because I do not know that we will finish by 1 o'clock.

CHAIR —Do you want me to move a motion? If you are not finished by tomorrow, we will have to have some way of dealing with the questions you put on notice.

Senator MACKAY —As has been indicated before, if we get responses in relation to the questions we ask, then we will finish by 1 o'clock tomorrow. Given the past performance of this minister in particular, there is no guarantee that we will get responses

CHAIR —I think we have had enough of these personal reflections flowing backwards and forwards across th1

Senator Macdonald —It is a bit like a letter I saw accusing -

CHAIR —I think that is enough.

Senator MACKAY —Minister, what did you say?

Senator Macdonald —I said it is a bit like a letter someone showed me—I think you sent me a copy—talking about me being censured by the Senate or something.

Senator MACKAY —No, I did not say that.

Senator Macdonald —If that happened, nobody ever told me about it.

Senator MACKAY —The letter did not actually talk about the censure motion.

Senator Macdonald —What did it say?

Senator MACKAY —Do you have a copy of it?

Senator Macdonald —No, I do not.

Senator MACKAY —I thought I sent you a copy.

Senator Macdonald —I do not have it now. You tell me -

Senator MACKAY —You have a copy. I think you might be misrepresenting correspondence that I sent. Perhaps you could provide a copy and table it here.

Senator Macdonald —Mr Chairman, do you happen to have a copy of that letter?

CHAIR —I am giving a clear ruling of our position. If at 1 o'clock tomorrow or thereabouts we have not finished, I will move a motion that we make other arrangements for the rest of the Transport portfolio—whatever is required in the way of questions being taken on notice. We will start AFFA with the intention of finishing tomorrow. It is absolutely pointless continuing with this discussion.

Senator MACKAY —I agree. Just to be clear in relation to this, does this mean that the opposition is not going to be able to avail itself of the spill over day? Is that what you are saying?

CHAIR —Possibly.

Senator MACKAY —To be clear, if we do not finish—I have to go back and talk to people about this—by 1 o'clock tomorrow, you will be moving a motion that Regional is complete?

CHAIR —No, I did not say that. I said very clearly—if you had been listening you would have heard what I said—that I would move a motion that we go to AFFA at 2 o'clock and we would make other arrangements, if required, to deal with the matters pertaining to Transport. That is what I said, so do not try to misrepresent me.

Senator MACKAY —I am seeking clarification in relation to precisely what you are saying.

CHAIR —I have nothing else to add to that.

Senator FERRIS —Check the Hansard.

Senator MACKAY —Excuse me, Senator Ferris, I have not finished. Just in relation to what we are doing tomorrow: at 1 o'clock if we do not complete Regional—`complete' I think is what you said—you will be moving a motion that we move on to AFFA?

CHAIR —As per the agenda.

Senator MACKAY —Does that mean that we will not be able to deal with Regional for the remainder of the estimates?

CHAIR —No. What I said was that we would make the necessary arrangements to complete them whether it is by notice or otherwise in view of the fact that at least three of the members of this committee, including two from the government and one from the opposition, have indicated to me that it would be very difficult for them to be in attendance on Friday. So we will deal with that appropriately, as has been dealt with by agreement in other committees and in this committee in the past, both when we have been in government and in opposition. I have nothing more to add. That is absolutely crystal clear. I will talk to members of the committee about it.

Senator MACKAY —I am not unhappy with this outcome, by the way, because I am not available on Friday. Does this mean that if we do not complete Regional by 1 o'clock we can actually get permission from the Senate to have a further estimates hearing this week?

CHAIR —The committee will make an assessment of the position and what is required. I cannot answer hypothetically as to at what stage we will be at 1 o'clock. If there is a little bit of goodwill around the table and I am sure that can be organised then we can finish, because we have almost completed seven components. We have from 8.30 until 1 o'clock tomorrow. I mentioned to Senator O'Brien earlier on that we might even skip the 20 minutes in the middle of the morning—I have not mentioned this to the minister or anybody else—and keep going so that we do everything in our power to get finished. If not, the committee—I cannot make this decision on my own—will decide how we are going to handle the rest of the program. I know that there are at least two from the government side and two from the opposition side who cannot be here, so we will deal with it at that particular time. It is no good me trying to make an assessment about what we are going to do as a committee at 2 o'clock tomorrow when we do not know what the circumstances will be.

Senator MACKAY —But you just indicated previously that you would move a motion at 1 o'clock.

CHAIR —I said very, very clearly, `If necessary I will move a motion'. If you read the Hansard, it is in there twice. I do not believe that when we come to 1 o'clock tomorrow it will be necessary to do that because goodwill will be back on the table. It has never left this part of the table, as has been demonstrated today by Senator O'Brien, the minister and the officers. I think we have done a lot of work; we have done it well and we have done it efficiently. Now can we proceed with what is before us?

Senator O'BRIEN —We can. In relation to your comment about not being able to be here, I said that my preference would be not to be here. I can be here on Friday.

CHAIR —I guess we all can be.

Senator O'BRIEN —Let us proceed as far as we can. Hopefully our immediate past discussion will not be academic. I wanted to ask some questions on shipping reform. Where are the government's shipping reform plans up to at the moment?

Mr Robertson —The short answer is that the government's consideration of shipping reform issues has received some initial consideration. That is the word that the minister has used publicly -

Senator O'BRIEN —I am sorry, for good reason I did not hear that.

Mr Robertson —The status is that there has been some initial consideration of the government's response to the Shipping Reform Working Group report. Final consideration has not yet happened.

Senator O'BRIEN —At the last hearing I think Minister Anderson was addressing the National Bulk Commodities Group in Melbourne on 1 December, the day of the estimates hearing. Dr Feeney told the committee that in the speech the minister was going to indicate that the government had made its initial view of the two reports—that is, the Manser report and the working report—clear. In that speech, the minister repeatedly said that shipping services are not a major export industry in this country and that other countries supported their shipping industries because it was in their national interest to do so. The minister said that Australia is a major user not a major provider of shipping services, that support for Australian shipping would have to be shown to be in the national interest and that Australia was better off strengthening our most competitive industries.

Apart from that sounding very much like economic rationalism to me, the minister said cabotage would be wound back. According to the report I read in the December issue of Minerals Update, Mr Anderson did not indicate when the legislative and regulatory framework required to give effect to this policy would be progressed. Firstly, can you assist the committee with some information on when the legislative and regulatory framework required to give effect to that policy is to be progressed?

Mr Robertson —I could not give an indication until the government had responded formally to the Shipping Reform Working Group report and indicated how it wanted to proceed with shipping reform.

Senator O'BRIEN —Let me understand the comments of Minister Anderson. Are you indicating that they are not government policy?

Ms Blackburn —The comments made by Minister Anderson in December reflected the position that the government had reached at that point in time. The government has not completed its consideration of the working group report, so we are unable to provide you with any further information beyond what the minister said in December.

Senator O'BRIEN —In terms of what the minister said, essentially it spells the end of an Australian shipping industry, as I understand it. In an answer to question on notice 1176, which I lodged on 5 July last year, the department referred to a report by Access Economics in that year titled Economic contribution of the Australian shipping industry. That report stated that in the financial year 1997-98 the Australian shipping industry generated gross freight earnings of $1,288 million and that the industry's net impact on our balance of payments in that year was $479 million. Does that seem to be an insignificant contribution to the Australian economy?

Senator Macdonald —You are asking for an officer's opinion.

Senator O'BRIEN —You can give an answer to that, Minister.

Senator Macdonald —What is significant to me may not be significant to you. Mr Anderson's words stand on their own, I think. You interpret them how you would wish.

Senator O'BRIEN —Certainly, anyone can interpret anything the way they wish. I am asking some questions about the facts. I am not asking for you to reflect on the minister's comments. I am asking you to reflect on the facts, as you advised the union in an answer you signed off, I think.

Senator Macdonald —Are you asking whether those facts are correct?

Senator O'BRIEN —I am asking whether that is an insignificant contribution to the Australian economy.

Senator Macdonald —That is a matter of opinion. I am not really here to do that. But if you are quoting from my answer, I assure you that that is the fact.

Senator O'BRIEN —So you are not sure whether gross freight earnings of $1.288 billion and a net impact on our balance of payments of $479 million is a significant contribution to the Australian economy?

Senator Macdonald —It is in the eye of the beholder. It is a matter of opinion.

Senator O'BRIEN —You do not have an opinion on that?

Senator Macdonald —No.

Senator O'BRIEN —In that same year, water transport contributed some $3.037 billion to the Australian gross domestic product. I wanted to ask some questions about the sorts of reforms that have occurred in the Australian shipping industry in recent years. Is it fair to say that average crewing levels have fallen from 30 down to 17?

Mr Robertson —That is correct.

Senator O'BRIEN —And that has come about through a significant increase in the level of multiskilling of crews?

Mr Robertson —That has been a factor, yes.

Senator O'BRIEN —Has there also been a significant change in the organisation of the maritime work force, with a shift from pooled employment to company employment?

Mr Robertson —That is correct.

Senator O'BRIEN —Has that reform been undertaken by both management and crews in a cooperative and constructive manner?

Mr Robertson —I am being asked for an opinion. I could not really comment.

Senator O'BRIEN —Has there been industrial action around that issue?

Mr Robertson —Not that we are aware of, no.

Senator O'BRIEN —That has been achieved by negotiation?

Mr Robertson —One would assume so, yes.

Ms Blackburn —That would be a matter between the companies as well. There has been no direct departmental participation in that process.

Senator O'BRIEN —But the department has kept itself apprised of what has been going on, has it not?

Ms Blackburn —Yes.

Senator O'BRIEN —You have been talking to industry participants about what has and has not been achieved?

Ms Blackburn —I personally have not, no.

Senator O'BRIEN —The department has. That is what I meant. Officers from the department and other government departments have kept themselves apprised of what has been going on?

Ms Blackburn —I cannot answer for other government departments.

Senator O'BRIEN —At one stage the waterfront division was part of Mr Reith's department?

Ms Blackburn —The Maritime Division of the Department of Transport and Regional Services was transferred to the Department of Workplace Relations and Small Business, and we have remained in that portfolio for 12 months as the Maritime Division.

Senator O'BRIEN —I am sure that the answers that Dr Feeney has given us previously would indicate that there has been an ongoing process of the government, through this department, keeping itself informed as to what has been taking place.

Ms Blackburn —Certainly. We have discussed in this forum before normal industry liaison arrangements that we have with our industry, as all other portfolios do.

Senator O'BRIEN —In answer to question on notice No. 1175 the government advised that there is a significant cost disadvantage faced by Australian flag ships when compared to foreign flag vessels. The answer states that the difference is primarily due to labour costs. There are some other issues that need to be compared. Am I correct in saying that the safety and operational standards that exist on Australian ships are second to none?

Ms Blackburn —I suspect that is a question that is better directed to officers from the Australian Maritime Safety Authority, which comes under the next program. They would be better placed to answer that than I would be.

Senator O'BRIEN —To whom should I direct questions about the average age of the Australian fleet? Is that something for your division?

Ms Blackburn —AMSA.

Senator O'BRIEN —The Australian Maritime Safety Authority?

Ms Blackburn —Yes.

Senator O'BRIEN —I am happy for them to come to the table now.

Ms Blackburn —Do that and then we will see how far we can take the questions and how many we have to take on notice.

Senator O'BRIEN —Let us go back to the previous question. I am told that safety and operational standards on Australian ships are superior to the standards of ships flagged with the flags of other nations?

Mr Davidson —I think in general we would regard the Australian flag vessels as being at the better end of performance in that area, yes.

Senator O'BRIEN —According to question No. 1174, the average age of the Australian fleet in 1998-99 was 13 years, compared with 18 years for the international fleet, and that the Australian figure had blown out in recent years due to lack of investment, which was largely due to uncertainty regarding government policy since 1996, because at the beginning of the 1990s the average age of the Australian fleet was eight years; that is correct, isn't it, Mr Davidson?

Mr Davidson —I am not certain of the particular answer that was provided. I am not familiar with that.

Senator O'BRIEN —Are you aware of what the average age of the Australian shipping fleet is, or is that something you need to acquaint yourself with?

Mr Davidson —I would need to acquaint myself with that.

Ms Blackburn —Are you seeking to update the information that was provided in the 1998 answer that you have?

Senator O'BRIEN —I am asking for it to be confirmed that it is still current, yes.

Ms Blackburn —I can take on notice updating the information that was provided in answer to that question. I am sorry, I do not have any material with me at this stage to confirm whether that is still accurate or to give you information on any changes in the detail, but I am happy to take that on notice and update it.

Senator O'BRIEN —Perhaps we should go back to the MIFCo issue for a moment, because I omitted a matter earlier. In the National Audit Office audit of the financial statements of Commonwealth entities for the period ended 30 June 1999, summary of results, on p.84 there is a passage relating to internal controls, Department of Transport and Regional Services, revenue collection new stevedoring levy scheme, and the summary says:

The following control matters were raised with the department in relation to processing and administration of the new stevedoring levy scheme.

There are seven points on that page. Ms Blackburn, are you familiar with this document?

Ms Blackburn —Yes.

Senator O'BRIEN —I wanted to get a response from officers on each point, please. Point 1 refers to the lack of follow-up mechanisms to ensure all levy payers were remitting returns as required. Has the department corrected that problem?

Ms Blackburn —Yes, the department has agreed with the finding. There were some initial teething problems, and we now have in place systems which ensure that. I think we answered a question earlier about whether there was any failure to pay. We have in place systems now to follow up what we should receive and compare that with what we do receive.

Senator O'BRIEN —Point 2 refers to the failure of the department to impose penalties for late payment of levies. I think you said earlier that there was a general waiving.

Ms Blackburn —Yes.

Senator O'BRIEN —Remind me when that waiver applied. Is it right up to date?

Ms Blackburn —Until December.

Senator O'BRIEN —Until December of this year?

Ms Blackburn —No, December 1999. That was essentially a period of grace to allow companies to set up their systems and, I guess, get used to paying the levy. As I understand it, from 1 January non-payment will be treated in accordance with the relevant provisions of the legislation.

Senator O'BRIEN —The next point relates to failure to issue receipts for levy payments.

Ms Blackburn —Yes, there were some initial problems with that. That has also been addressed by the department.

Senator O'BRIEN —Was that addressed some time ago?

Ms Blackburn —Yes. Back at the beginning, when the levy was first introduced, I guess it is fair enough to say, like introducing any new program, there are some teething problems, both on the administrative side and the industry side. That audit was very timely. It identified some administrative problems, which we have now addressed, and I am confident now that those problems have been adequately addressed and that the systems in place mean they will not happen again. But they were very much in the nature of teething problems, both on our side and industry side.

Senator O'BRIEN —The complaint that there was a breach of s.18 of the Financial Management and Accountability Act through failure to pay the money into consolidated revenue as soon as practicable?

Ms Blackburn —There were issues raised about the banking arrangements which were established for the levy, and one of those issues related to the timeliness with which you sweep the account to take the funding into the CRF. We have had a number of discussions with our own financial services area and with the audit office. We now have an agreed course of action in relation to the banking, and there is now daily clearance into CRF. So the initial problems, which stemmed from the type of bank account which was established, have now been removed, and we are now fully compliant with s.18.

Senator O'BRIEN —The next point was:

In addition, the levies were not recorded in the department's systems until transfer to consolidated revenue. The failure to promptly record moneys increases the risk of misappropriation and error.

Ms Blackburn —My recollection is that the department accepted that that was an error in our original processing, and it has now also been addressed.

Senator O'BRIEN —The non-remittal to consolidated revenue of interest earned in the bank account and using that interest to fund the bank account expenses, which was a breach of s.18 of the act.

Ms Blackburn —This issue is, as I said, associated with establishing a bank account with a bank other than the Reserve Bank, and those issues have been addressed within the department and with the Audit Office. The bank account is now a Reserve Bank bank account and is fully compliant with s.18.

Senator O'BRIEN —The non-reconciling of the bank account on a regular basis. I assume that has been attended to as well.

Ms Blackburn —That is now picked up, and it is just part of the ordinary departmental Reserve Bank banking arrangements.

Senator O'BRIEN —Thank you for that. I want to ask some questions about the proposal from the National Sea Highway Committee. You know what I am talking about: the Bass Strait issue. I understand that the government has rejected their proposal; is that correct?

Senator Macdonald —Yes. The BTE, I think it was, wasn't it, did an assessment, or certainly the department did. Was it the BTE?

Mr Robertson —I am not too sure whether it was the department.

Senator Macdonald —The department did a very detailed assessment of their proposal, and recently I think since Christmas I signed a letter to them explaining in detail why we did not support the proposal. But prior to Christmas, they had called upon me and we had advised them of that directly, and they had at that time proposed another approach, which we have partly implemented in conjunction with the Tasmanian government.

Senator O'BRIEN —So they have come up with another proposal. Can you tell us what they asked you to do and what you in fact have done?

Senator Macdonald —They wanted to be involved in any ongoing discussions with the Tasmanian government, and at about the same time, the Tasmanian government had written to me proposing that our respective officials get together to see if there was a better way of spending the existing quantum of funds, and that is what we have agreed to. But I can get you a copy of the letter that I wrote to the Sea Highway Committee rejecting their proposal, subject to just checking that there is no privacy or confidential matters being breached by me making it available to the committee.

Senator O'BRIEN —I guess what you have talked about is that the alternative proposal is not in fact an alternative but some other consultative mechanism they asked you to assist them to set up, rather than being an alternative or another proposal to financially assist passenger transport costs.

Senator Macdonald —By the time they came to speak with us—I think it was early December, but I am only going on memory and that is not always accurate—I think they had almost accepted that their original proposal was not appropriate. They had been in discussion with the Tasmanian government, which had come to that conclusion in any case. Regrettably, we did discuss the Bass Strait matters prior to dinner. The officer who would have all of these details at his fingertips, thinking that we were finished with that, has left. So I do not have the advantage of the advice just at the moment.

Senator MACKAY —You said the Bureau of Transport Economics did an assessment.

Senator Macdonald —No, I said the Bureau of Transport Economics or the department. The department reminded me that it was the department, not the BTE.

Senator MACKAY —Could somebody give me a run-down on the basis of that assessment?

Senator Macdonald —I have just said, Senator, that we went through this before dinner when you were not here. Thinking we were finished with it, the officer who did it has left. He is the best one to do it. I have offered to give to the committee a copy of my letter to the Sea Highway Committee explaining why we did not support their proposal. That is a very detailed assessment and would give the information you require.

Senator MACKAY —Broadly, given we do not have the person here, what was the basis for the rejection?

Senator Macdonald —It just did not stack up, Senator. It proposed solutions that required action by others, namely, the Tasmanian government. There was no indication from the Tasmanian government that that action was likely to occur.

Senator MACKAY —Does this mean the department actually sought advice from the Tasmanian government based on the proposal or did you as minister seek advice from the Tasmanian government as to whether they were likely to accede to it?

Senator Macdonald —Yes.

Senator MACKAY —What was the story there?

Senator Macdonald —My department is in close contact with the Tasmanian government on it. In fact, as I recall, an officer of the Tasmanian government sat in on all the discussions with the Sea Highway Committee. There was, as I understand from the department, quite regular contact between both governments in relation to the response.

Senator MACKAY —So what was the response from the Tasmanian government then?

Senator Macdonald —Senator, again I say to you that the officer who deals with this has left because we did deal with this before lunch and we thought we were finished with it. The details are with him.

Senator MACKAY —Madam Acting Chair, did we finish with Maritime before lunch?

ACTING CHAIRMAN (Senator Ferris) —I think Senator Macdonald meant before dinner.

Senator Macdonald —Before dinner, I am sorry.

Senator MACKAY —Did we complete Maritime before dinner?

Senator O'BRIEN —No.

Senator Macdonald —I thought we had completed discussion on Bass Strait.

Senator O'BRIEN —No. I asked about trade equalisation.

Senator MACKAY —Senator O'Brien, had you traversed Bass Strait at all?

Senator O'BRIEN —I asked questions about trade equalisation and passenger vehicles after that, but I did not say we had completed Maritime.

Senator Macdonald —Well, we had moved on from that, Senator.

Senator O'BRIEN —I think that might have been your assumption, but I do not think it is fair to suggest that I said that we were finished. I clearly said I was going on at that stage to another subject, namely, shipping reform but I did not indicate that we had finished Maritime.

Senator Macdonald —I am sorry. The officer must have misunderstood. If you have a question, we will take it on notice and get you the answer. I think you will find that the letter we wrote to the committee is very detailed and gives all the information you would want.

Senator MACKAY —We do not really have much option other than to have a look at it. Is it possible to get a copy of that letter tonight or is it not available?

Senator Macdonald —I did say subject only to any privacy. I will try to find my copy and make it available to you, Senator.

Senator MACKAY —Thanks. This question is a policy question, so it is probably best directed to the minister. What is happening in relation to the coalition's commitment as to Bass Strait being included in the national highway?

Senator Macdonald —We have been running the scheme now for some three years, since the 1996 election.

Senator MACKAY —That is not in relation to including it as part of the national highway though, is it?

Senator Macdonald —It is in fulfilment of the commitment we have made, Senator.

Senator MACKAY —The actual commitment was that Bass Strait be included as part of the national highway grid.

Senator Macdonald —I have been through this with the Sea Highway Committee. We choose to disagree on the interpretation. The government is quite clear on what it promised and that it has met its commitments.

Senator MACKAY —The actual quote from the coalition document is that `the coalition in government will develop the following initiatives: for Bass Strait to be treated as the Tasmanian sea highway'. It then goes on to talk about the passenger vehicle equalisation scheme. That is really it. In terms of your assessment, that meets that commitment, does it?

Senator Macdonald —Yes, we have met our commitment.

[8.06 p.m.]