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FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE - 03/06/98 - DEPARTMENT OF FINANCE AND ADMINISTRATION - Program 12—Australian Electoral Commission

CHAIR —We welcome Mr Gray and the representatives from the Australian Electoral Commission. Mr Gray, I understand you wish to make an opening statement?

Mr Gray —I wish to make a very short statement by way of opening. I would seek your approval to make a short statement in relation to certain comments made by Senator Ray during the hearings of this committee on 25 February 1998 that were directed towards my non-appearance before the committee.

Senator ROBERT RAY —They were not meant to be critical.

Mr Gray —I am sorry.

CHAIR —The commissioner is not being unduly sensitive.

Mr Gray —I wanted to clear up the record in case other people reading the Hansard thought you may have been.

Senator ROBERT RAY —I was not.

CHAIR —Go ahead.

Mr Gray —On the basis of what you have just said, I want to correct the record in that I had not been missing twice in a row. I wish also to indicate that the opportunity has been made available to both you and other members of the committee to inquire of me or present questions to me flowing from my evidence given on 4 June 1997. That opportunity was on 20 November 1997. I want to make it clear that I had not in any way had my leave motivated by the fact that this committee was sitting in February 1998. It was leave which I had planned for some time.

Senator ROBERT RAY —What I was trying to do was reserve my right to chase up tonight something from 4 June. That would not seem so strange. However, I do have some advice for you, commissioner, from W. C. Fields: never follow an animal or a kid act. My advice to you is: never follow OGIA or MAPS.

CHAIR —Mr Gray, if you wanted to table that statement, the committee will accept it.

Senator ROBERT RAY —Take my assurances that I was noting your absence so that I could return to an issue that I raised on 4 June last year.

CHAIR —Any questions?

Senator ROBERT RAY —I might clear that up now. On page 531, Senator Faulkner asked you some questions about the appointment of the deputy electoral commissioner and a short list. The reason I did not follow it up on 20 June was that I had not had a conversation about this until some time in October. The one thing I wanted to get clear and ask you is: was there only ever one short list or was there a short list to which one name was added so that it became a short list?

Mr Gray —No, there was only ever one short list which was finally agreed by the selection advisory committee.


Senator ROBERT RAY —Thank you.

Senator FAULKNER —Mr Gray, can I ask what the status is of tenders for contracts for the new computer programs for the next election? Very briefly, where are we up to there?

Mr Gray —Very briefly, we are a member of cluster 3. The outsourcing has been concluded and signed off. We are in the process of what we call rolling out some of the new network, which we hope to have completed around the end of July. This is a network of PCs out across the whole of the organisation. There are other aspects, of course, of the IT outsourcing: mainframe, mid range and so on, and I can give you the—

Senator FAULKNER —I assume—but I probably do not know enough about these matters to make such an assumption—that some of this would be time critical because of the possibility of an election being called in the not too distant future. This is not intended to be a question with a lot of spin on it, but that is a possibility and it is something that the Australian Electoral Commission would obviously have uppermost in its mind. Are there any time critical factors in this? I suppose that is the issue that I am just going to explore briefly with you.

Mr Gray —Can I answer just generally and then I will defer to the Acting Assistant Commissioner on Information Technology. What is critical, of course, is that we have a system which our people are able to utilise and are comfortable with in the management of the electoral process. Until such time as the new network and new processes are in place, we will have access and continue to rely upon the old processes—the old network. Consequently, we will have two running parallel—one slowly catching up with the other—and, therefore, there is not going to be a point where there will be a gap, if you like, between the old and the new.

Senator FAULKNER —Is there a changeover point there?

Mr Gray —There will be a changeover point.

Senator FAULKNER —Is that a date you could give us?

Mr Gray —No, that is not a date at this point which we can properly identify because it does depend on the way in which the roll[hyphen]out occurs, the training which occurs and the events which are under way when we reach that point. It may well be that, if an election were to be called and we were in the process of training and the roll[hyphen]out, we would be relying on the existing system and the systems we have relied upon for many years.

Senator FAULKNER —Thanks for that. I think that is all the information I probably need to know. I understand that you have not got a changeover date, if you like. Is there a ballpark time frame? You must have in the back of your mind a period of a couple of months, I would have thought at worst, when that would probably occur.

Mr Hunter —Yes, we do. Towards the end of July we should have all our PCs rolled out. There will be some testing to do at that time. More importantly, we are leaving our old network in place so that, if an election is called at any time, we are prepared; we can just immediately stop the roll[hyphen]out if we are not in a position to run with the new system or run part of the new system or, in fact, run with the old system.

Senator FAULKNER —I think I understand. Where is the tender process up to?

Mr Hunter —The contract for the tender for the outsourcing process under cluster 3 was signed on 31 March, I think. Are you referring to another request for tender that went out for the—

Senator FAULKNER —For the programs for the next election.

Mr Hunter —That was in relation to a newspaper article, I believe.

Senator FAULKNER —I am actually quoting a newspaper, which is always a risky business, of course.

Mr Hunter —That is a completely separate exercise from the outsourcing exercise.

Senator FAULKNER —Yes, sure.

Mr Hunter —That newspaper article actually misquoted what the requirement was. The requirement was, in fact, to just tender for contract services for maintaining and enhancing the existing election enrolment management systems. So this is a continuing process.

Senator FAULKNER —But is this a less time critical issue or not a time critical issue?

Mr Hunter —It is just a continuing process we go through every year.

Senator FAULKNER —So it not a time critical issue in that sense?

Mr Hunter —Not in that sense, no.

Senator FAULKNER —I think the compliance audit on the Australian Labor Party has concluded, is that right?

Mr Cunliffe —The compliance audit has concluded on the Australian Labor Party national secretariat. Mr Edgman is the director of the funding and disclosure area and he may have something to add, but the simple answer is: yes.


Senator FAULKNER —Is the concluded report finalised?

Mr Dacey —That is right, yes.

Mr Edgman —A report has been issued to the parties.

Senator FAULKNER —Can you just let me know what compliance audits have been conducted in this calendar year? There is the Australian Labor Party. Who else have we got?

Mr Edgman —I have not got a list of the audits that have been conducted with me, but it is an ongoing program, as you understand, of audits. We have been progressing with the program all year and we achieve a coverage of all parties and across all states as part of that cycle.

Senator FAULKNER —So has the compliance audit of the federal secretariat of the Liberal Party been concluded? I am sorry, Senator Minchin will correct me if I have used the wrong term—you know what I am driving at.

Senator Minchin —That is all it is.

Senator FAULKNER —I was hoping I got the right terminology.

Senator Minchin —Federal secretariat. We are a federal party—

Senator FAULKNER —Federal secretariat of the Liberal Party.

Senator Minchin —Much to the Prime Minister's chagrin sometimes.

Senator FAULKNER —Has that been concluded?

Mr Edgman —It has not been concluded, no. It is actually under way at the moment.

Senator FAULKNER —When are you expecting that to be completed?

Mr Edgman —We would be expecting that to be concluded early next week.

Senator FAULKNER —The National Party of Australia?

Mr Edgman —Their national secretariat has not been audited as yet and I could not tell you off the top of my head just when that is programmed.

Senator Minchin —I thought it had closed down.

Senator ROBERT RAY —Not for running out of this building, actually.

Senator FAULKNER —It will probably close down after the Queensland election. The Australian Democrats?

Mr Edgman —From my recollection, I do not believe the national secretariat of the Democrats has been audited this year.

Senator FAULKNER —Let me just concentrate then if I can, Mr Gray, on the Australian Labor Party, which has been concluded, and the Liberal Party, which is close to being completed. What is your practice in relation to making those compliance audit reports public? Has there been a consistent approach to this in the past?

Mr Gray —I believe there has been a consistent approach. I will ask Mr Edgman to outline it for us.

Mr Edgman —The reports are considered confidential between the Electoral Commission and the parties. The Commonwealth Electoral Act actually provides for the Electoral Commission to report upon compliance investigations to the parliament, but it actually precludes us from reporting in any detail as to the particulars of the findings unless the commission believes that there has been a breach of the disclosure provisions of the act.

Senator ROBERT RAY —What is the method of reporting?

Mr Edgman —Well, the last report on compliance investigations to the parliament was made in the funding and disclosure report on the 1996 election, and we included a section on compliance audits in that report.

Senator FAULKNER —So, therefore, it would not be proper for you to make those compliance audits public in terms of the provisions of the act?

Mr Edgman —I do not believe so, no.

Senator ROBERT RAY —Could I ask the commissioner whether they were consulted by Treasury as to the figures Treasury put in the forward estimates as to a joint select committee proposal on tax deductibility of donations? There is a figure in the forward estimates, not for this financial year but through outyears, of approximately $45 million over the three years. Were you consulted as to the calculation of that figure?

Mr Moyes —In the Treasury's development of that figure, yes, we were consulted for information that might assist in coming to that figure, but the figure itself was developed by the Treasury people.

Senator ROBERT RAY —We are puzzling about how they came to that figure. It is certainly not knowledge within DoFA, I don't think.

Senator Minchin —So was I, Senator Ray.


Senator ROBERT RAY —If you accept that even at the highest marginal rate of tax and company tax there is a mixture, you are looking at some massive political donations.

Senator Minchin —I would love to think that donations might be at that level, but I would be absolutely amazed that they would be at the level to generate that sort of reduction in revenue.

Senator ROBERT RAY —I take it the sort of advice Treasury asked you for was the level of political donations as recorded?

Mr Moyes —That was the sort of thing that was asked for, yes.

Senator ROBERT RAY —But how they could make a leap from there into this area is just bemusing.

Senator Minchin —I guess Treasury was inclined from their point of view to give a worst case scenario and from the party's point of view a best case scenario.

Senator ROBERT RAY —I would not like any reductions in public funding based on Treasury guesses. The tabulating of election results on election night is becoming even more of a mystery, even to those who have followed it. Will the figures in your computers in the upcoming election be expressed in primary votes or in preferred votes and is there a distinguisher put in? Do you not usually get primary results first and then add in preferred results because you get two lots of results from the booths? How do you distinguish there?

Mr Hallett —Probably the most popular screen on the computer system that is used on election night is the divisional results screen. It shows candidates, primary votes and swing figure. Then at the bottom of that screen there is a two candidate preferred figure. So both those results are available.

Senator ROBERT RAY —I might take that up privately with the commissioner at some stage. No doubt he will be having an explanation session for a few different people around the place. Could I ask a second question relating to the Senate, though? The Senate figures always come up much later. We all expect that and I would rather see the Reps figures first. The figures that you put up on the night—is there a disproportionate amount of `tick it' votes included there and an underrepresentation of `below the line', or is it pretty balanced?

Mr Hallett —In fact, there would be no below the line, because the only votes that are counted on polling night are above the line figures.

Senator ROBERT RAY —I thought that would be the case.

Senator Minchin —But 95 per cent of votes are above the line.

Mr Hallett —As Senator Minchin correctly states, more than 90 per cent of electors choose to vote above the line, but obviously in the week following polling day we start looking at below the line.

Senator ROBERT RAY —I just make that point because it is possible to misinterpret even the 90/10 ratio, given that the Democrats tend to be 40 per cent below the line, along with others—not Labor and Liberal. You can get a distorted view of what the quotas are.

Senator Minchin —You cannot do anything about that.

Senator ROBERT RAY —No, you cannot. I just wanted to confirm that was the case.

Mr Hallett —That quota that appears on the computer system on election night is a provisional quota.

Senator ROBERT RAY —Of course. We understand that. It is just that some people take it as gospel. I am sure, in fact, you could go to previous elections and put in a deflator based on previous voting figures. I just wanted to confirm that. Thank you.

Senator FAULKNER —I am sorry I do not have the act with me, but I think it is section 331. You will know. It is the section that relates to the possibility of furnishing of returns by government departments. Is that 331?

Mr Dacey —Section 331 is on electoral advertisements, Senator.

Senator FAULKNER —That might be right.

Senator Minchin —This is under disclosure?

Senator FAULKNER —Yes. I had a feeling it was 331. I am sorry—I should have checked it before I left the office and I did not.

Mr Edgman —I know the section you are referring to, Senator. I cannot recall the section number off the top of my head.

Senator FAULKNER —I am sorry about that. Have you got any proposals as to how that might be policed or applied?

Mr Edgman —Those returns are not actually made to the Australian Electoral Commission, so we do not have any role in policing those returns at all.

Senator FAULKNER —Who are the returns made to?


Mr Cunliffe —Senator, 311A requires—

Senator FAULKNER —It is 311, is it?

Mr Cunliffe —I think it is the one you are looking for. It actually requires departments in their annual reports to set out particulars. That is what the provision requires.

Senator FAULKNER —Could you just quickly read that section for me? Is it long? Do not worry about it.

Mr Cunliffe —I can talk quite fast, Senator, but it is about a page. In essence it requires departments—and by further definition that is broader than just departments—to report particulars of amounts paid by or on behalf of the Commonwealth department, et cetera, during the financial year to advertising agencies, market research organisations, polling organisations, direct mail organisations and media advertising organisations, and the persons or organisations to whom those amounts were paid, if it is more than $1,500.

Senator FAULKNER —Does the Electoral Commission do any work in relation to ensuring that that particular provision in the act is complied with by departments? Do you consider it an obligation you might have to have at least an oversight of compliance with that provision?

Mr Edgman —No, we do not. And I think the JSC made a recommendation that that section should be moved out of the Commonwealth Electoral Act into more appropriate legislation, because we play no role.

Senator FAULKNER —I do not think they made a recommendation that it be moved into more appropriate legislation. I just think they made a recommendation that it be removed.

Senator Minchin —The officer is correct. That committee did believe it was inappropriately placed—not that the requirement should be dropped, but that it should be put in more appropriate legislation.

Senator ROBERT RAY —What is the more appropriate legislation?

Senator Minchin —We did not specify.

Senator FAULKNER —Annual reporting requirements under the Public Service Act or something like that?

Senator Minchin —I do not think we had in mind the specific vehicle but just felt that there must be some more appropriate way in which that information would be reported rather than through legislation relating to political parties.

Senator FAULKNER —So would it be fair to say then that, if this is something that does not appear to cause a great deal of concern for the commission, the commission might take no interest in blatant political advertising from a government department or agency in the lead-up to an election campaign?

Mr Gray —I do not think that we would say that we are totally uninterested. The question is whether we have the authority, and where the authority lies, to inquire into or to make some judgment in relation to that activity. At the moment, as I have understood it, the JSC has agreed that it appears that that particular section appears in the Electoral Act. But there seems to be no capacity or, indeed, responsibility on behalf of the AEC for its monitoring and implementation. The JSC have identified the need to find the right piece of legislation and thereby the right authority to monitor and to make judgments in relation to that section. So I do not wish it to be implied that we have a total disinterest and we are not interested. The question is: who has the authority to do something about it?

Senator FAULKNER —I have a developing interest in it, I have to say, and a developing interest—if it might happen to be deleted from the Electoral Act—in where it might bob up again. I am hoping that you, as the commissioner, will keep a weather eye on that particular provision in the act. After all, you have certain responsibilities in terms of the act, and until the act is amended we still have that provision there. Of course, it was something of which the Liberal Party was very keenly supportive. If my memory serves me correctly, it was the coalition in opposition that argued very strongly for that, Senator Minchin. Obviously, there has been a change of heart somewhere.

Senator Minchin —I think I am right in saying that our amendment bill does not take up that recommendation. That was a committee report.

Senator FAULKNER —I am talking about the recommendation of the committee.

Senator Minchin —Yes. All I am saying is that that recommendation was not picked up by the government.

Senator FAULKNER —But a majority of the committee determined it. It has a government majority. I am not making a political point about that; I am just asking to what extent the commissioner takes account of this. I appreciate that this is not easy, and it is one that probably does require a bit of examination as to how it is best dealt with. But it is still an important policy issue. The Business Council of Australia have flagged a prospective involvement in the next federal election campaign, particularly in relation to tax policy questions. How would any donations to the Business Council of Australia be treated for such a campaign that might be conducted by the BCA? I am using that as an example. I think it is a good example because it is one that has been publicly flagged. I suppose you could speak hypothetically about it, but it seems more sensible to deal
with a tangible example. Would donations to the Business Council of Australia be considered donations in kind?

Senator HEFFERNAN —You could refer that question to the AMIEU and the various unions involved.

Senator Minchin —I think that Senator Faulkner is implying that this applies equally to the ACT and any other participant in an election campaign.

Senator FAULKNER —Absolutely. It is just that the trade unions might be aware of it and those who are donating to the Business Council of Australia might not. There may well be a difference there, Senator Minchin, which even you might acknowledge. I suspect that Senator Heffernan would not be bright enough to understand that, but I am sure that you are.

Senator Minchin —We will find out what the requirements are.

Mr Edgman —Where an entity other than a candidate or a political party incurs expenditure for a political purpose—and that would include publishing an electoral matter, broadcasting an electoral matter, running electoral advertisements and that sort of thing, and commenting on electoral issues during the campaign—if they have received any donations which they have used, either totally or in part, to fund that expenditure, they have to disclose those donations.

Senator ROBERT RAY —Up to a certain limit? Or do they have to disclose all donations or all donations as defined in the Electoral Act?

Mr Edgman —There is a limit. It is a very low limit these days, because they have not been indexed at all, if they have incurred $1,000 of expenditure for a political purpose, so that is virtually any ad that they run. So, if they have incurred $1,000 of expenditure for a political purpose, they have to disclose donations of $1,000 or more that they have received and then used to fund that expenditure.

CHAIR —Senators, we are past the appointed time for closing down. Do you have many questions left on this topic?

Senator FAULKNER —I do not think we will go long. As I indicated to you, we certainly would not go beyond half past 11. I do not think we will go anywhere near it, frankly. I think it is sensible to finish this if we can, but it is a matter for you.

CHAIR —I just urge you to hurry up. I agree that it would be sensible to finish with the commission, if we can.

Senator FAULKNER —On this issue that we have been speaking of, at what point in the election campaign process would the AEC be advising a body like the Business Council of Australia? You can use any of the other examples that have been mentioned, but I prefer to use the Business Council of Australia because of some of the public statements that have been made. When would you be advising the BCA, for example, given the nature of a political campaign, of their requirements under the act—during the campaign or after the campaign?

Mr Edgman —We would advise them during the campaign, as soon as an electoral advertisement came to our attention.

Senator FAULKNER —So an officer of the AEC would monitor this sort of thing? That is a responsibility of someone?

Mr Edgman —During the election period from the issue of the writ my section actually monitors major newspapers and regional newspapers, and generally advertising campaigns on television and radio come to our attention as a matter of—

Senator FAULKNER —Have you had the experience in the past that some third parties, for want of a better expression—you know what I mean by a third party; it is those who are involved with third party bodies in the campaign—are very surprised at some of their obligations under the act?

Mr Edgman —Yes. Quite a few can be surprised at their obligations. The commission itself tried in the early eighties to run advertisements advising third parties of such reporting obligations, but it was not at all successful.

Senator FAULKNER —Have you yet been able to ascertain the commercial arrangements surrounding the loans made by the Greenfields Foundation to the Liberal Party? Have you made any progress on that one?

Mr Edgman —Until we have completed the audit of the federal secretary to the Liberal Party, we will not have any further information as to the loan agreement with the Greenfields Foundation. As we said at the last meeting, that is really at this point in time our only avenue for obtaining any information as to the terms and conditions of the loan and the party's adherence to those terms and conditions. So when the audit is completed—next week it should happen—we will be in a position to make some further judgment as to the commercial or non-commercial nature of the loan.

Senator FAULKNER —Unfortunately the committee will not be able to get the benefit of your advice at that time, so that is a little disappointing.


Senator Minchin —Well, as indicated before, in relation to any compliance audit, the commission is not allowed under the act to tell the committee all about the compliance audit. If there is any—

Senator FAULKNER —I did not ask about the compliance audit. I asked about other arrangements.

Senator Minchin —If there is anything in the compliance audit that indicates to the commission that there has been a breach of the act, they will, of course, take the appropriate action, and that will become known.

Senator FAULKNER —Mr Edgman, you said at the last hearing that the AEC had written a standard letter to Greenfields inquiring as to its status as an associated entity. I assume that there is no problem with standard letters like that being made available to the committee. That is a matter for the commissioner. I don't know.

Mr Edgman —Can I clarify that, Senator? Do you wish to see the general form of such a standard letter? I think that might be more straightforward than getting to individual letters.

Senator FAULKNER —I was going to ask the commission whether we could have a copy of that letter. I wondered also if we could have a copy of a letter that Mr Bandle wrote back on behalf of Greenfields.

Mr Gray —I would like to take that on notice, if I could. I think that I would like to give due consideration to that request. It is, I think, going to the correspondence as between the AEC and a specific organisation—entity. It is one thing, I think, going to the general letter, to which Mr Edgman has referred; maybe it is another to go to the specific correspondence that has passed between the AEC and an organisation. I would like to see some advice on that as to whether or not it would be proper to release that letter to you.

Senator FAULKNER —I appreciate that. Please take that on notice. When you describe the Greenfields Foundation as an `entity'—

Mr Gray —No, it is not anything that immediately allows us to come to a particular view. As you well know, it is an issue that is the subject not only of a recommendation that we now make but an amendment that has now been—

Senator FAULKNER —It is not an associated entity, is it, Mr Gray?

Mr Gray —We have not identified that as yet.

Senator FAULKNER —Because it is not an associated entity, I would ask in your consideration, as you properly take on notice—you want to give that some thought; I appreciate that and acknowledge that that is a proper course of action—you take into account that it is not an associated entity. I hope that at this stage it has not been defined as such.

Mr Gray —Nor determined as such—whether it is or is not.

Senator FAULKNER —It has not been determined as such, yes. I would assume that if it had been determined as such, there might be a different view that you would have about this sort of correspondence. That is a matter for you. I appreciate your taking it on notice. I have to say to you that I would like to know those elements of the trust deed that state the objects of the foundation. If you can make that available to the committee, that would be most helpful also. You might give that some consideration, too.

Senator HEFFERNAN —I have a few quick questions. I will put a couple on notice to save time. You mentioned earlier that you have completed the audit of the Australian Labor Party. In the context of that audit, was the identity of Emily's List included in the audit?

Mr Edgman —Emily's List is not part of the national secretariat of the Labor Party, so it was not subject to that audit, no.

Senator HEFFERNAN —The document here states that Emily's List will not be part of the control of the national executive of the ALP, but it includes parliamentarians, branch members and women unionists from across Australia. The Australian Securities Commission lists Emily's List as a registered body with a registered number. That Emily's List was not included in your audit indicates, therefore, that it is a separate entity; is this correct?

Mr Edgman —That is correct.

Senator HEFFERNAN —Has the Electoral Commission established whether Emily's List is an associated entity?

Mr Edgman —No, we have not. At this stage, we do not have all the details. We intend to be in contact with the directors of Emily's List and seek some further information.

Senator HEFFERNAN —Will that be to seek out whether it is an associated entity under section 287 of the Electoral Act?

Mr Edgman —Section 287 provides the definition of an associated entity. We will be writing to Emily's List and asking for some information as to its operations, controls and so forth, so that we can make a judgment as to whether we believe it may fall within the definition of an associated entity.

Senator HEFFERNAN —To assist the committee, Emily's List states on its web site—and I have to say that that is a web site that is prepared by Labor Net Projects—that it will operate on a national basis and assist
endorsed Labor women candidates standing for election in winnable state and federal electorates. By its own admission, I would have thought that that would make it an associated entity under section 287 of the Electoral Act. I would be pleased to see the outcome of your correspondence. As Senator Faulkner mentioned, I would be interested to see a copy of any correspondence that you could make available to the committee in those deliberations. I will put the rest of my questions on notice.

Senator FAULKNER —Emily's List's accounts are publicly available, are they not?

Mr Edgman —That is correct.

Senator FAULKNER —Are the Greenfields Foundation's accounts publicly available, Mr Edgman?

Mr Edgman —Because they are a foundation, they are not.

Senator FAULKNER —No, so there is a very significant difference here. Have you contacted—

Senator ROBERT RAY —There is a similarity. They are probably both associated entities.

Senator FAULKNER —Have you contacted Ms Joan Kirner, who, I am sure, is certainly one of the office holders of Emily's List, about this matter yet?

Mr Edgman —We have not. We intend to do so shortly.

Senator FAULKNER —I am sure that you will find that, unlike the principals of the Greenfields Foundation, you will get a great deal of cooperation. That was probably a pretty dopey thing for Senator Heffernan to raise at the committee.

CHAIR —Any further questions?

Senator FAULKNER —I will put the rest of mine on notice.

CHAIR —If there are no further questions, that completes program 12. Thank you, Mr Gray and officers of the commission. We are sorry to hold you up so late in the night. Thank you, Minister. Thank you, staff. Thank you, Hansard.

Committee adjourned at 11.18 p.m.