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STANDING COMMITTEE ON ECONOMICS
INNOVATION, INDUSTRY, SCIENCE AND RESEARCH PORTFOLIO
Australian Research Council
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STANDING COMMITTEE ON ECONOMICS
Department of Innovation, Industry, Science and Research
Australian Research Council
CHAIR (Senator Hurley)
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STANDING COMMITTEE ON ECONOMICS
(Senate-Thursday, 23 October 2008)
Australian Prudential Regulation Authority
Corporations and Markets Advisory Committee
- Australian Prudential Regulation Authority
INNOVATION, INDUSTRY, SCIENCE AND RESEARCH PORTFOLIO
Australian Nuclear Science and Technology Organisation
Commonwealth Scientific and Industrial Research Organisation (CSIRO)
Australian Research Council
CHAIR (Senator Hurley)
- Australian Nuclear Science and Technology Organisation
RESOURCES, ENERGY AND TOURISM PORTFOLIO
National Offshore Petroleum Safety Authority
Dr James Johnson
- Tourism Australia
- TREASURY PORTFOLIO
Content WindowSTANDING COMMITTEE ON ECONOMICS - 23/10/2008 - INNOVATION, INDUSTRY, SCIENCE AND RESEARCH PORTFOLIO - Australian Research Council
CHAIR —We will reopen the meeting here today with the Australian Research Council. Do you have an opening statement?
Prof. Sheil —No.
Senator ABETZ —Can I ask where are we at with Excellence in Research for Australia?
Ms Harvey —We are still in consultation with regard to a range of different measures we are looking at to see whether or not they are feasible. We currently have a pilot of the system for the physical, chemical and earth sciences at the moment, in which institutions were invited, but it was not mandatory, to participate, of which a range of institutions have accepted. We are currently in that pilot stage of them sending data, making sure that the systems can talk to each other, and then we will be able to send some information back.
We have subgroups which are considering which measures are appropriate for each discipline. We have an overall indicators development group made up of a range of different experts. That is the overarching group. We also have two subcommittees that are considering, in particular, the disciplines around the humanities and the creative arts and what would work as an indicator of excellence for those disciplines.
We have had another expert group put together for the physical, chemical and earth sciences, which is the first cluster that we are going to trial, and they are about to meet again. We have been going through every single discipline that sits under that cluster to say what would work and what would not work and, on receipt of that information, we have been doing some testing with some of the data. We have been looking at what volumes are thresholds that we would need to make it statistically valid.
Senator ABETZ —You say that with absolute confidence so I am sure you are across it all, but I confess I struggle. You mentioned there were such things as clusters and disciplines. How many separate disciplinary—
Ms Harvey —Groupings.
Senator ABETZ —Yes.
Ms Harvey —I could give you a complete overview.
Senator ABETZ —Please do. I am personally very interested in this. If it were to take up time from other senators I would desist. If not, this is great. This is a private tutorial for me.
Prof. Sheil —The proposal is that we will review all the disciplines covered in Australian higher education institutions in a series of eight discipline clusters. We chose those eight discipline clusters to represent the six clusters within which the ARC works already.
Senator ABETZ —Is law, for example, a separate discipline?
Prof. Sheil —No. Law is within the humanities and creative arts cluster.
Senator ABETZ —Law, humanities and creative arts is all seen as being in the one?
Prof. Sheil —That is correct. That is how it is at the moment.
Senator ABETZ —Has all of this been set out in a document somewhere with a flow chart?
Prof. Sheil —It has. It is in the Excellence in Research for Australian consultation document that was released earlier in the year.
Senator ABETZ —I am sure I have seen that.
Senator Carr —It is on the website.
Senator ABETZ —That is very helpful.
Prof. Sheil —There are the six standard ARC discipline clusters within which we operate our normal business and then we added two additional clusters for health and medical research.
Senator ABETZ —In which discipline cluster have we made the most progress?
Prof. Sheil —We started with two discipline clusters to begin with, representing essentially two different areas across the spectrum of research activity. The first is the physical sciences, which covers physics, chemistry and earth sciences. The second one is humanities and creative arts. Within that cluster we have two separate subgroups working on work for the humanities group and a creative arts group.
Senator ABETZ —We have got discipline clusters, then under each one of those we have subcommittees?
Prof. Sheil —Subgroups working on those particular issues.
Senator ABETZ —How many subgroups do we have?
Prof. Sheil —At the moment we have two working around the humanities and creative arts, and then we have an overall indicators development group sitting above that. We have had separate consultation with the physical scientists.
Senator ABETZ —I do not mean this in any pejorative way, but can you tell me what the feedback is from the discipline clusters as to how this is progressing, because we do get various media reports? I would also be interested in your assessment of which ones you think might be approved and when you think you might have the first one up and running?
Senator Carr —I will add something here and then let the officers fill in the detail in terms of their experience. The approach that the ARC has sought to take here is to find the most difficult area—that is, the humanities and the performing arts—in trying to reach a consensus within the researches in those disciplines. The reason it is difficult is that the definition of research in those areas is open to so many different interpretations. What you are seeing in the press is a debate within the research community, which we welcome, because it allows the range of opinions to be expressed. These were difficulties that were first experienced with the RQF, which the previous government had sought to implement, and of course in any quality assurance regime there are going to be debates about the appropriateness of any particular matrix.
It is made more difficult in the humanities because not all of the different branches of the humanities, social sciences and the performing arts lend themselves easily to the application of metrics. On the other hand, the other area in which it is being trialled is in the sciences, where there is considerable agreement, and you are seeing very little public debate about those questions because there has been so much general agreement.
Senator ABETZ —Who has the lucky task of dealing with the physics area, and who has the difficult task of dealing with the humanities?
Senator Carr —The ARC has the responsibility for both of them.
Senator ABETZ —Do you have separate officers or officials? It would virtually be a full-time job trying to come to grips with this, especially in the humanities area.
Prof. Sheil —We have a range of expertise that we bring to bear to this. In addition to the officers of the ARC in the branch led by Ms Harvey, we have experts from the sector working with us and chairing various subgroups. We can provide you with details of who those experts are.
Senator ABETZ —I would appreciate that, if you could, on notice.
Prof. Sheil —Yes. We can tell you now if you would like.
Senator ABETZ —No. Let us not take the time. I would imagine that it would be a huge list of names.
Prof. Sheil —It is large, 20 or more names. In addition to that, within the ARC we have academic expertise in-house. I am a physical scientist and so I am aware of many of the issues in relation to the physical sciences discipline.
Senator ABETZ —Do you steer clear of the humanities?
Prof. Sheil —No. I have also been the deputy vice-chancellor of research, so I understand a lot of the humanities issues.
Senator ABETZ —Fair enough.
Prof. Sheil —Then we have up to five other executive directors who are academics that come from the sector and who work with the ARC and within the ARC managing programs, but also working very closely with Ms Harvey’s team.
Senator ABETZ —When we rank the research departments, will that ultimately end up ranking universities? Do you intend to take it that far?
Senator Carr —It does not quite work that way.
Senator ABETZ —Or departments within universities?
Senator Carr —Fields of study is a better way to look at it.
Senator ABETZ —I accept that.
Senator Carr —In terms of the development of the compacts, which the government is developing as a major policy instrument to drive reform within the university system, we are looking to the ERA as a means of developing an agreed set of indices that will assist us in the verification of university claims as to the strength of their research. There is a whole range of ways in which claims of excellence—which is what we are striving for—will be acknowledged and peer review is clearly part of that. There are citations and all sorts of different methods, but at the end of the day we will need an authoritative form of verification, which I trust the ERA will be able to provide us, and that will be agreed across the sector as to its strength. What we are seeing at the moment is a debate which, as I said, I welcome. We do want to encourage people to engage with this. I think it has been working quite well.
Senator ABETZ —At this stage it would be very easy for me and others to seek to inject a bit of politics into this and refer to all the newspaper articles, and I have a few of them—’Quality reforms may harm research’ et cetera. But my view is that it is in Australia’s interest to have a quality assurance framework if we can. If we think the former government’s approach was not right, so be it. Let’s try this approach and see how it operates. I wish those involved in the exercise the wisdom of Solomon and the capacity to deal with these matters. There are no trick questions here. I would like to ask about the final ranking of the list of journals and when a journal is going to be put in an A, B or C category. When is that going to be finalised for those two discipline clusters that you are currently working on? Do you have a realistic time line on that or is it going to be a moving feast until such time as it is settled? If that is the case I accept that, because some of these things cannot be nailed down to a specific time line. Do you have an ambition?
Ms Harvey —I have a time line. We have released the initial lists and we asked for feedback on those. We received quite a lot of feedback, as we expected.
Senator ABETZ —Robust feedback?
Ms Harvey —Robust and constructive. What we are looking at for the two trial clusters—physical chemistry and earth sciences, and the humanities and creative arts—is that we would release the ranked journal list for those before Christmas this year. We are working through all of that feedback now. I hoped to release it slightly earlier, but we did have to go back to some of the people who put submissions in because they did not follow the instructions of validating why they thought something should be changed with regard to a ranking.
Senator ABETZ —Are we doing both of these discipline clusters simultaneously?
Ms Harvey —The expectation is we will assess those two clusters within the calendar year 2009. The submission and the assessment period may not be exactly the same, but it is over the calendar year.
Senator ABETZ —In relation to the journals and the ratings, would it be fair to say that the vast majority of submissions that you have received would be on the humanities side, as opposed to the sciences?
Ms Harvey —No.
Senator ABETZ —Are they on the web?
Prof. Sheil —They are.
Senator ABETZ —Is every submission open?
Prof. Sheil —No. The list is on the web but the submissions are not.
Ms Harvey —We have finished the consultation. We took the list down because we thought it would be misinformation to have left it up while we were considering the different rankings. That was due to a discussion that we had with some of the people involved. At the moment it is not on the web but it will go back up once we release it.
Senator ABETZ —Is that just the list?
Ms Harvey —The preliminary list is down.
Senator ABETZ —None of the submissions are on the web?
Ms Harvey —No.
Senator ABETZ —I suppose we will take you on trust what those submissions said, and you will inform yourselves accordingly. One would assume that if somebody is too upset they will undoubtedly ensure that those submissions somehow get into the media. All the best with that and the work that you are doing. Being of a non-English-speaking background myself, do we have any bias for or against or are we indifferent to non-English-language journals in our consideration of this classification? How do we deal with the non-English journals?
Ms Harvey —We took advice from the four learned academies and some other groups about what should be included in that initial list. We put that list of non-English-speaking journals out for consultation, which particularly included the humanities and the creative arts. We then took advice about which ones should be included on that. We have been having a look at the issue of making sure that there is no bias in that. Where we are being told that those journals should be on there, they are included.
Senator ABETZ —Without giving the game away, can you indicate to the committee what other issues have been raised in these consultations? For example, there was the English and non-English issue. Are there any other issues that have come up in the consultations which it would be fair to say you did not necessarily have front of mind before the consultations occurred? I do not need a lot of detail on it, but has the consultation process proven fruitful and will it help inform? With all the best will in the world I doubt that anybody or any gathering, even the ARC, would have covered off on all the bases.
Prof. Sheil —The most important thing about the consultation process has been the level of engagement. Had we not had that level of engagement we would have run the risk of developing a system that the academics had not had some ownership of. We expected a high level of engagement and we welcomed that.
Senator ABETZ —Do you know how many submissions?
Ms Harvey —I do not know the exact number of submissions. I think it is about 116, but I know we have about 10,000 lines of feedback in those submissions. It is quite a large template.
Senator ABETZ —Can you tell me how many words?
Ms Harvey —No.
Senator ABETZ —Just joking. Ten thousand lines is significant. Can you take the submissions figure on notice?
Ms Harvey —Yes.
Senator ABETZ —I do not want to hold you to it. Sorry, Professor Sheil, I just wanted to nail that one down before I forgot about it.
Prof. Sheil —The other areas where we had significant feedback were not unexpected to us. You asked a question earlier about whether all the feedback was from the humanities, and the answer was ‘no’. The mathematicians were particularly robust with their feedback, and I expected that. The other area where we have had a lot of feedback, which is a real challenge in this exercise and one that we are taking very seriously, is the question of interdisciplinary research. We are working very hard on that issue and how to particularly capture high-quality interdisciplinary research where it goes beyond the disciplinary clusters that we are working within.
Senator ABETZ —I understand these days you can do a joint Bachelor of Law and Science Degree and things like that.
Prof. Sheil —They have been around for a while.
Senator ABETZ —That just goes to show how long I have been around. I am not sure that the University of Tasmania had such a thing when I was there in the late 1970s.
Senator Carr —This is a project aimed at research programs, not undergraduate programs.
Senator ABETZ —But you would think that lecturers in these areas would also be writing papers et cetera. As a result, what might initially be seen as an interdisciplinary approach may well one day grow and develop into its own discipline. I think those sorts of things should be taken into account and factored in.
Ms Harvey —I would just like to correct the record. We received 114 submissions.
Senator ABETZ —Thank you. I would like to draw Professor Sheil’s attention to an article in the Australian of Wednesday, 15 October 2008. I do not know if you have it in front of you.
Prof. Sheil —What was the subject matter?
Senator ABETZ —The heading was ‘Discovery project success rates lag’.
Prof. Sheil —I am aware of that article.
Senator ABETZ —For my benefit, and I do not want to take sides in this debate at all, do you have any comments you would like to offer in relation to what is asserted in that article?
Prof. Sheil —I am quoted in the article as saying that I believe that we are in a steady state position in terms of funding and we have continued application pressure, which creates pressure on success rates, and that I think it is critical that we maintain a success rate of at least 20 per cent to ensure that we have appropriate buy-in from the applicants and also those involved in the assessment.
Senator ABETZ —I read that we are currently at 20.4 per cent. Of course you quite rightly said that it is up to the government to decide how many of the recommendations of the national innovation review the government wants to adopt. We will get onto that later in the program. As part of the discussion in relation to the ERA, is the National Tertiary Education Union involved in the formal aspects of that or are they just one of the inputs?
Ms Harvey —I would have to check if they actually made a submission with regard to the various consultation processes. We had public consultation. I do know a range of other ones.
Senator Carr —I am not certain it had been appointed to anyone in the department.
Prof. Sheil —No.
Senator Carr —What about the agency?
Prof. Sheil —No.
Senator Carr —Hopefully many of their members have contributed.
Senator ABETZ —Absolutely. The indication in the article in the Australian is that on 2 July the NTEU had words and suggestions to offer, as one would expect, which is a good and proper thing.
Senator Carr —I have consulted widely on this directly. I have met with the NTEU. I trust that they have been active in all of the consultations, as I have with vice-chancellors, deputy vice-chancellors responsible for research and a range of other interests associated with the research community.
Senator ABETZ —Modern technology is a wonderful thing, isn’t it? Some person who does not have a life is watching this and has just emailed me and said it is important that the ERA equates quality not just in measures of number of publication citations et cetera but also takes into account high-impact research that is based on solving real world problems that affect the customers of Australian businesses. Do you want to offer a comment as to how the process is going to take that into account, if at all?
Prof. Sheil —There are a number of elements to the initiative, and one of them which is clearly laid out in the consultation draft will be about trying to identify appropriate measures for excellent high-quality applied research. Some of the measures will be around engagement with end-users and will cover off that concern.
Senator ABETZ —I express my thanks for that. Although none the wiser, I am definitely better informed.
Senator EGGLESTON —I wonder if the ARC is aware of the Federal Court judgement over intellectual property rights issued between the University of Western Australia and its former employee, Professor Bruce Gray.
Prof. Sheil —I am aware of the issue but I am not across the detail.
Senator EGGLESTON —Even though you are not across the specific detail of it, in a general way would this particular case have any impact on ARC funded research since this was the research part of the university?
Senator Carr —This judgement could have profound impacts on all of the research community. As I understand it, it is still subject to appeal.
Senator EGGLESTON —I do not think we should talk about the case itself. I am just talking about the implications of it.
Senator Carr —I just wanted to make that clear. I do not want to comment on matters that are before the courts.
Senator EGGLESTON —That is fine.
Senator Carr —But the terms of the legal dispute are matters that I am aware of and they will be matters, depending on the outcome of the appeal, that may require a further policy response from government. But at this point that is not the situation until we have actually had the appeal heard.
Senator EGGLESTON —Is the question in principle a matter of the Commonwealth funding an institution and then an employee of the institution?
Senator Carr —That is the issue that is at the core of the legal proceedings. But in essence it goes to the nature of the contract between the institution and the researcher. That is what is in dispute.
Senator BUSHBY —In relation to the National Competitive Grants Program, I saw recently in the media that the Curtin University of Technology is considering declining money that was allocated to it on the basis that it is effectively insufficient to allow them—
Senator Carr —We look forward to our researchers sending money back and we look forward to the opportunity to discuss that.
Senator BUSHBY —Essentially the allegation is that the grants are being spread too thinly and effectively it is not enabling the quality of research to be undertaken. Would you care to comment on that?
Prof. Sheil —I think to comment on that you need to understand a little bit about our processes. In making allocations in relation to the National Competitive Grant Program in, say, the discovery area where this grant falls, we make 845 separate decisions about the quality and the budget of each grant. If you look at the social, behavioural and economics cluster in which that grant fell, the grants that were most highly ranked in that cluster were awarded somewhere between 93 per cent to 98 per cent of the funding that they asked for. In the middle, they are awarded something like 50 per cent to 60 per cent. As you get towards the lower part of the ranking the grants are awarded less of what they are asked for. But each decision is made by experts in that discipline. They would have made a decision that the grant was still feasible with the money awarded.
Senator BUSHBY —That is one of the criteria that you would consider even if they have ranked it very low?
Prof. Sheil —That is correct.
Senator BUSHBY —Obviously the recipient in this case does not agree. Are there other recipients of awards who have expressed similar concerns?
Prof. Sheil —It is very rare for a recipient to return a grant.
CHAIR —Thank you to the ARC for coming in this afternoon.
CHAIR —We move to the General/Corporate area of the Department of Innovation, Industry, Science and Research.
Senator Carr —I understand Senator Boswell has notified the department that he has some questions he wishes to pursue in regard to IP Australia; is that the case?
Senator BOSWELL —Yes.
Senator Carr —Would it be convenient for the committee if we take those in cross-portfolio? I understand that the particular group of officers have not been called or have not been required.
CHAIR —Certainly, if that is easier.
Senator BOSWELL —The IP Australia fact sheet on the website says, ‘IP Australia’s role in support of innovation consists of making sure the rights we grant are robust and reliable.’ Given that, is it robust and reliable to grant a fraudulent researcher a patent on fraudulent work?
Mr Noonan —I think you are referring to application number 2004309300 from the Seoul National University Industry Foundation?
Senator BOSWELL —Yes.
Mr Noonan —That application is still being investigated by IP Australia. The patent examination team has decided that the application passes the statutory tests for examination but the patent has not yet been granted. I have asked the Commissioner for Patents to look further at the matter to see if the examination team has correctly applied the statutory tests. In the meantime the application will not be granted or sealed.
Senator BOSWELL —That is some good news. But I do want to point out that this application or this grant patent is to the disgraced Korean researcher Hwang Woo-suk, for embryonic cloning research. I am very pleased that you have not passed it. If it is still under consideration, when will the process be completed and what remains to be done?
Mr Noonan —I should just mention at the outset that the application is from Seoul National University Industry Foundation where Dr Hwang is one of 17 inventors named in the application. The commissioner will complete her review as soon as possible but there are some significant technical issues involved applying the law to the science. The current suspension on the ceiling of the patent can run until early December or longer if necessary to complete that review.
Senator BOSWELL —Does the minister have any discretionary rights to knock back a patent; and, if so, on what grounds?
Mr Noonan —Decisions on whether to grant a patent are made by the commissioner and her delegates. The minister has no power to intervene in those decisions.
Senator BOSWELL —A statement released by IP Australia’s Acting Commissioner of Patents, Mr David Johnson on 24 September states:
There is no statutory basis to refuse to grant a patent on the basis that the scientific data in a patent application is a misrepresentation or fraudulently obtained. However, it is a ground for revocation by the Court. In accepting the application in question, IP Australia is not endorsing the research that underpins the application.
How can IP Australia assert that its role is making sure the rights we grant are robust and reliable while not assessing an application for fraud?
Mr Noonan —I need to perhaps explain a little bit about the actual application here. The application claims the invention of a new line of stem cells. It is claimed in the application that the new line was produced by somatic cell nuclear transfer. It is generally accepted that the line of stem cells exists and is a new invention, but it is now generally accepted that they were not derived by somatic cell nuclear transfer but by another process called parthenogenesis. The scientific community considers that the research supporting the somatic cell nuclear transfer claim was false. So it is not the cell line that is at issue but how the cell line was produced.
The Patents Act requires IP Australia to be satisfied that there is an invention and that the invention is novel, that it has not been discovered before. The new line of stem cells is such an invention. The Patents Act does not require an inventor to understand the precise mechanism by which their invention works. Many inventions are not fully understood when they are first discovered. This application involves a situation not where the inventor simply has not yet worked out how their invention works but where we have reasonable grounds based on published scientific papers to believe that misrepresentations have been made about how the invention works. The Patents Act does not deal directly with this type of situation and examination. Like you, I am uncomfortable about granting a patent where the applicant has engaged in behaviour like this. If the act requires the patent to be granted, we will have to advise the minister about what can be done about that. But before we do that I want the commissioner to be sure whether we have applied the act correctly in this case.
Senator BOSWELL —Can the government or an agency of the government oppose the application or seek revocation by the court, and are there any plans to do so? If so, what are they?
Mr Noonan —If the commissioner concludes that the patent must be granted, it will be sealed. Under the Patents Act, the minister or any other person may then apply to the Federal Court to have the patent revoked. The grounds upon which the court can revoke a patent are somewhat broader than the grounds upon which the grant of a patent can be refused in the first place.
Senator BOSWELL —How have other countries treated this patent application? Have they rejected or accepted it in whole or part?
Mr Noonan —We understand that there are similar applications which have been lodged in other countries. These applications are not necessarily identical and will fall to be considered under the laws of those other countries. We are not aware that any of those applications has been finalised.
Senator BOSWELL —Has the patent application been substantially granted in any other country? I think you have answered that.
Mr Noonan —Yes; not as far as we are aware.
Senator BOSWELL —Thank you for that very fulsome answer.
Senator FIELDING —In relation to AusIndustry and the funding of projects—
Mr Paterson —Senator, AusIndustry manages quite a broad suite of programs and different officers will deal with different programs. If you could give us a closer cut in terms of the nature of the programs you want to talk about, we will get the right officers for you.
Senator Carr —Would it be more appropriate to wait until we call AusIndustry to the table? This is cross-portfolio at this point.
Senator FIELDING —When are they being called?
Senator Carr —I do not know. It depends on how many cross-portfolio questions you have got.
CHAIR —We will just check that.
Senator ABETZ —I have about half an hour. It would be helpful from my perspective if we do not deal with General and AusIndustry together. I finished my comments on the CSIRO by saying the government had made a good decision in appointing John Kerin, and now I find myself opening with the general questioning by thanking and congratulating the minister for allowing me to be the beneficiary of the media clips from his department. I am delighted that that has been resolved after a number of estimates and I am appreciative of the minister’s decision. I just wanted to put that on the record.
How many permanent staff have been recruited since the budget estimates? Depending on the answer, there might be a few follow-up questions, or I will ask them on notice.
Ms McClusky —I am going to have to take that question on notice. I do not have the staff numbers for the period you have requested.
Senator ABETZ —That is fine. I just noticed in the margin of all my preparations that that was going to be something I was going to put on notice anyway. What discussions has the department or agency had with—and correct me if I am wrong if I use a pejorative term—razor gang mark 2. Some people call it Operation Sunlight. What is the technical term for this review, so that I do not offend anybody in asking my questions?
Mr Paterson —I am not sure what the technical term is either but we know to which you refer.
Senator ABETZ —You know what I am talking about, so what discussions have been held?
Mr Paterson —I cannot give you an indication of the discussions that have been held because they are part of the normal budget cabinet process.
Senator ABETZ —Fair enough. Yes.
Mr Paterson —But we, like other agencies, have been subject to—
Senator ABETZ —You have been approached and consulted.
Mr Paterson —There are measures that have fallen within the portfolio that have been the subject of consideration.
Senator ABETZ —So the issue of cuts and savings has been canvassed?
Mr Paterson —Issues have been raised with us. I cannot go to the details.
Senator ABETZ —I am not asking about details but just whether the topic of cuts and savings has been raised.
Mr Paterson —I cannot go to the detail of the issues that have been raised as part of that general review, but I think it is fair to say that if we both agree that colloquially it is known as the razor gang—
Senator ABETZ —As long as you do not get into trouble with your minister, I am happy.
Mr Paterson —No. As I said, I cannot go into the detail of them, but we have, like other agencies, been subject to the review of some matters.
Senator ABETZ —I have a budget document with me. Am I right that there is a special page that deals with the special accounts that the department and agencies currently hold?
Ms McClusky —I will have a quick look for the page.
Senator ABETZ —Good. So it does exist. I thought it did.
Ms McClusky —There are some details of special accounts on page 15 of the PBS. There are various disclosures. It depends which ones you are referring to.
Senator ABETZ —What I am getting at is in relation to these special accounts, how much is in these accounts and does the department or agency use those accounts and interest accrued on those accounts to fund ongoing operations?
Ms McClusky —The department has a few special accounts. One of the special accounts we have is for the activities of the Australian Building Codes Board; that is the most significant special account the department holds. That is used to fund the activities of the Australian Building Codes Board. We then have some other minor special accounts.
Senator ABETZ —I suppose, Mr Paterson, you are not going to tell me what indication has been given by the colloquially named razor gang about the future of special accounts and any operating surpluses that may have been gathered together over the years.
Ms McClusky —If you wanted to look at all the details of our special accounts, you can refer to page 45 of the PBS. That has the most useful disclosure.
Senator ABETZ —Thank you very much. There is a fair bit of money in there, by anybody’s language.
Mr Paterson —Remaining within the portfolio.
Senator ABETZ —Will remain?
Mr Paterson —I said, ‘Remaining within the portfolio.’ Some of these are comparative numbers on page 45, and not all of those special accounts remain with this portfolio following the AAA changes. The range of rehabilitation, which is the largest of those special accounts, and the Ministerial Council on Energy, are clearly two matters for—
Senator ABETZ —Thank you for drawing that to my attention. I suppose, Mr Paterson, you are not going to divulge to me, are you, as to what is going to happen to those funds and other moneys that might be available? So we will have to wait and see as to what transpires in that area. Can I be given an indication how many reviews are currently being undertaken in the portfolio and in the various agencies or affecting portfolio agencies? Trying to keep a handle on all these reviews is sometimes a bit difficult. Do you have a convenient list?
Mr Paterson —I am not sure we have a convenient list for you. There were four major reviews that were undertaken within the department. Your question asked about the portfolio, but I will talk about the department in the first instance. The four major reviews were the review of the automotive industry chaired by former Premier Bracks; the review of the textile, clothing and footwear industries headed by a panel led by Professor Roy Green; a review of the National Innovation System led by Dr Terry Cutler; and the review of the cooperative research sector program led by Professor Mary O’Kane. Those four reviews have reported to government and they are subject to consideration by government at the present time. There was also a separate officers review of Questacon and that, too, is subject to consideration by government. There are a number of other reviews that have been undertaken within the portfolio which are looking at existing programs that we do as part of our normal reporting within the PBS, but I have sought to differentiate the two given the nature of your question.
Senator ABETZ —Thank you for that. That is very convenient. Would it be possible for you to provide me with a list of those? Are there any other reviews that may have slipped your mind at this stage, or not? If there are, take it on notice and let us know. If there are not any more, that is fine.
In relation to the government’s response to the first four reviews that you mentioned, is there a timetable scheduled? Does 5 November ring a bell for announcing anything in relation to one of these government reviews?
Senator Carr —No, that does not ring a bell.
Senator ABETZ —When do we hope to have the government’s response to the Bracks review—prior to the end of the calendar year?
Senator Carr —I would expect so.
Senator ABETZ —And what about Professor O’Kane’s report?
Senator Carr —A number of the reviews will be part of the white paper response which we have indicated that we are in the process of preparing.
Senator ABETZ —When do you think that might be ready—by the end of the year?
Senator Carr —The innovation review was delayed. We now have a range of issues to consider in regard to that, so, while I expect that the processes are continuing and that they are underway in terms of preparation of the white paper, we may not be able to publish a white paper until early next year.
Senator ABETZ —Was the delay in the Cutler review because you extended the time for submissions, which was largely based on the decision to abolish the Commercial Ready program?
Senator Carr —No, it was based on the fact that we had so many submissions.
Senator ABETZ —And so many people wanting to submit after the closing date after the Commercial Ready decision was made.
Senator Carr —There was a very large number of submissions. There was a considerably greater number of submissions to this review than there were to the Productivity Commission’s review. Those submissions had to be assessed and that is essentially what has occurred. Now we are in a process of considering the recommendations.
Senator ABETZ —Yes. I am aware of that. Professor O’Kane’s review—
Senator Carr —That has been part of the same process. All of these reviews have now been released publicly and are available on the website.
Senator ABETZ —Sorry, not the review, the government’s response to Professor O’Kane’s review.
Senator Carr —It will be considered in the context of the white paper. Obviously, these are matters that are currently before government.
Senator ABETZ —Is that the same with Dr Cutler’s review?
Senator Carr —Yes.
Senator ABETZ —And then we have got Professor Green’s review.
Senator Carr —That is a separate process.
Senator ABETZ —Yes, it is separate. When do we think that we might have—
Senator Carr —Frankly, given the workload that we are trying to manage at the moment, that will not be until next year.
Senator ABETZ —Until?
Senator Carr —Early next year is my expectation, yes.
Senator ABETZ —In relation to the white paper to which you referred, had you previously announced the delay of that through until early next year?
Senator Carr —No. In earlier comments I had made we had hoped to produce a white paper prior to Christmas; however, the circumstances have now changed. It is our intention to have a white paper ready to roll. This is to be produced in cooperation with myself and the Treasurer, which we have made perfectly clear—
Senator ABETZ —Good luck. I understand that. All I am asking is, has that been previously announced?
Senator Carr —Yes. I have made this clear at a number of forums that I have participated in, so I do not believe this is news.
Senator ABETZ —A forum, but not by way of a press release.
Senator Carr —No, I do not think it was a press release.
Senator ABETZ —Right. So, at forums you have—
Senator Carr —I have made the circumstances very clear.
Senator ABETZ —I will have to go to more of your forums to find out these things. Thank you for that.
Senator Carr —It may have been contained in speeches, as well. I am not certain, but it has been no secret.
Senator ABETZ —Now, let us get into some meaty things. I have got an article here from 25 July 2008 from the Sydney Morning Herald that tells me that:
On Tuesday the page for the Innovation Minister, Kim Carr, was changed to remove slabs of personal details and a paragraph detailing that he had been criticised for branch stacking. Hours later a reference to the disastrous 2002 state election in Victoria was cut from the page of—
another senator. Now, can I confirm that the changes—
Senator Carr —Another senator? Who was this senator?
Senator ABETZ —A very good friend and colleague of mine.
Senator Carr —Sorry, I am not familiar with any of this.
Senator ABETZ —All right. On 25 July your Wikipedia entry—
Senator Carr —Wikipedia; we got it clear.
CHAIR —Senator Abetz, does this relate to the estimates process?
Senator ABETZ —Absolutely, because what I want is an assurance that any change that was made was undertaken by electorate staff and not by ministerial or departmental staff.
Senator Carr —I think the Wikipedia—
Senator ABETZ —You can amend your entries. And it is appropriate if they are wrong to make amendments. There is no criticism of that. I just want to make sure that ministerial staff or departmental staff were not involved in it. That is all.
Senator Carr —I am not aware of any ministerial staff or any departmental staff taking any interest whatsoever in Wikipedia. Furthermore, the defamatory rubbish that appears on that site from time to time—
Senator ABETZ —I agree.
Senator Carr —is criticised on all sides of the parliament, and I think it is treated generally with the contempt it deserves.
Mr Paterson —No departmental staff have been involved. Wikipedia is, in fact, blocked by our departmental ICT infrastructure.
Senator ABETZ —Very wise. That is very good.
Mr Paterson —You asked a question earlier in relation to reviews and asked if there were any others. The only one that was identified previously in our PBS that I did not mention is a review of the Science Connections program, which is currently in progress. That is an internal review of the Science Connections program but it is not yet concluded. That was the only other one.
Senator ABETZ —Thank you for that. It is nice to know that even you, Secretary, have difficulty keeping in front of mind all the reviews that are taking place from time to time.
Can I go to the answers provided to questions on notice. The first one is B1-19. I asked a number of questions about travel, accommodation and other expenses and I am referred to the Department of Finance and Deregulation reports, and that tells me about accommodation, not TA. Has the department seen answer PN-41, provided by Prime Minister and Cabinet to similar questions at budget estimates about the Prime Minister’s travel? I invite the department to do what PM&C is doing and provide full answers rather than just to that which is paid for by the Department of Finance and Deregulation. As I understand it, there are other expenses associated with travel that the department bears. Just flicking it on and saying, ‘Have a look at that which is tabled in the parliament,’ does not reflect all the costs. It is not often I do this, but on this occasion I have to give credit to the Prime Minister and Cabinet section for the full answer that they provide in relation to the Prime Minister’s travel. I would invite the department to follow that approach, as well.
Mr Paterson —I am aware of the question on notice that you raised. The full details of the costs borne by the department are disclosed in the response to the question on notice. So the only costs that are not responded to in the question on notice are those costs that would be borne by the department of finance, which are regularly published to the parliament.
Senator ABETZ —Sorry?
Mr Paterson —We have responded to the question in detail and we have provided the detail of all of the costs borne by the department.
Senator ABETZ —Right. I invite you to have a look at—I hope I am reading from the right document here—B1-19, 2-3 June 2008, budget estimates hearings. Do you have that in front of you? B1-19.
Mr Paterson —Yes.
Senator ABETZ —Yes. We are given two paragraphs of answers. Do you see that?
Mr Paterson —We responded to the original question. You then put a parliamentary question, No. 729, which sought further details, and there was a response to that question.
Senator ABETZ —When was that tabled?
Mr Paterson —I will get the date for the tabling of that. It was question No. 729. The date it was asked was 2 September. I will just check the date for you on when it has been responded to.
Senator ABETZ —I have got a funny feeling I might not have a response to that as yet. Well, you never know. The department may have been very expeditious in its response.
Mr Paterson —I will check the date. I had understood that we had responded to that question. I will check it and respond later this afternoon.
Senator ABETZ —The fault may well lie with you; it may also well lie with me. But you are telling me that you have provided a full answer because I asked a further question.
Mr Paterson —You did. We continue in that answer to indicate to you that the costs borne by—I am paraphrasing—the Department of Finance and Deregulation will be tabled as part of their normal reporting to the parliament and we provide the detail of the costs provided. It is at page 92 from the Senate on 14 October in response to question 729 as tabled. I am happy for you to see that if you wish.
Senator ABETZ —Yes, if I may. I will not pursue that any further at this stage, but what I will ask you to do when these questions are asked, especially on notice, is to follow the Prime Minister and Cabinet approach, which would make it somewhat easier.
Mr Paterson —I do not know what happens in terms of reporting of the Prime Minister’s travel.
Senator ABETZ —Hopefully one of your officials might be able to look at that and see whether that is a convenient way for this department to do business as well. What we are trying to find out is the full cost of all these trips. I will have a further study of this. Talking about trips, can the minister confirm to us that the sole purpose of his trip to Japan was to make a $35 million green car announcement?
Senator Carr —No, I cannot.
Senator ABETZ —What other purpose was involved?
Senator Carr —I think those details have already been provided.
Senator ABETZ —Can you remind me?
Senator Carr —I do not think I have anything to add to what I have already said to you on that matter.
Senator ABETZ —You have told us that it was more than the green car announcement. What else did you do in Japan? It was not that long ago.
Senator Carr —We had meetings with the senior management of Toyota when we were in Japan.
Senator ABETZ —So we made the announcement and we had a meeting. Were you trying to tell them how to spend the money that Mr Watanabe had some difficulty knowing what to do with?
Senator Carr —I have no intention of going to the detail of the meeting with Mr Watanabe.
Senator ABETZ —Was this visit to Japan a last-minute decision?
Senator Carr —I do not think it was a last-minute decision.
Senator ABETZ —Did it require you to cancel any prearranged appointments in the United States?
Senator Carr —You have already been advised of this by way of questions on notice. The answer is no, as it was in the answer on notice.
Senator ABETZ —Nothing was rearranged?
Senator Carr —You asked me whether any appointments were cancelled. There was a rearrangement. From recollection, there was a delay in one meeting.
Senator ABETZ —Why was there a delay in that meeting because of your visit to Japan?
Senator Carr —We had to reschedule the time of the commencement of that meeting because of the airline travel from Nagoya.
Senator ABETZ —Which is in Japan?
Senator Carr —I understand that is the case.
Senator ABETZ —Previous to your visit to Japan, you were going to be going to the United States not via Japan.
Senator Carr —I do not know about you, Senator, but I find that with overseas travel there are occasions where you are required to make changes to your itinerary. At one point we were intending to go to the United States via Los Angeles, which would have involved a delay in the connecting flights. Instead, we flew directly from Nagoya to Detroit and entered the United States at Detroit airport.
Senator ABETZ —I fully understand that ministerial arrangements have to change from time to time. If you were very pleased with what you were doing with the rearrangements, you would be saying, ‘We made these rearrangements because of …’ for whatever reason, rather than being so defensive about it. Did you fly on the Prime Minister’s plane to Japan or did you go via commercial airline?
Senator Carr —Commercial airline.
Senator ABETZ —When did the Prime Minister arrive in Japan? Do you know that?
Senator Carr —You would be better to address those questions to another committee.
Senator ABETZ —When were you first notified of the desirability of your presence in Japan? Was that courtesy of the Prime Minister’s office?
Senator Carr —Sorry?
Senator ABETZ —When did you first decide to go to Japan for this particular visit?
Senator Carr —I would have to check the date on which it was first decided to go to Japan.
Senator ABETZ —Could you take that on notice for me?
Senator Carr —I have already answered these questions in slightly different form.
Senator ABETZ —That is right.
Senator Carr —If you consult your own records, you will find that these matters are canvassed quite extensively in question No. 513.
Senator ABETZ —That is right. I even have that information with me. As you quite rightly note, the questions are somewhat different.
Senator Carr —Not somewhat. There is minor variation in your questioning.
Senator ABETZ —Yes. I will be a judge of that as well.
Senator Carr —All I am saying to you is that I have nothing further to add to the answers that I have provided to you on question No. 513.
Senator ABETZ —What breathtaking arrogance. You might like to wait for the questions to ascertain whether you have an obligation to tell this committee any further information. When you have written questions you get answers, and they sometimes trigger follow-up questions.
CHAIR —I remind the committee that we are due to finish in five minutes with this section. Perhaps we could get straight to the questions.
Senator ABETZ —I am perfectly entitled to follow up.
Senator Carr —You have asked me a question about when I first considered going to Japan. In your question No. 513 you asked me when the itinerary was first drafted. There is a huge difference in that, I can tell.
Senator ABETZ —I would be interested in an answer. If you cannot give it now—
Senator Carr —I have answered it.
Senator ABETZ —you can take it on notice.
Senator Carr —I will not take that on notice. I have nothing further to add to the answer to question No. 513.
Senator ABETZ —Isn’t it a fact that the president of Toyota was scheduled to be in Melbourne just a few weeks later, when the announcement could have been made in Australia?
Senator Carr —That is a matter of opinion on your part.
Senator ABETZ —No. It is a fact, yes or no, as to whether or not the president of Toyota was scheduled to be in Melbourne just a few weeks later. You knew that to be a fact, didn’t you?
Senator Carr —I have nothing further to add on that.
Senator ABETZ —You either know it or you do not.
CHAIR —The minister has answered.
Senator ABETZ —No, he has not.
CHAIR —Do you have other questions?
Senator ABETZ —I do. The minister is refusing to tell us whether he knew that the president of the Toyota Automobile Corporation was scheduled to be in Melbourne just a few weeks later, when the announcement could have been perfectly made in Australia.
CHAIR —The minister has answered the question.
Senator ABETZ —He has not. The record will disclose that. Let us move on, because as you quite rightly indicate time is short. I understand Ms Susan Holliday has been appointed to the Built Environment Industry Innovation Council. Has a fee been set for her per day by way of remuneration?
Mr Payne —Yes. A deed was sent to her today.
Senator ABETZ —Undoubtedly we can be advised what her remuneration will be when she is signed up. I have a few other questions that I will put on notice. I notice Professor Green has been appointed to the Innovation Region Centre Interim Advisory Board. Was that position advertised?
Senator CARR —No.
Senator ABETZ —It was not? I have a few more questions to put on notice in relation to that. I would like to ask in relation to the new trade measurement bill, are we ready with the regulations for all that to come on board? Do we foresee any hiccups or problems with this? It is going to be before the parliament very shortly. I was just wondering whether there are any foreseen difficulties. I do not think it will bring down the government, but it does have a lot of interest for business in particular.
Dr Fisk —The answer is that, as far as we are aware and to the best of our knowledge, that is true. It is on track and there are no major impediments.
Senator ABETZ —Are the regulations being drafted as we speak or are we going to wait until the legislation is passed?
Dr Fisk —I will have to take that one on notice. The legislation was scheduled in parliament today, but it was displaced by other business.
Senator ABETZ —That is using the term ‘business’ loosely. I would like to ask the minister and secretary about departmental consultations in relation to the emissions trading scheme. Has the department done any modelling on the impact of the CPRS on Australian industry generally or on any sector of industry?
Mr Paterson —I think you are aware that the Department of the Treasury has been commissioned to undertake modelling in relation to the CPRS—
Senator ABETZ —All modelling?
Mr Paterson —Yes. We do not have the facility within the department to undertake modelling of that nature.
Senator ABETZ —Are you part of that?
Mr Paterson —We are actively engaged in all of the cross-government considerations in relation to the CPRS.
Senator ABETZ —Without telling me what changes, is the department in its active participation making any suggestions how the draft can be improved to protect the viability of Australian industry?
Mr Paterson —We are active participants in the process of consideration within government and providing advice on the structure and impact of the scheme, but I cannot go into the detail of that advice.
Senator ABETZ —You can, but you won’t, and I understand why you won’t.
CHAIR —That concludes the general/corporate section of the Department of Innovation, Industry, Science and Research. We will now go on to outcome 1, Industry.
CHAIR —Senator Fielding.
Senator FIELDING —I am interested in AusIndustry and some of the projects that it funds. Are the funding criteria on the website for a lot of the AusIndustry stuff?
Mr Paterson —You raised this earlier. There is a very broad range of programs are administered by AusIndustry. The programs differ in nature and in terms of the guidelines and the criteria. It might be more helpful if we can focus on the particular programs that you want us to focus attention on.
Senator FIELDING —There was an advertisement in the paper for the Great Ocean Road that had the Australian government initiative AusIndustry on the logo. Can I just table that? It is out of the Herald-Sun from Friday, 8 August 2008.
Mr Sexton —I suspect that is an advertisement relating to one of the projects that we have supported under one of our programs and where they are required under their contractual arrangements to acknowledge the support that is provided by the Commonwealth through AusIndustry. That would be why our logo is there. Without actually seeing it, I suspect that is the reason.
Senator FIELDING —I saw one on 10 August and it seemed to be a similar sort of ad and it did not have the AusIndustry logo. I am trying to find out what funding has been provided. I am from Victoria and I am quite happy for the road to be promoted, but I am just interested to know what the Australian federal government was doing with it.
Mr Sexton —Again, without seeing the advertisement, it may be a project that is being supported under the tourism programs which we now deliver on behalf of the Department of Resources, Energy and Tourism. They are the owners of those programs, but we continue to deliver them on their behalf.
Senator FIELDING —Is AusIndustry paying for ads in the paper?
Mr Sexton —No, they are not. I assume that ad was taken out by the project proponents and they would have paid for that advertisement.
Mr Paterson —It is not uncommon under contractual terms of grants to acknowledge the source of funding in particular advertising approaches. We have not seen the advertisements you are referring to, but it may well be it is just part of a normal or common requirement for there to be an acknowledgement of the source of funding in relation to particular projects.
Senator FIELDING —There was a similar ad that did not have the logo. I thought there must have been a reason why it was taken off or put on.
Mr Paterson —Once we get to see the advertisements we can examine it. As has already been indicated, this is a program that is the responsibility of the Department of Resources, Energy and Tourism that we administer on their behalf. I am happy for us to examine the issues that have been raised by the two advertisements and respond out of session or on notice.
Senator FIELDING —If you take those on notice, I will table the other advertisement as well.
Senator MILNE —I would like to ask about improving the economic viability and competitive advantage of Australian car manufacturing. In particular, I would like to ask about the announcement today of a deal signed between AGL, Macquarie Capital and Better Place’s Mr Agassi to build a network of electric plug-in stations across three Australian cities so that that can service a rollout of electric cars. In the press release it states that they have had talks with the Australian government as well as state governments. Can you give me any indication of what involvement the Department of Innovation or industry generally has had in this?
Mr Paterson —I know nothing about it.
Senator Carr —That puts an end to the line of questioning.
Senator MILNE —I am very pleased to see that innovations are happening all over the country.
Senator Carr —Especially in press releases.
Senator MILNE —I am interested in the move to get an electric car built in Australia and the whole move towards smaller, fuel efficient vehicles. There has been the Bracks review, to which Mr Brumby has responded. Where are we up to in terms of moving to get Australian car manufacturers on track to building smaller, more fuel efficient vehicles and are we driving the development of an Australian-built electric car?
Senator Carr —These matters are currently before government so I am constrained in what I can say. But I can indicate to you that I am firmly of the view that we will see significant improvement in the provision of Australian-made cars that are more fuel efficient, environmentally more friendly and safer quite quickly. It is my expectation that we will see real change quite quickly, which is long overdue.
Senator MILNE —In Australian car manufacturing?
Senator Carr —Australian made cars. You know my views on this. I hold them quite strongly and so I try to contain my remarks to the point. There is a lot of talk about the Australian fleet. Greening up the Australian car fleet needs to be seen in the context of the need to improve the capacity for Australian-made cars to be developed, and that is our intention.
Senator MILNE —Are these fuel efficient vehicles electric cars or just more efficient engines?
Senator Carr —We have already announced that we are taking steps in terms of the hybrid Camry. We were able to overturn a decision that had been made to produce that vehicle in Thailand. That vehicle will now be produced in Australia. I do not believe that will be the end of that particular story in regard to hybrid production in Australia. There is a range of other options that people are pursuing and there have been a number of people who have approached us about the possibilities of development of various types of vehicle. Recently a COMET grant was provided to a producer of an electric car in Victoria. I have not seen this press release, but that could be it. We are talking to a range of innovators who are interested in developing new technologies.
Fundamentally, the industry will not be transformed unless the major manufacturers are part of any transformation. Our intention is to move the industry quickly, to employ people in high-wage, high skilled jobs, and to encourage the development of indigenous capacity within global supply chains, which will allow us, in my judgement, to ensure the sustainability of the Australian automotive industry.
Senator MILNE —I will be very keen to see that happen. I would like to move on to carbon capture and storage. I am very interested to know what the department is doing in relation to how much it is spending and where either on carbon capture and storage pilot plants or coal to liquid conversion.
Senator ABETZ —Whilst departmental officials are thinking about their answer, I was wondering whether Senator Milne could give us an indication as to the time she thinks she will spend. I have questions on the green car fund as well, but I am more than happy for Senator Milne to have her bracket of questions and then I will go across all the issues as well.
CHAIR —I am proposing that we go to a break at 3.45 pm for 15 minutes. Will that be sufficient time for you?
Senator MILNE —Yes.
Senator ABETZ —That is fine.
Mr Paterson —You have asked about carbon capture and storage and the like. The policy responsibility for those areas of activity is the Department of Resources, Energy and Tourism, which is scheduled to appear before this committee later tonight. It is not our policy area of responsibility. CSIRO gave evidence earlier today in relation to it. There is some work undertaken by one of the CRCs. We have policy responsibility for oversight of the CRCs, but the CRCs themselves undertake activity. The policy responsibility for engagement in that area of activity is the Department of Resources, Energy and Tourism.
Senator MILNE —I understand there is a lot in research, but I was wanting to know whether you are doing anything in terms of getting it beyond the research stage.
Mr Paterson —The point I am making is that the policy responsibility for the areas of interest that you have identified, and therefore taking those issues forward on behalf of the government, is the Department of Resources, Energy and Tourism.
Senator MILNE —My final question is in respect of the effectiveness of improving the economic viability and competitive advantage of Australian industry: what are you doing to assist the renewable energy sector, particularly the solar industry, wind industry and so on, to overcome their constraints to growth?
Senator Carr —The same answer applies that Mr Paterson has given. We have agencies and CRCs that work in this area and are actively and extensively engaged, but the policy responsibility rests with another department.
Senator MILNE —Thank you.
Mr Paterson —I would like to respond to a question Senator Abetz asked earlier this afternoon. You asked for detail of the number of ongoing employees recruited since the last Senate estimates. The total number is 15—one APS3, four APS4s, one APS5, four APS6s, three EL1s and two EL2s.
Senator ABETZ —Thank you very much. That was going to be a follow-up question. I do have some further questions, but I will put those on notice.
CHAIR —The committee will adjourn for 15 minutes and reconvene still on outcome 1, Industry.
Proceedings suspended from 3.29 pm to 3.44 pm
Mr Paterson —Senator Abetz asked a question earlier in relation to the trade measurement regulations. Work is under way on a discussion paper for industry on the new regulations. That is seen as a first step towards finalising and framing the new regulations and we plan to finalise the new regulations by mid-2009.
Senator ABETZ —What is the implementation date again?
Mr Paterson —It is 2010.
Senator ABETZ —It is well on track.
Mr Paterson —You also asked a question of the ARC in relation to the development groupings and the names of the people. I have the names of all of the people who were involved in each of those groups—
Senator ABETZ —For tabling?
Mr Paterson —and the subgroup, and I table those.
Senator Carr —Senator Milne asked a question before about the policy responsibilities for support for—
CHAIR —I think she may be coming back. No, she is not.
Senator Carr —Just for the sake of completeness. I do not wish to correct the information we have given in regard to the responsibilities for energy policy, but it has been drawn to my attention that the minister actually referred to support for business as well. There is a number of programs that the department operates under ‘clean business’ and also in regard to Enterprise Connect. Measures are being taken in those areas. If she wishes to look at those, she will see the types of programs that are being run by the department.
Senator ABETZ —I will ask this question on notice. Mr Paterson, when I was asking about the minister’s travel, you indicated that I had been provided with an extra answer in relation to question No. 729. Yes, I did in relation to all the staff, but in relation to the minister it was basically a repeat of the initial answer, which only relates to that which the Department of Finance and Deregulation tables and not the costs incurred. As I understand it, the department—
Mr Paterson —In response to the question earlier this afternoon, I indicated that our response was a response for all costs borne by the department.
Senator ABETZ —Do they find their way into the Department of Finance and Deregulation tables?
Mr Paterson —No.
Senator ABETZ —No?
Mr Paterson —We have answered the question, which includes all of the costs borne by the department in respect of that travel; and the other costs that will be borne in respect of that travel by the Department of Finance and Deregulation they will table.
Senator ABETZ —Did the minister only incur costs that will be disclosed in the Department of Finance and Deregulation tabling?
Mr Paterson —I am not aware of any other costs associated with that travel that have not been disclosed in the answer to the question provided to you or in that which will be tabled by the Department of Finance and Deregulation.
Senator ABETZ —Without delaying this too much, B1-19 disclosed no costs at all. As a result, we put a further parliamentary question on notice and, once again, I was not given any costs in relation to the minister; it was just a repeat.
Mr Paterson —I agree. As I understand the response to the question that we have provided to you, all of the costs associated with the minister’s travel are costs that will be borne by the Department of Finance and Deregulation and tabled by them in their return. I am not aware of any other costs in relation to that travel that have not been disclosed in this answer to the question or will be disclosed by the Department of Finance and Deregulation in their normal response. If there is a gap in the question that I am missing of a category of expenses that you believe we have not responded to that will not be in the response from the Department of Finance and Deregulation, I am happy to look at it, but I am not aware of any category of expenses that has not been covered in our response.
Senator ABETZ —If you can check up on that, if whoever has that wonderful task in your department can have a look at what PM&C did to see whether that might alert them to any other expenses, that would be great, but I do not want to delay the committee any further. I understand the minister is departing at 4.30—
Senator Carr —I will be back later in the evening. I have an unavoidable engagement. I will be called away from the committee at 4.30 pm. Senator Sherry will be standing in for me for the duration of that—
Senator ABETZ —That is fine. I will start with the car industry. Is the department or the minister aware of the importance that finance companies play in providing finance to allow purchasers to purchase vehicles? In particular, what I am referring to is, for example, something like GMAC.
Senator Carr —Are you referring to their announcement today?
Senator ABETZ —I will be. Yes.
Senator Carr —We are aware of their importance and, yes, I am aware that they are making an announcement today.
Senator ABETZ —That is that they are pulling out of Australia very shortly, as of 31 December this year.
Senator Carr —I understand that is the case.
Senator ABETZ —I would have thought that will add even greater pressure. We can ask why they are pulling out and why they cannot raise finance, but that might be something that my good friend Dr Henry should be answering.
Senator Carr —I have made public comment on this matter. The automotive industry in this country has had to confront a severe rationing of credit for some time now. The statistics on this are quite startling. Notwithstanding the great difficulties the industry is confronting in terms of securing working capital, I remain optimistic about the capacity for the industry to work its way through these acute difficulties.
Senator ABETZ —The removal of the GMAC out of the financing market will undoubtedly create difficulties, especially for General Motors to continue to be able to market their vehicles.
Senator Carr —There are clearly some issues that are commercial-in-confidence. We are not in a position to comment on the implications of that in regard to any particular company.
Senator ABETZ —I know it is very short notice; this announcement seems to follow very hot on the heels of what we have discovered in recent days, that because of the government’s somewhat clumsy approach in relation to bank guarantees, money has fled the non-secured sector, and of course GMAC is just another one of those. I understand there are other companies facing similar circumstances. In the automobile industry sector, that is just going to compound the huge difficulties that they already face.
Senator Carr —You made some assertions about the government’s handling of the financial crisis. It is disappointing to the government that the opposition has withdrawn what they said was their bipartisan support for the measures that had been taken in a period that I think is now outside of this parliament very widely described as a crisis. We have a financial crisis affecting the entire global economy and clearly it has implications for domestic consumers and domestic producers. This is being felt particularly acutely in manufacturing and especially in the automotive sector.
Senator ABETZ —I agree with all that, but that has now been compounded.
Senator Carr —You made some assertions about how the government has responded. I am going to challenge your description of them, because I believe it to be inaccurate. The government has handled this issue decisively and with great effect. That does not mean that there will not be ongoing circumstances demonstrating the depth of the problem.
Senator ABETZ —But there is no doubt that as a result of the particular decision that has been made there has been a flight of capital out of the GMACs of this world and others into the secured banks.
Senator Carr —That is just a mistake in your analysis. It reflects, I am sorry to say, a disappointing level of understanding of the conditions that have been affecting the automotive industry for some considerable time. In your own state, for instance, ACL Bearings has had to deal with this situation. I recall our intervention there was some months ago now. This is a problem in terms of capital rationing, which has occurred for a period since the commencement of this crisis, which I think Mr Costello identified in August last year as the point where these problems were emerging.
Senator ABETZ —For which he was accused of scaremongering to try to win the impending election. I do not think anybody is accusing him of scaremongering anymore, are they?
Senator Carr —This is not a problem that has developed in the last five minutes. For you to make an assertion that the government’s handling of the financial crisis is in any way reflected in the decision of GMAC I think is a mistake. It reflects poorly on your understanding of these issues.
Senator CAMERON —It is only a political game for them.
Senator ABETZ —Does GMAC receive its money from the government guaranteed sector?
Senator Carr —That is a matter you will have to take up with the Treasury.
Senator ABETZ —Yes, of course. You know they do not. As a result, they are now facing difficulties in raising funds, of course because of the global situation as well. It is interesting that it has come so soon after the government capping—
Senator CAMERON —Talk about both sides of the street. What is it?
Senator ABETZ —Senator Cameron—
Senator Carr —This is an incredibly serious situation and attempts to make cheap political capital out of a situation of this type I think really is beneath even the Liberal Party.
Senator ABETZ —And that is not cheap political capital?
Senator Carr —GMAC is part of an international company. GMAC Australia is ceasing operations from 31 December as part of an international response by that company—GMAC. They have had a negative B rating from Standard & Poor’s. I think you will find that has considerably more to do with their financial situation than the response of this government to this crisis, which was leading the world in terms of government responses since that date.
Senator ABETZ —That may well be correct, that a fair proportion of the decision is based on the international situation, but of course the local decisions that have been made in recent times may well have been influential on the international grouping making a decision in relation to their ongoing operations in Australia. That then has very real consequences for one of Australia’s car manufacturers, I would have thought.
Senator Carr —I will read directly from a statement made at 1.30 pm today. This is from GMAC Financial Services:
This is an unprecedented time in global capital and credit markets. These markets remain severely disrupted and access to funding is constrained.
Senator ABETZ —’Constrained’; that is exactly right.
Senator Carr —It continues:
In order to prudently manage our resources during this challenging period, GMAC has evaluated all parts of its business and has had to make some difficult but necessary adjustments.
That is the context in which GMAC have made their decisions. For you to attempt to make cheap political capital out of I think is really beneath contempt.
Senator ABETZ —What they are telling us is that funding is constrained and clearly their capacity to raise funds within Australia is constrained given the bank guarantee that the government has announced. They undoubtedly have global constraints as well and I do not seek to diminish that in any way, shape or form.
Senator CAMERON —Really?
Senator ABETZ —And I did not do so at the beginning. But I thought that the peculiar domestic issues may have been of some interest to the minister. The fact that he so high-handedly dismisses this concern will give no comfort to the workers in the GM factories around Australia. Can I move to the Bracks review? Given the time constraints, I will read some of these questions into the Hansard. If you do not have the answer immediately, that is fine; take them on notice. What was the total cost of the review and how many days in total did Mr Bracks work on the review? If it takes too long to look it up—
Senator Carr —No, it will not take too long to look it up. You asked a question. We will try to answer it.
Senator ABETZ —But we have time constraints because you had something more important than your duty to the Senate, which I am willing to accept. Therefore, I do not want time taken up with officials looking up things. I am not suggesting they are deliberately delaying it. Of course it takes time to find these things. I do not need an answer immediately, but if it is available then that is great.
Mr Payne —As at 9 October the total expenditure for the automotive review was $677,373.
Senator ABETZ —Are you anticipating any further costs?
Mr Payne —There could be some further costs come in, basically receipt of invoices that could still be coming. There could be some small amounts in addition.
Senator ABETZ —You describe them as small amounts. We will ask next time and hopefully the accounts can be closed off. How many days did Mr Bracks work on the review? How much was Mr Bracks paid in total?
Mr Payne —I do not actually have the number of days.
Senator ABETZ —Take that on notice along with how much Mr Bracks was paid and how much each other reviewer was paid. I think the minister and I might be in a heated agreement that there are substantial job losses in the automotive sector. I have described it as haemorrhaging jobs. The minister may or may not agree with that. But what I am wanting to know is: when will the government respond to the Bracks review? We had a previous discussion on that cross-portfolio, but can I ask: has a proposal gone to cabinet as yet?
Senator Carr —I just want to indicate to you that, in terms of our previous discussion, the information I have available to me is that new commercial loan commitments to manufacturing fell 44 per cent in the three months to August compared to the three months to August 2007, which of course is significantly more than the decline in overall commercial lending. From the very first week of taking up this job, I have had to deal with the legacy of your government’s response to the automotive industry. It began with the Mitsubishi closure and we have seen since that time a continuing number of announcements which are deeply regrettable. We are in the process of developing the most comprehensive response in terms of the industry plan for the automotive industry that this country has ever seen. It is my belief that that matter will be resolved quite soon.
Senator ABETZ —Has it been to cabinet as yet?
Senator Carr —I am not in a position to discuss what goes to cabinet and what does not go to cabinet; all I can indicate to you is what I have said on the public record. We are highly conscious of the need for urgency and the need to address these fundamental challenges that are facing the industry, and it is our intention as a government to respond in a manner which will stand in sharp contrast to the approach that was taken by the previous government and to do so quickly.
Senator ABETZ —If we have finished with the cheap political comments, I am entitled to know whether or not a proposal has gone to cabinet. What I am not entitled to know is what was contained in the proposal.
Senator Carr —Senator, I have indicated to you that I am not in the habit of discussing what has or has not gone to cabinet. It is our intention to have a response to the Bracks review very soon.
Senator ABETZ —I have no interest in your habits—personal, professional or otherwise.
Senator Carr —You spend a lot of time on my personal affairs then.
Senator ABETZ —What I am interested in is whether or not this proposal, the government response, will be cabinet endorsed.
Senator Carr —I have indicated to you all I can on that question.
Senator ABETZ —Will the government response be cabinet endorsed?
Senator Carr —It is my expectation that the government’s response will be dealt with in the usual processes that we undertake on these matters.
Senator ABETZ —Will it be cabinet endorsed?
Senator Carr —I cannot see why we have any difficulty on that score.
Senator ABETZ —It is not for you to decide whether I have difficulties or anything else. I am entitled to ask: will the package be endorsed by cabinet?
Senator Carr —I am sorry, look, I intend that the government will respond very quickly.
Senator ABETZ —We know that, but will it be going to cabinet before the government responds quickly?
Senator Carr —I cannot add any more than that to the process.
Senator ABETZ —Of course you can. It is either a wilful withholding of information from this committee or you do not know. Now which is it?
Senator Carr —You would have to say that it is wilful because I probably have an idea about how we are going to respond to the package. It is not my intention to discuss what goes or what does not go to cabinet, the timetable or any other matters that are dealt with in the government’s decision-making processes in regard to cabinet deliberations.
Senator ABETZ —What is the public interest immunity that you rely on, Minister, that does not allow you to tell us about this very important, vital package, which I would encourage the government to get out as a matter of urgency—and having the imprimatur of cabinet I would have thought would have been a very good thing, and I think everybody would welcome it. I cannot see what the reticence is in telling us whether or not it is going to be before cabinet before it is publicly announced. There is no public immunity interest that you could rely on under any interpretation of standing orders.
Senator CAMERON —All you gave the workers was Work Choices.
Senator Carr —I cannot add any more than that.
Senator ABETZ —You can.
Senator BUSHBY —You must.
Senator ABETZ —Madam Chair, what I would invite you to do is take this particular question and non-response by the minister to the Clerk of the Senate for his determination. It clearly is within the province of the minister. I am not asking for the detail of the package. I am not at this stage even asking when it is going to go before cabinet. All I am asking is if it will go before cabinet before it is announced—and their minister says, for some bizarre reason, that that cannot be made known to the public. Is that your position, Minister?
CHAIR (Senator Hurley) —I will seek advice from the clerk. Do you have further question, Senator Abetz?
Senator ABETZ —It will not surprise you to learn that, yes, I do. I note that the Bracks report in its draft report talked about the luxury car tax but then in its final report did not. Was there any communication by the minister’s office or the department to Mr Bracks inviting him not to make comment in relation to the luxury car tax impact?
Senator Carr —On 31 March, you issued a press release about the Bracks report, in which you prejudged some matters. You said it was pro-tariff and anti-FTA. That was, of course, a reflection on the review. The fact is that the final report did refer to the luxury car tax. So your presupposition about what is or is not in there would probably be improved if it could be referred to what actually was done in that report.
Senator ABETZ —I stand corrected. It did not make any comment on or recommendation about whether the luxury car tax was good, bad or indifferent in relation to the Australian car industry. In that context, I ask whether or not there was any communication by the minister’s office or the department to Bracks or the review committee in relation to the issue of the luxury car tax.
Senator Carr —I am not aware of any conversation with him on the luxury car tax.
Senator ABETZ —What about the department?
Senator CAMERON —The industry is in crisis in the wake of the luxury car tax.
Senator ABETZ —Was there any communication by the department to the Bracks review about the luxury car tax?
Mr Paterson —In the course of the review, it was the department who provided the secretariat for the review. To that extent, there were officers from the secretariat and the department involved.
Senator ABETZ —No; on the specific matter of the luxury car tax.
Mr Paterson —The luxury car tax came up as part of our consideration in some of those discussions. So, to the extent of officers involved in the normal course of their duties, it would have come up.
Senator ABETZ —I accept that.
Mr Paterson —But were we a vessel for communication of something else? No.
Senator ABETZ —Minister, did you receive direct written representations from the local car industry regarding the luxury car tax increase?
Senator Carr —Yes.
Senator ABETZ —Are you willing to divulge to us what the content of that communication was as to whether the increase in the luxury car tax would be of benefit or detriment to the Australian car industry?
Senator Carr —I think it was widely reported that the FCAI had written to me and had expressed a view concerning their hostility to the government’s budget measure.
Senator CAMERON —BMW and Audi were screaming that it gave the local car industry an advantage.
Senator ABETZ —Of course, Senator Cameron, as always, comes in right on queue. That was their concern, until there were government sponsored amendments, and we are now finding half-page advertisements encouraging Australians to buy Audis because there is no luxury car tax on them. If only the Holden Statesman could run advertisements like that as well and Australian jobs could be kept in the car manufacturing sector. If there are any more interventions from Senator Cameron, I will welcome them. Going back to the review, I am delighted that the minister is telling us that very soon he will be in a position to respond to the Bracks review, because I believe an urgent and detailed response is needed. All I am doing, I suppose, is encouraging you to expedite that. I trust that it will be a plan that looks forward for about a decade and has a substantial and significant figure attached to it.
Senator Carr —I will look forward to your support for the legislation in the chamber then.
Senator ABETZ —Let us wait and see the fine print. You have promised, Minister, that it will be bigger and better than the Button plan and it is going to be bigger and better than Chifley getting Holden underway.
CHAIR —Senator Abetz, will you get to a question sometime soon?
Senator ABETZ —I am looking forward to that. Was the department consulted about the amendments to the luxury car tax when that legislation went through the Senate as to what impact they might have on the Australian automobile industry?
Mr Paterson —We were not consulted.
Senator ABETZ —I thought as much. That is regrettable. I would assume that, as a result, no modelling has been done, either before or since the legislation went through, as to the impact that that legislation or those amendments might have.
Senator CAMERON —Did you do any modelling for the Murray-Darling’s $10 billion package? Nothing.
CHAIR —Senator Cameron: we are waiting to hear the answer, please.
Mr Paterson —The answer is no.
Senator CAMERON —That is right; the same as the Murray-Darling.
CHAIR —Senator Cameron!
Senator ABETZ —Senator Cameron was not here before and does not realise how much his colleagues criticised the then government over certain things and how they promised to do things differently when in government.
CHAIR —Thank you. I think we have had quite a few statements from various members.
Senator Carr —If you ask the officers a question, you will get a straight answer.
CHAIR —Can we get on with the questioning?
Senator ABETZ —I made that comment in relation to Senator Cameron’s continual prattling from the sidelines.
Senator Carr —It was a Treasury matter; it is a matter for the Treasury.
Senator ABETZ —But somebody who was not prattling from the sidelines was one Senator George Campbell.
Senator CAMERON —The hypocrisy—I cannot stand it! I cannot stand the hypocrisy.
CHAIR —Senator Cameron, interjections are disrupting this questioning.
Senator ABETZ —Somebody who was not firing from the sidelines was Senator George Campbell, who was quite critical of the $35 million granted to Toyota. He said, ‘It looks like a deal that was done hurriedly so the Prime Minister could announce it on his recent trip to Japan’—and he, of course, was highly critical of that. That is now history, but I ask: other than Toyota, has any other Australian automobile components manufacturer or research institution received any advances out of the green car fund?
Mr Paterson —No.
Senator ABETZ —When will others be able to apply for funding?
Senator Carr —These matters are obviously part of our consideration in regard to the Bracks review response.
Senator ABETZ —By then, we will have the full detail as to how and when companies can apply for funding.
Senator Carr —I trust that you will approve of all our measures that we take in regard to the green car fund.
Senator ABETZ —I have never signed a blank cheque in my life, except with my wife, and I do not intend to start doing that with you, Senator Carr; I am sorry to say that our relationship is not quite that close. In relation to the green car fund, are we aware of how much profit Toyota made last year?
Senator Carr —They have got published accounts.
Senator ABETZ —Yes. It was ¥2.3 trillion—and they were in need of this $35 million grant?
Senator Carr —So I take it that you do not support this particular initiative.
Senator ABETZ —I have been critical in public about it being a very expensive photo opportunity, but what I want to know—
Senator Carr —All I can say to you is that the decision was taken—
Senator ABETZ —You asked me a question and I have answered it. It is now my turn to ask a question.
Senator Carr —I am indicating to you my response to your question.
Senator ABETZ —There was no question.
Senator Carr —There was. You asked whether they needed the support. In December, Toyota had taken the decision to manufacture the hybrid Camry in Thailand. We were able to have that decision overturned and, as a consequence of the initiative that this government has taken—which Toyota acknowledges was critical to that decision—we will now see the production of hybrid Camrys at Altona. It is a measure, of course, that I obviously believe to be a very good move.
Senator ABETZ —Two days after this was announced, did Toyota say that it would build the next generation plug-in lithium ion Camry, geared towards fleet customers in Japan, the United States and Europe, and see full scale production by 2010? Did Toyota make such an announcement?
Senator Carr —We are not aware of that, no.
Senator ABETZ —You are not aware of it. Can I let you know that they—
Senator Carr —You have made a claim that Toyota made that announcement and you have made a claim in regard to the production date.
Senator ABETZ —Yes. I refer you to the article ‘Toyota to make plug-in hybrid by 2010’ on all those matters that I have just repeated, courtesy of CNET Networks Inc. I just wonder why, in 2010—when old-technology hybrid vehicles start rolling off the production line in Australia—Europe, Japan and the United States are going to be getting the second generation hybrid vehicle coming off their production lines.
Senator Carr —That is an assertion you make.
Senator ABETZ —Are you denying that Toyota is planning to have lithium ion vehicles running off their production lines in 2010 in the United States, Japan and Europe?
Senator Carr —I am not aware of that, no.
Senator ABETZ —You are not aware of that? My goodness! No wonder Toyota was able to con you into this deal! We have bought, at a great price—
Senator Carr —You are citing a document that we do not have.
Senator ABETZ —I would have thought you, Minister, and the department would have kept yourselves up to date with the latest technology before throwing $35 million at a car maker, so that we get first generation vehicles lumbering off our production lines while at the same time—clearly now, without your knowledge and behind your back—it makes deals in its own country, the United States and Europe to get the second generation vehicles rolling off their production lines.
Senator Carr —We are not aware of the specifics of your claims.
Senator ABETZ —This is embarrassing.
CHAIR —Perhaps the minister can take it on notice when he has had an opportunity to look at the article.
Senator ABETZ —That is a very good idea, because it is embarrassing, I think, just for Australia’s reputation around the world—
Senator Carr —No, it is not embarrassing.
Senator ABETZ —if we as a government are making a grant to Toyota, the most successful automobile company in the world, to produce old-technology vehicles when, in three places—Asia, Europe and the United States—it has already moved on and is doing deals for the next generation. As Senator Carr leaves the committee room, I wish him well in his cabinet meeting on the Bracks review package and I trust that it all goes well for him—because I am sure that it will go to cabinet.
CHAIR —We welcome Senator Sherry.
Senator Sherry —Thank you, Chair.
Senator ABETZ —Can I ask the department: when were Holden and Ford officially advised that the green car fund was open for business before the advertised starting date of 20 November?
Mr Paterson —There has been no announcement in relation to the opening of that fund.
Senator ABETZ —So Toyota was just given a special deal. How did that happen? Did Toyota approach the government and say, ‘Would you mind opening it earlier for us,’ or did we approach Toyota and say, ‘Look, the Prime Minister is in your country; would you agree to something if we threw $35 million at you because it would make a good photo opportunity’? How did it happen that Toyota got $35 million from a fund that was not to open until 20 November?
Mr Paterson —The government made an announcement in relation to the awarding of that money to be brought forward from the green car fund to secure that investment in Australia.
Senator ABETZ —Was Toyota approaching the government, or was the government approaching Toyota?
Mr Paterson —There were conversations between the government and Toyota that preceded that announcement.
Senator ABETZ —I assumed as much, but who initiated the discussion?
Mr Paterson —I will take that on notice.
Senator ABETZ —You are entitled to take it on notice, but I think you might know the answer.
Mr Paterson —If I knew the answer, I would give it to you—and you know that.
Senator ABETZ —In fairness, I accept that. So there are no other proposals for the green car fund currently under consideration.
Mr Paterson —No.
Senator ABETZ —In fairness, the minister might have to take this on notice. There seems to be a view that Australian car manufacturers will struggle to meet the government’s target of 20 per cent greater fuel efficiency by 2010. How do we propose to deal with that, or do we say that such reports are wrong?
Mr Paterson —I do not know the basis upon which that report has been made.
Senator ABETZ —Please take that on notice and, in specific terms, I refer you to an article on page 2 of the Australian of 16 June 2008. Was the department involved in any way in the drafting of the amendments to the luxury car tax? I understand that you were not consulted, so I assume that you were not involved in any drafting either.
Mr Paterson —Not that I am aware of.
Senator ABETZ —Because there is a substantial criticism of the government’s approach to the green tinkering—but that might be more, I suppose, what Treasury—
Senator Sherry —As you would recall, I was present during questioning when you raised that issue and had it acknowledged—
Senator ABETZ —Yes, I did ask some questions of Treasury last night.
Senator Sherry —by an ATO officer.
Senator ABETZ —Yes. The ATO, of course, told me that increasing the luxury car tax does not change behaviours. If that is their view, one wonders how reducing the luxury car tax for certain vehicles is going to change consumer behaviours. But we will see what happens.
I turn to the issue of job losses in the manufacturing sector. It now seems that, since May, we have had a loss of over 9,000 jobs in the manufacturing sector. I dare say that we are agreed that there has been a substantial decline in manufacturing activity for the past four successive months.
Mr Paterson —I am not sure where you have got your number from.
Senator ABETZ —I am referring to an AiG PricewaterhouseCoopers survey but, if you are not aware of that—
Mr Paterson —I am aware of a number of job losses from the manufacturing sector over a period of 12 months to October 2008, but it does not accord with the number that you have just mentioned.
Senator ABETZ —What number do you have?
Mr Paterson —The number that I have is 7,600 jobs between June 2007 and October 2008. You said 9,000—
Senator ABETZ —Your figure is up to June 2008?
Mr Paterson —No. Our number is from June 2007 to October 2008 and your number was larger and over a much shorter period, so I cannot reconcile those two.
Senator ABETZ —In this AAP report of Friday 3 October at 9.28 am, I am told that recent statistics from the Australian Bureau of Statistics show that 9,200 manufacturing jobs have been lost in Australia since May.
Mr Paterson —We will check that.
Senator ABETZ —Thank you very much. In relation to the four successive months—this is the first dot point under key findings reported in the Australian Industry Group PricewaterhouseCoopers performance of manufacturing index for September 2008—’manufacturing activity fell for a fourth successive month in September’.
Mr Paterson —It is difficult to reconcile because the numbers that I have before me suggest that, if you look at manufacturing jobs nationally, in the year to August 2008, there was an increase of 5,500 manufacturing jobs over that 12-month period to August.
Senator ABETZ —So you would not agree that there has been a total loss of manufacturing jobs in Australia in the past 12 months?
Mr Paterson —Correct. We would say there has been a net increase.
Senator ABETZ —You would argue that there has been a net increase?
Mr Paterson —A net increase to August this year of 5,500.
Senator ABETZ —I am sure the manufacturing sector and all those people who have lost jobs would be delighted with that view of the world!
Mr Paterson —It is not a view of the world.
Senator ABETZ —We have information and I have quoted other information here. Undoubtedly, it is like a lot of statistics: it is how they are put together. But allow me to move on to a specific AusIndustry grant for our home state of Tasmania, Senator Sherry, up in the north east. It is for the Scottsdale area, the adjustment package for the north east of Tasmania, and, in particular, the money for the Musselroe road. Can I have it confirmed that that money has been withdrawn?
Mr Sexton —I think you are referring to the North East Tasmania Innovation and Investment Fund.
Senator ABETZ —That would be the one.
Mr Sexton —That has been announced but has not yet been opened.
Senator ABETZ —No, I am not referring to that. It was the previous government’s fund.
Mr Sexton —Are you referring to the Scottsdale Industry and Community Development Fund?
Senator ABETZ —That is the one; thank you. Under that, was there to be a $4.5 million grant for the Musselroe road?
Mr Sexton —That was a $10 million program, of which $6 million was allocated to a merit based granting program and $4 million was allocated to the upgrade of a road to the Musselroe Bay Resort.
Senator ABETZ —Was it $4 million and not $4.5 million?
Mr Sexton —It was $4 million, which was dependent on matching funding from the Tasmanian government.
Senator ABETZ —Am I correct in saying that the Tasmanian government never came forward with the matching funding?
Mr Sexton —There was no commitment by the Tasmanian government in matching funding, yes.
Senator ABETZ —What has happened to that $4 million now? Has it gone into consolidated revenue, or is it still available for the Scottsdale community to spend in another way?
Mr Sexton —Of that money, $2 million has been reallocated to the new North East Tasmania fund, which I have just mentioned, and $2 million was allocated to ACL Bearing in Tasmania.
Senator ABETZ —ACL Bearing in Tasmania. Senator Sherry, I think both you and I know that that would be in George Town?
Mr Sexton —Launceston.
Senator Sherry —It is in that vicinity.
Senator ABETZ —Sorry—Rocherlea, which is in the City of Launceston and not in the local government area of Dorset. Thank you for that. Can I ask about the Geelong Investment and Innovation Fund? I just want to see whether we can get some of that money for the football club. Both Senator Sherry and I are very disappointed with the result—
Senator Sherry —You and I would be in screaming agreement on that.
Senator ABETZ —We have seen the Tasmanian government waste $14 million on Hawthorn, so we were wondering whether we could get some federal government funding for Geelong out of this innovation fund. A lot of this Geelong innovation funding money seems to have been disappearing on administrative costs. If we have excess money, it might be better spent on the Geelong Football Club. Who can tell me—you, Mr Jones?—about the Geelong Investment and Innovation Fund? How much money has been allocated to that?
Mr Jones —The Australian government’s contribution to the Geelong fund is $15 million.
Senator ABETZ —How much has been disbursed, to date?
Mr Jones —I would have to take that on notice. I would point out that only four grants from the fund have been announced as yet and very little actual grant money would have been spent so far.
Senator ABETZ —Do you know how much those four grants total?
Mr Jones —The four successful projects from the first round of the fund were announced on 8 June 2008.
Senator ABETZ —For how much, just roughly?
Mr Jones —Those four projects had a total of $3.3 million in funding.
Senator ABETZ —What is happening with the rest of the money? There has been substantial criticism—we might as well cut to the chase here—about the high administrative costs of this particular fund.
Mr Jones —To answer the first part of your question, the second round of the Geelong fund was announced on 21 August. So that second round opened for applications at that time and will close very shortly.
Mr Paterson —Senator, you asked how much had been spent so far. To 30 September, we had spent $1.143 million of that $4 million committed.
Senator ABETZ —How much has been spent on administration thus far?
Mr Paterson —I do not think we have that number. The total administrative costs that were allocated to that project for its five-year life were $2.64 million.
Senator Sherry —We can take on notice how much has been spent to date.
Mr Paterson —Yes.
Senator ABETZ —I am referring to commentary in the Geelong Advertiser of 10 September 2008, where the Geelong Chamber of Commerce says:
We think that’s wrong, that $2.7 million—
they rounded it up—
of the fund will go to the coffers of the Federal Government to administer it when really there shouldn’t be an administration costs …
Just to balance up the equation, Geelong Trades Hall Secretary, Tim Gooden—Senator Cameron is not here to interject; I am just mentioning this to balance up the ledger for him—described the administrative costs as ‘appalling’. Can I ask the department: are you satisfied with the level of administrative costs that have been incurred by this fund?
Mr Paterson —Yes, I am.
Senator ABETZ —Do you think it could be improved?
Mr Paterson —If it could be improved, it would be. The approach that we have taken is to deliver these funds in the most efficient way we can. Mr Jones has already indicated that we have called for submissions, and there have been a number of rounds. It may be the view of some members of that community that they would have preferred this to be administered for nothing; but you cannot do anything for nothing. To undertake the tasks of administering a fund of this nature, or any other activity, requires people to administer the program and, as is normally the case, those people are funded from within the program.
Senator ABETZ —That is not an issue. The question is the percentage of the fund that is spent on administration. When you have the reunity ticket with agreement between the Chamber of Commerce and the Trades Hall, I would have thought that, with such an expression of concern, it might be worth having some investigation and consideration to see whether anything could be learnt from this particular fund, at least for future funds, rather than to say, ‘We are completely satisfied.’
Mr Paterson —We have learnt from previous funds. The nature of the administration arrangements that apply in relation to this fund have been informed by our experience in running a number of other funds, including two funds in South Australia and funds in Tasmania, so we have learnt from earlier experiences of administering these funds. I think you well know that, for us to be able to obtain funding support out of the Department of Finance and Deregulation, we have to justify every cent of administration costs that we put up. I am perfectly satisfied that the administration arrangements in relation to this fund are appropriate.
Senator ABETZ —It seems as though the department is of the view that it has now learnt all there is to know from the experience it has had with previous funds and there is no use in looking at this Geelong fund to see whether we can improve in the allocation of future funds. With respect, I just think that is a bit defensive—but that is a comment. What is the percentage cost of administration for this particular fund and how does it relate to other funds?
Mr Paterson —We will take that question on notice.
Senator ABETZ —Thanks a lot. I turn to the LPG conversion scheme? It seems as though they are doing pretty well and are selling like hotcakes. In the three months June to September, a total of 30,098 applicants were paid the $2,000 grant. Is that right?
Mr Sexton —Demand in the program remains very strong, yes.
Senator ABETZ —The figures that I have quoted have been provided by the department, but I do not have a reference for them. To your knowledge, are those figures correct?
Mr Sexton —I believe they are, yes, for that period.
Senator ABETZ —As a result, over $60 million has been spent. Is that correct?
Mr Sexton —To 21 October?
Senator ABETZ —I only had to 29 September, so you have another month on me; good on you.
Mr Sexton —To 21 October, we have spent $68.572 million.
Senator ABETZ —How many applicants is that? Would that now be 32,000 or 33,000?
Mr Sexton —That would relate to approximately 35,000 or 36,000.
Senator ABETZ —The budget papers had some indicative figures in them. I think I have been told that, in the first quarter, in rough terms, we have burnt up two-thirds of the actual figure in the budget statements. Is that right?
Mr Sexton —That is correct.
Senator ABETZ —Can you confirm that this will continue to be a completely open-ended scheme and will be demand driven and not dollar limited?
Mr Sexton —It is an entitlement based scheme. On that basis, I would expect applications to be honoured.
Senator ABETZ —Given the budget allocations, if demand keeps up, where will the extra funding that is required be drawn from? Will you be supplemented, or will it come out of—
Mr Sexton —As we said at the last hearing, given that it is an entitlement based scheme, if we need to find additional moneys, I assume the government will find them. I would assume that, for 2008-09, that would probably happen at the additional estimates stage early next calendar year. There would be several mechanisms by which that would occur: new money, or rephasing of moneys from out years to the 2008-09 year.
Senator ABETZ —Let us wait and see. The most important thing is that funding continues. I might say that it was a very popular scheme. If you were to believe, as I do, that it was destined for the axe but then got a reprieve, its ongoing popularity now hopefully will convince the Rudd government to ensure that it will not be axed. Minister, could you take on notice to ask the minister whether or not the government is willing to guarantee its ongoing funding, at least until the next budget?
Senator Sherry —I will take that on notice.
Senator ABETZ —Thank you. Can I ask about the administration of the scheme? I have a funny feeling that you might tell me to go to Centrelink in relation to this. Who actually administers the rebate?
Mr Sexton —The actual receipt and assessment of applications and the payment of moneys are handled through Centrelink, with the assistance of Medicare.
Senator ABETZ —That is what I thought. I have a particular constituent issue in relation to this and, looking at it, I dare say that I have missed my opportunity. According to the rules of the LPG scheme, the rebate is only for vehicles that are used 100 per cent for private purposes.
Mr Sexton —For private use; that is correct.
Senator ABETZ —If a person uses their vehicle for private purposes but is registered as a primary producer, should that have any impact on that person’s application? Would Centrelink deal with these sorts of details or would it be AusIndustry?
Mr Edwards —Centrelink deal with that, but I am aware of the rules around primary producers. Primary producers would be excluded if the registration was for primary production. That registration category is available in most states. If you register your car as a primary producer, you get a discount in most states. Certainly, the Victorian scheme states:
All vehicles registered as a primary producer vehicle must be used solely in connection with the operator’s business as a primary producer.
That makes it for business use and would exclude it from the program.
Senator ABETZ —Thank you. I was going to ask a few questions on the TCF review, but I think we can delay them. I was going to ask the minister whether he agrees with Professor Green’s implicit assertion that the Australian farmers who use mulesing or intensive techniques are unethical, but I note that the minister at the table has already been asked that from an agricultural perspective. If I might say, you gave a very sound answer, Senator Sherry.
Senator Sherry —It was a very succinct answer.
Senator ABETZ —It is rare that I am able to make that comment about your answers, but I was interested to see whether Senator Carr had a different view of life. I will not invite you to take that on notice.
Senator Sherry —Can I just ask why you were going to raise mulesing here with Senator Carr? I am glad it does not have a Latin name.
Senator ABETZ —Because it came up in the textile review that was undertaken by Professor Green. There is some method to my madness, Senator Sherry.
Senator Sherry —I see the linkage. I will take it on notice. If that had been given to Senator Carr in question time, I think he might have found it a bit tough to answer.
Senator ABETZ —I turn to Enterprise Connect. Does the government stand by its commitment that 10 manufacturing and innovation centres will be delivered in the second half of calendar year 2010?
Mr Dean —I expect that the manufacturing centres and probably the clean energy and creative industries centres will not be delivered until early next calendar year.
Senator ABETZ —I thought we were told previously that it would be in the second half of calendar year 2010.
Mr Dean —I am sorry; we are delivering the eight by the end of this calendar year and the other two will be opened early in 2009.
Senator ABETZ —So you will definitely meet your target of having them all up and running.
Mr Dean —Absolutely.
Senator ABETZ —Have any leases been finalised yet?
Mr Dean —Yes.
Senator ABETZ —Is the north-west Tasmanian manufacturing centre, which was promised during the election campaign, part of Enterprise Connect?
Mr Dean —It is.
Senator ABETZ —What is the delivery time frame for this facility?
Mr Dean —It should be opened next month.
Senator ABETZ —In fact, on 5 November. Can you tell Senator Carr that I think my invitation must be lost in the mail somewhere? GPO box 1675 is the address, just in case Senator Carr is interested in not being political about this particular facility. I turn to innovation. On notice, can we have the total cost of the Cutler innovation review and the total provided to Dr Cutler? Does the minister stand by his description that Dr Cutler’s recommendations ‘can’t be done’ and are ‘unrealistic’, and can he tell us whether that assessment is—
Senator Carr —Where did I say that?
Senator ABETZ —Radio National background briefing on 12 September.
Senator Carr —That is what I said, did I?
Senator ABETZ —Yes, that is what I have been advised.
Senator Carr —I would suggest that you go back to your adviser.
Senator ABETZ —You deny saying that; that is fine. So you think it can be done and it is realistic.
Senator Carr —No. I said that the recommendations from the Cutler review are extensive and they cannot all be implemented in the space of one budget or one parliament and that we were looking to develop a 10-year plan. I think you will find that is the context in which those remarks were made.
Senator ABETZ —Undoubtedly, like your luxury car tax comments.
Senator Carr —I do not think I mentioned luxury car tax.
Senator ABETZ —I think my other questions in this area were discussed in the general comment on reviews. Can I move to R&D figures? I note certain criticisms have been made about expenditure on R&D. Mr Paterson, are you aware of the Australian Bureau of Statistics Research and experimental development: all sector summary for Australia 2006-07?
Mr Paterson —Yes.
Senator ABETZ —Does that show that gross expenditure on research development by business increased substantially—about three-fold—from 1996 to 2006?
Senator Carr —I am not certain of those particular figures. I can say that—
Senator ABETZ —That was from $4,235 million to $12,036 million.
Senator Carr —What was the growth of GDP during that period?
Senator ABETZ —I am asking you whether that represented a 32 per cent increase over that period. I just want to know whether these figures are correct and whether we stand by the Australian Bureau of Statistics.
Senator Carr —I can say to you that—
Senator ABETZ —I do not want another political speech; I want to know whether the facts as outlined by the ABS are acknowledged by the department.
Senator Carr —What we can say is that the gross domestic expenditure on R&D exceeded two per cent of GDP for the first time in 2006-07, which of course is obviously a good result but still well below the OECD average of 2.26 per cent. We are ranked only 11th in the OECD and are well behind countries like Israel, Sweden, Finland, Japan, Korea and the United States. GIRD did grow by $21 billion at current prices, an increase of 32 per cent, compared with that period, but of course we still have a huge amount of catching up to do. Many countries have achieved consistently higher growth rates than Australia has. China’s gross expenditure on R&D rose nine per cent a year—
Senator ABETZ —I just asked about the ABS figures, not for the minister to work himself into a lather.
CHAIR —I think the minister is giving a complete answer.
Senator ABETZ —No, he is not.
Senator Carr —I was asked a question about the growth rate and I am providing—
Senator ABETZ —No, you were not. You were asked whether you accepted the ABS figures, and the answer would be either yes or no.
Senator Carr —You might think it would be yes or no. I am pointing out to you that—
Senator ABETZ —Do you or don’t you?
Senator Carr —China’s R&D growth rate was nine per cent per annum—
Senator ABETZ —Do you or don’t you accept the ABS figures?
Senator Carr —and our growth rate was one per cent.
Senator ABETZ —I know you have your prepared speeches for which you get brownie points if you can deliver them during estimates, but it is not helpful.
CHAIR —Senator Abetz, I think we will get to where we are going faster if you just allow the minister to finish his answers.
Senator Carr —What occurred during the period 1996-97 through to the year 2000 is that business R&D, on chain volume measures, fell for the first time on record. So we can only speculate on how much stronger our R&D performance would have been if the measures taken by the previous government in 1996 had not been taken. What the review of the national innovation system has sought to highlight is how Australia’s failure to keep pace with the rest of the world has hurt our productivity and competitiveness. That is why, in the white paper response, we will be paying particular attention to these issues.
Senator ABETZ —Does the ABS also tell us that, over the 10 years to 2006-07, GIRD increased at a two-yearly rate of 28 per cent? That is nearly of hocky stick proportions, isn’t it?
Senator Carr —No. What I have indicated to you is—
Senator ABETZ —I have the graph here in front of me.
Senator Carr —If you have the graph, why are you asking me the question?
Senator ABETZ —Because I want to know whether the department is of the view that the ABS somehow has its analysis wrong. Is the department aware of the Australian Bureau of Statistics’ Research and experimental development, all sector summary, Australia 2006-07?
Mr Paterson —Yes.
Senator ABETZ —Have you had the opportunity of examining it?
Mr Paterson —Yes.
Senator ABETZ —Do you have any reason to doubt the base data that is contained in its summary?
Mr Paterson —No.
Senator ABETZ —Thank you very much. That is all I really need to know on that one. Can I quickly backtrack, Minister? You indicated that you did not say certain things on Radio National. I am a trusting sort of fellow and I am willing to take your word on that but, just to confirm my trust, I am sure that your media monitors would have had that transcribed. Could I invite you to provide the committee with a transcript of that Radio National interview?
Senator Carr —I think you will find it is on the ABC website. I thought there was actually a transcript—
Senator ABETZ —If you have one available, it would be helpful. If not, we will go to the ABC website.
Senator Carr —I thought there had already been one on the ABC website.
Senator ABETZ —Are we currently between chief scientists?
Senator Carr —No.
Senator ABETZ —One has resigned and one is about to start?
Mr Paterson —Correct.
Senator ABETZ —So we are between chief scientists. It is not a trick political question.
Senator Carr —We have announced the appointment of a new Chief Scientist.
Senator ABETZ —That is right. She has not taken up her position as yet, but her predecessor has resigned, retired or left the post. Is that right?
Mr Paterson —Concluded the term of appointment.
Senator ABETZ —All right, ‘concluded the term of the appointment’, and the new one has not taken up her new term of appointment as yet.
Mr Paterson —Correct.
Senator ABETZ —So there is a hiatus period.
Mr Paterson —November 3.
Senator ABETZ —No trick question. I just wanted to make sure that I was right. So there is an Office of the Chief Scientist. Is that represented here today?
Mr Paterson —The questions in relation to the Office of Chief Scientist were scheduled to be considered in the first session this afternoon. I am happy to respond to any questions that you have. They were explicitly mentioned in the first session.
Senator Carr —They are listed on your program, Senator.
Senator ABETZ —Fair enough. Can I then put on notice: what is the budget of the office, how many staff does it have, what band are those staff in and how many applications were there for the position of Chief Scientist? In addition, could it be confirmed that this is a Public Service position? I do not need those questions answered now.
Mr Paterson —The answer to the last question is that it is not a Public Service position—that is, it is not an appointment under the Public Service Act but an appointment under a deed with the Commonwealth.
Senator ABETZ —So it is a separate deed, is it?
Mr Paterson —Yes.
Senator ABETZ —Thank you. That is very interesting.
Mr Paterson —It continues the pattern of previous appointments in relation to the Chief Scientist.
Senator ABETZ —I think, of itself, that might be a good position.
Mr Paterson —The total budget for the office for 2008-09 is $1.294 million, probably closer to $1.295 million, excluding the costs associated with the direct employment of the Chief Scientist. At present there are nine allocated staff: one EL2, four EL1s, three APS6s and one APS3.
Senator JOYCE —So that budget pertains to all those people for the year?
Mr Paterson —Correct. It is for the year, with the exception of the appointment of the Chief Scientist, which is separately provided for.
Senator JOYCE —That is on top of that?
Mr Paterson —The question was in relation to the Office of the Chief Scientist, and that is the staffing complement and budget of that office.
Senator ABETZ —In relation to the Chief Scientist, I must say that everything I have read about the lady would indicate that a very well-qualified and capable person has been appointed. She has said:
I’d like to think I’m doing things for Australia. I’ll be the Chief Scientist for Australia, not of Australia.
I must say that is a great approach to have. Will access to the Chief Scientist be given to the opposition and, indeed, the minor parties, should they be interested, to discuss things that are in the public domain so that she can be, if you like, an independent operator in her duties for Australia?
Mr Paterson —My understanding is that access to the Chief Scientist would be provided on the same basis as access to other parts of the public sector and agencies of government. The normal protocol that applies in those circumstances is that, if there is an approach from the opposition or from a minor party, those approaches are normally made to the minister responsible for the particular area of activity and it is a matter for the minister to decide in the circumstances.
Senator ABETZ —That is why I was inquiring as to whether it was an Australian Public Service position or not, or whether it was a completely independent position where people could access the Chief Scientist for information or advice from time to time.
Mr Paterson —They are appointed on a deed.
Senator ABETZ —You have clarified the position and I accept that that will be the way, whether we necessarily like it or not. I will finish with a brief bracket of questions on cooperative research centres. I understand that currently there is no application process for new CRCs to start in the 2009-10 year. Is that information correct?
Mr Paterson —I think you are aware—we made reference to this earlier—that there was a review of the CRC program as part of the broader review. It was a separate but integrated review of the CRC program, which is currently before government. A matter that would flow out of that consideration is how that program is dealt with in 2009.
Senator ABETZ —My question was: is it true that there is currently no application process for new CRCs to start in 2009-10? We are in a hiatus period.
Mr Paterson —No new round has been announced at this stage. The CRC community, if I can call it that, is aware of the CRC review and that that is a matter for consideration by government at the present time.
Senator ABETZ —Can we confirm that start-up CRCs that are to start in 2009-10 need to be announced by 30 June 2009? Is that a correct timetable that I have been given?
Mr Paterson —That may be the expectation. Those who apply for the whole of that period clearly need to have some prior announcement. But, if history informs us on this, with new CRCs there is a gap between the announcement of the selection of a CRC and the resolution of the contractual terms and the flow of dollars. So I do not think there is an automatic sort of switch that ‘by 30 June, therefore start on 1 July’. The reality is that any selection round will take a period of time. The resolution of any selected new CRC, for example, will depend on the nature of the CRC and the contractual terms that need to be resolved.
Senator ABETZ —But, as I understand it, if one is to start in 2009-10 or even 2010-11 but there is to be a cut-off date of 30 June 2009, there is no application process as yet and any new application process will be as a result of the national innovation review white paper, as I understand it, which will be announced early next year; therefore, there will be a very tight time constraint on anybody who wants to have an application in by 30 June 2009. Have I misunderstood—
Mr Paterson —I just want to clarify a point. I understood your question to be associated with applicants for new CRCs.
Senator ABETZ —Or for start-up CRCs, yes.
Mr Paterson —So this is not about applications for existing CRCs that may be looking for new money, this is about new start-ups?
Senator ABETZ —Yes.
Mr Paterson —I have answered that question.
Senator ABETZ —So, there are no guidelines at the moment for new CRCs. Is that right? They will have to wait for the national innovation review white paper. Is that right?
Mr Paterson —There are 2006 selection guidelines that are still listed on the website but, as I said earlier, it is a matter for consideration before government at the present time, having been a review of the CRC program, and there is no new funding round announced for 2009 at this stage.
Senator ABETZ —Right. But if somebody was wanting to be proactive, anticipating that the government might actually deliver on one of its science policies and research policies and keep funding going—so they are anticipating funding might come along—they should be preparing their application on the basis of the 2006 guidelines, or will there be substantially different guidelines as a result of the white paper?
Mr Paterson —A proactive person would read the CRC review and anticipate what might come from that. The challenge in these circumstances is that we do not know what the final decisions will be. If we start to provide advice in public hearings that people should follow the 2006 guidelines and then find that there are different guidelines in relation to an announced 2009 funding round, then someone will come back and can say, ‘But you misled us in relation to saying, “Follow the 2006 guidelines”.’ That is why I am being cautious. There is a review; there are published guidelines and, as yet, there is no announced funding round for 2009. The minister indicated earlier his aspiration in terms of being able to announce the outcome of the national innovation system review. The CRC review is part of that program.
Senator ABETZ —The science and research community are telling me there is much dislocation and concern—two words that have been used with me—in relation to the CRC sector and the period that we are in, because it may be with a review, with new guidelines, that we miss out on a whole year for start-up CRCs. That would be unfortunate if that were to occur, so I would invite the minister and the department to try to streamline this as much as possible. When I talk about streamlining, I do not mean as streamlining was used in the Labor Party policy in relation to Commercial Ready. Is it correct that no applications are going to be called for until the white paper review?
Mr Paterson —I missed that.
Senator ABETZ —There will not be a call for applications for a new round of CRCs until the white paper has been delivered?
Mr Paterson —There will not be a call for a new round of applications until such time as the government has decided on the course of action. I will not say until the white paper; I am saying there will not be an announcement in relation to the round until the government has decided what it wants to do in relation to that CRC review.
Senator ABETZ —Do we have an idea as to when that might be?
Senator Carr —I have already indicated that to you. I see you put a press release out on that topic, so perhaps you should read your own press release.
Senator ABETZ —Are you going to favour us with an answer?
Senator Carr —I have indicated to you that there will be a response to the reviews in the context of the white paper preparation. In regard to the specifics of the CRC review, that will be considered by government in that process.
Senator ABETZ —Mr Paterson I think was quite proper in being very careful to say that any calls for applications for new CRCs will be undertaken when the government is right and ready for it, and that may be after the white paper is provided or, indeed, before.
Senator Carr —I did not speculate either way. I just indicated—
Senator ABETZ —That is right, ‘when the government is ready’. Now, Minister, I am asking—
Senator Carr —When will the government be ready?
Senator ABETZ —It seems that you are saying, that it will be after the white paper.
Senator Carr —No, I did not say that at all. What I said to you is that a response to the CRC review—Professor O’Kane’s review—will be considered in the context of our preparation of the white paper.
Senator ABETZ —You indicate it would be responded to in the white paper when it is released.
Senator Carr —No, I did not. I said ‘in the context of the white paper’.
Senator ABETZ —We can re-read the Hansard.
Senator Carr —Perhaps I should try and assist you in this way. I will try to explain this in simple terms. You have the Cutler review, which the government will respond to. You have the O’Kane review, which the government will respond to.
Senator ABETZ —Yes. We know all that.
Senator Carr —We will obviously need to consider those things in tandem. When we announce another round will, of course, be a subject of further conversations within the government.
Senator ABETZ —Do we have a timetable for that?
Senator Carr —It is our intention, of course, to consider these matters over the next little while. I have already indicated publicly our intention, of course, is to respond as soon as we can.
Senator ABETZ —I understand that you might hold me in contempt, but do not forget there are actual CRCs and start-up CRCs waiting for this information. I would have thought a provision of some sort of more definitive assistance to them would be appropriate, because this is this research and scientific community that you championed so long and hard, yet you have presided over huge cuts in a whole host of areas.
Senator Carr —That is not true.
Senator ABETZ —Just ask ANSTO, CSIRO, the Commercial Ready program, and the list goes on. You know that. We have gone over time, Chair, and I thank you for your indulgence.
CHAIR —We will now move to Outcome 3: Science and Research.
Senator ABETZ —Whilst that is happening, I have been advised that your wonderful words in relation to Radio National are, in fact, not able to be obtained from the ABC website or there are technological deficiencies within my office. I was wondering if your office could provide that transcript. That would be most helpful.
Senator Carr —I will take that on notice. The truth is I do not get transcripts for most of the work I do. It may well be we can provide you with a copy of the interview, I just do not know.
Senator ABETZ —That is fine. I believe I was given a verbatim—
Senator Carr —Yes, but it is not the language that I normally use, that is the point.
Senator ABETZ —I believe one of your spin doctors might have written it for you; but, anyway, we will see.
CHAIR —We will now move on to Outcome 3.
Senator ABETZ —Can I turn to national research priorities? I want to know about them and what the current status is, please. I think we have got five national research priorities, is that correct?
Ms Borthwick —Yes.
Senator ABETZ —This is not a trick question. I would imagine if circumstances change, you would update or change these priorities, so can I ask are they being updated or finetuned in any way?
Mr Paterson —One of the terms of reference of the review of national innovation system was to look at national research priorities and to provide advice to government on those. Dr Cutler’s report has provided that advice to government, so that is currently the subject of consideration by government.
Senator ABETZ —That is another aspect that has wound up in there.
Mr Paterson —Yes.
Senator ABETZ —That is fair enough.
Mr Paterson —There has been no change to the pre-existing national research priorities but that is something that is subject to consideration within government as part of that broader consideration of the white paper.
Senator ABETZ —So it would be fair to say that if they were to be updated we would be potentially informed of that in the white paper?
Mr Paterson —That would be my expectation.
Senator ABETZ —Thank you for that. That truncates all that until we get the white paper. Undoubtedly, the February estimates will be the time when we deal with those matters. Can I turn to a charter of academic rights and responsibilities?
Mr Paterson —Yes.
Senator ABETZ —What is the current status of the academic charter of rights and responsibilities?
Senator Carr —Are you talking about the agencies’ charters?
Senator ABETZ —The one you announced on 16 January.
Senator Carr —The charter is related to the agencies.
Senator ABETZ —Was that being driven out of your office? Has any departmental assistance been given? Yes?
Senator Carr —There was department assistance but—
Senator ABETZ —Thank you. So from the departmental point of view, can I ask how is it progressing?
Senator Carr —What is the question?
Senator ABETZ —Sorry?
Senator Carr —Our problem is trying to identify what is your question.
Senator ABETZ —What is the current status of this charter, or these charters, in relation to the various agencies? Is it going to be in the form of one charter applying to everybody or will there be specific charters for specific bodies? Let us drill right down then.
Senator Carr —These charters vary from agency to agency. There are common elements in so far as all of the agencies are concerned, but then there are specific elements for each of the agencies. They are in the process of negotiation.
Senator ABETZ —How is it progressing? We have got negotiations underway and I understand the department is part and parcel of undertaking that negotiation with each agency. Is that correct?
Senator Carr —Last time I had a look at this they were pretty close to completion.
Senator ABETZ —Good. So in that case the answer is, ‘The negotiations have gone very well’, which is good. If they are very close to completion, when do we think that we might announce them and will they be announced as a job lot or will it be announced agency by agency?
Senator Carr —I will be taking advice on that.
Senator ABETZ —Undoubtedly from your department?
Senator Carr —I have not made a decision on that yet.
Senator ABETZ —Have some agencies’ charters progressed quicker than others in negotiation?
Senator Carr —They are all pretty much the same.
Senator ABETZ —We were told that there were standard elements in each but that they were also specifically tailored for each agency. Is that correct?
Ms Borthwick —Yes.
Senator ABETZ —So, I am wondering in relation to the dealing of the specifics for each particular agency, have they all gone swimmingly or have some agencies taken a bit longer than others?
Senator Carr —No.
Senator ABETZ —So, they have all been able to respond at exactly the same time?
Senator Carr —All the advice coming to me is that they have gone very smoothly and they are being discussed within each of the agencies in their decision-making processes.
Senator ABETZ —They are all going very smoothly. Are some going more smoothly than others?
Senator Carr —There is no problem with any of them.
Ms Borthwick —All of the charters are close to finalisation and they have progressed to the point where they are all now close to conclusion.
Senator ABETZ —I do not know what the difficulty is. It would stand to reason that when you are dealing with a number that some might be closer to completion than others. That is all.
Ms Borthwick —That is what I am saying. They are all at the same point now. That is what I understand.
Senator ABETZ —Exactly the same point?
Ms Borthwick —Correct. My understanding is we are close to concluding all of them now.
Senator ABETZ —So, no more negotiations are required?
Senator Carr —I am not aware of any difficulties in terms of negotiations. As far as I know it is a question of—
Senator ABETZ —But are any more—
Senator Carr —I will try to answer your question. As far as I am aware it is a question of board schedules and sign-offs within each of the agencies, but no-one has drawn to my attention any difficulties with any of the agencies.
Senator ABETZ —Just because it has not been drawn to your attention does not necessarily mean that there have not been certain difficulties because your departmental officials undoubtedly can handle these things very well without bothering you with the detail. So, all I am seeking to do—
Senator Carr —If there were difficulties I would expect to hear about them, and I have not.
Senator ABETZ —I am willing to accept that they have all run very smoothly, but it stands to reason that some would have run smoother than others. It would be a strange world if every single agency responded in exactly the same way in relation to every aspect. It just would not be the real world. So I do not think my questioning is out of order in any way and I think it is relevant. We are entitled to know whether there have been any difficulties.
Ms Borthwick —I support what Minister Carr has said in that some of the progress has been subject to the timetables of various board meetings, but none of them have come across obstacles which we could not negotiate or resolve, and they are all at the same point now, which is close to conclusion.
Senator ABETZ —That is fine, but it stands to reason that those issues that you had to negotiate to resolve, with some agencies it was easier or quicker to resolve than with other agencies. That is all I am asking, and I would have thought in the real world the very simply answer would be yes, each agency is different and, yes, some agencies were quicker and easier to negotiate with than other agencies. What is the difficulty with telling the Senate that?
CHAIR —I think there is some confusion. If there is a particular point or if you know of some agency, it might be helpful if you would expand on it.
Senator ABETZ —The art of asking questions you can leave to me, thank you.
CHAIR —I am just trying to be helpful because there seems to be some confusion.
Senator Carr —We are going around in circles here.
Senator ABETZ —Only because I am not being given a direct answer.
Mr Paterson —You have got a direct answer from Jessie Borthwick. She has given you a quite explicit, direct answer. There have been no problems. There have been negotiations. They have been resolved amicably and all of the negotiations are at the same state. I am not sure that we can give any straighter answer than that.
Senator ABETZ —As we are getting to the stage where we are at now with all of them, you cannot tell us whether the progress to the stage where they are all at now was smoother with one agency as opposed to another agency? That is all I am seeking to inquire about.
Mr Paterson —I think we have indicated on a number of occasions—
Senator ABETZ —That they were all exactly the same—please!
Mr Paterson —Not exactly the same—
Senator ABETZ —Thank you.
Mr Paterson —But with respect, you are asking whether there were impediments or if there were problems or if there have been challenges in relation to these negotiations and the officer has given advice that the negotiations have proceeded smoothly and they have all reached a conclusion. I do not know what else we can give you.
Senator ABETZ —We are entitled to know how the progress went in relation to each one. I accept that they are now all at the same stage. I have no reason to doubt that in any way, shape or form. I am asking about the progress to the point we are at now as to wether negotiations and discussions, timeliness of responses et cetera was better with one agency as opposed to another agency. That is all I am asking. In the real world it would stand to reason that some agencies were more expeditious or more cooperative than others. But you are saying they were all exactly the same. They were all like identical twins; you could not tell them apart.
Mr Paterson —No, we are not suggesting that to you and we have not suggested that to you. We have indicated—
Senator ABETZ —All right then, tell me the differences.
Mr Paterson —What we have indicated to you is that there were no impediments along the way.
Senator ABETZ —But that is not the question I am asking. I am not asking about impediments, I am asking about the differences.
Mr Paterson —What differences would you like us to examine?
Senator ABETZ —I do not know whether there were any differences—
Mr Paterson —I have tried to indicate—
Senator ABETZ —If you could acknowledge that in the real world there would have been differences in relation to timeliness of responses or the negotiations that had to happen in relation to each agency because I understand each agency, whilst on a standard basis, is treated differently, it stands to reason that there would be a difference in the time line that got us to where we are at now where they are all equal.
Senator Carr —There is no difficulty with these negotiations. Each of the agencies was responsive. Each of the agencies has considered these matters very carefully. We are simply waiting on a final sign-off. I am not aware of anybody indicating any serious difficulties in terms of the processes for the resolution of these questions.
CHAIR —Senator Abetz, if you do not mind, Senator Boswell has been waiting for some time to ask a question. I am happy to let you return.
Senator ABETZ —I would not mind just closing this off. Mr Paterson and officials and, in particular, Minister, I really cannot understand the difficulty in answering the question. I know where we are at today. I accept that at face value they are all basically ready to be signed off. I think that is the stage we are at. Can I compliment you on achieving and arriving at that? But the journey to getting there clearly must have been different for each agency. For that not to be acknowledged is quite frankly mind numbing and I think not fair to this Senate committee.
Mr Paterson —I take exception to suggestions that we are not being fair to this committee. We are answering your question as openly and as honestly as we can. There have been no problems. We are not going to sit here and single out an agency just for the sake of identifying a problem that did not exist. We say there were no problems in relation to the negotiations. There are no problems. What can we identify for you that we have not identified for you if we do not have a problem?
Senator ABETZ —I am asking: was one agency quicker to respond than another in relation to this charter of rights and responsibilities? Surely some responded quicker than others. Are we willing to concede that?
Ms Borthwick —With regard to the process, the overall speed is from the beginning of the process to now. Some of those, as I indicated earlier, were subject to different timing because of consideration by board meeting dates. That contributed to some of the timing issues.
Senator ABETZ —That would be a timing issue—
Senator Carr —We have canvassed this. This point was made 20 minutes ago.
Senator ABETZ —After your discussion—
CHAIR —Senator Abetz, Senator Boswell really has been waiting for some time. It is a query about whether he can ask a question. It will just take a couple of minutes.
Senator BOSWELL —I am not sure that I have got the right officers. Does the department keep any statistics on the increase or decrease of specific industries?
Mr Paterson —I missed the question.
Senator BOSWELL —I am trying to find out the decrease or increase on specific industries. I am trying to get to the processed fruit and vegetable industry. Has there been an increase or decrease in it?
Mr Paterson —If you are asking about the fruit and vegetable industry, that is the Department of Agriculture, Fisheries and Forestry.
Senator BOSWELL —I understand that but I am talking more about the processing—
Mr Paterson —Food processing is also undertaken—
Senator BOSWELL —Your department does not keep any statistics on, say, Ardmona or Golden Circle?
Mr Paterson —The food industry program is handled by Minister Burke.
Senator ABETZ —Clearly we are not going to get any further. It defies belief that they all progressed in exactly the same manner and in the same way—
Senator Carr —What defies belief is that you would spend so much time going around and around in circles.
Senator ABETZ —It is my entitlement to ask the question.
CHAIR —Can we draw a line? Have you got further questions on this outcome area?
Senator ABETZ —Absolutely I do. The questions I was asking clearly fit into that category, but once again the minister will not be responding so we will move on. Can I ask about the Australian Stem Cell Centre?
Senator Carr —Yes.
Senator ABETZ —Thank you. That is gracious. Can I have confirmed that we will spend $5.5 million in this financial year on the Australian Stem Cell Centre; is that correct?
Mr Paterson —You asked a question about the $5.5 million under the Major National Research Facilities program.
Senator ABETZ —Yes. Is that the only funding out of this department for the Stem Cell Centre?
Mr Paterson —No. There is ongoing funding of the Stem Cell Centre jointly funded by a program administered by this department and a program administered by the Australian Research Council. The Stem Cell Centre is funded through to 2011. It was the Centre of Excellence program through to 2011—
Senator ABETZ —What is the total that this department is spending on the Stem Cell Centre this financial year, 2008-09?
Mr Pennifold —It is $5.5 million that we have scheduled to spend with the Australian Stem Cell Centre this current financial year.
Senator ABETZ —That was the figure I first mentioned. In the few minutes remaining perhaps I can have a bit of a tutorial on this, but can you indicate how the department and the Stem Cell Centre interact with administration? Are they completely autonomous?
Mr Chesworth —The relationship between the department and the ARC on the one hand and the Stem Cell Centre on the other is governed by a deed of agreement.
Senator ABETZ —How extensive is that deed of agreement? Are we talking about 10 pages or hundreds?
Mr Chesworth —It is a very extensive document.
Senator ABETZ —A tome, is it?
Mr Chesworth —It is a tome.
Senator ABETZ —In that case I will not bother to ask for a copy of it. To use some loose language, are they relatively autonomous in the way they run themselves or does the department have an active oversight?
Mr Chesworth —There is a regular reporting mechanism based on some key performance indicators that have been put forward by the Stem Cell Centre itself and those reports are made on a quarterly basis.
Senator ABETZ —Did those regular reports highlight some of the difficulties that the centre is now experiencing? Did those reports on a quarterly basis start indicating some of the difficulties that I understand the centre is currently experiencing?
Mr Chesworth —Yes.
Senator ABETZ —I do not mean to be critical of Mr Paterson, but is this another review that is in the department? I understand the minister was getting a review on the Australian Stem Cell Centre by the end of last month.
Mr Chesworth —This is a scheduled review. It had been scheduled to take place in 2008. There was also a review that took place in 2006 and it is my understanding that there is another schedule review due in 2010 as well.
Senator ABETZ —But there is an ongoing review, even if it is a rolling review. So that I understand, would a fair description of it be that it is a rolling review?
Mr Chesworth —The review was a discrete exercise.
Senator ABETZ —Were there any other discrete reviews, Secretary, that I should be made aware of that are currently underway in the department?
Mr Paterson —I did indicate that I would take that on notice. I have clarified the answer in relation to one additional issue earlier today. If there is anything else that I have not brought to your attention—
Senator ABETZ —Like this one. I appreciate you cannot have them all.
Mr Paterson —I did take it on notice earlier.
Senator ABETZ —Yes. I am just indicating that here is another one. Minister, have you received what has been described as a final report?
Senator Carr —Yes.
Senator ABETZ —When will be you responding to it or anticipating that—
Senator Carr —I would like to have a look at the review. It was handed to me yesterday.
Senator ABETZ —That is fair enough. When was the timetable for the review? There was a press report suggesting the end of September. I am not critical of the fact that we are halfway or three-quarters of the way through October. The minister has now received the report and clearly has not had the opportunity to read it.
Senator Carr —It is a commercial-in-confidence report.
Senator ABETZ —I am not critical of that.
Senator Carr —I just think you should be aware of some elements that I need to consider in responding to the review because there are matters that need to be carefully considered. Nearly 100 people were contacted in the preparation of the report by Growing Your Knowledge, which is the company commissioned to undertake the review. There are matters that were presented to the reviewers in confidence and it is a commercial-in-confidence report. I am seeking advice from the officers about these matters and I will make a determination after discussion with them. It is unlikely that I will be able to release the full report, given the confidential nature of those matters. I am considering a question of the executive summary of recommendations. I will be seeking advice on those matters.
Senator ABETZ —All the best with that. Can we be advised as to how much was paid for this review to be undertaken? Has that been announced anywhere as yet?
Mr Pennifold —The cost of that review is under a contract and GST inclusive is $324,410.
Senator ABETZ —In anybody’s language that is not a small sum of money but clearly the ASCC—
Senator Carr —It is substantive.
Senator ABETZ —It does consume a substantial amount of Australian taxpayers’ money. Given the problems that the minister described as ‘major problems’, it is appropriate that this sort of report be obtained. Undoubtedly, for that sum of money—
Senator Carr —You know the public conversation around this issue. I think it would be a fair description to say there are major problems. The board has resigned and the CEO has resigned.
Senator ABETZ —Sorry?
Senator Carr —Both the board and the CEO have resigned. These are not usual circumstances.
Senator ABETZ —When did the board resign?
Senator Carr —That is all in the public record. I do not know the precise dates.
Senator ABETZ —I am not being critical of this. It is an unfortunate situation.
Senator BOSWELL —I just want to come in on this.
Senator ABETZ —Take on notice please when the board resigned and when the CEO resigned.
Senator Carr —This is all on the public record.
Senator ABETZ —I am sure it is but if you can provide me—
Senator BOSWELL —The government has put in $100 million and this Stem Cell Centre was supposed to be self-sufficient and was supposed to get out there in the market and sell cures and do all sorts of wonderful things. It is $100 million for Trounson, who I believe sold our government a complete pup. He is headed for Canada or somewhere. We are $100 million down the chute. The board has resigned. The CEO has resigned. The universities do not want to have any part of it.
Senator Carr —That is not true.
Senator BOSWELL —That is good.
Senator Carr —I do not think that is true.
Senator BOSWELL —Is the government going to put in any more money?
Senator Carr —You and I have a difference of opinion about the value of stem cell research. So we are clear about this, you have been an opponent of this centre from its creation. The previous government established the centre and established the business model and the terms of the deed. I think that is all incontestable. I am of the view that stem cell research is extremely important. However, I want to be satisfied that this is an effective use of public money. We are now evaluating with this report what needs to be done about the present situation. The reviewers have made some recommendations to government. There is a detailed report that is under consideration. I think it would be a fair description to say it is a thorough review. I have no reason to doubt that it is a quality review. There is a scientific panel that has made recommendations as well, and these are matters that we are currently considering in toto.
Senator BOSWELL —Thank you for that. I cannot say that you were not warned because I continually warned you this was exactly the position you would end up with in regard to the Stem Cell Centre and Mr Trounson—I do not think he is a professor; he is a sheep doctor or something.
Senator Carr —That is a bit unfair.
Senator BOSWELL —He is a vet of some description. He is not a doctor.
Senator Carr —He is a professor. I recently met with him in California. I have met with the people that he is now engaged with. I do not believe that your description of him is fair.
Senator BOSWELL —Did you ask him about the rat that he hit with stem cells and it walked?
Senator Carr —I am aware of your claims on these matters.
Senator BOSWELL —My claims were proved and run in the Australian.What I said was completely accurate. I am asking you to be very careful with taxpayers’ dollars. We have already done $100 million. Please do not send good money after bad.
Senator Carr —The officers are advising me it is actually $65 million that has been spent on the centre. I will not concede that it has been ‘done’, as you put it. However, we are considering these issues very carefully and I thank you for your advice.
Senator BOSWELL —You cannot say you have not been warned.
Mr Paterson —I would like to clarify an observation I made earlier. I indicated that the department blocked access to Wikipedia. I should more accurately have said we have blocked the capacity of anybody in the department to update any Wikipedia entry. They can view a Wikipedia entry but they cannot provide any updates to Wikipedia.
CHAIR —Thank you. I am pleased to hear it.
Mr Chesworth —Could I respond to a question that Senator Abetz asked to be put on notice? The former ASCC board resigned on 5 September.
CHAIR —That concludes that outcome and indeed the innovation, industry, science and research portfolio. Thank you, Minister, Mr Paterson and officers of the department.