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Australian Customs Service

CHAIR —Welcome. Would you like to begin with an opening statement?

Mr Carmody —Not so much an opening statement but, seeing this is an estimates hearing, I do need to correct a figure in our table in the budget related paper 1.2—Attorney-General’s portfolio. On page 112 there is a table, ‘2.1 continued’. Unfortunately, the average staffing level numbers that are recorded there are inaccurate. So I want to take the opportunity to correct those now, as it is probably relevant to your hearings. The estimated average FTE for 2007-08 is about 5,864, rather than 5,525. Our estimate for the coming year, 2008-09, is an average FTE of roughly the same number, around 5,875. Firstly, I apologise—we got it wrong—but I want to correct those figures. Secondly, a couple of points: they do reflect average FTE for a year and they reflect a period of growth in FTE over 2007-08 and a period of some decline in FTE over 2008-09. I wanted to correct those figures for the committee.

CHAIR —I can report in opening that I was in Nhulumbuy on the north-east Arnhem Peninsula last Thursday and your new Customs building on the peninsula looks like it is on schedule. It is in the middle of being built. I imagine there will be a fight to see who is going to staff it. It is two storeys and it looks out over the Wessel Islands.

Mr Carmody —That is very important—what an outlook!

CHAIR —Four people behind you have put their hand up to go there already! Do we have some questions?

Senator MARSHALL —Flicking through some yachting-cruising magazines recently I saw some letters to the editors that are rather scathing about Customs. I have a couple of questions about your complaints process.

Mr Carmody —Someone will be able to handle them for you.

Senator MARSHALL —In terms of overseas cruising and Australian based yachting, what level of complaints do you get?

Mr Carmody —I do not know that we have any details, but I do not believe they are that significant. Possibly the background to some of those complaints was a prosecution that was done of people who did not report within the time frames.

Senator MARSHALL —I want to take you to that specific matter.

Mr Carmody —I think that was what was generating it, but I am not aware that we have received a large number—not at all, apparently.

Senator MARSHALL —Could you take that on notice and give me a list of how many complaints there have been and whether they are all on that issue or whether there are some other issues. Some of the complaints go to some heavy-handed nature of Customs officials, but I will not go to the detail of each complaint at this point. But you are right: many of them are around the issue of reporting within 96 hours of arrival. Can you explain to me how that works in practice. To predict your entrance at an Australian port 96 hours in advance when you are relying on the weather seems a rather difficult ask to me.

Mr Carmody —We will get an expert to help.

Senator HEFFERNAN —It sounds easier than tax.

Mr Carmody —Calculating 96 hours is not all that taxing, Senator.

Ms Kelley —While the legislation requires that the report must be lodged no earlier than 10 days before a vessel’s intended time of arrival, this provision is administratively waived in relation to yachts and other small craft in recognition of possible limitations in their communication options and also the length of their journeys. That takes account of some difficulties they may have.

Senator MARSHALL —Again, some of the articles refer to prosecutions by Customs for breach of this provision. How many yachts or masters of yachts have been fined or prosecuted for failing to comply?

Ms Kelley —I do not have that figure with me. We can take that on notice.

Mr Carmody —I do think a lot of this is generated by the particular case. I do not have it on me. It would be instructive to read the court’s comments on this, because I think it is fair to say they are rather scathing of the particular gentleman’s approach.

Senator MARSHALL —Okay. That is all I have. I would like the answers to those questions on notice.

Mr Carmody —We do have a number of prosecutions.

Ms Grant —Since the introduction of the new pre-arrival reporting regime in October 2005, which required 96 hours prior to arrival, we have had seven prosecutions of individuals who have failed to comply with the requirements and one prosecution of a company that failed to comply with the requirements.

Senator MARSHALL —I will leave the complaints breakdown there. We will have a look at that and maybe ask a couple more questions next time around. Finally, are Customs officers required to wear identification when they are boarding vessels?

Ms Grant —Customs officers are not required to wear a Maritime Security Identification Card when they are working in the port environment because they are law enforcement officers under the relevant legislation. Customs officers will wear the identification pertaining to the Customs uniform. The uniform requires wearing of a name badge or a number badge.

Senator MARSHALL —Are there set protocols for the boarding of yachts?

Ms Grant —There is certainly a small craft boarding guide that our officers apply when they are boarding craft.

Senator MARSHALL —Is that a public document?

Ms Grant —A public version of that document was made available to this committee some years ago, so we could provide that version of the document again. That document deletes some operationally sensitive risk assessment information.

Senator MARSHALL —My final question is: under what circumstances would Customs officers board an Australian registered vessel in Australian waters?

Ms Grant —The Customs Act allows us to board an Australian registered vessel in Australian waters if we believe that there has been a contravention of some Commonwealth legislation that we administer.

Senator MARSHALL —So there does in fact have to be just cause for the boarding of an Australian vessel?

Ms Grant —We can request to board a vessel to ascertain the circumstances of that vessel and what that vessel is doing. In Australian waters we can board an Australian registered vessel at any time, but of course we would be boarding to ascertain the journey of the vessel, what the vessel is intending to do in those waters and if any contravention of legislation is taking place. We would not board a vessel for no apparent reason.

Senator MARSHALL —Thank you. That is all the questions I have. I may have some more questions in November.

Senator HEFFERNAN —How are you, Mr Carmody? You look pretty cheerful these days!

Mr Carmody —I am very good, thank you.

Senator HEFFERNAN —I am chairing, believe it or not, an inquiry into fertiliser. To assist that inquiry, I want to ask you: what records do you keep of port movements—in this particular case, for Townsville? Do you keep invoices and accurate records of the fertiliser that comes through the port and its destination?

CHAIR —Shouldn’t you be raising these matters in your inquiry?

Senator HEFFERNAN —These blokes should have this information.

CHAIR —I know that, but is this the right place for doing this?

Senator HEFFERNAN —Yes, it is, because then we will have it for the inquiry.

Mr Carmody —We certainly have a combination of vessel reporting requirements and cargo reporting requirements. But I do not know what specific details we could provide to the committee.

Senator HEFFERNAN —I have the shipping records from the port, and there is some definition of ‘destination’, but we have heard various assertions and allegations in our inquiry. Do you keep accurate records on whether a shipload of fertiliser from Townsville is going to Melbourne, Burnie, Bullamakanka, Taiwan or somewhere?

Ms Grant —We keep records of international arrivals in Australia. If an international vessel is arriving here, we have 96 hours advance notice of a ship’s expected arrival time. We have a report of the ship’s crew, the passengers on board the vessel and the cargoes on board the vessel.

Senator HEFFERNAN —That is inbound, but what about outbound?

Ms Grant —We have a record of the departure of the vessels as they leave ports and move to another port or leave their final port in Australia. If they are exporting goods from Australia an export entry would be lodged, so we have a record of export cargo.

Senator HEFFERNAN —By way of routine, in the case of fertiliser, do you sample it to see what it is? Does anyone bother to see whether it is actually fertiliser?

Mr Carmody —Not by way of routine, but we would make interventions on a risk basis.

Senator HEFFERNAN —Would you be able to provide to this committee, to assist the other committee, a breakdown of where the 492,674 tonnes of fertiliser that went through Townsville in 2004-05 actually went?

Mr Carmody —If you provide us with the questions, we will provide what we can. As Marion has indicated, we get reports on exports and imports.

Senator HEFFERNAN —If I am a ship’s captain and I load my ship in Townsville and say that I am going to, say, Suva, is there any way the ordinary Australian citizen can tell that the ship actually went to Suva and did not go to Brazil?

Mr Carmody —Short of getting intelligence reports, we do not track vessels once they leave Australia to go overseas. In the normal course of events, we would not have that information.

Senator HEFFERNAN —If the ship left Townsville, went to the port of Melbourne, paid demurrage and then left for overseas somewhere, would you know about it?

Ms Grant —Yes. In fact I should clarify my previous response. If the vessel was on a domestic voyage from, say, Townsville to Melbourne and had been on a domestic voyage, we may not know about that one. But when voyages commence overseas and arrive in Australia, we know movements of those vessels from port to port within Australia, and then we know when they leave Australia to an overseas destination.

Senator HEFFERNAN —So you would have a definite record of a ship that loaded in Townsville and then went to Melbourne. You would have a record that it went down to Melbourne and did not go to Fiji?

Ms Grant —If it was on an international voyage we would have that record.

Senator HEFFERNAN —If it was just supplying fertiliser—

Mr Carmody —If it was an Australian vessel doing coastal trade—that is, not international—we do not have records of that.

Senator HEFFERNAN —At the port in Townsville, though, does the ship have to fill out a log saying, ‘We are going to Melbourne’?

Mr Carmody —I think what we have been attempting to explain is that we are talking about international exporting, importing and associated links in Australia. But, if it is purely domestic plied trade, we do not get records of that.

Senator HEFFERNAN —So if there were an instance where a ship allegedly was exporting—going to an overseas destination—but instead went to the port of Melbourne and stood off in the port of Melbourne for a month, for instance, and paid demurrage, you would not know about it?

Mr Carmody —I think if it is alleged to be an export they are due to report to us.

Ms Grant —Yes. If it were to export, we should have—

Senator HEFFERNAN —In other words, if they were playing silly buggers, which is one of the allegations that have been made to our committee—

Mr Carmody —We are talking in generalities. If you do have specific details of vessels and craft, if you provide them to us we will provide what information we can on notice.

Senator HEFFERNAN —I have here a document showing a record of shipping for three years out of Townsville and the ships recorded. Would you be able to provide the alleged destination for those ships?

Ms Grant —If those ships departed from Australia, we would be able to extract the information about their next port on departure from Australia.

Senator HEFFERNAN —That will do me. Thank you very much. I might take that bit of paper back and do some paperwork up and send you a request—

CHAIR —Senator Heffernan, I was just about to draw your attention to the fact that I think we may well be right in our first assessment about your questioning, and you may well be—

Senator HEFFERNAN —Out of order.

CHAIR —You may well be out of order.

Senator HEFFERNAN —That does not surprise me. I am always out of order.

CHAIR —Let me just tell you for future purposes: standing order 25(14) says:

A committee shall take care not to inquire into any matters which are being examined by a select committee of the Senate appointed to inquire into such matters and any question arising in this connection may be referred to the Senate for determination.

Senator HEFFERNAN —To overcome that, we could call these people to the select committee.

CHAIR —That is correct, and you would need to ask your questions in that forum.

Senator HEFFERNAN —That will do, thanks.

CHAIR —Thank you, Senator Heffernan. I had a feeling my first reaction was close.

Senator SIEWERT —I have some questions on whales and some on bees and honey. I will do the bees first. I understand that earlier in the year there was a result in the long-running court case on the import of honey—120 cases of it—that stretched from 2000 to 2002. That was concluded and, in fact, it was won.

Ms Grant —That is correct.

Senator SIEWERT —Could you tell me who was found guilty and what penalty was applied?

Ms Grant —I will need to take that on notice; I do not have those details with me.

Senator SIEWERT —That would be appreciated. Could you also tell me if costs were awarded against those who were found guilty.

Ms Grant —We will include that with the answer on notice.

Senator SIEWERT —You do not know.

Ms Grant —Unfortunately, I did not bring any details of that particular case to the hearing this evening.

Senator SIEWERT —You may not be able to help me with my other questions then, but I will ask them and it would be appreciated if could take them on notice. Did the government fully recover their legal costs?

Ms Grant —I will take that on notice.

Senator ABETZ —I appreciate that. Could you also tell me whether Customs believes that the penalty applied was adequate to cover the seriousness of the offence? It was a pretty serious case in terms of the threat posed by importing that honey and then exporting it. The honey was moved from China via Australia to the US to circumvent the US antidumping laws. Does Customs consider that the penalty was significant enough to actually discourage people from doing it again, considering the seriousness of the offence? Has Customs made any recommendations of any review of penalties for infringing customs and our quarantine rules?

Ms Grant —I can answer the last question to say that we have not made any recommendations about a review of the penalties, but I will need to answer the rest on notice.

Senator SIEWERT —Thank you. Turning to whales, I understand that $8.4 million has been provided over four years to continue intelligence support in Australia’s response and law enforcement operations in the Southern Ocean. I would like to know if part of this is being used to support monitoring of activities of the Japanese whaling fleet.

Mr Carmody —I am not sure of the figures, but we certainly have ongoing operations in the Southern Ocean. There were the particular activities of the Oceanic Viking undertaken earlier this year. I am not aware of any particular decisions on future operations of that nature.

Senator SIEWERT —I interpret that to mean that the government will be making a decision down the track.

Mr Carmody —I imagine the government will make those decisions, but I am not conscious at the moment of particular decisions having been taken.

Senator SIEWERT —Therefore, would the $8.4 million be enough to cover that or would you need to have an additional allocation?

Mr Carmody —That would depend on the nature of the activities and the location of our vessels at the time. On the occasion that this was undertaken, we reported in the last Senate estimates an additional allocation of, I think, $1.3 million for that particular operation.

Senator SIEWERT —I need to do a bit of quick maths—I do not have that particular line item in front of me. How much in the past have you received for monitoring and surveillance for the Southern Ocean?

Ms Grant —Senator, I just want to clarify that your $8.4 million figure is a whole-of-government figure rather than just an Australian Customs Service figure—that is the basis you are working from.

Senator SIEWERT —Okay.

Mr Carmody —That funding is actually a continuation of funding that I believe lapsed as of June this year, so that was funding to maintain the intelligence effort in the Southern Ocean. The original funding was more around the illegal foreign fishing in the zone rather than associated with whaling.

Senator SIEWERT —I appreciate that, and that is why the additional $1.3 million—as Mr Carmody just said—was allocated last year. Is it a safe assumption that, to carry out further surveillance on the whaling fleet this summer, there will need to be an additional allocation beyond what has already been allocated?

Ms Grant —Yes. Customs has no funding beyond that $1.3 million, which was specifically for the surveillance monitoring activity.

Senator SIEWERT —So that has not been factored into this budget?

Mr Carmody —No. We do undertake missions to the Southern Ocean, so the extent of and any requirement for additional funding will depend on the actual operational positioning of the vessel at the time and what is available. So it is really on a case-by-case basis given the operational circumstances.

Senator SIEWERT —So you are saying that there could happen to be a ship down there next time that could then be put on to surveillance work.

Mr Carmody —There may be some additional costs. I am just saying this will need to be determined on each occasion.

Senator SIEWERT —Thanks. How much time would Customs need to send a properly equipped vessel to monitor the Japanese whaling fleet if a decision were made to do that?

Mr Carmody —Again, it depends on the timing and whether or not the vessel is already provisioned for a voyage.

0Senator Abetz interjecting

Mr Carmody —I think that is right—the present chartering arrangement goes through to 2010.

Senator SIEWERT —What would be the minimum time?

Ms Grant —It is quite difficult to give you minimum times because it depends, as the chief executive officer has said, on where the vessel is located, on whether it is provisioned, on whether we have the crew available and on what the turnaround time to get the right combination of qualified crew is. P&O provide the vessel and the crew to drive the vessel and Customs provide the boarding parties, and we have an Antarctic Division doctor on board. So there are a number of factors that all need to come together to get the vessel safely away. We have a planning program so we know when to give crew their accrued days off from having done a patrol in the Southern Ocean. You would appreciate that it is arduous work in the Southern Ocean; they accrue days off for the days they have been down there, so a different crew needs to be available to go if there is to be a back-to-back turnaround of a vessel. So it is quite hard to tell you precisely how many days it takes to get all of the factors lined up.

Senator SIEWERT —Thank you.

Mr Carmody —For the sake of accuracy: I was just looking at the last committee hearing, and the cost was $1.271 million.

Senator SIEWERT —Which rounds up to $1.3 million!

Mr Carmody —Yes—around about $1.3 million. I like to be accurate!

Senator SIEWERT —Thank you. At the moment, sending a vessel to the Southern Ocean to monitor any whaling activity next summer has not been put into your planning process. Would that be a fair assumption to make?

Ms Grant —That is correct.

Senator SIEWERT —Thank you. I suppose it is safe to assume it could cost around the same amount?

Ms Grant —The costs this year were calculated on what it would cost us additional to a normal mission to the Southern Ocean—that is, to extend the mission to undertake the whaling monitoring. It would presumably cost in a similar order: the money that we would already have in our budget for the mission plus any additional costs and fuel costs arising. So I would expect the overall cost to be higher in the future than in the mission we have just undertaken.

Senator SIEWERT —Higher because of fuel and other costs?

Ms Grant —Input costs going up.

Senator SIEWERT —I may need to ask somebody else this question but I will ask you in case you are the right person to ask. Have you made any response to the claims on the website of the Japanese Institute of Cetacean Research that the Oceanic Viking impeded their research and endangered their vessels?

Mr Carmody —Yes, we have responded to that and made it clear we do not accept that accusation.

Senator SIEWERT —Is that a publicly available response?

Mr Carmody —I am not sure that it was made public but I can assure you that we emphatically denied those suggestions.

Senator SIEWERT —Is it possible to get a copy of that?

Mr Carmody —We would have to see. If it is possible, we will make it available to you.

Senator SIEWERT —Thank you. That is appreciated. Can you provide detail on whether the evidence that the department gathered during the Oceanic Viking’s trip has been shared with other countries? If so, on what basis has it been shared?

Mr Carmody —Ours was the gathering of evidence issue and we have done that. I cannot help you with what use that has been put to.

Senator SIEWERT —You have collected it, handed it over and I have to ask A-G’s.

Mr Carmody —Yes, that was our responsibility on behalf of—

Senator SIEWERT —Thank you very much.

Senator ABETZ —I have a few questions following on from what Senator Siewert was asking about. Has the government made any plans, or is it considering any plans, to extend the Oceanic Viking’s contract? It will expire in about two years.

Mr Carmody —We have been reviewing the capabilities we require in that time frame, because between 2010 and perhaps 2012 our Bay class patrol vessels will also be reaching their end of life. We have been doing an analysis of future capability requirements for our patrolling activities. That is being prepared for submission to government.

Senator ABETZ —What about the ACV Triton?

Mr Carmody —You know that that was extended, I think, at the start of this year. What we are doing is sort of stepping back from the particular vessels we have now, looking to the 2010-on environment and saying: what are the capabilities of the vessels you need for that? Once we have got government agreement to the capabilities, then we will turn to the specific vessels that we need.

Senator ABETZ —So the Triton was seen as being worth while, but you are still deciding on the Oceanic Viking. Is that a fair summary?

Mr Carmody —Certainly we believe that we need at least a vessel for the southern patrols. As I say, we are looking at the capabilities of 2010 onwards and we will put to government the best solution in terms of vessels to meet those requirements.

Senator ABETZ —Can I take you to the whale watch episode. Last time we were told $1.3 million was the cost of that.

Mr Carmody —No, it was 271.

Senator ABETZ —Or $1.271 million. If I recall the Senate estimates correctly, she had not returned to port at that time.

Mr Carmody —That would be correct.

Ms Grant —Yes.

Senator ABETZ —I am wondering whether that figure should in any way be updated, given the fact that she had not completed her voyage by the stage of the last estimates.

Mr Carmody —An analysis has been done post the event because the estimate was put in beforehand. I will correct this if I am reading incorrectly, but we believe the total additional cost was $1.47 million.

Senator ABETZ —So it went up about another $200,000?

Mr Carmody —Yes.

Senator ABETZ —So it is now—

Mr Carmody —Sorry. Excuse me, Senator.

Senator ABETZ —You are not going to tell me it was less, surely? So what is the increase?

Mr Carmody —No, but we are just looking at the breakdown and the additional cost seems to be mainly relating to the aircraft surveillance aspects.

Senator ABETZ —Which was part of the whale watch exercise.

Mr Carmody —Yes, but not the Oceanic Viking costings.

Senator ABETZ —All right. So what was the total Oceanic Viking cost for the whale watch exercise?

Mr Carmody —Well, we might have the additional costs with us. According to this spreadsheet, if we are reading it correctly—Marion is putting on her glasses to help me out—the additional patrol cost for the Oceanic Viking looks like being $1.291703 million.

Senator ABETZ —And how many cents?

Mr Carmody —Thirty-two, according to the spreadsheet. We are very precise! We have got a table here which includes a number of minor details—

Senator ABETZ —We are now a lot closer to $1.3 million than we were before.

Mr Carmody —Yes, and we are looking at what are termed ‘surveillance costs’ and they look like they are more surveillance from the Oceanic Viking. I will give you this figure, and we will correct it if it is wrong, but it does look like it is $1.474 million.

Senator ABETZ —So, in round figures, $1.5 million would be a fair estimate?

Mr Carmody —On the basis that I rounded up 1.27 to 1.3, I guess that is permissible.

Senator ABETZ —Last time around I do not think I was aware—and nobody volunteered the information—that there was an extra surveillance cost. So are we talking about aerial surveillance here?

Mr Carmody —No. That was our misreading. What it has to do with is surveillance from the vessel. We had our crews out with cameras and all those sorts of issues. It is surveillance associated with the vessel.

Senator ABETZ —Right, so the whale watch exercise was $1.474 million and there is no aerial surveillance associated with that?

Ms Grant —No, there is no aerial surveillance associated with that. That is the cost of extending the Oceanic Viking’s normal 40-day patrol to a 53-day patrol, and then these specific additional costs that we have called the ‘additional costs for surveillance’.

Senator ABETZ —You have called the additional costs the ‘additional costs’—fair enough.

Mr Carmody —For surveillance.

Ms Grant —For surveillance from the water. The largest component of that additional cost is $60,000 for floodlighting ice operations—so we could get the footage.

Senator ABETZ —For something which will now never appear in court, but that might be a bracket of questions later on. Can we have a copy of the exact route that the Oceanic Viking took from port, whilst she was whale watching and coming back? You might have to take that on notice.

Mr Carmody —We will certainly have to take that on notice, and I will have to take on notice whether we can appropriately provide it. Normally we do not provide operational issues but seeing as it is already—

Senator ABETZ —But this was a one-off.

Mr Carmody —As I said, seeing as this has already been conducted we will review what we can provide to you.

Senator ABETZ —It was a one-off and it is very doubtful that it would be repeated, given the government has now acknowledged that the legal advice we had for 11½ years is the same legal advice that they are going to be mugged with, but we will deal with that at a later stage. Can I ask, in relation to the Oceanic Viking’s involvement with people from the Sea Shepherd, what extra costs, if any, were incurred in getting people off one of the Japanese whaling ships and onto the Oceanic Viking?

Mr Carmody —I do not think we would be able to provide you the specific costs of that occurring. They were included in the total cost. That was conducted as part of the general mission, so we did not—

Senator ABETZ —It was an unexpected part, I would trust.

Mr Carmody —We did not expect when we took on the mission that we would be doing that. That is correct.

Senator ABETZ —What is Customs’s knowledge about the potential for legal action being taken against the Sea Shepherd activists?

Mr Carmody —I am not sure that I can help you with that. I am not in that position.

Senator ABETZ —Given the close proximity of the Oceanic Viking—and witnessing some of these events—did we not potentially place Customs officers and other people on the Oceanic Viking in the invidious position of potentially having to give evidence against Australian citizens in an international court?

Mr Carmody —We have not had any suggestion that that would occur. We have had no approaches on that.

Senator ABETZ —When activists or other people behave in ways that may be against international law and we then send in our equipment to assist those that are allegedly breaking the law, does the government have a policy position on that, Minister? It seems an invidious position to place officials in.

Senator Ludwig —I can seek some advice from the Minister for Home Affairs to see whether or not he had any comment in respect of that. The position you are putting is supposition—it did not happen, as we well know—but I am certain that I can ask him to make a comment on it and provide it to the committee in due course.

Senator ABETZ —Are you suggesting that the uninvited boarding of a vessel on the high seas in the manner undertaken by the Sea Shepherd activists could in any way be seen as within the law?

Senator Ludwig —What I said was I would take it on notice and ask the relevant minister if he wanted to provide any information on it. I am not going to comment on what the law is or is not in respect of the high sea; it is not my area of expertise. If you want me to seek some advice on that, I will.

Senator ABETZ —Yes, I would indeed. Spraying or lobbing on another vessel certain substances which can debilitate the seamen on a ship, I would have thought, is prima facie an illegal activity on the high seas—even not on the high seas. There was, I would have thought, the real potential for this, and I am interested in knowing what the circumstances would be if charges were to have been brought. Are the surveillance flights in the northern seas being maintained in our fight against illegal fishing up in the northern waters?

Mr Carmody —Certainly surveillance flights are continuing, yes.

Senator ABETZ —But are they being maintained at the level they used to be? What was that level as in number of hours per month?

Mr Carmody —Rather than hours, we tend to talk about square nautical mile coverage of surveillance flights. I am hesitating because we now have new arrangements with our providers. We now have an all Dash 8 fleet and sophisticated new surveillance technology on that, and we can now more accurately determine the actual surveillance. If we do them on the same measurement as was done prior to that, then certainly it has been well maintained.

Senator ABETZ —What you are saying is we now have aircraft undertaking the surveillance that can do the same job quicker?

Mr Carmody —We can more accurately measure the areas that they have been surveilling. We report in here what we project for the coming period, and if you look over the previous estimates they will suggest a lower square nautical mile coverage. The point is: the reason that appears lower is that we now can more accurately measure the surveillance than we could under the previous arrangements. To try to get a comparable measure, I had asked our people to calculate the current surveillance under the old measure. Are you still with me?

Senator ABETZ —I am not sure I am, but keep going.

Mr Carmody —Under the old measure we are at least maintaining the square nautical mile coverage.

Senator ABETZ —Maintaining the square nautical mile coverage on a daily basis, on a weekly basis, on a monthly basis? How regularly are we undertaking surveillance in the square nautical mile area that you are talking about?

Mr Carmody —There are daily surveillance flights, and the particular areas that they fly in are determined. I think Admiral Goldrick explained to this committee how they go through a rating process to determine the particular areas that should be subject to surveillance, based on risk analysis—and that surveillance is undertaken daily.

Senator ABETZ —I am sorry if I am a bit obtuse, but I do not necessarily get from the answers provided, and I am not saying that you are deliberately avoiding the question—

Mr Carmody —I am not.

Senator ABETZ —Thank you. I just want to get a proper handle on this. In the past we used to measure it by the hours of surveillance flights. Is that generally correct?

Mr Carmody —That was a measure we used, but we have adopted for a while now the more pertinent measure, which is the square nautical mile—

Senator ABETZ —You say that is the more pertinent measure. Since when?

Mr Carmody —I think we have reported it for some time. We used to report both, and I would say in the last 12 months or so we have moved towards reporting the square nautical miles. The reason is quite simple. A surveillance area might be some distance from where the plane takes off. So the actual flying time to that area of surveillance does not help with your understanding of how much surveillance we are doing. That is why we have moved to the square nautical mile surveillance as the measure.

Senator ABETZ —Albeit, I understand, when these things started off, we had illegal fishing vessels actually on our shores on occasion—I think in one year there were 30 of them confirmed—and therefore the surveillance flights, as I understood, were undertaking surveillance as soon as they crossed the post line. I accept that they are now no longer penetrating as deep and therefore it makes sense that we fly out further. But what I am trying to get a proper handle on is the square nautical miles that have been surveiled. Is that the word, as opposed to ‘surveyed’?

Mr Carmody —It sounds good. We are not surveying but we are surveilling.

Senator ABETZ —Is that commensurate or similar to that which used to be surveilled in the past?

Mr Marshall —I might just go back for a moment to why we stopped reporting hours and missions and started concentrating on square nautical miles. In the previous fleet of aircraft, we had four different types of aircraft, including helicopters. So, if you just compared hours of a helicopter against hours of a very high-performance Dash 8, you were not getting a meaningful performance measure at all. So we looked at all of our aircraft types and we worked out how many square nautical miles the particular ones could cover. In a particular year we said, ‘From now on, we will concentrate on the area covered rather than the hours flown or the missions covered.’ So we have used square nautical miles for the last couple of years.

In terms of coverage, in 2004-05, when the foreign fishing problem was particularly severe, in the high threat areas in the north we flew some 99 million square nautical miles. As our compliance effort that was initiated at that time started to evolve we wanted to make sure that we were not just reporting less vessels but also covering more square nautical miles at the time so that it was a meaningful figure. So we purposely stepped up our surveillance as the sightings went down. The next financial year we moved from 99 million square nautical miles up to 109 million square nautical miles. In the next financial year, when we were actually getting very few sightings at all, we went right up to 119 million square nautical miles.

Senator ABETZ —What was the 2005-06 figure?

Mr Marshall —The figure for 2004-05 was 99 million square nautical miles and the figure for 2005-06 was about 109 to 110 million square nautical miles.

Senator ABETZ —Oh, 109. I had 190—sorry, my mistake.

Mr Marshall —Then we went up to 119 million square nautical miles. Then for the reasons that Mr Carmody just said—that is, that we have changed the way we calculate square nautical miles—

Senator ABETZ —Wait a minute! How do we change the way we calculate square nautical miles? I would have thought that would be standard.

Mr Carmody —That is probably not a completely accurate statement. As I unexplained before, our surveillance equipment now enables—

Senator ABETZ —I think you are testing to see if I was still awake—and I am!

Mr Marshall —Notwithstanding that, it does not make operational sense to keep flying more and more square nautical miles each year when we are seeing fewer and fewer illegal fishing vessels. It is not a proof of anything operational to just keep flying more square nautical miles. Now that we have got the fishing problem pretty well off our shores, it is time to think about where the most appropriate place is to fly, and it does not make sense to fly more and more square nautical miles in the north. We are considering where the threats are and what we will do in that respect.

Senator ABETZ —All these flights were not only for illegal fishing; they were also for illegal immigration, border protection et cetera. You are now saying that that has been scaled down. How many square nautical miles has it been scaled down to now? We were up to 119.

Mr Marshall —As we are only up to April, I cannot give you a comparative figure. If we keep going—

Senator ABETZ —You must have figures to date.

Mr Marshall —The figures to date till April 2008 are 89 million square nautical miles.

Mr Carmody —We have refined our method of measurement of the square nautical mile coverage because we have more accurate surveillance and technology on the new fleet. The figures that are being quoted there—the 88 to 89 million square nautical miles—have, from 1 January at least, been calculated on a refined basis. The refined basis is proving more accurate and, as such, is showing a lower square nautical mile coverage for that particular period because it is a more refined measurement. We used a formula for the previous calculation of how many square nautical miles were covered. So there is a combination of factors going on here.

Senator ABETZ —Are you able to advise us of the number of sightings of illegal fishing vessels in the period up to April 2008?

Mr Carmody —Yes. We have a total number of 638 sightings which, compared to 2004-05, is a 91 per cent reduction. Compared to 2005-06, it is a 91 per cent reduction and compared to 2006-07—where we had already started to see reductions—even over that, it is an 81 per cent reduction in sightings.

Senator ABETZ —How many apprehensions were there out of those 638 sightings?

Mr Carmody —We do have to be careful about sightings because they can be the same vessel.

Senator ABETZ —Multiple. Yes, that is understood.

Mr Carmody —We had 154 apprehensions.

Senator ABETZ —How many legislative forfeitures?

Mr Carmody —We do not do too many legislative forfeitures.

Senator ABETZ —They are mainly with the banana boats, as I understand it, from Papua New Guinea.

Mr Marshall —That is right. I would say there would be less than a dozen. We will get the number for you. But, as you say, they are banana boats in the Torres Strait.

Senator ABETZ —Can you confirm that, other than banana boats in the Torres Strait, there were no legislative forfeitures?

Mr Marshall —We will check that.

Senator ABETZ —If you take that on notice, that is fine. I do not need the exact answer on that. Out of the 638 sightings, are you able to tell us how many banana boats are included in that figure?

Mr Marshall —That figure excludes banana boats.

Mr Carmody —That is actually type 3 and type 4.

Senator ABETZ —Banana boats were an emerging problem, as I left the ministry. However, it has been six long months since. What is the situation with the banana boats in the Torres Strait? Are we getting on top of it or is that something I should be asking AFMA about tomorrow?

Mr Marshall —Certainly, the number of sightings are decreasing, but it is an ongoing issue for us and for AFMA.

Senator ABETZ —What are our protocols with Papua New Guinea in relation to returning these banana boats and repatriating the crews? As I understand it, we do not prosecute them; we expect the Papua New Guinean authorities to do that.  Or should that be asked of AFMA?

Mr Marshall —It is probably better asked of AFMA, but I can tell—

Senator ABETZ —Because they would do the prosecutions rather than Customs?

Mr Marshall —Yes, AFMA is in charge of all Fisheries prosecutions.

Mr Carmody —Senator, I have a figure here for legislative forfeitures of 11, up to April 2008.

Senator ABETZ —Can you confirm whether they are all banana boats?

Mr Carmody —I cannot confirm that.

Senator ABETZ —Could you take that on notice. I must say that 154 apprehensions out of 638 is a pretty good percentage.

Mr Carmody —I would not like to leave any impression that we are diminishing our surveillance efforts. As I said, it is well known that there are issues with pirates. It is an industry-wide issue. We are seeking to at least maintain that surveillance. Our answer has been complicated by the change in the accuracy of the figures, but I would not like there to be any suggestion that we are decreasing our surveillance effort.

Senator ABETZ —In anybody’s language, what does 154 out of 638 relate to? Is somebody good at maths? About 20 per cent, is it? Is that about right?

Mr Carmody —It is not far off.

Senator ABETZ —Our advice used to be: if you got 10 per cent it made it uneconomic. So at 20 per cent, we are still sending a very loud message.

Mr Marshall —In 2004-05, at the same time, there were 183 apprehensions against 7,145 sightings so the situation has improved considerably.

Mr Carmody —I want to assure you, Senator, that since you left the ministry that we maintain this presence as a high priority. We are certainly very conscious that, while very significant inroads have been made, if we are seen to back away as a result then there is a high risk of a return of the problems that we had in the past. So we are very conscious of maintaining a deterrent presence and surveillance.

Senator ABETZ —That is reassuring to hear. Thank you very much. Mr Burke seems to be building on the excellent work that Senator Macdonald started, which I was then able to continue with, in getting rid of this scourge.

Senator IAN MACDONALD —My first question is to the minister. I read from a transcript of Mr Rudd, dated 2 May, where he said, ‘Labor’s policy is to have a coastguard on patrol 24 hours a day, seven days a week. The Howard government simply nods and genuflects at the problem and, frankly, does very little about it. We think practical action needs to be taken and that a coastguard is the best way of doing this.’ Where are we going with the coastguard, Minister?

Senator Ludwig —Is that 2 May this year or last year?

Senator IAN MACDONALD —2006.

Senator Ludwig —The current information that I can provide you with is that there is a review of the homeland and border security arrangements and that is with PM&C. So you can seek information on that review from that committee. It will report, as I understand it, by the middle of the year.

Senator IAN MACDONALD —But there was an election commitment to have a coastguard for Australia.

Senator Ludwig —What I have said is that there is currently a review of the homeland and border security arrangements with a view to making recommendations about how best to progress the issue of a coastguard.

Senator IAN MACDONALD —The election commitment was not about having a review; it was about having a coastguard. So I am wondering what your government is doing about your election commitment to a coastguard.

Senator Ludwig —It will encompass that. That is what I have said.

Senator IAN MACDONALD —So when would we expect to see the coastguard formed?

Senator Ludwig —As I have said, the report will be provided by the middle of the year, and that will inform us as to the direction the government will take.

Senator IAN MACDONALD —But we will have a coastguard, I take it?

Senator Ludwig —That review will inform us of the direction we will have to take.

Senator IAN MACDONALD —But it was an election promise to have a coastguard. You and your predecessors on your side of the fence spent years promoting a coastguard, so I assume that you have all the plans in place. I am surprised it has not been announced in this year’s budget.

Senator Ludwig —You will have to wait until the middle of the year for the report that I have mentioned to be dealt with.

Senator IAN MACDONALD —So we can expect a coastguard to be announced?

Senator Ludwig —I do not know what will be in the report. But I am certain that, like me, you would agree that the best possible homeland protection and border security arrangements should be achieved—within available resources, of course.

Senator IAN MACDONALD —Who is the minister responsible for Customs?

Senator Ludwig —Minister Debus.

Senator IAN MACDONALD —What is his title?

Senator Ludwig —Minister for Home Affairs.

Senator IAN MACDONALD —Is there a Department of Home Affairs?

Senator Ludwig —There is a Minister for Home Affairs.

Senator IAN MACDONALD —But there is no department?

Senator Ludwig —That is the department. It falls within the portfolio of the Attorney-General.

Mr Cornall —The Minister for Justice and Customs has been replaced by the Minister for Home Affairs, which has slightly different duties, including responsibility for external territories.

Senator IAN MACDONALD —And it also has responsibility for Customs?

Senator Ludwig —That is right—that is under the administrative orders.

Senator BARNETT —There is no separate department?

Mr Cornall —No. It is the same as before. The Minister for Home Affairs is the non-cabinet minister in this portfolio.

Senator IAN MACDONALD —How did Customs fare in the budget? Did you get an increase in your operating expenses?

Mr Carmody —The total of resources provided to us is $1.303 million.

Senator IAN MACDONALD —It is up from $1.295 million.

Mr Carmody —That is correct.

Senator IAN MACDONALD —I notice that the forward estimates show you dropping back next year to $1.291 million.

Mr Carmody —There is a combination of programs that will be ceasing. The programs change according to decisions each budget.

Senator IAN MACDONALD —At the last estimates we spoke about the impact of the efficiency dividend. You kindly provided answers to questions on notice about a series of contracts to which Customs was committed, which meant that you could not seek any efficiency dividends from those. From recollection, it was a fairly substantial sum. Is the efficiency dividend tied up in those figures that we have just spoken about?

Mr Carmody —Yes, that would include the impact of the efficiency dividend.

Senator IAN MACDONALD —We have all heard ad infinitum about the huge galloping inflation we had prior to the budget of anywhere from three per cent to upwards of four per cent. If you factor that into your forward estimates, they are looking pretty grim for you. You are going to have to make savings somewhere.

Mr Carmody —I do not know about ‘pretty grim’. We do get a price adjustment of 2.5 per cent.

Senator IAN MACDONALD —So it is the amount of the efficiency dividend? That is my commentary, not your commentary.

Mr Carmody —That is your commentary. We get a price adjustment of 2.5 per cent and that would be included, I assume, in those figures. Your budget figures are affected by programs—that is, whether they are continued, whether there are new programs, whether a program is ceasing and so on. But, while there has been a fair bit of focus on the two per cent efficiency dividend, we should also remember there has been a longstanding 1.25 per cent efficiency dividend which also is included in that. We are also impacted, like all agencies, by the longstanding rule that any pay rises have to be paid through efficiencies—in other words, you do not get additional funding for them. So all those things affect budgets.

Senator IAN MACDONALD —I do not want you to enter into the political debate, but we have been warned and threatened with galloping inflation. So it does mean that, whatever figures are shown here, you really take four per cent off for the inflation.

Mr Carmody —All I can say is that what we get for price adjustment—and this is determined by the department of finance and—what are they called now?

Senator IAN MACDONALD —They were criticising me for not knowing who your minister was! I am only a part-timer at this.

Mr Carmody —What I was pointing out is that the price adjustment is 2.5 per cent and that is determined by the approach adopted by the Department of Finance and Deregulation. I do not know the intricacies of their basis for calculation.

Senator IAN MACDONALD —I will make the commentary and I will not put that on to you. One thing that very greatly concerns me is that there were savings of $3.3 million in the Department of Defence portfolio under the heading ‘Illegal foreign fishing—intelligence support’, where the Australian Customs Service is shown as dropping $300,000 for the next four years. I appreciate that we do not want to talk too much about what the intelligence support means for illegal fishing, but it does concern me that between yourselves, Defence, ONA and ASIS, there is a cutback in intelligence funding over the next four years. Without being too specific, how will that impact upon the very significant, very essential and very professional work that the intelligence community give to the fight against illegal fishing?

Ms Grant —The reduction that you have detected in the Customs’ figures is funding that has lapsed as at the end of this financial year and that Customs is absorbing in the future years. There was a submission that reflects continuation of funding for some of the partner agencies. Customs has made the decision to maintain the funding of the relevant analyst positions covered by that $300,000, so we are finding that from within our resources. The way the portfolio budget statements operate, it is continuation of an initiative with no new money coming in.

Senator IAN MACDONALD —According to the budget papers, the same applies for the Department of Defence, the ONA, the ASIS and yourselves: you are all going to somehow absorb these funds you have been cut back on for intelligence support for illegal fishing. You are going to absorb it from somewhere else but, on top of the efficiency dividend and the inflation price, you are going to have to cut back somewhere else. You cannot keep doing everything you have always done and absorb these costs that the government has taken from you, absorb inflation and get pretty mean funding in the out years.

Mr Carmody —As Marion explained, it was a lapsing program within our priorities. We saw that the best basis on which to commit our funds was to maintain those analyst positions. This year, for example, we need to look at the totality of our operations and the totality of the risks we face and cut our budget to reflect that. There are a compound number of decisions and risk based analyses that go into the final allocation of funding within our budget.

Senator IAN MACDONALD —You would be aware that some of the great inroads we have made against illegal fishing over the last several years were as a result of excellent work done by intelligence agencies—perhaps a fraction before your time.

Mr Carmody —No, I am fully conscious of those. I cannot speak for the other agencies, but Marion has explained that we are keeping those analyst positions.

Senator IAN MACDONALD —It is all done together. I notice you say it is a lapsing program. Can someone tell me why it has shown as minus $0.3 million over the next four years if it is a lapsing program this year?

Ms Grant —That was an error in the forward estimates. The funding had only been agreed until June 2008 but it had inadvertently been included in our forward estimates. The figures in the statements correct that error.

Senator IAN MACDONALD —Where do I see that explained?

Ms Grant —It is explained by the fact that the minus $300,000 is removed from our forward estimates.

Senator IAN MACDONALD —With due respect to you—and I am sure you are telling me the truth—you are saying me it was an error from previous budgets and yet that is not mentioned anywhere. Instead it says that the government will get savings of $3.3 million from this initiative. How is the government going to get savings if what you are saying is that they were never really allocated anyhow?

Ms Grant —Perhaps our chief financial officer can use the correct terminology to explain this issue.

Mr Ramsden —The $300,000 is included in our forward estimates because until told otherwise we assume that program would be ongoing. Therefore, at the conclusion of the discussions, when no funding was available, we took the funding out of our forward estimates.

Senator IAN MACDONALD —So it was there for the next four years? It was not an error?

Mr Ramsden —It would have been there for the next four years because we would have assumed at that time that it was ongoing.

Senator IAN MACDONALD —So it has been an effective cutback to you, which I have been told you will absorb from other sources.

Mr Ramsden —That is correct.

Senator IAN MACDONALD —Thank you for clarifying that. My colleagues have been through the Oceanic Viking deployment and we have all noted that it is a $1.3million commitment this year with nothing in the out years. The poor old whales are not in danger after this year, I assume.

Mr Carmody —I think that was funding for additional flying hours; it was an additional element to the program.

Ms Grant —That funding was originally provided for the deterrence of unauthorised boat arrivals from Papua New Guinea, as is explained on page 108 of the portfolio budget statement. We had that funding for a limited period of time and we have secured another 12 months worth of that funding, subject to future budget review.

Senator IAN MACDONALD —Is that the 2008-09 figure you are talking about?

Ms Grant —Yes.

Senator IAN MACDONALD —So you are saying you also got it in 2007-08, although that does not show in my set of budget papers.

Ms Grant —I think we originally got the funding for two years, so it would have first appeared in the 2006-07 budget papers.

Senator IAN MACDONALD —But not in the 2007-08 budget papers, according to what I have here. Unfortunately I have a photocopy so I cannot give you the page number, but it is headed ‘Measures delivered on the government’s election commitment’. The commitment, I guess, is that stupid one they put in about responsible financial management, which makes everyone laugh.

Ms Grant —To clarify: the funding, as I said, was provided for two years, so it shows in the 2006-07 portfolio budget statements, but the second year of funding does not particularly get highlighted as a stand-alone item in the second year of the program. Because the funding lapsed at the end of 2007-08, it shows again as new funding provided in 2008-09.

Senator IAN MACDONALD —I do not want to have an argument with you on the way the budget papers are done, but that just is nonsensical. You are saying it was there in 2006-07 and, because it is a continuing program, it is not there in 2007-08—but it has popped up again in 2008-09.

Ms Grant —It was included in the 2006-07 papers and forward estimates for 2007-08.

Senator IAN MACDONALD —So why doesn’t it show here in 2007-08? I do not want to have an argument with you over that, but it seems fairly clear to me that the government has popped $1.1 million in this year without any thought to the future. With respect to you, Ms Grant, that would seem to be the reasonable interpretation of that.

Mr Carmody —I think the funding was provided for a specific period. It will be subject to review, and further continuation of funding will depend on that review. That is a perfectly reasonable way to assess and review the effectiveness and need for something. I think that is the basis of the argument.

Senator IAN MACDONALD —So you are not planning to continue that sort of work as part of your forward planning on border protection?

Mr Carmody —We are saying that we understand a review will be conducted in the coming year and funding decisions will be based on that.

Senator IAN MACDONALD —Perhaps that is where the coastguard takes over, and the funding will be in the coastguard.

Mr Carmody —I think it is just a matter of ensuring and reviewing the appropriate programs.

Senator IAN MACDONALD —On the patrol vessel in northern waters, the Triton, $35.7 million was provided by the previous government from 2007-08 to retain that vessel up in Northern Australia. That does not seem to have been extended beyond 2007-08.

Mr Carmody —The Triton contract has been extended.

Senator IAN MACDONALD —I am looking at page 94 of Budget Paper No. 2, which has a series of blanks. Again, according to the commentary, the previous government provided funding for two years, but it seems like the current government has made no commitments beyond the previous year’s budget.

Ms Grant —The Triton was funded for a 12-month period in the original northern waters package. That contract was up in January this year and we have had a contract extension until 30 June 2009.

Senator IAN MACDONALD —Where do I see the funding for that? With respect, these budget papers seem to be typical of the new government. There is lots of rhetoric but, when you look down to find where the figures are, they just do not happen to be there.

Mr Ramsden —The funding for the Triton was provide in the 2007-08 year, so it would be reflected in the 2007-08 budget papers.

Senator IAN MACDONALD —I appreciate that. I have just spent five minutes lauding the previous government for funding it. My point to you is that there is no extension of it.

Mr Ramsden —There is no extension beyond the 2008-09 year at this point in time.

Senator IAN MACDONALD —That is right; that is my point. So there are no forward plans to keep the Triton up there.

Mr Ramsden —That would be considered in the 2009-10 budget.

Mr Carmody —The plan does extend the contract to then. I am not sure whether you were here, but I explained to Senator Abetz—

Senator IAN MACDONALD —Yes, I was here.

Mr Carmody —that these arrangements are in place now. We are currently doing a program for government that is looking to the future patrol capability we need—short of a coastguard. Government will determine whether they accept that that capability is needed, and then the craft and vessels that are necessary will be developed from there.

Senator IAN MACDONALD —I am conscious that you have been looking at the right vessels for the right job for a long period of time. A lot of money has been spent. I am just concerned that I cannot see anything in the budget figures taking us beyond next year. Obviously, there will be new appropriations next year.

Mr Carmody —It will be based on this assessment that we are providing for government.

Senator IAN MACDONALD —We can just cross our fingers and hope that the forward funding is there, because there is no indication in this budget that anyone is giving any thought to it for the out years. I am not saying that it is Customs so much as the people who pay your way. Just finally, I have a couple of very quick questions. I think was Customs that was funding an officer in Indonesia to help with the fight against illegal fishing and doing a lot of things on the Indonesian mainland, with the approval of the Indonesian government. Is that program still continuing?

Mr Carmody —That officer is still there, yes.

Senator IAN MACDONALD —And it is a Customs officer?

Mr Carmody —Yes. Customs was part of that program, yes.

Senator IAN MACDONALD —The incidence of illegal fishing in the Southern Ocean has dropped to zero, as I understand it. Is that correct?

Mr Carmody —Not zero, but it has certainly dropped dramatically by sightings. I am sorry—you said the Southern Ocean. Yes.

Senator IAN MACDONALD —You had me worried there. Clearly that is the case because of good work by Customs and Fisheries over the last few years. I am conscious that some of this is government policy and government action, but for how long is funding currently available for that activity? I heard what you said about the Oceanic Viking, but that is not the only cost. There are other costs that are borne by you. Have you planned to continue funding that sort of surveillance into the years ahead?

Mr Carmody —I think the current charter goes through to 2010, and that is reflected in our funding base for that. The future will be determined, as I said, by this program of capability that we are putting to government.

Senator IAN MACDONALD —In relation to that activity, you work in concert with AFMA, the Department of the Prime Minister and Cabinet and intelligence agencies. Is that correct?

Ms Grant —Yes.

Senator IAN MACDONALD —We used to have different working groups, which I never could follow. Are those combined operations still current?

Ms Grant —Yes, all of those governance arrangements you will recall still operate as required. We have a Strategic Maritime Management Committee chaired by the Department of Prime Minister and Cabinet that brings together all of the operational agencies, intelligence collection agencies and central agencies—that is, any agency that has an interest in the illegal foreign fishing issue. That group provides the strategic and policy direction for the particular efforts in relation to all maritime threats, illegal foreign fishing being a key component of the matters considered by that group. The operational working parties still convene when there is an operational requirement to do so. The whole of government effort is still alive and well.

Senator IAN MACDONALD —Thank you very much for that.

Mr Carmody —If I could just provide some figures for Senator Abetz, who is not here now. These figures, about surveillance coverage, have been made available to me. I mentioned to Senator Abetz that we have refined and improved the basis for calculating the square nautical mile coverage, but up until December 2007 it was calculated on the same basis. That shows square nautical mile coverage. While, as I explained, there are pilot issues that have impacted slightly, the 2007-08 coverage compared to 2006-07 was down slightly by 3.8 per cent; however, coverage in 2007-08 compared to 2005-06 is up by 6.78 per cent. The coverage in 2007-08 compared to 2004-05 is up by 18.6 per cent, showing the emphasis that we continue to place on that.

Senator BRANDIS —Let me take you back, Mr Carmody, to where you began, with your correction to page 112 of budget related paper 1.2. The full-time equivalent staff positions in Customs should be, in 2007-08, 5,864 and, in 2008-09, 5,875. Is that right?

Mr Carmody —They are the average figures and, of course, on the projection for 2008-09 we are continuing to refine our budgeting position. But that is a projection.

Senator BRANDIS —That shows, basically, a static staffing position—that is, for all practical purposes, no increase in staff.

Mr Carmody —No. I explained this in my introductory comments, and I might have been too brief. They reflect average staffing levels. The 2007-08 figures are the average of an increase in staffing numbers. Our staff numbers increased over the period of 2007-08 and the average FTE was 5,864. The actual number of FTEs at 30 June 2008 will be above that, so the average staffing level of 5,875—which, again, is an average for the year—reflects a decrease in staff over the 2008-09 year.

Senator BRANDIS —All right. That is slightly worse than I thought. We are going to have a decrease in staff in the coming financial year. Does that reflect economies forced upon Customs by the budget cutbacks?

Mr Carmody —It reflects a combination of some programs receiving small amounts of additional funding, some insourcing of staffing in our IT service desk area and—as I was explaining to Senator MacDonald—the 2.5 per cent price adjustment, as a positive, the 1.25 per cent efficiency dividend, the two per cent one-year efficiency dividend and the requirement under longstanding policy to fund pay rises from efficiencies.

Senator BRANDIS —Going to page 23 of Budget Paper No. 4, under ‘Agency Resourcing’: the total resourcing for Customs in 2008-09 is $1,475,609,000, compared with total resourcing in the prior year of $1,479,061,000. So there has been, by my calculations, a slight fall of about half a per cent in your resourcing. But, if we factor in the assumption which appears in Budget Paper No. 1 of 3.25 per cent inflation in the coming financial year, what we actually get in real terms is a projected reduction in funding to Customs of a little over 3.25 per cent, getting on to 3½ per cent. Is that right?

Mr Carmody —I hesitate because, as I said, we receive a price adjustment—and you are talking about an inflation factor, but we do receive a price adjustment—of 2.5 per cent.

Senator BRANDIS —These figures on page 23 of Budget Paper No. 4 do not reflect that adjustment, do they? We have the 2007-08 estimated actuals and the 2008-09 budgeted figures.

Mr Carmody —The budgeted figures would include the appropriation for the price adjustment of 2.5 per cent.

Senator BRANDIS —So are you saying that factors in a 3.25 per cent rate of inflation?

Mr Carmody —No, sorry—a 2.5 per cent appropriation for price adjustments. The price adjustment, as I was saying before, was formally adopted by the Department of Finance and Deregulation.

Senator BRANDIS —I understand what you are saying now. But you know, don’t you, that in Budget Paper No. 1 the estimate for the change in the value of money over 2008-09 is 3.25 per cent? So, even if we allow for an in-built price adjustment of 2.5 per cent, there is still a reduction in funding in real terms, isn’t there?

Mr Carmody —I would have to ask you to discuss with the Department of Finance and Deregulation the basis for their calculation, because I am sure they have a particular basis for calculating that which they believe reflects the pricing adjustments.

Senator BRANDIS —For goodness sake, the budget is ultimately the Treasury’s document—they are the lead agency here. The budget—we are told by the new government—is prepared on the assumption of a change in the value of money over the budget period of 3.25 percent. So, if you are saying that the Department of Finance and Deregulation has undertaken a somewhat similar exercise on the basis of a different figure, that is very interesting. But I am entitled, surely—and the Australian public are entitled—to assume the government knows what it is talking about. That might be a large leap of faith. When the budget is premised on a 3.25 per cent inflation rate, what I am putting to you—even allowing for the price adjustment issue that you directed our attention to—is that there has actually been a relatively small reduction of funding to Customs in real terms.

Mr Carmody —There is a difference in those two figures; I am just hesitating because I do not understand the calculation of either. I think it is fair to say the fact that the pricing adjustment is less than the published inflation figure has been consistently the case for a number of years.

Senator BRANDIS —Be that as it may, if you take Treasury’s inflation figure and look at the bottom-line figures of the budget papers, your agency has suffered a reduction in funding in real terms; and you have already told us that the staff establishment over 2008-09 is falling. Are those two phenomena related?

Mr Carmody —The staffing position reflects whether there are any lapsing programs or any new programs combined with the effect of efficiency dividends and paying for staffing increases. If it can be shown that 2.5 per cent is less than what is fair—and I cannot say that is the case because this is determined by the department of finance—that would be a factor, but I cannot answer that.

Senator BRANDIS —Come on, Mr Carmody. You are surely in a position to know the basis upon which this fiscal discipline imposed upon your agency by the Department of Finance and Deregulation has been arrived at.

Mr Carmody —All I can tell you is that we are given that this figure and for many years that figure has been less than the published inflation figure. That is all I can tell you.

Senator BRANDIS —But are you saying that you are not in a position to comment on the derivation of the 2.5 per cent figure?

Mr Carmody —I do not know the detail of it.

Senator BRANDIS —Are any of your officers, particularly officers in the accounting sections of Customs, in a position to speak to the issue of the derivation of the 2.5 per cent figure?

Mr Ramsden —I do not know how Finance devise it exactly. It is a published figure. It is called the wage and cost index. It is derived by the Department of Finance and Deregulation. That is the adjustment that is provided to us to increase our appropriation from one year to the next.

Senator BRANDIS —In what areas will Customs be cutting back programs, please?

Mr Carmody —First of all, I need to explain that we have not completed our budgeting process yet. That has been going on and that will be completed in the next few weeks. I cannot give you a definitive answer.

Senator BRANDIS —Nevertheless, when your minister went before the ERC for the preparation of the last budget he must have had—informed by you and your officers—a pretty good idea of what programs you wanted to expand and which were lapsing programs. You must have had a pretty good idea of where you might need to make cuts in the event of a reduction in funding, as it appears has occurred.

Mr Carmody —The two per cent dividend was actually announced during the election period so those processes were not in place. However, the position we are at is that I can express to you the broad direction for our funding decisions.

Senator BRANDIS —Well, you express the broad direction, Mr Carmody, but do not hold it against me if I then ask you more specific questions.

Mr Carmody —I certainly would not hold it against you, Senator, but do not hold it against me if I have to explain that the final details will be determined as part of our final budgeting position.

Senator BRANDIS —All right, let us press on. You make whatever general statement you want to make and then I will ask you about more particular matters.

Mr Carmody —Okay. We have undertaken a number of steps in approaching our planning and budgeting for the coming year. The impact of any particular efficiency dividend and whatever else will be determined by things like the mix between our support functions and our front-line and operational functions. It will be determined by the level of effectiveness and efficiency of our targeting and risk management approaches. It will be determined by the level of technology support and the efficiencies that we provide through that, for example, in a range of those programs. What we are looking at doing is this. We have had a review of our corporate support staffing, human resources staffing and other related areas. We can expect to see a reduction in those levels over the coming year and a reasonably substantial reduction in those in our intelligence and targeting areas. There may be some overall reduction but the actual targeting component and expertise is being enhanced as part of that. We are looking at better technology support for simple things like detained goods management. The efficiency of our present systems could be much improved.

For example, we are also looking for further efficiencies in our IT area. Having just transitioned and consolidated our major applications to a new environment—in the new contract with IBM—we can see opportunities to consolidate the particular systems and licences that we have in place. Our overall objective is to reduce where we can efficiently do it in our support functions and enhance our operational functions by improved risk approaches and systems support.

Senator BRANDIS —Thank you, Mr Carmody. Let us go through each of those particular topics with more particularity. You said that we can expect ‘reasonably substantial’—that was your phrase—reductions in corporate support. What does that mean specifically?

Mr Carmody —You are putting me in a difficult position because we have not finalised these and I would prefer to discuss these with our staff and others. However, you are—

Senator BRANDIS —This is estimates. Seriously, Mr Carmody—

Mr Carmody —No. I just want to explain something to you before answering. I am going to answer, Senator.

Senator BRANDIS —You appropriately caveated the answers you propose to give by indicating that there are no final figures because the budget is still being prepared, in effect. I understand that. I am not asking you about confidential communications between governments, matters of commercial confidentiality or any of those areas about which an officer might, with proper circumspection, decline to answer. It is core business for an estimates committee to find out where the money is being spent and, when there are cutbacks, where they are being made. It is core business for this committee.

Mr Carmody —I do understand that, Senator. I was merely sharing my hesitations, but that was not going to prevent me from answering your question.

Senator BRANDIS —Thank you. All right, let us go to corporate support.

Mr Carmody —In the corporate support area we have had a review and that indicates that there are significant efficiencies that could come from more properly managing that as a national operation. To put it in round figures, there could be around 80 or more reductions in that area.

Senator BRANDIS —Eighty or more staff positions?

Mr Carmody —Yes.

Senator BRANDIS —That is equivalent full-time staff positions?

Mr Carmody —Yes.

Senator BRANDIS —When you say ‘managing it more efficiently as a national operation’, that sounds to me suspiciously like centralising the operation and cutting back on regional activities. Is that a fair assumption?

Mr Carmody —Let me explain what it means without saying yes or no. We have very regionally based operations and most of our operations will continue to be regionally based. However—

Senator BRANDIS —But there are some that will not?

Mr Carmody —There will be a reduction in some regional positions and some positions here in head office. When I said a national operation, I meant that the corporate support areas are almost solely regionally based and we believe that there has been some duplication. More importantly, having looked at benchmarks across other organisations and seeking advice from the consultants engaged, we believe there is adequate room to operate our corporate support more efficiently—which leads to those figures.

Senator BRANDIS —I will come back to that in a moment. Who are the consultants?

Mr Carmody —Accenture.

Senator BRANDIS —When were they engaged?

Ms L Smith —They were engaged in late February 2008.

Senator BRANDIS —Presumably there was a letter of engagement.

Ms L Smith —Yes, that is correct.

Senator BRANDIS —May it be produced, please?

Ms L Smith —I have not got that with me.

Senator BRANDIS —Will you take it on notice? I would like the letter of engagement to the consultants, which I assume sets out the terms of their task, to be produced.

Ms L Smith —Yes, that is correct.

Senator BRANDIS —The report has been received, has it? Or has only an interim report been received?

Ms L Smith —The report has been received and we are finalising it with Accenture to see what the impact is and what the implication is.

Senator BRANDIS —When was the report received?

Ms L Smith —The report was received in about the third week in April.

Senator BRANDIS —I would like a copy of it to be produced, please.

Mr Carmody —We will take that on notice.

Senator BRANDIS —Thank you. When you say that you are in discussions with Accenture in relation to the implementation of the report, are you awaiting a supplementary report on implementation issues or are you merely in a dialogue with them seeking their guidance about how the recommendations embodied in the written report can best be accomplished?

Ms L Smith —Probably the latter, and we also just wanted it in a format that was suitable to be used to discuss within the organisation and so that we knew specifically what needed to happen and over what period of time.

Senator BRANDIS —How many meetings have there been with Accenture of that character?

Ms L Smith —There have been several meetings—probably four or five meetings—plus phone calls.

Senator BRANDIS —Have those meetings been minuted?

Ms L Smith —No, they have not been minuted.

Senator BRANDIS —Has there been a form of documentary record prepared of the meetings which notes the decisions taken by, or the advice given at, those meetings?

Ms L Smith —On one or two occasions there may have been an email but not for every occasion.

Senator BRANDIS —So for one or two occasions there is some form of record of the transactions of the meeting in an email. Is that what you are telling me?

Ms L Smith —As far as I remember, yes.

Senator BRANDIS —Could you check please to see in respect of how many of the meetings there is some form of documentary record? I would like each of those documentary records produced, please.

Ms L Smith —Yes, I will take that on notice.

Senator BRANDIS —Mr Carmody, coming back to this estimate of about 80 or more: I take it ‘80 or more’ means that, if there are more than 80, it is not many more than 80. So ‘80 or more’ does not mean 80 or 150; it means 80 or 90, I suppose.

Mr Carmody —The report suggests around 80, I believe.

Senator BRANDIS —Okay. Regionally based operations—

Mr Carmody —and here in Canberra.

Senator BRANDIS —I am just reading my note about what you said—‘Reduction in some regional positions and some in head office.’

Mr Carmody —That is right.

Senator BRANDIS —Approximately how many are regionally based and how many are Canberra based?

Ms L Smith —I would have to take that on notice.

Mr Carmody —I do not have that detail.

Senator BRANDIS —You must be able to tell us approximately.

Mr Carmody —I do not have that detail—

Senator BRANDIS —Is there an officer at the table who has read the Accenture report?

Ms L Smith —Yes, I have read the Accenture report.

Senator BRANDIS —Well, then I will ask you. About how many?

Ms L Smith —I am sorry, but honestly I cannot remember.

Senator BRANDIS —Approximately?

Ms L Smith —I honestly cannot remember. I am sorry.

Senator BRANDIS —Are more than half of the positions regional positions?

Ms L Smith —No, they would not be.

Senator BRANDIS —So it is fewer than half? Or not more than half?

Mr Carmody —We do not want to mislead the Senate—

Senator BRANDIS —I am sure you do not.

Mr Carmody —We have already committed to providing what detail we can. We just do not want to mislead—

Senator BRANDIS —Of course you do not, Mr Carmody. I would not think for a moment that you would. But I am rather keen to tie down the answers with as much specificity as I am able to.

Mr Carmody —And we are attempting to provide that.

Senator BRANDIS —Of course, if you give me the Accenture report, I could find out for myself.

Mr Carmody —We have agreed to take that on notice.

Senator BRANDIS —Yes. Can you give me an example of some of the cities or regional towns where it is proposed to cut back on the regional positions? I am not expecting you to be able to give me a comprehensive list, but just give me a few.

Ms L Smith —The main cities where there would be a change would be Brisbane, Sydney, Melbourne and Canberra.

Senator BRANDIS —Just pausing there. Two things: I am not interested in Canberra for the moment because I am interested in the out-of-Canberra operations—what I understood Mr Carmody to mean when he said ‘ regional operations’ as opposed to head office operations—

Ms L Smith —Yes, that is correct.

Senator BRANDIS —When you say ‘there would be a change’, I take it that is a euphemism for ‘there would be a reduction’?

Ms L Smith —Yes, that is correct.

Senator BRANDIS —Outside the capital cities what regional centres, as opposed to capital city centres, will suffer a reduction in positions, please?

Ms L Smith —None.

Senator BRANDIS —Will the regional offices in all capital cities suffer a reduction?

Ms L Smith —No.

Senator BRANDIS —Which ones will not? You have told me that Melbourne, Sydney, Brisbane will.

Ms L Smith —Tasmania and the Northern Territory will not. I believe South Australia will not and I believe there is just one position in WA.

Senator BRANDIS —Thank you. Do you have an indication of the costs that will be saved by the elimination of these 80 or more staff positions?

Ms L Smith —Approximately $4.5 million.

Senator BRANDIS —Per annum?

Ms L Smith —That is correct.

Senator BRANDIS —Will that saving be accomplished by the retrenchment of existing staff? In other words, will there be any involuntary retirements?

Mr Carmody —There are no plans for any involuntary retirements.

Senator BRANDIS —All right. That is very helpful. Mr Carmody, the second category you mentioned was intelligence and targeting and you said there would be some reductions. Could you, or whoever is the appropriate officer, please elaborate for us a little more fully as to what are the particular functions comprehended by the category ‘intelligence and targeting’?

Mr Buckpitt —The Intelligence and Targeting Division, as the name implies, involves two components. The targeting function, which is about two-thirds of the division, is that part that selects cargo and passengers for further examination. Intelligence is much as you would expect it to be.

Senator BRANDIS —What is the staff establishment of the respective subdivisions?

Mr Buckpitt —It is currently about 480 in total across the division.

Senator BRANDIS —So two-thirds is about 320-odd in targeting?

Mr Buckpitt —It is about 270.

Senator BRANDIS —In targeting.

Mr Buckpitt —The intelligence function is about 170 and there is a third branch which is much smaller.

Senator BRANDIS —What is that?

Mr Buckpitt —That looks after expansion of our capability. It is called the Strategic Development Branch.

Senator BRANDIS —What is the staff establishment of that?

Mr Buckpitt —It is about 35.

Senator BRANDIS —And that gets you up to 475. Where is it proposed to make the reductions?

Mr Buckpitt —We will be making reductions of the order of about 20 staff.

Senator BRANDIS —Over the entire intelligence and targeting branch?

Mr Buckpitt —That is correct.

Senator BRANDIS —And from which of those three subdivisions will the 20 staff reductions come, please?

Mr Buckpitt —There will be reductions across all three branches. Predominantly they will be in the Intelligence Branch. We will achieve that in several areas. The liaison function, which is responsible for liaison with other agencies regarding intelligence, is a group of about 25 officers. We will reduce that by about four.

Senator BRANDIS —Twenty-five to 21?

Mr Buckpitt —Yes. We have the front-line program, which involves about 14 officers. We will be reducing that by two.

Senator BRANDIS —Fourteen to 12.

Mr Buckpitt —We have analysts who write analytical reports on intelligence across the organisation. They will reduce from 55 to 50.

Senator BRANDIS —Yes.

Mr Buckpitt —I think we are losing two administrative staff across the division.

Senator BRANDIS —We are still in the intelligence subdivision?

Mr Buckpitt —Correct.

Senator BRANDIS —From what to what?

Mr Buckpitt —I do not have that figure in front of me.

Senator BRANDIS —You told us that there are approximately 170 officers in intelligence. So far—and this is before the cutbacks—you have accounted for 94 of them, other than the unspecified figure in administration. So we are looking for about another 70. What other branches of the intelligence subdivision are there that are being cut back?

Mr Buckpitt —The areas that I have mentioned are the areas where the main reductions are occurring. The balance between the 170 total and the number I have given you so far is largely unaffected.

Senator BRANDIS —What are those other areas that are unaffected, please?

Mr Buckpitt —There would be the officers who are involved with the evaluation of intelligence material.

Senator BRANDIS —They are different from the analysts, are they?

Mr Buckpitt —That is correct. They are the officers who initially receive the information reports, do some checks on them—in terms of additional information that we can bring to bear—and forward the information on to the areas that would have an interest in that information.

Senator BRANDIS —They not being reduced at all. Is that right? Or are they being reduced slightly?

Mr Buckpitt —They are not being reduced.

Senator BRANDIS —How many are there?

Mr Buckpitt —From recollection it is of the order of 16 staff.

Senator BRANDIS —Who else? What other branches are there of the intelligence subdivision?

Mr Buckpitt —There are the officers who do the work of actually going out collecting the information.

Senator BRANDIS —What do you call them?

Mr Buckpitt —Collection and liaison. I mentioned previously the liaison role but then there is the actual collection role, which is a little different.

Senator BRANDIS —So there is the collection function. Is that being reduced at all?

Mr Buckpitt —No.

Senator BRANDIS —How many officers are in the collection branch?

Mr Buckpitt —I would have to take that question on notice but I think it is of the order of 25.

Senator BRANDIS —Are there any other branches?

Mr Buckpitt —I think that is as many as I can remember off the top of my head.

Senator BRANDIS —You are being genuinely helpful, Sir, and I appreciate that. But you are the manager of the targeting and intelligence branch. Surely you must know, off the top of your head, what the branches are in one of the two principal divisions for which you have responsibility.

Mr Buckpitt —Yes. If you wished, I could give you a breakdown of the totals by a different means.

Senator BRANDIS —That would be very helpful. Thank you.

Mr Buckpitt —There are a number of areas in central office; the first is called clients and current intelligence.

Senator BRANDIS —This is within intelligence. Is that correct?

Mr Buckpitt —Yes. That has five staff. Intelligence collection and liaison in Canberra has eight staff. Analysis and production has 13 staff. Knowledge management and enhancement has 11 staff. In total in central office you are looking at 37.

Senator BRANDIS —How many of those will be cut?

Mr Buckpitt —The reductions in the central office component would be of the order of three or four. Intelligence in New South Wales is 38 staff.

Senator BRANDIS —I see what you are doing. You are now dealing with this regionally rather than functionally.

Mr Buckpitt —Yes.

Senator BRANDIS —I understand. That is good. Thank you.

Mr Buckpitt —Intelligence in Victoria has 31 staff.

Senator BRANDIS —Give me the figure for New South Wales again, please.

Mr Buckpitt —Thirty-eight.

Senator BRANDIS —And by how many is that being reduced?

Mr Buckpitt —I have not previously done this calculation by region, but it would be of the order of four or five.

Senator BRANDIS —Victoria?

Mr Buckpitt —Intelligence Victoria, 31.

Senator BRANDIS —The reduction?

Mr Buckpitt —Of the order of two or three. Intelligence Queensland, 22.

Senator BRANDIS —The reduction?

Mr Buckpitt —One. Intelligence South Australia, six.

Senator BRANDIS —And no reduction I think you told us before.

Mr Buckpitt —Correct. Intelligence WA, 15.

Senator BRANDIS —The reduction was one, I think Mr Carmody said or perhaps you said before.

Mr Buckpitt —I think it is one in WA, but I have to admit that that is a vague recollection for me. It is either one or none.

Senator BRANDIS —Tasmania?

Mr Buckpitt —Intelligence Tasmania, six staff.

Senator BRANDIS —No reductions?

Mr Buckpitt —Correct. Intelligence NT, seven staff.

Senator BRANDIS —Any reductions?

Mr Buckpitt —Not that I can recall.

Senator BRANDIS —You will confirm all those figures on notice, won’t you?

Mr Buckpitt —Okay. I can do that, Senator.

Senator BRANDIS —Thank you. That is very helpful. That is the intelligence section. What about the targeting section? Would it be more efficient to do this by functional category or by region? Perhaps we should do both.

Mr Carmody —Why not!

Senator BRANDIS —I have to tell you, Mr Carmody, that I was so inspired by a speech I heard Senator John Faulkner give recently about how the Rudd government was going to be responsible for a new dawn of freedom of information, and he used this wonderful phrase: ‘a culture of disclosure’. So I am doing my modest little bit to encourage in a bipartisan fashion this culture of disclosure. Let us deal with the targeting section, please, first of all by function.

Mr Buckpitt —The first four groups relate to central office staffing. Target Development is a group of 15.

Senator BRANDIS —What does that do? Identifies targets, I suppose.

Mr Buckpitt —It mostly comprises analysts who do further work in developing up information that would help us identify specific operational targets. Typically it takes information and turns it into specific entities and what we know about them.

Senator BRANDIS —All right. That sounds very important. How many staff did you say there were?

Mr Buckpitt —It is actually FTEs, so 15.

Senator BRANDIS —Okay, 15 FTEs. How many of those are being chopped?

Mr Buckpitt —I am not aware that there is any reduction in that group.

Senator BRANDIS —No reduction, okay. Next branch of targeting?

Mr Buckpitt —Targeting Operations in central office is six.

Senator BRANDIS —What do they do?

Mr Buckpitt —Targeting Operations in central office largely oversights and coordinates a much larger group in the states. It is typically these people in the states who would do the work of what we call match evaluation or cargo targeters. They would deal with assessments about consignments or people for whom we have a particular interest in further examination activity.

Senator BRANDIS —Are any of the Targeting Operations central office being reduced?

Mr Buckpitt —From recollection, I do not think so. There might be one; it is of that order. Targeting Strategies is the third section.

Senator BRANDIS —That is a central office branch?

Mr Buckpitt —Yes. That is a group of five and that is not being affected. Targeting Systems—and by systems we mean IT systems, basically—is a group of 9.5 FTE.

Senator BRANDIS —Are there any reductions to that one?

Mr Buckpitt —No. I will go through the targeting in the states. I might say that we are making some changes to targeting which reflect changes that we have already had in train nationally to increase the efficiency of our operations and change some of the ways in which we have worked. For example, there has been a variation in the number of consignments that each cargo targeter has dealt with.

Senator BRANDIS —When you say ‘variation’, do you mean a reduction?

Mr Buckpitt —No. There has been a variation in the past, in that one cargo targeter might have got through X thousand a week, whereas another might have got through 2X in a week. What we have done is to review our processes and we are issuing much more detailed guidance to cargo targeters so that, based on best practice, we think that we will get a better result and a more consistent result in terms of throughput. So that will deliver some savings for us nationally.

Senator BRANDIS —I just want to get the raw data out, if I may.

Mr Buckpitt —All right. Targeting New South Wales, 64.

Senator BRANDIS —And how many reductions?

Mr Buckpitt —I do not have the exact figure, but it is of the order of three.

Senator BRANDIS —Victoria?

Mr Buckpitt —Targeting Victoria, 66; and the reductions there are of the order of six.

Senator BRANDIS —Queensland?

Mr Buckpitt —Thirty-eight.

Senator BRANDIS —Reductions?

Mr Buckpitt —Of the order of two.

Senator BRANDIS —South Australia?

Mr Buckpitt —Nineteen.

Senator BRANDIS —Reductions?

Mr Buckpitt —I do not think there are any reductions in South Australia.

Senator BRANDIS —Western Australia?

Mr Buckpitt —Thirty-one, and in the order of two reductions.

Senator BRANDIS —Tasmania?

Mr Buckpitt —Two.

Senator BRANDIS —Any reductions?

Mr Buckpitt —Not that I recall, Senator.

Senator BRANDIS —You would be sure to recall if there was a reduction of one or two in Tasmania.

Mr Buckpitt —Yes, exactly.

Senator BRANDIS —And the Northern Territory?

Mr Buckpitt —Six.

Senator BRANDIS —Reductions?

Mr Buckpitt —None.

Senator BRANDIS —All right. So you have very properly allowed for the fact that you do not have the precise data there, and you will of course take all these questions on notice and confirm them. But your best assessment is that, in the states, the targeting staff are being reduced by 13.

Mr Buckpitt —It is about that, yes.

Senator BRANDIS —If I may express this question in layman’s language, the targeting staff are the people who, at the various points of entry of cargo into the country, are actually responsible for inspecting, whether by X-ray, electronic process or visual inspection. These are the people who actually look at the cargo, aren’t they?

Mr Buckpitt —No. These are the staff who deal with the electronic profile match—so they would be making judgements based upon information as to whether or not another Customs officer should actually be doing a physical inspection of some sort.

Senator BRANDIS —Who are the staff then, at the various ports and points of entry, who do the actual inspection, whether by X-ray or by the naked eye—

Mr Buckpitt —They would be officers of either the Cargo Division or the Enforcement and Investigations Division, depending upon the location.

Senator BRANDIS —So they are not in the Intelligence and Targeting Division.

Mr Buckpitt —No, they are not.

Senator BRANDIS —All right. I will ask someone else about them. That is very helpful. Thank you very much for that.

Mr Carmody —I just want to reinforce that, as explained by Mr Buckpitt, these are coming about because we are finding improved efficiencies for the operations of our targeting. So we are not reducing the effectiveness of our targeting.

Senator BRANDIS —You remind me of the famous remark of Christine Keeler about Mr Profumo when you say that, Mr Carmody.

Mr Carmody —That is a curious analogy.

Senator BRANDIS —You would say that, wouldn’t you?

Mr Carmody —I just want to reinforce that Mr Buckpitt explained that we have been looking at the efficiency of our operations and benchmarking performance, and these savings reflect that.

Senator BRANDIS —Thank you, Mr Carmody. I hear what you say. The next area of operation, Mr Carmody, that you identified as suffering reductions or—as you would no doubt put it—enjoying efficiencies, was technology support. Can the officer who knows about that come to the table, please?

Mr Carmody —What I explained there, Senator, was that we moved our operations to a new supplier, IBM, and that has opened up possibilities. I do not know that we will be able to give you too much more detail. It opened up possibilities of consolidating some of the tools of licences that we pay for at the moment. There probably will not be a whole lot more detail on that at this stage.

Senator BRANDIS —And this is a tender or a subcontract to IBM?

Mr Carmody —No. EDS used to be our supplier and we have now transitioned to IBM as a result of a contract review—a new contract.

Senator BRANDIS —Will there be any reduction in the number of staff positions?

Mr Carmody —The first point I need to make is that there are savings overall as a result of this new contract, which helps with the issues we are talking about at the moment. They are significant over the life of the contract. As to staffing, the chief information officer can help you there.

Mr Harrison —There is no specific staff reduction. There has been a staff increase in the IT area as a result of those contract arrangements where we decided to insource our service desk arrangements. I think that was mentioned earlier. We are looking to save money by employing staff rather than contractors over the course of the year. We expect the staff numbers overall to go up.

Senator BRANDIS —Thank you. The next category you mentioned, Mr Carmody, was IT.

Mr Carmody —I said that we are looking—

Senator BRANDIS —You are looking for efficiencies and opportunities for consolidation.

Mr Carmody —Yes. That is what I mentioned about the licences and products that we have at the moment.

Senator BRANDIS —Pardon my ignorance, but what does ‘opportunities for consolidation’ mean?

Mr Carmody —It means that we suspect, having consolidated, that we will have a few suppliers of products that can be consolidated into a single licence or product and that perhaps an expert will help.

Senator BRANDIS —Do you mean that you will get more of your services from fewer suppliers in larger packages?

Mr Harrison —Senator, the reference is in relation to the fact that, like any large IT shop, we have quite a variety of products and services—specifically hardware and software. We have just spent the last six months moving all of our equipment and our applications from one place to another. So we are in the reasonably unique position of having examined that in some detail. We have discovered that over time, as these multiple products and services have grown up, there are a number of software packages in particular that potentially do the same job. Equally, we have a number of different vendors of relational databases et cetera. We believe there are opportunities for rationalisation of those types of products and services that will, in effect, save money.

Senator BRANDIS —I understand that; thank you. Mr Buckpitt before told me that the people who do the inspection of cargoes at the various points of entry are the intelligence and enforcement division. What are they called?

Mr Carmody —Cargo and enforcement investigations are involved in those areas.

Senator BRANDIS —Will there be any cutbacks in cargo and enforcement?

Mr Carmody —We are getting into territory now where we have really not finalised some of these figures.

Senator BRANDIS —Then I will not ask you for definitive answers; I will just ask you for estimates.

Mr Carmody —I certainly cannot give you cargo at the moment. We have not settled that budget because there are issues we continue to work through. There will be some—

Senator BRANDIS —Pausing there—stay with cargo for the moment, and I hear what you say. Tell me what the current full-time equivalent staff positions in cargo are?

Mr Carmody —I do not have those—

Senator BRANDIS —I am sure one of your officers will be able to assist.

Ms Fisher —As at March 2008 our FTE is 952.5.

Senator BRANDIS —The FTE is 952.5 officers.

Ms Fisher —It is 952.5 FTE, full-time equivalent.

Senator BRANDIS —Let me just make sure I am following you. These are all FTE positions located at points of entry into the country?

Ms Fisher —Those FTE are split between some in Canberra and some in points of entry around Australia. The majority are located in regional offices doing operational, facing cargo duties.

Senator BRANDIS —I understand that. What is the split between the Canberra based FTE positions—

Ms Fisher —Approximately 12 per cent of those staff are located in Canberra.

Senator BRANDIS —So 838.2, or thereabouts, FTE are at entry points. Is that right? That is 88 per cent.

Ms Fisher —I would need to just check those figures for you, but that is approximately the split.

Senator BRANDIS —About 840-odd. Let us just concentrate for the moment on the 840-odd non-Canberra based positions. By approximately how many FTE is it expected that that number will be reduced?

Mr Carmody —I am afraid that that cannot be answered because this is one area where we have not resolved the funding position. We are just not in that position at the moment.

Senator BRANDIS —So it is possible that none will be reduced?

Mr Carmody —I suspect there will be reductions, and we will be looking for efficiencies in the processes. This is one area where we are really working diligently, but we are a long way from finalising those positions.

Senator BRANDIS —Nobody is doubting your diligence, Mr Carmody. I do not know why you would say that. Nobody is doubting your diligence.

Mr Carmody —I am just sharing with you, Senator!

Senator BRANDIS —I am sure that you are working under tremendous handicaps with the cutbacks that the new government has imposed on your agency. But, anyway, you are not in a position to tell me now because, although you think there are going to be some, it is just too early in the process to put a meaningful figure on that.

Mr Carmody —We have not resolved that particular area of the organisation.

Senator BRANDIS —By when do you expect to resolve it?

Mr Carmody —We are planning to be in a position to resolve this within the next two to three weeks.

Senator BRANDIS —The next two to three weeks?

Mr Carmody —Yes.

Senator BRANDIS —So, within probably three weeks hence, you will know what number of FTE positions in cargo will be going?

Mr Carmody —We will know the number of FTE positions that will be funded for the coming year not only for cargo but for the total organisation.

Senator BRANDIS —Mr Secretary, Mr Hallihan, can you remind me please what the date is for answers to questions taken on notice?

Secretary interjecting—

Senator BRANDIS —Well, Mr Carmody, you will know this by the time you have to answer these questions. So you will take that on notice, won’t you?

Mr Carmody —It would be helpful to explain that, with respect to Mr Buckpitt’s answers, they have not been signed off as final figures.

Senator BRANDIS —He made that perfectly clear.

Mr Carmody —We are working through the process in addition to staffing. We are working through supplier expenses and there will be savings that we will be targeting in those operations. We will be in a position within three weeks to finalise our budget. That is our expectation. We will share that with the organisation and we will be happy to share it with the committee, if you would like us to.

Senator BRANDIS —I have made it very obvious that I want this information.

Mr Carmody —That is right, and that is why I am offering to assist you by providing the answer when we have concluded our deliberations.

Senator BRANDIS —If I may say so, both you and your officers have been very careful to appropriately caveat your answers. It is perfectly obvious to me and, I am sure, to everyone listening to these proceedings that your officers have not said that this is necessarily the definitive number of reductions. But they, particularly Mr Buckpitt, have been as helpful as they can given that we have not finalised the position yet. Nevertheless, there will be, you expect, some reductions in the cargo FTE positions—in at least the 88 per cent of them that are in regional offices—and you will be in a position to tell us within three weeks what that reduction will be. Is that correct?

Mr Carmody —That is our plan. To help you, Senator, in most areas of the organisation, there will be some reductions in staffing. We will be able to provide details once we—

Senator BRANDIS —You will take that on notice. You will also take on notice, won’t you, please, Mr Carmody, where the reductions in the staff positions in the cargo inspection area of the operation will take place?

Mr Carmody —Yes.

Senator BRANDIS —Beyond the corporate support, intelligence targeting, technology support, IT and cargo areas of Customs, are there any other areas of Customs that we have not discussed where cutbacks are being contemplated at the moment?

Mr Carmody —I think I indicated that almost all areas of Customs will have some reduction. Perhaps the only one, at the moment—and I stress ‘at the moment’, because we have not finalised these—that I doubt will have a reduction is our airport operations, because of the particular funding arrangements associated with them.

Senator BRANDIS —And no doubt you would have been chastened by the report in this morning’s Sydney Daily Telegraph which tells its readers of gaping holes in security at Sydney airport.

Mr Carmody —I am suitably chastened! I saw the headlines.

Senator BRANDIS —I am not vouching for the accuracy of the report in the Sydney Daily Telegraph, but you would no doubt be aware of the sensitivity of the issue of cutbacks in airport security, Mr Carmody?

Mr Carmody —That is correct.

Senator BRANDIS —Would you please take this on notice in an omnibus fashion, if I can ask you to do so. I would like to know every reduction in all areas of the operations, classified both by function and by the locality at which the position to be eliminated was hitherto based.

Mr Carmody —We will share that with you, as we will with our staff, when it is finalised. I would just make a couple of observations. We will share with you, as Mr Buckpitt has said, the particular strategies we are employing to make sure that we achieve our objectives for the community in terms of border security. I would just reinforce that nowhere in our plans do we have plans for compulsory redundancies.

Senator TROOD —The passenger movement charge will increase by $9 from 1 July 2008. Is that right?

Mr Mann —From 1 July 2008 the government will increase the passenger movement charge from $38 to $47 per liable passenger.

Senator TROOD —Can you tell us when that passenger charge was last increased?

Mr Mann —I think it was last increased by $8 to $38 per passenger in the 2001-02 budget.

Senator TROOD —In 2001?

Mr Mann —In the 2001-02 year.

Senator TROOD —And that was an $8 increase that year?

Mr Mann —That is correct.

Senator TROOD —And the anticipated revenue raised over four years is $459 million approximately. Is that correct?

Mr Mann —Yes; $459.3 million.

Senator TROOD —I am just trying to understand the costs that this charge is intended to recover. Budget Paper No. 2 says at page 7 under ‘Revenue measures’:

The Passenger Movement Charge also recovers the costs of processing international passengers at international airports and maritime ports, and the cost of issuing short-term visas overseas.

Is that correct?

Mr Mann —Yes. It was basically to offset the costs of the Customs, Immigration and Quarantine processing and the cost of issuing short-term visas.

Senator TROOD —Did the charge recover all of those costs?

Mr Mann —The charge is not directly disbursed to agencies for covering the costs. It was intended to offset the cost of the Customs, Immigration and Quarantine processing. It was increased in the 1998-99 budget to help meet additional costs arising from the Sydney 2000 Games and was last increased to offset the increased costs of inspecting passengers, mail and cargo in 2001-02. I would have to take on notice the extent to which that is seen as a full cost recovery.

Senator TROOD —Could you do that for me, Mr Mann?

Mr Mann —Yes.

Senator TROOD —The statement in the budget papers seems to be inaccurate, then, because, as I read it, it says that it ‘recovers the cost of processing international passengers at international airports and maritime ports, and the cost of issuing short-term visas overseas’. But you are saying that there are other costs that it seeks to recover.

Mr Mann —No; that there have been other costs associated with the processing of passengers—in particular, there has been a range of aviation security measures in recent years.

Senator TROOD —I have not got to that yet. I realise that. Do you have any figures on the cost of issuing short-term visas overseas?

Mr Mann —That would be a question for the Department of Immigration and Citizenship.

Senator TROOD —So you are saying that I should go to another agency for that answer?

Mr Mann —We collect the charge from airlines. That is provided to—

Senator TROOD —So you are the collecting agency?

Mr Mann —That is correct. It is to cover costs that are incurred by a range of agencies—not just Customs but also Immigration, AQIS—

Senator TROOD —So what you are saying is that you are the collection agency?

Mr Mann —Yes.

Senator TROOD —For other agencies?

Mr Mann —Not for other agencies, but to collect the charge. The amounts are not disbursed to agencies; they are paid into consolidated revenue to offset those costs that we and other agencies incur.

Senator TROOD —There have been costs to which this charge has been attributed in the past and you are now adding, as I read the budget papers, the cost of a range of aviation security initiatives as well. Is that right?

Mr Mann —The measure is to partially offset the costs of aviation security measures.

Senator TROOD —Yes, the cost of a range of aviation measures. Could you just elaborate for us what this range of aviation security initiatives might be?

Mr Mann —There have been a range of measures in relation to enhanced aviation security over recent years, including the upgrading of security at airports, implementation of the Air Security Officer Program, application of security regulation regime at all airports, promoting industry awareness and compliance and placing trained officers on domestic and international flights. There are a range of other measures, including improved data access for border control agencies, expanding the detector dog program, improving security and crime information exchange arrangements for aviation, funding counterterrorism first response teams to a terrorist incident or threat in the airport environment, community policing at airports, enhanced CCTV monitoring and analysis capability at international airports, funding trial X-ray inspection technology and deployment of explosive trace detection equipment, funding increased air cargo security and purchase of mobile X-ray screening vans.

Senator TROOD —That sounds like a large number of initiatives for which you are seeking to recover costs. Do you have a figure as to the value of those?

Mr Mann —No. Customs was not—

Senator Ludwig —As I understand it, I am advised that the national security aviation initiatives implemented since the 2001-02 budget are expected to cost approximately $2,249.3 million to 2011-12. Currently the costs are not recovered as part of the passenger movement charge. The measure itself is estimated to raise about $459.3 million over four years. It was, as I think you have heard, last increased in the 2001-02 budget by $8 million to offset the increased cost of inspecting passengers, mail and cargo at Australia’s international airports. Since 2001 the government has implemented a significant number of aviation security measures, including improving data access for border control agencies, increasing airside border control, increasing cargo security, funding counterterrorism first response teams and the unified policing model—if that helps.

Senator TROOD —Somewhat, Minister. It helps me to understand that there are a large number of aviation security initiatives of considerable expense. It does not quite help me understand why a decision has now been made to try and recover some of those costs through the passenger movement charge. Can you explain that to me, please?

Senator Ludwig —It was in order to partially offset the cost of the national security aviation initiatives. The government said it would, and it did, increase the PMC from 1 July 2008, by $9, from $38 to $47.

Senator TROOD —I see that. That is a budget measure but, at some stage, a decision must have been made to try and recover some of those costs via this charge. Is that right?

Senator Ludwig —It does, as you have already heard, get paid into consolidated revenue. It is not an offset, as you would directly attribute it. It is to partially offset in the sense that it goes to consolidated revenue as an income. Along with all of the national security aviation initiatives and the range of other work, it recovers the costs of the Australian Customs Service, the Department of Immigration and Citizenship and the Australian Quarantine and Inspection Service in processing international passengers at international airports and maritime ports and the issuing of short-term visitor visas.

Senator TROOD —Minister, you seem to be saying that—

Senator Ludwig —This is the advice that I have that I am happy to help you with. If there is any other further detailed information then either Customs or I can seek to find an answer.

Senator TROOD —The proposition that you seem to be putting to the committee is that there are a large number of charges related to aviation security et cetera and that a decision has been made to try to increase the recovery of those associated costs and that this charge has been increased in part to help to recover some of those costs.

Senator Ludwig —Yes. The PMC is a cost recovery levy imposed under a tax act rather than a fee-for-service levy, if that helps. It is not a fee-for-service levy.

Senator TROOD —But this is only a partial recovery of those costs. Is that correct?

Senator Ludwig —Yes, clearly it is. The approximate costs are significantly more than the 459. I think I said in the response that I have given that it is sought to partially cover those costs

Senator TROOD —Clearly that seems to be the case. I suppose that leads to the question, Minister or Mr Mann, as to how long one might expect these charges to continue to expand without there being a further increase in the passenger movement charge.

Senator Ludwig —That would be a budget question. But I can put it in this context: if the PMC had been indexed to, for argument’s sake, the consumer price index since 2001, it would be about 46.45c now. As to where it might move from there, given the price it is now, that is a budget matter. It is really impossible to answer that from a Customs perspective.

Senator TROOD —So there has not been a decision not to further increase it?

Senator Ludwig —We have only had the recent budget, where it was increased from 1 July 2008. I am unaware of any other information that might suggest anything else.

Senator TROOD —I refer to the list that I have been given, Mr Mann. Is that of all of the items that you quickly read through just a moment ago?

Mr Mann —I think there are over 100 measures, and that was a large but not complete list of them.

Senator TROOD —Perhaps you would be good enough, if I could put it on notice, to list those items that this is attributable to for the purposes of the committee. You said there were over 100. Is that right? Perhaps you would take that question on notice.

Mr Mann —I will take that on notice.

Senator TROOD —Thank you, Mr Mann. Do you have a cost that is attributable to Customs processing those arriving and departing from airports? I am conscious that Mr Carmody said that one of the areas where it was unlikely there would be any cuts in the overall Customs Service was likely to be airports. Is that right, Mr Carmody? Did I hear you correctly in that respect?

Mr Carmody —That is correct.

Senator TROOD —I assume that reflects the emphasis that is being placed on airport security and the responsibilities that Customs has at airports. Do you have a figure as to the cost for each of the movements? Is there an attributable figure for those movements?

Mr Carmody —We would have to take it on notice as to what we could do. I do not have it to hand. If you are asking for the total cost of our airport operations divided by the number of passengers, we can provide something like that for you.

Senator TROOD —I suppose I am interested in determining whether or not you make, for the purposes of your budget, a calculation as to the number of movements et cetera and whether or not that is related to the number of officers you have on duty.

Mr Carmody —That is certainly a factor that is taken into account in our staffing: projections of movements of passengers at international airports.

Senator TROOD —And they presumably are increasing? Is that correct?

Mr Carmody —That is correct. That is the projection at this stage.

Senator TROOD —Is that what I am seeing in these projections for the increases over the next four years? There is an increase of 106 million to 124 million movements in the forward estimates.

Mr Mann —Yes, there is an impact that flows through to the passenger movement charge that comes from the expected increase in passenger numbers departing. That is in calculating the passenger movement charge estimates. Customs itself receives a workload funding adjustment. That is also based on the marginal cost of additional passengers. At this stage of the estimates it is something like 4.9 per cent growth per annum.

Senator TROOD —So you are expecting something like a 4.9 per cent increase in movements. Is that correct?

Mr Mann —In international movements, yes.

Senator TROOD —And that is for all airports across the country. Is that right?

Mr Mann —It is averaged out. Certainly the distribution would differ per airport but, as national forecasts go, it averages out at 4.9 per cent.

Senator TROOD —Do you have any figures in relation to particular airports—

Mr Mann —Not with me.

Senator TROOD —or to the increase in movements at particular airports?

Mr Mann —We could give you historical information.

Senator TROOD —Do you have projections?

Mr Mann —Customs would not create such estimates. They are based on tourism forecasts, which would be publicly available, I believe. We can certainly see if we can identify those for you.

Senator TROOD —That would be helpful; thank you. You have mentioned tourism and I am wondering whether or not there has been any consultation with the tourism industry about the increase in this passenger movement charge.

Mr Mann —Not by Customs.

Senator TROOD —Are you aware of any consultation that took place prior to the announcement of the increase?

Mr Mann —I am not aware.

Senator TROOD —Mr Carmody, are you—

Mr Carmody —No; I am not aware.

Senator TROOD —Where might I go to clarify that matter?

Mr Carmody —I suspect the Department of Finance and Deregulation would be your best port of call.

Senator TROOD —Are you suggesting that it would not be normal to make inquiries on this line?

Mr Carmody —No. I am just suggesting that they would be best positioned to answer those questions.

Senator TROOD —Has the Customs Service had any reaction to this increase announcement?

Ms Dorrington —Yes. We have had some inquiries by industry about the increase to the passenger movement charge. I am the chair of the national passenger facilitation task force. We have a meeting with industry in June and I will be outlining the measures and the way the measures will work into the future.

Senator TROOD —You put that in fairly neutral terms—that is, that you have had some inquiries about it. But have you had any reaction from industry to the increase in the charge?

Ms Dorrington —I can assure you that industry has not been positive in their reaction. However, neither have they been overly negative.

Senator TROOD —How ‘unpositive’ have they been? Let me put it the other way. How critical have they been?

Ms Dorrington —They have been critical in the sense that industry, particularly tourism bodies, have a view that passengers are already paying enough money in taxes and charges through ticket fares.

Senator TROOD —That is a reasonable proposition, isn’t it?

Ms Dorrington —So, of course, they are critical of any increase in taxes and charges that comes through passenger fares because they have a view that this would have an impact on tourism.

Senator TROOD —Do you not share that view, or do you have no view on that view?

Ms Dorrington —I do not have any evidence before me.

Senator Ludwig —Chair, it does seem that we are moving into an expression of an opinion by a witness in this area.

Senator TROOD —Actually, Minister, I was seeking Ms Dorrington’s view on the reaction from industry to this increase in charge, which she was being very helpful about.

Senator Ludwig —Witnesses are still not required to give opinions. That has not changed. That would be an opinion.

Senator TROOD —I acknowledge the undesirability of seeking that information but I was seeking the industry’s reaction to the increase in charge.

Mr Carmody —She has provided the understanding of that reaction and we cannot do any more than that, I think.

Senator TROOD —I see. Ms Dorrington, is it from travel agents in particular or is it from across the industry that you have had this reaction?

Ms Dorrington —From the tourism industry.

Senator TROOD —I see. Through the peak body?

Ms Dorrington —Yes.

Senator TROOD —Have they sought any discussions with you? You are going to meet with them next month—is that right?

Ms Dorrington —That is correct.

Senator TROOD —You intend to explain more completely the intention behind this increase?

Ms Dorrington —That is correct.

Senator BARNETT —When and where will you meet them?

Ms Dorrington —I am meeting them on—I might be corrected if the date is wrong—I think it is 23 June in Cairns.

Senator BARNETT —Can you provide further and better particulars?

Ms Dorrington —I can, on notice. I can confirm the date.

Senator TROOD —Thank you. That concludes the questions I have on this subject.

Senator BRANDIS —Arising out of the line of questioning that Senator Trood was pursuing, Ms Dorrington, had there been consultations with industry in advance of the increase in the passenger movement charge? You would be aware of that, wouldn’t you, in your role?

Ms Dorrington —I may be aware of it, but—

Senator BRANDIS —You would expect to be, wouldn’t you?

Ms Dorrington —I am not aware of any consultation that did take place.

Senator BRANDIS —No, that is not the question I asked you. Had there been consultations, in the ordinary course of your work, in your role, you would know about it, wouldn’t you?

Ms Dorrington —I expect that I would know, but not necessarily so.

Senator BRANDIS —Given that you are unaware of any such consultations, it seems likely that there were none.

Ms Dorrington —It does seem that way.

Senator BRANDIS —You would know about it too, Mr Carmody, wouldn’t you?

Mr Carmody —Not necessarily.

Senator BRANDIS —Though probably.

Mr Carmody —Not necessarily at that level. I have already reported that I am not aware of those.

Senator BRANDIS —You have told us that you are not aware. But let us not leave it—

Mr Carmody —Ms Dorrington would be the one who conducts on behalf of Customs, as she has explained, in her position, the ongoing discussions.

Senator BRANDIS —Ms Dorrington has told us that she would expect to be aware if there were any and she is not aware that there were. You have told us that you are not aware of any consultations—

Mr Carmody —That is correct.

Senator BRANDIS —and as the head of Customs you would expect to be aware too, wouldn’t you, had there been?

Mr Carmody —Probably but not necessarily was the answer.

Senator BRANDIS —So the fact that neither of you are aware of any such consultations happening would lead to the fair inference that there were none?

Mr Carmody —I cannot make that conclusion. We are not aware of any.

Senator BRANDIS —I know Senator Barnett has a question about Customs as well. I promise, Senator Barnett, you will have time to ask it before 11 o’clock. Customs prepares, does it not, historical data which records the number of items of cargo inspected in each year?

Mr Carmody —Yes.

Senator BRANDIS —Those data are broken up, are they not, by reference to shipping cargo, air cargo, air freight, shipping freight, passenger shipping cargo—or, in other words, baggage—and airline passenger baggage. Are those the full categories?

Mr Carmody —There is also post.

Senator BRANDIS —Of course.

Mr Carmody —I am not sure about passenger.

Mr Mann —A distinction we would make is detections in sea cargo, air cargo and postal, and finds in passenger baggage.

Senator BRANDIS —Sea cargo, air cargo, post and passenger baggage. What is the last year for which there were complete data assembled? Do we know the data for 2006-07 yet?

Mr Carmody —It should be in our annual report.

Mr Mann —We should have data for 2006-07.

Mr Carmody —2006-07 in the annual report.

Senator BRANDIS —Does Customs also set targets for each year as to the number of items of cargo in each of the categories it proposes to inspect?

Mr Carmody —If you look at the portfolio budget statements, page 114 includes a range of those details. For example: sea cargo, number of 20-foot equivalent units inspected, 134,000; air cargo consignments, 6.2 million; and so on.

Senator BRANDIS —Thank you, Mr Carmody, for directing me to that. That is exactly what I was looking for. How do the 2008-09 targets or forecasts compare? We do not have the 2007-08 figures yet, do we?

Mr Carmody —No.

Senator BRANDIS —Do we have provisional figures for 2007-08?

Mr Carmody —The portfolio budget statements would have targets for those.

Senator BRANDIS —But the last year for which we have actuals is 2006-07, correct?

Mr Carmody —I assume that would be the case.

Senator BRANDIS —Taking sea cargo, air cargo and mail one by one, are the targeted or forecasted number of items or units inspected in each category in 2008-09 greater or fewer than the actuals for 2006-07?

Mr Mann —For sea container inspection, we have consistently had a target in recent years of 133,000 20-foot equivalent units. Shipping containers come in 20 or 40 feet, so to standardise the target we use 20-foot equivalents.

Senator BRANDIS —What was the actual figure in 2006-07 for that category?

Mr Mann —The actual figure was 140,539.

Senator BRANDIS —And the target for that category in 2008-09 is fewer?

Mr Mann —It was 133,000.

Mr Carmody —The target to 2006-07 was 133,000—

Senator BRANDIS —That is not what I asked.

Mr Carmody —If I can just go through it: the target was 133,000. We over achieved, but we have maintained the target and the actual results hopefully will over achieve.

Senator BRANDIS —I understand that, Mr Carmody. It might be helpful if you just answer the questions I am asking. In relation to air cargo, what were the actual figures in 2006-07, for the number of consignments inspected?

Mr Mann —Our target was 6.2—

Senator BRANDIS —No, I am only interested in the actuals. How many were inspected?

Mr Mann —For 2006-07 the actual amount of cargo physically screened was 6.418834, so 6.4 million.

Senator BRANDIS —There is a distinction between ‘inspected’ and ‘examined’. I take it ‘examined’ means a closer scrutiny. What were the actuals in 2006-07 of the number of air cargo consignments examined?

Mr Mann —We have tried to make our targets consistent. You might see the difference between the words ‘physically screened’ or ‘inspected’ and ‘examined’. We have tried to align for our sea, air and postal examinations the same terminology to measure our performance.

Senator BRANDIS —I think it might be faster if you answered the question I asked you and confine yourself to it. I want to know the number of air cargo consignments examined in 2006-07—that is all.

Ms Fisher —We do not have that information available. What we have is: 6.418 million were inspected. I do not have the amount actually examined at that time. We differentiate between inspection and examination.

Senator BRANDIS —Yes, I know. That is clear from the table that Mr Carmody helpfully directed me to. In 2006-07, what were the number of EMS registered items inspected?

Ms Fisher —We do not actually have the exact number inspected.

Senator BRANDIS —Do you have an estimate?

Ms Fisher —Because of the counting methodology that is used by Australia Post to separate the different categories of postal items, we do not have the accurate figures.

Senator BRANDIS —Do you have figures that are not accurate?

Ms Fisher —No.

Senator BRANDIS —Do you have some figures?

Ms Fisher —I can get for you the information that we have regarding the number of items that we examined in the post.

Senator BRANDIS —That is what I am after.

Mr Carmody —We will take that on notice.

Senator BRANDIS —Thank you. There is one I omitted to ask you about: the actuals in 2006-07, under the sea cargo category, of the number of 20-foot equivalent units examined as opposed to inspected. What was that, please?

Ms Fisher —The number examined in 2006-07 was 15,062.

Senator BRANDIS —Thank you. I think Senator Barnett has some questions.

Senator BARNETT —On page 107 of the agency resource statement it says:

The port security measure will double examination capacity at four regional ports. For 2008-09 the additional resourcing comprises $3.687m for operating expenses and $3.264m for capital. The examination facilities are to be located at four key regional seaports: Launceston, Townsville, Newcastle and Darwin.

Vis-a-vis Launceston, can you provide better and further particulars as to what is planned?

Mr Mann —Key elements of the commitment are to include the establishment of dedicated and secure facilities for sea cargo examination in that location in a suitable property with appropriate security for examination activities to occur.

Senator BARNETT —Leasing of property or purchasing of property?

Ms Fisher —It is more likely that we would be leasing property.

Senator BARNETT —Over what period? Do we know?

Ms Fisher —The measures are for four years.

Mr Mann —Key elements also include new X-ray devices to inspect smaller consignments unpacked from containers—cabinet type X-ray—the introduction of a range of substance identification and trace detection equipment already available at larger container examination facilities, and additional staff to support targeting and examination activity.

Senator BARNETT —And the reason you have chosen Launceston?

Mr Mann —Launceston, Townsville and Newcastle are the ports with the next highest volume following Darwin.

Senator BARNETT —So they are growing, getting bigger, and there is more volume, and therefore this type of examination is needed. Is that the purpose of the commitment?

Mr Mann —In addition to the examination of high-risk containers that are already targeted and examined in all ports, including Launceston, this provides us a capability to do additional risk-based sampling to ensure that we keep up to date with emerging trends at these next volume ports. I think the import volume at Launceston is something like 7,415 20-foot equivalents per annum. In Darwin, for example, it is 6,417. So it in fact has a slightly higher volume than Darwin.

Senator BARNETT —And the reasons the resources are not being committed to Burnie, Hobart or Devonport?

Mr Mann —The volume and the risk profile would not warrant that level of investment.

Senator BARNETT —The volume is not as high as in Launceston?

Mr Mann —I do not know that there are containers discharged at Burnie. These are for containerised cargo, not bulk or break-bulk cargo.

Senator BARNETT —When will this commence?

Mr Mann —That will be contingent in Launceston’s case on obtaining appropriate lease arrangements, so I cannot give you a definite date.

Senator BARNETT —But in this financial year—the 2008-09 financial year?

Mr Mann —That is certainly our intention, yes.

Senator BARNETT —The second half of this year?

Mr Mann —I could not give you a definite date at this stage.

Senator BARNETT —Thank you.

Committee adjourned at 11.00 pm