ACTING CHAIR —I now call the witnesses for Territories and Local Government. Senator Lundy?

Senator LUNDY —I want to go through the references to the local government financial assistance grants. I note the papers identify that the budget is committed to providing $1.7494 billion in financial assistance grants. Can you confirm that this represents a smaller proportion of total Commonwealth taxation revenue than the previous financial years? Specifically, what proportion of Commonwealth taxation revenue does that represent?

Ms Page —I do not know that we are able to do that. We are not responsible for determining the macro level of assistance to local government.

Senator LUNDY —But I am sure you have done the calculation.

Ms Page —I do not believe that we have. Our responsibility is to distribute the funds in accordance with the indexation formula that applies to those funds. Those funds this year represent indexing in accordance with the population growth and with CPI to maintain the real per-capita value of the grant pool. That, and the distribution of it, is the extent of our portfolio responsibilities.

Senator LUNDY —Perhaps my question is better directed to the representative of the government at the table. In fact, what it does represent is a reduction in the proportion of total Commonwealth taxation revenue from 0.97 per cent in 1996-97 to 0.76 per cent in 2007-08 and a projected reduction to 0.73 per cent in 2010-11. Minister, I am sure you are familiar with the advocacy of the local government associations across the country seeking one per cent of Commonwealth taxation revenue. What is your response to their charge that their proportion of Commonwealth taxation revenue is slowly being eroded as a result of the formula that is put in place, as Ms Page points out, by government policy?

Senator Johnston —Given AusLink and other projects, I reject that contention. The Commonwealth local government funding is not linked to Commonwealth tax revenue.

Senator LUNDY —No, I think they use it as an argument to make a claim.

Senator Johnston —They might use it but we do not.

Senator LUNDY —I am asking you to respond to their argument.

Senator Johnston —I do not think their argument is founded properly, given the demographic, and given the variation in population and needs of each local government. For example, compare the Shire of Derby/West Kimberley to the City of Bunbury; you could not find two more different groups. So, on a case-by-case basis, the government will provide funding for projects, I would have thought, logically, not about tax revenue but about need and the community of interest.

Senator LUNDY —I think they are arguing, as is obvious, that the pool would be bigger, so it would still be distributed on a needs basis with the other formula applied, but there would just be some sort of benchmarking of the proportion of Commonwealth revenue. I will move on.

Ms Page —COAG agreed to defer consideration of local government funding for a further 12 months. This is because one of the final pieces of work in response to the Hawker review of local government has just commenced, and that is a review by the Productivity Commission into sources of revenue generation for local government. The PC is to report in April next year.

Senator LUNDY —The minister appeared to back the idea of a community infrastructure renewal fund when this PWC report was originally released late last year; is the department formally working on a proposal such as that? I know it has not been announced as policy by the government.

Ms Page —I think we addressed that at last estimates and our position has not changed on that.

Senator LUNDY —It has not changed?

Ms Page —No.

Senator LUNDY —You have not done any work on it?

Ms Page —We have not changed our position.

Senator LUNDY —Are you working on it?

Ms Page —No, we are not working on it. We have read it, but as I indicated, the COAG decision in relation to local government funding has effectively been deferred for 12 months. The government has announced the local government financial assistance grants for the next 12 months together with additional funding for strategic regional and future funding for Roads to Recovery.

Senator LUNDY —Can you rule out that the infrastructure renewal fund will be announced between now and the election?

Ms Page —I cannot rule anything in or out.

Senator LUNDY —Can I ask the government representative at the table, Senator Johnston?

Senator Johnston —I cannot rule anything out either.

Senator LUNDY —It is worth me asking.

Senator Johnston —It is novel I think that you would even ask, but the point is that the minister, who is not me—

Senator LUNDY —No, I appreciate that.

Senator Johnston —is across the policy, and he has not taken me into his confidence with respect to future plans and proposals. If you wish you can put the question on notice. I would have thought that the answer would probably not be the one you wanted.

Senator CROSSIN —We often get answers we really do not want.

Senator LUNDY —You could interpret that both ways. On the issue of financial sustainability of local government, obviously the Productivity Commission report does got to one of those aspects, but what other work, if any, is the department doing with respect to the support or otherwise of local councils in their expenditure and efficiency in what they spend their financial assistance grants on?

Ms Page —We do not undertake work on the distribution of financial assistance grants; those grants are untied. The local councils are the financial and legal responsibility of state governments. The Commonwealth government’s position is that it provides a contribution to councils to assist them with their costs and also provides targeted assistance in the form of targeted road funding as well.

Senator LUNDY —Can you go through the government’s decision on continuing the additional payments for South Australia with respect to roads, particularly noting the minister’s statement that, despite some of the Commonwealth Grants Commission’s recommendations to make changes, they obviously proceeded with the current situation? Was that also in the context of the decision of COAG to defer it to allow the Productivity Commission report to go ahead? What was the reason behind that?

Ms Page —That was a separate piece of work. The government commissioned the Commonwealth Grants Commission to review the distribution of the untied portion of financial assistance grants that is available for local road use to determine whether there was a better distribution on a budget neutral basis for those funds. The Commonwealth Grants Commission reported and indicated broadly that there was not sufficient data to provide a definitive reallocation of the funds. Specifically they indicated that there was not a standard definition of a local road, there was not information on bridges, on traffic use and local road use in each state and on maintenance expenditure by local councils on bridges in each state. There was not data on those, or where it existed it was not standardised. The Commonwealth Grants Commission proposed an interim redistribution of the funds. The government reviewed that and it decided not to adopt the recommendations on the basis that they considered that it was unlikely that the better data would be able to be achieved in the near future. For that reason, they did not accept the revised distribution also to South Australia but chose instead to continue the existing level of additional assistance to South Australia.

Senator LUNDY —Can you tell me what, if anything, the department or the government can do or is doing to address this problem with the reliability of information? Again, the Pricewaterhouse Coopers report identified that system of the whole of life asset management of local councils as being an area requiring some attention. What is the Commonwealth doing to help councils in that regard?

Ms Page —There are a couple of things I think we are doing probably indirectly. The first is that local government and planning minister’s council, which is one of the COAG ministerial councils, has recently endorsed a series of principles for financial sustainability of local councils, and that includes providing guidance to councils on preparation of financial statements, financial management and also the maintenance of assets. Those principles, the distribution of them and promulgation by state governments should start at least providing some guidance to states in terms of how they record their assets and how they value them and, indeed, how they manage whole of life costs. I think also that the Australian Local Government Association, ALGA, might be undertaking some work in relation to local road data. Barry, do you want to speak to that?

Mr O’Neill —We provided some seed funding for that some time ago, but they are undertaking a project to improve data on local roads around Australia. We have not seen a report of that yet.

Senator LUNDY —You provided a grant to ALGA to achieve that?

Mr O’Neill —Part-funded, I believe.

Senator LUNDY —When do you expect some outcome from that investment?

Mr O’Neill —I might have to take that on notice. They may be preparing to announce something at the upcoming roads congress, but I will take that on notice.

Senator LUNDY —I was very interested to see in the budget documents a reference to local community infrastructure funding under the specific purpose payments. It identifies in 2006-07 $667,000 spent for this purpose. What were the projects funded under that item in the budget paper?

Ms Page —I do not know whether that involves expenditure by our portfolio or not. What is the budget paper that that reference comes from?

Senator LUNDY —It is Budget Paper No. 3, it is direct payments, capital and it lists $667,000 provided to local government, and then in the 2007-08 financial year $900,000. Because it said specific to local government for projects on community infrastructure, I presumed you had something to do with it.

Ms Page —No, we do not believe that it is ours.

Senator LUNDY —Some other department is paying that money to that?

Ms Page —Yes, or it could be more than one department; it could be a combination of initiatives. Our grants direct to local government really consist of the financial assistance grants, FAGs, which indeed are paid by state governments.

Senator LUNDY —I will go to Treasury for the answers to those questions?

Ms Page —Yes, Treasury should be able to refer you to the genesis of that.

Senator LUNDY —And perhaps the methodology for that particular grants program.

Ms Page —Yes, it could be a single grants program or it could indeed be a combination of items.

Senator LUNDY —Thank you, that is all I have.

Senator HOGG —I have got some questions on Norfolk Island and a question on the Indian Ocean territories. Firstly, in page 50 of the PBS, there is a contribution of $0.6 million for the Kingston and Arthur’s Vale Historic Area project. Is that the annual commitment?

Mr Angley —Yes, that is the Commonwealth’s contribution to the operations of the KAVHA project.

Senator HOGG —On an annual basis?

Mr Angley —Yes, $600,000.

Senator HOGG —It is not a substantial amount. Has that been increased in recent years?

Mr Angley —I think it has been about that amount for the last few years.

Senator HOGG —Could you therefore tell me what it has been for the last three financial years?

Ms Page —Yes, we could certainly do that.

Senator HOGG —Do you suspect, though, that that is the same amount?

Mr Angley —Yes, we certainly have not changed it radically, but I will check.

Senator HOGG —If you could confirm that for me, please. Is the use of that money audited in any way?

Mr Angley —Yes, it is a contribution to an agreed works program that is agreed by the KAVHA board, on which the Commonwealth has two representatives and the Norfolk Island government nominates two representatives.

Senator HOGG —The expenditure of the amount of money, is that audited in some way, and if so by whom?

Mr Angley —I am not sure. We certainly do the works program at the beginning of the year and I am sure we do audit it, but I would have to check on exactly how that is done.

Senator HOGG —Would you take that on notice as well. Then the next item, the refurbishment of the Kingston pier, that has been an ongoing program.

Ms Page —That has been concluded.

Senator HOGG —That was what I was going to ask. Is the $0.1 million the wrap-up of that cost?

Ms Page —That will be residual costs.

Mr Angley —It is kind of like an insurance wrap-up just at the end.

Senator HOGG —Again, I ask the question, has that program been audited?

Ms Page —That is a Commonwealth grant.

Senator HOGG —A grant?

Ms Page —Yes, that is a Commonwealth facility. It is a Commonwealth heritage item.

Mr Angley —Just on that, that is $10,000 not $100,000.

Senator HOGG —$0.01 million. I just wanted to clarify that that was a wrap-up. At page 74 there are two items of loan repayment: Norfolk Island government Cascade Cliff safety project; can you explain that item to me; and then the following one?

Ms Page —The Cascade Cliff safety project is a project that predates us.

Senator HOGG —Yes, I know the project.

Ms Page —I think it is for fencing and safety measures around a cliff area. The other one is for the resurfacing.

Senator HOGG —I am more interested in the amounts of money, in the estimated actual $300,000 in 2006-07 and the budget estimate of $300,000 in 2007-08. I understand what the project is, I have actually witnessed the project.

Ms Page —They would be the scheduled loan repayments.

Mr Angley —That is based on the amount of crushed material taken from the quarry.

Senator HOGG —Those repayments are being made?

Mr Angley —Yes.

Senator HOGG —What was the period over which the repayments had to be made?

Mr Angley —It was an interest free loan in 1999. This loan is based on royalties each six months. As at 31 January just gone, $2.3 million had been repaid of the $3.5 million and there is about $875,000 left. It is repaid twice a year.

Senator HOGG —There have been regular repayments made in accordance with the agreement about the rock crushing?

Mr Angley —Yes, exactly.

Senator HOGG —Then the next one, the runway resurfacing, I understand that that is taking place. What is the repayment strategy on that?

Mr Angley —The repayments are not due to begin until 30 June, 1 July 2009.

Senator HOGG —1 July 2009?

Mr Angley —Yes.

Senator HOGG —Is there an agreed amount that will be repaid?

Mr Angley —$12 million.

Senator HOGG —Sorry, I presume that will be repaid in instalments?

Ms Page —Yes.

Senator HOGG —Is there an agreed amount for each instalment?

Ms Page —That loan has been rescheduled because the Norfolk government asked could it have a deferral of the commencement of the repayment, and that is why, as Mr Angley said, it does not start until 2009. There is an agreed schedule of payments, I think.

Mr Angley —Yes, I could find out. There is certainly an agreement and the government agreed to move it out three years for the starting.

Senator HOGG —I understand the reasons there. If I turn back to page 51, I will ask this question in respect of both the Office of the Administrator of Norfolk Island, which is outlined at the top of page 51, and I would like also a similar figure for the Indian Ocean territories, if that is available. If I can understand what is here, is it the cost of running the Office of the Administrator of Norfolk Island that is $0.5 million per annum?

Ms Page —Yes, it is the salary of the administrator, consistent with the relevant remuneration tribunal determination, plus the additional costs of running his office.

Senator HOGG —That $0.5 million is salary, plus office costs, relevant travel costs and other costs?

Mr Angley —That is right.

Senator HOGG —Does that include the costs of the official secretary?

Mr Angley —No.

Ms Page —He is paid for by the department, he is a departmental employee.

Senator HOGG —Right, paid for by the department. Is it possible to get a breakdown of those costs?

Ms Page —I think we have indeed done it in the last 12 months or so, but we will have another look.

Senator HOGG —If you could give me the same figure for the Indian Ocean territories; is that possible?

Mr Angley —Certainly.

Ms Page —Yes.

Mr Yates —The cost of the administrator there would be comparable to that of Norfolk, but we would have to take it on notice for the detail.

Senator HOGG —Yes, and the same break-up as well.

Mr Yates —Yes.

Senator HOGG —In Mr Taylor’s opening statement yesterday he said:

Does that have any financial implications and, if so, what are they?

Ms Page —It has no direct financial implications. The government made the decision late last year not to extend Commonwealth legislation to Norfolk Island, in other words Norfolk Island would continue to be responsible for its own revenue raising. Minister Lloyd at the time wrote to the then Chief Minister, however, with a series of expectations. I think we tabled that letter at last hearings indicating what his expectations were, both in terms of a series of legislative reforms and also in terms of financial management and sustainability objectives for the island. I think he also proposes to write to the new Chief Minister to re-emphasise those messages, which he proposes to do shortly.

Senator HOGG —I am not trying to be cute here, but Mr Taylor does say, ‘Our focus will be on working with the new Norfolk Island government to assist the implementation of its commitment.’ What sort of assistance will the department be providing? Will it be a more of an in-kind assistance, and if so, what sort of assistance can the government of Norfolk Island expect?

Ms Page —We meet with them regularly, the minister meets with representatives of the Norfolk Island government. Indeed, there is a meeting this week. The minister has indicated to Norfolk Island that, if they require professional governance assistance in particular areas, the government would consider that request. We have not had a request along those lines.

Senator HOGG —It will be on an as requested basis?

Ms Page —That is correct.

Senator HOGG —That the department and the minister will then determine whether or not the assistance is given and we will see later on what that assistance is worth.

Mr Angley —Yes.

Ms Page —Yes.

Senator HOGG —I am clear. Thank you very much. Thanks, Chair.

Senator CROSSIN —I will keep going with Norfolk Island. Some of the reports have been commissioned by the Commonwealth since 2005. My understanding is that we have the Acumen Alliance; the Australian Bureau of Statistics did the Norfolk Island statistics in June 2006; and the Commonwealth Grants Commission reviewed the financial capacity of Norfolk Island in 2006. Are you able to give me a costing for each of those reports.

Ms Page —I think we might have provided it, but we can certainly provide it again.

Senator CROSSIN —I want to know how much this government has spent on commissioning those three reports.

Ms Page —Yes, certainly.

Senator CROSSIN —There are also now five reports from the National Capital and External Territories Committee, and all five of those reports have clearly pointed to this federal government needing to take action to ensure the sustainability of Norfolk Island. Minister Johnston, can you explain to me why the cabinet submission to give some better sustainability for Norfolk Island did not get approval? Minister Lloyd clearly took a proposal to do something about the situation on Norfolk Island, and I am wondering if you can shed some light on why that is not progressing.

Senator Johnston —No, I cannot. I will have to take that on notice.

Senator CROSSIN —You must have been at that cabinet meeting, surely.

Senator Johnston —I was not. As much as I would like to be, I am not in cabinet, so I do not know what cabinet’s deliberations were. It would probably be inappropriate to discuss them in any event.

Senator CROSSIN —Perhaps you could take on notice the reasons—

Senator Johnston —I certainly will.

Senator CROSSIN —the government would be happy to provide publicly as to why some of these initiatives have not been taken up. Ms Page, can you do that?

Ms Page —I can. There was a media release issued at the time by Minister Lloyd, which has been the government’s statement on its decision on Norfolk Island. There have been no other documents other than that.

Senator CROSSIN —Can you tell me what has occurred since that announcement to address the governance issues and the delivery of basic services on Norfolk Island?

Ms Page —The minister wrote to then Chief Minister Buffet, as I indicated, advising that some of the suggestions or some of the issues that Minister Lloyd marked for attention were being addressed. More generally in relation to the Norfolk Island government finances, a broad based consumption tax was introduced in April this year as a means of generating further revenue for the island, and that has been part of a general rebasing, I suppose, of the tax base of the island. With that, some other taxes have gone.

There has been an increase in the level of tourists over the year before. We looked at the monthly financial indicators and advised the minister accordingly, based on the information that we get from the island, but I think, as we have indicated in the past, they are an imperfect means of assessing the total financial picture of Norfolk Island. The minister has written to the chief minister indicating that publication of forward estimates and forward budgeting would be a useful initiative for the Norfolk Island government to take.

Senator CROSSIN —Are those letters able to be provided to this committee?

Ms Page —We have tabled them in the past.

Senator CROSSIN —What about anything that has been written since February?

Ms Page —I am not aware that anything has been written. As I indicated, there were elections on Norfolk Island in March. There is a new chief minister, and the minister proposes to write to him shortly. But I think we provided the letter to Chief Minister Buffet on notice.

Senator CROSSIN —What is the plan then to address such items as immunisation for children?

Ms Page —Those are responsibilities for the Norfolk Island government.

Senator CROSSIN —So there is no consideration by this government to look at assisting with the immunisation of children?

Ms Page —The government has indicated in general terms that it would consider requests for assistance by the Norfolk Island government on a case by case basis, but the government has made an explicit decision not to extend Commonwealth legislation to Norfolk Island.

Senator CROSSIN —Child protection legislation?

Ms Page —Child protection legislation is generally, I think, state legislation. That falls into the class of legislation that the minister has suggested to the chief minister that the Norfolk Island government may wish to consider.

Senator CROSSIN —Registration of childcare centres?

Ms Page —Again a state government legislation.

Senator CROSSIN —Would Norfolk Island have the capacity to register childcare centres there? There are probably only one or two that I can think of.

Ms Page —I cannot answer that.

Senator CROSSIN —FOI legislation?

Ms Page —Again I think that was part of the package of suggestions made to Chief Minister Buffet.

—Provision of adult health, such as mammography screening?

Mr Angley —Those are the types of issues that have been raised with the Norfolk Island government.

Senator CROSSIN —So you are suggesting to me that this is also a Norfolk Island matter?

Ms Page —It is their responsibility.

Mr Angley —It is part of their health system.

Senator CROSSIN —Education and training programs? Are they also the island’s responsibility?

Ms Page —Yes.

Senator CROSSIN —Senator Hogg went through a number of loans that were in the PBS. Did he miss any? Are there any other federal government loans currently to Norfolk Island?

Ms Page —No, there are just the two.

Senator CROSSIN —Can you take on notice for me how many grants have been extended to Norfolk Island since 2004 and what those grants were for?

Ms Page —Yes.

Senator CROSSIN —You may have answered this with Senator Hogg, but what progress has been made with the World Heritage listing plans for the KAVHA site?

Ms Page —That is a matter for the Department of the Environment and Water Resources.

Senator CROSSIN —So there is no cross-department assessment of that?

Ms Page —We meet from time to time to discuss those issues.

Senator CROSSIN —So the actual progress is something that we would need to ask the department about?

Ms Page —The progress is something that they are responsible for, yes.

Senator CROSSIN —In relation to the Indian Ocean territories, can you give me an update of exactly how many staff from DOTARS are now either on Christmas Island or Cocos Island.

Mr Yates —If you are referring to DOTARS staff—that is, Australian Public Service staff—there are two full-time staff posted to Christmas Island. There is one outposted officer from my branch on the island at the moment assisting with information for the health service review. We have no APS positions on Cocos Island. In addition to those, on any given day there are around 70 non-Australian Public Service public servants based on Christmas Island.

Senator CROSSIN —Seventy of what sort?

Mr Yates —These are employees of the minister. They are non-APS public servants. They are the equivalent of the state public service. Because there is no state government, the Australian government provides state type services.

Senator CROSSIN —Are they employed by the shire council?

Ms Page —No, by the minister.

Mr Yates —At the moment, these are ministerial employees employed under their own certified agreements.

Mr Angley —They are not members of DOTARS, though.

Mr Yates —They are not DOTARS staff. They are not Australian public servants.

Mr Angley —Employed by the government.

Mr Yates —They are non-APS public servants employed by the minister to deliver the state type services on-island. For example, they look after the power authority; they provide health services; they provide educational assistance in the schools; they provide a small clerical staff.

Senator CROSSIN —So they would be health workers, not nurses?

Mr Yates —There is a range of health staff, including assistants at the hospital. Nurses are employed under the agreements, so there are enrolled nurses under the system.

Senator CROSSIN —So this is on Christmas and Cocos?

Mr Yates —Only on Christmas.

Senator CROSSIN —So 70 of those?

Mr Yates —That is correct.

Senator CROSSIN —And they would report to their respective—wherever they are. If they are in a school, they would go to the principal?

Mr Yates —That is correct. We have a series of business units on the island. They have a management structure and they end up reporting through to my APS director, Sheryl Klaffer, on the island.

Senator CROSSIN —Can you provide me with a list, by occupation and number, of those people?

Mr Yates —Yes, we can. I will take that on notice.

Senator CROSSIN —The community consultative committee is still operating on Christmas Island?

Mr Yates —It is still functional. I do not have any details immediately at hand as to when it last met. I can get that information for you.

Senator CROSSIN —Take that on notice. Can you take on notice for me now the membership of the community consultative council?

Mr Yates —Yes.

Senator CROSSIN —Perhaps I will keep going with Christmas Island and we will do Cocos second. The demolition of the Christmas Island precipitator tower is in Budget Paper No. 2. Can you tell me what NFP means, under the forward out years?

Ms Page —It is ‘not for publication’. There are three measures associated with the Indian Ocean territories that appear in Budget Paper No. 2 that have ‘not for publication’.

Senator CROSSIN —Is that because it is due to go to tender?

Mr Angley —Yes.

Ms Page —They are all to go to commercial tender, yes.

Senator CROSSIN —See, I can second-guess people.

Mr Yates —I should add, in terms of the precipitator tower specifically, that contract has been signed. It is in the form of a funding agreement through the mine, PRL. They actually have the contractual arrangement with a company to have the towers demolished and we expect work to start in June.

Senator CROSSIN —So there has been a competitive tender process?

Mr Yates —That was run by the mine.

Senator CROSSIN —Yes.

Mr Yates —We have a funding agreement with the mine that is in place at present and the mine has conducted a process that resulted in a Western Australian company, Delta, being selected to demolish the towers, and work is expected to commence in June.

Senator CROSSIN —Can I ask you then what the cost is, or is that not publicly available?

Mr Yates —The cost of the contract that the mine has signed is $3.7 million.

Senator CROSSIN —That is your costs?

Mr Yates —No. That is the cost that the mine has signed with Delta. The mine is also making its own contribution in terms of project management expenses.

Senator CROSSIN —What costs are you putting into the demolition of this tower?

Mr Yates —That is the part that we are keeping as not for publication to protect the Commonwealth’s commercial interests.

Senator CROSSIN —When will we know that—once the project is completed?

Ms Page —The amount of money that we are providing is to meet the costs of demolition. The contribution by PRL is just the supervision costs of the works. It will be the cost of demolition. There is an amount that the government allocated prior to knowing the outcome. We would still prefer not to provide advice on the full amount until that work has been completed.

Senator CROSSIN —I understand. The tender has already been awarded, essentially?

Ms Page —Yes.

Mr Yates —Yes.

Senator CROSSIN —I am assuming Delta have got experience in handling asbestos and asbestos removal products.

Ms Page —Yes.

Mr Yates —That is correct. The agreement we have with the mine obliges them to only choose a contractor that meets all the relevant legislation for the demolition and removal of an asbestos site.

Senator CROSSIN —The asbestos will be taken off the island?

Mr Yates —Yes.

Senator CROSSIN —I want to ask you one question about the detention centre. I know it is not yours. I know Finance and Administration are responsible for building it and Immigration will manage it once it is up and running. At any stage were you consulted at all, in the design or construction of that, about green energy? My understanding is that there will be no solar panels used on the detention centre and that thousands of litres of diesel will be used to drive what is needed in terms of running that centre, electricity-wise.

Ms Page —I do not think we can speak for the early part of the project. There may have been consultation in relation to aspects of the construction. I am not aware that there were at the outset. We certainly have meetings with both the immigration department and with the department of finance on aspects of the construction where they affect our interests.

Senator CROSSIN —The issue about actually building this place to be a little bit more greenhouse gas, environmentally useful, was never raised in your discussions about this?

Mr Angley —Senator, not while we were in—

Ms Page —We have only been involved during the latter part of the construction phase, so I cannot speak on behalf of any earlier discussions that may have happened.

Senator CROSSIN —I understand the machinations between the departments. Crazy ants control on Christmas Island: do you actually have an assessment of the damage to the ecosystem there or are these all questions I should be putting to Environment?

Mr Yates —No. We are obviously interested as anyone interested in the island is, but that is very much a Parks Australia matter, so the Department of Environment and Water Resources, I am afraid.

Senator CROSSIN —The management of the crazy ants project—the money, the funding, all of that—would be questions for  Parks?

Mr Yates —Parks Australia.

Senator CROSSIN —Let me just go to a few other issues that I have. Can you give me an update on where we might be at—and this is quite an old request but it is worth raising every now and then—with the issue of the five laundry workers who are still $20,000 out of pocket from the closure of the casino?

Ms Page —No. I am not aware of that issue, Senator.

Mr Yates —I am aware in a general sense that that is an unresolved issue, but I would have to take on notice any detail.

Senator CROSSIN —Can you take it on notice?

Ms Page —Yes, certainly.

Senator CROSSIN —Ms Page, just for your interest, when the casino was closed the Commonwealth government actually had the laundry there and the assets of the laundry were sold off but the unpaid entitlements to the laundry workers were never passed on. So my understanding is that it is a revenue matter: the Commonwealth actually took control of the laundry, sold off the washing machines and the dryers inside it, paid everyone who had to be paid except the five workers in the laundry, who I understand are about $20,000 out of pocket.

Ms Page —We will take that on notice.

Mr Yates —Yes. We will have to take that on notice.

Senator CROSSIN —Can you take that on notice and tell me where that might be at?

Mr Yates —Yes.

Senator Johnston —Were these laundry workers employees of the Commonwealth?

Senator CROSSIN —No, but there was an arrangement that, when the casino was closed, the Commonwealth would become the administrator of the asset, so they actually sold and divested all of the interests and then paid out whoever was to be paid: (a) there is no doubt the laundry workers are owed $20,000 each; (b) there is no doubt the Commonwealth actually has that money because they sold the assets of the laundry. We have been working on this issue for five years now.

Senator Johnston —Is there doubt that the Commonwealth actually owes them the money?

Senator CROSSIN —No.

Senator Johnston —All right, that is interesting. We will take that on notice and get to the bottom of it.

Senator CROSSIN —No, there is no doubt. There is a whole history about this issue. Answers have been given in estimates hearings since about 1999 to 2000, so I would be interested. The money from the sale of the assets of the Christmas Island laundry went into the account of the Christmas Island administration. We would like an update on where that is at.

Mr Angley —We will get you a clear written answer.

Senator CROSSIN —Thank you very much. That would be useful. Can I now take you to the asbestos removal—the budget initiative regarding the asbestos removal from the 220 Australian government buildings and infrastructure. That is across both islands?

Mr Yates —Yes, it is.

Senator CROSSIN —And there is again no funding in the budget. Is that because that tender has not been awarded?

Mr Yates —That is correct.

Senator CROSSIN —Are you able to provide me with a list of government buildings that will be cleared of asbestos?

Mr Yates —We should be able to. When I say ‘should’, we had a full survey done of both islands, which made assessments of all the buildings. In fact, I think we should be able to provide that on notice. It is a fairly large document and I do not have it with me.

Mr Angley —There are 220 buildings.

Mr Yates —It was an assessment of the asbestos in the buildings, so it was roofing, cladding, insulation.

Senator CROSSIN —To make it a bit easier, give me a breakdown of government buildings and government houses on Christmas and Cocos islands. So that will be four columns you will need to provide instead of 220 buildings.

Ms Page —Okay.

Senator CROSSIN —I assume, if that goes out to tender, we will be looking for experts in asbestos removal.

Mr Yates —That is correct.

Senator CROSSIN —Who will supervise or oversee that?

Mr Yates —What we expect to do is have a project manager, appropriately skilled, to oversight the program. We would point out here that we have already had an asbestos removal program that removed all the highest risk asbestos, so we are now dealing with the lower risk asbestos.

CHAIR —What do you call the highest risk?

Mr Yates —They have a four-level system, A, B, C and D.

CHAIR —For instance, if you had blue asbestos in a ceiling as insulation, have you removed that?

Mr Yates —If it is in a stable, secure environment—contained—that is a lower risk.

CHAIR —There is lots of that around.

Mr Yates —There is. In government buildings, our aim is to remove all the asbestos. We have already removed the highest risk asbestos, which is the stuff that is friable and is already releasing fibres. We are now moving down to the lower risk asbestos, but our aim is to remove all of the asbestos from government properties.

Senator CROSSIN —I assume that the asbestos will be taken off the island and disposed of.

Mr Yates —Yes.

Senator CROSSIN —My understanding is that the former administrator, Evan Williams, commissioned SGS, a business consultant, to undertake an economic development study of the Indian Ocean territories. This was done three years ago. Does DOTARS have the report or does the minister?

Ms Page —DOTARS has the report. It has to some degree been overtaken by events. You will be aware that there was an announcement by Minister Turnbull—

Senator CROSSIN —I am more than aware of that.

Ms Page —about the future of the mine leases.

Senator CROSSIN —That is right.

Ms Page —There is clearly an issue for the government to consider in relation to the future sustainability of Christmas Island, in particular, as a result of that. More generally, the way in which the annual level of funding to the IOTs is calculated is being reviewed this year.

Senator CROSSIN —Sorry, say that again.

Ms Page —The annual level of administered funding which is provided to run the IOTs is going to be reviewed this year.

Senator CROSSIN —By whom?

Ms Page —Initially by the Commonwealth Grants Commission, who did it the last time in 1999, and that work is being updated at present and will be considered by the government later this year. Given Minister Turnbull’s announcement, it is probably more appropriate to consider the issues of the long-term sustainability and the economic development of the islands in that context rather than in terms of those reports.

Senator CROSSIN —So you have made a decision that perhaps this economic development study is out of date?

Ms Page —I think that it would benefit from consideration in a broader environment, and we have been discussing that.

Senator CROSSIN —With whom?

Ms Page —With the minister.

Senator CROSSIN —Have you spoken to the shire council about shelving that economic study?

Ms Page —I have not said that we will shelve it.

Senator CROSSIN —But you are saying that, by and large, it is out of date?

Ms Page —I think that it has been overtaken a little by events. That does not mean that the government will not draw upon that in considering more broadly some of the big issues that it has to consider in relation to the future of the IOTs.

Senator CROSSIN —Was the shire council ever given a copy of that report?

Mr Yates —No, the shire has not been given a copy of the report. The minister discussed it with the shire on his recent visit to outline very much what Ms Page has said. Having read the report several times, one of the issues we have with it is that it does not provide concrete guidance on how to practically transition the Christmas Island economy from a mining based one to a tourism based one. So we are seeking further advice on that.

In fact, I today signed a further contract with some consultants who are going to make use of the work done by the SGS report and take it forward, as Ms Page has said, to take account of the recent developments, which are quite significant, so that we can come up with a coherent and implementable transition from mining to tourism. This will also tie in with the work being done at the moment with the Commonwealth Grants Commission. So the SGS report has not been shelved; it is being used to help inform the way forward. As it stands at the moment, it is not very useful. It could be because of a change in circumstances.

Senator CROSSIN —Who are these consultants and what have they been tasked to do?

Mr Yates —The name escapes me, so I will have to take that on notice. In summary, their aim is to take the work done by the SGS report, review the current situation and provide us with practical steps that we can use to develop the islands’ economies.

Senator CROSSIN —Are there instructions that these consultants do this in conjunction with the islanders and the shire council?

Mr Yates —Not specifically with the shire council or the islanders. They are working to us based on the work done by SGS and the recent announcements.

Senator CROSSIN —What is your plan to involve the broader community and the council in this transition?

Ms Page —Following Minister Turnbull’s announcement, Minister Lloyd visited the island.

Senator CROSSIN —Yes, I know. He was there the very next day.

Ms Page —That is right, and he indicated that the government wanted to develop a future for the island in consultation with the island. This is really just one input into that. There are a range of issues that have to be worked through. He has indicated, I think, that he wants to continue dialogue with the island. There is also dialogue with the mine that has to take place, because the mine has not definitively responded yet to the announcement by Minister Turnbull or indicated, other than in a very general sense, how it sees its future, how long that might be, what the nature of that involvement in the island might be and what the future employment prospects for people on the island are.

There are a range of opportunities certainly for the government to continue to engage with the island, and indeed Minister Lloyd has indicated that he will be doing that. One of the issues, for example, that the government needs to consider is future plans for the mine workers. Do they wish to stay on the island? Do they wish to relocate? All of those issues are issues that we are committed to working through.

Senator CROSSIN —One of the other issues also might be the reduction in the demand for shipping services. Are you just starting to look at the flow-on effect of not having the mine there and the use of current services that might not be used so much in the future?

Mr Yates —That is one of the key things we are looking at. We have a good understanding of the level of service provided by the shipping services at the moment. Our expectation is that the routine supply ship that runs Perth-Cocos-Christmas-Singapore and back will continue. The major impact of the mine’s closure will, of course, be the reduction in ships coming to pick up phosphate. When the mine closes, of course that drops away to zero. We aim to have a transition. The mine has informed us that they think they have five to six years of remaining life. Our task over the next few years is to develop that transition so that, as the mining winds down, we develop a range of other economic activities on the island. Tourism and associated activities are clearly going to be the major component there.

Senator CROSSIN —Mr Yates, I do not clearly get any sense that there is a commitment to do this in consultation with the shire council or the people on the island.

Mr Yates —In my own case, I visit the island regularly. Whenever I go there, I meet with the shire. The minister does so when he visits. I meet with a wide range of community groups, such as the Chinese Literacy Association, which represents the Chinese business community, and the Chamber of Commerce that represents the non-Chinese business community. This is ongoing consultation that occurs on a regular basis.

Ms Page —Senator, as I indicated, there is no way that the Commonwealth government can make decisions on behalf of the citizens of the Indian Ocean territories without consultation with them.

Senator CROSSIN —I beg to differ, Ms Page. There have been many decisions that have been made in the past without any consultation with them, so it does happen and it has happened.

Ms Page —It would be very difficult for us to determine the nature, the size and the composition of those communities without talking to those people about their future plans.

Senator CROSSIN —Talking to them and actually listening or doing what they think is best are sometimes two different things, but we will not waste time arguing about that now. We might get an update on that next time. I suppose that you are waiting for the mine to react?

Ms Page —Yes, there will be continuing discussions with the mine about the future.

Senator CROSSIN —Is there any kind of formal committee that will be set up to look at the transition arrangements that are needed, or are you just planning to do this work in Canberra in the DOTARS office and just slip up to Christmas Island every now and then and give them a report?

Ms Page —I think that is unfair, Senator.

Senator CROSSIN —Not if I am representing my constituents accurately it is not.

Senator Johnston —I do not think you are.

Senator CROSSIN —So I ask, is there any plan to set up some sort of formal consultative or advisory board or committee that will work with you?

Ms Page —That will be a matter for the minister.

Senator CROSSIN —Can you give me an update on the space base, where that is at?

Ms Page —It is where it has always been at, I think, Senator.

Mr Yates —Senator, Mr Kwon, as the managing director of the associate companies with it, has stated he plans to submit a proposal.

Senator CROSSIN —When did he tell you that? When did he last tell you that?

Mr Yates —As recently as a couple of weeks ago when I was on the island with the minister.

Senator CROSSIN —That was verbally or in writing?

Mr Yates —That was verbally. He has also said it in writing. We await the proposal with great interest.

Senator CROSSIN —So it is where it has always been at. In the meantime, has the mine been given access to the leases that they have to give up?

Ms Page —Yes.

Mr Yates —Yes, the mine has active access to those areas at the moment and is using them.

Senator CROSSIN —Okay, but the space base is where it has always been?

Mr Yates —That is right.

Senator CROSSIN —Can I also ask about Linkwater Road?

Mr Yates —Linkwater Road is at present closed. I received advice from Main Roads WA that, subject to some final technical assessments to do with slope and so on, they expect to be able to advise us that we can reopen the road with relatively minor repairs and clearing, provided we put a load limit on it and probably a reduced speed limit. The shire’s new engineer, who has literally only just arrived on-island, will have the main carriage of implementing that. He needs to understand the issues and talk to Main Roads and then we will work with the shire, the aim being to get the road reopened.

Senator CROSSIN —In answer to a question, you said that the tenders for the roadworks would be sought in the second half of 2006-07. Is that happening?

Mr Yates —The information I have just given you will lead us to issue those but we need to understand exactly what we need to do to get the road reopened. That has taken longer than I would have preferred, but we now have that information.

Senator CROSSIN —Do you have a construction timetable for that?

Mr Yates —Not at this stage because we have not been given the definitive advice. I point out here that one of the delaying factors there is the shire’s engineer having to be replaced. There has been a gap of some two to three months. Without the shire engineer, we do not wish to proceed because we need to work in consultation with them.

Senator CROSSIN —Is it still this government’s policy that there will be no casino licence reissued to the resort?

Mr Yates —Yes.

Senator CROSSIN —That is still the policy of this government?

Mr Yates —Yes.

Senator CROSSIN —Did I read somewhere where $5 million had been given to the resort? Was that from this government?

Mr Yates —Not from this government, no.

Senator CROSSIN —So no money has gone towards the latest refurbishment of the casino?

Mr Yates —Yes. We understand that is private funding.

Senator CROSSIN —The health services: a decision has been made to not privatise that, I understand?

Mr Yates —That is correct; not to outsource.

Ms Page —Not to outsource it.

Senator CROSSIN —I think that was a welcome decision from the island. You said to me that you believed it represented best value for money. Why is that? Is your cost of running the health service much cheaper than what an outsourcing provider was going to cost?

Ms Page —Based on a competitive tender process, yes. There was quite a large differential in cost.

Senator CROSSIN —What is now the situation with the health service? Will it continue as it is?

Ms Page —No, we are restructuring the health service.

Mr Yates —Essentially, the health service is being restructured in consultation with the community. We have two health consultative groups that are being set up on the island. My officer on the island has been talking to people extensively. What we need to do is to move the health service away from a strong focus on acute health care towards one that more effectively manages emerging health issues in both island communities, particularly around improving the health outcomes for people in a—relatively speaking—ageing community, so that we do not have a lot of acute health care.

This is a process that is going to take a little bit of time because clearly we need to keep managing the services as they are at the moment, while we transition to that approach. We are doing this very much in consultation with the communities on both islands, because they have different requirements. This will lead us to develop things such as recruitment plans so that we recruit the right mix of people to deliver these services. It may involve some consideration of what is the right mix of equipment to be provided on the islands, particularly in light of an ageing community.

Ms Page —And a focus on preventative medicine as well, Senator, which the health service has not had a strong emphasis on in the past.

Senator CROSSIN —You have an officer working with the restructuring of the health service till only July; is that correct?

Mr Yates —No, she will be going beyond that. We made an assessment that she would be most effective if she was placed out there for about three months to do this work and then come back to her normal job in Canberra, which includes implementing the reforms, so she will have an ongoing role.

Senator CROSSIN —Who is that person?

Mr Yates —Mary-Ann McQuestin.

Senator CROSSIN —Can I just ask for a quick update on the crane?

Mr Yates —The crane is working.

Senator CROSSIN —Today?

Mr Yates —Yes, and yesterday and, I hope, tomorrow.

Senator CROSSIN —But maybe not tomorrow?

Mr Yates —I expect it to work tomorrow.

Senator CROSSIN —Like you, I keep reading about it in the Islander. One day the footings work and one day they do not. Why is that? Is it an ongoing problem? Is it a structural fault?

Mr Yates —The crane received an exceptionally high rate of use in a short period of time, so instead of wear and tear happening over, say, a 10-year period, it was compressed into a shorter period. We have had the appropriate engineering analysis done, which says that you have wear and tear. We need to fix that wear and tear, which we are doing. The essential thing we have to do is to find a time window where we can take the existing crane down and take it out of service so that this maintenance work can be done.

The plan is to move the crane from Nui Nui onto the platform at Flying Fish Cove whilst the main crane is being repaired, and then the main crane goes back up and the Nui Nui one returns to Nui Nui. To do that, we have to find a window where there are no ships visiting so that we can take it down and do not disrupt services. Our port manager is working on that particular plan. I do not think they have been able to set an exact date at the moment. It is quite a difficult task. You need to find about a two-week window to do that.

Senator CROSSIN —In the meantime? You are just patching up these problems?

Mr Yates —No, the crane is functioning.

Ms Page —It is an issue to do with one of the motors in the crane rather than the four legs which were summarily—

Senator CROSSIN —All right.

Mr Yates —The footings have been repaired.

Senator CROSSIN —And the port access on the other side of the island?

Mr Yates —At present it is open and operational, should we need it. It is only used in particular swell conditions and it has had quite low levels of use because the swell has not required it.

Senator CROSSIN —I want to raise with you an issue that has been raised with me about the time it has taken to repair a fault with the SBS TV channel on Christmas Island. Is that your responsibility?

Mr Yates —It is, yes.

Senator CROSSIN —Why did it take so long and has it been fixed?

Mr Yates —Essentially, because it has been repaired and is back in service. It took time to get that particular item of equipment. I do not have all the technical details. If you need that I can take that on notice. But a piece of electronic equipment on the island failed. It was the ABC one that failed and a judgement was made that we would put the ABC on air and take SBS off, based on the viewing habits of the majority of the population.

Senator CROSSIN —How long did it take to repair?

Mr Yates —I would have to take the details on notice. I do not know about that.

Senator CROSSIN —Have you put mechanisms in place to ensure that perhaps there is not such a long time delay?

Ms Page —Servicing the IOTs and doing it properly is an ongoing issue. Finding people available and appropriately skilled who are prepared to travel to do the work and to do it at a competitive price is a continuing challenge.

Senator CROSSIN —I understand that, but there is an issue about—

Mr Yates —With this particular one, we now have a much better understanding of how to fix that particular fault, but with a reasonably unique set-up there is not anywhere else that does it quite this way because of the nature of the islands. We cannot give an absolute certainty that another unknown thing will not come up. It might take us a little longer to fix than we would all like. It is a reality of the distance and isolation of the islands.

Senator CROSSIN —But it is working now?

Mr Yates —Yes.

Senator CROSSIN —I will just go to Cocos Island and then I am finished.

Senator Johnston —Can we go home then?

Senator CROSSIN —You can go home then. I will not be long with Cocos, I have to tell you. The big news at Cocos would have to be the Rumah Baru plans mark 3, maybe 4.

Ms Page —This is a commitment of funding, Senator, so this is a fairly significant development.

Senator CROSSIN —There was a commitment of funding last time. By the time the project got wings and started to fly, I think the funding was much smaller than we anticipated. Are we looking at the same plans as previously or are we starting from scratch?

Mr Yates —We are not starting from scratch. We are using all the previous work to produce a new design but it will be based on the earlier work: essentially, an island built out into the water with a wharf connecting it to the mainland. It is a smaller scope than some of the earlier ones but it is one that is appropriate for the need. The detailed design work is yet to be done.

Senator CROSSIN —A new environmental impact study would need to occur?

Mr Yates —Yes.

Senator CROSSIN —Under the EPBC act?

Mr Yates —I believe so.

Senator CROSSIN —What arrangements have been made for foreign merchant or foreign military vessels that might use that facility?

Mr Yates —Essentially, none, because they will not be able to. It will still need to be serviced by the barges because the water will still be comparatively shallow. We will not be able to have ships of any sort pulling up alongside it.

Senator CROSSIN —There is a plan to have a new ferry.

Mr Yates —Yes. We have the existing ferry service by a particular vessel. We are looking at better solutions to that in terms of speed and operating costs.

Senator CROSSIN —So we are looking at a different sort of craft?

Mr Yates —I would expect that to be the outcome but that is speculative on my part at this stage. We have not gone to the market on that yet.

Senator CROSSIN —Again, you have not allocated money this time; it is not in the budget?

Mr Yates —Not specifically in the budget. We received a reasonable level of funding through the administered program to allow for depreciation of assets. The existing ferry is thoroughly depreciated.

Senator CROSSIN —Yes.

Mr Yates —My expectation is that we will be able to fund that from within the capital works part of the depreciation fund.

Senator CROSSIN —What happened to the money that was allocated many years ago towards this? Did that go back into consolidated revenue?

Ms Page —It certainly was not spent, Senator.

Senator CROSSIN —I know it was not spent.

Mr Yates —I do not know the origins of that money. If it were done through the depreciation funding stream it would have simply been reallocated to some other capital replacement program within the islands, but I do not know the specifics of that.

Senator CROSSIN —I do not know. It was many millions of dollars and my recollection of five or six years ago is that, by the time plans were actually drawn up for the Rumah Baru and certain things happened, it went out to tender and it was almost $10 million or $12 million more than the money that had been allocated, so the whole thing was shelved.

Mr Yates —Yes.

Senator CROSSIN —There is now a commitment to build it.

Mr Yates —Correct.

Senator CROSSIN —Knowing that that may well be the cost.

Mr Yates —Yes.

Ms Page —In the interim, the government wanted to explore alternatives to the building of a wharf which included the hovercraft option. Those options have been well and truly explored so Mr Yates has indicated, we would now hope, that the Rumah Baru wharf would proceed as planned.

Senator CROSSIN —Are there still plans to perhaps upgrade the airstrip on Cocos Island?

Mr Yates —At present there are no defined plans to do that but as with any capital asset we need to maintain it, which we are currently doing, and then in due course we would need to replace it. That would undoubtedly be a joint DOTARS-Defence activity but at this point there are no plans in place.

Senator CROSSIN —Can I ask you if DOTARS have been involved in or are you aware of any research that has occurred to look at the impact of climate change on Cocos Island, given what is happening to some of the Pacific island communities?

Mr Yates —The primary report I have is a 1992 report looking at rising sea levels. It drew certain conclusions, one being that if the sea water rise was at eight millimetres per year or less the natural growth of the coral would be able to cope with that level of annual rise. I do not have any more recent reports that indicate any change to that. It is a matter we are obviously aware of and we keep in discussion with Environment and Water Resources and the Australian Greenhouse Office on it.

Senator CROSSIN —There is no update on that research in respect of Cocos?

Mr Yates —Not that I am aware of, no.

Senator CROSSIN —You are not aware of any plans?

Mr Yates —Not specific to Cocos, no.

Senator CROSSIN —You are not aware of any plans to update that, because the highest point of land on Cocos is only about—metres or something?

Mr Yates —Nine metres; that is correct.

Senator CROSSIN —You would be aware that we are being now contacted by women on Cocos Island who are looking at getting access to the breast screening program, as the women on Christmas Island have now got. In the answer to the question you suggested to me that you are proposing to implement a similar service for Cocos residents. Is that the purchase and placement of a machine?

Mr Yates —That would be the purchase and placement of a machine next financial year on Cocos Island and an extension of the arrangement we have with BreastScreen WA to undertake screening, I would expect, on the same basis as Christmas Island, and that is once every two years.

Senator CROSSIN —That is not in the 2007-08 budget?

Mr Yates —At the scale of dollars, we would again be funding that from within the administered budget.

Senator CROSSIN —You are planning to purchase that machine in 2008-09?

Mr Yates —No, the next financial year, 2007-08.

Senator CROSSIN —You will purchase that machine then?

Mr Yates —Whilst that is subject to the minister’s approval, we have not submitted that budget for it yet.

Senator CROSSIN —So I cannot go skipping back to my office and email everyone on the island.

Mr Yates —It remains our intention, as previously stated, to do that.

Mr Angley —In our draft budget.

Mr Yates —That is correct.

Senator CROSSIN —It is in your draft budget.

Mr Angley —It is one thing that we—

Senator CROSSIN —You are proposing it?

Mr Angley —Yes, it is one of our plans.

Senator CROSSIN —But we are waiting on the minister’s approval to say—

Mr Angley —We have not put it to the minister yet. We are trying to sort the budget out.

Ms Page —The minister is certainly aware and supportive of the initiative.

Senator CROSSIN —Thank you. Is there any other sort of update on the wind generators on the island that I need to perhaps—

Mr Yates —No. There has been no change since last time. They remain out of service at present while we work with the original supplier to finalise a design that satisfies us that it meets safety requirements and then we can bring them back to service.

Senator CROSSIN —Your answer says to me that the department is working with the manufacturer—

Mr Yates —That is correct.

Senator CROSSIN —to resolve the problem. Is that still the status?

Mr Yates —That continues, yes.

Senator CROSSIN —In relation to the cost-benefit risk analysis for the Home Island water supply, do you now have the further environmental analysis of the long-term options?

Mr Yates —I am waiting for a formal report from the Water Corporation in Western Australia, which held a full study of this about one month ago. That involved the shire, us and the water corporation’s own technical expertise. They are finalising that report and will send it to us. We await it because we see it as very important advice on how we go forward.

Senator CROSSIN —When are you expecting to get that?

Mr Yates —I expect to get it soon, but I cannot give you an exact date.

Senator CROSSIN —So there will be no change in that situation until you get this report; is that right?

Mr Yates —No, except of course it has rained significantly, so at the moment there are no water issues on Cocos Island.

Senator CROSSIN —I want to ask you about the deregulation of airline services in Asia. I noticed an article in the Atoll about Air Asia and Air Asia X. Is there any likelihood that this will impact on the services provided by National Jet?

Mr Yates —With respect to the National Jet services, that is unlikely to occur in the short term because of the nature of that particular market. The current contractual arrangements with National Jet continue until, I think, March 2009. I do not see any reason to change those. We are, however, actively looking at how we can improve northern airlink services to both Christmas and Cocos Islands. We certainly do not have any definitive answers at the moment.

I am getting some advice on how the aviation market is going to look over the next five to 10 years, with particular interest in what the low-cost carriers are likely to be able to do from Asia down to Cocos and Christmas islands, to see how we can develop the tourism markets on those two islands and get better support from the north. It is at its formative stage at this point.

Senator CROSSIN —Have Air Asia or Air Asia X made any application that you are aware of to fly into those islands?

Mr Yates —No, not that I am aware of at the moment.

Senator CROSSIN —Have you looked at the possibility of flying out of Broome—a Broome-Christmas-Cocos link?

Mr Yates —Not recently. I believe that there has been some work done on that in the past; not so much by DOTARS but by others. It is hard to see the tourism potential for that working compared to coming out of a hub such as Singapore or Kuala Lumpur, because they are just so much closer—dramatically closer. It is hard to see that the numbers of tourists from Broome wanting to go to Cocos and Christmas islands would make it work, because of the long flights involved.

Senator CROSSIN —Broome does not have an international airport either, does it?

Mr Yates —It has in the past.

Senator CROSSIN —It has a functioning international airport?

Mr Yates —It has in the past. I do not know its current status. That would be a question for someone else.

Senator Johnston —It is used mainly in respect of customs and maintenance.

Senator CROSSIN —My very last question is: what is happening with the quarantine station? You have had your elephants. They have gone.

Mr Yates —The quarantine station is still controlled by AQIS. There is an agreement that they will transfer it to DOTARS when they are ready. They have not actioned that one yet, so the future of the station remains with AQIS at the moment.

Senator CROSSIN —Has there been any approach from you to AQIS to relinquish that asset to the shire council?

Mr Yates —Not from us to AQIS, no.

Senator CROSSIN —So they are currently still sitting on it?

Mr Yates —That is correct. It is still their asset; their property.

Senator CROSSIN —I am done.

ACTING CHAIR —To conclude, I would like to thank the department, the minister and the officers at the table. Thank you very much.

Committee adjourned at 7.23 pm