CHAIR —Senator Eggleston, I understand you have questions.

Senator EGGLESTON —I would like to ask ANSTO about some issues to do with the availability of medical radioisotopes in Australia. First, I understand that about 400,000 Australians a year benefit from the medical procedures using isotopes supplied by ANSTO, and about another 80,000 from radioisotopes produced in the National Medical Cyclotron. Do you agree with that?

Dr Smith —That is correct—about 500,000 in total.

Senator EGGLESTON —The use of radioisotopes is very important in modern medicine, as I am sure you would agree. I understand that we do have some problems with the production and supply of radioisotopes at the moment. First, as I understand it, the new Opal research reactor built last year closed down just some three months after its official opening. Is that the case?

Dr Smith —Yes, that is correct. The fuel that was loaded into the reactor, which was supplied to us from the manufacturers in Argentina, actually failed and we had to get a new start-up core—the core that you need to start the reactor from the beginning. We had to seek another one to be manufactured. That is being manufactured in France now, and is in fact ready to start. At the moment we are waiting for regulatory approval to start the reactor.

Senator JOHNSTON —What are you going to do if it fails?

Dr Smith —The core?

Senator JOHNSTON —The fuel failed—

Dr Smith —The fuel consists of aluminium plates with uranium embedded in them, and they are held in a fuel element. In fact it was the connection of the plates to the element body that allowed some movement and, as soon as that was discovered, the reactor was stopped and the problem identified. It was not recoverable as it was, so we had to get fuel remade in France.

Senator JOHNSTON —At whose cost?

Dr Smith —That is a matter we are still discussing, but it is certainly my intention that it will be at the cost of the Argentineans.

Senator EGGLESTON —The question of cost is an issue. Will ANSTO be seeking to recover those costs?

Dr Smith —Exactly. At the moment our main focus is to get the reactor running again, and that needs everybody to cooperate. We will then settle down to come to the commercial settlement, although at this point we have had initial meetings in which we have made what might be called the full claim of the damage that has occurred.

Senator EGGLESTON —What is the scale of that damage? What sum are you seeking?

Dr Smith —I believe that $2 million is the total.

Dr Cameron —It is made up of different elements and, as Dr Smith said, part of it goes to the cost of the fuel, and that is what he has identified. Clearly there are other areas in terms of the rectification process that we will also be pursuing contractually. In addition, we will also be pursuing any other assurance for business continuity disruption.

Senator FORSHAW —Do you mind if I just jump in on costs, to save me coming back to it? You said $2 million—

Dr Smith —That is the direct cost of the fuel part.

Senator FORSHAW —There were reports that it was costing around $100,000 a week for the importation of—

Senator EGGLESTON —Yes, I am going to come to that.

Senator FORSHAW —I thought you were moving off costs, that is all.

Senator EGGLESTON —We are, but we will come to the replacement cost. At the time of this shutdown, Senator Wong put out a media release in October last year referring to the shutdown as an important public safety issue. Was she correct in saying that? Was there any sort of issue of public safety? Was there any issue of radiation affecting the public in the area where the plant was?

Dr Smith —No, there was not.

Senator EGGLESTON —We would not agree with Senator Wong’s view that it was an important public safety issue. You are happy that your procedures and the mechanisms that were in place were enough to protect the public from any danger?

Dr Smith —Yes.

Senator EGGLESTON —Did Senator Wong consult you about the issue of public safety?

Dr Smith —No.

Senator EGGLESTON —She simply made this press release without any consultation whatsoever with you on this matter.

Senator CARR —Since you have raised the question, despite the fact that this was in the caretaker period, I actually requested a briefing on these issues and the former minister denied me a briefing on these matters directly in correspondence that I sent to her on 25 October. It is most unusual, I might say, in a caretaker period for the shadow minister not to be granted a briefing, particularly in these circumstances.

Senator EGGLESTON —That is interesting, but I suppose that it is Senator Wong who appears to have made a rather inflammatory statement without any kind of basis of consultation with the relevant authority, and not you.

Senator CARR —What I can say is that, as the responsible shadow minister, I sought a briefing from the officers who are present at the table today, and that was denied. It was blocked by the previous minister, which, I repeat, is extremely unusual.

Senator EGGLESTON —Thank you very much for that information.

Senator CARR —Perhaps you could ask Mrs Bishop why she chose to do that.

Senator EGGLESTON —I can only commend you on the fact that you sought a briefing and note that Senator Wong jumped in publicly creating fear in the public of that area about possible nuclear radiation hazards. We were told that the shutdown was expected to last for about eight weeks, but I understand that on 10 January it was reported that the water leak had been repaired and delivery taken of newly designed rods. When can we expect this plant to actually be back in production?

Dr Smith —We are awaiting regulatory approval at the moment.

Senator EGGLESTON —What does that involve?

Dr Smith —It involves ARPANSA satisfying itself that the reactor is perfectly safe.

Senator BUSHBY —You have your new fuel?

Dr Smith —Yes, the new fuel has arrived. We are awaiting the regulatory process to reach a conclusion.

Senator EGGLESTON —Senator Forshaw referred to the cost of replacement isotopes. Could you provide some information about that? How much does it cost to bring in isotopes from overseas, and where have they come from?

Dr Smith —At the moment most of the isotopes are coming from South Africa, but we also get some from Canada. The cost is approximately half a million dollars a month.

Senator EGGLESTON —What isotopes does the reactor produce?

Dr Smith —The main isotope that is produced in the reactor is molybdenum-99 which is used in making technetium-99 generators, which is used in approximately 60 per cent of nuclear medicine procedures, and the iodine isotopes—the isotopes that are made within the reactor.

Senator EGGLESTON —What has been the total cost of these imports of molybdenum-99 and the other relevant isotopes over the period?

Dr Smith —The net cost to ANSTO, because in fact we buy molybdenum and then we sell it to hospitals, in the additional cost compared with manufacturing it, is about half a million dollars a month. We anticipate that will rise to be a total of $8 to $10 million.

Senator EGGLESTON —Okay, that is quite a significant sum.

Dr Smith —Yes.

Senator EGGLESTON —You will have the Opal reactor up and running, I suppose, within a short period of time. Do you feel it is completely safe, that there is no danger to the public in the area it is located?

Dr Smith —I do.

Senator EGGLESTON —No problems at all?

Dr Smith —No problems.

Senator EGGLESTON —It is interesting you say that, because the Greens have put out a statement saying that they called for permanent closure of the Opal reactor. Senator Nettle put out a press release calling for permanent closure. Would you like to comment on the impact this would have on medical services provided in Australia, since it seems that these isotopes can be imported, or is it much cheaper to produce them in Australia?

Dr Smith —We have the experience of trying to import isotopes and in the period we have been importing isotopes we have had a failure to import once every 2.4 weeks on average. The security of supply of isotopes to Australia would be greatly lessened by an importation strategy, and equally, of course, the short-lived isotopes lose quite a lot of their activity during the delivery. If you talk to the nuclear medicine specialists, they tell you that some procedures are simply not possible with imported isotopes.

Senator EGGLESTON —In other words, for security of supply of isotopes, we need to have a plant like the Opal plant in Australia producing isotopes?

Dr Smith —That gives Australia the greatest security of access to modern nuclear medicine facilities.

Senator EGGLESTON —Do we supply New Zealand?

Dr Smith —We supply New Zealand—not all of New Zealand’s activities, but the activities that require short-lived isotopes.

Senator EGGLESTON —The other issue I raise is that Professor Baldock, the Director of Sydney University’s Institute of Medical Physics, has expressed the view that the growing demand for radioactive pharmaceuticals in hospitals and nuclear medical diagnostic technology has created the need for more trained specialists in the field of nuclear science. You have told us about the needs on an ongoing basis for medical isotopes in Australia, but I understand that, while Professor Baldock proposed a training program to graduate 15 postgraduate nuclear scientists a year, that program has not been continued or developed. In fact, I believe that it has been abandoned. Would you like to comment on that?

Dr Smith —It is true that the previous government had a program for training up to 15 nuclear technology graduates in a four-year training program, and that has been abandoned by the current government.

Senator EGGLESTON —Do you know why the current government has abandoned that program?

Senator Carr —It is a budget measure.

Senator EGGLESTON —It is a budget measure. So, even though we need nuclear scientists to work in this field to ensure that there is a security of supply for the treatment of Australians requiring imaging with radioisotopes, you are abandoning the program as a budget measure. What was the cost of this program?

Dr Smith —It was $6 million over three years.

Senator EGGLESTON —That is $2 million a year. For the price of $2 million a year—

Senator Carr —No, it is one, two and three. It is on page 72.

Senator EGGLESTON —What are you saying the cost was?

Senator Carr —It is one, two and three—six million. It is not two million a year.

Senator EGGLESTON —I am sorry, but it is still a relatively small amount of money, isn’t it? It is a very small amount of money.

Senator Carr —Indeed.

Senator EGGLESTON —It seems very hard to understand the thinking behind abandoning such an important project, Senator Carr.

Senator Carr —These are often difficult decisions that have to be made in the context of the budget. We have been left with a difficult budgetary situation as a result of the neglect of the previous regime, and it has placed this country in quite a difficult inflationary situation. The current government is moving to address that, and this is one of the measures as part of the fiscal discipline that we are imposing.

Senator EGGLESTON —So, for a relatively small amount of money, the government is willing to put in jeopardy the health of a lot of Australians who require medical isotope technology. Is that the case? It seems to be a very irresponsible decision to me.

Senator CHAPMAN —If you change workplace relations you increase inflation.

CHAIR —Senator Chapman, we are trying to hear Senator Eggleston.

Senator CHAPMAN —Let us have some commonsense.

Senator EGGLESTON —Let us hear it from Senator Carr. I think it is quite scandalous, Senator Carr. This is a major requirement for modern medicine and here you are, for a few paltry million dollars, abandoning a training program so that we would have qualified people to provide these sorts of services in Australia.

Senator Carr —This is a budget measure that is required—

Senator EGGLESTON —You said that before, but it is a fairly lame sort of excuse.

Senator FORSHAW —Coming from a government that cut 10 per cent off universities—

CHAIR —Senator Forshaw!

Senator CHAPMAN —When we were facing a $10 billion deficit, not a national surplus.

CHAIR —Senator Chapman, we are trying to hear answers and questions. Please proceed, minister.

Senator Carr —This is a budget measure that has been made necessary because of the profligate manner in which the previous government chose to manage the finances of this country.

Senator JOHNSTON —You’ve got 20 billion bucks in that bank.

Senator CHAPMAN —A $20 billion surplus.

Senator Carr —It is my understanding that ANSTO has reordered its priorities to ensure that the training is maintained.

Senator EGGLESTON —At what cost, and whereabouts? Will they be additional people to the previous number of qualified scientists being produced in Australia?

Dr Smith —ANSTO’s contribution is in fact to take graduates and to give them a training program at ANSTO and perhaps overseas to get the training. There are no straight nuclear engineering or nuclear science courses in Australia, so ANSTO’s program, which is the one obviously we are continuing with, is to take graduates. We have recruited 12 graduates—12 bright young people—and they have started at ANSTO. They are coming to learn about all aspects of nuclear science and technology, and that includes nuclear medicine and radio pharmaceuticals, and they will be part of ensuring the future for ANSTO.

Senator EGGLESTON —How will you fund that?

Dr Smith —We are reordering our priorities to use the money that we get.

Senator EGGLESTON —What does that mean, though? Could you provide some information about what that means? Are you cutting other programs?

Dr Smith —It means we have to find an extra $1 million in the coming year, $2 million in the year after, and $3 million in the year after that.

Senator EGGLESTON —Will that mean your services will be less effective by so doing?

Dr Smith —We hope to do it by increasing efficiency.

Senator EGGLESTON —It is still a relatively small amount of money. Wouldn’t you prefer that the federal government simply gave you a grant for this purpose?

Senator Carr —I am sure every agency head would prefer that the Commonwealth government increased the grants available to it, and that is particularly the attitude that has caused this problem. I draw your attention to the new fiscal discipline that is being imposed by the new government.

Senator EGGLESTON —When people around Australia find that they cannot have their radioisotope scans and those sorts of tests done to diagnose tumours and heart failure and so on, you will tell them that it was a budget measure?

Senator Carr —I do not think this measure has anything to do with anyone having heart failure, other than coalition senators who will have to vote for many of these measures in due course.

Senator EGGLESTON —Senator Carr, you will be renowned around Australia, I assure you, for the remarks you have made today about this. It seems totally heartless and totally irresponsible to me.

Senator BUSHBY —You are currently awaiting regulatory approval for the Opal reactor. When do you expect to get that?

Dr Smith —We can never have a firm expectation. I could say we hope to get it in a matter of weeks, but we do not know—

Senator BUSHBY —How long have you been waiting since you first applied for re-regulation?

Dr Smith —I think we submitted the application on 21 December.

Senator BUSHBY —Would the period of time that has passed so far be what you would normally expect an approval of the regulation to take? When you lodged the application, were you expecting that it would be approved by now?

Dr Smith —We had hoped that it would have been approved by now.

Senator BUSHBY —Have any issues with respect to your re-regulation been presented to you, or do there appear to be any obstacles at this point?

Dr Smith —We have a letter from ARPANSA, the regulator, which contained I think 69 questions to be answered, and we have three teams of people set up to answer those questions as promptly as we can.

Senator BUSHBY —Without casting any aspersions, did you consider those 69 questions that have been raised to be reasonable in the normal course of a process such as this?

Dr Smith —I think people who work in the nuclear area understand that the role of the regulator is essential for both safety and public confidence in the safety regime. We work in an industry where you respect that regulation. I cannot say that that means you always smile and are happy with it, but you respect that that is part of the building of public confidence in the safety of what we are doing.

Senator BUSHBY —In general, the process that has been followed in order for the re-regulation to be achieved is, in your view, in order? It is just a matter of working through it?

Dr Smith —We have no choice but to work through it and to put our maximum effort to give the regulator the information that they require to make their decision.

Senator EGGLESTON —That is all on ANSTO. I now wish to go to the Australian Institute of Aboriginal Affairs and Torres Strait Islanders.

Senator FORSHAW —I have some questions on ANSTO, just to follow up on a couple of things. Let me say at the outset that, as you know, I have followed these issues for many years, and I am fairly familiar with them. What would have been the consequences of continuing to operate the reactor once you discovered the problem with the fuel source?

Dr Smith —It was not an option because the regulator required a full analysis of what had happened and a full solution to be produced.

Senator FORSHAW —This issue of public safety has been raised, and I do not want to take that too far. There is the safety of the operating of the plant that does not of itself mean that it has some huge impact on public safety through a radiation leak, but at the same time I would assume that it would not have been in the best interests of the high level of safety you require to continue to operate the plant. is that right?

—That is correct. There was no radiation leak; there was no hazard involved, but clearly once we saw that there was a problem with this fuel, it was our immediate intention to stop the reactor and to repair it. Unfortunately, it came down to being a root cause of the fuel that had been delivered with the reactor from Argentina, and we had to get a new core to start the reactor, and that has taken the time.

Senator FORSHAW —Would you have been able to continue to produce radioisotopes with that flawed fuel source?

Dr Smith —No.

Senator FORSHAW —If I can just stay on this safety issue for a moment, earlier in 2007 there was a discovery of a small radiation leak, was there not, which I understand—

Dr Smith —Not that I am aware of.

Senator FORSHAW —Let me just quote from ANSTO’s background information:

that is the one relating to the fuel source—

That is the context in which I raise it. You took the opportunity to fix an earlier problem that had been discovered?

Dr Smith —I guess in complex machinery, when you stop it, there is a risk that has been built up of things that you take the opportunity to fix.

Senator FORSHAW —Yes, considering that this is over a fairly short period of time, not like a refinery or a plant—

Senator JOHNSTON —There was not a leak as such.

Dr Smith —No, it was in fact—

Senator FORSHAW —A leak was detected.

Dr Smith —Normal water was leaking into the heavy water at the rate of something like a cup of day.

Senator FORSHAW —I am not saying there is a radiation leak into the atmosphere or anything; I am just saying—

Senator JOHNSTON —As long as we establish that.

Senator FORSHAW —Senator Johnston, if you know my experience with this issue, I think you would appreciate that I hope I know what I am talking about and that I do not try to overdramatise the problems. It is clear to get that on the record, because the other modifications or changes that you would have had to make would have been considered also by ARPANSA in its assessment—

Dr Smith —In due course.

Senator FORSHAW —Yes, but are they now being assessed?

Dr Smith —Now they are, yes.

Senator FORSHAW —Which goes to the issues raised by Senator Bushby. Going back some years to earlier Senate inquiries, my recollection is that there was discussion about whether or not the new fuel source would be available from Argentina to coincide with the start-up of the reactor. I have some recollection that there were some optional interim arrangements being looked at to use a different fuel source for the first year or so, and then swing over to the more permanent source. My memory is hazy, but this whole question of the availability of the new fuel source for the new reactor was looked at in the inquiry.

Dr Cameron —I think that refers to the fact that the Opal reactor was designed to use what is called a uranium-molybdenum fuel type, and it was hoped that that fuel type would be available when we began the reactor. There was an international development program under way to develop that. It was not ready in time, so we have reverted to using what everyone else was using in the world, which is uranium silicide.

Senator FORSHAW —That answers my query.

Dr Smith —Transition to uranium molybdenum is possible when uranium molybdenum is qualified fuel.

Senator FORSHAW —You have clarified it, because I wanted to see whether there was any connection, if you like, between the problems that arose with this fuel source and the concerns expressed earlier.

Dr Smith —The problem with the fuel was a mechanical problem that did not relate to the nuclear part of the fuel.

Senator FORSHAW —Okay. I hope you get it up and running soon, too.

Senator NETTLE —For how long has the reactor been shut down?

Dr Smith —Since about the middle of July 2007.

Senator NETTLE —I want to ask some questions about the waste dump. I understand that the new government, during the election campaign, committed to repealing the Commonwealth—

Senator Carr —Can I indicate that this matter is another portfolio. This is not in this portfolio. Questions relating to the radioactive waste management facility should be directed to DRET. While ANSTO has some responsibilities under its act, the matters that you are pursuing I think would probably be more appropriately directed to the next portfolio.

Senator NETTLE —After this one?

Senator Carr —Yes.

Senator NETTLE —Could you tell me when to ask them?

Senator Carr —I am not responsible for the waste management facility under the current administrative orders. That would come under the Department of Resources, Energy and Tourism.

CHAIR —Which is next.

Senator NETTLE —Okay.

CHAIR —Are there any further questions for ANSTO?

Senator NETTLE —No, they are all about nuclear waste dumps.

Senator Carr —I would suggest we take them up with that department.

Senator NETTLE —Okay.

CHAIR —Any further questions from other members for ANSTO?

Senator JOHNSTON —Dr Smith, when you say the fuel failed, do you mean the structural composition of the frame of the fuel failed?

Dr Smith —In this case, the fuel was enclosed in aluminium as plates, and those aluminium plates moved in the framework that effectively holds them. Normally those fuel plates are trapped by compression by deforming the aluminium to grip it, and there was a manufacturing failure that some plates did not have sufficient grip.

Senator JOHNSTON —Have you ever had that problem before?

Dr Smith —No. We have asked about it around the world and it is a very rare problem. Certainly the French tell us that they have never seen that kind of failure in their manufactured fuel.

Senator BUSHBY —What is the source of the uranium that ends up in Argentinean fuel rods?

Dr Smith —It will be a mine, because it was discovered and used before nuclear science was underway. The material will be directly as mined.

Dr Cameron —If you are talking about the source of where we buy uranium, we buy it from the United States.

Senator BUSHBY —Where would it have come out of the ground?

Dr Smith —I thought you were talking about what had happened in Hunters Hill.

Senator BUSHBY —No.

Dr Smith —Our uranium is generally purchased from the United States.

Dr Cameron —As you know, uranium is mined as natural uranium, as yellowcake, but it needs to be enriched. There are only a few places where enrichment occurs. The Americans hold enriched uranium. We purchase that. It then goes to Argentina to be made into fuel elements, and then it is trans-shipped to us.

CHAIR —Thank you to ANSTO for participating in the discussions.

[3.22 pm]