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Department of Transport and Regional Services

CHAIR —I welcome the officers from the Transport Regulation Division.

Senator O'BRIEN —I will start with questions on shipping, and I want to first ask questions about the Stadacona. The minister has made a declaration under section 8AA of the Navigation Act to permit the Stadacona to operate. Is it fair to say that this declaration process is usually an opting-in process of vessels that wish to trade between jurisdictions?

Mr Ellis —It is not so much a declaration; in fact, the ship operator sought a licence under section 288 of the Navigation Act, and the department granted that on 23 October.

Senator O'BRIEN —So it was not a declaration?

Mr Ellis —No.

Senator O'BRIEN —I am told the Queensland government had denied the vessel a second restricted use flag. Is that right?

Mr Ellis —I understand that the vessel and Queensland Transport, the Queensland regulator, were trying to resolve the regime under which the ship could carry freight intrastate within Queensland. There was a measure of dispute associated with that. That was reported when the vessel was in Townsville in October.

Senator O'BRIEN —How frequently are section 288 licences issued?

Mr Ellis —They are issued to vessels seeking to operate around Australia. There are 54 on issue at the moment.

Senator O'BRIEN —Is that like a continuing voyage permit?

Mr Ellis —No. The continuing voyage permits are for vessels that come to Australia and are granted a permit to operate around the coast and then go off. The licence is for those vessels that intend to operate through Australian ports.

Senator O'BRIEN —Is it intended to cover interstate trade?

Mr Ellis —That is correct, and intrastate.

Senator O'BRIEN —But isn't the intrastate trade a matter for the state?

Mr Ellis —No. Under the Commonwealth Navigation Act, the licence does allow for the vessel to operate interstate and intrastate.

Senator O'BRIEN —Does the vessel become, to all intents and purposes, a vessel under the control of Australian law once the licence is issued?

Mr Ellis —That is correct.

Senator O'BRIEN —So the crew have to pay Australian tax and they have to operate under other Australian laws, such as awards, workers compensation et cetera?

Mr Ellis —Yes.

Senator O'BRIEN —That is different from a continuing voyage permit, in other words?

Mr Ellis —The licence situation is different from the permit situation.

Senator O'BRIEN —Does the Commonwealth involve itself in satisfying itself of anything in issuing a section 288 licence?

Mr Ellis —Yes. There are two primary conditions: to pay Australian rates of wages, as you mentioned, and a secondary condition that talks about access to a library if one is provided for passengers but not crew, which is not particularly relevant in this situation.

Senator O'BRIEN —Does the vessel need to make any notified changes or is it assumed that it makes the changes required under the law?

Mr Ellis —We asked the operator to confirm that they understood the conditions, and they confirmed that they did and would comply.

Senator O'BRIEN —What are the implications for the right to work for a crew of a foreign vessel which is licensed under section 288?

Mr Ellis —There are no nationality requirements under that section, if that is the question that you are asking.

Senator O'BRIEN —Are they exempted from the laws which would otherwise require a person engaged in work in Australia to have a working visa of some sort?

Mr Ellis —In this department issuing the licence under the Navigation Act, that is not a consideration; but clearly it would be of interest to the immigration authority.

Senator O'BRIEN —Does this department advise the operator of the vessel that that is a matter that they would need to attend to?

Mr Ellis —We have spoken with the representatives of CSL, and I think they are sufficiently aware of the need to have proper immigration visas.

Senator O'BRIEN —Did you say there were 50 operators?

Mr Ellis —There are 54.

Senator O'BRIEN —Do you do that with each of the 54 operators that have licences?

Mr Ellis —In my experience, no; but, as you would appreciate, there is a fair degree of attention to the operations of the two vessels operated by CSL.

Senator O'BRIEN —How many of the vessels subject to the 54 licences issued are operated with foreign crews?

Mr Ellis —On the information which we have collected recently, currently 11 foreign flag ships hold a coasting trade licence. At this stage, I believe that three of those may have foreign crews. I would need to take that on notice.

Senator O'BRIEN —I would appreciate that. I would have thought that that would be known. I would have thought that, in the context of the government's approach to immigration, that would be a fundamental point. That is not a matter that you automatically require in issuing licences?

Mr Ellis —No.

Senator O'BRIEN —Is ministerial approval required for issuing the licences?

Mr Ellis —No, that is a function delegated to people in the department. The minister is not involved.

Senator O'BRIEN —For some reason, I have been told that this is a section 8AA issue. What is section 8AA? Maybe someone has given me the wrong steer there.

Mr Ellis —In general terms, a section 8AA declaration means that the Navigation Act will apply to the vessel while it is engaged in intrastate trade as well as when it is engaged in interstate or international trade. That declaration is provided by AMSA. The Stadacona has sought and acquired that status.

Senator O'BRIEN —Did you say that AMSA has given them intrastate trade, or was it interstate trade?

Mr Ellis —It means that the Navigation Act applies while it is engaged in intrastate trade as well as interstate trade.

Senator O'BRIEN —So they have both?

Mr Ellis —They have both. To put it in context: they sought a licence, which the department issued under section 288, and complemented that by seeking the declaration under 8AA.

Senator O'BRIEN —Does AMSA automatically issue that once you have issued a licence under section 288?

Mr Ellis —Put it this way: in seeking and getting that declaration, there are certain measures that the operator then needs to comply with.

Senator O'BRIEN —What is the life of the licence?

Mr Ellis —All licences issued expire on 30 June each year. This one was issued to cover the period 23 October to 30 June next year.

Senator O'BRIEN —Does the section 8AA declaration have the same life?

Mr Ellis —The 8AA declaration stays in force until the operator seeks to remove or withdraw it.

Senator O'BRIEN —So it is indefinite?

Mr Ellis —Yes.

Senator O'BRIEN —What is the effect of the expiry of the section 288 licence on that, if any? They could keep operating within Queensland waters—

Mr Ellis —Yes.

Senator O'BRIEN —even though you declined to renew the 288 licence?

Mr Ellis —Could you rephrase that?

Senator O'BRIEN —They have a 288 licence which will expire, unless renewed, on 30 June.

Mr Ellis —No, they had a licence to 30 June next year. That has now been surrendered. They have a section 8AA declaration issued by AMSA which causes them to comply with certain requirements. That runs indefinitely, until the operator seeks to take it back or they no longer require it.

Senator O'BRIEN —They got that because you issued the licence?

Mr Ellis —They got it because they applied for it. In terms of intrastate voyages, it made sense for the operator to seek the 8AA declaration to complement the licence which allowed them to conduct that voyage.

Senator O'BRIEN —According to information provided subsequent to last estimates, at least two foreign freighters that carry paying passengers have been issued with single or continuing voyage permits this year—the MV Cape Darby and the MV Cape Don. These vessels are all flagged in the Marshall Islands and are crewed by Filipino crew. That is right, isn't it?

Mr Ellis —I would have to check the detail of those two vessels.

Senator O'BRIEN —So the system of single and continuing voyage permits applies to the carriage of passengers and freight to the Australian coast?

Mr Ellis —Only for SVPs—single voyage permits—not CVPs.

Senator O'BRIEN —So you cannot get a CVP if you are carrying passengers?

Mr Ellis —No.

Senator O'BRIEN —Do you need a specific permit which entitles you to carry passengers as well as freight?

Mr Ellis —Yes. That requires the port to port designation, as well as the number of passengers that are intended to be carried.

Senator O'BRIEN —So for each voyage, which I presume could include a number of ports, they would need a permit?

Mr Ellis —Yes.

Senator O'BRIEN —Is the same test that is applied to freight applied to a vessel that is going to carry passengers—that is, that no Australian ship is available?

Mr Hogan —I can answer that. Yes, it is subject to the same test—the test being that, if there are no licensed vessels able to carry those passengers, they might well be eligible for an SVP.

Senator O'BRIEN —How does the department satisfy itself that there are not licensed vessels available to carry those passengers?

Mr Hogan —The number of licensed vessels operating in the passenger trade is relatively limited, but we always have regard to operating schedules and, where there is any doubt, to the operators themselves.

Senator O'BRIEN —You might need to take this on notice, but I would like to know how many single voyage permits have been issued to permit foreign ships to trade in fare paying passengers to the Australian coast?

Mr Hogan —Do you have a time period in mind for that?

Senator O'BRIEN —The last two years would be sufficient.

Mr Hogan —I will take that on notice.

Senator O'BRIEN —Regarding maritime security, the US Congress this month passed the Maritime Transportation Security Act, including a range of measures to tighten shipping and port security. I quote from an industry newsletter:

It requires shipping companies to submit security plans to the US Coast Guard for approval, designate company and ship security officers to oversee their plans, and hire private security firms when requested by the USCG.

The USCG is the coastguard. The newsletter goes on to say:

In addition, federal agencies will have authority to impose additional conditions and regulations on vessels judged to present unacceptable security risks. Finally, all seaports will be required to assess their vulnerability to terrorist attack.

Is this department preparing similar regulatory changes?

Dr Feeney —Effectively, yes. Measures similar to that are being developed in the context of the International Maritime Organisation's consideration of maritime security in the wake of the events of 11 September. The diplomatic conference will be finalising that in December. The Americans are ahead in the world in relation to introducing some security measures and they have been the main instigators behind the IMO developing these measures for the international community. In the IMO context, Australia has been very active in helping put together those codes.

In developing our position on that, we have had extensive discussions with industry. We have set up the Maritime Security Working Group, which consists of industry, states and the Commonwealth representatives—many departments of the Commonwealth are involved with that. Also, through the Australian transport ministers forum, we have addressed issues in relation to Commonwealth-state relations and maritime security, because states will take a prominent role in the implementation of those measures, particularly through the ports. We are now helping the IMO to develop those new measures. When those new measures are approved by the IMO in December, we will be developing domestic legislation to implement those measures. We are also going to look at legislation to possibly extend those measures to domestic activities because the IMO measures are limited to international activities.

Senator O'BRIEN —So whatever is contained in that outline is the extent of industry consultation?

Dr Feeney —That is quite extensive. There has been a lot of consultation with industry. I did omit a series of visits around ports all around Australia discussing it at port operator level, so they are very well aware of the measures that are in train.

Ms Briggs —I think we should add that the Australian Logistics Council, which has many of the leaders of the freight logistics sector, were also briefed on these issues.

Senator O'BRIEN —Thank you for that. I know you are a very busy man, Dr Feeney, but have you now responded to all the letters sent to you by Mr Williamson of the Institute of Marine and Power Engineers?

Dr Feeney —Yes, I have. I have only had one directly from Mr Williamson and I responded. I think his letter was dated 1 March; I responded to that in mid-May. I have since had a letter from McNally, the solicitors acting for the Australian Institute of Marine and Power Engineers. They also sent a similar letter to the department of immigration. The letter to both of us was in relation to migration legislation. The department of immigration has responded to McNally, the solicitors. In the knowledge of that response I did not feel it necessary to respond to the lawyer's letter because it specifically had been involved in migration issues.

Senator O'BRIEN —I think it is pretty clear that they are saying that you have acted in a partisan way in dealing with them and the company, CSL. There is one item of correspondence from Mr Williamson and one from the lawyers?

Dr Feeney —I responded to the first. I deemed it not necessary to respond to the second one because Immigration had responded effectively on behalf of the government.

Senator Boswell —If there is some legal dispute maybe we should be fairly careful about what we ask the officers to answer.

Senator O'BRIEN —I am always careful, Senator. How many pieces of correspondence would CSL have sent you, Dr Feeney?

Dr Feeney —Now my responsibility is in policy; most of those issues that CSL are involved in are regulation so they have had interactions with Mr Ellis. He is the responsible area now.

Mr Matthews —I have not seen the letter that you have been discussing, but I infer from one of your questions that Dr Feeney is being accused of taking a partisan position. In the full period of time that Dr Feeney was responsible for maritime regulation, his conduct has been absolutely above board and beyond reproach. I would vouch for that quite unambiguously.

Senator O'BRIEN —I raise it because it is a matter which has been canvassed publicly.

Mr Matthews —That is why I am making the response.

Senator O'BRIEN —In the remaining five minutes, I am proposing to ask some questions on the transport programs division. The Aviation Legislation Amendment Bill 2002 includes aviation security issues. Can you provide an outline of what the original intent of the bill was when it was introduced in 2001; what its current status is; and why those changes have been made to it?

Mr Ellis —I am afraid aviation security is not my area of responsibility. If there is anyone in the waiting room from aviation who might be able to help, perhaps they could come forward.

Senator O'BRIEN —And regional airport security is the same?

Mr Ellis —Yes, that is not mine. It is the responsibility of the aviation and airports policy area division.

Mr Matthews —The way the departmental organisation works is that all transport regulation has been put together under Bill Ellis's leadership, except aviation. The rationale behind that is that, because so much is happening at present on aviation and airports, that has been held separately for the present. That is Mr Dolan's area. He has left. I am happy to take it on notice, unless someone is walking in the door.

Senator O'BRIEN —I am sure at the first opportunity they would have left.

Mr Ellis —Can we leave now?

Senator O'BRIEN —Yes, I will reluctantly let you go.

[12.58 p.m.]

CHAIR —I welcome to the table officers from the Transport Programs Division.

Senator O'BRIEN —When AusLink was announced, the minister said he would honour all road projects that had firm funding commitments in the three-year forward estimates. Is that the position, Mr Matthews?

Ms Briggs —Senator, if I might take that question on behalf of the Secretary. The minister indicated that where a clear commitment had been made those commitments would be honoured.

Senator O'BRIEN —So, if it is in the forward estimates, is that a clear commitment?

Ms Briggs —Taking as an example some maintenance agreements we have with the states, I will explain what we are doing. For the most part, those maintenance agreements cover the period through to 2003-04, except those for Tasmania, which run a bit beyond that. So all those commitments will be met. As well as that, we have got in train a process where the CEOs of the relevant state organisations, together with the Secretary and I, are meeting to consider a range of issues around the implementation. As part of that process, we are going to work through the status of various commitments and so on.

Senator O'BRIEN —Can the committee be supplied with a list of the projects—listed by state and territory—where there is a firm funding commitment from the government following the AusLink announcements?

Ms Briggs —Not yet. Following discussions with the states, we are having discussions with our minister on that, and that is the commitment we have undertaken with the states.

Senator O'BRIEN —What is the timetable to work that out?

Ms Briggs —We did not agree on a timetable at that stage.

Senator O'BRIEN —But surely you know in which areas the Commonwealth has made firm commitments on road funding?

Ms Briggs —As an experienced official, I always believe that it is absolutely necessary to be very scrupulous about these arrangements. We would want to have everything perfectly sorted before we made a commitment on that issue.

Senator O'BRIEN —I am sure you are very scrupulous when you present papers to the committee for the estimates process, and they contain forward estimates. Can we rely on them?

Ms Briggs —We have some figures which would indicate the magnitude of those commitments.

Senator O'BRIEN —Can we rely on the estimates in that regard to indicate what the government's commitments are?

Ms Briggs —I do not quite understand your question. Are you asking whether the government is committed to—

Senator O'BRIEN —portfolio budget statements.

Ms Briggs —Okay; I think I get your drift. The current level of funding allocation has not changed, but within that some funds are committed and some funds are uncommitted. So we are going through a process of clarifying fully the projects that relate to the committed funds.

Senator O'BRIEN —Let me understand the difference: when the portfolio budget statement says, `The government has allocated an amount of money to a particular project'— and let us use by way of example the Albury upgrade, which shows the cost to the Commonwealth at $187 million, with money firmly allocated to 2005-06 totalling $144.1 million; those figures are contained in an answer to question on notice No. 49 that I asked— can we rely on that as the committed funding for that project?

Ms Meakins —Yes. If the figures appear in the forward estimates, particularly for this project, that would be considered a commitment. That is a public statement of the minister.

Senator O'BRIEN —Using the same example, which is a national highway project, one would expect the extra $42.9 million to come in 2006-07 or beyond. Do we understand the minister's AusLink proposal to mean that, if the additional amount is not in the forward estimates now, it will not be provided—the project will be $42.9 million short of funding?

Ms Meakins —This is an example of, as Ms Briggs was saying, a particular issue that needs to be sorted through. As a public statement of the minister, the amounts in the forward program will be considered as estimates for construction. If the figure goes beyond the forward estimates, obviously the government would have to look at that.

Senator O'BRIEN —But that was not thought out before the AusLink announcement was made. This issue was not thought out—in other words, you have projects on the go, you have money committed in the forward estimates, but that is not a totality of the cost of the project. The issue of what happens to the balance of it was not thought out before the AusLink announcement was made.

Ms Meakins —As Ms Briggs explained, we do have processes in train to sort through these transitional issues with the states.

Ms Briggs —We understood that that was an issue at the time AusLink was being developed. I would not want you to have the impression that these issues were not on our minds.

Senator O'BRIEN —What I understand you to be saying, and correct me if I am wrong, is that these very important issues were not resolved and it was understood that they would take resolution—that there was going to be an issue of substance to be resolved in this regard to clarify the announcement. I would have thought that $42.9 million for this project is an issue of substance, and that is one example.

Ms Briggs —I think the answer is yes.

Senator O'BRIEN —With regard to the Albury-Wodonga Hume Highway project, is it fair to say that the department now needs to talk to the states to determine exactly what is going to happen with that project in totality? Is the commitment from both the states and the Commonwealth to the project subject to those discussions between the states and the Commonwealth?

Ms Meakins —We would say that this is a committed project. My answer previously was putting it in the context of the minister's statements generally. It is a committed project in total.

Senator O'BRIEN —The Prime Minister went to Albury six months ago and promised to speak to the minister about a different approach to fixing the impasse between the states and the Commonwealth on this issue. Has that happened?

Ms Varova —Yes. We are aware that the Prime Minister and the Deputy Prime Minister have had a meeting on that, but we are not aware of the outcome.

Senator O'BRIEN —I understand that the planning and the environmental impact statement for an internal Hume Highway upgrade in the Albury-Wodonga area have been finalised. Is that the case?

Mr Cory —That route had received approvals from the department of planning in New South Wales. I think it is fair to say that there would be further work required before one could say that planning was completed on that particular option.

Senator O'BRIEN —What would be required to commence construction on the internal highway?

Mr Cory —I could not answer that question in any detail. As you may be aware, there was a decision taken not to proceed with that option. At that point, as far as I am aware, all work ceased on the further development of that option towards construction. We would normally need to seek advice from the state road agency, or both state road agencies in this case, to ascertain what would be required.

Senator O'BRIEN —I understand that the work is substantially complete. I am trying to get an idea how long it would take for construction to get underway on an internal highway, if the decision was made to ditch the bypass idea.

Mr Cory —I cannot answer that question. The EIS that was undertaken for that project is dated about 1995. In the light of today's standards there would, I guess, be some issues about the completeness of that process and what might be being proposed to be built at this point. So I really could not answer that question.

Senator O'BRIEN —I will put my other questions on notice.

CHAIR —Ms Briggs, you will recall that, when I asked a couple of questions related to the priorities for the Deer Park bypass a couple of days ago, you suggested that Trudi Meakins would be the best person to put those questions to, so I now raise them. Could you explain to me the way priorities are set for some of the large transport infrastructure programs in Australia. I am specifically interested in the reasoning behind the apparent downgrading of the Deer Park bypass in Victoria. I am advised by members of the community in that region that, despite some very strong arguments, the project appears to be nowhere near the top of the priority list. In fact, some people believe it has actually moved down the list. Could you give me an explanation as to the system by which you ascertain the priorities?

Ms Meakins —Certainly. Inclusion of a project such as the Deer Park bypass on the forward works program involves consideration of a number of factors. Each state submits a forward strategy report each year, and within that strategy they name their own priorities. Other factors that we take into account include the inherent demonstrated need for the project, budget allocations, other current commitments and competing demands on the federal roads budget from across Australia. We would put a recommendation to the minister based on our consideration of all these factors.

The Commonwealth recognises the need for the construction of the Deer Park bypass to address traffic and safety concerns. We have allocated $950,000 towards planning, and that planning work is now complete and the route alignment has been preserved through the Victorian planning scheme amendment. However, the budget allocation to Victoria already this year includes our very significant commitments to a very large number of high priority projects—all high cost projects, such as the Craigieburn bypass, the Scoresby Freeway, Geelong Road and the Murchison East Deviation. Victoria's program is fully committed. That goes into the out years, where there is a very high level of commitment and a high proportion of funds going to Victoria.

The Deer Park project is considered a high priority by the federal government. As funds become available, it will be considered by the minister, along with other high ranking projects within Victoria and around Australia. Within the Victorian government's priority list it is certainly the highest priority on the western highway, but within the Victorian documentation it is their fifth highest priority in the state, behind the Scoresby Freeway, the Calder Highway, the Goulburn Valley Highway and the Pakenham bypass.

CHAIR —This is an area that attracts a lot of accidents. I am advised that it is a high accident area. Does the number of accidents on a highway play any particular role in re-evaluating the criteria. In other words, if it is seen as being the site of more accidents, does that entitle it to move up the structure?

Ms Meakins —Obviously, safety issues are part of our considerations when we put recommendations to the minister about priorities. But again it is within a context of competing priorities across the state and across Australia.

CHAIR —Are there any key project areas—evaluation criteria, I suppose you would call them—that this project fails to meet in relation to the others?

Ms Meakins —Not that I am aware of, Senator. The real issue is availability of funding and competing priorities.

CHAIR —Can you tell me what the implications are of the proposed AusLink approach on the delivery of this project?

Ms Meakins —As Ms Briggs indicated earlier, there are mechanisms set up for consideration of priorities under AusLink. For example, there is an infrastructure priorities working group with participation from the states, territories and local government. Until that working group completes its deliberations, it is hard for me to anticipate exactly how that process will work.

CHAIR —Do you have any idea when that might be?

Ms Meakins —I think the end date for the deliberations is March next year.

CHAIR —I will keep an ongoing interest in this, as I am sure you will. As someone who drove through it during some rare rain in Victoria not too long ago, it was particularly hazardous with the spray from the road and the large number of heavy vehicles on that road. I can only imagine how difficult it is for people who are regular users of that particular stretch of road. It really is very hazardous.

Thank you very much, Ms Meakins, for those answers. The committee is suspended until quarter to two. We will forego our afternoon teabreak, to try to enable people who are committed to catching aircraft to leave a little earlier. I would appreciate it if departmental officers could give short answers to questions this afternoon, to enable as many of our questions as possible to be asked.

Proceedings suspended from 1.16 p.m. to 1.46 p.m.

CHAIR —I call the committee to order. Senator Stephens, I believe you are leading off with questions.

Senator STEPHENS —We are now looking at the regional policy division issues. Perhaps we could begin with the regional business development analysis. As part of the stronger regions initiative, the government has announced plans to undertake that regional business development analysis. Having had a look at some of the documentation about that program, I understand, Mr Doherty, that at the last estimates, you indicated that this project would have about $1.4 million to spend this year. Is that still your best estimate?

Mr Doherty —The program originally had $1.5 million allocated, which was split over two years. At the last estimates, we were not sure whether we would be able to carry forward the full amount to ensure that the full $1.5 million was available, because there had been less expenditure in the first year than we anticipated. We have worked through that within the department and we can confirm that the full $1.5 million will be available for the program.

Senator STEPHENS —How much of that expenditure has been for travel?

Ms Armitage —The travel cost for the panel has been approximately $72,000 to date.

Senator STEPHENS —What is budgeted for travel?

Ms Armitage —The budget for travel is about $132,000.

Senator STEPHENS —Does that include the staff?

Ms Armitage —No. That is basically for the panel. I would have to get back to you on the costs for staff travel. Those costs have been caught up in the meeting costs, but it is about $83,000 for the secretariat.

Senator BUCKLAND —What budget will staff travel come out of?

Ms Armitage —The estimated travel cost of $83,000 which I mentioned is part of the $1.5 million—because staff have been there as secretariat support to the panel during the consultations.

Senator BUCKLAND —Are these people working full time in that position?

Ms Armitage —The departmental people have been assigned to the secretariat, and they are full time. The panel is not full time.

Senator BUCKLAND —How many are involved in the secretariat?

Ms Armitage —There are four DOTARS officers and one officer from the Department of Agriculture, Fisheries and Forestry who are the main part of the secretariat and there are two support staff.

Senator BUCKLAND —So that is seven?

Ms Armitage —Yes.

Senator BUCKLAND —My maths is good today!

Senator STEPHENS —Mr Doherty, I understand the consultation process is complete now?

Mr Doherty —There has been a program of visiting regional areas around Australia. The program for those visits which were scheduled has been completed, but we anticipate that there will be further consultations, certainly with targeted groups, as the panel proceeds. We cannot rule out that there may be further visits.

Senator STEPHENS —When do you think the consultation process might be finalised?

Mr Doherty —It is really driven by the due date for the action plan report from the panel, which is in April. So, working back from that, as they finalise their proposals, they would certainly be aiming to have any consultations finished by early February. Again, it is a case of keeping open the option for extra consultations as the process proceeds.

Senator STEPHENS —What will happen with the action plan? Is a draft action plan going to be available for comment, or will it go back to the people who made submissions or were consulted before it is finalised?

Mr Doherty —Before an action plan is delivered to government, the process is entirely for the independent panel to decide. I am not aware if there have been any decisions on that process. The process, once the government receives it, is then in ministers' hands.

Senator STEPHENS —So it will be considered by ministers prior to being publicly released?

Mr Doherty —Yes.

Senator STEPHENS —Would it be possible to check with the panel about how they propose to consider their action plan? For example, is it going to be in draft form first? Can you find that out?

Mr Doherty —Ms Armitage has been working closely with the panel to work through that, but the panel are an independent group and, until they go through the process and form their own views, they might not resolve a view on that.

Senator STEPHENS —Did you say that the action plan is due in April?

Ms Armitage —Yes, that is correct.

Senator STEPHENS —Do you think they will meet the proposed time line?

Ms Armitage —They are planning to meet that proposed time line, yes. The process they have set in place is to ensure that they do meet that time line.

Senator STEPHENS —Once it has been submitted to the minister, do you anticipate a release date for the action plan?

Mr Doherty —Again, that would be anticipating the process once it is provided to government. I cannot anticipate what the government's decisions would be about the process once it receives the plan from the panel.

Senator STEPHENS —Ms Armitage, looking at some of the submissions, I have noticed that there seems to be healthy interest in the whole project, which is very helpful. I have also noticed that in the question paper which was distributed to stimulate discussions and submissions the telecommunications issue—that is, Internet access and mobile phone coverage as possible impediments to business development in regional Australia—was one of the discussion points. Has there been much response on that issue?

Ms Armitage —From a preliminary analysis of the submissions that have been coming in up until this week—there are over 190 of them—some issues have been identified, but there is not a common theme running through them to date, and that is about as much as I can say without a more in-depth analysis.

Senator STEPHENS —Were any of the submissions referred to the Estens inquiry?

Ms Armitage —No. But the Estens inquiry was aware that submissions from people who had agreed to have them made public were available on the web site.

Senator STEPHENS —Which brings me to the point that people were able to request that their submissions were not made public. How many of those have there been to date?

Ms Armitage —I would have to take that on notice. I have not got that number. But it is not a large percentage, from memory; it is quite a small percentage. Usually it was for commercial reasons that they requested it.

Senator STEPHENS —Some of the submissions received—for example, submissions Nos. 4, 10 and 16—were just marked as `confidential', so it was not identified that someone had put in a confidential submission and the source of the submissions was not identified. Was there a reason for that?

Ms Armitage —I am not aware of the reason for that. It may very well have been that they had requested that they were—

Senator STEPHENS —I have just printed off the first page: it is 4, 10 and 16. It is a pattern, in that if it is a submission where someone has obviously indicated that they do not want it published, you have just marked it as confidential without identifying the source. I wondered why that was.

Ms Armitage —Part of our commitment was that we would not identify the source.

Senator STEPHENS —I also read the literature review of the work that they have done. They have got themselves an interesting challenge. The other part of that whole process I am also interested in is the Commonwealth Regional Information Service, but Senator Buckland may have some questions before we move on.

Senator BUCKLAND —Yes, I do. You talked about the action plan and the consultation, and we asked about travel and the number of people. In this consultation process, who do you consult?

Mr Doherty —For the visits to the various regional areas the program was put together by our area consultative committees—the ACCs. There are 56 of those around Australia. They are established to have links into the local business communities. The program was established by arranging for all the ACCs to identify the people that they thought it would be useful for the panel to talk to, and invitations were sent to those people.

Senator BUCKLAND —So you have the ACCs as one program that is funded?

Mr Doherty —Yes.

Senator BUCKLAND —We will be addressing that particular program later on this afternoon. Do you have another program separately administering that? Just explain the interconnection. The ACCs—and I want to ask questions about them later—are, as I understand it, on the whole voluntary; that is, the on the ground people?

Mr Doherty —Yes, that is right. That is a permanent on the ground—

Senator BUCKLAND —Do they have a separate secretariat or are you the secretariat for the ACCs?

Mr Doherty —No, each of the ACCs has an executive officer. They have their own smaller administrative structure.

Senator BUCKLAND —I understand. I may not be explaining this well. You have your series of ACCs. They are funded by the Commonwealth. Are they funded under this program we are now on? Do they have a separate funding stream with a separate secretariat and administration personnel?

Mr Doherty —That is correct. They have their own funding stream and resources for the functions which have been allocated to them.

Senator BUCKLAND —So you consult with the ACCs because they are a readily available source of information, hopefully?

Mr Doherty —That is correct, and they have the on the ground knowledge about business interests.

Senator BUCKLAND —We hope. Who else do you consult?

Mr Doherty —The consultation for those regional visits was, I think, based entirely on the ACC recommendation. There was a wide group of people—chambers of commerce, local councils—that the ACCs identified as being worth consulting. They were brought into forums and there were a series of additional meetings conducted with people in the regions.

Senator BUCKLAND —I think we might be getting there, but be patient and gentle. Do the secretariat and the administrators of the regional policy division—the development analysis people—go to the centres where the ACCs operate from? We were talking about travel earlier on.

Mr Doherty —That is right. The travel costs identified for staff would include for people from the secretariat travelling with the identified members of the panel to those areas where the consultations were carried out.

Senator BUCKLAND —And all they do is meet with the ACCs? Do you ever go to a factory, a business or industry?

Mr Doherty —They did not just meet with the ACCs. They met with the business groups which the ACCs identified.

Senator BUCKLAND —That is what I wanted to know.

Mr Doherty —There is a wide range of groups coming to those consultations. It was both the panel member and at least one member of the secretariat who were at all those consultations and met with the local business interests.

Mr Matthews —Perhaps I could give my version of that. One of the roles of the ACCs is to be a point of entry into the local community. One of their responsibilities is to know as many of the local industry people and local interest groups as possible. It was the ACCs who took the leading role, therefore, in assembling an invitation list. A whole range of people were invited to the meetings. The consultations then occurred under the auspices of the ACCs, but not only with the ACCs.

Senator BUCKLAND —I would not like you to get excited and think that we will not be addressing the ACCs separately. Do you have a list of people you consulted at each centre you went to?

Ms Armitage —We have lists of people. The tally at the moment is that, out of 784 attendees at the consultations across Australia, about 354 were business groups—others were in regional development. In some places we did go to businesses. In Mackay, we went to a tyre retread factory. Sometimes the consultations were with groups and sometimes they were bilaterals with individual business people. For example, in Bundaberg, the first one started at about 6.30 in the morning with a group of business people, working through to agribusiness people. In Kununurra, they went and had a look at some horticultural establishments, et cetera. There was a combination of groups, individuals and visits.

Senator BUCKLAND —Could you table the list of people and businesses who attended consultation groups?

Ms Armitage —We can do that, yes.

Senator BUCKLAND —I would appreciate that. The reason I asked that question is that there appears to me to be a degree of duplication, and that worries me somewhat.

Senator Boswell —Duplication with whom?

Senator BUCKLAND —There is a duplication of the Regional Business Development Analysis Group and the group which administers the ACCs.

Mr Doherty —The fundamental difference there is that the regional business development analysis is a short-term exercise. It is a specific inquiry for this period, focusing on the range of issues the panel sees as important. The ACCs have an ongoing role of liaison within their communities. It is much wider than the specific issues covered in the business analysis— much wider than the task of responding to this particular process. It is, in effect, an overlay of a particular inquiry for a short period.

Senator Boswell —Senator Buckland, I would suggest you go and have a talk to some of these ACCs in South Australia and get to know them. They can take you through what they actually do.

Senator BUCKLAND —Okay. As I am almost finished, I suggest we complete the questions. Would it not be easier—and correct me if I am wrong, because this could put the whole thing to bed—to have this analysis conducted by the group that operates or controls the ACCs, rather than to have a separate group doing it?

Mr Doherty —I do not think it would be; I think the answer is no. For the duration of this inquiry task, we need an extra resource to be focused specifically on serving the needs of the panel as they do the job and supporting them. That would be in addition to the work conducted by the unit which supports the ongoing work of the ACCs.

Mr Matthews —But at the end of that process the staff supporting the regional business development analysis project will be disbanded and redeployed on other tasks throughout the department.

Senator BUCKLAND —I understand that; they will just meld into the pot somewhere.

Ms Armitage —Senator, could I just make a change? My colleague has pointed out to me that there were actually 454 businesspeople rather than 354 businesspeople.

Senator BUCKLAND —That is fine; I do not mind that at all. If we get the list we can have a look at that. I am concerned that there appears to be duplication of officers doing something that could be done by another group. I suppose $1.5 million, in the scheme of things, is not an immense amount, but it could be spent on other things.

Mr Matthews —$1.5 million is a very large sum of money, particularly when it is taxpayers' money.

Senator BUCKLAND —It is.

Mr Matthews —We are very careful with how we spend our money. As Secretary, I am satisfied that the people who are servicing the ACCs are more than fully occupied. We needed to provide full support for the panel doing the analysis of regional business and so, for a finite period of time, it was necessary to use some staff to assist that panel. At the end of that time, they will be redeployed elsewhere. In the meantime, as Mr Doherty says, the support staff for the ACCs continue with their ongoing work.

Senator BUCKLAND —I believe it was you, Ms Armitage, who told us when this would be concluded.

Ms Armitage —The action plan is due to be presented in April next year.

Senator BUCKLAND —We await that with bated breath.

Senator STEPHENS —I have a question on a related issue. Ms Armitage, in terms of the whole intelligence gathering and analysis exercise that we have just been talking about, instead of moving on to CRIS, the Commonwealth Regional Information Service, we went to the issue of regional research and the Bureau of Transport Economics now becoming the Bureau of Transport and Regional Economics. In the transcripts of the last estimates hearings, Ms Armitage, you indicated that you had had some discussions with DIMIA about reform of the regional sponsored migration scheme. DIMIA have entered into a process of discussing regional business migration. Has the department been involved in this?

Mr Doherty —Yes, Senator, we certainly have.

Senator STEPHENS —The regions excluded for business migration are Brisbane, Gold Coast, Newcastle, Sydney, Wollongong, Melbourne and Perth. Has anything more been done to identify regions that may have the greatest need for business migrants—as part of the analysis exercise that is going on?

Ms Armitage —Some regions have identified the issue of immigration and increasing business immigration. That will be taken up as part of the response in the action plan.

Senator STEPHENS —With regard to the report from the CSIRO about future dilemmas, have you been involved in some of those discussions about impacts?

Ms Armitage —No, Senator.

Senator STEPHENS —At the last estimates session I noticed that you had not done anything to determine the level of population that regions can sustain. Given that the CSIRO have now released their very comprehensive modelling, how does this relate to the report that you mention in the annual report, the research from the Monash University, supplying regional population forecasts to 2100? Has that project been completed?

Ms Armitage —It is completed, but we have not analysed it yet.

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

Ms Armitage —We will check that and get back to you; yes, I would think so.

Senator STEPHENS —So you have not analysed it. What was the intent of that research?

Ms Armitage —That research was conducted as part of a program which is now complete, which was Understanding Rural Australia. That was to allow universities to put in force funding to support some of the research that they were interested in. That program is no longer in existence.

Senator STEPHENS —I would be quite interested in seeing by what kind of analysis they were able to determine regional trends and migration needs, given the fact that we have that other comprehensive body of work from CSIRO now to consider as well.

Ms Armitage —They are from different perspectives.

Senator STEPHENS —I look forward to reading it; thank you. I will move on to the Commonwealth Regional Information Service. This is a service that I found quite useful under its old name of Countrywide. Please explain to me how much money was budgeted for the CRIS campaign.

Ms Harris —We received $12.5 million in funding over the four years from last year.

Senator STEPHENS —How much of that was expended in 2001[hyphen]02?

Ms Harris —In 2001[hyphen]02 we expended $1.944 million.

Senator STEPHENS —In the annual report I notice that Singleton, Ogilvey and Mather were paid $828,000-odd to deliver the campaign. Was other money spent on promoting the products?

Ms Harris —The money that was paid to Singleton, Ogilvey and Mather in 2001[hyphen]02 was campaign production costs. We are still reconciling all of the accounts associated with that, but that is largely the money that has been paid to Singleton, Ogilvey and Mather for that campaign. There were costs associated with the production of the direct mail component of the campaign, which was also handled by Singleton, Ogilvey and Mather.

Senator STEPHENS —So it was for production costs and direct mail?

Ms Harris —Yes, that is right.

Senator STEPHENS —What about the TV advertising aspect? How much was spent on advertising, on television and radio?

Ms Harris —In terms of media placement costs, at this stage we have spent $1.79 million, and we anticipate possible expenditure in the order of another $800,000 till the end of the campaign.

Senator STEPHENS —When is the end of the campaign?

Ms Harris —The end of the initial burst of campaign activity is at the end of this month, although it may run a little later in Victoria; it has been held over because of the state elections.

Senator STEPHENS —Did the department have a free-call number for the community prior to this campaign?

Ms Harris —Yes. The number you are referring to was the Countrylink number, and it is the same number. The Commonwealth Regional Information Service includes that former 1800 number. Basically, it is a broader service, and we have rebranded a range of products to the Commonwealth Regional Information Service to encompass that broader range of products. That has been done also to delineate us better from the Countrylink New South Wales rail service—which previously accounted for about 50 per cent of calls to that number.

Senator STEPHENS —I am sure that you could provide advice on travel in country New South Wales! That would be one obvious change in the call patterns that you would have noticed with the change of name.

Ms Harris —That is true.

Senator STEPHENS —Has there been greater use of the free call number for information services?

Ms Harris —Yes. Since the campaign began in August, we have had around 12,000 calls to that service. That is a significant increase on what it was prior to the service—more than double.

Senator STEPHENS —Are you monitoring the reasons for that, for your own internal purposes?

Ms Harris —Yes; we certainly monitor the types of questions that are asked, to get an idea of what issues are in people's minds currently and also to track how other activity across this portfolio and other portfolios is being received in regional Australia or generating interest or calls to our service.

Senator STEPHENS —Is it staffed by people, or is it a voice recognition service?

Ms Harris —No; it is staffed by real people.

Senator STEPHENS —How many?

Ms Harris —It varies according to the number of calls we are receiving. We have the capacity to have up to 20 or 30 people staffing those calls, if there is a campaign that leads to a huge response rate. Generally, it may be around six people.

Senator STEPHENS —Where are they located?

Ms Harris —They are located in a regional New South Wales centre.

Senator STEPHENS —Can you tell me which one?

Ms Harris —It is in Cooma call centre.

Senator STEPHENS —What is the difference between the old version of the Rural Book and the Commonwealth Regional Information Directory?

Ms Harris —The Commonwealth Regional Information Directory is largely the same as the Rural Book. It was one of the broad range of products that were all badged individually that we have brought under the Commonwealth Regional Information Service itself. So it performs largely the same function as the former Rural Book.

Senator STEPHENS —If people ring your 1800 number and they want a copy, how do they get one?

Ms Harris —We take their names and addresses and we send them a copy.

Senator STEPHENS —If they ask for the Rural Book?

Ms Harris —We will advise them of the new directory and the other information outlets that they can get to, and we will send them a copy of the directory.

Senator STEPHENS —When was the last edition of the Rural Book produced?

Ms Harris —The Commonwealth information directory was released as part of the campaign in August, and so the Rural Book was produced in the year before that.

Senator STEPHENS —So it was 2001?

Ms Harris —Probably it was more towards the end of 2000 that the last edition of the Rural Book was produced.

Senator STEPHENS —Do you have some kind of feedback form in the new book?

Ms Harris —Yes, we always include a survey asking people for their feedback to do with the directory.

Senator STEPHENS —Do you get many responses?

Ms Harris —We do. I have not got exact numbers, obviously, but we do get quite a few responses back to that survey.

Senator STEPHENS —That is good. Other than the media campaign—and we all received a little brochure in the mail with the direct mail campaign—what are the other products that you outlined as part of this?

Ms Harris —We have the regional entry point, which is a web based directory, if you like, to all government programs and services. Under that sits GrantsLINK, which is also a directory for grants products. We have the mobile shopfront where we attend country shows and agricultural field days and specific industry events at which we feel we should have a presence. There is the series of community information stands—about 400—which are held by community organisations across Australia.

Senator STEPHENS —I noticed that the community information stands are sponsored by regional community groups. How does that work? Do they contribute to the cost of them?

Ms Harris —They apply to us or ask us if we can provide them with a community information stand. The stand itself, as you know, is a very simple sort of wall-hanging pocket in which information can be put. We provide them with that pocket to have within their local chambers or halls or whatever.

Senator STEPHENS —It is basically a display stand for your materials?

Ms Harris —It is, yes.

Senator STEPHENS —You mention 400. Is that how many you anticipated having?

Ms Harris —It is demand driven, basically. If people want to have a stand, then they can apply to us. We do not anticipate the level of need, as such. People come to us. It has not changed much over the years, but we have had a range of organisations come to us and we provide them with that information.

Senator STEPHENS —Thank you. All of that information is very useful. Let us move now to the Sustainable Regions Program.

CHAIR —We will just check whether Senator Buckland has any questions on this area.

Senator BUCKLAND —We have covered the issue of regional research and are satisfied with that.

Mr Doherty —Perhaps I might make a comment. The sustainable regions is outside the Regional Policy Division; that is the Regional Programs Division. Before I leave the table, we are a bit concerned that we may have answered a question from Senator Stephens about a study which I think was a Monash University study, with reference to a different research exercise we were thinking of. It may be useful to clarify whether we did answer the right question.

CHAIR —Thank you.

Ms Armitage —Senator, when you mentioned the Monash study and I mentioned URAP, I was reflecting on the Sustaining Regions report, which included that. We just double-checked because, when I had a second look, the project did not quite fit. We believe that it is another report that is outside the regional research. We would seek some clarification on that Monash study. It would seem to be something that was conducted by the Bureau of Transport Economics for another purpose rather than under the regional research. We just wanted to clarify that what you were referring to does not appear to come under the regional research.

Senator STEPHENS —I appreciate that. Thank you.

CHAIR —Senator Buckland, do you wish to ask any questions?

Senator BUCKLAND —No.

CHAIR —Are we continuing with Regional Policy Division, or are we moving to regional programs?

Senator TCHEN —Before we leave this area, I would put on the record acknowledgment of the work done by the network of ACCs across Australia. These community volunteers have been making a tremendous contribution to the restoration of regional developments.

CHAIR —Thank you very much, Senator Tchen.

Senator STEPHENS —It is your division that looks after ACCs, is it?

Mr Doherty —No. Regional Programs Division looks after ACCs and the Sustainable Regions Program.

CHAIR —I thank the officers at the table.

Ms Briggs —While the officers are changing seats, I would inform the committee that Senator O'Brien—I am sorry; I wanted to do this when he was here, but he has not returned— asked this morning whether the estimate of $350 million still stood in connection with the payout around the air passenger ticket levy and the compensation to employees. Perhaps I can update the committee now through Senator Stephens and you, Chair. As at 21 November, $332 million had been paid out through those arrangements. There are an additional 200 employees who are entitled to support, and their entitlements are estimated to be another $13 million, taking us to a total of $345 million to be paid out within the immediate term. So the estimate of $350 million still stands.

CHAIR —Thank you very much, Ms Briggs. I welcome the next group of officers to the table.

Senator STEPHENS —With the Sustainable Regions Program, I am very interested to see the implementation of a whole of government approach to regional development and I am also interested in the fact that you are trying to work so comprehensively across all levels of government. To begin questions, you provided a time line in the public documentation on the program. Is that still current? Are you still on track?

Ms Key —A time line in the annual report?

Senator STEPHENS —No; in the documentation for the program. We only have the public information paper. You have a conference planned for December. Is that still happening?

Ms Key —We had a meeting of all of the chairs and executive officers of the new Sustainable Regions Program a few weeks ago here in Parliament House, Canberra.

Senator STEPHENS —So you have just had the meeting that was originally planned for June.

Ms Key —We had a meeting earlier in the year and a second one just a few weeks ago with the chairs and their executive officers from each of the eight regions.

Senator STEPHENS —A first annual forum of designated sustainable regions has been scheduled for here. Is that still going ahead?

Ms Key —Yes. That was the one that took place probably a little earlier than we had anticipated. It fitted into the minister's schedule and our planning quite well, and so we took advantage of that.

Senator STEPHENS —I understand that committee members receive remuneration.

Ms Key —Yes, they do.

Senator STEPHENS —Which category of remuneration do they receive?

Ms Key —It is rem rate 2.

Senator STEPHENS —What is the current level of that remuneration?

Ms Key —It is a few hundred dollars a day for the chair and about $250 for members. I am sorry that I do not have accurate information on that with me.

Senator STEPHENS —How have the committees been set up?

Ms Key —They comprise people from the business sector, community organisations, educational institutions and local government, in the main.

Senator STEPHENS —I have managed to print out the current advisory committee's membership. It is intriguing in that there does not seem to be a recommended number of members.

Ms Key —That is right. Each committee has been formed based on what we feel is an appropriate representation, both with geographic coverage and with skills mix. In some committees we have been able to achieve that with quite a small committee—say, three in the Gippsland. But in the Kimberley, for example, where we have to address some broader issues to do with remoteness and the like, we found it very useful to have a much broader representation to make sure that we are covering off all of those complex issues to do with remoteness in that region.

Senator STEPHENS —Who selects the chair?

Ms Key —The chair is selected based on a range of inputs we have from the community, from elected representatives and the like, but the final decision rests with the minister.

Senator STEPHENS —Was there an advertisement for membership and the chair?

Ms Key —No, not in the initial stages. It was really done on the basis of contacting key people in each of the regions and just sounding out who was available and also interested in the program and who could commit the time needed to get the program up and going.

Senator STEPHENS —So the same related to the committee members—that they were just recruited from local intelligence?

Ms Key —That is right, yes.

Senator STEPHENS —What about the executive officers?

Ms Key —The executive officer positions have all been advertised in national newspapers and regional papers as well. Normal competitive selection processes have taken place for those.

Senator STEPHENS —What is the tenure of those positions? The funding is to 2004, isn't it?

Ms Key —That is right. The executive officer positions were initially advertised for a period of one year, and we are currently looking to extend that for the life of the program. We were concerned to give ourselves an opportunity to see whether that approach was appropriate and then review that, and we are doing that at the moment.

Senator STEPHENS —Are any of the existing executive officers seconded from other departments?

Ms Key —No, they are not.

Senator STEPHENS —What is the status of their employment now? Are they temporary officers?

Ms Key —They are employed under contract.

Senator STEPHENS —How often do the committees meet?

Ms Key —Do you mean individually or collectively?

Senator STEPHENS —Individually.

Ms Key —To a degree, that is driven by the amount of work they have on and whether they have had a recent call for an expression of interest or applications to assess. If they have a lot of EOIs to get through and to firm up to the next stage, they may meet once a month. Once they settle down such things, they may not need to meet again for perhaps another three or four months, depending on whether they choose to go back and advertise their next round. As part of the set-up of the program, they have been doing a lot of community consultations as well. So they have been actually quite active, although not necessarily in formal committee meetings but in a number of processes to engage with their local community.

Senator STEPHENS —Is the department represented at those meetings?

Ms Key —We attend all of the committee meetings as an observer and we also attend as many of the community consultations as possible.

Senator STEPHENS —Given that there is not a fixed number of members for each of the committees, what constitutes a quorum for those meetings?

Ms Key —We have it in our guideline document. It is a majority of members present.

Senator STEPHENS —Does the EO count for the purposes of a quorum?

Ms Key —No, an executive officer does not count.

Senator STEPHENS —And minutes are kept?

Ms Key —Minutes are taken by the executive officer.

Senator STEPHENS —Are they provided to the department?

Ms Key —Yes, they are.

Senator STEPHENS —What about the operational costs of the committees?

Ms Key —The operational costs are largely to do with the remuneration rates, the sitting fees; travel expenses, if they are required to travel within their region; and normal travelling allowance, reimbursement for meals and the like.

Senator STEPHENS —Does that come out of the greater allocation to the committee, or is there a separate line item for that?

Ms Key —We have an allocation within our departmental expenses for that.

Senator BUCKLAND —The consultative committees are comprised of voluntary people, and so they are just community members. Do they get paid?

Ms Key —In the area consultative committees, no, they do not; but in the sustainable regions advisory committees, we do remunerate them.

Senator BUCKLAND —I am having a little bit of difficulty following where we are at the moment. We are on sustainable—

Ms Key —We are on the Sustainable Regions Program, and they also have their own advisory committee structure. The ACCs are represented on each of the sustainable regions committees though.

Senator BUCKLAND —Thank you.

Senator STEPHENS —With the regions and their rankings—`prototype regions' is an interesting term—can you explain how they were determined in the first place?

Ms Key —Yes. You will see from previous advice we have provided in other hearings that the regions were selected on a whole range of indicators at the time, from the Socioeconomic Index for Australia through to a remoteness and accessibility index and a range of other publicly available information—unemployment rates and the like. But also it was a view about how prepared these regions were to engage in leading their own future development as well. So it was not just the fact that they might have been lower on some scores but that they had the capacity and the interest to do something about it.

Senator STEPHENS —You did indicate at the previous estimates there was a ranking; that is right. Did you find a cumulative way of gathering all of those indicators into a ranking system?

Ms Key —What the Socioeconomic Index for Australia does is provide an aggregated score, of which the benchmark is 1,000. In the supporting documentation we provided last time to the committee, we showed all of the SEIFA scores for each statistical local area within each of our regions—and they do vary around that 1,000 benchmark. But, as I said, that was only one of the factors we looked at. We did not aggregate those in any way but rather looked at SEIFA, ARIA and a range of others to come to a view about which regions we would choose for the program. They are deliberately described as prototype regions because this is a test of whether this new approach is the right way to go in terms of regional development in the future.

Senator STEPHENS —I suppose I was surprised that western New South Wales was not one of the regions. Can you tell me where it ranked in the scheme of things?

Ms Key —I am afraid that I do not have that with me. However, a lot of regions throughout Australia would probably feel the same. To give us some depth with that prototype nature of the program, we have a broad cross-section of regional Australia there. We have everything from outer urban regions right through to the remote Kimberleys. That is quite a deliberate attempt at getting a feel for whether this type of intervention works across a whole range of regional scenarios. Realistically, we just could not fund almost all of Australia.

Senator STEPHENS —I suppose my interest is in balancing some of the dynamics of rapidly growing regions with those that are pretty stagnant or in decline and the mechanisms we can use to respond to the very different needs there.

Ms Key —But, to respond to those kinds of concerns, we have a number of other programs that we encourage other regions to tap into.

Senator STEPHENS —The first region was the Atherton Tablelands, wasn't it?

Ms Key —That is right.

Senator STEPHENS —How did that get chosen?

Ms Key —At the time I think there had been a mayoral task force. Again, this was a community that was ready to respond. The tobacco industry was going through considerable change at the time. It seemed an ideal area in which to test out the program, and we could get it up and running quite quickly.

Senator STEPHENS —Is there a reason why that area got $18 million when every other region got $12 million?

Ms Key —I think it recognises the particularly severe circumstances there in relation to the tobacco industry adjustment that is occurring.

Senator STEPHENS —But it is a pretty significant difference, isn't it?

Ms Key —It is.

Senator STEPHENS —Other regions I think would argue that they are pretty special also. Can you provide the committee with an updated list of the projects that have been funded, please?

Ms Key —Certainly. We have now funded 29 projects. I can provide that to you, yes.

Senator STEPHENS —For each region?

Ms Key —Yes, certainly—broken down. We can do that.

Senator STEPHENS —How much of the budget has now been allocated?

Ms Key —Those 29 projects represent $7.1 million, and so that is a bit less than 10 per cent of the program.

Senator STEPHENS —I understand that the projects can be partnered by federal, state, local or community organisations.

Ms Key —And private sector organisations as well.

Senator STEPHENS —Can you also provide a breakdown of the partnering arrangements?

Ms Key —Yes.

Senator STEPHENS —That is, the extent to which a project has drawn on other programs. For example, the Malanda Dairy Centre project probably drew on dairy RAP money. I do not know; I am assuming that is probably the case.

Ms Key —A few different sources were contributing there, and I would be happy to provide that to you.

Senator STEPHENS —Thank you. How is the committee going in the Playford and Salisbury region?

Ms Key —In the last month or so, they have formulated their strategic priorities formally. They have held a range of community consultations and partnering forums with key stakeholders in the region. They are to meet in mid[hyphen]December to consider expressions of interest from their first round.

Senator STEPHENS —Have they funded any projects?

Ms Key —Not yet.

Senator STEPHENS —I suppose their committee is not the best one to ask this question about but, in general, what is the turnaround time for applications?

Ms Key —I cannot tell you that for Playford.

Senator STEPHENS —I mean in general terms.

Ms Key —To a degree, it depends on the level of response we have had. In Gippsland I think we had 160 expressions of interest—or in that order of magnitude. We endeavour to have a quick look at all those with the executive officer and to provide advice back to the committee within a few weeks—within a month, say. Then at its next meeting the committee considers that. From that, it will encourage those people who it feels should go to a full application stage. So the process from the EOI phase would probably be a few months.

If you would like me to give you an indication of what has happened so far, I could do that, but some applicants may take longer than others to develop their concept more fully, of course. It becomes then a rolling program of addressing those more detailed applications. Sometimes we invite the proponents in to give presentations to the committee as well. So it is a very active engagement with the proponent by the committee. Again, if the committee wants to ask more questions of a proponent, that can mean another two weeks or a month until the application is finalised and a recommendation made.

Senator STEPHENS —So, at the expression of interest stage, the expressions of interest go to whom? Is it the executive officer?

Ms Key —That is right; they go to the executive officer.

Senator STEPHENS —Who then assesses—

Ms Key —The executive officer assesses them against the priorities that have been identified by the committee itself for the region and the triple bottom line objectives we have for the program. We assist the executive officer with that as well. Also, we can sound out other agencies in terms of whether they have seen this project before and whether it is a good project. If it has implications, say, in the environmental sector, we will liaise with other federal agencies and get a view on that project to help inform the committee to make the best decision they can.

Senator STEPHENS —So that liaison is done by the department as opposed to the executive officer?

Ms Key —That is right. At the federal level it is done by us, yes.

Senator STEPHENS —What if the proposed partners are state government agencies?

Ms Key —We have a good relationship with the state regional development bodies. We do that, but so do the executive officers in the regions as well. So it is a joint exercise.

Senator STEPHENS —If a project expression of interest comes in that is way out there and is not within the guidelines, what happens? Do they get knocked back or referred to someone else?

Ms Key —If we think that another funding program is more appropriate, we certainly encourage the person to seek an alternative Commonwealth program for that—or, indeed, even a state program. If we think the idea is good and needs work then we do what we can to help them prepare a proposal, if indeed it has got through that first screening by the committee. The committees generally take a pretty open-minded view about those projects, as long as they are aligning with their regional priorities. If there is a good idea there, they will perhaps invite the proponent back to make a presentation and get a better feel for the project.

Senator STEPHENS —So the sense is that an organisation that is submitting an expression of interest does not just get a blank rejection?

Ms Key —That is right. They are given a reason against the criteria.

Senator STEPHENS —Can they resubmit?

Ms Key —Yes, they can.

Senator STEPHENS —I notice that the chair of the Playford-Salisbury region, a Mr Smith, is also currently the chair of the Adelaide ACC. Does that happen in other places as well?

Ms Key —Yes, in the Kimberley the chair of the ACC chairs the sustainable regions committee as well. As I said, there is a lot of other common membership.

Senator STEPHENS —I am sure that Senator Buckland will have some questions to ask about that. Wide Bay Burnett seems like a pretty dynamic committee too.

Ms Key —Yes, it is.

Senator STEPHENS —How are their projects going?

Ms Key —I think they have just met and considered their first round of expressions of interest, and they have narrowed those down quite considerably. They have formalised their priorities. They are a very forward thinking, strategic group, as you said. They are a very enthusiastic bunch. They have a fairly new executive officer, but there is a lot of positive thinking up there.

Senator STEPHENS —Have you had a report on the outcome of Dr Ellyard's visit in August?

Ms Key —Yes. They found that very useful in terms of framing those priorities for the future. Indeed, at our conference here in Canberra the chair, Diana Collins, said how useful that had been in getting to them to think outside the box.

Senator STEPHENS —Is it something that you would recommend to other regions?

Ms Key —We have given them the option of doing that. In Playford-Salisbury, we have had a session with a whole lot of people from a whole range of industries and with visiting experts from the UK too, to talk to the community about a whole range of trends that are happening internationally with demographics, globalisation and the like.

Senator STEPHENS —With regard to the Gippsland region, I see the government has recently announced $4 million worth of projects, or a little more than that. How many expressions of interest would that committee have considered, to come up with a final round of projects like that?

Ms Key —There were a lot; I will just check. There were 160.

Senator STEPHENS —You obviously had some kind of pretty effective criteria for assessing those expressions of interest.

Ms Key —That is right. And of course the first test is how clearly they line up against the priorities identified by that region.

Senator STEPHENS —Are there other things?

Ms Key —Yes, there are—the selection criteria.

Senator STEPHENS —Is it possible to supply a copy of those to the committee?

Ms Key —Yes, certainly. I did table them at the last hearings, but I am happy to give you another copy.

Senator STEPHENS —I would appreciate that. Is it possible to get hold of a list of those 160 expressions of interest and where they were?

Ms Key —We do have that on record but, of course, some of that material is quite sensitive, as you would appreciate.

Senator STEPHENS —A one-line description of the project which told you where it was located would not be sensitive information, would it?

Ms Key —I think we could certainly provide that to you.

Senator STEPHENS —I am only thinking in terms of, for example, a similar list of things that was provided to a question on notice about RTCs—just a brief description, if that would be possible.

Ms Key —We could give you a project number and a brief description. Would that be sufficient for you?

Senator STEPHENS —And a location, because I am not familiar with some interstate locations.

Ms Key —Senator, we just had a discussion around the fact that a number of the proponents believed that their submissions were only going as far as the committee itself. What we will do is consult with the minister about what we think is appropriate, but we will endeavour to give you as much information as we can about each of those projects.

Senator STEPHENS —Thank you for that. To understand the rollout and impact in the longer term of the sustainable regions program itself, it would be quite helpful for me if I could have some kind of information about the location within the region—not just that it was within Gippsland, for example, but actually where it was and those kinds of things— particularly in New South Wales.

Ms Key —Certainly.

Senator STEPHENS —I will now focus more on Gippsland. When I saw the first range of projects proposed, it seemed to me that more than three-quarters of the funding went to one part of the Gippsland region and the Latrobe Valley only had one project funded there.

Ms Key —There are actually three: the Monash University Bionics and Cognitive Science Centre, which is $360,000; the Maryvale salt cake project in Morwell, which is $50,000; and the Latrobe Regional Airport Industrial Park, which is another $100,000 in Morwell. There are another three projects that have application right across the region rather than being specific to a particular location. But there are ongoing rounds and that was just the first one, so there are some very positive new initiatives coming forward from that region in particular.

Senator STEPHENS —I was reading the State of the regions report, and it is obvious that the Latrobe Valley area seems to be the main area of disadvantage in the Gippsland region. It is interesting that the other parts of the Gippsland region do not seem to have the pockets of disadvantage that Latrobe has.

Ms Key —There is an excellent application in the pipeline at the moment which will serve to redress parts of that issue that you are concerned with. It is also important to recognise that the health of the region as a whole is important too, and there may be really positive spin-offs for Latrobe from some of the other projects that we are undertaking at the moment.

Senator STEPHENS —To me it sounds as if any suggestion that Latrobe is being treated unfairly would not stand up to any kind of scrutiny, given that you say that there is another project in the pipeline.

Ms Key —That is right. I do not believe that at all. The program responds to projects coming forward from the region as well, so if there are not a lot of projects coming forward from that particular pocket—and hopefully, they will come forward—they are not going to necessarily exceed the distribution of the other areas at all. There are some excellent projects in current rounds coming forward from Latrobe, and people would be very pleased with the projects that the committee is considering at the moment.

Senator STEPHENS —I find the State of the regions report very useful in understanding the dynamics of regions. Are the advisory committees being encouraged to use that kind of material to make sure that there are not pockets of disadvantage that miss out and to build some capacity in those areas of the regions that perhaps have not been able to put forward proposals?

Ms Key —Indeed, and that is an important aspect of what we are doing with the program. We have a community capacity building focus, and in fact we have allocated money to each region to do some of that work. They have done strategic planning and some of them have done quite a bit of community capacity building with agencies like FACS as well, to help build a bit of strength in the community to ensure that we can keep these outcomes sustainable.

Senator STEPHENS —Did you say that you have allocated some money within each committee?

Ms Key —Each region gets around $140,000 for planning and community capacity building.

Senator STEPHENS —Was that funding used for the Regional Leaders Program in the Atherton area?

Ms Key —Yes, it was.

Senator STEPHENS —Is that the kind of thing those funds are used for?

Ms Key —Yes.

Senator STEPHENS —Having been someone who has worked in program areas for a long time and seen the favourites that come out of the bottom drawers for regions—the favourite projects that come out every time some new funding program emerges—how are you looking to address the issue of not just getting those kinds of projects up but looking at the dynamics of the regions and where the areas of need are? You mentioned the fact that the committees have done strategic planning as part of their initial process. What else is being done to make sure that the needs of those smaller communities or those with less capacity or less voice are able to get their projects to a stage where they can be considered?

Ms Key —A number of executive officers are working very actively with proponents that have made it to the expression of interest stage but need, in our view, to develop their applications quite a bit more. So those executive officers are working one on one with proponents to help develop more solid proposals. We are also putting them in touch with other agencies that might be able to help them. As I said, the community capacity building area of the program recognises that there is a bit of a gap out there, and we are endeavouring to work with communities to build up those skill levels.

Senator STEPHENS —I would be very interested in any information or material you could provide about that aspect of the program and the work with FACS.

Ms Key —We could perhaps give you something on the Atherton in particular, where that has been happening more extensively than in some other places. That is just because they are the first cab off the rank, I think. That might be most useful for you.

Senator STEPHENS —Thank you. One more thing about that: do the executive officers act proactively in going out and identifying projects, working projects up and finding partners within the community, as well as responding to expressions of interest that may be the same old chestnuts?

Ms Key —They do both. It depends on the region and where they are at as well. Certainly some of the things we will be doing next year are more in line with what Playford-Salisbury has done in partnering forums and identifying key people in the region that we can work with to generate high quality projects.

Mr Matthews —You have acknowledged that there is a strategic planning process going on and you are asking Ms Key to talk about other things, but the strategic planning process is itself a really important thing from our point of view. What we like to say is that we are trying to make this program not just another granting program, which I think has been the point of some of your questions. So the plans try to articulate strengths, weaknesses and opportunities—they try to act as a catalyst—and then there will be some beating of the bushes and some catalysing of community thinking to respond and to fill in that plan rather than just lifting old proposals out of bottom drawers.

Senator BUCKLAND —As part of that process, how much time has been spent with state government authorities getting this plan into place?

Mr Matthews —I will ask Ms Key to handle that.

Ms Key —We actively recognise that the states have a key role in our regions. In fact, we ensure that any state plans that might apply to that region are considered as part of the strategic planning exercise. We will touch and cover all the local and state government plans for the region and any other work that is being done as part of a review process to help inform that exercise.

Senator BUCKLAND —How is that done? Do you sit around a table and go through it or do you see that they are looking at a particular project or program?

Ms Key —We run a tender process and select the consultants who specialise in this area. They have done reviews of the literature and they have also talked to some key players to help the regions work up a document that they can use as their first planning document to engage with the community. Generally, we make sure that we contact the key people in the region and form a good network with the major players. But we do the desktop research as well.

Senator BUCKLAND —So you would have fairly close working relationships with state development departments?

Ms Key —We do, that is right.

Senator BUCKLAND —How often would you meet with them?

Ms Key —When committees meet, some of the officers here make sure that they touch base with their colleagues in the states and with other Commonwealth agencies in the regions before the meeting. We just capitalise on the opportunity while we are there to meet with other people and help promote the program.

Senator BUCKLAND —If a program is identified, is that something that is done in partnership?

Ms Key —Yes, that is right. We have contributions in the form of, say, payroll tax exemptions and the like. There are some state training initiatives that are contributing to our larger projects.

Senator BUCKLAND —Are these consultations and works in progress harmonious or are there times when the Commonwealth feels it has to give directions to the state or vice versa?

Ms Key —Generally our approach is to work in concert with the state as much as we can on these, particularly on some of the bigger, more strategic investments that need to be made. There are a number of those under way in Gippsland at the moment, for example.

Senator BUCKLAND —If you take Gippsland then, where you have projects, who would be involved once something is identified as a project? Local government?

Ms Key —Local government, state departments of regional development, perhaps other agencies—there is a specific agency for Gippsland—and also community organisations.

Senator BUCKLAND —What sorts of community organisations? Only relevant ones or selected ones?

Ms Key —It is usually project specific. But, as I said earlier, they are engaged in helping with consultations to form priorities for the region at the outset. But we will engage with them on a project by project basis. Exactly who we will talk to in the state and local government depends on whether a project is in the social sphere or whether it is an environmental project or a business or economic project.

Senator BUCKLAND —If you have community groups involved and there are costs associated with their involvement—not in the form of salaries, stipends or anything of that nature but costs of meetings or things like that—are they reimbursed?

Ms Key —If that is built into their project, it is reimbursed. But we find, generally, most people are prepared to engage in a voluntary way, providing advice and talking to the committees—and they are very happy to do that. But, if their role requires them to be an active partner in the project and that is costed as part of the project, they are remunerated.

Senator STEPHENS —Coming back to the point Mr Matthews made about strategic planning, the intent of my question was to make sure that, if there is strategic planning, those most disadvantaged areas are actually able to participate in this program to the greatest advantage. That is why I was so concerned about what I was able to get from the publicly available information about the Latrobe Valley. It seems to me that they have been pretty short-changed in the process so far. I will be interested to see what happens in the next round. There is one issue, though: was the federal member for Gippsland, Mr McGauran, consulted about those projects?

Ms Key —The decision on the first round was taken entirely by the minister, following a recommendation from the committee, but Mr McGauran was advised and was involved in the press release and media statements.

Senator STEPHENS —Mr Zahra is the other federal member. He was involved in the announcements of the ones in Latrobe, was he?

Ms Key —Of course, it was the same process, but the minister decided that he would do the press release for the whole region in concert with Mr McGauran.

Senator STEPHENS —If we can move on to the Campbelltown-Camden committee— somewhere close to home for me, so one that I am very interested in—I was a bit flummoxed to see that there were only three members of the committee there.

Ms Key —That is correct.

Senator STEPHENS —Given that that is such a significant growth area, I would have thought that there were probably more issues and more people to be represented than could be done effectively with three members. Who determines that three is sufficient?

Ms Key —At the time, we saw it as an appropriate committee structure. We are looking at some new membership at the moment for that committee. We are also looking at some other mechanisms to engage with the broader community in that region for next year.

Senator STEPHENS —In terms of looking at new membership, I understand Councillor Corrigan resigned and was replaced by Mrs O'Keefe. Are you looking at additional membership? Are you looking to broaden that committee?

Ms Key —At this stage, we are just considering that. We have not developed any formal proposals at the moment.

Senator STEPHENS —Are you considering whether to replace people or to broaden—

Ms Key —No, we are looking, rather, to extend the membership.

Senator STEPHENS —It seems to be a large population base for three people—they would have to do so much work and to represent so many interests. Is that an effective group? Have they been through strategic planning process values?

Ms Key —They have, and they have also had community consultation forums which have helped them confirm their priorities for the region. But, as I indicated, we are looking at some other mechanisms for early next year to help generate some more projects.

Senator STEPHENS —To date, how many projects have been generated there?

Ms Key —I think we have had two announcements so far, and we have a number of proposals being developed further, as I said earlier, from EOIs and the like. There are a number of others that are being actively worked on by the committee at the moment for consideration in a further round.

Senator STEPHENS —Members of a committee would have great connections within a region, but would it be fair to say that a small committee limits those connections and, therefore, that is why there have been fewer proposals?

Ms Key —I think they have taken the same approach in that they have seriously tried to consult with their community and run their stakeholder forums earlier in the year. They certainly had a wide range of interests represented and it was a very successful day. Their priorities reflect a wide range of issues from infrastructure right through to the more pressing social concerns in that region. But they do recognise that it is a challenging task and they are looking for some other ways to engage with the community next year.

Senator STEPHENS —How many times have they met since they were appointed?

Ms Key —I could provide that to you, but I do not have that with me at the moment.

Senator STEPHENS —It would be helpful if you could provide that, as well as who attended those meetings and the decisions that were made about shortlisting the expressions of interest.

Ms Key —Do you mean at which meetings the decisions were made?

Senator STEPHENS —That would be helpful. My concern is that that committee is perhaps missing some opportunities. I again went to the state of the regions report—and understanding your comment about the regions being ranked on the socioeconomic index— and I see the unemployment rate in the Pilbara-Kimberley region is 11 per cent but in Lingiari it is 25[half ] per cent. I am wondering why you chose Pilbara-Kimberley as opposed to Lingiari as a prototype region.

Ms Key —Most of the Pilbara is not captured in the Kimberley sustainable region at all. I am afraid I am not sure of the physical boundary of Lingiari.

Senator STEPHENS —So why was the Kimberley chosen?

Ms Key —Because it presented a whole range of issues. As part of the prototype program, it has remoteness, Indigenous issues, a serious unemployment problem, youth retention problems and a range of other social issues as well.

Senator STEPHENS —Are you getting some innovative responses to the expressions of interest?

Ms Key —We are. We have announced only one project in the region so far. At the next meeting on 11 and 12 December, the committee will be considering a whole range of projects that have been through the expressions of interest phase and have been developed up into more solid projects. We have a range of projects which address their Indigenous employment and enterprise priority areas through to projects that have, for example, a more economic and tourist focus, as well as cultural projects and the like. There is a very broad range of projects out there.

Senator STEPHENS —Are they close to being announced or are they still in the development phase?

Ms Key —The committee will consider them on 11 and 12 December, and the committee will then provide advice to the minister about whether or not they are comfortable for those projects to proceed. It really depends on how developed they are.

Senator STEPHENS —So the committee is only considering the expressions of interest?

Ms Key —They are considering several projects which have passed the expressions of interest phase and have been developed into full applications.

Senator STEPHENS —You did not answer my question about why Kimberley was chosen over Lingiari.

Ms Key —Lingiari is the electorate for that area, is it not?

Senator STEPHENS —Yes, I suppose it is, but it does cover—

Ms Key —It does cover the Pilbara as well.

Senator STEPHENS —Yes.

Ms Key —There are pockets of employment in the Kimberley that are perhaps not as high as 25 per cent but are up in the high teens. I think that at the time it just reflected the whole range of issues. We have fantastic development taking place in Broome but serious issues in the eastern Kimberley to do with sustainability and where those communities are heading. From that point of view, it presents a mix of challenges but a mix of opportunities as well.

Senator STEPHENS —North-east New South Wales is a challenging region.

Ms Key —Indeed, it is.

Senator STEPHENS —How are things going there?

Ms Key —Very well. We are very excited about some of the initiatives that have been announced in the first round. We have a range of high-tech industry proposals through to socially oriented projects under way up there. I think it is going well.

Senator STEPHENS —How many have been announced there?

Ms Key —There have been four projects announced so far.

Senator STEPHENS —I noticed in the guidelines that you are developing an evaluation strategy as well.

Ms Key —Yes, that is right.

Senator STEPHENS —How is that going?

Ms Key —Very well. At that recent meeting, we talked to our chairs and executive officers about the framework we have in mind. We will be putting something in place before Christmas.

Senator STEPHENS —Is that the framework that CSIRO developed?

Ms Key —CSIRO has contributed to the overall framework that we will be taking on board for the program. Certainly, it was an important part of where we got to in the design of that framework.

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

Ms Key —Yes, it is.

Senator STEPHENS —It would be great if you could provide that to the committee. I will watch the project with interest because it does seem to be a very different approach and one that is worthy of pursuing.

Senator BUCKLAND —Firstly, I want to address the Newcastle structural adjustment fund.

Ms Key —That is my area of responsibility.

Senator BUCKLAND —I think you will need a glass of water when you are finished.

Ms Key —I need one now.

Senator BUCKLAND —I was involved very early with this. In fact, when all this was starting I had quite a bit to do with the closure of the steelworks and the subsequent reuse of that area. My understanding is that there was initially $10 million of structural adjustment money.

Ms Key —That is right, yes.

Senator BUCKLAND —Between April 1999 and May 2001, there were 11 projects announced with total funding of $11.445 million. I think that you touched on this earlier on.

Ms Key —I think we touched on this at the last estimates.

Senator BUCKLAND —Yes. At those earlier hearings we were told that the program is administered by the New South Wales state government and the federal government merely handed over the money, which was very generous of them.

Ms Key —The minister still approves and announces the projects and the New South Wales Department of State and Regional Development administers the program on our behalf.

Senator BUCKLAND —In October this year, Bob Baldwin announced funding of $500,000 for three new projects. What were the three new projects?

Ms Key —In fact, there are four: Adventure Plastics and Integrity Marine for factory modifications, R. H. Taylor and Co. for some new headquarters for their company, Goldsmith's Frames and Trusses for relocation to some larger premises and some capital works for the visitors centre for Cessnock City Council.

Senator BUCKLAND —Would you explain the role played by Bob Baldwin in all of that, apart from making the announcements?

CHAIR —As the local member, I would suggest.

Ms Key —Only in terms of announcing the programs.

Senator BUCKLAND —He announced them, but what role did he play in initiating the three programs?

Senator Boswell —What was the question? Did he lobby for them?

Senator BUCKLAND —I just want to know what involvement he had in getting these projects off the ground. That is the question to Ms Keys.

CHAIR —As a powerful advocate and a good local member probably.

Senator Boswell —I suppose he lobbied for them and worked with them.

Senator BUCKLAND —Let us see what Ms Keys has got to tell us.

Ms Key —Project proposals can come forward from a range of players in the region, from the ACC to the local member. We are not aware of Mr Baldwin's involvement necessarily in any of those projects that have come forward, but they do come via referral.

Senator BUCKLAND —If you have got money going to South Australia, could you let me know? I would be happy to announce it for you.

Senator Boswell —If you get out and identify some good projects—

Senator BUCKLAND —It could be that we have done that, Senator. At the last estimates hearing, some questions were asked about funding to the Maitland Transport Hub, to which I think it was you, Ms Keys, provided answers on notice.

Ms Key —That is right.

Senator BUCKLAND —I thank you for that. In your answers you indicated that the administration for the program is done by the New South Wales government. Since that time, has your department undertaken any investigation of the funding of the Thornton Land Co.?

Ms Key —Only in response to the questions that were raised in the last hearing and then subsequently tabled.

Senator BUCKLAND —So there has been no subsequent investigation undertaken into that company?

Ms Key —That is right.

Senator BUCKLAND —How much money was given to the Maitland Transport Hub?

Ms Key —It was $1[half ] million.

Senator BUCKLAND —So $1.5 million was allocated to the project?

Ms Key —That is right.

Senator BUCKLAND —And since that time parts of the hub have been sold for $1.65 million and, I think, $1.5 million. Who are the directors of Maitland Transport Hub?

Ms Key —Graham Burns and Hilton Grugeon.

Senator BUCKLAND —Is it normal to give funding to a company or to a project and then have it sold off?

Ms Key —Once all of the contract obligations had been met by the company and the jobs had been created, the deed was essentially met. The subsequent sale of the company has not impacted on the contractual obligations that were established at the time.

Senator BUCKLAND —What did the department do to satisfy itself that all obligations under the deed had been met?

Ms Key —The New South Wales Department of State and Regional Development undertakes audits of those contracts to ensure that the requirements are met. In this case, I understand that they were.

Senator BUCKLAND —Did the Commonwealth also investigate that?

Ms Key —Not separately, Senator, I understand.

Senator BUCKLAND —Does the Department of Transport and Regional Services receive an audited statement of projects funded under the Newcastle structural adjustment fund?

Ms Key —We will have to take that on notice. We know that the New South Wales department does, but whether or not we actually have copies of them on our files I am not sure.

Senator BUCKLAND —Could you take that on notice. Also, would you advise us as to whether such an audited statement was received for the Maitland Transport Hub.

Ms Key —Yes, certainly.

Senator BUCKLAND —Could you provide those audits if they are available?

Ms Key —We will contact the New South Wales department, and if they are available—

Senator BUCKLAND —The Commonwealth's.

Ms Key —The Commonwealth's contract with the state?

Senator BUCKLAND —Or audit, if there is one.

Ms Key —If there is one I will provide it.

Senator BUCKLAND —In your answers to questions at the last estimates hearing you indicated that the New South Wales government had managed contracts for this project. Today you have reiterated that. The web site indicates that the terms and conditions of the contracts are agreed between the Commonwealth and the recipient. Did you agree that the proponent of the Maitland Transport Hub could sell parts of the project at any time?

Ms Key —The contract is between the state department and the proponent. We are given an opportunity to comment on milestones, phasing of payments and the like before the contract is finalised.

Senator BUCKLAND —That creates a little bit of a dilemma because your web site says something quite different from that. It says that the terms and conditions of the contract are agreed between the Commonwealth and the proponent or in this case the recipient.

Ms Key —I will have to check that and get back to you.

Senator BUCKLAND —I think that is very important because all of this is going back to the state, so all responsibility is handed to the state. It worries me that your own web site says it is you and not the state, but today you cannot answer questions as to whether you have audited. You do not even know if you have information.

Ms Key —The state audits it on our behalf because the contract exists between the proponent and the state.

Senator BUCKLAND —I do not really think that satisfies your position as far as the web site is concerned, and I think that would worry not just me but many others.

Ms Key —Could I clarify that and come back to you with a statement in relation to it?

Senator BUCKLAND —Yes, I would very much appreciate that being clarified. If terms and conditions agreed between the Commonwealth and the recipient exist—and we are not now sure—was there any requirement that the Maitland Transport Hub, funded from Commonwealth funds, not be sold for a specific period?

Ms Key —I believe not.

Senator BUCKLAND —Has an audited statement been received for the $2.5 million project to develop the Impulse Airlines call centre?

Ms Key —The project is still being funded; it does not terminate until October next year. We are regularly monitoring that project, but we do not have a final audited statement for it.

Senator BUCKLAND —Could you provide us with information as to where it is at the moment?

Ms Key —Certainly. I do know that they are meeting the job requirement at the centre at the moment and that they have exceeded the job requirement in a number of months.

Senator BUCKLAND —So there has been an audit in progress, if you like, carried out on them?

Ms Key —Yes, we keep a regular eye on whether the call centre employment numbers are being maintained.

Senator BUCKLAND —Has the state government got any involvement in auditing the Impulse Airlines call centre?

Ms Key —In this particular case we have been monitoring the audit arrangements ourselves. We will continue to do that and do the final audit on completion of the project in about October next year.

Senator BUCKLAND —How is that project different to the Transport Hub?

Ms Key —Do you mean in the auditing sense in particular?

Senator BUCKLAND —Yes.

Ms Key —I understand the difference is that it was a one-off capital injection and so there were different auditing arrangements set up at the beginning which gave a greater role to the department to monitor it in the first instance. That is why I am able to actually tell you how we are tracking the job numbers on that particular project, but the responsibility does rest with the department for the ongoing monitoring of that project.

Senator BUCKLAND —I have looked at your web site. Can I find an explanation there that gives some indication of what is audited and looked after by the state as opposed to what is audited and looked after by the Commonwealth?

Ms Key —I do not believe that information is actually on the web site.

Senator BUCKLAND —I did not think that I had seen it. There are often things on web sites and it is potluck with me whether I strike them or not. I thought there might have been. I cannot understand the difference under the funding arrangements between the two.

Ms Key —I do not have a lot of background in this program, unfortunately, because I was not involved at the time. My scanty understanding is that it involved a mortgage over the property that is involved and that is why it is treated very differently to the other projects in the program.

Senator BUCKLAND —In the original proposal for the project, did the budget indicate payments to a consultant or to a firm for any purpose? If it did, how much was budgeted for this purpose?

Ms Key —I understand the total project cost was $6.7 million. Our injection was specifically in relation to the mortgage over the property. There may well have been a consultancy funded elsewhere. Our costs were all associated with the building rather than the consultancies or other expenditure that may have been required in the project. We are not aware of this consultancy.

ACTING CHAIR (Senator Buckland) —If consultants were used, is there any way any of the budgeted Commonwealth money could have been used?

Ms Key —Our contract specifies exactly that the funds will go to the building itself. We have paid at milestones on the basis of that being the case. I understand the total budget was $6.7 million approximately. As I said earlier, if consultants had been used, funding could have been sought from other areas—the state government and the proponent itself—for those sorts of activities.

ACTING CHAIR —Without having put funds into the system, are you aware through your normal auditing system—and I assume that your officers are watching carefully what is occurring—that consultants may have been used without being directly funded by the Commonwealth?

Ms Key —I personally am not aware of anything other than the contract we have over the property. It has not been raised with me at all.

ACTING CHAIR —If consultants were used, despite not being directly funded by the Commonwealth, would that appear in some form in the audit or in reports coming back to your department?

Ms Key —It would only appear if they related to the construction of the building per se, as would be the case with engineering consultants and the like, but not if they were engaged in doing other work.

ACTING CHAIR —If it was in connection with the building, or modifications to design or work like that, would it appear?

Ms Key —I could not tell you exactly. I just do not have the history on that project.

ACTING CHAIR —Do you think you could find that out and provide us with an answer?

Ms Key —We will check our files and see what we have in relation to that request.

ACTING CHAIR —I would appreciate that. Under what administrative arrangements was the program run?

Ms Key —Essentially, it was run between us and the New South Wales Department of State and Regional Development. They have in place people with specific expertise in that area who manage the program on our behalf.

ACTING CHAIR —Over how many years was the funding allocated?

Ms Key —The Commonwealth contribution was actually paid into a trust fund with an expectation that it would take some years to expend. There is not a finite end date for the program and, as you mentioned earlier, we just had a most recent round announced.

ACTING CHAIR —At this stage there is no known end?

Ms Key —We hope that the program, in the sense of all the funds being awarded, will happen in this current financial year.

ACTING CHAIR —If at the end of the day it does come to a conclusion, what arrangements are made for any unspent allocations of funds?

Ms Key —We think there are only a couple of hundred thousand dollars left. We are aware that there are still a few good projects out there, so we expect that it will be fully expended.

ACTING CHAIR —There was no mention of this program in the 2001-02 annual report. Is that because the full allocation was given the previous year to New South Wales to administer—or am I wrong?

Ms Key —I am just double-checking that. That is correct. It is not mentioned explicitly in the descriptive part of the annual report because the funds were administered by the state department—if you are looking at the detailed summaries that start around page 106 in the report.

ACTING CHAIR —I mentioned earlier the announcement by Mr Baldwin of $500,000 for three new projects. My understanding of that money is that it was reallocated from three other projects that were part of the program. Could you tell me where that money came from? What projects were affected by the reallocation of fund because it was not additional money?

Ms Key —There was some additional money allocated, plus there is some accrued interest that has been generated in the trust fund.

ACTING CHAIR —$500,000 worth?

Ms Key —No. It all contributed to that $500,000. The original $10 million has been bolstered by two things: an additional allocation of $735,000 and some accrued interest.

ACTING CHAIR —Where did that come from? Your colleague might like to pull up a chair.

Ms Key —Essentially, they are from the two projects that did not proceed—Trucksmart and Exel Trading.

ACTING CHAIR —Why did they not proceed?

Ms Key —I understand that Trucksmart withdrew due to a downturn in the industry and a change of direction. The partners were not in agreement about the direction of the company and so they chose to withdraw their project. The Exel project lost their principal private backer. They could not submit a revised proposal and so withdrew.

ACTING CHAIR —That expenditure was not indicated in the portfolio budget statements for 2002-03. What administrative process has been undertaken to make this money available?

Ms Key —Again, it is the trust fund administered by the state department that is involved here. We, of course, have a process internally to monitor the total number of funds remaining in the trust fund with the New South Wales government. This is to ensure that we manage to get a couple of good projects up between now and, say, the end of the financial year to fully expend the fund.

ACTING CHAIR —In what public document would I find how that is being done? Is it available?

Ms Key —I will have to check with my colleague again. We are not aware of any public documentation necessarily that shows that increase in funding. We can check with our colleagues in the New South Wales department and get back to you on that.

ACTING CHAIR —Thank you. What was the selection process for identifying those three projects?

Ms Key —There are several criteria that we look at in assessing the projects. Sustainable private sector employment should be generated from the project. At least 50 per cent of funding should come from sources other than the New South Wales and Commonwealth governments' funding allocations for Newcastle, the project has to be based in the Hunter's regional competitive advantage and build on that and the Commonwealth's funds must not be put to purposes that are inconsistent with other Commonwealth policies. They are the criteria we use to assess the projects.

ACTING CHAIR —At what stage did both the Minister for Transport and Regional Services and the Minister for Regional Services, Territories and Local Government become involved in the process of selecting the projects?

Ms Key —It is the Minister for Regional Services, Territories and Local Government who has the delegation for this program. The submission was made to him, as the delegate, for approval. So only at that stage.

ACTING CHAIR —How far had the process gone before he became involved?

Ms Key —The projects had been through checking against those mandatory criteria and had been referred for comment to the prime ministerial task force, the Hunter Area Consultative Committee and the state department for advice before they were put forward as recommendations.

ACTING CHAIR —Were they involved in the selection process?

Ms Key —Yes, they were involved in providing advice to make a decision.

ACTING CHAIR —Who was involved in the actual selection of the three projects?

Ms Key —I will just check. Based on all of those contacts we have that I articulated earlier, the department forms a view about the projects and then puts that advice to the minister. There would be a number of people involved in those various committees and advisory bodies that we would consult before framing the advice.

ACTING CHAIR —We are going to run out of time very shortly because we are going to become inquorate. Could we just advise that we will not be requiring the Territories and Local Government Division this afternoon. I have questions about the ACCs, which I will put on notice. The DOTARS web site states:

The Commonwealth's funds are being administered by the NSW Department of State and Regional Development under a deed of grant, whereby the State contracts with recipients on terms and conditions agreed between the Commonwealth and the recipient.

What role did the New South Wales government have in the selection of the three projects?

Ms Key —They were one of a range of players that we consulted in coming to a view about the projects.

ACTING CHAIR —Did they put forward any of the projects as their particular interest?

Ms Key —I am not aware of that at all, no.

ACTING CHAIR —Did the New South Wales government express concern about any of those projects?

Ms Key —No. They were supportive of all the projects.

ACTING CHAIR —Of all the projects?

Ms Key —Of all the announced projects; that is right.

ACTING CHAIR —Who in the New South Wales government was involved?

Ms Key —The Newcastle office of the state department.

ACTING CHAIR —Are the contracts for those projects between the New South Wales government and the proponents or between the Commonwealth and the proponents?

Ms Key —The contract is between the New South Wales government and the proponent. The comment that you read out earlier refers to our oversight, to ensure that contract milestones are properly reflected in those arrangements and that we are comfortable with the regime.

ACTING CHAIR —Are you comfortable with these particular projects?

Ms Key —Yes, we are. We have put them through a very vigorous process and we are very comfortable with them.

ACTING CHAIR —Has the New South Wales government expressed concern about any of the projects?

Ms Key —Not about any of these projects. They are very happy with those that were finally put forward for approval.

ACTING CHAIR —Was the local member, Mr Baldwin, involved in any of this process?

Ms Key —As I said earlier, he certainly announced them, and he may have provided a view on them, but I do not know that personally. I cannot tell you one way or the other.

ACTING CHAIR —Are you able to find out?

Ms Key —I will check. A lot of work was done out of the Newcastle office of the state department, so how closely they may have touched base with him I do not know. We could contact them for advice but, again, this is second-hand information.

ACTING CHAIR —I would appreciate that advice.

Ms Key —Yes, certainly.

ACTING CHAIR —As we still have a few minutes left, we will keep going and at least start on the ACC questions. The remainder of them, as with territories and local government, we will ask you to take on notice.

Senator STEPHENS —Acting Chair, could I clarify something. Mr Matthews, in terms of the bushfire program recently announced by Minister Tuckey, I am not too sure where that policy and strategy is going to be housed. I wonder if you can clarify whether or not it is going to be within your department.

Ms Briggs —It will be in the Territories and Local Government Division.

Senator STEPHENS —I will have some questions on notice about that.

ACTING CHAIR —We will not be able to get too far into this. The ACCs are set up by volunteers and they have a chairman and a board. They administer, if I am correct, about $30 million overall nationally, with some 56 consultative councils. What are the criteria for selecting the chairs of those committees?

Mr Kennedy —We are adopting a fairly rigorous process now. We have public advertisement of the position. We ask community organisations, business groups and employer organisations to nominate according to our selection criteria. Once those nominations are in, the department's regional office assesses those, and they come to national office. Then the relative merits of the applicants are put together in advice that goes to the minister.

ACTING CHAIR —You said that is the process you have now.

Mr Kennedy —That is right.

ACTING CHAIR —When did that process start?

Mr Kennedy —That process was first trialled in the Central West ACC.


Mr Kennedy —I am not sure of the exact date but I think it was probably within the last two months.

ACTING CHAIR —Prior to that, what was the selection process and how rigorous was it?

Mr Kennedy —It was rigorous. It was virtually the same process but without the public advertisement. The local regional office contacted local business groups, employer organisations and community groups. It sought nominations, assessed the relative merits of the applicants and then put them forward to the department.

ACTING CHAIR —There are some extremely good ACCs in that 56—some very good ones. Senator Boswell is not here, but for his benefit: yes, I have spoken to ACCs. What involvement do local members of parliament have in the selection process—are they consulted?

Mr Kennedy —They are consulted after the nominations are made by the various employer groups and business organisations.

ACTING CHAIR —So there might be three or four nominations?

Mr Kennedy —Yes.

ACTING CHAIR —In some cases, there might just be the obvious one. If I were available, it would probably be me. But on occasions there would be three or four nominations. At that point, is the federal member of parliament consulted?

Mr Kennedy —Generally, yes.


Mr Kennedy —It is really to assess their views. We expect the chair of an ACC to have strong links in the community and to be able to work well with all representatives from the community, be they political, business or other government representatives. We would assess that person against some of the input we have received from those organisations—which would include local members.

ACTING CHAIR —Are state members of parliament consulted?

Mr Kennedy —Not to my knowledge, no.

ACTING CHAIR —I will have to finish on this question, or Senator Tchen will just run and be stuck anyway. It may develop a couple of other short ones. You said that two months ago you trialled this new process and you reckon it is pretty good. Are you now going to review all the chairs of the remaining ACCs?

Mr Kennedy —They are appointed until the end of this calendar year, and then it is up to the minister to decide whether that appointment continues.

ACTING CHAIR —In the minister coming to that determination, will they have to meet different criteria to those for the first occasion, or will it be a case of, `They've been there and it hasn't fallen over yet, so it must be working'?

Mr Kennedy —We will provide advice to the minister on the background of the chair and the term of their appointment, but really it is up to the minister to decide.

ACTING CHAIR —Will the performance of the ACC have any bearing on whether the chair is reappointed or terminated?

Mr Kennedy —Absolutely. The way we look at it, the performance of the chair is strongly related to how the ACC operates in the region. So, if it is a strongly performing ACC, that would form part of our advice.

ACTING CHAIR —Are any of the ACC chairs currently under review for poor performance?

Mr Kennedy —No.

ACTING CHAIR —So there is no auditing of performance during their term of office?

Mr Kennedy —There is by the department. We have local regional officers that monitor the performance of ACCs, attend the meetings of ACCs and have very strong links with those ACCs. That is the process we use to monitor how well the ACCs are performing, as well as advice from other community groups and business organisations as to how effective they are in their communities.

ACTING CHAIR —What percentage of the allocation of funds to ACCs is for administration?

Mr Kennedy —ACCs are funded under the Regional Assistance Program to the tune of $13 million. That $13 million is divided between the 56 ACCs. It generally supports the secretariat to the ACC, which includes an executive officer, accommodation lease costs, marketing costs et cetera.

ACTING CHAIR —Is that lease costs for each of the ACCs?

Mr Kennedy —For accommodation for each of the ACCs.

ACTING CHAIR —Phones and mobile phones?

Mr Kennedy —Yes, and computers.


Mr Kennedy —Yes, travel is a part of the on-costs component. But the chairs and members of the ACCs themselves are voluntary and unpaid.

ACTING CHAIR —Are they paid for attending meetings?

Mr Kennedy —No.

ACTING CHAIR —Are they reimbursed if they travel on behalf of the ACC, or is there a set amount?

Mr Kennedy —They have responsibility for allocating that funding but, when they travel on behalf of the ACC, they are reimbursed costs.

ACTING CHAIR —On what basis are they reimbursed?

Mr Kennedy —The department has an operation contract with each ACC that we monitor very closely. We agree to that operational contract annually, and it needs to be in line with their three-year strategic regional plan. So there is an agreement between the department and the particular ACC as to how they allocate those funds for that year.

ACTING CHAIR —I am afraid we have run out of time.

Senator STEPHENS —In summary, my real concern is the extent to which we have a duplicated process here with the Sustainable Regions Program, the ACCs and the Regional Solutions Program. Our line of questioning this afternoon perhaps did not get as far as we wanted to go on the extent to which there is duplication or a sense of difference. To my knowledge, and in my experience of working with regional areas, they feel that they are consulted to death and do not get great value for that consultation. I think that we were trying to head along that track this afternoon. Mr Matthews, I foreshadow the fact that there will be some questions on notice about the recent announcement of $60 million for the sugar regional assistance program, of which there do not seem to be many details available. We will be putting some questions on notice about that process and how it might work.

Mr Matthews —That program is being run from AFFA.

Senator STEPHENS —So it will not be run in the same way as the dairy RAP?

Mr Matthews —No. Acting Chair, before you declare the hearing closed, Robyn Beetham is appearing before a Senate estimates committee for the last time today. She has been appearing alongside me for at least 10 years before this committee and its predecessors. Robyn has always been articulate, constructive, helpful and thoroughly professional, and I acknowledge the contribution that she has made over 10 years. I am sure she is heartbroken that this will be her last appearance!

Senator STEPHENS —Considering she did not have to say a word—

Mr Matthews —Professionally, it is worth mentioning.

ACTING CHAIR —We echo those comments but we also thank you, Ms Beetham, for your time in coming before this committee. Had I known earlier, I am sure we could have developed questions for you to give you a very fine farewell.

Ms Beetham —I am quite impressed that I managed to get through this hearing without saying a word. That reflects very much on the skill of my offsiders, who have handled the questions very well. Perhaps I can say something though, Senator Stephens, in relation to your concerns about duplication and so on. One of the things that we are endeavouring to do within the department is to rationalise and streamline the way we administer programs. Because the Sustainable Regions Program is a pilot, it has been set up separately. We did not then have direct access to the area consultative committees within our portfolio but I am hopeful that, down the track, we will minimise any level of duplication, make increasing use of the ACC structure and minimise any overlay.

Senator STEPHENS —I appreciate that. One of my concerns is that they seem to be conflicting structures, in the sense that the new program has paid advisory committees. The ACCs are community based and have been working in a voluntary capacity, and I wanted to get on record their concern that they feel like the poor relations.

ACTING CHAIR —Thank you.

Committee adjourned at 4.01 p.m.