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Community Affairs Legislation Committee - 05/06/2014 - Estimates - SOCIAL SERVICES PORTFOLIO


In Attendance

Senator Fierravanti-Wells, Parliamentary Secretary to the Minister for Social Services

Department of Social Services


Mr Finn Pratt, Secretary

Ms Barbara Bennett, Deputy Secretary

Ms Felicity Hand, Deputy Secretary

Ms Serena Wilson, Deputy Secretary

Mr Michael Lye, Acting Deputy Secretary and Chief Operating Officer

Ms Carolyn Smith, Acting Deputy Secretary

Cross Outcomes

Ms Alanna Foster, Acting Group Manager, Social Security Policy

Mr Steve Jennaway, Group Manager and Chief Finance Officer, Finance and Services

Dr Tim Reddel, Group Manager, Program Office

Ms Janean Richards, Group Manager, Legal and Compliance

Ms Margaret McKinnon, Group Manager, Corporate Support

Ms Susan Black, Group Manager, Building DSS

Mr Paul McBride, Group Manager, Welfare System Taskforce

Mr Peter Qui, Chief Information Officer and Group Manager, Information Management and Technology

Mr Scott Glare, Branch Manager, Shared Services

Ms Sharon Bailey, Branch Manager, Ministerial, Parliamentary and Executive Support

Ms Tracey Bell, Branch Manager, Communication and Media

Mr Watson Blaikie, Branch Manager, Application Services

Ms Flora Carapellucci, Branch Manager, Welfare System Taskforce

Mr Andrew Whitecross, Branch Manager, Rates and Means Testing Policy

Mr Max Devereux, Branch Manager, IT Operations

Mr Scott Dilley, Branch Manager, Budget Development

Mr Peter Broadhead, Branch Manager, Property, Environment, Procurement and Security

Mr Sebastian Hood, Branch Manager, Corporate and Data Services

Ms Shona Moloney, Branch Manager, People

Mr Matthew Roper, Branch Manager, Commercial and Aged Care Law

Mr Kurt Munro, Branch Manager, Financial Management

Ms Janet Stodulka, Branch Manager, Project and Deregulation Office

Ms Helen Duke, Acting Branch Manager, Transition

Ms Joanna Carey, Branch Manager, Public Law

Mr Dave Agnew, Branch Manager, National Delivery

Mr Andrew Howard, Acting Branch Manager, Assurance

Mr Stephen Sheehan, Branch Manager, Financial Accounting

Ms Sharon McCarter, Branch Manager, Aged Care Business Systems

Ms Ros Baxter, Branch Manager, Project and Deregulation Office

Ms Trish Woolley, Branch Manager, Civil Society and Program Delivery Policy

Outcome 1

Ms Cate McKenzie, Group Manager, Multicultural, Settlement Services and Communities

Ms Alanna Foster, Acting Group Manager, Social Security Policy

Mr Steve Jennaway, Group Manager and Chief Finance Officer, Finance and Services

Dr Tim Reddel, Group Manager, Program Office

Ms Janean Richards, Group Manager, Legal and Compliance

Mr Sean Innis, Group Manager, Policy Office

Mr Paul McBride, Group Manager, Welfare System Taskforce

Ms Cath Halbert, Group Manager, Payments Policy

Ms Tracey Bell, Branch Manager, Communication and Media

Mr Ty Emerson, Branch Manager, Labour Market Payments Policy

Ms Michalina Stawyskyj, Branch Manager, Age, Disability and Carer Payments Policy

Ms Flora Carapellucci, Branch Manager, Welfare System Taskforce

Mr Andrew Whitecross, Branch Manager, Rates and Means Testing Policy

Mr Murray Kimber, Branch Manager, Social Security Performance and Analysis

Mrs Diana Lindenmayer, Acting Branch Manager, Family and Students Payments Policy

Ms Kathryn Mandla, Branch Manager, Longitudinal Studies, Evaluation and Policy Capability

Ms Allyson Essex, Branch Manager, Strategic Policy and Research

Mr David Dennis, Branch Manager, Data and Modelling

Ms Danielle Donegan, Acting Branch Manager, Eligibility and Participation Policy

Outcome 2

Ms Alanna Foster, Acting Group Manager, Social Security Policy

Mr Steve Jennaway, Group Manager and Chief Finance Officer, Finance and Services

Dr Tim Reddel, Group Manager, Program Office

Ms Janean Richards, Group Manager, Legal and Compliance

Ms Cate McKenzie, Group Manager, Multicultural, Settlement Services and Communities

Mr Paul McBride, Group Manager, Welfare System Taskforce

Ms Elizabeth Hefren-Webb, Acting Group Manager, Families

Mr Bryan Palmer, Group Manager, Housing, Homelessness and Gambling

Ms Tracey Bell, Branch Manager, Communication and Media

Ms Flora Carapellucci, Branch Manager, Welfare System Taskforce

Mr Andrew Whitecross, Branch Manager, Rates and Means Testing Policy

Ms Trish Woolley, Branch Manager, Civil Society and Program Delivery Policy

Ms Chantelle Stratford, Acting Branch Manager, Program Systems and Strategy

Ms Helen Board, Branch Manager, Program Performance

Mr Phil Brown, Branch Manager, Parental Payments and Family Research

Ms Eliza Strapp, Acting Branch Manager, Family Support Program

Ms Lara Purdy, Acting Branch Manager, Welfare Payments Reform

Ms Jill Farrelly, Branch Manager, Family Safety

Ms Angela Hope, Acting Branch Manager, Children's Policy

Mr Warren Pearson, Branch Manager, Multicultural and Settlement Policy

Ms Kris Cala, Branch Manager, Settlement and Multicultural Programs

Mr Leo Kennedy, Branch Manager, Program Operations

Outcome 3

Mr Steve Jennaway, Group Manager and Chief Finance Officer, Finance and Services

Dr Tim Reddel, Group Manager, Program Office

Ms Janean Richards, Group Manager, Legal and Compliance

Ms Donna Moody, Group Manager, Ageing and Aged Care Services

Mr Paul McBride, Group Manager, Welfare System Taskforce

Ms Rachel Balmanno, Acting Group Manager, Aged Care Policy and Reform

Mr Iain Scott, Group Manager, Aged Care Quality and Compliance

Ms Louise O'Neill, Acting Branch Manager, Transition Office

Ms Tracey Bell, Branch Manager, Communication and Media

Ms Flora Carapellucci, Branch Manager, Welfare System Taskforce

Mr Andrew Whitecross, Branch Manager, Rates and Means Testing Policy

Mr Russell de Burgh, Branch Manager, Policy and Evaluation

Mr Nigel Murray, Branch Manager, Finance and Funding

Mr Craig Harris, Branch Manager, Access Reform

Ms Shona McQueen, Branch Manager, Aged Care Programs

Mr Ben Vincent, Branch Manager, Home and Community Care

Ms Shirley Browne, Branch Manager, Ageing and Service Improvement

Mr Damian Coburn, Branch Manager, Prudential and Approved Provider Regulation

Ms Bernadette Walker, Acting Branch Manager, Quality and Monitoring

Mr Michael Culhane, Branch Manager, Aged Care Complaints

Mr Leo Kennedy, Branch Manager, Program Operations

Dr Susan Hunt, Branch Manager Senior Nurse Advisor

Outcome 4

Mr Steve Jennaway, Group Manager and Chief Finance Officer, Finance and Services

Mr Bryan Palmer, Group Manager, Housing, Homelessness and Gambling

Mr Paul McBride, Group Manager, Welfare System Taskforce

Ms Tracey Bell, Branch Manager, Communication and Media

Ms Flora Carapellucci, Branch Manager, Welfare System Taskforce

Mr Andrew Whitecross, Branch Manager, Rates and Means Testing Policy

Mr John Riley, Branch Manager, Housing and Analysis

Ms Amy Laffan, Acting Branch Manager, Homelessness and Gambling

Mr Peter Deakin, Acting Branch Manager, Housing Affordability Programs

Ms Kathryn Mandla, Branch Manager, Longitudinal Studies, Evaluation and Policy Capability

Outcome 5

Ms Fiona Buffinton, Group Manager, Specialist Employment Services

Dr Tim Reddel, Group Manager, Program Office

Ms Janean Richards, Group Manager, Legal and Compliance

Mr Evan Lewis, Group Manager, Disability and Carers

Dr Nick Hartland, Group Manager, NDIS

Mr Paul McBride, Group Manager, Welfare System Taskforce

Ms Tracey Bell, Branch Manager, Communication and Media

Ms Flora Carapellucci, Branch Manager, Welfare System Taskforce

Mr Andrew Whitecross, Branch Manager, Rates and Means Testing Policy

Ms Karen Pickering, Branch Manager, Mental Health

Ms Karen Wilson, Branch Manager, Disability and Carers Policy

Ms Laura Angus, Branch Manager, BSWAT Employment Response Team

Mr Mitchell Cole, Acting Branch Manager, Autism and Early Intervention

Ms Jillian Moses, Branch Manager, Financial Policy and Performance

Ms Lyn Murphy, Branch Manager, Disability Employment Services Compliance

Ms Sharon Stuart, Branch Manager, Disability Employment Services Policy

Ms Lis Kelly, Branch Manager, Disability Employment Services Program

Ms Deborah Winkler, Branch Manager, Governance and Stakeholder Relations

Mr Bruce Smith, Branch Manager, Policy and Legislation

Ms Alison Smith, Branch Manager, Policy and Legislation

National Disability Insurance Agency

Mr David Bowen, Chief Executive Officer

Ms Louise Glanville, Deputy Chief Executive Officer and General Manager

Ms Jo-Ann Rose, Chief Financial Officer, Corporate Services Division

Ms Liz Cairns, General Manager

Ms Anne Skordis, General Manager

Mr Stephen Payne, Chief Financial Officer

Aged Care Commissioner

Ms Rae Lamb, Aged Care Commissioner

Aged Care Pricing Commissioner

Mr Stephen Dellar, Acting Aged Care Pricing Commissioner

Australia Aged Care Quality Agency

Mr Nick Ryan, Chief Executive Officer

Ms Elizabeth Pringle, General Manager Operations

Mr Chris Falvey, Australian Aged Care Quality Agency

Australian Institute of Family Studies

Professor Alan Hayes AM, Director

Dr Daryl Higgins, Deputy Director, Research

Ms Sue Tait, Deputy Director, Corporate and Strategy

Social Security Appeals Tribunal

Ms Jane Macdonnell, Principal Member

Ms Louise Anderson, Registrar

Committee met at 09:00.

CHAIR ( Senator Boyce ): I declare open this hearing of the Community Affairs Legislation Committee. The Senate has referred to the committee the particulars of proposed expenditure for 2014-15 and related documents for the portfolios of health and social services, including human services. The committee may also examine the annual reports of the departments and agencies appearing before it. The committee is due to report to the Senate on 24 June, 2014 and has fixed 25 July 2014 as the date by which answers to questions on notice are to be returned. Senators are reminded that any written questions on notice should be provided to the committee secretariat by the close of business 12 June 2014. The committee’s proceedings today will begin continue with its examination of social services, commencing with outcome 4.

Under standing order 26 the committee must take all evidence in public session. This includes answers to questions on notice. I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to the committee. The Senate by resolution in 1999 endorsed the following test of relevance of questions at estimates hearings: any questions going to the operations of financial positions of the departments and agencies which are seeking funds in the estimates are relevant questions for the purpose of estimates hearings. I remind officers that the Senate has resolved that there are no areas in connection with the expenditure of public funds where any person has discretion to withhold details or explanations from the Parliament or its committee unless the Parliament has expressly provided otherwise. The Senate has also resolved that an officer of a department of the Commonwealth shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to a superior officer or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted.

I particularly draw the attention of witnesses to an order of the Senate of 13 May 2009 specifying the process by which a claim of public interest immunity should be raised.

The extract read as follows—

Public interest immunity claims

That the Senate—

(a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly raising claims of public interest immunity as required by past resolutions of the Senate;

(b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;

(c) orders that the following operate as an order of continuing effect:

(1) If:

   (a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from a Commonwealth department or agency; and

   (b) an officer of the department or agency to whom the request is directed believes that it may not be in the public interest to disclose the information or document to the committee, the officer shall state to the committee the ground on which the officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify the harm to the public interest that could result from the disclosure of the information or document.

(2) If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to refer the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to the minister.

(3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or document.

(4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result from the disclosure of the information or document to the committee could result only from the publication of the information or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the committee as in camera evidence.

(5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement does not sufficiently justify the withholding of the information or document from the committee, the committee shall report the matter to the Senate.

(6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from raising the matter in the Senate in accordance with other procedures of the Senate.

(7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal deliberations of, government, in the absence of specification of the harm to the public interest that could result from the disclosure of the information or document, is not a statement that meets the requirements of paragraph (1) or (4).

(8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall then be required to provide a statement in accordance with paragraph (3).

(d) requires the Procedure Committee to review the operation of this order and report to the Senate by 20 August 2009.

(13 May 2009 J.1941)

(Extract, Senate Standing Orders, pp 124-125)

Witnesses are specifically reminded that stating that information or a document is confidential or consists of advice to government is not a statement that meets the requirements of the 2009 order. Instead, witnesses are required to provide some specific indication of the harm to the public interest that could result from the disclosure of information or the document.


CHAIR: I welcome Senator the Hon. Fierravanti-Wells, representing the Minister for Social Services, the departmental secretary—welcome back, Mr Pratt—and officers of the Department of Social Services. Senator Fierravanti-Wells, do you have an opening statement?

Senator Fierravanti-Wells: Yes, I do wish to clarify some comments that were made yesterday by Senator Doug Cameron. In estimates yesterday afternoon he made certain allegations in relation to Senator Abetz. I would like to table a statement in response to false assertions that shadow minister O'Connor made in response to an article that appeared in the Australian and also table a statement by the Department of Employment dated 24 March 2014. I would appreciate if that could form part of the record. I have a couple of copies and I would appreciate if they could be distributed to members of the committee.

CHAIR: These are public documents, are they?

Senator Fierravanti-Wells: These are public documents.

CHAIR: We are moving now into housing. Senator Bishop, you are leading off for the opposition, are you?

Senator MARK BISHOP: I don't know if I am. If I may just ask a procedural question. I do have some questions on NRAS. My question is whether that is to be done in 4.1 or 4.2 or do you run them together?

Senator McLUCAS: My suggestion is that we run them together. I was going to ask questions around NRAS.

CHAIR: Were you anticipating starting with those questions?

Senator McLUCAS: No.

CHAIR: I know that there are questions on NRAS from numerous people.

Mr Pratt : Technically it would come under 4.2, but we are, of course, happy to assist the committee and we will do it whenever it suits the committee.

CHAIR: Flexible as ever. Senator McLucas.

Senator McLUCAS: I first want to go to the National Partnership Agreement on Homelessness. Prior to the budget coming down, the government announced that $115 million would be supplied for the 2014-15 National Partnership Agreement on Homelessness. How was the figure of $115 million arrived at?

Mr Palmer : The figure was derived by looking at the service delivery component of the National Partnership Agreement on Homelessness for 2013-14 and applying an indexation factor.

Senator McLUCAS: What was the indexation, Mr Palmer?

Mr Palmer : I don't have the specific indexation factor, but it is simple arithmetic between the old agreement and the new agreement.

Mr Pratt : It would have been whatever the standard indexation factor that applies to these sorts of agreement is. Whether it is CPI or something else, I am not sure. But it would have been applied to the amount that was provided under the previous agreement for services to increase slightly.

Ms Laffan : It also includes a contribution for SACS.

Senator McLUCAS: Could I have that $115 million disaggregated to reflect the base money, the SACS money and the indexation?

Mr Pratt : Yes.

Senator McLUCAS: I put a question through the Senate, and was frankly fairly disappointed. Part 3 of question No. 356 that I asked in the Senate was very explicit. It said that the 2013-14 NPAH was $159 million and the 2014-15 was $155 million. I then asked what projects or services will be cut or discontinued. Frankly, the answer was an intentional avoidance of the question. What I was asking was very plain, and I do not take kindly to departments intentionally not answering questions. So I ask again: what projects or services will be cut or discontinued in 2014-15, given, Mr Palmer, you said that $115 million will be the service delivery part? What was the other money in 2013-14 applied to?

Mr Pratt : I have the question here. The question is, 'What services or projects will be cut or discontinued in 2014-15?' The answer says that the funding that is provided under this agreement goes to the state governments, and they are the ones who determine what services are funded. We don't know, basically, what services will be provided. In anticipation, the states will work that out and no doubt tell us in due course. But given that the money for services has been slightly increased as a result of indexation and the SACS component, it may well be that in macro terms there are no cuts there. I can't guarantee that. That will be subject to what the states and territories do with the money next financial year. The other part of the question relates to what was not provided in comparison to the previous partnership. So there is no funding there for capital, for example.

Senator McLUCAS: That is right. That is the answer to the question, Mr Pratt.

Mr Pratt : Yes.

Senator McLUCAS: And the other part is research, and now I want to ask questions about that.

Mr Pratt : Part 6 of the answer says, 'No, funding for capital projects under the 2013-14 NPAH for the delivery of milestones through 2013-14 only.' Part 4 indicates that funding is for homelessness service delivery purposes only and does not include a capital component. This is, of course, the minister's answer. In no way has the department sought to mislead, I assure you.

Senator McLUCAS: Thank you. I hope not. Let us go to the capital in the research component. What was the capital component previously in the old NPAH?

Ms Laffan : It is $43.2 million.

Senator McLUCAS: What did that build or make?

Ms Laffan : That was for 11 projects in all states and territories other than the Northern Territory, which did not bid for a capital project.

Senator McLUCAS: Accommodation for what sort of people?

Ms Laffan : Examples include a common ground facility in Adelaide, a foyer light facility in Tasmania and another common ground facility in the ACT.

Senator McLUCAS: What type, what classification or what demographic of homeless people use common ground facilities?

Ms Laffan : I am sorry; I do not have details of many of the projects. But, for example, there were two projects in New South Wales to support young people in crisis and preventing homelessness for women and children escaping domestic violence.

Senator McLUCAS: So we have no more accommodation for young people in crisis and women and children escaping domestic violence because we have taken $43.2 million out of this project? It is a decision of government, I understand that. That is what they have decided to do.

Mr Palmer : There was no money in the forward estimates for the National Partnership Agreement on Homelessness.

Senator McLUCAS: You do not have to defend the government, Mr Palmer. There was an opportunity for government to find the money to build accommodation for young people in crisis and women and children escaping domestic violence. That was $43.2 million.

Senator Fierravanti-Wells: Can I just—

Senator McLUCAS: No, I want to finish the answer to this question.

Senator Fierravanti-Wells: If I can comment on Senator McLucas drawing aspersions about the intention of the public service: I think you have been around long enough, Senator McLucas, to know that that is not an appropriate comment. I find it really interesting. Let us not forget that we had to come in and clean up the mess that you left—

Senator McLUCAS: Here we go; another minister with the same song sheet.

Senator Fierravanti-Wells: You failed to leave any money for homelessness beyond 30 June 2014.

Senator McLUCAS: We would have found it.

Senator Fierravanti-Wells: We made a decision to allocate the $115 million. You left us the grand total of zero, so it is a bit rich to come in and criticise us when you left nothing for homelessness after 30 June.

CHAIR: Senator McLucas, do you have a question?

Senator McLUCAS: Well, I was actually asking my question before the minister intervened. So $43.2 million was the capital component. My reckoning, and it may be wrong, is that the amount of money not carried into the next NPAH was $47.3 million. Is that right?

Ms Laffan : Maths is not my best point, but that is correct as far as I can tell.

Senator McLUCAS: So, is 4.1 the component that would have been applied to research?

Ms Laffan : There was $4 million committed in Commonwealth own expenditure for research under the NPAH.

Senator McLUCAS: And what research was that doing?

Ms Laffan : That was primarily for the extension of the Journeys Home project.

Senator McLUCAS: Has that been re-applied in the budget somewhere?

Ms Laffan : Sorry, I do not understand your question.

Senator McLUCAS: Part 11 of the question I asked the minister was, 'Will we continue with the longitudinal study into homelessness Journeys Home?' The answer to that was, 'Yes we would, but it will be somewhere else'.

Ms Laffan : Apologies, Senator. Some of the money for Journeys Home in the 2013 financial year was taken from funds earmarked under the NPAH. The funding for Journeys Home for 2014-15 is in a separate allocation.

Senator McLUCAS: Where?

Ms Laffan : In 4.1, Housing and Homelessness programs.

Senator McLUCAS: It is one project isn't it, the Journeys Home?

Ms Laffan : Yes.

Senator McLUCAS: It is longitudinal evaluation?

Ms Laffan : Yes.

Senator McLUCAS: So we took money out of the NPAH but we will continue with that element. Is that 4.1 in this financial year?

Ms Laffan : Yes.

Senator McLUCAS: Have agreements been executed with the states and territories for the 2014-15 year?

Mr Palmer : Agreements have not yet been executed with the states and territories.

Senator McLUCAS: Are we going to sign another National Partnership agreement on Homelessness?

Mr Palmer : I certainly hope that we will. We are just finalising the negotiations.

Senator McLUCAS: It starts at the end of the month.

Mr Palmer : It does.

Senator McLUCAS: So who has not signed yet?

Mr Palmer : We had a meeting with the states and territories yesterday. There were a couple of draft clauses that they wished to discuss with us. We are currently re-crafting it, and I am hopeful that it will be issued very shortly for their signature.

Senator McLUCAS: The reason that the community was concerned that there was no information about this agreement was that people were losing staff and people couldn't see any future for that funding. Are you saying that that funding is still not assured, although the Commonwealth has committed a lesser amount?

Mr Palmer : The Commonwealth is committed to $115 million.

Senator McLUCAS: Which are the clauses that are problematic?

Mr Palmer : I think the content of those discussions with the states and territories is not something that particularly should be aired here.

Senator McLUCAS: Is it reporting?

Mr Palmer : Yes.

Senator McLUCAS: I thought it would be. Is it the intention of the Commonwealth to sign another one-year agreement in the same vein as the National Partnership Agreement on Homelessness, with some extra clauses?

Mr Palmer : Do you mean for 2014-15? That is the intention of the Commonwealth—to sign a 2014-15 national partnership agreement.

Senator McLUCAS: With some additional clauses, I think you are telling me?

Mr Palmer : It is slightly different to the previous agreement. The reason it is slightly different is that some of the states have re-tendered their homelessness service mix, and we needed to change the agreement to facilitate that change in service mix from the states and territories.

Senator McLUCAS: Thank you. Is it the intention of the government to progress a national Partnership Agreement on Homelessness beyond 2014-15? That is probably a question to you, Minister.

Senator Fierravanti-Wells: We are in discussions with the states and territories in relation to 2014-15, and that is in progress.

Senator McLUCAS: No, I said beyond 2014-15.

Senator Fierravanti-Wells: That is a matter for consideration by the government.

Senator McLUCAS: I wonder if you could ask the minister if he could provide any more information than that?

Senator Fierravanti-Wells: I will pass it on to the minister.

Senator McLUCAS: So at the moment, Mr Palmer, you are simply trying to get through the next year before trying to even contemplate what might happen after that?

Mr Palmer : The years beyond the current year are decisions for government.

Senator McLUCAS: In Minister Andrews's press conference on 30 March, he said,

… yet at the same time give us some time and opportunity to work with all those who are involved over the next few weeks and months to try and ensure that what we have in place in the future can be a long-term commitment—

What work has been done around the 'long-term commitment'?

Mr Palmer : You may have noticed in the budget papers the minister foreshadowed a review of housing and homelessness arrangements.

Senator McLUCAS: I did.

Mr Palmer : The National Partnership Agreement on Homelessness would be one element of that review.

Senator McLUCAS: Yes, we will come to that later, Mr Palmer.

Mr Palmer : Okay.

Senator McLUCAS: So we are not working now in the 'next few weeks and months' to try a long-term—

Mr Palmer : Our immediate priority, as you indicated, is to get an agreement with the states and territories that is executed.

Senator McLUCAS: Given that we now do not have a Select Council on Housing and Homelessness, what is the mechanism for a national agreement?

Mr Palmer : The mechanism for national partnership agreements is unchanged. It is actually an agreement between first ministers, and the agreement is managed between the first ministers' departments in that process.

Senator McLUCAS: So that is through the COAG subcommittee?

Mr Palmer : It is through COAG and senior officials.

Senator McLUCAS: Do personnel from DSS attend those meetings?

Mr Palmer : Ms Laffan and I were yesterday at a meeting with first ministers' officials on the national partnerships agreements

Senator McLUCAS: On homelessness?

Mr Palmer : On homelessness, yes.

CHAIR: Are you moving on to another section, Senator McLucas?

Senator McLUCAS: I am.

CHAIR: Senator Ludlam, do you have questions in this area? There are about six senators waiting with questions.

Senator LUDLAM: Is this the general portfolio overview?

CHAIR: We are primarily in 4.1. But Mr Pratt has pointed out that straying into 4.2 won't be too much of an issue. Is that how it goes?

Mr Pratt : We are happy to help the committee.

Senator LUDLAM: Great. I will start at something a little high level. And apologies that I am a little late in. What is the government's vision for housing? From some of the language of the minister and senior members of cabinet, it would appear to me that the Commonwealth is actually trying to get out of the housing affordability space. That is probably best addressed to you, Senator Fierravanti-Wells. Does the government actually have a national housing affordability strategy or do you believe that it is best just left to the states and territories?

Senator Fierravanti-Wells: We will be undertaking a review of housing and homelessness. The minister has stated publicly that there is a need to review housing and homelessness policies and programs to ensure increased housing supply and approve affordability. This review will include an examination of the National Rental Affordability Scheme. I am sure that we will come to that later as well. But our concern is to reduce and limit the trading of incentives, reduce red tape and increase delivery. The review will outline the direction in which the government is seeking to drive housing reform and will also feed into the white papers on reform of the federation and taxation.

Senator LUDLAM: All right. Thank you, Senator. Chair, would you rather that we held off questions on the National Rent Affordability Scheme until later in the morning?

CHAIR: I think that there is going to be a whole section on that.

Senator LUDLAM: That is fine. Let's stay with this review, then, which is into housing affordability and homelessness. That is the broad scope of the portfolio review that you just outlined, or is it narrower?

Senator Fierravanti-Wells: My understanding, as I have said, is that it will review housing and homelessness policies. We are very concerned that during the Labor years we had a revolving door of six ministers over six years, and we are working hard in this space. The minister will have more to say in relation to this.

Senator LUDLAM: I guess if you just abolish the housing minister altogether, then you don't have to worry about the revolving door. That is what you have done.

Senator Fierravanti-Wells: Senator Ludlam, we are first trying to clean up the mess that six years and six ministers left us—that the Labor Party left us.

Senator LUDLAM: Please do not start. I could recite your talking point in my sleep.

Senator SESELJA: If you are going to make political points in your questions—

Senator LUDLAM: Heaven forbid that a politician would make a political point.

Senator SESELJA: then don't complain when Senator Fierravanti-Wells responds.

Senator LUDLAM: Are you chairing this meeting? What are you doing?

Senator SESELJA: I am just adding helpful commentary.

CHAIR: Senators Seselja, would you allow Senator Ludlam to get on with his questions.

Senator LUDLAM: Thank you, Chair. What are the terms of reference and what is the timeline for this review?

Senator Fierravanti-Wells: We are currently determining how best to undertake the review. Those matters are under consideration.

Senator LUDLAM: So you have been in government for nearly 10 months, you have abolished nearly everybody with any expertise outside the department on housing affordability and homelessness—

Senator Fierravanti-Wells: That is your assertion.

Senator LUDLAM: It is. That is right; it is exactly what I'm doing. The National Housing Supply Council is gone, you have abolished the National Rental Affordability Scheme, or at least taken it out of the budget papers, and you have been in government nearly 10 months and you still don't know what this review is going to canvass. Is that a reasonable summary of your progress to date?

Senator Fierravanti-Wells: We are currently determining how best to undertake the review, Senator Ludlam.

Senator LUDLAM: What is taking so long?

Senator Fierravanti-Wells: We are currently considering the matter.

Senator LUDLAM: That is a great answer! Do you propose that there will be public consultations and/or a process for public submissions?

Senator Fierravanti-Wells: In due course the minister will have more to say.

Senator LUDLAM: We don't even know that. That is amazing. Any idea who has been appointed to conduct the review?

Senator Fierravanti-Wells: As I just said, Senator Ludlam, the matter is under consideration and the minister will have more to say on that matter.

Senator LUDLAM: Nothing! It is going to be very quick.

Senator Fierravanti-Wells: I am sure he will take your concerns into consideration.

Senator LUDLAM: We will see, won't we? So we just do not have anything yet. Is there a view within government that the Commonwealth should simply get out of this space and to allocate everything back to the states and territories?

Senator Fierravanti-Wells: As I indicated to you, we believe that there needs to be a review of housing and homelessness policies and programs. We are now undertaking that review. As I indicated to you, we are currently determining how best to undertake that process.

Senator LUDLAM: Great! We are waiting on the edge of our seats. Does the government acknowledge that there is a housing affordability crisis in Australia?

Senator Fierravanti-Wells: As I have indicated to you, the MINISTER has publicly stated that our National Affordable Housing Agreement needs improvement. He wants to incentivise performance, he wants to encourage competition, he wants to improve reporting and he wants to tie funding to outcomes.

Senator LUDLAM: Maybe if you let me try and phrase it in a different way: does the government acknowledge that there is a housing affordability crisis in Australia?

Senator Fierravanti-Wells: As I have indicated to you, the minister has publicly stated that the housing agreements need improvement. We are currently undertaking a review of housing and homelessness. As I have indicated to you, the process is being considered, and in due course the minister will make announcements in relation to it. Senator Ludlam, I can't give you any more than that.

Senator LUDLAM: I gather.

Senator Fierravanti-Wells: I am happy to refer the matter to the minister. I am sure in due course, if the minister has anything further to add, he will do so.

Senator LUDLAM: I am not detecting any particular sense of urgency, let's put it that way.

Senator Fierravanti-Wells: If I can summarise it this way: we inherited the mess and we are now trying to address it.

Senator LUDLAM: As I say, I could recite your talking point in my sleep. You have abolished the National Housing Supply Council. I know in my office we found that source of independent data on the affordability supply gap extremely valuable. When will you next be reporting on the national housing supply gap and where exactly are you getting your data from?

Mr Palmer : Matters of housing supply are actually matters in the Treasury portfolio. Questions on the National Housing Supply Council should be directed towards Treasury.

Senator LUDLAM: I would have thought that you would have found that input reasonably valuable as well. But that is fair enough. It has always puzzled me why it is parked in Treasury. Nonetheless, that is where it is. Where do you in the department get your information from about housing supply now that that supply council has been trashed?

Mr Palmer : There is quite a wealth of data published by the Australian Bureau of Statistics on housing supply. There is also a range of private market providers on housing supply data.

Senator LUDLAM: So we are getting by with what we have. Back to you, Minister. How important is evidence-based policy to this government?

Senator Fierravanti-Wells: Clearly our decisions are based on best evidence available. But, as I have indicated earlier, as part of this process the minister has committed to work closely not only with the state and territory governments but also with public, private and community sectors in relation to future housing and homelessness needs.

Senator LUDLAM: That was a cautious 'yes'. Is evidence important in informing housing affordability policy to this government?

Senator Fierravanti-Wells: Well, I think it is a statement of the obvious.

Senator LUDLAM: No, believe me, it really is not. That is why I am asking. If it is a yes—

Senator Fierravanti-Wells: As I have indicated to you, the minister has indicated publicly that he will be working closely with the states and territories as well as the public, private and community sectors on future housing and homelessness needs. That, of course, infers that he will gain information as part of that process.

Senator LUDLAM: What is the current number of homeless people in Australia?

Mr Palmer : The ABS census reports on homelessness every five years using the census. It was 105,000 people, in round terms, in the last census.

Senator LUDLAM: That was in 2011.

Mr Palmer : That is the latest data that is available on that. There is no other data that goes to the number of homeless people other than the census data.

Senator LUDLAM: So we have to rely on data points that are five years apart and imperfect?

Mr Palmer : That is correct.

Senator LUDLAM: What is the government's plan to provide homes and services to these homeless Australians?

Mr Palmer : The provision of homelessness services and the planning of homelessness services delivery is primarily a matter for the state and territory governments. That question would be best directed to them.

Senator LUDLAM: You want me to travel around the country asking the states and territories?

Mr Palmer : I did not say that, Senator.

Senator LUDLAM: Okay. Just tell me what you did say.

Mr Palmer : I said that the question of what services will be provided is a matter for state and territory governments. They are the direct service provider and the funder of direct services in housing and homelessness.

Senator LUDLAM: You are aware that the Commonwealth to date does provide significant amounts of funding for homelessness?

Mr Palmer : We provide to the states and the states administer the programs.

Senator LUDLAM: And you have no visibility of how they are using that money, what kind of services they are providing, whether they are coping or whether they are overwhelmed?

Mr Palmer : We have some information. There is the National Homelessness Services Collection run by the Australian Institute of Health and Welfare. But primarily the states are responsible for that service delivery.

Senator LUDLAM: Can you tell us the current gap of affordable and available rental homes in Australia and what the government's plan is for filling that? There are 105,000-odd homeless people as of 2011. What is the current affordable rental supply gap?

Mr Palmer : You are going to questions of housing supply again, which are questions primarily for the Treasury.

CHAIR: Make this your last question in this section, Senator Ludlam.

Senator LUDLAM: They would provide you with the data. I understand that the research is meant to come from Treasury, even though the government went and abolished the body that was doing it. But, presumably, you cannot operate in blissful ignorance of the national rental affordability supply gap. I get that the data collection is done elsewhere. But you must know, and it is your job to put the plan together, I would have thought, to close that gap.

Senator Fierravanti-Wells: Can I just make a comment, Senator Ludlam?

Senator LUDLAM: You could answer my question. That would be better.

Senator Fierravanti-Wells: One of the important aspects of housing supply is what happens at the local government level in terms of residential development. Perhaps you might look closer to home at some of your Greens councillors and some of their activities, especially in New South Wales, where they fight development every step of the way.

Senator LUDLAM: So it is local government's fault.

Senator Fierravanti-Wells: So you might look closer to home in relation to some of your assertions.

CHAIR: Senator Seselja.

Senator SESELJA: I might pick up there, Senator Fierravanti-Wells. I might get you to expand on that, because Senator Ludlam was pursuing the question around housing affordability and some of the supply issues. It is a really important point, and it is certainly something I have seen in the ACT with some people who are claiming to support housing affordability but seemed to oppose every land release, every new development which may actually provide housing stock, including to low- and middle-income earners. Is it your view that actually the land release question is an important part of making housing more affordable?

Senator Fierravanti-Wells: As Mr Palmer said, while the supply issues are predominantly in the purview of the states and territories, I also wanted to add at local government, because there are influences there. Whilst we can assist the states, a lot of this is predominately in their purview. I come back to the point that I made earlier, which is that that is one of the reasons why we believe that there needs to be a review in this space. As I indicated earlier, we will be working with the states and territories and stakeholders in this space to develop a better long-term policy and to clean up the mess that has been left to us by the Labor government.

Senator SESELJA: Is it fair to say that when we see the fairly extreme antidevelopment agenda on show, whether it is at a local level, in states and territories or around the country, that that has an impact on the ability of state and territory governments to make housing more affordable?

Senator Fierravanti-Wells: It is a supply and demand issue. Clearly, as I indicated earlier, as more and more development is knocked back, it affects supply. It is the simple levers of supply and demand.

Senator SIEWERT: You are just taking the opportunity to have a bash about limiting housing supply—gratuitously.

Senator SESELJA: Hang on! You are extraordinarily sensitive about this.

Senator SIEWERT: If you are going to do that, I think we should take the opportunity to explain what has been happening.

CHAIR: Senator Siewert, Senator Seselja is asking questions.

Senator SIEWERT: No, he is not. He is making political statements, and if that is what is going to happen, we will do the same.

Senator SESELJA: There is some serious sensitivity here from the Greens.

CHAIR: Senator Seselja, could you ask a question?

Senator SESELJA: I will, but I can't not respond to the rant over there from the Greens senator.

Senator SIEWERT: No, it was not a rant. You were the one who was trying to make this a political exercise.

Senator SESELJA: Senator Ludlam—

Senator CAROL BROWN: The Chair has asked you to ask your question.

Senator SESELJA: Excuse me, I am responding to the noise over here and I am entitled to do so. Senator Ludlam started down this path, and Senator Fierravanti-Wells has very sensibly put it into some context in the role that the Greens party often plays in making housing less affordable. I think that is perfectly reasonable, and I thank the senator for clarifying that. I note the extraordinary sensitivity from the Greens on this—

CHAIR: Can we have a question now please, Senator Seselja?

Senator SESELJA: I did want to go to some comments you made earlier about NPAH funding. I want to clarify what the situation was and what it is now. Is it true from your evidence, Senator, that the former government did not fund the NPAH beyond the middle of this year? Is that correct?

Senator Fierravanti-Wells: Yes, that is the situation.

Senator SESELJA: And there was nothing in PEFO that would have suggested that there was any funding beyond July 1?

Senator Fierravanti-Wells: That is exactly the situation. That is why we came in and had to clean up this problem and basically keep the services of approximately 180 homelessness initiatives continuing for another 12 months until 30 June 2015. This will also allow us to work with the sector and the states to look at the more long-term future of homelessness arrangements.

Senator SESELJA: So under the former government's plan, there would have been nothing, whereas now we have the additional $115 million. Is that right?

Senator Fierravanti-Wells: That is right.

Senator McLUCAS: That is not correct.

Senator SESELJA: I am asking Senator Fierravanti-Wells.

Senator McLUCAS: Well, that is not correct.

Senator SESELJA: You are no longer at that side of the table, so I will direct my questions to Senator Fierravanti-Wells. If you have different questions I am sure that you can ask them later.

Senator McLUCAS: I am sorry, but the minister should not try and answer on behalf of a potential Labor government. She does not know.

Senator Fierravanti-Wells: Well, nor did you, Senator McLucas, because if you did know we probably would not be in the mess that we are in at the moment.

Senator SESELJA: I will pick that up, because Senator McLucas is right that you cannot go into what was in the minds of the former government. So let us go to the facts, then. Did the former government, just to make it clear for Senator McLucas, reveal its secret plan to extend homelessness funding in any budget documents that you are aware of?

Senator Fierravanti-Wells: No. The previous government terminated the National Partnership Agreement on Homelessness Funding beyond 30 June 2014 and did not include provisions for future funding in the Pre-election Economic and Fiscal Outlook, released in August 2013.

Senator SESELJA: If it had a plan, it is not apparent from any budget papers that you are aware of? It was something that it kept to itself?

Senator Fierravanti-Wells: Not that I am aware of.

Senator SESELJA: You cannot go into what was in the Labor Party's mind but what we have seen. Will the $115 million provide the same level of services that we have seen in this financial year?

Senator Fierravanti-Wells: My understanding is that it will enable approximately 180 homelessness initiatives to continue for another 12 months until 30 June next year. The department may have further details in relation to that.

Mr Palmer : It will allow the same level of service delivery. Because the states manage the front-line contracts with service providers, they may choose to change the providers that deliver the front-line services.

Senator SESELJA: Thank you very much.

Senator McLUCAS: The research component of the NPAH, you have answered in terms of Journeys Home. Can I talk more broadly about research work that is happening in housing and homelessness and try and track it through the budget, because that was quite difficult to do? You told me that the Journeys Home money came out of the NPAH allocation and has gone to 4.1.

Ms Laffan : It has not been moved from that allocation. That funding that was earmarked under the NPAH will cease at the end of 2013-14. But under 4.1, the housing and homelessness program, one of the four components of that program is research. That is where the future Journeys Home funding comes from.

Senator McLUCAS: Is there any other research happening in that component?

Mr Riley : There is $1.6 million per annum for the next three years for the Australian Housing and Urban Research Institute. As you would be aware, it has a broader focus, but one of the priority areas for research is homelessness.

Senator McLUCAS: So that is the three-year funding agreement with AHURI?

Mr Riley : That is correct.

Senator McLUCAS: $1.6 million per year for three years. Is there any other research money that you can point me to?

Ms Laffan : It is all contained in program 4.1. As I said, 4.1 has four components, one of which is research. So we will not be able to tell what amount of that funding will go directly to research until selection processes and things are completed. As Mr Riley said, money has been committed to AHURI and money has been committed to the Journeys Home project.

Senator McLUCAS: So the National Homeless Research Agenda 2009-13 and the four components of that is what you are referencing there?

Mr Palmer : My understanding is that that was funded under the earlier national partnership agreement. That funding end at the end of this financial year. There is a small amount of money in our forward estimates in 4.1 in the out years that we have earmarked for homelessness research, over and above the money that Mr Riley mentioned for AHURI.

Senator McLUCAS: How much is that?

Mr Palmer : In the out years it is in the order of $1 million a year.

Senator McLUCAS: Over 2015-16 through—

Mr Palmer : Through forward estimates, yes.

Senator McLUCAS: How will that be applied?

Mr Palmer : The actual processes for applying that have not been determined at the moment.

Senator McLUCAS: You would be aware that in the commission of audit report there was an annex that talked about what should happen to non-principal bodies. They have said that AHURI needs 'other action'. What does that mean to the department?

Mr Riley : The comments in relation to the national commission of audit report have been made elsewhere—that it is not a government report, and so forth.

Senator McLUCAS: I understand that. But you received it, so you will have to have a think about it.

Mr Riley : We did receive it. I think that the logic in the report says that if the Commonwealth went to the funding mechanism that is referred to in the report for the funding of public housing, it may flow from that that you will not continue with an arrangement with the Australian Housing and Urban Research Institute.

Senator McLUCAS: So if you completely vacate the space, pay Commonwealth rent assistance only, you do not need any research. That is what the commission of audit is saying, basically.

Mr Riley : I think that the commission of audit is saying that because housing is primarily a state responsibility under the constitution, it would be a matter for the states and territories how they funded the research they needed to perform their primary responsibility in this area.

Senator McLUCAS: And how does the government respond to that recommendation, that thinking?

Mr Palmer : The government is clearly considering the commission of audit report.

Senator McLUCAS: How then do you achieve the national leadership that the minister talks about if you don't do any research and you do not participate in any partnerships with the states and territories? How do you actually exhibit national leadership in housing and homelessness policy if the only thing you do is pay Commonwealth rent assistance?

Mr Palmer : I think that is a hypothetical question, and I do not accept the premise that—

Senator McLUCAS: Maybe it is a question to the minister.

Senator Fierravanti-Wells: As far as the commission of audit is concerned, that is a report to the government. The recommendations do not represent government policy. Until we formally respond to the recommendations, I don't propose to comment further.

Senator McLUCAS: It seems that the theme of the commission of audit is actually appearing in what is occurring on the direction of the government.

Senator Fierravanti-Wells: Perhaps, Senator McLucas, we will start by not having six ministers in six years. That would be a good start.

Senator McLUCAS: Your answer is to have none. That makes it easy. Can I talk now about engagement with the housing and homelessness sector-

Senator SIEWERT: Just because it is timely, because you have just touched on the research, I am wondering, as part of that are you going to be looking into the impact of the young people's measure where they do not get any income support to six months? Would you be looking at the impact of that measure on youth homelessness?

Mr Riley : The priorities for the AHURI are developed in cooperation with the states and territories. That process was well advanced for the next year's research priorities before that measure was announced.

Senator SIEWERT: So there is no capacity to alter that, given that a measure has come in that is likely to significantly impact and be a driver of homelessness?

Mr Riley : Research has not yet been tendered, if you like—if that is the right term. One of the focus areas is homelessness. I could not speculate at the moment as to whether that would be one of the areas that would be covered.

Senator SIEWERT: Thank you for that. Is there a potential that, in fact, given there is a new measure that is likely to be a driver, that you could take that into account in the final decision making?

Mr Pratt : Without speculating as to what might happen in the future, certainly it is possible for the Commonwealth and the states to agree different things considered under the research that we jointly fund.

Senator SIEWERT: Can I ask then, Mr Pratt, has that been discussed already or contemplated?

Mr Pratt : Not to my knowledge.

Senator SIEWERT: Given the circumstances, have you in the past made changes to this type of research in response to measures that may have an impact?

Mr Pratt : I can't think of an occasion where that has been the case, but that does not mean that it hasn't. Clearly we can change the parameters of what we want to have research into in the future, subject to agreement with the states.

Senator SIEWERT: But you have not taken that step yet?

Mr Pratt : No.

Senator McLUCAS: I want to move to engagement with the sector, please. I am trying to track how the minister is thinking about engaging with the housing and homelessness sector. He answered my question on notice after February stating that there will not be a social services ministerial advisory council. Is that still the case?

Mr Palmer : That is still the case.

Senator McLUCAS: In Minister Andrews's speech to AHURI he said that—

Senator Fierravanti-Wells: Chair, I understood that the previous procedure in this committee was that if a senator was quoting from a document, that document would be made available to the official to whom he or she was quoting. That was certainly the process I adopted and that Senator Moore enforced in this committee. So I was just wondering if Senator McLucas could do the officials the courtesy of providing them with a copy of the document that she is quoting from?

Senator McLUCAS: I am more than happy to.

CHAIR: It simply requires a request, because quite often what we find is that people are quoting from publicly available documents that are well-known. Would you like a copy of the document that Senator McLucas is referring to?

Mr Palmer : In this instance, I believe I have a copy of the document.

Senator McLUCAS: Everyone in the sector has a copy of the speech, because it is really the only comment that the minister has made about housing since he became the minister. He said in that speech:

I am currently considering what forum or engagement model might be best to provide sector-based advice on social and welfare issues.

My recollection is that that was in November last year. Then in November estimates Mr Lye told me in regards to that same question;

We are providing advice to the minister, so it is too early to tell.

Also have in February estimates, Mr Palmer, you indicated to me:

The Prime Minister announced the incorporation┬╗ of the Prime Minister's Council on Homelessness into the social services ministerial advisory council.

Then I asked the question about what is happening with the social services ministerial council and the answer was, 'No, we are not going to have a social services ministerial council.' We used to have the Prime Minister's Council on Homelessness. We used to have the National Supply Council, albeit in another place. We had lots of opportunities for the minister to engage with the broader sector on housing. So my question is, again, on the third estimates after this government has been elected, what is the mechanism that the minister is intending to use to have ongoing consultation and discussions about housing and homelessness in Australia?

Mr Palmer : The minister has a large number of organisations that come to his office that he meets with on a regular basis.

Senator McLUCAS: Yes, I have heard from them.

Mr Palmer : He is planning a holistic review that will provide further opportunities for consultation, and it is my understanding that he wants it to be a consultative review that takes the views of providers and people who benefit from services. But it is the minister's decision about the arrangements that he sets.

Senator McLUCAS: Yes. I absolutely accept that.

Mr Pratt : I may have touched on this at the last estimates, but it is my understanding that Minister Andrews is open to a variety of mechanisms for getting views—from bilateral meetings with his counterparts in the states through to, as necessary, gatherings of all ministers. The minister has been doing a lot of travel around the country talking to organisations which have interests in this area. There is a lot of consulting going on. My understanding is that the minister is happy to use a range of interventions from informal to formal, as necessary.

Senator McLUCAS: Well, I am hearing informal, ad hoc consultation—potentially. The minister is just picking the people he would like to talk to. Then you will get the message you want to hear. If you want to talk to everyone and get a proper analysis and understanding of what is happening, I would suggest that we do need something more formal than a few conversations here and there. That is not a question to the department. Is there any intention, though—and I am asking the department this—or is there any indication that the minister is intending to do what the Prime Minister has asked him to do and have a social services ministerial advisory council or another entity that would serve that same purpose? It is in the Prime Minister's media release that we would have a social services ministerial advisory council, and now we find out that we will not. So what is going to happen? What is the method by which we achieve some formal consultative process?

Mr Pratt : Ultimately, that is a matter for the minister to decide. So far, he has indicated that he is prepared to use existing consultative mechanisms that exist in the portfolio. As I was saying before, a range of formal and informal measures through bilateral and multilateral get-togethers with counterpart ministers and various stakeholders. My observation—and I am very keen generally not to make observations about ministers—is that he is quite prepared to talk with people who may give him different points of view. He has expressed to me a number of occasions that he is prepared to do that. I understand that he does do so.

Senator McLUCAS: That is very generous of him. Mr Pratt, the existing structures in the portfolio that the minister is using to consult with housing and homelessness, what would they be?

Mr Palmer : He has been meeting with key stakeholder groups. He has met with a number of key stakeholder groups in the housing space and the homelessness space.

Senator McLUCAS: Mr Pratt said that he would use existing structures in the portfolio.

Mr Pratt : That is right. The minister is prepared to use existing consultative mechanisms within the portfolio. There are a range of them. I do not know whether or not the minister has used them to discuss homelessness or housing issues to date. But we have get-togethers with stakeholders in the families and community space, in the disability space and in the ageing sector. All of these areas. Sometimes there are overlaps with housing and homelessness issues, and on top of that, as I have indicated, he meets with counterpart ministers and stakeholders around the country.

Senator McLUCAS: I wonder if you could take on notice, Mr Pratt, which existing structures or consultative mechanisms in the portfolio have been used to consult on issues to do with housing and homelessness?

Mr Pratt : Yes, Senator.

Senator McLUCAS: Thank you.

Mr Riley : We meet every second month with the Community Housing Federation of Australia and also with National Shelter on a regular basis.

Ms Laffan : We are obviously in regular contact with Homelessness Australia via meetings or phone calls.

Senator McLUCAS: But that is from the department. I am asking from the minister's point of view. Senator Ludlam asked some questions about the review that is happening, and I tend to agree with Senator Ludlam in terms of the review happening in a lot of spaces at the moment. There was a simple sentence in the budget that says that there 'will be a review of housing and homelessness.' I am going over the same ground again, but when is it expected to report?

Mr Palmer : The life of the review is foreshadowed in the simple sentence you noted on page 129 of the portfolio budget statement. It will occur in 2014-15. The specifics are still being settled by the minister.

Senator McLUCAS: Will it include the review of the National Partnership Agreement on Homelessness?

Mr Palmer : I fully expect it to go to issues around the national partnership agreement. I expect it to go to issues around NRAS. The minister has foreshadowed those. What other issues would be included, I am not sure. He has used the language of 'holistic' in describing it to us.

Senator McLUCAS: Mr Palmer, were you indicating that the end of that review is 2014-15?

Mr Palmer : I do not have a specific date. He envisaged a review through the 2014-15 financial year.

Senator McLUCAS: Terms of reference?

Mr Palmer : They are still being settled by the minister.

Senator McLUCAS: When do you expect that will be announced?

Mr Palmer : The announcement is a matter for the minister.

Senator McLUCAS: How much work have you been asked to do to prepare for this review?

Mr Palmer : We have briefed the minister on this issue, but I can't go to the content of that briefing.

Senator McLUCAS: Of course. When was that?

Mr Pratt : We have been advising the government on this over the course of this year and, in fact, since the election.

Senator McLUCAS: That we would be having a review starting 10 months after we get elected?

Mr Pratt : No, sorry. Let me clarify. We have been providing ongoing advice and working with government on housing and homelessness matters since the election. We have been providing advice to government around the housing review over, I would say, this calendar year.

CHAIR: I thought we would now move to NRAS. Let's allocate 30 minutes for that. If we do better, great, but then other issues at the end. Senator Bishop, do you have questions in NRAS?

Senator MARK BISHOP: I do, thank you, Chair. Mr Pratt, I have been engaged in some correspondence with the government of Western Australia in the last few months over the NRAS, and they have advised me in writing that despite a number of administrative deficiencies, NRAS has been one of the few initiatives that addresses both housing supply and affordability. Then they go on to develop some commentary, saying that the state government has provided support for a total of 7,000 incentives, and 2,000 dwellings have been delivered in that state. With the decision not to proceed with round 5, Western Australia will lose 1,568 incentives, and this means that 3,145 incentives have been approved in previous rounds but not yet delivered. I understand that the Western Australia minister for housing, Mr Marmion, has written to Minister Andrews seeking assurances that 'any amendments to NRAS will not jeopardise the delivery of the remaining incentives'. I want to look to you, if I may, about the delivery of the incentives for round 4 and round 5.

CHAIR: Do you have anything there that you wanted table so that the officials have it?

Senator MARK BISHOP: I heard the earlier discussion. I do have correspondence from the minister for housing in Western Australia. Whilst it is not private, the government also has a copy of it. I do not intend to use it improperly. If you insist that I table it, I will. But it is not my desire to table correspondence from the Western Australian minister.

CHAIR: I generally would not insist unless it was in the context of something that was necessary for the official's response.

Senator MARK BISHOP: I certainly don't want to table correspondence that the Western Australian Minister has provided to the Commonwealth minister without the authority of both.

Senator Fierravanti-Wells: We can ask the officials if they are aware of the correspondence. Have they seen it and do they have a copy?

Mr Palmer : I do not have a copy of that correspondence with me.

Senator SMITH: Just to be clear, Senator Bishop, this is correspondence between the Western Australian state housing minister and the Commonwealth?

Senator MARK BISHOP: No, it is correspondence from the Western Australian housing minister to myself. In that correspondence he advised that he had written of a particular set of concerns to Minister Andrews. That is a piece of correspondence I do not have.

Mr Pratt : We will take it as a given that he has written to Minister Andrews. We don't have access to that, but perhaps if you ask a question then I will attempt to answer it.

Senator MARK BISHOP: Yes, you will know where I am going. Firstly, can you tell me whether the department has received feedback from other states requesting that the scheme retain sufficient flexibility so that legitimate delays and location changes can be accommodated?

Mr Palmer : Yes, we have received that feedback from states and territories.

Senator MARK BISHOP: Is that relatively common that they wish to have that issue of legitimate delays and location changes accommodated as we go forward?

Mr Palmer : That is the view that the states have provided, yes.

Senator MARK BISHOP: Broadly speaking in that context, is it the intention currently of the government to honour existing incentives in Western Australia if the state department supports the reasons for delay in construction and completion times?

Mr Pratt : Can I take you to page 205 of budget paper number two on NRAS where it says that the government will not proceed with round five of the NRAS. It states:

Funding for incentives from earlier rounds that are uncontracted or not used within agreed timeframes will be returned to the Budget. Funding for tenanted NRAS properties is not affected.

My interpretation of that is that where we are operating within agreed timeframes, there is not going to be a problem.

Senator MARK BISHOP: But otherwise there will be issues. I have read that statement. It is a very broad statement, that is why I am really pursuing the question.

Mr Pratt : Yes, but there is a very important caveat there, which is 'within agreed timeframes'. So it recognises the possibility that, as has been the experience with the management of this program, there are sometimes things that are beyond the control of the various players, and therefore these need to be taken into account.

Senator MARK BISHOP: Okay then. So if other departments advise you that with other projects there have been legitimate reasons for delay outside the control of the players, that would be something the government would consider?

Mr Palmer : I have actually anticipated this question, but it is rather a complicated question and I need to take you to a couple of facets, if I can take a couple of minutes. The government will honour all reserved NRAS incentives on the terms in which they have been reserved. NRAS funding will flow in respect of reserved incentives once they are delivered at the agreed location and the agreed timeframe, subject to compliance with the other regulatory requirements, such as that it is tenanted with an eligible tenant.

The budget has not changed the capacity for NRAS participants to apply to change requests. So they are still able to apply for change requests, and nor has it limited our decision-making ability under the regulations to consider those change requests. We are still accepting and processing NRAS change requests as they come in. The key change flowing from the budget is that where we withdraw an incentive that money is no longer available for reallocation in a subsequent round. It is returned to savings.

Senator MARK BISHOP: And that is really round 5, isn't it?

Mr Palmer : No, this is rounds 1 to 4. If we withdrew an incentive, previously we would have had that available in the funding envelope to reallocate into the future. That is no longer going to be the case. Change requests are considered by the department on a case-by-case basis and they are considered under regulations. The rules of the regulations are something we have to follow.

Senator MARK BISHOP: Can I ask you to take on notice and provide me a copy of the relevant regulations? I was not aware of that.

Mr Palmer : I am more than happy to provide a copy of the regulations. The department does not automatically agree change requests. On our website, we make this clear. Change requests, particularly those that depart from the fundamentals contained in the original NRAS proposal, are unlikely to be approved without considerable supporting evidence. So simply having a state government saying that they support it is not always sufficient.

For change requests in respect of location and dwelling configurations, the regulations require us to consider them consistent with the original selection criteria from that round. Different rounds have had different selection criteria. For Change requests seeking a time extension, the department considers whether the extension sought is reasonable and whether the participant can meet the new timeframe. If the department forms the view that a dwelling will not be delivered on time, the reserve incentive may be withdrawn. We are working through the change requests we have on hand in consultation with relevant state and territory governments and applying the rules as set out in the regulations.

Some change requests take a long time to evaluate. Sometimes it is about the complexity of the change request, and sometimes we get change requests without any supporting information and we have to spend some time actually finding the facts out. The requirements of the regulations require us to take a number of factors into consideration. While change requests are being considered, NRAS participants should not presume the department will automatically agree, and the participants really need to manage their business risk rather than making an assumption that the department will agree a change requests.

Senator MARK BISHOP: Okay, that is quite useful.

Senator McLUCAS: Is that a different approach to what you have taken in the past to deal with change requests?

Mr Palmer : The only difference in our processing of change requests at the moment is that when they are withdrawn, the money goes to savings. The decisions are made under regulations. The regulations have not changed.

Senator MARK BISHOP: The WA Department of Housing has advised that they take a proactive approach to delivery of NRAS incentives and meet with approved participants every two months to review delivery timeframes and resolve any issues that may lead to incentives being withdrawn. As a result of this engagement, the WA department has supported requests to extend delivery timeframes and relocation of incentives to alternative sites. Mr Palmer, can you advise what the process is for the relocation of incentives to alternative locations?

Mr Deakin : The process is actually set out under the regulations for NRAS, where broadly the participant is required to submit some template documents and provide those to the department for assessment. Often with those documents, we will require additional evidence to be provided. We often will be working backwards with the participant to actually gain that information required.

Senator MARK BISHOP: Do you know, off the top of your head, which particular regulations, so I can look them up?

Mr Deakin : I believe that it is 21, but we are more than happy to provide you with a copy of those.

CHAIR: One more question, Senator Bishop.

Mr Deakin : Just to clarify that, there are a number of different regulations that affect different types of change requests. I believe 21 is the one we are referring to here.

Senator MARK BISHOP: In the previous government, I received a briefing at one stage from officials who advised me that the views of the various state agencies and state governments were quite persuasive, and they provided information to the Commonwealth. Whilst the Commonwealth did not engage in a tick and flick, particular heed was paid to the decisions of the state governments. In that scenario, do decisions of the state government, in the discussion we are having to approve support incentives or relocations, carry any particular weight these days or is it just another matter to be considered?

Mr Palmer : Our processing arrangements have not changed, because the regulations have not changed.

Senator MARK BISHOP: Has the interpretation of the regulations changed?

Mr Palmer : I don't believe so.

CHAIR: Senator Ludlam.

Senator McLUCAS: It would have been more comforting if the officer had said no. He said, 'I don't believe so.'

CHAIR: Senator McLucas, we are asking questions here. Senator Ludlam.

Senator McLUCAS: There is a lot of concern out there.

Mr Pratt : Perhaps we could clear that up. Nothing has changed in the way we operate under the regulations. The regulations are the regulations, and we adhere to them as we have in the past.

Senator LUDLAM: Under this government, does NRAS have a future or do we need to wait for the outcome of the review that we were discussing with Senator Fierravanti-Wells earlier? The government seems to have withdrawn all of its funding, which as far as the sector is concerned and as far as we are concerned, looks as though NRAS is dead. Is the government keeping open the option of reviving it post review, whenever that gets underway?

Mr Palmer : Future decisions about the NRAS scheme are a matter for government. But there is funding in the forward estimates right through to, I think, 2028 for the incentives that are currently in play. The regulations and the scheme will continue to pay those incentives.

Senator LUDLAM: Yes, I understand that. You are not capping off incentives that are already in the field. I don't mean you—the government itself is winding this back as aggressively as it can without breaching contracts. Does NRAS have a future past this review? Maybe it is best to put it to you, Senator Fierravanti-Wells. Has a decision been made that NRAS is over or are you keeping the option alive to reboot after your review?

Senator Fierravanti-Wells: Two things, if I can. One is that we clearly have decided to cap the scheme at around 38,000 incentives. These funds are included in the forward estimates for these dwellings. Incentives under the scheme will be paid for 10 years for these dwellings, subject to eligibility conditions. We hope to improve the administration of the scheme. It has been rorted. There has been the trading of incentives and we want to reduce red tape and better target the scheme. Basically, we are adopting a 'use it or lose it' approach. If delivery conditions aren't being met, then those incentives will be withdrawn. That is the first part. The second point that I want to make is that there will be a review and there will be a number of matters under consideration. No doubt NRAS will also be under consideration.

Senator LUDLAM: If the government had decided that NRAS was dead and you are going to pay out your existing obligation and then that was that, you would be telling us, right? It sounds as though the scheme may survive, even though you have taken all the money off the table in the meantime.

Senator Fierravanti-Wells: We are not going to pre-empt any review, suffice to say that we will be meeting commitments, as I have outlined, in relation to the current total of around 38,000 incentives.

Senator LUDLAM: Notwithstanding the kinds of concerns that Senator Bishop raised, which have been canvassed quite extensively in recent months, does the government believes that it worked as a supply-side measure?

Senator Fierravanti-Wells: Can I just say that this was another classic, problematic Labor program.

Senator LUDLAM: Oh, please don't start.

Senator Fierravanti-Wells: It was poorly designed. I have to, Senator Ludlam, because we have to again clean up another mess in another area. It was originally intended to deliver 50,000 dwellings. It has not. But in addition, it has generated a secondary market in which the NRAS incentives have been traded like futures shares. It was half baked in its design and it has been criticised. Indeed, I know that Senator Bishop himself has been critical of it, as have other colleagues.

Senator LUDLAM: As have I.

Senator Fierravanti-Wells: We have decided to cap the scheme at the current total of 38,000 incentives and we will meet our obligations in relation to it.

Senator LUDLAM: The scheme wasn't perfect by any means, but you must be aware that as far as the investor community is concerned, stability and continuity was that number one complaint. I think as a result of the negotiations over the Queensland flood levy, we had to talk the government out of killing the scheme. Now we have to talk you out of killing the scheme. All the funds want is some continuity as a stable investment vehicle in the affordable housing space. Are you aware that capping it off, as you call it, or killing it as I would put it, is providing exactly the kind of uncertainty that has been part of the problem all along?

Senator Fierravanti-Wells: I am sure that this and other issues will be considered as part of the review we discussed earlier, and I do not want to pre-empt what may be in the review.

Senator LUDLAM: Are you proposing to be just completely inert, apart from all of the things that you have cancelled, until the middle of next year? Is that what we can look forward to then—nothing?

Senator Fierravanti-Wells: As I understand, there is also a Senate inquiry into housing affordability.

Senator LUDLAM: Which I believe the government opposed.

Senator Fierravanti-Wells: Which is also due, I understand, to report, and I am sure that an appropriate time—

Senator LUDLAM: That is a funny thing to hide behind—you opposed it.

Senator Fierravanti-Wells: We will respond. This government takes very seriously ensuring that taxpayers money is used appropriately. Something that perhaps you, Senator Ludlam, and some of your Greens colleagues have not been as assiduous about in the past. But I won't make any further comments in relation to that.

Senator LUDLAM: You can't help yourself, can you? Can I just ask a technical—

Senator Fierravanti-Wells: Nor can, you Senator Ludlam.

Senator MARK BISHOP: I have one point, which will be of interest to yourself and the committee. The minister referred to and used the term 'rorting' in reference to, as I understand it, the trading of credits. I should put on the record that I received a briefing in 2013, attended by political officers of the then minister and departmental officials. I particularly raised the issue of trading of credits in the context of NRAS. I was interested to see if it was permitted. I was advised by the officials present that it was a commercial arrangement and they did not have a line on it. I specifically asked whether it was permitted or prohibited, and the officials chose not to respond. So I just want to make it quite clear that there was, under the previous government, advice to me that trading of credits was something that was not yet resolved as either improper or illegal.

Senator Fierravanti-Wells: Mr Pratt, if you would like to comment in relation to that briefing. I certainly was not aware of that briefing. Perhaps you may wish to add to it.

Mr Pratt : I do not have any knowledge of that briefing. Certainly there can be occasions where trading of incentives is legitimate. But also there can be occasions where the trading of incentives is not legitimate, is happening for the wrong reasons and is being done in contravention of the objectives and the spirit of the scheme.

Senator Fierravanti-Wells: Before we go there, I trust Senator Bishop that your comments were not in any way impugning the officials.

Senator MARK BISHOP: No.

Senator Fierravanti-Wells: You have made certain comments in the past. I wanted to make sure that on this occasion that was not happening.

Senator MARK BISHOP: No, Minister, they were in direct response to the language you chose to use.

Senator LUDLAM: This is just a technical question, I guess. It should be fairly quick and then I might put one on notice, if I may. In the budget process, where are we going to find this measure to wind it back? Will this need to be put through the parliament and, if so, where? I am talking about the NRAS changes specifically.

Mr Palmer : It is on page 205 of budget paper No. 2.

Senator LUDLAM: But are you going to need to move separate legislation or is it within the appropriations bills? Help me out. Where are these measures actually going to be?

Mr Palmer : There is no separate legislation required. The current administrative processes allow for that to be given effect to.

Senator LUDLAM: Finally, the NRAS participants who have signed contracts for construction or developments that then have the incentives withdrawn before completion, I guess you would acknowledge they may incur substantial financial losses due to breaking those contracts. How are you managing that? Are you pulling these incentives out from under people if they haven't met the rather arbitrary new timelines that you have set?

Mr Palmer : I indicated earlier that we were not changing our processing and consideration arrangements with change requests. So the arrangements that we were operating under for the last number of years are the arrangements that we are currently operating under.

Senator LUDLAM: But the incentives are being withdrawn from rounds that are under active negotiation. People have signed contracts.

Mr Palmer : That has been the practice of some time.

Senator LUDLAM: So no change. We are not going to be hearing from a whole flood of providers who think that you have yanked the carpet out from underneath them?

Mr Palmer : I cannot guarantee that providers who have not delivered and are well overdue will not complain. But I can say that our practices have not changed.

Senator LUDLAM: What if the result of a project being overdue is due to the bottlenecks inside the department in processing an application?

Mr Palmer : They entered into an agreement a number of years ago, depending on which round they applied under. That is the arrangement that they are making decisions on.

Mr Pratt : Clearly if we were at fault in this and it was not their fault, we would not arbitrarily withdraw the incentive. I am not acknowledging that we might be at fault.

Senator LUDLAM: Of course. Heaven forbid!

Senator McLUCAS: Can I ask how many of the uncontract or unallocated incentives of NRAS pre-round 5 are expected to be clawed back, and on what terms and time frame?

Mr Palmer : I don't have a target or an expectation or anything like that. Our experience has been around five to 10 per cent of incentives that are allocated don't come to fruition and are ultimately withdrawn.

Senator McLUCAS: But the numbers in the budget don't indicate a predicted clawback.

Mr Palmer : The forward estimates don't have any clawback in them. They just have the termination of number 5.

Senator McLUCAS: That is the full potential expenditure that could be applied?

Mr Palmer : Yes.

Senator McLUCAS: The world has changed a bit with people knowing that there is no round 5. Is there a desire and a keenness to make sure that incentives that have been allocated but are uncontract are delivered? What is the quantum of the allocated but uncontracted—

Mr Palmer : What is the number of reserved but not activated?

Senator McLUCAS: Is that the language?

Mr Palmer : Well, we will use that language.

Senator McLUCAS: Has that changed, because the language that the sector is talking to me about is this term of 'uncontracted' or 'unallocated'?

Mr Palmer : The language in the regulations is about reservations. It is 16,801 as of 19 May.

Senator McLUCAS: Describe those in the accurate terminology for me, please.

Mr Deakin : It is referred to in the regulations as a 'reserved incentive'. It is a NRAS incentive. That is a reserved incentive, and when they become activated they are an 'allocated incentive'.

Senator McLUCAS: When they become activated, is that when the contract is signed?

Mr Deakin : That is when the dwelling is delivered into the scheme.

Mr Palmer : It is built and it is tenanted.

Senator McLUCAS: That is at the very end?

Mr Palmer : Yes.

Senator McLUCAS: There are a number of points where the incentive can be clawed back, I understand.

Mr Palmer : Once it has been delivered into the scheme, it can't be clawed back.

Senator McLUCAS: Yes, but working back from there, at what point in the process from successful allocations, or reserving, to the endpoint can the department say, 'You have not met the time frame'? At what point in the process can that happen?

Mr Palmer : It can happen at any point. But obviously if people are on the development track, you would not go there. It depends on how far outside the development track before you might come to a view that they will not be delivered.

Senator McLUCAS: I will put some hopefully quite discrete questions on notice that might help answer some of those questions.

Senator SMITH: Can I asked some questions here about the Building Better Regional Cities program?

Mr Pratt : Yes.

Senator SMITH: I am just reflecting on the reserved incentive versus allocated incentive. Perhaps after these questions, if there are no other questions, I might go back to NRAS. I have in front of me the Auditor General's report number 25, 2013-14. Are you familiar with the report, Mr Palmer?

Mr Palmer : I have had the pleasure of reading it.

Senator SMITH: Can you share with me what the report says and what its key findings are?

Mr Palmer : Can I give a bit of background to this report before going there? The Building Better Cities program was first announced in July 2010.

Senator SMITH: That is the answer to my first question, thank you.

Mr Palmer : It was announced the day after the election was called but a day before the caretaker conventions commenced.

Senator SMITH: And one month after Julia Gillard deposed Kevin Rudd.

Mr Palmer : I do not have that on my chronology.

Senator SMITH: I would not expect you to. That is my commentary.

Mr Palmer : With the re-election of the Gillard government, a new portfolio was established—SEWPAC, or the Department of Sustainability, Environment, Water, Population and Communities. At the same time, or soon after, the Queensland floods occurred, the program was re-profiled from a $200 million program to a $100 million program. The guidelines for the funding of the program were settled at that time, the program was advertised in October and the applications closed in November. The assessment process began and was largely completed in there. The reason I go there is that the first finding of great substance in respect of that is that when the department made a recommendation to the minister on the recommended councils to receive the Building Better Regional Cities grant, the audit office found that we did not refer to the original target that were settled by the government and that the recommendation would have delivered far short of that original target. The difficulty for us, in assessing when the program came back to FaHCSIA in December 2011 with a ministerial reshuffle, was that the original target wasn't in the guidelines that SEWPAC had written. So it was hard to assess against a target that wasn't in the guidelines that was originally there.

Mr Pratt : Perhaps I could jump in on that. If we had taken into account something which was not in the original guidelines, I imagine the auditors would have had a real issue with us breaching probity.

Mr Palmer : The second issue that arose is that the minister at the time did not accept the recommendation, asked for further information, further information was provided and then the minister came to a different view—and not a completely different view—at the edges about which services should be funded. The audit office was critical of the department that we did not provide the minister with enough cautions around that process and decision-making in that process. There are a range of other technical flaws, in passing, as well.

Senator SMITH: I want to go to page 15 of the Auditor General's report. At the top of the page it says:

...the BBRC program has been implemented in a way that gave insufficient attention to the program’s objective, the related key performance target (of delivering up to 8000 additional more affordable homes), the program guidelines and the importance of achieving value from the expenditure of public funds. Rather, emphasis was given to spending the program’s $100 million budget, notwithstanding that the recommended applications were expected to deliver less than 3200 additional more affordable homes (a figure 60 per cent below the program target), and that most of the applications had been assessed by the department to lack sufficient merit and/or as not providing value for money.

Mr Palmer : That is correct—that is what the report says.

Senator SMITH: Do you have a view about that comment at page 15 of the Auditor-General's report?

Mr Palmer : It is a bit difficult to have a view. My knowledge of this program is purely from the audit report and from the files. I was not around at the time these events occurred. So beyond observing that that is what the Australian National Audit Office observed—that is their observation—I do not have anything more that I can bring to the table on that.

Senator SMITH: Would you model future programs like—

Mr Palmer : You will notice that in the department's response to the audit we made it very clear that we actually have quite a new way of managing grants within the department. In part that is to ensure these kinds of processes do not happen in this kind of way.

Senator SMITH: I just want to go then to page 18 of the audit report. It talks specifically about a number of applications and decisions that were taken by the then minister. Who was the minister at the time?

Mr Palmer : Minister O'Connor.

Senator SMITH: At page 18, heading 29, it talks about the minister having awarded '17 applications, 12 of which had been recommended earlier for funding by the department. In respect to the funding decision,' it says, 'unpublished eligibility criteria, that were inconsistent with key design parameters of the program'. Further, it says in regard to the five—and I will come to the five specific ones in a moment:

… the five not recommended but approved applications13 had been assessed as offering 'marginal' value for money for the BBRC funding sought. They had also been assessed as not adequately meeting at least two (and in one instance, each) of the five merit criteria. Approving funding for these applications was seen as necessary, otherwise a significant proportion of the available funding of $114.5 million would not have been allocated.

Does that sound like a good governance model—a good way to proceed when it comes to allocating funds?

Mr Palmer : You are asking me to speculate, Senator.

Senator SMITH: Sorry?

Mr Pratt : I think, in fact, Senator, you are asking Mr Palmer to provide an opinion on something, which we are not meant to do.

CHAIR: Do you have any further questions, Senator Smith?

Senator SMITH: I do, yes.

CHAIR: We do not have much time.

Senator SMITH: If my reading of the situation is clear, the former minister funded decisions despite their poor value for money, despite the department recommending against them, in the instance of five, and funding projects that did not adequately meet some of the criteria. I want to turn to five of those 17 applications now—

Senator McLUCAS: Wasting the public servants' time.

Senator SMITH: These are five non-recommended projects. I just want to share with the committee where they were located.

Senator McLUCAS: We can read the report.

Senator SMITH: Would you like to share with the committee where they were located, Senator McLucas?

Senator McLUCAS: We can read the report.

Senator SMITH: Would you like to share with the committee where they were located?

CHAIR: Senator Smith, please direct your questions to the officers.

Senator SMITH: Tamworth in the seat of New England; Lake Macquarie in the seat of Charlton, held by the member Greg Combet; Maitland in the electorate of Hunter, held by the member Joel Fitzgibbon; Wyong in the seat of Dobell, held by Mr Craig Thompson; and Latrobe in the electorate of Gippsland, handled by Darren Chester.

Senator McLUCAS: Chair, this is really wasting the time of the committee. The officer cannot make any comment.

Senator SMITH: We have a situation where the Auditor-General's report—

Senator McLUCAS: It is abuse of the committee process.

Senator SMITH: makes it very clear that funding decisions were made in a way that was not in accordance with best practice. Perhaps not surprising for some—not surprising for those people who read the report, Senator McLucas—seats dominated by Labor members and the independent member for New England.

CHAIR: Is that a question, Senator Smith?

Senator SMITH: No, it is a comment.

Senator McLUCAS: He is abusing your chairperson's authority.

Senator SESELJA: I know you do not like the question.

CHAIR: Senator McLucas, I think there will always be some varying opinions on what constitutes good questioning and time wasting, and I would like to point out that the opposition has had more than 70 per cent of the hour and a half we have had of questioning in this area already. Senator Smith, could you just—

Senator SMITH: My question is this. Does that amount to a wise decision on the part of the former minister in regard to allocating public moneys around those seats?

Mr Pratt : I will attempt to answer a question but perhaps not that question. That does ask for us to provide an opinion about the issues you have raised. The only comment I would make is that the former minister was the delegate in this case, and it is open to a minister as delegate to make decisions based on their assessment of what we present and what other information is available. I will leave it at that.

Senator SMITH: But a critical issue for the department, Mr Pratt, if I may, is footnote 13:

Under the grants administration framework, these five grants should have been reported to the Finance Minister but departmental advice to Ministers had not identified that these grants required reporting as instances of a Minister awarding a grant that the department had recommended be rejected.

Mr Pratt : Yes, our administration in that area fell down.

Senator SMITH: Thank you very much, Secretary.

Senator Fierravanti-Wells: Senator Smith did ask for an opinion and, in fairness, I would like to put on the record that this was just another debacle. It was intended by the former Labor administration to provide 8,000 additional affordable homes, and 3,200 were delivered. At least something was delivered. It could be considered some victory by the Labor Party but in the real world it was another wastage of taxpayers' money, another monumental disgrace to add to the litany of other debacles of the former Labor government.

CHAIR: Thank you, Minister. We will now move into other areas.

Senator McLUCAS: In November, Minister Andrews said, 'Improving NAHA is something that the government is currently considering in some detail.' That is quite a while ago now. Can I have an update on what work has been done in the department around improving NAHA?

Mr Palmer : There are a couple of things I would note here. In the budget decision the federation review process was announced. My expectation is that housing will be featured as a centre issue in the federation review, which would go to our Commonwealth-state arrangements, in which at the moment NAHA is the principal lead vehicle. That review process will take that forward.

Senator McLUCAS: So when Minister Andrews said in November, 'NAHA is something that the government is currently considering in some detail', what did he mean?

Mr Pratt : We have been working with the government on the NAHA—identifying some of the issues with the NAHA, which have been well known for quite some time—

Senator McLUCAS: We knew that already.

Mr Pratt : We have been providing advice to the government on these issues. As we have already discussed this morning, we have the forthcoming review of housing and homelessness and so these issues are being considered in that context. And, as Mr Palmer has pointed out, we have also the federation review white paper process which will cover these things. So we have been looking at these issues in that context as well.

Senator McLUCAS: Just for clarity, I understand you have been doing a lot of work but the action that has happened out of that work is that Minister Andrews has referred the NAHA to the federation review—or has he referred the NAHA to the internal housing review?

Mr Pratt : They will be connected.

Senator McLUCAS: They are connected, so—

Mr Palmer : The minister intends that the review he talked about would inform and be an input into the federation review as well. But the issues are linked.

Senator McLUCAS: In both places we will review the NAHA?

Mr Pratt : The outcomes of the review of housing and homeless will inevitably feed into the government's consideration of the review of the federation, housing of course being delivered by the states. It is their constitutional responsibility. We provide significant funding to the states for that purpose. That is how those are connected.

Senator McLUCAS: Okay, that is very clear. We know that we will review it and that is all.

Mr Pratt : I am not sure that I can agree with the last part of that premise.

Senator McLUCAS: Fine. I am not reflecting on the department.

Mr Pratt : Thank you for that.

Senator McLUCAS: I am reflecting on the minister's decision making. All I can see is that, nine months later, we have decided that we will have a review and it will happen in two places. I asked a question on notice about whether there would be a formal submission process regarding the future of NAHA. The answer said that at the famous national housing conference on 1 November the minister 'invited the sector and state and territory governments to contact him with their views on housing and homelessness policy'. That was the input process that he encouraged. The answer says, 'The minister has received a letter from two states and two non-government organisations so far.' Is that it?

Mr Riley : Those contacts are the ones that make specific reference to his remarks at the national housing conference. Of course he has been approached by a range of organisations in relation to a broad range of housing and homelessness issues.

Senator McLUCAS: So there have been no more responses to the invitation Minister Andrews offered at the 1 November AHURI conference. Four pieces of correspondence have been received in response to that offer to consult. That is it?

Mr Riley : As I said, there are four pieces of correspondence that make specific reference to the minister's remarks at the national housing conference.

Senator McLUCAS: Okay, thank you. I suppose there will be no more formal consultation specifically around NAHA because it is going to be reviewed elsewhere. Thank you for those answers.

Senator Fierravanti-Wells: Can I just add, Senator McLucas, that consultation is not just in writing. As has been indicated earlier, the minister is undertaking consultation in a broad range of areas.

Senator McLUCAS: Yes: broad, ad hoc. I do not know how the department can glean information from Minister Andrews having a conversation with someone in a hallway. It is a bit hard for the department to know what to do.

Senator Fierravanti-Wells: Senator McLucas, given the number of consultative bodies that you had when you were in government, it hardly helped you. Prime Minister Rudd at the time said he would halve homelessness, and it is very clear that homelessness has increased.

Senator McLUCAS: That is a very ill-informed comment.

Senator Fierravanti-Wells: So I would not be coming into this place and making those sorts of assertions, thank you, Senator McLucas.

Senator McLUCAS: I want to go now to the abolition of Housing Help for Seniors. How many people were forecast to take advantage of that program?

Mr Pratt : Senator, that is probably a question that should have been asked last night under outcome 1.

Senator McLUCAS: Why has Housing Help for Seniors—it has been abolished but then why has it gone to outcome 1?

Mr Pratt : That is a good question.

Mr Palmer : Housing Help for Seniors, as I understand it, was a change to thresholds on the means test for pension eligibility allowing people to have up to $200,000 of the sale of their property in a special bank account that was not means tested. Because it goes to the operation of the income support system it is in outcome 1, not in outcome 4 for housing.

Senator McLUCAS: That is an answer, thank you. I will put those questions on notice.

Mr Pratt : That would be helpful. I am looking at my list of briefings from last night and I appear not to be able to help you.

Senator McLUCAS: Thank you. Rent assistance—is this in this area now?

Mr Palmer : We are happy to answer questions on rent assistance.

Senator McLUCAS: The budget is fairly silent on rent assistance. So I am interested to know what measures in the budget will affect the operation of Commonwealth rent assistance.

Mr Riley : There are broadly four things that affect the Commonwealth rent assistance outlays. There is the number of income support customers, there is the nexus between first home buyers and rental, there is the number of people renting and the amount of rent they are paying—so there are a couple of housing affordability things there—and then, at the margins, to some extent there is also the impact of transfers from public housing to community housing dwellings which then become eligible for Commonwealth rent assistance.

Senator McLUCAS: Sorry, Mr Riley; I have framed the question incorrectly. I am trying to ascertain—there are a number of measures that were introduced, including the one-week waiting period for all payments, the freeze on non-pension rates of payment, and whether the freeze on thresholds affects the operation of CRA. I am trying to tease out—

Mr Palmer : Certainly to the extent to which those parameter changes change the number of clients, as Mr Riley was saying, who receive income support and who are eligible to receive rent assistance there would be a flow-on impact on rent assistance outlays.

Senator McLUCAS: So will the one-week waiting period affect—

Mr Palmer : You would have to be eligible for a primary payment to receive rent assistance; you cannot get rent assistance as its own payment in its own right. It is a supplementary payment to a primary payment, be that an age pension or family tax benefit A.

Senator McLUCAS: Was any advice provided from the housing section of the department to those deliberations? That has enormous implications for making people homeless, as I am sure you understand.

Mr Palmer : Which element are you referring to, Senator?

Senator McLUCAS: In the framing of the budget, did the housing section—

Mr Pratt : Senator, if I can perhaps—this is unusual—re-ask your question for you, are you wondering whether we provided advice on the impacts on rent assistance of these measures?

Senator McLUCAS: Absolutely.

Mr Pratt : Yes, that would have been taken into account in the costings for the various measures.

Senator McLUCAS: Not the costings, Secretary—I am actually more interested in the implications of this measure. If we say to people who do not have any income that they cannot even get their rent assistance for a week, we know what happens in those circumstances: people lose their homes. So was the housing section of DSS consulted on the implications of applying the one-week waiting period on Commonwealth rent assistance?

Mr Riley : I do not believe we were specifically consulted in relation to what you are talking about. However, we were part of a broader governance arrangement in relation to the payments forum and were broadly consulted.

CHAIR: One more question here, Senator McLucas.

Senator McLUCAS: I want to finish off this element. How does the freeze on all non-pension rates of payment affect Commonwealth rent assistance?

Mr Palmer : The way rent assistance works is that if you get a dollar of an eligible payment you get the supplement as the supplement is calculated. So, to the extent that changes in the parameters for income support change the number of people who may be eligible, there will be a number of people who do not get rent assistance.

Senator McLUCAS: Have you worked out how many that is?

Mr Palmer : We would have worked out the costing element in doing the forward estimates.

Senator McLUCAS: How much is that saving for CRA?

Mr Riley : The outlay on Commonwealth rent assistance is forecast to increase by 9.1 per cent over the course of 2014-15.

Senator McLUCAS: That is a good answer but not the answer to the question that I asked.

Mr Riley : I do not have the details of the cost implications.

Senator McLUCAS: But you could find that out for me?

Mr Pratt : We can take it on notice.

CHAIR: One last question, Senator McLucas.

Senator McLUCAS: Does the freeze to the threshold result in a freeze to the cap—the total amount that could be paid? How will the freeze on the threshold affect the CRA?

Mr Palmer : The calculation of rent assistance is not affected by changes to the parameters in calculating the primary payment. The calculations for calculating rent assistance were not changed in the budget.

Senator McLUCAS: Okay. That answers that.

Senator PERIS: The National Rental Affordability Scheme—what was the funding applicable for the Northern Territory for rounds 3 and 4?

Mr Palmer : In round 3 we offered 1,200 reserved incentives. In round 4 we offered 496. They were the offers accepted.

Senator PERIS: I do not know if this question has been answered. On 24 March this year the review of the National Rental Affordability Scheme—there was going to be a review. Has the review been done?

Mr Palmer : No, the review has not commenced yet. It will be part of the larger review that the minister announced in the budget.

Senator PERIS: When do you envisage that being completed?

Mr Palmer : It will occur over the next financial year.

Senator SIEWERT: What work has the department done on any calculations of the impact of the young people's no income support measure on homelessness?

Mr Palmer : We have not done an impact calculation or an estimate.

Senator SIEWERT: Have you been asked to do any calculations on it?

Mr Palmer : No, we have not.

Senator SIEWERT: Mr Pratt, why haven't you done any work on looking at the impact of the young people's measure where they are forced to live on no income support for six months?

Mr Pratt : I would not agree that we have not done any work on that.

Senator SIEWERT: Calculations on the impact of homelessness?

Mr Pratt : I do not believe we have made a calculation on the impact of homelessness. As we discussed last night, I do not think we are in a position to be able to make a calculation of that sort.

Mr Palmer : We do not believe it is possible to make a reliable estimate. We just do not have the data that goes to causality, the evidence, marginal propensities for behavioural change—we just do not have the information to inform a reliable estimate.

Senator SIEWERT: You have said that you have not yet done any preparation work for asking for research to be done. Is it not inevitable with this measure that you can expect that there will be an increase in homelessness of young people?

Mr Pratt : We just do not know.

Senator SIEWERT: You know this is going to have a significant impact, because you have already budgeted for emergency relief funding. So you know that it is going to have an impact. What impact do you think it is going to have on homelessness?

Mr Pratt : I cannot tell you, Senator. I do not know.

Senator SIEWERT: Have you done any policy work—because I am not allowed to ask 'do you think'—on its impact on homelessness? Have you not taken that into consideration when you have been looking at its impact?

Mr Pratt : Certainly we have. I will remind you, Senator, that this measure affects more than my department; it covers a number of portfolios. What I will say is that in the budget process we looked at impacts to the extent we could in providing advice to government.

Senator SIEWERT: But why can you not then look at, given the comments that Mr Palmer made—I understand that there are some unknowns but you do know that it is going to have an impact. So why not at least do some work?

Mr Palmer : The measure was specifically designed not to have an impact on people who were not work ready. It has a range of exemptions: are people in full-time education, do they have a paid work capacity that is greater than 30 hours a week—

Senator SIEWERT: I am aware of those exemptions but it does not—

Mr Palmer : But that design—

Senator SIEWERT: But anybody with work readiness—if you have not got any money you still cannot pay the rent.

Mr Palmer : The framework was designed to—specifically at the work ready end, rather than people with high support needs.

Senator SIEWERT: I understand what you are saying. But the government knows it is going to have an impact. It has budgeted for the impact.

Mr Pratt : Senator, I do not want to be argumentative but we cannot calculate, for example, the extent to which people will rely on support from family and from friends and other support that might be available through existing services. We have not attempted to quantify things in this area and what we are saying to you is that we, certainly at this stage, are not able to do so.

Senator SIEWERT: I could sit here and argue for hours but I will not.

CHAIR: Senator Ludlam, just two or three so Senator McLucas can finish off.

Senator LUDLAM: I will be brief. I am going to continue in similar vein as Senator Siewert. There is actually a motion before the Senate at the moment to the government to provide an estimate of how many people will be made homeless as a result of the cumulative impact of the budget measures. Senator Fierravanti-Wells, do you want to take this one? Does the government intend to provide that figure—or at least that modelling, an estimate?

Senator Fierravanti-Wells: Can I just make a couple of points if I can.

Senator LUDLAM: I am after a reply to the question. That would be better.

Senator Fierravanti-Wells: As Mr Palmer has said, there are exemptions. And, as Mr Pratt has eloquently responded, this calculation has not been done.

Senator LUDLAM: The department is not sitting there helplessly waiting for direction from government. They are meant to be providing frank and fearless advice. Will the department provide this committee and the Senate with an estimate of how many additional people will be made homeless—because that has direct consequences for service providers, who are already struggling—as a result of the 2014-15 budget?

Mr Pratt : Two comments there, Senator. One is—and this was well covered yesterday—we do not do calculations of impacts of budget measures that go beyond what this department is responsible for. That is a role for Treasury, not for this department. Subject to the outcome of the process you have described in the Senate, we will react to what the government wishes us to do following that.

Senator LUDLAM: I am working with 40 or 50 people sleeping in their cars and in swags and in tents in a car park in Rockingham. What do I take home to them about this government's policy on homelessness and whether the cumulative impacts of the budget that is before the parliament now will be to throw thousands or probably tens of thousands more people into homelessness? Senator Fierravanti-Wells, do you intend to at least try to provide an estimate of the additional assistance that crisis centres, support centres and shelters are going to need to provide to the additional people who will be made homeless as a result of the budget? Can you at least commit to coming up with an estimate so that your department and the service providers on the front line and the people sleeping in a car park will have some idea of the impacts?

Senator Fierravanti-Wells: Mr Palmer's comment that we are not in a position to estimate that figure—

Senator LUDLAM: Don't you think it would be a useful thing to find out?

Senator Fierravanti-Wells: He gave you the reasons why—

Senator LUDLAM: I am asking you. You are in the executive.

Senator Fierravanti-Wells: Mr Palmer is giving advice in relation to that point. He is answering your question, Senator Ludlam. Mr Pratt also indicated the position. I do not add anything further to that. The reality is that there are provisions in the budget in relation to vulnerability and homelessness, and there are exemptions in relation to provisions. I cannot add anything further. As Mr Pratt said, this matter—

Senator LUDLAM: You could if you wanted to, Minister.

Senator Fierravanti-Wells: Senator Ludlam, I am not sure if you were present yesterday. Matters pertinent to provisions in the budget to do with social security matters were well canvassed yesterday at estimates. I am not sure if you attended. As Mr Pratt said—I am sure that had you been present you could have asked these questions but I am sure you would have got the same response that we are giving you this morning.

Senator LUDLAM: That is the first point of agreement so far.

Senator McLUCAS: I note that all the questions that I asked in the housing and homelessness space were answered after the cut-off date. On what date did each of them go to the minister's office?

Mr Palmer : I would have to take that on notice.

Senator McLUCAS: Thank you very much. Can I ask why Reconnect and the Home Advice program have been moved into outcome 1?

Mr Palmer : I understand that that would have been discussed at length yesterday as part of the broadbanding and reforming of the department's grant arrangements. I believe that the secretary tabled his honeycomb document—

Senator McLUCAS: Yes, he did, and that was very helpful. The question I am asking—and, Mr Pratt, you might be able to help me—is why those two programs, one of which is a youth homelessness program and the second a program to provide non-government organisations brokerage money to keep people housed, are not in housing anymore.

Mr Pratt : In fact they have moved into program 2.1, which is next on the agenda. We will have the people here who can—

Ms Laffan : I can respond. Broadly it was a program reform to reduce duplication and increase efficiency. With respect to Home Advice, it will sit under a financial capability and wellbeing program, and a target group of that program will remain families homeless or at risk of homelessness. With respect to Reconnect, it has been moved into outcome 2 because of the strong focus on family relationships as an important foundation to improving the living situations of young people at risk of homelessness. You might be aware that the Reconnect program—the funding agreements continue until 30 June 2016, so they will not be affected by the program reforms.

Senator McLUCAS: I suppose it is the philosophy we are bringing to it that I am questioning.

CHAIR: We will break now for morning tea.

Proceedings suspended from 11:01 to 11:17

CHAIR: We will resume with outcome 2. This goes through in programs, of course, but I think the first area where senators have questions is in the area of emergency relief. Secretary, I was told there was an income management summary that was to be tabled.

Mr Pratt : Madam Chair, I believe it was presented yesterday. This is the income management information that we provide each time ahead of the hearing to help senators see what—

CHAIR: Thank you. This is entitled 'Income management summary 16 May 2014'.

Senator MOORE: Ms Bennett, thank you so much for the information that you gave us yesterday. I have been through most of it. I have to admit I have not gone through every one of the grants, because it is killing my printer, but I am more than happy to have that. I will come back to some more questions—and I know many people have them—about the general grants stuff, particularly in this program where there are so many. But I have some particular questions about emergency relief. We had some discussion last night, and I am just trying to get it clear, about emergency relief. Can you give me any information about what has happened to emergency relief in this budget?

Ms Bennett : Emergency relief as it exists and has historically continues within this budget. Emergency relief has also, as was set up in the big hexagonal—

Senator MOORE: The honeycomb.

Ms Bennett : honeycomb is now part of financial wellbeing. The estimated—as I have explained previously, we obviously are going through a selection process for those broadbanded programs. But the estimated availability for funding for emergency relief as it stands—and I am separating that out from the new component which may come out of the learn and earn measure—

Senator MOORE: We will talk about that separately. I want to get the baseline and then anything that is coming in.

Ms Bennett : On the baseline the estimated funding for 2014-15 is just under $60 million.

Senator MOORE: How does that compare to the previous year?

Ms Bennett : Sorry, it is $50 million.

Senator SIEWERT: It is $50 million now?

Ms Bennett : For 2014-15.

Senator SIEWERT: That is what I mean, yes. And what was it previously?

Ms Hefren-Webb : This year's funding is $57.457 million.

Senator SIEWERT: So it has gone down.

Senator MOORE: So 2013-14 was $57 million—is that right?

Ms Bennett : Yes. And, as I have said, this is an estimated funding depending on the arrangements.

Senator MOORE: Absolutely. So $57 million was in the budget and spent in 2013-14—is that right?

Ms Bennett : Yes. And this year it is notionally allocated, pending the selection process, just over $50 million. That reflects also a reduction in the number of requests or episodes for assistance. I will just go back with some numbers. In 2011-12 there were just over a million requests for assistance. In 2012-13 there were 864,000 requests for assistance. Last year there were, to date for a half year, 374,000.

Senator MOORE: That is until when?

Ms Bennett : To December.

Senator MOORE: So it is the end of December figure?

Ms Bennett : Yes. The adjustment in the funding reflects—

Senator CAMERON: What does that December figure include?

Ms Bennett : To the end of December.

Senator CAMERON: What was that figure?

Ms Bennett : Just over 374,000 requests for assistance. As you would be aware, that is not individuals. An individual over a period may have more than one occasion on which they seek that assistance.

Senator MOORE: Sure. And those guidelines for how many times they can seek and those things have not changed?

Ms Hefren-Webb : The guidelines ask that the organisation take steps to limit the number of repeat requests and try to assist people to—refer them to other services, financial counselling, other support services, with an aim of building their capability so as to not need to keep coming back. But it does not set any cap.

Senator MOORE: No, the guidelines actually are there in allowing an individual agency to determine their own process.

Ms Hefren-Webb : Correct.

Senator MOORE: My understanding is that if there are people who have concerns about that they can come back through the system and ask questions. Is that right?

Ms Hefren-Webb : If people have concerns about—

Senator MOORE: Individuals who are concerned about the way it is operating can actually go through the organisations that are supplying the emergency relief or, in some cases, contact the department with concerns.

Ms Hefren-Webb : Yes, they can ring our contact line or our complaints line if they feel they have been denied access.

Senator MOORE: And in the past we have asked that question. Do you have any statistics about how many complaints or concerns or calls about emergency relief have come through to the department?

Ms Hefren-Webb : I do not have that with me.

Senator MOORE: Can we get that on notice?

Ms Hefren-Webb : Yes, I will get someone to provide that.

Senator MOORE: In terms of the way the emergency relief funding is provided, is there a review after every year to look at the funding for the next year? We have heard that the reduction from $77 million to $50 million is responsive to the number of requests that had occurred the year before. Is there any—

Ms Hefren-Webb : It is from $57 million to $50 million.

Senator MOORE: Sorry.

Ms Hefren-Webb : The last set of funding was provided on a three-year basis, so it would have been determined back in 2010-11. You will remember that there were significant increases made to emergency relief at the time of the global financial crisis.

Senator MOORE: Yes, we do remember that.

Ms Hefren-Webb : Yes. A decision around the next three years of funding was made then. We are now entering a new funding agreement period. As Ms Bennett outlined yesterday, we are looking at five-year funding for providers. So these figures are our current estimate of how much emergency relief will be allocated over the next five years, based on our analysis of demand and on the funding available within the broader program activity.

Senator MOORE: We had a three-year funding cycle that was due to end this year. The emergency relief organisations are part of the general—looking at the discretionary grants program. Emergency relief—did they get a six-month or a 12-month letter?

Ms Hefren-Webb : Six month.

Senator MOORE: So from the period of now until July they will be funded on the basis of $50 million—is that right?

Ms Hefren-Webb : No, the $57 million was continued for the six months. As with other agreements, it was pro rata.

Senator MOORE: I did not get that clear earlier. So the letter that they have got to the providers—and one of us will ask about that soon. The letters that went out—and I have read your sequence of communication, Ms Bennett, so I presume they all got an email and then they got a letter, and the letter includes the information about what is going to happen to them over the next 12 months in the process. They have got a letter saying that for the next 12 months they will get pro rata of $57 million. Is that right?

Ms Hefren-Webb : Six months.

Senator MOORE: Six months at a pro rata of $57 million?

Ms Hefren-Webb : Yes.

Senator MOORE: Then there will be the process of a five-year grant program.

Senator SIEWERT: Are they on the five-year grant program?

Ms Hefren-Webb : They are in the selection process.

Senator MOORE: For a five year?

Ms Hefren-Webb : Organisations will be applying.

Senator SIEWERT: This is the 19 June tender document?

Ms Hefren-Webb : Correct: that process. We have a new activity called financial wellbeing and capability. It rolls in emergency relief, financial counselling, microfinance activities like the low-interest loans scheme, and money management services. Those organisations will be applying for funding under that activity. The figures that we were reading out are our estimate of how much of that activity will go for emergency relief.

Senator SIEWERT: Of that component?

Ms Hefren-Webb : Of that activity.

Ms Bennett : If I can refer you to page 98 of the portfolio budget submission, there is the estimate for financial wellbeing and capability as the total broadband program. And the emergency relief is—it is five down. Financial wellbeing and capability—emergency relief is an element of that program in the new broadbanding arrangement.

Senator SIEWERT: Okay, I could not see the words.

Senator MOORE: Ms Bennett, I am particularly interested—

Senator CAMERON: Where is the—

Senator MOORE: It is the yellow book, Senator Cameron.

Senator CAMERON: What page are we on?

Ms Bennett : Page 98.

Senator MOORE: What I have not heard yet—and I have religiously written down all the figures. What I have not heard yet is in that financial wellbeing and capability bucket, which picks up not just emergency relief but also the others, how much is there for each of those new components. We have not shared that information yet.

Ms Hefren-Webb : As Ms Bennett was outlining, we are going through a selection process. So we have asked organisations to apply. Some organisations will apply for just one type of activity and some might wish to deliver a no-interest loans scheme, emergency relief and financial counselling. Once we have received all the applications and made the assessments then we will have a final figure on exactly the components that go to each. But our estimated component for emergency relief at this stage—

Senator MOORE: Emergency relief only?

Ms Hefren-Webb : Yes—emergency relief and things like food bank assistance, which really is the same sort of thing.

Senator MOORE: Okay.

Ms Hefren-Webb : $50.149 million in 2014-15.

Senator SIEWERT: What are the estimates for the other components? So financial counselling—I understand what you just said; they are a bit flexible. But you have obviously allocated a notional emergency relief. What is it for those other components?

Ms Bennett : We will have to take that on notice to break up all those components. We will see if we can find it.

Ms Hefren-Webb : I am sure we can provide that this afternoon. I will get someone to send that through.

Senator SIEWERT: Thanks.

Senator MOORE: All of it has to fit within $139,131?

Ms Hefren-Webb : Correct, yes.

Senator MOORE: So the whole component for financial wellbeing and capability is $139,131, of which, based on your current calculations, $50.149 million will be for the emergency relief for 2014-15?

Ms Hefren-Webb : Yes.

Ms Bennett : And, as you see, last year for those like-like activities, it was $122,960. So the same activities that we are talking about that have been broadbanded to reflect the estimated actual in 2013-14 were also added together to what their expenditure was on those various elements from last year.

Senator MOORE: So $122,960 for 2013-14 included all the things that we are talking about?

Ms Bennett : Yes. That reflects also the earlier conversation that the secretary showed about the reorganisation of the department. It shows the honeycomb. So for those elements that move into the future, the expenses in the last year for them have been added up together. As is the normal practice in a portfolio budget submission, you can see what the expenditure was in the previous year and then what the expenditure is in this year and the forecast in the forward estimates.

Senator MOORE: Given that, last year's emergency relief component was $57 million and this is $122,960; is that right?

Ms Bennett : Yes.

Senator MOORE: I need to know what the last year's components of all the other things are. If these figures are as they look, it says in 2013-14 for everything, including emergency relief, the total was $122,960. In 2014-15, the same components identically will now total $139,131. We already know that there is going to be less for emergency relief. There must be an increase in other things. Is that right?

Ms Bennett : It also includes the additional half-year or proportion of the assistance that will be provided under the learn and earn measure.

Senator MOORE: And how much is that?

Ms Bennett : For 2014-15, for the period of effect, it is estimated—as we have said, it is not final until we know what the arrangements will finally be—at $20 million.

Senator SIEWERT: That is the half-year money, is it not?

Ms Bennett : A half year within the parameters which we discussed last night.

Senator SIEWERT: That is what I mean. It is not timed to go with the starting of the program?

Mr Pratt : One of the benefits of this broadbanding—I hope we have made this clear—is that if there is a requirement for more money in one subcomponent as compared to another one, we have the flexibility to move the money back and forth.

Senator MOORE: Making funding more flexible. You can move in between buckets?

Mr Pratt : Yes, that is right.

Senator MOORE: As long as it is the one big bucket. You will not be able to move anything from financial wellbeing and capability into settlement services?

Mr Pratt : No.

Senator MOORE: You could not?

Mr Pratt : We could not.

Ms Bennett : No.

Senator SIEWERT: If you take that $20 million off the 2014-15 budget, it comes down to $119,000.

Ms Bennett : Yes.

Senator SIEWERT: So that is a decrease in that bucket?

Ms Bennett : A minor decrease.

Senator CAMERON: Where do you get the $20 million from?

Ms Bennett : It is at page 35.

Mr Pratt : I might go to the further implications of your question. What was the basis for a $20 million estimate for that financial year? We have made an estimate of the potential number of requests that we might get for assistance for people who are part of the earn or learn program. There is something that I think would be very helpful to clarify from the discussion last night. We used the term 500,000 people over four years. That is, in fact, 500,000 requests over the four years. In fact, the number of people no doubt would be a subset of that because our experience is a number of people will potentially seek extra assistance and on multiple occasions. Just to complete that, the estimate that we have done in this area is, on average, very roughly over the period of the four years—and this is an average—it will come to around $400 of assistance on each request. That is a mathematical breakdown of the $229 million.

Senator CAMERON: That really was not where I wanted to go. But thanks for that information.

CHAIR: Senator Cameron, you have some follow-up questions here?

Senator CAMERON: Yes. You talk about the honeycomb. Someone listening probably would not know what the honeycomb is. But that is basically the basket of funding of the envelope across all your different agencies. Is that right?

Mr Pratt : This goes back to my show and tell yesterday.

Senator CAMERON: Just wait a minute, Mr Pratt. This is a very simple proposition I am looking at. First of all, I am trying to find out this: is the $20 million being shuffled within the overall allocation to DSS?

Mr Pratt : It is new money associated with the budget measure—the earn and learn.

Senator CAMERON: So where does that new money come from?

Mr Pratt : Well, it comes from the money set aside within the measure earn and learn, which is on Budget Paper No. 2.

Senator CAMERON: So let us chase that back a little.

Ms Bennett : That is different. It is reflected in the yellow book on page 35.

Senator CAMERON: This one here?

Ms Bennett : Yes. And in the other white book that you have on your table, it is, as the secretary referred to, on page 210.

Senator CAMERON: You say it is new money. You are saying $20 million. Where does the $229.6 million over four years come from?

Mr Pratt : It is in our PBS on page 35, as Ms Bennett has pointed out.

Senator SIEWERT: Could you just explain—

Mr Pratt : If I can please continue.

Senator SIEWERT: where it is on the page, though.

Mr Pratt : At page 35 of the PBS.

Senator SIEWERT: Yes. Which bit is it?

Mr Pratt : It is right down the bottom at outcome 2, administered expenses.

Senator SIEWERT: It is as clear as mud. It says 'administered expenses'. As if we could work that out.

Ms Bennett : Well, it actually has a heading that says 'Stronger participation incentives for job seekers under 30'.

Senator SIEWERT: But it does not say what it is for.

Ms Bennett : It is participation incentives for job seekers under 30.

Senator SIEWERT: It does not say it is for emergency relief.

Ms Bennett : But if you go to page 210—

Senator CAMERON: Before you go to page 210—

Mr Pratt : Can I please finish?

Senator CAMERON: I am happy. Everyone just seemed to be heading off.

Mr Pratt : I am getting a number of questions here. I want to finish. On page 210 of the Budget Paper No. 2, it sets out the stronger participation incentives for job seekers under 30 measure, which is a savings measure that has savings of $1.2 billion over four years. That is the net result of this measure. But there are expenditure elements to this measure, including the extra money for assistance for people which will be provided through the emergency relief program.

Senator SIEWERT: I want to follow that up, then.

Senator CAMERON: Can I just finish my questions, please?

Senator SIEWERT: Well, you jumped in on us asking some questions, Senator.

Senator CAMERON: Actually, Senator Moore was asking questions and you jumped in. I am trying to get some follow-through.

CHAIR: I think there is a tradition of jumping in going on here, Senator Cameron.

Senator CAMERON: I want to finish this line of questioning. So in terms of this figure of $230-odd million—is it $234 million, is it?

Mr Pratt : It is $229 million.

Senator CAMERON: Is that $229 million all new money?

Mr Pratt : Yes.

Senator CAMERON: When you say new money, is it new money for the program or is it additional money for the portfolio?

Mr Pratt : It is both. It is new money for the program which has come to the portfolio as part of the earn or learn measure.

Senator CAMERON: Is there somewhere in the budget that can identify where that $229 million came from?

Mr Pratt : Well, it arises from the combination of spends and savings associated with this measure, which are set out not in detail. But the net effect is set out on page 210 of the Budget Paper No. 2.

Senator CAMERON: So how about giving us some of the detail of where it comes from.

Mr Pratt : Yes. The savings come from Newstart allowance and youth allowance.

Senator CAMERON: So it is money that some of the lowest socioeconomic people in the country are losing. So poor people are losing it and it is being paid for this new earn and learn Work for the Dole scheme. Is that right?

Mr Pratt : Well, the measure is about people spending a longer period looking for work without income support. So there are savings associated with that, some of which have been reinvested for this purpose.

Senator CAMERON: So it is not really new money, is it? Some of the poorest people in the country are actually losing income to pay for this. Is that how it works?

Mr Pratt : I do not want to sound like a CFO, but this is prospective. So it is money that is anticipated to be expended in future years. The measure is an estimate of reduced expenditure in that area, which then frees up resources that can be invested for emergency relief purposes.

Senator CAMERON: So, in simple terms, it means that people on Newstart are getting less and it is being ploughed into the Work for the Dole scheme?

Mr Pratt : That is another component of the measure.

Senator CAMERON: But that is not what I was asking you. So the money comes from Newstart recipients. Is that correct?

Mr Pratt : The money comes from an estimate of reduced expenditure on Newstart allowance and youth allowance, which can be reinvested for interventions like Work for the Dole and emergency relief.

Senator CAMERON: Well, how can you say that is new funding? That is not new funding. That is a shuffling. That is actually taking money away from some of the poorest Australians in this country.

Mr Pratt : This is where I was being unhelpful in a technical sense. It is new money because it is money that is yet to be appropriated in future years. It has not happened yet. It is new to the emergency relief program.

Senator CAMERON: That is quite a technical explanation, is it not?

Mr Pratt : You are welcome.

Senator CAMERON: There are lots of laughs going on in the background from bureaucrats who are not going to suffer.

Senator Fierravanti-Wells: Senator Cameron.

Senator CAMERON: I just find that outrageous.

Senator Fierravanti-Wells: Senator Cameron, ask your question of the secretary.

Senator CAMERON: The secretary makes a smartarse remark and all the people start laughing.

CHAIR: Senator Cameron!

Senator CAMERON: What a joke.

CHAIR: Order!

Senator Fierravanti-Wells: Senator Cameron, please withdraw your comments. Do not impugn the officials.

CHAIR: Order!

Senator CAMERON: Okay. I will come back.

CHAIR: Order! Senator Cameron, would you withdraw that remark, please?

Senator CAMERON: That the secretary made a smartarse remark? Is that the one you want me to withdraw?

CHAIR: Please withdraw your comments, Senator Cameron.

Senator CAMERON: Is that what you want me to withdraw?

CHAIR: You know what I want you to withdraw, Senator Cameron, and I do not think you are behaving in a very professional manner at all. Please withdraw.

Senator CAMERON: If it makes you happy, I withdraw.

Mr Pratt : May I apologise for my remark. It was light-hearted, and I did not intend to provoke laughter with that feeble comment.

Senator CAMERON: Well, it did provoke laughter. I just find it really, really bad when people are sitting on $100,000 plus—

CHAIR: Senator Cameron, three more questions.

Senator CAMERON: and people are on $35 a day. I do not think it is appropriate for laughter, let me tell you. It is not appropriate.

Mr Pratt : My feeble joke was intended to make light of the difficulties associated with describing the technicalities behind our budget processes.

Senator CAMERON: I can understand why you are having that difficulty. It is difficult. Let us come back—

Senator Fierravanti-Wells: Senator Cameron, some of your people did not think about ripping off the HSU and other unions.

Senator CAMERON: Let us come back to this, Secretary. So can you tell me how much of the component is being allocated in the future to be removed from Newstart and youth allowance to be put into the Work for the Dole scheme?

Mr Pratt : No, I cannot. That is an employment department matter. They run the Work for the Dole scheme. But it will be the amount set aside for Work for the Dole.

Senator CAMERON: What about the expenses for the emergency relief? Can you tell me how much is coming back to the department from Newstart and youth allowance back to the emergency relief component of your budget?

Mr Pratt : It is $229.6 million.

Senator CAMERON: So it is new money for the department, but in the overall budget parameters, it is not new money, is it?

Mr Pratt : Well, I probably cannot explain it any better or worse than I attempted to before.

Senator CAMERON: So it comes from Newstart recipients and it comes from youth allowance recipients and goes into your emergency relief. Is that not a bit circular, because a lot of these Newstart recipients and youth allowance recipients will probably come and ask for the money, some help?

Mr Pratt : This is a very conventional way in which budget measures operate and have done for decades.

Senator SIEWERT: I want to pick up that line of questioning. To check where the money is coming from, could you take us through the out years for the additional emergency relief money—the $229 million—because we have $20 million for the next financial year that comes off the $139,000. In the next year, 2015-16, you have $164,686. How much of that is the allocation that goes to this special emergency relief?

Mr Pratt : If you go to page 35 of the PBS.

Senator SIEWERT: That is that $86 million. So all those administered expenses are all that emergency relief money. Is that correct?

Ms Bennett : I can walk you through the anticipated split between what we would call the base emergency relief and aligning it—

Mr Pratt : Before Ms Bennett does that, if you look across that line, you have $20 million in 2014-15, $86.5 million in 2015-16, and $71.12 million et cetera. That line totals $229 million.

Senator SIEWERT: And the $51 million. So that all comes off the money that is allocated here against emergency relief. In other words, financial wellbeing and capability is now emergency relief. It goes down—

Mr Pratt : It contributes to that program.

Senator SIEWERT: So $86 million comes off there, because half of the allocation is the emergency relief for this program. Is that correct?

Ms Hefren-Webb : The underpinning activities, such as microfinance, had some different funding profiles. For example, when funding was provided for the no interest loans Siemens Saver Plus at $12.5 million a year, I think it is, it was provided in a terminating fashion. So there was already a predicted drop of $12 million in 2015-16.

Senator SIEWERT: That is what we are trying to find out. I am trying to find out how much in each of those components that were running and some that were not were going to stop. That does not mean they were not important and that they should not be continued. That is why we need those figures. In order to properly do this, we need those figures against each of those programs to see where money is coming out of and where money has been going. Financial counselling is in this section as well. What we are really keen to know is what is happening with that money, for example. With this information so far, we cannot tell that.

Ms Hefren-Webb : That is related to the decision around broadbanding and the selection process. As I said, we will attempt to get you an indicative split, noting that for a terminating measure there may be a process next year to go and seek additional funding and so forth.

Senator SIEWERT: If we are able to get that, because we are continuing with this after lunch. I suppose what I am putting on notice and asking the chair is, once we get the information, we are going to have a whole number of questions that we would like to continue with once we have that information.

Senator MOORE: How long will it take, because I would have thought these were kind of expected questions? With the interest that we have had around these areas over many years, I would have thought that whole honeycomb effect of looking at financial wellbeing, and whatever the title is, would be an area where we would have that data. What is the problem?

Ms Hefren-Webb : Senator, the problem, I guess, is that we are in the middle of a selection process. So we have been out to talk to providers, as you know. There have been a number of information sessions. There is a probity adviser advising the department about what it is appropriate to advise in terms of specific funding amounts for specific activities prior to running a selection process.

Senator MOORE: That is the 19 June one?

Ms Hefren-Webb : Yes. So some of the detail is not there as it would have been there in previous years because of that process. We can provide it to you on the basis that you understand it is a very indicative split and with all the caveats around it.

Ms Bennett : I will add to that. To be emphatic and to define what might be in every component pre-empts that we are going out to selection. Organisations may come up with different configurations of delivering those services and those elements. The efficiencies that we talked about yesterday—about streamlined contracts, about changed arrangements and about bundling up, to say X is available for this and Y is available for that—ends up perhaps pre-empting where they might come back and say how much they can do it for.

Senator SIEWERT: Ms Bennett, I understand that. But, from our perspective, we are looking at a table that says next year there is $86½ million for emergency relief under the earn and learn measure. That comes off $164 million. It takes it down to half. It takes it down to around, quickly doing the maths, $80 million, which is substantially less than the money that was allocated for this financial year.

Ms Hefren-Webb : So it is partly in relation to a series of terminating measures as well as a decision to allocate savings from grant programs, as discussed yesterday.

Senator SIEWERT: What we are trying to understand is where those cuts come in.

Senator Fierravanti-Wells: Senator Siewert, I appreciate where you are going. I think it is probably appropriate that this question, given the probity issues, be taken on notice. After lunch perhaps—

Senator MOORE: For how long, Minister?

Senator Fierravanti-Wells: We may be able to give an indication of what information we can assist with. But I think we are going around in circles.

Senator SIEWERT: I want to frame why we need this.

Senator Fierravanti-Wells: I appreciate, Senator Siewert, your question. I understand there are also probity issues. Perhaps if we can come back to you just after the lunch break with another response in relation to this.

CHAIR: And then we will have further questions.

Senator Fierravanti-Wells: And then we will have further questions.

CHAIR: Last question, Senator Cameron.

Senator CAMERON: I want to clarify what you are going to come back with, because the honeycomb broadbanding rhetoric makes it more difficult to identify what is happening. I reckon you could get to the bottom of Eddie Obeid's trust funds easier than that.

Senator Fierravanti-Wells: Senator Cameron, you probably know how.

Senator CAMERON: Then you could get to the bottom of the Liberal Party's funding arrangements quicker than this.

Senator Fierravanti-Wells: Senator Cameron, those comments are not relevant to the inquiry.

Senator CAMERON: The question I am asking—

Senator Fierravanti-Wells: Senator Cameron, have you looked at it? Have you examined it? Do you have a copy?

Senator CAMERON: What do you intend coming back with?

Ms Bennett : What we propose to do is that we will set out the elements that we have bundled into that new financial wellbeing. I think there are about six programs. We will broadly explain what was spent in 2013-14, the previous year. Then we will provide an indication of the notional if you were separating it out, but, as I said, without it being clear, what it would look like just for this year. That will show you that there are some elements where the programs had reductions because they were cease or changes. What we are trying to say is that through the selection process, it may be that that indicative amount does not reflect that. Someone may be able to continue to provide those services in a more broadbanded way through the capacity of joining up or being able to provide the service in more spaces. That is the problem that we are trying to—the benefit of having—

Senator CAMERON: That is the expenditure side, is it not?

Ms Bennett : This is the notional allocation.

Senator CAMERON: That is expenditure?

Ms Bennett : Expenditure.

Senator CAMERON: What about the income? Where is the money coming from? That is what I am interested in. I am happy to hear where the expenditure is going and all the analysis you have just gone through. I would like details of where the money is coming from in detail. Can you provide that after lunch?

Ms Bennett : As the secretary said, the way the budget process works is that the forward estimates are always an assumption. That was discussed last night. There was an assumption made in previous years of how many people would have been receiving certain payments. Changes have been introduced under the learn and earn measure, based on those assumptions, such that there has been a reduction in payments that would be made in that space. They have been used to offset some of these provisions.

Senator CAMERON: So can you provide details of the reductions in that space, whatever those spaces are, so that we can look at money in and money out? That is simple. Not honeycombs, not broadbanding. Money in and money out. Can we do that?

Mr Pratt : Well, not beyond what I have described already. In fact, my description is very much a shorthand for how the budget process works. But, to have another go at it, essentially, what governments do in setting the budget is they look across the various spending measures. They identify areas where they propose to make savings. Those savings go into a pot. They look across new policies, election commitments and new things that governments wish to do. Those cost money. The money for those purposes comes out of that pot. If the overall effect of the budget is to have savings, there is some left over in the pot. Really, I imagine the Treasury would say, 'Well, you can't actually hypothecate a particular spend measure to a particular savings measure. It really just comes from the generic bottom line of the budget.'

Senator CAMERON: But the generic pot is a DSS pot here, is it not? We are talking about what the DSS pot is. Is there money coming from outside the DSS pot? Is there another pot out there that is pouring money into DSS to increase the overall capacity of DSS?

Mr Pratt : The way the government would see it is, yes, it all comes from the budget ultimately.

Senator CAMERON: But that is not answering my question. The budget is made up of a number of areas. DSS has budget allocations. DSS had budget allocations through the last budget and forward estimates. You are saying that it all goes into one pot. Are you talking about an overall budget pot across all of the departments of government, all the areas of government? Are you talking about a smaller pot, a pot that is the DSS pot?

Mr Pratt : I am talking about across government.

Senator CAMERON: So it is right across government? Can you then this afternoon advise us where the money is coming from across government into DSS? How much money is being shuffled around within DSS? This is the input that I am looking for. This is the input area, not the expenditure. Where is the money coming from outside the DSS pot? Where is the money coming from in the DSS pot? We can sit down and look and go, 'That's where the money is coming from. We're satisfied there's more money.' But it does not look like it to me at this stage.

Mr Pratt : No. I do not believe I can do that. The budget papers set out all of the savings and expenditure measures. That is where the money comes from.

Senator CAMERON: I am not surprised you cannot, because it is a bit of a con job.

Senator Fierravanti-Wells: Senator Cameron, can you desist from verballing officials?

Senator CAMERON: I am not verballing the officials.

Senator Fierravanti-Wells: It just demonstrates that you are not in the detail. You have not read the detail.

Senator CAMERON: I am happy—

Senator Fierravanti-Wells: It is like the brochure you issued that was blatantly wrong which was telling pensioners that they would lose their seniors supplement, which they never got.

Senator CAMERON: The same as the minister. It is exactly the same as the minister.

Senator Fierravanti-Wells: Read the PBS documents and then come back and ask informed questions.

Senator CAMERON: Well, how about you explain it to me, then? You explain it to me, Minister.

Senator Fierravanti-Wells: Madam Chair, we said we would take it on notice.

Senator CAMERON: Minister, how about you explaining it to me?

Senator Fierravanti-Wells: We are just wasting time.

Senator CAMERON: Minister, how about explaining it?

Senator Fierravanti-Wells: We will take this matter on notice. I think Mr Pratt has sufficiently explained to Senator Cameron. Senator Cameron is clearly not understanding. But we will come back this afternoon and seek to provide further information.

Senator CAMERON: Well, can you explain it to me?

CHAIR: Thank you, Senator Fierravanti-Wells.

Senator MOORE: I have one other question. You may have to bring it back, but it is on this issue.

CHAIR: One more question. Then we will move on to the Institute of Family Studies on the basis we are going to resume this without more honeycombs after lunch.

Senator MOORE: In terms of the process and the range of organisations that receive funding for this area, are they subject to the administered program indexation pause on page 69 of Budget Paper No. 2?

Ms Bennett : In relation to the index—this is a general response to this—depending on the grant and what program it was, and the enduring period of it, some programs received indexing at different levels across the agencies that were joined. The measure that you are describing has said that there is an indexing pause for those programs. We are still working through with the Department of Finance how that would be reflected in the future contractual arrangements. Obviously, we would make it very clear when that is resolved at the time of entering into contractual arrangements, that that bid, in a sense, or that selection would be that for that time without indexing. Or if it is one that receives indexing, we would make it clear at that point that indexing would be part of it.

Senator MOORE: Thank you.

Ms Bennett : So there is not a precise answer as we are still working through those issues with the Department of Finance on that measure.

Senator SIEWERT: Yesterday you were going to come back to us and tell us the ones that you have already signed, whether they were indexed or not.

Ms Bennett : Yesterday we agreed that you could ask and we would try to give an answer to indicate, which I think Ms Woolley can, which programs. Not all of it will be the same. There will be different levels of indexing over different points and periods.

Senator MOORE: Before we go back, and we will get the general one, I am very keen to hear your answer, Ms Woolley. My question remains: in terms of the organisations which will be part of a tender from 19 June on issues to do with financial wellbeing, that includes emergency relief, will their tenders possibly be subject to the indexation freeze?

Ms Woolley : What Ms Bennett has explained is the application of the pause, which is detailed in the budget measure. The Department of Finance website details the 23 Department of Social Services programs that are impacted by that.

Senator MOORE: Say that again, I am sorry. Which piece of information lists all of those?

Ms Woolley : The Department of Finance website.

Senator MOORE: The one I have not read.

Ms Woolley : So the issue that has been described is that we are continuing to work through the application of what that measure in fact means in terms of applying it to grants programs and continuing to work through that issue. So we are not able to provide exact advice about how that will work in effect—how that measure will operationalise, in short.

Senator MOORE: We are rapidly seeking the Department of Finance website to see whether they are going to list the programs or they are going to list the agencies. They list the programs?

Ms Woolley : It lists the programs, is my understanding, by agency. But we can provide you with that information.

Senator MOORE: We have just been told it is unavailable. Do you have that?

Ms Woolley : Yes. I do.

Senator MOORE: Can we get a copy of it? Do the programs listed there include the ones that are now going to be broadbanded into financial wellbeing et cetera?

Ms Woolley : No. They do not. The issue of indexation, though, is slightly more complicated with broadbanding—

Senator MOORE: Of course it is.

Ms Woolley : which is why we are not being evasive in our answers. It is simply that when indexation is applied at the time a new policy proposal is brought forward through the budget process, there is often inconsistent treatment of indexation by different activities. When you broadband, you have a situation where certain activities might have different types of indexation applied and different custom and practice in how that has been received. That is an issue that we need to look at more broadly in the context of broadbanding before we can make commitments about how indexation would be applied for future grants.

Ms Bennett : I will assist. A provider might be successful in the selection, as Ms Hefren-Webb said, that might provide three or four different elements of financial wellbeing. Previously, one component may have had this type of indexing and then the other had this type and the third bit did not. We have to work through that as those providers put in their application for selection and work out what might apply in those circumstances.

Senator SIEWERT: I understand what you have just said, but you have signed contracts. Yesterday we went through who you had signed some contracts with.

Ms Bennett : Extensions.

Senator SIEWERT: Extensions.

Ms Bennett : For five years.

Senator SIEWERT: The five years.

Ms Bennett : Yes. We can explain the indexing for those five years.

Senator SIEWERT: Okay.

Ms Hefren-Webb : Senator Siewert, the five-year agreements are being prepared on the basis of no indexation until we clarify this issue. This is not an uncommon approach. Most years we are not clear about the indexation amounts before we enter into the contract at the beginning of the financial year. I am calling it a variation, although I am sure my colleagues will tell me there is another technical term. But we send a follow-up letter saying, 'We have now worked out your exact indexation component', and we do a little variation to the contract.

Senator SIEWERT: You do a variation that says, 'Actually, we know that the value of the contract will go down in real terms. Therefore, we understand that you may not be able to meet these outcomes.' You are signing a contract with a certain amount of money expecting to be able to achieve certain outcomes, yet they do not know exactly how much money they are going to get. I realise you do not use indexation, but you can usually expect an increase with indexation.

Ms Hefren-Webb : As Ms Bennett said, some programs have had no indexation for many years. Some have had indexation. It is really quite variable. Most providers would have some activities that have been indexed over the years and some that have not.

Senator SIEWERT: They are expecting to deliver. They are signing a contract and are expected to deliver certain outcomes.

Ms Hefren-Webb : Correct.

Senator SIEWERT: If you are signing a contract and you do not know how much you are going to get indexed, it is a bit hard to say, 'Yes, we can definitely achieve these outcomes', if you do not know how much money you are going to have.

Ms Bennett : Yes. But some did not receive indexing because they went to recontracting one year after another or two years and they recontracted for a new price, so they would have determined what that delivery was. What we have explained through this process is that—the five-year ones themselves have different indexing arrangements—the practice has been that we would look at the indexing, which is obviously to reflect an increased cost that is based on other parameters. For those contracts, we are going to come back to them if indexing is available.

Senator SIEWERT: I understand that.

CHAIR: Senator Siewert, this is your last point.

Senator SIEWERT: I am just trying to ask for the variation. I presume the variation goes two ways. We have clarified that you do not get indexation on this contract you have just signed. Therefore, there is a built-in understanding—

Ms Hefren-Webb : I guess our funding agreements are not, in general, specific fee-for-service type arrangements. It would be unusual, for example, for us to say to Communities for Children, 'You're getting this much. We expect you to see 7,300 children. If you see one less than that, you are in breach of your contract.' We generally have broad targets. So when the indexation comes through, we will offer it to the organisation. If they then say to us, 'We're really concerned about our ability to deliver', we can negotiate on that. But it is not a scientific case.

CHAIR: Thank you. We will now have the Institute of Family Studies until we break at 12.30 pm for lunch.